Pro-Team Coil Nail Enter., Inc. v. United States , 2020 CIT 163 ( 2020 )

Slip Op. 20-
UNITED STATES COURT OF INTERNATIONAL TRADE
PRO-TEAM COIL NAIL ENTERPRISE,
INC. AND PT ENTERPRISE INC.,
Plaintiffs,
UNICATCH INDUSTRIAL CO., LTD., ET
AL.,
Consolidated Plaintiffs,
and
Before: Mark A. Barnett, Judge
S.T.O. INDUSTRIES, INC.,
Consol. Court No. 18-00027
Plaintiff-Intervenor,
v.
UNITED STATES,
Defendant,
and
MID CONTINENT STEEL & WIRE, INC.,
Defendant-Intervenor.
OPINION AND ORDER
[Remanding the U.S. Department of Commerce’s remand results issued in connection
with the first administrative review of the antidumping duty order on certain steel nails
from Taiwan.]
Dated: November 16, 2020
Ned H. Marshak, Max F. Shutzman, Andrew T. Schutz, Dharmendra Choudhary, and
Eve Q. Wang, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of New York,
NY, for Plaintiffs Pro-Team Coil Enterprise, Inc. and PT Enterprise Inc.; Consolidated
Consol. Court No. 18-00027 Page 2
Plaintiffs Unicatch Industrial Co., Ltd. and TC International, Inc.; and Consolidated
Plaintiffs Hor Liang Industrial Corp. and Romp Coil Nails Industries Inc.
Ronald M. Wisla, Fox Rothschild LLP, of Washington, DC, for Plaintiff-Intervenor S.T.O.
Industries, Inc.
Sosun Bae, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, DC, for Defendant United States. With her on
the brief were Ethan P. Davis, Acting Assistant Attorney General, Jeanne E. Davidson,
Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was
Vania Wang, Attorney, Office of the Chief Counsel for Trade Enforcement &
Compliance, U.S. Department of Commerce, of Washington, DC.
Adam H. Gordon and Ping Gong, The Bristol Group LLC, of Washington, DC, for
Defendant-Intervenor Mid Continent Steel & Wire, Inc.
Barnett, Judge: In this consolidated action, five sets of plaintiffs 1 each
challenged aspects of the final results of the U.S. Department of Commerce’s
(“Commerce” or “the agency”) first administrative review of the antidumping duty order
on certain steel nails from Taiwan. See Certain Steel Nails From Taiwan, 83 Fed. Reg.
6,163 (Dep’t Commerce Feb. 13, 2018) (final results of antidumping duty admin. review
and partial rescission of admin. review; 2015–2016) (“Final Results”), ECF No. 20-2,
and accompanying Issues and Decision Mem, A-583-854 (Feb. 6, 2018) (“I&D Mem.”),
ECF No. 20-3. The matter is before the court following Commerce’s first
redetermination upon remand, see Final Results of Redetermination Pursuant to Court
1 The five sets of plaintiffs consist of lead Plaintiffs Pro-Team Coil Nail Enterprise, Inc.
and PT Enterprise Inc. (together, “Pro-Team”); Consolidated Plaintiffs Unicatch
Industrial Co., Ltd. and TC International, Inc. (together, “Unicatch”); Consolidated
Plaintiff PrimeSource Building Products, Inc. (“PrimeSource”); Consolidated Plaintiffs
Hor Liang Industrial Corp. and Romp Coil Nails Industries (together, “Hor Liang”); and
Plaintiff-Intervenor S.T.O. Industries, Inc. (“S.T.O. Industries”).
