Mueller Comercial De Mexico, S. De R.L. De C v. v. United States , 753 F.3d 1227 ( 2014 )

United States Court of Appeals
for the Federal Circuit
______________________
MUELLER COMERCIAL DE MEXICO, S. DE R.L.
DE C.V. AND SOUTHLAND PIPE NIPPLES CO.,
INC.,
Plaintiffs-Appellants,
v.
UNITED STATES,
Defendant-Appellee,
AND
TMK IPSCO TUBULARS AND
ALLIED TUBE AND CONDUIT,
Defendants-Appellees,
AND
UNITED STATES STEEL CORPORATION,
Defendant-Appellee.
______________________
2013-1391
______________________
Appeal from the United States Court of International
Trade in No. 11-CV-0319, Judge Leo M. Gordon.
______________________
Decided: May 29, 2014
______________________
2 MUELLER COMERCIAL DE MEXICO v. US
YOHAI BAISBURD, White & Case LLP, of Washington,
DC, argued for plaintiffs-appellants. With him on the
brief were DAVID E. BOND, JAY C. CAMPBELL and TING-
TING KAO.
DOUGLAS G. EDELSCHICK, Trial Attorney, Commercial
Litigation Branch, Civil Division, United States Depart-
ment of Justice, of Washington, DC, argued for defendant-
appellee United States. With him on the brief were
STUART F. DELERY, Assistant Attorney General, JEANNE
E. DAVIDSON, Director, and FRANKLIN E. WHITE, JR.,
Assistant Director. Of counsel was NATHANIEL J.
HALVORSON, Attorney, Office of the Chief Counsel for
Import Administration, United States Department of
Commerce, of Washington, DC.
ROGER B. SCHAGRIN, Schagrin Associates, of Washing-
ton, DC, argued for defendants-appellees TMK IPSCO
Tubulars, et al. With him on the brief was JOHN W.
BOHN.
ELLEN J. SCHNEIDER, Skadden Arps, Slate, Meagher
& Flom LLP, of Washington, DC, argued for defendant-
appellee United States Steel Corporation. With her on
the brief were ROBERT LIGHTHIZER and JEFFREY D.
GERRISH. Of counsel were JAMES C. HECHT and LUKE A.
MEISNER.
______________________
Before NEWMAN, DYK, and TARANTO, Circuit Judges.
MUELLER COMERCIAL DE MEXICO v. US 3
DYK, Circuit Judge.
Plaintiffs Mueller Comercial de Mexico, S. de R.L. de
C.V., and Southland Pipe Nipples Company, Inc. 1 (collec-
tively, “Mueller”) appeal from a decision of the Court of
International Trade sustaining the United States De-
partment of Commerce’s (“Commerce”) antidumping
determination. We vacate and remand.
BACKGROUND
The Tariff Act of 1930 (the “Act”), as amended, per-
mits Commerce to levy antidumping duties on goods “sold
in the United States at less than . . . fair value.” 19
U.S.C. § 1673. Antidumping duty orders are issued for
imported merchandise that is sold in the United States
below its fair value and materially injures or threatens to
injure a domestic industry. Id. An antidumping duty
reflects the amount by which the “normal value” of a
product (typically, the home market price—the price of
the merchandise when sold for consumption in the export-
ing country), 19 U.S.C. § 1677b(1), exceeds the “export
price” of the merchandise. 19 U.S.C. §§ 1673, 1677(35)(A).
This difference is called the dumping margin. The impo-
sition of the antidumping duty, equal to the dumping
margin, is intended to ensure that merchandise is not sold
in the United States below its fair value.
Commerce periodically reviews and reassesses anti-
dumping duties imposed in earlier proceedings. 19 U.S.C.
§ 1675(a). On November 2, 1992, Commerce published an
antidumping duty order on certain circular welded non-
1 Southland Pipe Nipples Company, Inc. is
Mueller’s importer-of-record for direct sales in the United
States and is a wholly-owned subsidiary of Mueller Indus-
tries, Inc.
4 MUELLER COMERCIAL DE MEXICO v. US
alloy steel pipe from Mexico. On November 2, 2009,
Commerce published a notice of opportunity to request an
administrative review of the antidumping duty order.
