United States Court of Appeals
for the Federal Circuit
__________________________
KYD, INC.,
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Appellee,
AND
POLYETHYLENE RETAIL CARRIER BAG
COMMITTEE,
HILEX POLY CO., LLC, AND SUPERBAG
CORPORATION,
Defendants-Appellees.
__________________________
2009-1366
__________________________
Appeal from the United States Court of International
Trade in case no.07-00456, Judge Evan J. Wallach.
___________________________
Decided: May 28, 2010
___________________________
DAVID J. CRAVEN, Riggle & Craven, of Chicago, Illi-
nois, argued for plaintiff-appellant.
KYD v. US 2
DAVID L. SILVERBRAND, 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 TONY
WEST, Assistant Attorney General, JEANNE E. DAVIDSON,
Director, and PATRICIA M. MCCARTHY, Assistant Director.
Of counsel was SCOTT D. MCBRIDE, Office of the Chief
Counsel for Import Administration, United States De-
partment of Commerce, of Washington, DC.
DANIEL L. SCHNEIDERMAN, King & Spalding LLP, of
Washington, DC, argued for defendants-appellees Poly-
ethylene Retail Carrier Bag Committee, et al. With him
on the brief was STEPHEN A. JONES. Of counsel was
JOSEPH W. DORN.
__________________________
Before NEWMAN, BRYSON, and DYK, Circuit Judges.
Opinion for the court filed by Circuit Judge BRYSON.
Opinion concurring-in-part and dissenting-in part filed by
Circuit Judge DYK.
BRYSON, Circuit Judge.
KYD, Inc., an importer of polyethylene retail carrier
bags (“PRCBs”), challenges an antidumping duty imposed
on bags made by King Pac Industrial Co., Ltd., a Thai
company that manufactured the bags KYD imported.
KYD appeals from a decision of the Court of International
Trade, which affirmed a determination by the Depart-
ment of Commerce setting the antidumping duty rate for
King Pac’s bags at 122.88 percent.
3 KYD v. US
I
In 2004, Commerce issued an antidumping duty order
on PRCBs from Thailand. Polyethylene Retail Carrier
Bags From Thailand, 69 Fed. Reg. 48,204 (Aug. 9, 2004)
(antidumping duty order). In that order, Commerce
assigned an antidumping duty rate of 122.88 percent to
Zippac Company and two other exporters who failed to
cooperate with Commerce’s investigation. Commerce
assigned that rate based on 19 U.S.C. § 1677e, which
provides that if an interested party withholds or fails to
provide requested information, Commerce shall “use the
facts otherwise available in reaching the applicable de-
termination.” Id. § 1677e(a)(2). In the case of an uncoop-
erative respondent, Commerce “may use an inference that
is adverse to the interests of that party in selecting from
among the facts otherwise available.” Id. § 1677e(b). A
margin based on such an adverse inference is referred to
as an adverse facts available (“AFA”) margin.
When Commerce initiated its investigation of PRCBs
from Thailand in July 2003, it noted that the domestic
industry petitioners had calculated dumping margins for
Thai-manufactured PRCBs ranging from 24.84 percent to
122.88 percent. The petitioners’ information as to the
normal value and export prices of those PRCBs was based
on information from a single large Thai producer. Poly-
ethylene Retail Carrier Bags From The People's Republic
of China, Malaysia, and Thailand, 68 Fed. Reg. 42,002,
42,004 (July 16, 2003) (initiation of antidumping duty
investigations).
