Gold East Paper (Jiangsu) Co., Ltd. v. United States , 61 F. Supp. 3d 1289 ( 2015 )

Slip Op. 15 - 37
UNITED STATES COURT OF INTERNATIONAL TRADE
:
GOLD EAST PAPER (JIANGSU) CO., LTD., :
NINGBO ZHONGHUA PAPER CO., LTD., :
and GLOBAL PAPER SOLUTIONS, :
:
Plaintiffs, : Before: R. Kenton Musgrave, Senior Judge
:
and : Consol. Court No. 10-00371
:
BUREAU OF FAIR TRADE FOR IMPORTS :
& EXPORTS, MINISTRY OF COMMERCE, :
PEOPLE’S REPUBLIC OF CHINA, :
:
Plaintiff-Intervenor, :
:
v. :
:
UNITED STATES, :
:
Defendant, :
:
and :
:
APPLETON COATED LLC, NEWPAGE CORP., :
S.D. WARREN COMPANY d/b/a SAPPI FINE :
PAPER NORTH AMERICA, and UNITED :
STEEL, PAPER AND FORESTRY, RUBBER, :
MANUFACTURING, ENERGY, ALLIED :
INDUSTRIAL AND SERVICE WORKERS :
INTERNATIONAL UNION, AFL-CIO-CLC, :
:
Defendant-Intervenors. :
:
OPINION AND ORDER
[Remanding second results of administrative redetermination on investigation of sales at less than
fair value of certain coated paper from the People’s Republic of China.]
Dated: April 22, 2015
Consol. Court No. 10-00371 Page 2
Daniel L. Porter and Ross E. Bidlingmaier, Curtis, Mallet-Prevost, Colt & Mosle LLP, of
Washington DC, for the plaintiffs and plaintiff-intervenor.
Alexander V. Sverdlov, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington DC, for defendant. With him on the brief were Stuart F.
Delery, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Claudia Burke,
Assistant Director. Of Counsel on the brief was Mykhaylo A. Gryzlov, Senior Attorney, Office of
the Chief Counsel for Import Administration, U.S. Department of Commerce.
Terence P. Stewart and William A. Fennell, Stewart and Stewart, of Washington, DC, and
Gilbert B. Kaplan, Christopher T. Cloutier, and Daniel L. Schneiderman,, King & Spalding, LLP,
of Washington DC, for the defendant-intervenors.
Musgrave, Senior Judge: This matter, most lately embodied in the second Final
Results of Redetermination Pursuant to Court Remand (“RR2”) concerning the antidumping duty
investigation into Certain Coated Paper from the PRC,1 must be remanded a third time due to
arguments over (1) the use of market economy purchase prices for certain inputs procured by/for the
plaintiffs (herein “APP-China”) from the Kingdom of Thailand (“Thailand”) and (2) the targeted
dumping methodology utilized on second remand that persuade further remand is appropriate.
Familiarity with the prior opinions on the case is presumed, but a brief background is provided
below. See 37 CIT ___, 918 F. Supp. 2d 1317 (2013) (“Gold East I”) and 38 CIT ___, 991 F. Supp.
2d 1357 (2014) (“Gold East II”).
1
Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses
from the People’s Republic of China, 75 Fed. Reg. 59217 (Sept. 27, 2010), PDoc 360, as amended
by Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses from
the People’s Republic of China: Amended Final Determination of Sales at Less than Fair Value and
Antidumping Order, 75 Fed. Reg. 70203 (Nov. 17, 2010) (“Final Determination”), and
accompanying issues and decision memorandum (“IDM”), PDoc 353. The period of investigation
(“POI”) covers January 1, 2009 through June 30, 2009.
Consol. Court No. 10-00371 Page 3
Background
In the Final Determination, the U.S. Department of Commerce, International Trade
Administration (“Commerce”) averred that pursuant to its practice it disregarded the market
economy purchase prices (“MEPs”) for inputs that originated from Thailand and the Republic of
Korea (“Korea”) that APP-China submitted to account for its production. See IDM at cmt. 7. Cf.
19 U.S.C. §1677b(c)(1) with 19 C.F.R. 351.408(c)(1). After considering APP-China’s challenge
thereto on the basis of relevant precedent2 and legislative history3 in comparison with the relevant
regulation, Gold East I concluded that the record lacked “positive evidence” to support the
determination, as articulated, of a belief or suspicion that those inputs had been distorted by
subsidies, and that issue was remanded with instruction either “to reopen the record and make
particularized findings in support of [the] decision to ignore the Thai and Korean price data . . . or
to reverse [the] decision not to use such price data”. 37 CIT at ___, 918 F. Supp. 2d at 1324.
Commerce also requested remand in order to examine its targeted dumping
calculation program and, if appropriate, correct certain alleged programming errors. The request was
endorsed, but the court also concluded that a relevant targeted dumping regulation had not been
properly withdrawn through the notice and comment required under the Administrative Procedure
Act, 5 U.S.C. §500, et sequentia. That regulation is no longer in effect, but during the investigation
it had provided, inter alia, that the application of the “remedy” of targeted dumping should
2
See, e.g., Fuyao Glass Indus. Group Co. v. United States, 29 CIT 109 (2005) (“Fuyao II”);
Sichuan Changhong Electric Co. v. United States, 30 CIT 1481, 460 F. Supp. 2d 1338 (2006).
3
See H.R. Conf. Rep. No. 100-576, at 590 (1988) (“[i]n valuing such factors [of production],
Commerce shall avoid using any prices which it has reason to believe or suspect may be dumped or
subsidized prices”), reprinted in 1988 U.S.S.C.A.N. 1547, 1623.
Consol. Court No. 10-00371 Page 4
“normally” be limited to those sales that “constitute targeted dumping.” See 19 C.F.R.
§351.414(f)(2) (2008). Consistent therewith, therefore, Gold East I opined that the targeted dumping
remedy had to be limited to targeted sales or adequate explanation provided as to why the relevant
sales are not “normal”. 37 CIT at ___, 918 F. Supp. 2d at 1328.