Commerce received requests for administrative review
from appellant Mueller; Tuberia Nacional, S.A. de C.V.
(“TUNA”); and Ternium Mexico, S.A. de C.V. (“Ternium”),
and from defendant-appellees Allied Tube and Conduit
Corporation and TMK IPSCO Tubulars.
On December 23, 2009, Commerce initiated an anti-
dumping administrative review concerning the period
spanning from November 1, 2008, to October 31, 2009,
issuing questionnaires to three mandatory respondents:
(1) Mueller, an exporter, which purchased the majority of
its subject merchandise from TUNA and Ternium, (2)
TUNA and (3) Ternium, both producers of subject mer-
chandise. TUNA’s review was rescinded (because there
were no direct shipments), and Ternium opted not to
participate in its own margin calculation. As a result,
Commerce drew an adverse inference against Ternium
pursuant to 19 U.S.C. § 1677e(b), assigning an adverse
facts available (“AFA”) dumping margin of 48.33 percent,
“which is the highest calculated transaction-specific
margin from the most recently-completed administrative
review of this antidumping duty order in which a rate was
calculated.” J.A. 63 (Preliminary Results). Ternium’s
dumping margin is not at issue in this appeal.
For Commerce to calculate Mueller’s antidumping
rate, it was required to determine the difference between
the “normal value” of Mueller’s goods (typically “home
market” price) and the “export price” at which Mueller’s
goods were sold in the United States. 19 U.S.C.
§§ 1677(35)(A), 1677b(a). The “normal value” is ordinarily
the price at which the goods were first sold for consump-
tion in the exporting country—in this case, in Mexico. Id.
§ 1677b(a)(1)(B)(i). Here, Mueller had sufficient volume
of home market sales such that they could be used to
MUELLER COMERCIAL DE MEXICO v. US 5
calculate “normal value.” See id. § 1677b(a)(1)(B)(ii)(II).
However, where an exporter’s home market price is less
than the cost of production for the goods it sells, Com-
merce “may” disregard the below cost sales to calculate
“normal value.” Id. § 1677b(b)(1). Therefore, Commerce
must determine the cost of production of the subject
merchandise. Id. § 1677b(b)(3). Such production costs are
normally “calculated based on the records of the exporter
or producer of the merchandise, if such records are kept in
accordance with the generally accepted accounting princi-
ples of the exporting country . . . and reasonably reflect
the costs associated with the production and sale of the
merchandise.” Id. § 1677b(f)(1)(A). If the cost of produc-
tion is greater than the home market price, home market
sales below production cost may be disregarded in calcu-
lating the normal value. 2 Id. §§ 1677b(b)(1)(A);
1677b(b)(2)(C).
Although Mueller fully cooperated with Commerce’s
review, Mueller did not possess all of the production cost
information necessary to calculate its antidumping mar-
gin. See 19 U.S.C. § 1677b(b)(3). To calculate cost of
production, Commerce requested data directly from
Mueller’s two principal suppliers, TUNA and Ternium.
TUNA fully cooperated with the data requests, report-
ing cost of production on a product-specific basis. Howev-
er, Ternium did not “provide detailed product-specific
calculations that allocate[d] costs based on product di-
mensions.” J.A. 47 (Memorandum from Mark Flessner,
Case Analyst, Dep’t of Commerce, to Richard Weible,
Office Director, Dep’t of Commerce, Certain Circular
2 Production cost data is also used to calculate “con-
structed value” in lieu of home market sales. 19 U.S.C.
§ 1677b(e).
6 MUELLER COMERCIAL DE MEXICO v. US
Welded Non-Alloy Steel Pipe from Mexico: Use of [AFA]
for Final Results 2 (June 13, 2011)) (“AFA Mem.”) (inter-
nal quotation marks omitted). Ternium stated that it did
not provide the data because it was not “readily availa-
ble.” As a result, Commerce did not have the data neces-
sary to calculate margins that took into account cost
differences associated with the different physical charac-
teristics of the goods.