In its preliminary and final determinations of sales at
less than fair value, Commerce stated that it corroborated
the petitioners’ export price and normal price calculations
by comparing the prices and expenses set forth in the
petition with the prices and expenses submitted by the
KYD v. US 4
responding Thai companies for comparable products. In
particular, Commerce explained that it examined infor-
mation in the petition such as price quotations from the
large Thai producer for various sizes of PRCBs commonly
produced in Thailand, import statistics, and affidavits
from managers of the Thai producer. Based on its inves-
tigation, Commerce found that the information in the
petition was “reasonable.” Commerce also stated that it
had found no information indicating that the dumping
margin of 122.88 percent was inappropriate. To the
contrary, Commerce concluded that the record supported
the use of 122.88 percent as the “best indication” of the
dumping margin for the uncooperative exporters, includ-
ing Zippac, as it had “probative value” with respect to
those firms and reflected “the appropriate adverse infer-
ence.” Polyethylene Retail Carrier Bags From Thailand,
69 Fed. Reg. 3552, 3554 (Jan. 26, 2004) (preliminary
determination of sales at less than fair value); Polyethyl-
ene Retail Carrier Bags From Thailand, 69 Fed. Reg.
34,122, 34,123-24 (June 18, 2004) (final determination of
sales at less than fair value).
In 2006, Commerce conducted the first administrative
review of the antidumping duty order, for the period
January 26, 2004, through July 31, 2005. In response to
Commerce’s questionnaire, King Pac responded on behalf
of four entities, including Zippac, claiming that all four
companies were affiliated due to common ownership and
that they should be reviewed as a single entity. Com-
merce made several requests for information from King
Pac, but it found King Pac’s information to be incomplete,
internally inconsistent, misleading, and inaccurate.
Commerce concluded that although King Pac maintained
detailed records containing all the information necessary
to provide a complete and accurate questionnaire re-
sponse, King Pac “did not provide complete or correct
information” in response to Commerce’s questionnaires.
5 KYD v. US
Decision to Apply Adverse Facts Available and the Ap-
propriate Rate for the Preliminary Results of Review, at 5
(Aug. 31, 2006). Because Commerce determined that
King Pac had significantly impeded the administrative
review by not providing accurate and necessary informa-
tion contained in its records, and had not acted to the best
of its ability in producing the requested information,
Commerce found it appropriate to calculate a dumping
margin for King Pac based on facts otherwise available
and to use an adverse inference in selecting from among
the facts otherwise available. Id. at 5-6.
In the final results of the first administrative review,
Commerce assigned an AFA rate of 122.88 percent to
King Pac. Polyethylene Retail Carrier Bags From Thai-
land, 72 Fed. Reg. 1982 (Jan. 17, 2007) (final results of
administrative review). In response to King Pac’s objec-
tion that the 122.88 percent AFA rate was punitive,
Commerce explained that in addition to the analysis
based on the materials submitted with the petition, it had
calculated “transaction-specific margins for cooperative
companies which are higher than the petition rate,” from
which Commerce concluded that “the petition rate does
not lie outside of the realm of actual selling practices and
therefore is not punitive but is meant to encourage King
Pac’s cooperation.” Issues and Decision Memorandum for
the Antidumping Duty Administrative Review of Polyeth-
ylene Retail Carrier Bags From Thailand for the Period of
Review January 26, 2004, through July 31, 2005, at 30
(Jan. 9, 2007).
On King Pac’s request for review, the Court of Inter-
national Trade sustained Commerce’s decision. Universal
Polybag Co. v. United States, 577 F. Supp. 2d 1284 (Ct.
Int’l Trade 2008). The court held that Commerce had
validly corroborated the AFA rate assigned to King Pac by
looking to (1) the rate assigned to one of the companies
KYD v. US 6
affiliated with King Pac following the original investiga-
tion; (2) price quotes on similar products, accompanied by
affidavits by company officials, that were submitted with
the petition; and (3) “transaction-specific margins for
other companies in the initial investigation [that] corrobo-
rate that the selected AFA rate continues to give an
accurate reflection of commercial practices in the indus-
try.” Id. at 1300. The court noted that Commerce had
found “high-volume transaction-specific margins for
cooperative companies which are both higher than the
122.88 percent petition rate and are close to that range.”
Id.