In Commerce’s first final results of redetermination (“RR1”), it complied with the
opinion on those issues under protest. See generally RR1. The first results incorporated the prices
of APP-China’s inputs from Thailand and Korea and, apparently, limited the targeted dumping
“remedy” in accordance with Gold East I, but did not “appl[y]” it. Cf. RR1 at 17 with id. at 18
(referring parties to a further discussion of the “proprietary nature of this analysis” in a certain
memorandum dated concurrently with RR1). Those results relied on average to average (“A-A”)
methodology instead of average to transaction (“A-T”) methodology. Considering those results and
the parties arguments thereon, Gold East II reiterated why the matter had been remanded and, after
further analysis of Commerce’s articulated position on the matter, remanded again for a fuller
analysis either on the record as it stood or as may be supplemented on remand if necessary. Gold
East II, 38 CIT at ___, 991 F. Supp. 2d at 1269.4
On second remand, Commerce reopened the record, and the petitioners and
APP-China filed submissions with new factual information pertaining to subsidization. Considering
4
In passing, the court observed that the fact that Commerce had placed additional
information on the record in the form of additional administrative determinations via citation thereto
was at odds with Commerce’s position regarding a “reopening” of the record. See Gold East II, 38
CIT at ___, 991 F. Supp 2d at 1366 & n.14 (parameters of the administrative record); see also 19
C.F.R. §351.104(a) (“[t]he Secretary will include in the official record all factual information,
written argument, or other material developed by, presented to, or obtained by the Secretary during
the course of a proceeding that pertains to the proceeding”) (italics added).
Consol. Court No. 10-00371 Page 5
them, Commerce again determined to use APP-China’s claimed prices for inputs from Thailand and
to reject the prices for inputs from Korea in the calculation of the dumping margin. Commerce also
continued to apply the A-A targeted dumping methodology to all sales to calculate APP-China’s
dumping margin. The second final remand results (“RR2”) did not substantively change from the
draft thereof, but they provide further explanation of the determinations made in the calculation of
a weighted-average dumping margin for APP-China of zero percent.
APP-China argues the second remand results should be sustained. The petitioners
agree with them in part, but they continue to contest Commerce’s determination to use market
economy prices (“MEPs”) for inputs purchased by APP-China from Thailand and the determination
not to counteract targeted dumping. For the following reasons, the matter must be remanded again.
Discussion
I. Administrative Finality and Information on the Record
On second remand, Commerce took the position that it was appropriate to disregard
any information submitted for the record that “only became available” subsequent to the
determination of the original investigation.5 RR2 at 22.
Disregard of information that “only became available” subsequent to the original
investigation in the sense of “only came into being” through creation subsequent to the original
investigation accords respect for that point at which an agency’s determination may reasonably be
5
Commerce further explains that “while certain factual information submitted by Petitioners
may have been available during the POI, . . . the Department continues to rely on its published
determinations, and the contemporaneity of such determinations to the POI, to determine whether
there is evidence of the existence of generally available, non-industry specific export subsidies
during the POI.” RR2 at 22.
Consol. Court No. 10-00371 Page 6
concluded “final” in the administrative sense. See RR2 at 7 (“[o]therwise, the Department’s
decisions would not have administrative ‘finality’ and would be subject to newly-developed
documents and facts with the passage of time, when litigation is pursued”). Cf. Essar Steel Ltd. v.
United States, 678 F.3d 1268 (Fed. Cir. 2012) (“Essar”) (generally improper for courts to “require”
reopening the record). Commerce’s disregard of information that only came into being subsequent
to the original investigation is appropriate, but the reader should not confuse or conflate a “final”
decision thereon with the applicability of law or methodology on remand. See infra.
II. Treatment of the Certain Input Purchases
A. MEP Inputs from Korea
Regarding the relevant MEP inputs from Korea, Commerce found that 2009 CORE
Review6 provides evidence that Korea maintained at least one countervailable generally-available,
non-industry specific export subsidy program and that it would have been against any market
economy supplier’s interest in Korea not to take advantage of the subsidy. Gold East I characterized
the mere reference to 2009 CORE Review in the Final Determination’s issues and decision
memorandum as “insufficient” evidence of record to justify disregard of APP-China’s MEP inputs.
Gold East I, 37 CIT at ___, 918 F. Supp. 2d at 1324. See also, e.g., Gold East II, 38 CIT at ___, 991
F. Supp. 2d at 1362. At this stage, Commerce’s particularized explication of 2009 CORE Review
satisfies the three prongs of Fuyao II and provides substantial evidentiary support for disregarding
the relevant MEP inputs from Korea, which no party contests. See RR2 at 11-14.
6
Corrosion-Resistant Carbon Steel Flat Products from the Republic of Korea: Preliminary
Results of Countervailing Duty Administration Review, 73 Fed. Reg. 52315, 52323-24 (Sep. 9, 2008)
(“2009 CORE Review”); unchanged in final determination, see its accompanying issues and decision
memorandum at cmt. 1.
Consol. Court No. 10-00371 Page 7
B. MEP Inputs from Thailand
1. Thailand’s Investment Promotion Act of 1977 (“IPA”)
Regarding the issue of MEPs for certain inputs from Thailand, the petitioners called
Commerce’s attention to several cases of countervailed sections of Thailand’s Investment Promotion
Act (“IPA”) from 1989 to 2001, including “countervailable” export subsidy benefits under the IPA
in 1995 Pocket Lighters investigation.7 The petitioners argued that the record evidence demonstrated
that the IPA was still in effect during the POI, that the suppliers were eligible for and thus likely
received benefits under the IPA, and that it would have been unnatural for the suppliers not to have
taken advantage of the subsidies under the IPA because of the competitive nature of market economy
countries and the supplier’s demonstrative interest in receiving available subsidies by applying for
promoted status.
Commerce disagreed, explaining that although it had countervailed programs under
sections of the IPA as early as the 1989 Malleable Iron Pipe Fittings investigation8, it had made such
determinations on a case-by-case and industry-specific basis, which led to differing results depending
upon the type of monitoring system employed with respect to each particular industry. Consistent
therewith, Commerce found that its prior findings concerning section 36(1) of the IPA (i.e., duty
7
Final Negative Countervailing Duty Determination: Disposable Pocket Lighters From
Thailand, 60 Fed. Reg. 13961 (Mar. 15, 1995) (“1995 Pocket Lighters”). Actually, that proceeding
determined the “net bounty or grant” as 0.23 percent, ad valorem, which was not countervailable.
See id. at 13962.
8
Final Affirmative Countervailing Duty Determination and Countervailing Duty Order:
Malleable Iron Pipe Fittings From Thailand, 54 Fed. Reg. 6439 (Feb. 10, 1989) (“1989 Malleable
Iron Pipe Fittings”).
Consol. Court No. 10-00371 Page 8
exemptions on imports of raw and essential materials) in 2001 Hot-Rolled Investigation9 did not
establish that Thailand maintained countervailable broadly-available, non-industry specific export
subsidies at the time of the original Final Determination. RR2 at 9.
Elaborating on the specific programs determined countervailable in 2001 Hot-Rolled
Investigation, Commerce explained that in that determination it countervailed a program under
sections of the 1991 version of the IPA because it determined that the IPA benefits were de facto
specific to a steel-sheet industry within the meaning of 19 U.S.C. §1677(5A)(D)(iii)(I) and the
program was not administered in a manner in accordance with 19 C.F.R. §351.519(a)(4)(i), even
though it determined that the assistance provided by the Thai Board of Investment under the IPA did
not constitute an export subsidy. Id. at 18. By way of contrast, Commerce noted that in the 2005
PET Resin investigation10 it had found the import duty exemptions on imports of raw and essential
materials under section 36 of the IPA not to be countervailable within the meaning of 19 C.F.R.