Consol. Court No. 18-00027 Page 3
Remand (“Remand Results”), ECF No. 71-1,2 issued in response to the court’s
resolution of five motions for judgment on the agency record pursuant to U.S. Court of
International Trade (“CIT”) Rule 56.2, see Pro-Team Coil Nail Enter. v. United States,
43 CIT ___, 419 F. Supp. 3d 1319 (2019). The court remanded Commerce’s use of
total facts otherwise available with respect to Pro-Team, id. at 1330–34; sustained
Commerce’s use of total neutral facts otherwise available with respect to Unicatch but
remanded Commerce’s use of an adverse inference when selecting from among the
facts otherwise available (referred to as “adverse facts available” or “AFA”), id. at 1336–
40; declined to reach Hor Liang’s first claim seeking a recalculation of the rate assigned
to non-examined respondents on remand given the absence of a live dispute, id. at
1340; and declined to resolve Hor Liang’s second claim regarding Commerce’s
summary denial of their ministerial error allegation on mootness grounds, id.On remand, Commerce reconsidered its use of total facts otherwise available
with respect to Pro-Team and, instead, used Pro-Team’s reported data and calculated a
company-specific dumping margin of zero percent. Remand Results at 6–8, 32. With
respect to Unicatch, Commerce provided additional explanation supporting its use of
total AFA to determine Unicatch’s dumping margin and continued to select the 78.17
percent dumping margin alleged in the petition as the AFA rate. Id. at 8–15, 20–28, 32.
2 The administrative record associated with the Remand Results is divided into a Public
Remand Record (“PRR”), ECF No. 72-2, and a Confidential Remand Record (“CRR”),
ECF No. 72-3. Parties submitted joint appendices containing record documents cited in
their comments on the Remand Results. See Public Remand J.A., ECF No. 94;
Confidential Remand J.A. (“CRJA”), ECF No. 93. The court references the confidential
version of the relevant record documents, unless otherwise specified.
Consol. Court No. 18-00027 Page 4
For the all-others rate applicable to the non-examined respondents, such as Hor Liang,
Commerce calculated the simple average of Pro-Team’s zero percent margin and
Unicatch’s 78.17 percent margin to assign these respondents a rate of 39.09 percent.
Id. at 15–16, 28–32.
Unicatch submitted comments opposing Commerce’s use of total AFA and its
selection of the petition rate. Confidential Consol. Pls., [Unicatch] Cmts. on
Redetermination (“Unicatch’s Opp’n Cmts”), ECF No. 84. 3 Hor Liang submitted
comments opposing Commerce’s method of calculating the all-others rate. Confidential
Consol. Pls., [Hor Liang] Cmts. on Redetermination (“Hor Liang’s Opp’n Cmts.”), ECF
No. 77.
Pro-Team submitted comments supporting the Remand Results with respect to
its zero percent rate. [Pro-Team’s] Cmts. Sup[p]orting Remand, ECF No. 86.
Defendant United States (“the Government”) and Defendant-Intervenor Mid Continent
Steel & Wire, Inc. (“Mid Continent”) urge the court to sustain the Remand Results in
their entirety. Def.’s Resp. to the Parties’ Cmts. Upon [Commerce’s] Remand
Redetermination (“Gov’t’s Reply Cmts.”), ECF No. 87; Def.-Int. [Mid Continent’s] Cmts.
in Supp. of Final Remand Results, ECF No. 88.
3S.T.O. Industries filed comments agreeing with and incorporating by reference
Unicatch’s comments. Pl.-Int.’s Cmts. in Opp’n to Remand Results, ECF No. 79.
PrimeSource did not file comments on the Remand Results.
Consol. Court No. 18-00027 Page 5
For the following reasons, the court sustains Commerce’s redetermination with
respect to Pro-Team 4 and use of AFA with respect to Unicatch. However, the court
remands Commerce’s selection of the petition rate as AFA because Commerce did not
adequately corroborate that rate. Accordingly, the court defers resolution of Hor Liang’s
arguments regarding the all-others rate.
JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction pursuant to section 516A(a)(2)(B)(iii) of the Tariff Act of
1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2018), 5 and 28 U.S.C. § 1581(c).
The court will uphold an agency determination that is supported by substantial
evidence and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i). “The
results of a redetermination pursuant to court remand are also reviewed for compliance
with the court’s remand order.” SolarWorld Ams., Inc. v. United States, 41 CIT ___,
___, 273 F. Supp. 3d 1314, 1317 (2017) (quoting Xinjiamei Furniture (Zhangzhou) Co.
v. United States, 38 CIT ___, ___, 968 F. Supp. 2d 1255, 1259 (2014)).
4 In the absence of any challenge to Commerce’s redetermination respecting Pro-Team,
the court will not further discuss that aspect of the Remand Results.