For its preliminary analysis, Commerce simply relied
on the submitted data and calculated a weighted-average
dumping margin of 4.81 percent for Mueller. But because
Ternium did not submit necessary cost data before the
time for a final determination, in making the final calcu-
lations, Commerce used “facts otherwise available” to
calculate Mueller’s margin under 19 U.S.C. § 1677e(a) of
the statute. Specifically, Commerce concluded that the
production costs of the goods Mueller acquired from
Ternium (data that was unavailable) were related to
acquisition costs (data that was available). Commerce
identified the three sales transactions between TUNA and
Mueller made at the greatest discount to Mueller—where
Mueller’s acquisition cost was the furthest below TUNA’s
production cost. Commerce then inferred that all of
Ternium’s pipe that was sold to Mueller involved this
discount for acquisition cost. This enabled Commerce to
calculate Ternium’s cost of production from Mueller’s cost
of acquisition from Ternium. Although there were other
sales transactions between TUNA and Mueller that were
not discounted as significantly, Commerce chose not to
use that data. In its Final Results, Commerce used data
from the three transactions to calculate a new weighted-
average dumping rate for Mueller of 19.81 percent.
On August 22, 2011, Mueller filed suit in the Court of
International Trade (“Trade Court”) seeking to overturn
Commerce’s Final Results, noting that Mueller had fully
cooperated and alleging that Commerce’s application of
MUELLER COMERCIAL DE MEXICO v. US 7
“Ternium’s AFA to its calculation of the margin for
Mueller,” despite Mueller’s full cooperation with Com-
merce’s requests, was improper. J.A. 197. Mueller ar-
gued that, instead, Commerce should have calculated
production costs using the entire TUNA data set. 3 The
Trade Court found that Commerce’s application of facts
available was reasonable, and sustained the Final Re-
sults. Mueller appealed. We have jurisdiction pursuant
to 28 U.S.C. § 1295(a)(5).
DISCUSSION
I
As discussed, Mueller’s antidumping rate was based
on the difference between the “normal value” of the sub-
ject merchandise (typically, the “home market” price) and
the “export price” of the goods sold in the United States.
See 19 U.S.C. § 1677(35)(A). But Mueller’s data alone
could not be used to determine whether its home market
sales were below the cost of production for the goods.
Commerce requested data from Mueller’s two primary
suppliers, TUNA and Ternium, to calculate the cost of
production for the subject merchandise. See 19 U.S.C.
§ 1677b(b)(3). Ternium did not provide product-specific
cost data that would enable Commerce to calculate Terni-
um’s cost of production for each product, failing to account
for different costs based on nominal pipe size and pipe
wall thickness. Therefore, Commerce did not have suffi-
cient information to calculate Mueller’s antidumping rate.
When Commerce is missing necessary data, the stat-
ute provides two options to secure data that can be used
3 Mueller argued alternatively that Commerce
should have used Mueller’s acquisition costs from Terni-
um or extrapolated from Ternium’s limited cost data.
8 MUELLER COMERCIAL DE MEXICO v. US
as a substitute for the missing information. See 19 U.S.C.
§ 1677e. The first is “facts otherwise available.” The
statute provides:
(a) In general
If—
(1) necessary information is not available
on the record, or
(2) an interested party or any other per-
son—
(A) withholds information that has
been requested by [Commerce]
under this subtitle,
(B) fails to provide such infor-
mation by the deadlines for sub-
mission of the information or in
the form and manner requested . . .
[Commerce] shall . . . use the facts otherwise
available in reaching the applicable determination
under this subtitle.
19 U.S.C. § 1677e(a) (emphases added). The second is the
“adverse facts available” approach. In this respect, the
statute provides:
(b) Adverse Inferences
If [Commerce] finds that an interested party has
failed to cooperate by not acting to the best of its
ability to comply with a request for information
from [Commerce], [Commerce], in reaching the
applicable determination under this subtitle, may
use an inference that is adverse to the interests of
that party in selecting from the facts otherwise
available. Such adverse inference may include re-
liance on information derived from—
MUELLER COMERCIAL DE MEXICO v. US 9
(1) the petition,
(2) a final determination in the investiga-
tion under this subtitle,
(3) any previous review under section 1675
of this title or determination under section
1675b of this title, or
(4) any other information placed on the
record.