§351.519(a)(4). Id. Commerce further explained that in that proceeding it had not determined that
the IPA is an export subsidy per se, because the IPA did not generally require an export commitment
and Commerce had examined the manner in which the Thai government administered the duty
drawback program, finding that the system used to monitor and track the consumption and/or
9
Final Affirmative Countervailing Duty Determination: Certain Hot-Rolled Carbon Steel
Flat Products From Thailand, 66 Fed. Reg. 50410 (Oct. 3, 2001) (“2001 Hot-Rolled Investigation”)
and accompanying issues and decision memorandum.
10
Final Negative Countervailing Duty Determination: Bottle-Grade Polyethylene Tereph-
thalate (PET) Resin From Thailand, 70 Fed. Reg. 13462 (Mar. 21, 2005) (“2005 PET Resin
Investigation”) and accompanying issues and decision memorandum.
Consol. Court No. 10-00371 Page 9
re-export of imported goods, along with normal allowance for waste, was reasonable and effective.
Therefore, Commerce explains,
[t]his demonstrates that the Department’s prior subsidy findings on the IPA were
industry-specific and led to differing results depending upon the type of monitoring
system employed with respect to each particular industry. Accordingly, we find that
the Department’s findings concerning section 36(1) of the IPA (i.e., duty exemptions
on imports of raw and essential materials) in 2001 Hot-Rolled Investigation do not
establish that Thailand maintained countervailable broadly available, non-industry
specific export subsidies at the time of the Final Determination.
Id. at 9. See 66 Fed. Reg. 50410 and accompanying issues and decision memorandum, section II.A.
Commerce’s explanation of the nonapplicability of its prior IPA findings to the subject matter at bar
is reasonable and supported by substantial evidence of record. See, e.g., MTZ Polyfilms, Ltd v.
United States, 33 CIT1575, 1582, 659 F. Supp. 2d 1303, 1311 (2009) (proposed methodology not
“relevant to” and “does not comport with” how Commerce treated export program benefits).
2. Export-Import Bank of Thailand 2009 Statements
The petitioners also cited to mission statements from the 2009 annual report of the
Export-Import Bank of Thailand to argue that the bank was funded by the Thai government to cover
losses on loans and credit insurance provided to exporters, and that it would be unnatural for
APP-China’s Thai suppliers not to have taken advantage of the program. Commerce, however,
responded that it has not countervailed a program under the Export-Import Bank of Thailand, and
that therefore the above assertion in the mission statements of the bank’s annual report is, by itself,
insufficient for finding that any Thai company received countervailable export subsidies through
programs from the Export-Import Bank of Thailand during the POI. Substantial evidence of record
supports this determination.
Consol. Court No. 10-00371 Page 10
3. Thai Tax Coupon Program
a. Further Background
On remand, the petitioners argued that the record now contained the same law
governing the Thai tax coupon program11 that was countervailed in 1992 Carbon Steel Butt-Weld
Pipe Review as well as documentation that a change was made to the tax coupon law in 2009 and
the ad valorem export coupon rates applicable during 2009 for the inputs exported from Thailand.
See Petitioners’ Submission of New Information (Aug. 20, 2014) at Exhibits 1, 2A & 2B. The
petitioners argued this evidence demonstrated that the tax coupon program was still in place during
2009 and that APP-China could have benefitted from the program. Petitioners’ Comments on Draft
Second Remand Redetermination (Oct. 9, 2014) at 10.
Commerce interpreted Gold East II as ordering it to address whether subsidies existed
during the POI of this instant investigation.12 The interpretation led to disregarding the petitioners’
evidence and determining that Commerce did not have a reason to believe or suspect that prices may
have been subsidized, on the grounds that it has not countervailed the tax coupon program as an
11
The petitioners aver this is Thailand’s Tax and Duty Compensation of Exported Goods
Produced in the Kingdom Act, B.E. 2524 (1981). Cf. Carbon Steel Butt-Weld Pipe Fittings From
Thailand; Preliminary Results of Countervailing Duty Administrative Review, 56 Fed. Reg. 55283,
55283-84 (Oct. 25, 1991) (“Carbon Steel Butt-Weld Pipe Review”).
12
In the process, Commerce highlighted the prior decision’s observation that “detailed
positive evidence of that existence -- during the POI -- of broadly-available, non-industry specific
subsidies has been held to satisfy this prong”, and from other context that “[i]t thus behooves
Commerce to relate a relevant and contemporaneous factual predicate to the particular period of
investigation, not merely to avoid the appearance of ossification of administrative practice, but also
as a necessary part of the particularized findings that will suffice for the purpose of the substantial
evidence standard of review.” RR2 at 15-16, quoting Gold East II, 38 CIT at ___, 991 F. Supp. 2d
at 1363 (referencing CS Wind Vietnam Co., Ltd. v. United States, 38 CIT ___, ___, 971 F. Supp. 2d
1271, 1292 (2014) (“CS Wind”)) & 38 CIT at ___, 991 F. Supp. 2d at 1365.
Consol. Court No. 10-00371 Page 11
export subsidy since the 1997 Apparel Review13 and that all the orders countervailing the tax coupon
program had been revoked by 2000.14 Commerce reasoned that the subsidization determinations
concerning the tax coupon program from the 1980s and 1990s were “not sufficiently
contemporaneous with the POI of the instant investigation” to accord with the order of remand. RR2
at 9-10, 15-17.
Though Petitioners placed on the record evidence of the law in 2009 governing the
tax coupon after we opened the record, the Department is not required in the context
of this antidumping duty investigation to conduct a formal investigation of this
alleged subsidy program and make [a] de novo determination that this law establishes
a generally available countervailable export subsidy program in Thailand. Because
we did not make any subsidization determinations on the tax coupon program in
other CVD reviews or investigations that are sufficiently contemporaneous with the
POI, we are not relying on the evidence of the law alone to conclude that
countervailable export subsidies existed during the POI.
Id. at 16-17 (footnotes omitted).
b. Analysis
Commerce’s conclusion that “no information generally available to it at the time of
the Final Determination supports a finding that the MEP prices for inputs from Thailand during the
POI may have been distorted because of countervailable export subsidies” is not supported by
substantial evidence for the following reasons, and therefore the matter of whether there is a reason
to believe or suspect that MEPs from Thailand were distorted would require further consideration
if it presents a material impact on the results. However, it is unclear at this time whether that would
have a material impact on the results or should be regarded as harmless error. Cf. infra, notes 25-26.
13
Certain Apparel From Thailand; Final Results of Countervailing Duty Administrative
Review, 62 Fed. Reg. 63071 (Nov. 26, 1997) (“1997 Apparel Review”).