5 All citations to the Tariff Act of 1930, as amended, are to Title 19 of the U.S. Code,
and references to the U.S. Code are to the 2018 edition, unless stated otherwise.
Consol. Court No. 18-00027 Page 6
DISCUSSION
I. Commerce’s Use of Total AFA for Unicatch and Selection of Unicatch’s
AFA Rate
A. Relevant Background
The court presumes familiarity with the facts and procedural history set forth in
Pro-Team and summarizes below the relevant facts.
In the underlying administrative review, Commerce selected Unicatch as a
mandatory respondent. Remand Results at 4. Commerce issued Unicatch a section D
questionnaire that contained detailed instructions for preparing a complete cost
reconciliation. Pro-Team, 419 F. Supp. 3d at 1334; see also Remand Results at 4.
Upon examining Unicatch’s section D cost response, Commerce issued a supplemental
questionnaire instructing Unicatch to “revise its cost reconciliation to reconcile the sales
from Unicatch’s audited financial statements to the extended total cost of manufacturing
in Unicatch’s submitted cost database.” Remand Results at 4. In response, Unicatch
explained “that its initial worksheet reconciled the cost of sales to Unicatch’s cost of
production for both subject and non-subject merchandise.” Id. at 4–5 & n.20 (citation
omitted). Commerce issued a second supplemental questionnaire repeating its request
for a revised cost reconciliation and further requesting explanations and documentary
support for each reconciling item. Id. at 5 & n.21 (citation omitted). Unicatch submitted
a revised cost reconciliation “that ended with the cost of production for subject and non-
subject merchandise.” Id. at 5 & n.22 (citation omitted). In its administrative rebuttal
Consol. Court No. 18-00027 Page 7
brief, Unicatch explained how Commerce could use record information to complete the
reconciliation. Pro-Team, 419 F. Supp. 3d at 1335.
“For the Final Results, Commerce disregarded Unicatch’s submitted data and
determined a dumping margin based on total AFA.” Id. at 1335–36. Pro-Team
remanded that determination. Id. at 1340. The court explained that “Commerce based
its decision to use an adverse inference on Unicatch’s failure to submit a complete cost
reconciliation” but otherwise failed to either address “evidence demonstrating Unicatch’s
attempts to comply with Commerce’s supplemental questionnaire[s] or apprise the court
of its reasons for nevertheless finding less than full cooperation.” Id. at 1339.
In the redetermination, Commerce continued to find that Unicatch failed to
“cooperate to the best of its ability and that it potentially benefitted from its lack of
cooperation.” Remand Results at 8. Commerce stated that the agency issued “multiple
requests” that “contain[ed] clear instructions on what information was necessary.” Id. at
11; see also id. at 24–25. Commerce explained that it reasonably “expect[ed] more
forthcoming responses” from Unicatch, id. at 11, but Unicatch “simply did not put forth
the effort or cooperation to respond fully to Commerce’s requests for a complete cost
reconciliation,” id. at 12. Further supporting its determination, Commerce explained,
was Unicatch’s provision of instructions for completing the reconciliation, which
demonstrated that Unicatch “understood how to provide the requested information” but
“chose not to do so.” Id. Even then, Commerce found, Unicatch’s instructions “failed to
directly link to the antidumping cost database” and Commerce confronted “significant
discrepancies” when it attempted to complete the reconciliation. Id. Commerce further
Consol. Court No. 18-00027 Page 8
found that Unicatch’s failure to provide a cost reconciliation “would benefit Unicatch”
because it precluded Commerce from conducting a below cost sales analysis or asking
follow-up questions, thus inhibiting the agency’s ability to make a proper determination
whether dumping has occurred. Id. at 14. Commerce also found that Unicatch’s failure
to provide the complete reconciliation allowed Unicatch to “control[] the pace and
schedule for Commerce’s work.” Id. at 22.