In 2007, Commerce conducted a second administra-
tive review covering the period August 1, 2005, through
July 31, 2006. King Pac failed to respond to Commerce’s
requests for information pertinent to that administrative
review. In the preliminary results for the second admin-
istrative review, Commerce stated that it would again
assign the 122.88 percent AFA rate to King Pac because
King Pac had failed to cooperate with Commerce’s review,
had significantly impeded the review, and had not acted
to the best of its ability. Polyethylene Retail Carrier Bags
From Thailand, 72 Fed. Reg. 37,718, 37,720 (July 11,
2007) (preliminary results of administrative review). 1
Commerce further determined that the AFA rate it had
selected remained reliable and relevant. Id.
1 Before publishing those preliminary results,
Commerce placed in the record the memorandum explain-
ing Commerce’s decision to assign the 122.88 percent AFA
rate to Zippac in the initial investigation and the memo-
randum explaining Commerce’s decision to assign that
same AFA rate to King Pac in the first administrative
review. See Adverse Facts Available and the Corrobora-
tion of the Rate (Jan. 16, 2004); Decision to Apply Adverse
Facts Available and the Appropriate Rate for the Prelimi-
nary Results of Review (Aug. 31, 2006).
7 KYD v. US
In August 2007, KYD entered its appearance as an in-
terested party. KYD challenged Commerce’s selection of
King Pac as a mandatory respondent and Commerce’s
application of the 122.88 percent AFA rate to King Pac for
the second administrative review. Commerce rejected
KYD’s arguments and sustained the AFA rate of 122.88
percent for King Pac. Polyethylene Retail Carrier Bags
From Thailand, 72 Fed. Reg. 64,580, 64,581 (Nov. 16,
2007) (final results of administrative review). At the
same time, Commerce determined antidumping duty
margins ranging from 0.80 percent to 1.87 percent for
other respondents. Id.
In the memorandum in which Commerce explained its
decision, Commerce noted that it had provided King Pac
“with an opportunity to provide current information
showing that its margin is lower than the adverse facts-
available rate applied in earlier segments of the proceed-
ing,” but that King Pac had elected not to cooperate at all
in the review. Issues and Decision Memorandum for the
Antidumping Duty Administrative Review of Polyethyl-
ene Retail Carrier Bags From Thailand for the Period of
Review August 1, 2005, through July 31, 2006, at 6-7
(Nov. 8, 2007). Commerce noted the general rule that if a
respondent fails to respond to a request for pricing data,
Commerce may presume that the highest prior margin
reflects the current margins. Based on that rule, Com-
merce elected to presume that “King Pac has not altered
its past practices and that its previous rate is reflective of
its current pricing practices and, therefore, has relevance
in this administrative review.” Id. at 7. Because King
Pac had not cooperated with the Department in the two
administrative reviews, and because the record contained
no justification for a rate lower than the current rate
applied to King Pac, Commerce concluded that the ad-
verse facts available rate had been corroborated to the
extent practicable through the use of information that
KYD v. US 8
was corroborated in the original investigation and deter-
mined to be relevant to King Pac. Id.
KYD appealed Commerce’s decision to the Court of
International Trade, challenging the 122.88 percent AFA
rate assigned to King Pac. The Court of International
Trade affirmed Commerce’s determination. It held that
Commerce’s selection and imposition of the AFA rate
against King Pac (and thus against KYD as the importer
of King Pac’s products) was supported by substantial
evidence and was in accordance with law. In particular,
the court held that Commerce had adequately corrobo-
rated the AFA rate by determining that it was both
reliable and relevant. The court concluded that the
petition rate of 122.88 percent had not been discredited.