14
See RR2 at 10 & n.49.
Consol. Court No. 10-00371 Page 12
Commerce bases its decision in part on its observation that all the orders
countervailing the tax coupon program had been revoked by the year 2000. In one sense, that would
not be unreasonable. Cf. AK Steel Corp. v. United States, 192 F.3d 1367, 1376 (1999) (clear that the
Korean government exercised control to benefit a particular industry at one time but court not
referred to evidence to support reasonable inference that governmental control continued into the
period of investigation). However, to the extent Commerce interpreted the law of the case as
expressing that “the standard for determining the existence of generally available
non-industry-specific export subsidies is a particularized finding of subsidization during the POI”
requiring a new, de novo, determination of subsidization as a result of those revocations,
Commerce’s interpretation is overly restrictive. Revocation is a discrete agency action, and the act
thereof does not invalidate the prior administrative findings and conclusions upon which the issuance
of the countervailing or antidumping duty order being revoked was validly predicated. Indeed, that
is basically the premise that Commerce sought to advance in Canadian Wheat Bd. v. United States,
32 CIT 1116, 580 F. Supp. 2d 1350 (2008), aff’d 641 F.3d 1344 (Fed. Cir. 2011). Commerce here
noted that the tax coupon program had been countervailed in the 1997 Apparel Review,15 and the
petitioners had placed on the record the law in 2009 governing the tax coupon program to show that
the program existed in 2009, not to induce a formal investigation. On those facts, Commerce could
have reasonably inferred that the tax coupon program continued to exist during the POI.
To the extent Commerce interpreted the prior opinions as at odds with its “practice”
of imposing a rebuttable presumption from a past affirmative subsidy determination that the
15
See RR2 at 10, referencing 1997 Apparel Review.
Consol. Court No. 10-00371 Page 13
particular program “exists” for purposes of a period under consideration,16 certain clarification is
necessary here: In neither the Final Determination nor the first remand results did Commerce ever
explain that its finding was predicated on the basis of a rebuttable presumption,17 Commerce simply
(1) stated that it had determined in the past that Korea and Thailand “maintain” broadly available
non-industry specific export subsidy programs and (2) declared from citations to same that such
programs were in “existence” during the POI. Yet, “[i]t is well established that an agency’s action
must be upheld, if at all, on the basis articulated by the agency itself.”18 Motor Vehicle Mfrs. Ass’n
v. State Farm, 463 U.S. 29, 50 (1983). Courts are thus bound not to sustain on grounds not
articulated by the agency itself. See, e.g., Burlington Truck Lines, Inc. v. United States, 371 U.S.
16
The second remand results explain that in countervailing duty proceedings “if the
Department has countervailed an export subsidy in a prior determination, unless parties provide us
with the evidence that the program has been terminated and flow of the residual benefits has ceased,
we will normally find that the subsidy is still in existence.” RR2 at 16. Cf. 19 C.F.R. §351.526(d)
(“Terminated programs”) (“The Secretary will not adjust the cash deposit rate under paragraph (a)
of this section if the program-wide change consists of the termination of a program and: (1) The
Secretary determines that residual benefits may continue to be bestowed under the terminated
program . . ..”); ALZ N.V. v. United States, 27 CIT 1265, 1284, 283 F. Supp. 2d 1302, 1318 (2003)
(“Commerce regularly requires direct evidence of a program-wide change in a subsidy program
before it adjusts the cash deposit rate”) (citations omitted).
17
In point of fact, it was the court, not Commerce, that first brought up the subject of
presumptions in the context of the matter at bar. See, e.g., Gold East II, 38 CIT at ___, 991 F. Supp
2d at 1360-67. Cf. RR1 generally; Def’s 56.2 Resp. at 6-7, 16, 28-33; Def’s RR2 Resp. to Cmts at
4-8. The petitioners here also call attention to Peer Bearing Company-Changshan v. United States,
27 CIT 1763, 1772, 298 F. Supp. 2d 1328, 1337 (2003) (opining that once Commerce has presented
evidence supporting a reason to believe or suspect that prices are subsidized “a rebuttable
presumption is established that the prices paid are distorted” and the burden shifts to the challenging
party “to present evidence demonstrating that its supplier did not benefit from such subsidies”).
18
See SEC v. Chenery Corp., 332 U.S. 194, 196 (1947) (“a reviewing court, in dealing with
a determination or judgment which an administrative agency alone is authorized to make, must judge
the propriety of such action solely by the grounds invoked by the agency”).
Consol. Court No. 10-00371 Page 14
156, 168-69 (1962). Taking Commerce at its word in the Final Determination, the court could not
discern from the record and referenced citations the validity of either assertion for purposes of the
POI, i.e., that Korean and Thai broadly available non-industry specific export subsidy programs
“existed” during the POI.19 See, e.g., Gold East I, 37 CIT at ___, 918 F. Supp. 2d at 1324 (“there
must be some positive evidence on the record to permit the court to evaluate whether Commerce’s
decision is supported by substantial evidence”); Gold East II, 38 CIT at ___, 991 F. Supp. 2d at 1365
& n.13 (examining record support for declared existence of relevant subsidy programs). That
inference was a necessary precursor for further presuming (i.e., providing reason to believe or
suspect) that the MEPs of the inputs at issue were likely distorted, and therein lay the problem of
APP-China’s original res on this matter.
To the extent Commerce would regard the prior opinions and Fuyao II as at odds with
its, now apparent, rebuttable presumption practice on this issue, clarified here is why those decisions
are not at odds with such practice. In the Final Determination, Commerce quoted from China
National Machinery Import & Export Corp. v. United States, 27 CIT 1553, 1557, 293 F. Supp. 2d
1334, 1338 (2003), upon which Fuyao II relies, to the effect that “it is sufficient if the Department
has ‘substantial, specific, and objective evidence in support of its suspicion that the prices are
19
Notwithstanding Commerce’s interpretation expressed in RR2, it was for this reason that
the court previously stated that there must be “some primary source from which it could reasonably
be concluded that such programs were in fact in existence and operable during the POI, with a degree
of specificity in describing the relevant program[s], before the possibility of believing or suspecting
that the relevant MEPs during the POI were likely distorted by such programs could even arise.” See
RR2 at 5, quoting Gold East II, 38 CIT at ___, 991 F. Supp. 2d at 1366 (italics in original).