With respect to the AFA rate assigned to Unicatch, Commerce explained that its
“practice is to select, as an AFA rate, the higher of: (1) the highest dumping margin
alleged in the petition, or (2) the highest calculated rate from any previous segment of a
proceeding under an [antidumping] order.” Id. at 15 & n.60 (citations omitted); see also
id. at 27. Commerce further explained that it “select[ed] the highest dumping margin
alleged in the petition, 78.17 percent,” in light of “Unicatch’s multiple failures to supply a
complete reconciliation and to ensure that Unicatch does not obtain a more favorable
result by failing to cooperate than if it had fully cooperated.” Id. at 15. Commerce
rejected the highest calculated rate from the investigation as insufficient to induce
cooperation. 6 Id. Commerce referred to its explanation in the Issues and Decision
6 In the investigation, Commerce calculated rates for the two mandatory respondents in
the amount of zero percent and 2.24 percent, respectively. Certain Steel Nails From
Taiwan, 80 Fed. Reg. 28,959, 28,961 (Dep’t Commerce May 20, 2015) (final
determination of sales at less than fair value). Following litigation before the CIT,
Commerce revised the 2.24 percent rate to 2.16 percent. Certain Steel Nails From
Taiwan, 82 Fed. Reg. 55,090, 55,091 (Dep’t Commerce Nov. 20, 2017) (notice of court
decision not in harmony with final determination in less than fair value investigation and
notice of am. final determination); Mid Continent Steel & Wire, Inc. v. United States, 41
CIT ___, 273 F. Supp. 3d 1161 (2017). That rate is nonfinal because the U.S. Court of
Consol. Court No. 18-00027 Page 9
Memorandum regarding the agency’s corroboration of the AFA rate. Id. According to
Commerce, that explanation demonstrated that the AFA rate “(1) was determined to be
reliable in the pre-initiation stage of the investigation; and (2) is relevant based on
information derived from the petition that gave rise to the investigation.” Id. at 15 & n.62
(citing I&D Mem. at Cmt. 2).
B. Commerce’s Use of an Adverse Inference is Supported by
Substantial Evidence and Reasoned Explanation
At issue here is whether Commerce’s use of an adverse inference is supported
by substantial evidence and reasoned explanation. See Unicatch’s Opp’n Cmts. at 4–
13; Gov’t’s Reply Cmts. at 8–11; Pro-Team, 419 F. Supp. 3d at 1336–39 (sustaining
Commerce’s use of total facts otherwise available). Commerce may use an inference
that is adverse to the interests of a respondent when Commerce determines that the
respondent “has failed to cooperate by not acting to the best of its ability to comply with
a request for information.” 19 U.S.C. § 1677e(b). “Compliance with the ‘best of its
ability’ standard is determined by assessing whether a respondent has put forth its
maximum effort to provide Commerce with full and complete answers to all inquiries in
an investigation.” Nippon Steel Corp. v. United States, 337 F.3d 1373, 1382 (Fed. Cir.
2003). As discussed, Commerce determined that Unicatch’s conduct in this case did
not satisfy the “best of its ability” standard because Unicatch failed to submit a complete
Appeals for the Federal Circuit (“Federal Circuit”) concluded that Commerce must
reconsider one aspect of its calculation of that rate. See Mid Continent Steel & Wire,
Inc. v. United States, 940 F.3d 662, 673–75 (Fed. Cir. 2019). Commerce’s
redetermination is pending before the CIT. See Mid Continent Steel & Wire, Inc., et al.
v. United States, et al., Court No. 15-cv-00213 (CIT June 16, 2020).
Consol. Court No. 18-00027 Page 10
cost reconciliation despite “multiple requests” that “contain[ed] clear instructions on what
information was necessary.” Remand Results at 11. While Unicatch argues that
Commerce’s use of an adverse inference is unsupported by substantial evidence,
Unicatch’s Opp’n Cmts. at 1–13, those arguments lack merit.
Unicatch argues that it mistakenly believed that its cost reconciliation was
complete and that its mistake does not merit an adverse inference. Id. at 4–13. Here,
however, on three occasions Commerce instructed Unicatch to end its reconciliation
with its total submitted cost of manufacturing, and in each corresponding response
Unicatch failed to do so. Remand Results at 11–15. While the statute “does not require
perfection and recognizes that mistakes sometimes occur, it does not condone
inattentiveness [or] carelessness.” Nippon Steel, 337 F.3d at 1382 (emphasis added).