19 U.S.C. § 1677e(b) (emphasis added).
These two subsections have different purposes. Sub-
section 1677e(a) (“subsection (a)”) may be used whether or
not any party has failed to cooperate fully with the agency
in its inquiry. See Zhejiang DunAn Hetian Metal Co. v.
United States, 652 F.3d 1333, 1346 (Fed. Cir. 2011)
(“‘[T]he mere failure of a respondent to furnish requested
information—for any reason—requires Commerce to
resort to other sources of information to complete the
factual record . . . .’” (emphasis added) (quoting Nippon
Steel v. United States, 337 F.3d 1373, 1381 (Fed. Cir.
2003))). In contrast, subsection 1677e(b) (“subsection (b)”)
authorizes an inference adverse to an interested party
when “Commerce makes the separate determination that
[the party] has failed to cooperate by not acting to the best
of its ability.” Id. (quoting Nippon Steel, 337 F.3d at
1381) (internal quotation marks omitted). In this case,
Mueller is a cooperating party, while Ternium is not.
II
Initially we note that there is no contention here that
Commerce, acting primarily under subsection (a) in
setting a margin for Mueller, erred in using TUNA’s data
as a surrogate for Ternium’s missing data. Mueller’s
primary complaint is that Commerce limited its analysis
to a small and unfavorable subset of the TUNA data. As
stated above, Commerce used the three highest-margin
10 MUELLER COMERCIAL DE MEXICO v. US
transactions instead of taking the total number of trans-
actions from the TUNA cost of production data, which
resulted in a higher normal value, and therefore, a higher
dumping margin. Mueller argues Commerce arbitrarily
cherry-picked the data to achieve this higher dumping
margin.
We separately address the two rationales that Com-
merce used to justify its approach. Commerce relied on
the two rationales in combination, not on either one as an
independent ground. If one fails, as we conclude it does,
Commerce’s ruling cannot stand. SEC v. Chenery Corp.,
332 U.S. 194, 196–97 (1947).
First, Commerce concluded that the use of the adverse
inference to calculate Ternium’s surrogate production cost
actually yielded the most accurate calculation of Mueller’s
antidumping rate. 4
4 See J.A. 40 (Memorandum from Christian Marsh,
Deputy Assistant Sec’y, Dep’t of Commerce, to Ronald K.
Lorentzen, Deputy Assistant Sec’y, Dep’t of Commerce,
Issues and Decision Memorandum for Final Results of
Antidumping Duty Administrative Review: Certain
Circular Welded Non-Alloy Steel Pipe from Mexico 16
(June 13, 2011)) (“Decision Memorandum”) (“[Commerce]
has selected from the facts otherwise available, the best
information to use in place of Ternium’s withheld data.”
(emphasis added)); J.A. 44 (Decision Mem. 20) (“The
Department considers that if it ignores the fact that
Ternium chose to withhold necessary information and
fails to apply an adverse inference in the selection of the
facts available, the resulting dumping margin would not
reflect accurately the rate at which Muel[l]er’s sales of
merchandise produced by Ternium was sold at less than
normal value.” (emphasis added)).
MUELLER COMERCIAL DE MEXICO v. US 11
Mueller argues that this rationale is arbitrary and
capricious or not supported by substantial evidence. We
agree.
There is no support for Commerce’s claim that using
the three least-favorable TUNA transactions would
produce the most accurate dumping margin for Mueller.
Even calculating Mueller’s dumping margin based on the
TUNA transactions where Mueller purchased the subject
merchandise at below cost prices showed that Mueller
received an average discount that was approximately half
of the Commerce rate. An analysis based on all of the
TUNA data showed that Mueller received, as a weighted
average, less than a ten percent discount on the subject
merchandise. Finally, an unweighted average of all the
TUNA data showed that overall, Mueller’s acquisition
costs were higher than TUNA’s production costs. Com-
merce has not explained why using a larger data set
would produce a less accurate dumping margin. Com-
merce’s rationale that Ternium would have cooperated if
disclosing its actual costs to Commerce had been favora-
ble to its interests does not support a conclusion that the
particular TUNA data Commerce ultimately chose to rely
on accurately estimated those costs. There is no showing
that Ternium, in the hypothesized benefit calculus, could
have anticipated that, if it chose non-disclosure of its
actual costs, Commerce would rely on TUNA’s three least
favorable transactions to calculate Mueller’s rate; indeed,
there is no showing that Ternium would even have known
what TUNA’s data contained, given Commerce’s obliga-
tion to keep TUNA’s data confidential. 19 C.F.R.