Consol. Court No. 10-00371 Page 15
distorted.’” IDM at cmt. 17, pp. 44-45 (also referencing H.R. Rep. Conf. 100-576 at 590).20
Considering the circumstances before it, the Fuyao II court unpacked those concepts in stating that
“Commerce must demonstrate by specific and objective evidence that (1) subsidies of the industry
in question existed in the supplier countries during the period of investigation . . . ; (2) the supplier
in question is a member of the subsidized industry or otherwise could have taken advantage of any
available subsidies; and (3) it would have been unnatural for a supplier to not have taken advantage
of such subsidies.” Fuyao II, 29 CIT at 114. But whether the concern is over an industry-specific
subsidy program or a broadly available non-industry specific export subsidy program, Fuyao II’s
summation amounts to a rather straightforward restatement of how to evaluate the “substantial,
specific, and objective evidence” that would satisfy the reviewing standard of substantial evidence
on the record and assist in evaluating the validity of the inference or conclusion drawn therefrom.
Furthermore, as previously mentioned, Fuyao II is not the only “reasonable method
for evaluating the sufficiency of the evidence upon which Commerce base[s] its belief or suspicion
that prices were subsidized”, see CS Wind, 38 CIT at ___, 971 F. Supp. 2d at 1292, and in the
meanwhile, Fuyao II provides useful guidance, and therefore administrative “reasonable suspicion”
conclusions, established via rebuttable presumption or otherwise, should either be able to satisfy its
three prongs or be articulated with sufficient clarity to explain why the chosen method reasonably
gives rise to a valid belief or suspicion that input prices are distorted. See id. at 1292 n .14.
20
See also China National Machinery, 27 CIT at 266-67, 264 F. Supp. 2d at 1239, discussing
AL Tech Specialty Steel Corp. v. United States, 6 CIT 245, 247, 575 F. Supp. 1277, 1280 (1983) and
restating the analysis of Terry v. Ohio, 392 U.S. 1 (1968) upon United States v. Cortez, 449 U.S. 411
(1981) and Marshall v. Barlow’s, Inc., 436 U.S. 307, 320-21 (1978).
Consol. Court No. 10-00371 Page 16
And, if Commerce perceives anything in this opinion that could be construed as
inconsistent with its reading of the prior opinions, then this opinion controls.
III. Targeted Dumping Redetermination
A. Background
It will be recalled that the Limiting Rule described that if the criteria for targeted
dumping are satisfied,21 then in the comparison of normal value and export price Commerce
“normally will limit the application of the average-to-transaction method to those sales that
constitute targeted dumping” for purposes of determining sales at less than fair value. See 19 C.F.R.
§351.414(f)(2) (2008); see also 19 U.S.C. § 1677f-1(d)(1)(B). Regarding the attempt to withdraw
that then-existing targeted dumping regulation, Gold East I held that due to noncompliance with the
notice provision of the Administrative Procedure Act (“APA”), as amended, 5 U.S.C. §553(b), the
Limiting Rule was still in effect at the time of the Final Determination and remanded the case for
reconsideration of the targeted dumping analysis. See 37 CIT at ___, 918 F. Supp. 2d at 1328.
In light of the first remand results, the court refrained from addressing the parties’
further arguments thereon, due to the uncertain impact of the MEP subsidization issue upon the
targeted dumping analysis, but it requested that Commerce further address the defendant-intervenors’
(herein “petitioners”) points on the issue. 38 CIT at ___, 991 F. Supp. 2d at 1369. On second
remand, Commerce found that the exclusion of APP-China’s MEP price for the input from Korea
did not materially affect the targeted dumping analysis results and, as in the first remand, it continues
to find that the weighted-average margin resulting from either the average-to-average (“A-A”)
21
Inter alia, “determined through the use of, among other things, standard and appropriate
statistical techniques . . ..” 19 C.F.R. §351.414(f)(1)(i) (2007).
Consol. Court No. 10-00371 Page 17
methodology or the average-to-transaction (“A-T”) methodology, as applied only to the sales found
to have been targeted, is below the de minimis threshold. Accordingly, Commerce continues to
apply the standard A-A comparison methodology to all sales to calculate the weighted-average
dumping margin for APP-China.
B. Motion to Reconsider -- Effect of Limiting Rule Withdrawal
On remand, pointing to the recent case of Beijing Tianhai Industry Co. v. United
States, 38 CIT ___, 7 F. Supp. 3d 1318, 1333-34 (2014) (“Tianhai”), the petitioners argued that the
withdrawal of the targeted dumping regulation was harmless error, and that A-T methodology should
be applied to all of APP-China’s sales based on their results of testing for Cohen’s d, part of the
differential pricing analysis Commerce adopted subsequent to the Final Determination. See
Petitioners’ Comments on Draft Second Remand Redetermination at 8-9. Commerce responded
that the United States has already raised the harmless error argument, and since it was not accepted,
the law of the case is binding. RR2 at 23-24. Cf. Gold East I, 37 CIT at ___, 918 F. Supp. 2d at
1325-28. The petitioners move at this juncture for reconsideration of the issue.
The APA requires that a court take “due account” of the harmless error rule. 5 U.S.C.
§ 706. Tianhai proceeded from the proposition that the “‘relevant harm’ to be analyzed when the
Department fails to comply with the APA’s notice and comment procedures is whether ‘an interested
party has lost the opportunity to alter the agency’s decision through full participation in the
regulatory process.”’ Tianhai, 38 CIT at ___, 7 F. Supp. 3d at 1333 (citing Parkdale International,
Ltd. v. United States, 31 CIT 1229, 1237, 508 F. Supp. 2d 1338, 1348 (2007)) (“Parkdale”).22
22
The quote appears in a discussion of when a claim accrues against “final agency action”
(continued...)
Consol. Court No. 10-00371 Page 18
Tianhai went on to determine that Commerce’s failure to follow the procedural requirements of the
APA constituted “harmless error” because the party claiming the error had not filed comments on
the withdrawal of the regulations during either of the two times when comments were solicited.23
Id., 38 CIT at ___, 7 F. Supp. 3d at 1334-37. Here, the petitioners argue that, as in Tianhai, APP-
China filed no comments on the withdrawal when comments were solicited and that therefore any
procedural failure by Commerce must be considered as “harmless error.”
“The major grounds justifying reconsideration are an intervening change of
controlling law, the availability of new evidence, or the need to correct a clear error or prevent
manifest injustice.” Royal Thai Government v. United States, 30 CIT 1072, 1074, 441 F. Supp. 2d
1350, 1354 (2006), quoting Doe v. New York City Department of Social Services, 709 F.2d 782, 789
(2d Cir. 1983) (quotation marks omitted). Thus, the court will not exercise discretion to disturb a
previous decision unless it is manifestly erroneous. Id. (citation omitted). Upon further
consideration, the court perceives no manifest error in Gold East I.
In Parkdale, the relevant issue concerned whether a certain “reseller policy” was void
because it had not been passed in accordance with the procedural requirements of the APA governing
the publication of regulations. Parkdale proceeded from the proposition that “if a rule adopts a new
22
(...continued)
(see 5 U.S.C. §704), to wit: “A claim raising procedural objections accrues at the time that the rule
goes into effect because the relevant harm has already been inflicted: an interested party has lost the
opportunity to alter the agency’s decision through full participation in the regulatory process.”