After three detailed requests for a complete cost reconciliation, Commerce reasonably
expected “more forthcoming responses” from Unicatch. Remand Results at 11. 7
Unicatch further argues that Commerce overreached in using an adverse
inference because Unicatch “sought to correct its deficiencies in responding to a
7 Commerce characterizes Unicatch’s conduct as intentional, stating, for example, that
“Unicatch repeatedly refused to provide Commerce with a complete cost
reconciliation.” Remand Results at 13; see also, e.g., id. at 24. While the record
supports Commerce’s finding that Unicatch failed to cooperate fully with Commerce’s
request for a complete cost reconciliation, Commerce did not identify substantial
evidence demonstrating that Unicatch deliberately withheld information. Cf., e.g., id. at
12 (stating that Unicatch “simply did not put forth the effort or cooperation to respond
fully”). That discrepancy does not change the outcome, however, because it is well-
settled that “[t]he statutory trigger for Commerce’s consideration of an adverse inference
is simply a failure to cooperate to the best of respondent’s ability, regardless of
motivation or intent.” Nippon Steel, 337 F.3d at 1383.
Consol. Court No. 18-00027 Page 11
supplemental questionnaire,” Unicatch’s Opp’n Cmts. at 6 & n.6 (quoting
Mannesmannrohren-Werke AG v. United States, 23 CIT 826, 842, 77 F. Supp. 2d 1302,
1316 (1999)), and any noncompliance was not “willful or deliberate,” id. at 6 & n.7
(quoting Fujian Mach. and Equip. Imp. & Exp. Corp. v. United States, 25 CIT 1150,
1177, 178 F. Supp. 2d 1305, 1334 (2001)); see also id. at 12. Unicatch’s reliance on
Mannesmannrohren-Werke AG and Fujian Machinary is misplaced. In each case, the
court sustained Commerce’s use of adverse facts available in the subsequent
redetermination that further explained why an adverse inference was merited in
connection with conduct not unlike the facts of this case. See Fujian Mach. and Equip.
Imp. & Exp. Corp. v. United States, 27 CIT 1059, 1067–68, 276 F. Supp. 2d 1371,
1378–79 (2003) (sustaining Commerce’s use of AFA based on record evidence of
“multiple failures” to provide requested information the respondent was able to provide);
Mannesmannrohren-Werke AG v. United States, 24 CIT 1082, 1090–91, 120 F. Supp.
2d 1075, 1081–83 (2000) (sustaining Commerce’s use of AFA when the respondent
simply repeated deficient information following Commerce’s requests for clarification in
two supplemental questionnaires).
Unicatch also argues that “Commerce should have clarified . . . the precise
format for the information required” or again requested the complete cost reconciliation
“in its Third Supplemental Questionnaire.” Unicatch’s Opp’n Cmts. at 7 (citing Mukand,
Ltd. v. United States, 767 F.3d 1300, 1306 (Fed. Cir. 2014) (a case in which Commerce
issued four supplemental questionnaires and provided a sample chart for the
respondent to complete before applying AFA)). The Federal Circuit’s decision in
Consol. Court No. 18-00027 Page 12
Mukand to sustain Commerce’s use of AFA did not, however, rest on the number of
questionnaires Commerce issued or Commerce’s provision of a sample chart. Rather,
the appellate court explained that the respondent’s evasiveness and sudden production
of requested information following Commerce’s use of AFA in its preliminary
determination justified Commerce’s use of an adverse inference in the final
determination. Mukand, 767 F.3d at 1307.
While Mukand is factually distinct, the appellate court noted that Commerce
reasonably expected “more accurate and responsive answers to the questionnaire[s]”
that sought information that is “fundamental” to “the dumping analysis.” Id. So too here,
reliable and complete cost information is necessary for Commerce to “calculate
constructed value[,] . . establish a basis for comparison to U.S. price,” and, ultimately,
calculate an accurate dumping margin. Pro-Team, 419 F. Supp. 3d at 1339. Thus,
Commerce was within its discretion to use an adverse inference in order to incentivize
Unicatch to cooperate more fully in providing this information in future reviews. See
Maverick Tube Corp. v. United States, 857 F.3d 1353, 1360 (Fed. Cir. 2017) (explaining
that, in the absence of subpoena power, “the adverse facts statute . . . provide[s]
respondents with an incentive to cooperate with Commerce’s [administrative review]”)
(alteration and citations omitted). Accordingly, Commerce’s use of an adverse
inference is sustained.