§§ 351.105, 351.303–06. Therefore, we find that Com-
merce’s accuracy rationale for its calculation of Mueller’s
antidumping rate was unsupported by substantial evi-
dence.
Because Commerce’s calculation of Mueller’s rate re-
lied in part on this accuracy rationale, this decision must
12 MUELLER COMERCIAL DE MEXICO v. US
be set aside. There is no contention that the use of the
particular TUNA data relied on by Commerce was some-
how required by the antidumping statute. See, e.g., ICC
v. Bhd of Locomotive Eng’rs, 482 U.S. 270, 283 (1987);
Koyo Seiko Co. v. United States, 95 F.3d 1094, 1101 (Fed.
Cir. 1996). However, a reversal is also not appropriate
because, as we conclude below, Commerce’s second ra-
tionale provides a possible factor supporting the rate that
Commerce adopted.
Commerce’s second rationale rested on policy consid-
erations unrelated to accuracy of the determination to be
made on the already-developed record. Commerce found
that Mueller could and should have induced Ternium’s
cooperation by refusing to do business with Ternium, and
Ternium would not be sufficiently deterred if Mueller
were unaffected by Ternium’s non-cooperation, stating
that Ternium could otherwise evade its antidumping rate
by funneling its goods through Mueller. 5 We conclude
5 See J.A. 42–43 (Decision Mem. 18–19) (“[W]e seek
to induce compliance and to ensure that Ternium does not
benefit from its non-compliance. As a general matter,
companies that choose to do business with uncooperative
parties may also be impacted.”); J.A. 43–44 (Decision
Mem. 19–20) (“[I]f we were to accept Mueller’s arguments,
the subject merchandise produced and exported by Terni-
um would be subject to a total adverse facts available rate
of 48.33, while the Ternium-produced merchandise ex-
ported by Mueller would be subject to the much lower
weighted-average rate of Mueller, such as the rate of 4.81
from the Preliminary Results. Accordingly, Ternium
could continue to produce and sell the subject merchan-
dise for prices less than its normal value to the U.S.
market by directing it[s] merchandise through Mueller,
MUELLER COMERCIAL DE MEXICO v. US 13
that Commerce may rely on such policies as part of a
margin determination for a cooperating party like
Mueller, as long as the application of those policies is
reasonable on the particular facts and the predominant
interest in accuracy is properly taken into account as well.
This analysis is justified and required, even if Com-
merce is viewed as acting entirely under subsection (a) in
determining Mueller’s rate. But Mueller argues that
because these adverse inferences and related rationales
are the same as those that support the use of AFA under
subsection (b), they cannot support a “facts otherwise
available” determination under subsection (a). Mueller is
mistaken. Subsection (a) does not provide for the specific
facts that should be used as a gap-filling mechanism. The
statute on its face does not preclude Commerce from
relying on the same considerations under subsection (a)
for an AFA determination as used under subsection (b).
Under Chevron, Commerce’s interpretation of subsections
(a) and (b) otherwise governs as long as it is reasonable
and a permissible statutory construction. United States v.
Eurodif S.A., 555 U.S. 305, 316 (2009); Timken Co. v.
United States, 354 F.3d 1334, 1342 (Fed. Cir. 2004).
Consideration under subsection (a) of facts found or
rationales applicable under subsection (b), in the way
Commerce may be viewed as having done here, passes
muster under Chevron.
This result is wholly consistent with our precedents
applying subsection (b) itself, which is properly directed to
non-cooperating parties. This Court’s decision in F.lli De
Cecco Di Filippo Fara S. Martino S.p.A. v. United States,
216 F.3d 1027, 1032 (Fed. Cir. 2000), required that, even
where it would have no obligation to ever provide cost of
production information, under Mueller’s argument.”).