The court reached that conclusion for two reasons: first,
because the petition rate had been affirmed in the prior
administrative review, in which it was corroborated by
independent sources; and second, because it was reason-
able for Commerce to conclude, given King Pac’s refusal to
cooperate in the second administrative review, that King
Pac had not altered its past pricing practices “and that its
previous rate is reflective of its current pricing practices
and, therefore, has relevance in this administrative
review.” The court also ruled that the AFA rate was not
punitive, because the AFA rate reasonably reflected the
rate that would have applied had the party in question
cooperated, plus a reasonable additional amount to deter
non-compliance. Finally, the court ruled that KYD, as the
importer of record of King Pac’s PRCBs, was not entitled
to an assessment rate different from the dumping margin
assigned to King Pac. KYD appeals that decision.
II
KYD renews its challenges to the selected AFA anti-
dumping duty rate. It contends that the AFA rate was
9 KYD v. US
uncorroborated and punitive, and that it is improper for
Commerce to impose a high AFA rate against an importer
such as KYD that is not related to an uncooperative party
such as King Pac.
A
While acknowledging that Commerce enjoys “particu-
larly great” discretion in applying an AFA margin to an
uncooperative respondent, PAM, S.p.A. v. United States,
582 F.3d 1336, 1340 (Fed. Cir. 2009), KYD complains that
Commerce violated the statutory requirement that it
corroborate information in the petition before using that
information to establish an AFA rate. The statute that
governs the use of “facts otherwise available” in anti-
dumping determinations provides that when Commerce
relies on “secondary information” rather than on informa-
tion obtained in the course of an investigation or review,
Commerce “shall, to the extent practicable, corroborate
that information from independent sources that are
reasonably at [its] disposal.” 19 U.S.C. § 1677e(c). Sec-
ondary information includes “[i]nformation derived from
the petition that gave rise to the investigation or review,
the final determination concerning the subject merchan-
dise, or any previous review under [19 U.S.C. § 1675]
concerning the subject merchandise.” Statement of
Administrative Action Accompanying the Uruguay Round
Agreements Act (“SAA”), H.R. Rep. No. 103-316, at 870
(1994), as reprinted in 1994 U.S.C.C.A.N. 4040, 4199.
Before Commerce can rely on secondary information, it
must establish that “the secondary information to be used
has probative value.” Id.
In this case, Commerce first derived the AFA rate by
using import statistics, price quotations for various sizes
of PRCBs commonly produced in Thailand, and affidavits
from company officials of a Thai producer of similar
KYD v. US 10
products. KYD argues that, because that information was
included with the petition filed by the domestic producers,
Commerce was required to find other sources to corrobo-
rate that data. We disagree. The relevant inquiry focuses
on the nature of the information, not on whether the
source of the information was referenced in or included
with the petition. The SAA explains that independent
sources “may include, for example, published price lists,
official import statistics and customs data, and informa-
tion obtained from interested parties during the particu-
lar investigation or review.” SAA at 870, as reprinted in
1994 U.S.C.C.A.N. at 4199. The information Commerce
used to calculate King Pac’s rate, i.e., price quotes and
third-party company affidavits, is of the same independ-
ent nature; it did not change in character simply because
the documents were attached to an antidumping petition.
For that reason, we agree with Commerce and the Court
of International Trade that the AFA rate was supported
by independent information when it was first calculated.
KYD further contends that Commerce should not
have applied the AFA rate to King Pac because that rate
was neither reliable nor relevant to King Pac. Specifi-
cally, KYD asserts that the AFA rate was much higher
than the dumping margin applied to other companies
during the second administrative review and was not
sufficiently supported by the underlying data. This court
has made clear, however, that Commerce need not select,
as the AFA rate, a rate that represents the typical dump-
ing margin for the industry in question. For example, in
PAM, S.p.A., 582 F.3d at 1340, this court affirmed an
AFA rate even though only 0.5% of the respondent’s total
sales were above the selected rate. Similarly, in Ta Chen
Stainless Steel Pipe, Inc. v. United States, 298 F.3d 1330,
1339 (Fed. Cir. 2002), we upheld an AFA rate even though
only a single sale by the respondent was at the selected
margin.