Consol. Court No. 18-00027 Page 13
C. Commerce’s Selection of the 78.17 Percent AFA Rate Must Be
Reconsidered
When using an adverse inference to select from among the facts otherwise
available, Commerce may rely “on information derived from--(A) the petition, (B) a final
determination in the investigation . . . , (C) any previous [administrative] review . . . , or
(D) any other information placed on the record.” 19 U.S.C. § 1677e(b)(2). If
Commerce “relies on secondary information”—that is, information that was not
“obtained in the course of an investigation or review”—Commerce must, “to the extent
practicable, corroborate that information from independent sources that are reasonably
at [its] disposal.” Id. § 1677e(c)(1). Corroboration does not require Commerce “to
estimate what the . . . dumping margin would have been if [Unicatch] had cooperated”
or “demonstrate that the . . . dumping margin used by the [agency] reflects an alleged
commercial reality of [Unicatch].” Id. § 1677e(d)(3). Additionally, Commerce “is not
required to determine, or make any adjustments to, a . . . weighted average dumping
margin based on any assumptions about information the interested party would have
provided if [Unicatch] had complied with the request for information.” Id.
§ 1677e(b)(1)(B).
Unicatch argues that the data underlying the petition rate “had no relationship
with actual prices and costs of Taiwan nails sold to the United States” in any segment of
this proceeding and the petition rate is aberrant in light of the rate Commerce calculated
for Pro-Team during the remand proceeding. Unicatch’s Opp’n Cmts. at 15–16. The
court understands Unicatch to argue that the petition rate was insufficiently
Consol. Court No. 18-00027 Page 14
corroborated. The Government argues that Commerce’s selection of the petition rate is
lawful and supported by substantial evidence. Gov’t’s Reply Cmts. at 12–14.
“Corroborat[ion] means that the [agency] will examine whether the secondary
information to be used has probative value.” 19 C.F.R. § 351.308(d). Commerce
evaluates the information’s probative value by “examin[ing] the reliability and relevance
of the information to be used.” I&D Mem. at 21 & n.83 (citation omitted).
Commerce supported its determination that the petition rate “is reliable for
purposes of this review” by way of reference to the agency’s pre-initiation examination
of the information provided in the petition and corresponding discussion in the notice
regarding Commerce’s initiation of the investigation. Id. at 21–22 & nn.86–87 (citing
Certain Steel Nails From India, the Republic of Korea, Malaysia, the Sultanate of Oman,
Taiwan, the Republic of Turkey, and the Socialist Republic of Vietnam, 79 Fed. Reg.
36,019, 36,019–23 (Dep’t Commerce June 25, 2014) (initiation of less-than-fair-value
investigations). Commerce further determined that the petition rate is relevant,
explaining:
The petitioner calculated normal value for the petition based on the
experience of a surrogate producer of nails, adjusted for known
differences between the surrogate producer and the industry of Taiwan,
during the proposed [period of investigation]. The petitioner relied on
financial statements of a producer of comparable merchandise operating
in Taiwan to determine depreciation, [selling, general and administrative
expenses], financial expenses, and profit rates. In calculating export
price, the petitioner based U.S. price on a resale price from a
distributor/trading company to its downstream customer in the U.S. during
the period of investigation . . . . Based on the price quote by an
unaffiliated distributor, the petitioner deducted from these prices
movement expenses consistent with the sales delivery terms and adjusted
for mark-ups from the distributors/trading companies. Based on this
Consol. Court No. 18-00027 Page 15
information, we determine that the dumping margin alleged in the Petition
is relevant.
Id. at 22 (internal footnote citations omitted).