14 MUELLER COMERCIAL DE MEXICO v. US
for a non-cooperating party, subsection (b) be applied to
arrive at “a reasonably accurate estimate of the respond-
ent’s actual rate, albeit with some built-in increase in-
tended as a deterrent to noncompliance.” All the more so
for a cooperating party, for which the equities would
suggest greater emphasis on accuracy in the overall mix.
Moreover, this Court’s decision in Changzhou made clear
that, in the case of a cooperating party, Commerce cannot
confine itself to a deterrence rationale and also must
carry out a case-specific analysis of the applicability of
deterrence and similar policies. Changzhou, 703 F.3d at
1379. And those principles were in no way questioned in
Fine Furniture (Shanghai) Ltd. v. United States, No.
2013-1158, 2014 WL 1613883, at *4 (Fed. Cir. Apr. 23,
2014), which simply rejected a contention that a counter-
vailing duty rate for a cooperating importer could not be
based on adverse inferences drawn against a non-
cooperating foreign country (about the country’s subsidiz-
ing of an input into the importer’s product). Fine Furni-
ture involved no issue about the application of the De
Cecco and Changzhou analysis to the selection of the
particular rate for the cooperating party.
Contrary to Mueller’s contention, consideration of var-
ious factors in calculating the rate of a cooperating party
is not precluded by Changzhou. In Changzhou, Com-
merce concluded it was necessary to use an adverse rate
against a cooperating party because other rates “would
not be sufficiently adverse as to effectuate the purpose of
the facts available rule to induce respondents to provide
[Commerce] with complete and accurate information”—in
other words, they would not have sufficient deterrent
effect. Changzhou, 701 F.3d at 1378 (internal quotations
omitted). But there was no support in the statute for
imposing any deterrent effect on cooperating parties in
that case. Id. at 1379. The cooperating parties could not
have induced the non-cooperating party to provide com-
MUELLER COMERCIAL DE MEXICO v. US 15
plete and accurate information, thus “there was no need
or justification for deterrence.” Id. Nor was there a claim
that the non-cooperating party was likely to evade its own
antidumping duty through the cooperating parties. Id.
We concluded that it was unreasonable to rely on a deter-
rence rationale. We reversed and remanded to Commerce
to “act non-arbitrarily” in calculating the separate rate for
the cooperating parties. Id.
There is potentially greater support for Commerce’s
use of an evasion or inducement rationale in this case
than in Changzhou. While the cooperating plaintiffs in
Changzhou did not have any mechanism to force the non-
cooperating party’s cooperation (since the cooperating
parties did not purchase goods from the non-cooperating
party), id. at 1370–71, Mueller had an existing relation-
ship with supplier Ternium. Therefore, Mueller could
potentially have refused to do business with Ternium in
the future as a tactic to force Ternium to cooperate. In
fact, the relationship between Mueller and Ternium is
similar to the relationship between the importer and
exporter in KYD, Inc. v. United States, 607 F.3d 760, 768
(Fed. Cir. 2010). There, King Pac and KYD had an exist-
ing relationship as importer-exporter, and this court
found that KYD could have used this relationship to
induce King Pac to cooperate. Id. (“In the aggregate,
however, the importers’ exposure to enhanced antidump-
ing duties seems likely to have the effect of either directly
inducing cooperation from the exporters with whom the
importers deal or doing so indirectly, by leaving uncoop-
erative exporters without importing partners who are
willing to deal in their products.”); see also Fine Furni-
ture, 2014 WL 1613883, at *7 (“Fine Furniture is a com-
pany within the country of China, benefitting directly
from the subsidies the government of China may be
providing [and] a remedy that collaterally reaches Fine
Furniture has the potential to encourage the government
16 MUELLER COMERCIAL DE MEXICO v. US
of China to cooperate so as to not hurt its overall indus-
try.”). So too with Mueller and Ternium—if Mueller and
other entities were not willing to export goods produced
by Ternium, this would potentially induce Ternium to
cooperate. On the other hand, if the cooperating entity
has no control over the non-cooperating suppliers, a
resulting adverse inference is potentially unfair to the
cooperating party. SKF USA Inc. v. United States, 630
F.3d 1365, 1375 (Fed. Cir. 2011).