Parkdale, 31 CIT at 1237, 508 F. Supp. 2d at 1348-49 (citations omitted).
23
See Targeted Dumping in Antidumping Investigations, 72 Fed. Reg. 60651 (Oct. 25,
2007); Proposed Methodology for Identifying and Analyzing Targeted Dumping in Antidumping
Investigations, 73 Fed. Reg. 26371 (May 9, 2008).
Consol. Court No. 10-00371 Page 19
position inconsistent with an existing regulation, or effects a substantive change in the regulation,
notice and comment are required.” Parkdale, 31 CIT at 1246, 508 F. Supp. 2d at 1356 (internal
quotation marks omitted), quoting United States Telecom Association v. FCC, 400 F.3d 29, 35 (D.C.
Cir. 2005) (quoting Shalala v. Guernsey Memorial Hospital, 514 U.S. 87, 100 (1995)) (emphasis
omitted in Parkdale). After considering the relevant policy, Parkdale found that it “is not a new
position inconsistent with the existing regulation” and thus notice and comment were not required.
The decision in Gold East I is in accord with the line of cases that extend from Braniff
Airways v. CAB, 379 F.2d 453 (D.C. Cir. 1967) (“Braniff”), which evaluated the administrative law
question posed therein on the basis of whether the “mistake of the administrative body is one that
clearly had no bearing on the procedure used or the substance of the decision reached.” 379 F.2d
at 466, quoting Massachusetts Trustees of Eastern Gas and Fuel Associates v. United States, 377
U.S. 235, 248 (1964) (“EGFA Trustees”). In United States Steel Corp. v. EPA, 595 F.2d 207 (5th
Cir. 1979) (“U.S. Steel”), for example, the Fifth Circuit held that the EPA’s failure to provide notice
and comment in advance of designating certain areas in Alabama as nonattainment areas “plainly
affected the procedure used, and we cannot assume that there was no prejudice to the petitioners[;]
[a]bsence of such prejudice must be clear for harmless error to be applicable.” See 595 F.2d at 215.
and cases cited. The petitioners in that case faced “collateral effects” as a consequence of the EPA’s
action, and the agency’s acceptance of comments after the effective date of the designations did not
cure the lack of prior notice and comment. Id.
The case of Riverbend Farms, Inc. v. Madigan, 958 F.2d 1479 (9th Cir.1992) is
further instructive on this point. After observing that “the notice and comment requirements . . . are
Consol. Court No. 10-00371 Page 20
designed to ensure public participation in rulemaking”, 958 F.2d at 1485, the court went on to state
as truism that a court
must exercise great caution in applying the harmless error rule in the administrative
rulemaking context. The reason is apparent: Harmless error is more readily abused
there than in the civil or criminal trial context. An agency is not required to adopt a
rule that conforms in any way to the comments presented to it. So long as it explains
its reasons, it may adopt a rule that all commentators think is stupid or unnecessary.
Thus, if the harmless error rule were to look solely to result, an agency could always
claim that it would have adopted the same rule even if it had complied with the APA
procedures. To avoid gutting the APA’s procedural requirements, harmless error
analysis in administrative rulemaking must therefore focus on the process as well as
the result. We have held that the failure to provide notice and comment is harmless
only where the agency’s mistake “clearly had no bearing on the procedure used or the
substance of decision reached.”
958 F.2d at 1487, quoting Sagebrush Rebellion, Inc. v. Hodel, 790 F.2d 760, 764-65 (9th Cir.1986)
(quoting Braniff, supra, 379 F.2d at 461) (further citations omitted). See also, e.g., Natural
Resources Defense Council v. Abraham, 355 F.3d 179 (2d Cir. 2004) (suspension or delayed
implementation of a rule normally constitutes substantive rulemaking requiring notice and
opportunity for comment; DOE’s withdrawal of published final rules and replacement with less
stringent standards without notice and comment held not to be a valid exercise of agency authority);
Natural Resources Defense Council, Inc. v. EPA, 683 F.2d 752 (3d Cir. 1982).
As discussed in Gold East I, Commerce’s Withdrawal of Regulatory Provisions
Governing Targeted Dumping in Antidumping Duty Investigations, 73 Fed. Reg. 74930 (Dec. 10,
2008) (“Withdrawal Notice”) plainly resulted in a substantive rule change24 and a new position
24
Parkdale provides an excellent summation of the distinction between legislative
(substantive) and interpretive rules. See 31 CIT at 1246, 508 F. Supp. 2d at 1356 (‘“[A]n interpretive
statement simply indicates an agency’s reading of a statute or a rule. It does not intend to create new
rights or duties, but only reminds affected parties of existing duties’”), quoting Paralyzed Veterans
(continued...)
Consol. Court No. 10-00371 Page 21
inconsistent with existing regulation or effected a substantive change in the regulation. 37 CIT at
___, 918 F. Supp. 2d at 1325. Cf. Parkdale, 31 CIT at 1246, 508 F. Supp. 2d at 1356. As further
implied in Gold East I, because the Withdrawal Notice was found not to meet the APA’s good cause
exception, 5 U.S.C. §553(b)(3)(B), and because of the uncertainty surrounding the two requests for
comments on targeted dumping methodology generally, it could not (and cannot) be concluded that
the Withdrawal Notice’s noncompliance with APA notice and comment had been without “bearing
on the procedure used” nor can the procedure Commerce did pursue be assumed non-prejudicial to
APP-China. See, e.g., U.S. Steel, 595 F.2d at 215. Cf. EGFA Trustees, 377 U.S. at 248; Braniff, 379
F.2d at 412. At the time Gold East I was issued, it was not incorrect, notwithstanding how
Commerce has developed its targeted dumping methodology in the period since its issuance. For
these reasons, the court perceives no reason to disturb its prior decision.
B. Administrative Finality and Application on Remand
of Law, Policy, Methodology, Et Cetera
1. Background
As mentioned, in remanding this matter, the court requested Commerce to consider
and address in greater detail the petitioners’ points on the issue of targeted dumping as raised in their
confidential brief. In commenting on the draft of the second remand results, the petitioners argued
that their points with respect to applying the exception to the Limiting Rule had not been properly
addressed in the draft in accordance with Gold East II. In particular, they contended that their
24
(...continued)
of Am. v. West, 138 F.3d 1434, 1436 (Fed. Cir. 1998) (quoting Orengo Caraballo v. Reich, 11 F.3d
186, 195 (D.C. Cir. 1993)).
Consol. Court No. 10-00371 Page 22
allegation that APP-China’s targeted dumping was not “normal” but was so pervasive that it is
appropriate to apply the A-T methodology to all of APP-China’s sales was not properly analyzed.