The court cannot conclude that Commerce adequately corroborated the petition
rate. Corroboration requires a petition rate to meet a different standard than is
necessary at the pre-initiation stage of an investigation. Compare 19 U.S.C. § 1677e(c)
and 19 C.F.R. § 351.308(d) (discussed above), with 19 U.S.C. § 1673a(c)(1)(A)(i)
(directing Commerce, upon receipt of a petition and before initiating an investigation, to
use readily available sources to examine “the accuracy and adequacy of the evidence
provided in the petition” and “determine whether the petition alleges the elements
necessary for the imposition of a duty under [19 U.S.C. §] 1673 . . . and contains
information reasonably available to the petitioner supporting the allegations”). 8
Commerce has recognized this different standard in other administrative
determinations. See, e.g., Issues and Decision Mem. for the Final Determination of
Sales at Less Than Fair Value and Affirmative Final Determination of Critical
Circumstances: Certain Lined Paper Prods. from Indonesia, A-560-818 (Aug. 16, 2006),
available at https://enforcement.trade.gov/frn/summary/indonesia/E6-13470-1.pdf (last
visited Nov. 16, 2020) (finding that Commerce’s corroboration of a petition rate in an
investigation met “the higher standard applicable to preliminary and final
8 Commerce’s regulations also direct petitioners in an antidumping proceeding to
include in the petition “factual information” for Commerce to calculate export price,
constructed export price, and normal value. 19 C.F.R. § 351.202(b)(7)(B); see also 19
C.F.R. § 351.203(b)(1) (stating agency requirements for determining sufficiency of the
petition).
Consol. Court No. 18-00027 Page 16
determinations” as compared to pre-initiation). Thus, “Commerce’s determination that
the . . . petition rate[ was] sufficient to warrant initiation of an investigation is not the
same as finding [that rate] reliable for determining a rate after the investigation has been
concluded.” Yantai Xinke Steel Structure Co. v. United States, 36 CIT 1035, 1042
(2012). 9
“[T]he petition constitutes . . . ‘an allegation of dumping, not a determination of
dumping.’” Id. (quoting Zhejiang Native Produce & Animal By-Prods. Imp. & Exp. Corp.
v. United States, 35 CIT 1161, 1173 (2011)). Consistent with that observation, the
statute exempts Commerce from the corroboration requirement when it selects as an
AFA rate “any dumping margin” used “in a separate segment of the same proceeding.”
19 U.S.C. § 1677e(c)(2). Commerce did not, however, use this petition rate in the
original investigation, see supra note 6; thus, the rate remains an “unverified
allegation[]” that is subject to the corroboration requirement before Commerce may
utilize it. Uruguay Round Agreements Act, Statement of Administrative Action (“SAA”),
H.R. Doc. No. 103–316, vol. 1, at 870 (1994), reprinted in 1994 U.S.C.C.A.N. 4040,
9 While Yantai Xinke addressed—and rejected—Commerce’s use of a simple average
of the petition rates to calculate the rate assigned to separate rate respondents
pursuant to 19 U.S.C. § 1673d(c)(5)(B) and, thus, did not address 19 U.S.C.
§ 1677e(c)(1), 36 CIT at 1039–43, the court’s opinion is nevertheless instructive for its
insight into the limitations of Commerce’s pre-initiation evaluation of a petition rate when
the agency seeks to rely on that rate later in the proceeding.
Consol. Court No. 18-00027 Page 17
4199 (“Secondary information may not be entirely reliable because, for example, as in
the case of the petition, it is based on unverified allegation.”). 10
Here, Commerce has overlooked information reasonably at its disposal that
could inform the reliability and relevance of the petition rate—such as data underlying
the rates Commerce calculated for mandatory respondents in the investigation or the
instant review. See 19 U.S.C. § 1677e(c)(1) (instructing Commerce to corroborate
secondary “information from independent sources that are reasonably at [its] disposal”).
Thus, Commerce’s determination that the petition rate is reliable and relevant for
purposes of this administrative review, based on nothing more than its pre-initiation
review of the data, is unsupported by substantial evidence and reasoned explanation.
Accordingly, Commerce must reconsider or further explain its corroboration of the
petition rate.
Unicatch also argues that Commerce failed to conduct the analysis discussed in
BMW of North America LLC v. United States, 926 F.3d 1291 (Fed. Cir. 2019) to ensure
that the AFA rate was not punitive. Unicatch’s Opp’n Cmts. at 13–15. Here, as
previously noted, Commerce followed its practice of selecting the higher of the highest
dumping margin alleged in the petition or the highest rate from any prior segment of the
proceeding, i.e., the investigation. Remand Results at 14. Commerce largely ignored
Unicatch’s arguments that the 78.17 percent rate was punitive, aberrational, and lacking
10The SAA “shall be regarded as an authoritative expression by the United States
concerning the interpretation and application of the Uruguay Round Agreements Act.”