In addition, as Commerce recognized, there is the pos-
sibility that Ternium could evade its own AFA rate of
48.33 percent by exporting its goods through Mueller if
Mueller were assigned a favorable dumping rate. In this
respect, too, this case is different from Changzhou and
similar to KYD. We noted there that “KYD’s argument
would allow an uncooperative foreign exporter to avoid
the adverse inferences permitted by statute simply by
selecting an unrelated importer, resulting in easy evasion
of the means Congress intended for Commerce to use to
induce cooperation with its antidumping investigations.”
KYD, 607 F.3d at 768. Mueller argued that there was no
evidence that Mueller was likely to act on Ternium’s
behalf and reasoned that Commerce could investigate
such false exports and impose Ternium’s own antidump-
ing rate on them. See, e.g., Tung Mung Dev. Co. v. United
States, 354 F.3d 1371, 1381 n.10 (Fed. Cir. 2004). But the
fact that Commerce has alternative methods for address-
ing evasion does not mean that the particular chosen
method is arbitrary. Commerce can use all of the meth-
ods provided in the Act for enforcement of the antidump-
ing provisions.
III
In summary, on the remand, Commerce should recal-
culate Mueller’s rate. In doing so, Commerce must have
as its primary objective the calculation of an accurate rate
MUELLER COMERCIAL DE MEXICO v. US 17
for Mueller—as we said in Changzhou—“[w]e find no
support in our caselaw or the statute’s plain text for the
proposition that deterrence, rather than fairness or accu-
racy, is the overriding purpose of the antidumping statute
when calculating a rate for a cooperating party.” 701 F.3d
at 1378 (internal quotation marks omitted). But we do
not foreclose Commerce from also relying on the policy
considerations that motivated the decision under review—
namely, its desire to encourage Mueller to induce Terni-
um’s cooperation and Commerce’s concern that calculat-
ing too low a rate for Mueller might allow Ternium to
evade its own dumping duty by channeling sales through
Mueller.
Commerce must take into account that Mueller itself
was a cooperating party and that Commerce’s induce-
ment/evasion approach to Mueller’s rate calculation could
discourage Mueller’s own cooperation. See id. To the
extent that Commerce chooses to rely on induce-
ment/evasion considerations, its approach must be rea-
sonable. We do not today decide whether relying on
inducement/evasion rationales to calculate Mueller’s rate
would be reasonable in the circumstances of this case. We
only hold that the statute does not preclude reliance on
inducement or evasion considerations in calculating
Mueller’s rate, and that such an approach is not fore-
closed by Changzhou. We leave it to Commerce in the
first instance to determine the relevant considerations
and balance the need to calculate an accurate rate for
Mueller and Mueller’s status as a cooperating party with
other potentially relevant concerns.
Finally, we wish to be clear that under subsection (b)
we do not bar Commerce from drawing adverse inferences
against a non-cooperating party that have collateral
consequences for a cooperating party. Where an adverse
inference is used to calculate the rate of a non-cooperating
party that rate may sometimes be used in calculating the
18 MUELLER COMERCIAL DE MEXICO v. US
rate of a cooperating party and thus have collateral
consequences for the cooperating party. KYD, 607 F.3d at
768. That is not the situation here. Commerce drew two
adverse inferences against Ternium. The first adverse
inference was used to calculate Ternium’s own antidump-
ing rate of 48.33 percent under subsection (b). The second
adverse inference against Ternium, used to approximate
Ternium’s cost of production, was not used in calculating
Ternium’s rate, but only in calculating Mueller’s rate. So
too this is unlike Fine Furniture where the government of
China provided a subsidy to Fine Furniture. Fine Furni-
ture, 2014 WL 1613883, at *5–6. China was an “interested
party” as defined by the statute and the adverse inference
applied was “adverse to the interests of that party.” 19
U.S.C. § 1677(9)(B); see also Fine Furniture, 2014 WL
1613883, at *4. The use of an adverse inference was
contrary to the interest of China because it directly offset
the subsidy that China provided. Here, there is no direct
adverse effect on Ternium from using an adverse infer-
ence as facts otherwise available in computing Mueller’s
dumping margin. Under these circumstances Commerce
must proceed in the manner we have described.
VACATED AND REMANDED
COSTS
No costs.