In the second remand results, Commerce responded that it is incumbent on a party
before it to make specific arguments in each particular administrative proceeding including during
remand in order for the agency to be able to consider them, that the petitioners’ targeted dumping
points had been addressed in the First Remand Redetermination as well as the United States’
response brief before the court, and that the court had not ruled in favor of them. Commerce
continued to disagree that the targeted dumping among APP-China’s sales is abnormal, and it
repeated the First Remand Redetermination’s articulation that the only circumstances that may
support applying the A-T methodology to all sales
include when “targeted dumping by a firm is so pervasive that the A-T methodology
becomes the best benchmark for gauging the fairness of that firm’s pricing
practices,”[ ] or alternatively, when “targeted dumping practice is so widespread it
may be administratively impractical to segregate targeted dumping pricing from the
normal pricing behavior of a company.”[ ] We find neither of these circumstances
is present here. . . . Moreover, we discern no other distinguishing facts or features
of the U.S. sales (targeted or otherwise), and Petitioners did not articulate[ ]any
either, that would justify the conclusion that the “normal” targeted dumping analysis
is inappropriate. Accordingly, consistent with our past practice, which was
previously affirmed by this Court, we declined to find that the specific circumstances
of this case are abnormal.
RR2 at 24-25, quoting RR1 at 18 (footnotes omitted).
Commerce thus maintains that APP-China’s U.S. sales did not present an abnormal
situation that warranted the application of the A-T methodology to all sales because neither of the
listed circumstances occurred here.25 Commerce interpreted the petitioners to argue that the current
25
In passing, Commerce also calls attention to the fact that the level of targeted dumping
(continued...)
Consol. Court No. 10-00371 Page 23
administrative differential pricing analysis based on Cohen’s d should be applied “with respect to
APP-China” and Commerce declined to do so because the differential pricing methodology was not
in effect at the time of the Final Determination. RR2 at 25. To analyze the extent of the alleged
targeted dumping, Commerce therefore applied the targeted dumping test that was in effect at the
time of the Final Determination based on the Steel Nails test.26 From the result thereof, Commerce
determined it was appropriate to continue to apply the A-A methodology to all of APP-China’s sales
to calculate its dumping margin because even after accepting APP-China’s purchase prices from
Thailand, the dumping margin continues to be de minimis under either A-A methodology applied
to all sales or A-T methodology applied only to targeted sales in accordance with the Limiting Rule.
The petitioners argue Commerce’s reasoning is flawed. They contend that on second
remand they highlighted to Commerce the extent to which APP-China engaged in targeted dumping
25
(...continued)
remained the same from that of the first remand results because the change in the margin calculation
affected only normal values and not U.S. prices, which is the case “regardless of whether the
Department accepted any of the MEP input prices”. RR2 at 25 (italics added). The court remains
unclear as to what this implies, for Commerce does not here state “all”, cf. RR1 at 5, , and the issue
of MEP inputs from Thailand is being remanded, supra.
26
See Certain Steel Nails from the People's Republic of China: Final Determination of Sales
at Less Than Fair Value and Partial Affirmative Determination of Critical Circumstances, 73 Fed.
Reg. 33977 (June 16, 2008) and accompanying issues and decision memorandum at comments 1
through 8; Certain Steel Nails from the United Arab Emirates: Notice of Final Determination of
Sales at Not Less than Fair Value, 73 Fed. Reg. 33985 (June 16, 2008) and accompanying issues and
decision memorandum at comments 1 through 8. “Under the Department’s Steel Nails test, the
extent of an alleged targeted dumping is measured by dividing the total quantity of the targeted sales
which passed the gap test by the total quantity of a respondent’s U.S. sales. In this case, record
evidence shows that the percentage of alleged targeted sales with respect to APP-China’s total U.S.
sales when the Department accepted the MEP prices from both . . . Korea and Thailand in the First
Remand Redetermination does not change when the Department accepted the MEP prices only from
Thailand in this instant remand.” RR2 at 25 n.116 (italics added). Cf. supra, section II.B.3.b.
Consol. Court No. 10-00371 Page 24
and noted Commerce’s statement when it promulgated its targeted dumping regulation that “where
a firm engages extensively in the practice of targeted dumping[ ] the only adequate yardstick
available to measure such pricing behavior may be the average-to-transaction methodology.”
Petitioners’ Comments on Second Remand Redetermination at 3-8, quoting Antidumping Duties;
Countervailing Duties, 62 Fed. Reg. 27296, 27375 (May 19, 1997) (final rule). They contended they
had undertaken the Cohen’s d test as an “additional means” of examining the extent to which
APP-China engaged in targeted dumping, id. at 5-7, and that based on this information they
requested Commerce to consider the data and employ the alternate methodology to determine
dumping for APP-China. Id. at 8. At this stage, they argue that Commerce’s refusal to apply the
Cohen’s d test to measure even the pervasiveness of targeted dumping, on the ground that “the
differential pricing methodology was not in effect at the time of the Final Determination,” RR2 at
25, misses the point, because at the time of the Final Determination there was no test for
determining when the exception to the Limiting Rule applied. They argue here that they did not ask
Commerce to replace the Nails test for targeted dumping used in the investigation with the
alternative “differential pricing” methodology, which came into being shortly before (and
unbeknownst to the court at) issuance of Gold East I in 2013, but rather, because Commerce must
now, for the first time in this case, adopt a test for determining “pervasiveness” under the old
targeted dumping methodology. They contend they explained to Commerce that for that purpose,
it is reasonable to use the standard that is currently in use in differential pricing methodology. Cf.,
note 21, supra. The petitioners here argue that Commerce provided no reasonable explanation for
why it should not utilize the Cohen’s d test for the limited purpose of determining “pervasiveness,”
Consol. Court No. 10-00371 Page 25
nor did Commerce explain why the test it actually used in the first redetermination -- which was
essentially “we know it when we see it” -- is superior to the Cohen’s d test. For these reasons as well
as ignoring the request of Gold East II, 39 CIT at ___, 991 F. Supp. 2d at 1369, they argue the
second remand redetermination is unsupported by substantial evidence and is not in accordance with
law. Remedially, they contend the targeted dumping by APP-China should have been found
“pervasive” and the exception to the Limiting Rule should have applied. Petitioners’ Comments
on Second Remand Redetermination at 25.