19 U.S.C. §3512(d).
Consol. Court No. 18-00027 Page 18
consideration of the totality of the circumstances or the seriousness of Unicatch’s
conduct. Cmts. in Resp. to Draft Results of Redetermination Pursuant to Court Remand
(Feb. 26, 2020) at 15–21, CRR 5, PRR 10, CRJA Tab 31 (discussing, inter alia, BMW,
926 F.3d at 1301). At most, Commerce pointed to Unicatch’s “multiple failures to supply
a complete reconciliation” to support the selection of the petition rate over the highest
calculated investigation rate, Remand Results at 15, which is the same rationale
Commerce supplied for its use of AFA, see id. at 11.
Because the court is remanding Commerce’s selection of the petition rate as
AFA, the court defers further consideration of Unicatch’s arguments that the selected
petition rate was unduly punitive. On remand, Commerce may only continue to rely on
the petition rate if the agency identifies substantial evidence supporting its corroboration
of the rate and the agency’s use of that rate is otherwise lawful. Alternatively,
Commerce may choose another source of adverse facts available, in which case it must
corroborate that information if so required, see 19 U.S.C. § 1677e(c), and, as
necessary, adhere to the requirements set forth in 19 U.S.C. § 1677e(d)(2). 11
11 Unicatch relies on the court’s discussion of section 1677e(d)(2) in POSCO v. United
States, 42 CIT ___, ___, 296 F. Supp. 3d 1320, 1349 (2018), to support its argument
that Commerce must conduct further analysis of the petition rate. See Unicatch’s Opp’n
Cmts. at 14. In POSCO, the court explained that subsection (d)(2) directs Commerce to
base its selection of the dumping margin, which may include the highest margin
specified under subsection (d)(1), on an “evaluation . . . of the situation that resulted in
[the agency] using an adverse inference.” 296 F. Supp. 3d at 1349 (quoting 19 U.S.C.
§ 1677e(d)(2)) (alterations original). Subsection (d)(2), however, applies when
Commerce is “carrying out paragraph (1),” i.e., subsection (d)(1). 19 U.S.C.
§ 1677e(d)(2). Subsection (d)(1) contemplates Commerce’s use, as AFA, of “any
dumping margin from any segment of the proceeding under the applicable antidumping
Consol. Court No. 18-00027 Page 19
II. Commerce’s Calculation of the Rate Assigned to Non-Examined
Companies
Hor Liang argues, inter alia, that the 39.09 percent all-others rate derived from
the simple average of Pro-Team’s zero percent rate and Unicatch’s 78.17 percent rate
is not reasonably reflective of Hor Liang’s dumping margin and is aberrational and
punitive. Hor Liang’s Opp’n Cmts. at 8–9. Because the court is remanding
Commerce’s selection of the 78.17 percent rate for Unicatch, the court will defer
resolution of Hor Liang’s arguments pending Commerce’s second remand
redetermination.
CONCLUSION
In accordance with the foregoing, it is hereby
ORDERED that Commerce’s Remand Results are sustained with respect to
Commerce’s calculation of a weighted-average dumping margin of zero percent for Pro-
Team; it is further
ORDERED that Commerce’s Remand Results are sustained with respect to
Commerce’s use of an adverse inference with respect to Unicatch; it is further
ORDERED that Commerce’s Remand Results are remanded with respect to
Commerce’s selection of Unicatch’s AFA rate in accordance with this opinion; it is
further
order.” Id. § 1677e(d)(1)(B). Here, Commerce instead relied on the rate alleged in the
petition and section 1677e(d)(2) is inapplicable at this time.
Consol. Court No. 18-00027 Page 20
ORDERED that the court defers resolution of all challenges to the all-others rate
pending Commerce’s second redetermination; it is further
ORDERED that Commerce shall file its remand redetermination on or before
February 1, 2021; it is further
ORDERED that subsequent proceedings shall be governed by USCIT Rule
56.2(h); and it is further
ORDERED that any comments or responsive comments must not exceed 4,000
words.
/s/ Mark A. Barnett
Mark A. Barnett, Judge
Dated: November 16, 2020
New York, New York