2. Analysis
The fact that the court did not rule in Gold East II in favor of the petitioners on their
targeted dumping arguments does not result in construing that they were ruled against. The opinion
simply did not reach their arguments. Here, however, the court disagrees with the petitioners’
premise that “pervasiveness” is a new issue that Steel Nails did not test for, as Commerce explained
that the Steel Nails test addresses that question.27
On the other hand, the agency’s position is that it was necessary to apply the Steel
Nails methodology because that was the test in effect at the time of the original investigation. It is
unclear from the papers whether that was by choice, or because Commerce believed it was
compelled to do so in consequence of Gold East I. Cf., e.g., Def’s Resp. at 9-10. Either way, insofar
27
See id; see also Antidumping Duties; Countervailing Duties, 61 Fed. Reg. 7308, 7350
(Feb. 27, 1996), and Antidumping Duties; Countervailing Duties, 62 Fed. Reg. 27296, 27375 (May
19, 1997) (Preamble) (it is appropriate to depart from the default rule when: (1) “targeted dumping
by a firm is so pervasive that the average-to-transaction method becomes the best benchmark for
gauging the fairness of that firm’s pricing practices,” or (2) “the targeted dumping practice is so
widespread it may be administratively impractical to segregate targeted dumping pricing from the
normal pricing behavior of the company”) (italics added).
Consol. Court No. 10-00371 Page 26
as APP-China is concerned, Gold East I only decided that the Limiting Rule was still effective for
purposes of the investigation. Whether the record compels that the Limiting Rule be excepted is a
different matter, as the defendant also seems to recognize. Cf., e.g., id. As the matter stands,
Commerce’s indication of the “proper” methodology to apply in order to answer that question
reveals a concept of administrative finality that is at odds with this court’s general understanding of
that concept, pursuant to which the application of changes or developments in methodology with
respect to matters outstanding before the agency have generally been held appropriate -- indeed,
encouraged -- on the assumption that current methodology is the result of refinement, and interest
in the application of particular methodology generally does not “vest” without demonstrative reliance
upon it. See, e.g., Ugine and Alz Belgium, N.V. v. United States, 31 CIT 1536, 1553, 517 F. Supp.
2d 1333, 1347 (2007) (“[i]n the trade context, administrative finality attaches when entries are
liquidated, not when the administrative review closes”); Brother Industries, Ltd. v. United States,
15 CIT 332, 771 F. Supp. 374 (1991) (reliance must be evident from the record). Compare Final
Affirmative Countervailing Duty Determinations: Certain Steel Products From Mexico, 58 Fed. Reg.
37352, 37355 (July 9, 1993) (explaining immediate application of change in how hyperinflation is
analyzed) with British Steel PLC v. United States, 127 F.3d 1471 (Fed. Cir. 1997) (upholding the
immediate application of that change as reasonably explained). Cf. also, e.g., Tung Mung Dev. Co.
v. United States, 354 F.3d 1371, 1378-79 (Fed. Cir. 2004) (any errors in remand orders do not
survive ITA decisions to adopt a new policy; the Supreme Court “has repeatedly emphasized[ ] the
Chevron doctrine contemplates that agencies can and will abandon existing policies and substitute
new approaches” as necessary, including on remand); SKF USA Inc. v. United States, 254 F.3d 1022,
Consol. Court No. 10-00371 Page 27
1030 (Fed. Cir. 2001) (“an agency must be allowed to assess ‘the wisdom of its policy on a
continuing basis’”, quoting Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467
U.S. 837, 864 (1984)); Allegheny Ludlum Corp. v. United States, 367 F.3d 1339 (Fed. Cir. 2004)
(discussing new methodologies applied on remand to Commerce); Union Steel Manufacturing Co.,
Ltd. v. United States, 36 CIT ___, ___, 837 F. Supp. 2d 1307, 1323-24 (2012) (granting voluntary
remand to reconsider cost-recovery methodology in light of intervening case law); United States
Steel Corp. v. United States, 36 CIT ___, Slip Op. 12-48 (Apr. 11, 2012) at 8 (“[t]o the extent [the
defendant] is arguing ITA’s hands were tied by a ‘record rule’ vis-à-vis application of its new policy
to a matter remanded for reconsideration, the argument misstates the law”) (citations omitted), aff’d,
500 Fed. Appx. 948 (Fed. Cir. 2013); AG der Dillinger Huttenwerke v. United States, 26 CIT 298,
319, 193 F. Supp. 2d 1339, 1361 (2002) (“under its own practices, Commerce may choose or not
choose to apply current law in a review as circumstances warrant” and remanding for findings to
support refusal to apply then-current methodologies ) (italics added); id., 26 CIT at 320, 193 F. Supp.
2d at 1362 (further remanding refusal to consider altering change-of-ownership methodology on
grounds articulated).28 It may be the case that Cohen’s d is not better suited to answering the
28
It is also noted that Commerce also had the authority on remand to depart from
“established” methodology so long as it reasonably explains the circumstances that compel that
departure, as the petitioners imply -- e.g., NMB Singapore Ltd. v. United States, 557 F.3d 1316, 1328
(Fed. Cir. 2009) (“[o]nce Commerce establishes a course of action . . . Commerce is obliged to
follow it until Commerce provides a sufficient, reasoned analysis explaining why a change is
necessary”) -- and Commerce implicitly argued that its then-existing targeted-dumping methodology
should not even be considered “established” despite its public announcement in 1997. Cf.
Withdrawal of the Regulatory Provisions Governing Targeted Dumping in Antidumping Duty
Investigations, 73 Fed. Reg. 74930, 74930-31 (Dec. 10, 2008) (“Until recently, there have been very
few allegations or findings of targeted dumping. This situation has caused the Department to
question whether, in the absence of any practical experience, it established an appropriate balance
(continued...)
Consol. Court No. 10-00371 Page 28
“pervasiveness” question in accordance with Commerce’s prior regulation than its Steel Nails test,
but analysis of pervasiveness appears distinct from the “normal” targeted dumping “remedy”
articulated in the Limiting Rule. Further clarification from Commerce is therefore requested.
Conclusion
In view of the foregoing, the case needs to be remanded a third time. Results shall
be due July 10, 2015. As soon as practicable after such results are docketed, the parties shall confer
on filing a joint status report or proposed scheduling order for comments, if any, on the results of
remand, and the plaintiffs shall apprise the Clerk of the Court of such efforts in writing by close of
the fifth business day thereafter.
So ordered.
/s/ R. Kenton Musgrave
R. Kenton Musgrave, Senior Judge
Dated: April 22, 2015
New York, New York
28
(...continued)
of interests in the provisions. The Department believes that withdrawal of the provisions will
provide the agency with an opportunity to analyze extensively the concept of targeted dumping and
develop a meaningful practice in this area as it gains experience in evaluating such allegations.” 73
Fed. Reg. at 74930-31. But to the extent that implies Commerce has had the ability to “moot” the
application of the Limiting Rule during this proceeding all along, that still does not translate to
procedural “harmless error” in that rule’s withdrawal without proper notice and comment. Cf., e.g.,
Consumer Energy Council of America v. FERC, 673 F.2d 425, 445-48 (D.C. Cir. 1982) (litigation
not mooted by revocation not in compliance with APA notice and comment). Cf. Gold East I.