11 KYD v. US
KYD asserts that because there is no evidence of any
sales during the period of review for the second adminis-
trative review at margins above or near the 122.88 per-
cent mark, it was improper for Commerce to assign that
rate to King Pac in the second administrative review.
However, the fact that current dumping margins for other
companies in the same industry are lower than the rate
applied to King Pac does not invalidate Commerce’s
determination. In its initial dumping determination and
in the first administrative review, Commerce used evi-
dence that accompanied the petition as well as evidence
Commerce obtained in the course of its investigation and
review to calculate a range of dumping margins. Because
King Pac failed to participate in the first administrative
review, Commerce acted within its discretion in drawing
an adverse inference against King Pac and assigning it
the highest calculated rate. See F. lli de Cecco di Filippo
Fara S. Martino S.p.A. v. United States, 216 F.3d 1027,
1029, 1033-34 (Fed. Cir. 2000) (an uncooperative party
may be assigned the “highest verified margin” of the
cooperating companies, even though it was “highly likely
that the real dumping margin for [that company] would
be well under” the AFA rate); Shanghai Taoen Int’l Co. v.
United States, 360 F. Supp. 2d 1339, 1345-48 (Ct. Int’l
Trade 2005) (upholding a 223.01 percent AFA dumping
margin, the “highest rate determined in the current or
any previous segment of the proceeding” because “the rate
reflects recent commercial activity” by a different exporter
of the same goods from the same country, and because
there was no prior dumping margin for that company on
which Commerce could rely).
In this case, Commerce’s choice of 122.88 percent as
the AFA rate is well grounded because, as the Court of
International Trade found following the first administra-
tive review, that margin was supported not only by the
evidence submitted with the petition, but also by Com-
KYD v. US 12
merce’s calculation of “high-volume transaction-specific
margins for cooperative companies which are both higher
than the 122.88 percent petition rate and are close to that
rate.” Universal Polybag Co., 577 F. Supp. 2d at 1300-01.
Therefore, Commerce had a sufficient basis for concluding
that the AFA rate assigned to King Pac in the first admin-
istrative review was reliable.
During the second administrative review, Commerce
was unable to calculate a dumping margin for King Pac
directly because King Pac chose not to cooperate with
Commerce’s review. Commerce therefore decided to
continue the 122.88 percent AFA rate that was assigned
to King Pac in the prior administrative review. Signifi-
cantly, we have held that Commerce is permitted to use a
“common sense inference that the highest prior margin is
the most probative evidence of current margins because, if
it were not so, the importer, knowing of the rule, would
have produced current information showing the margin to
be less.” Rhone Poulenc, Inc. v. United States, 899 F.2d
1185, 1190 (Fed. Cir. 1990) (emphasis in original); Ta
Chen, 298 F.3d at 1339 (“In cases in which the respondent
fails to provide Commerce with the most recent pricing
data, it is within Commerce's discretion to presume that
the highest prior margin reflects the current margins.”).
Although KYD seeks to challenge the relevance of Com-
merce’s calculation of the AFA rate established in the
antidumping duty order and applied against King Pac in
the first administrative review, KYD overlooks the fact
that Commerce relied on the presumption that the rate
established for King Pac in the first administrative review
was still valid. KYD offered no evidence regarding King
Pac’s activities during the period of review for the second
administrative review that would rebut that presumption.
For that reason, Commerce correctly determined that the
AFA rate remained relevant to King Pac.
13 KYD v. US
The presumption that a prior dumping margin im-
posed against an exporter in an earlier administrative
review continues to be valid if the exporter fails to cooper-
ate in a subsequent administrative review distinguishes
this case from this court’s recent decision in Gallant
Ocean (Thailand) Co. v. United States, 602 F.3d 1319
(Fed. Cir. 2010). In that case, in which the AFA margin
far exceeded the calculated margin for cooperating re-
spondents, we overturned an AFA margin as unsupported
by substantial evidence. In Gallant Ocean, however,
Commerce had not previously determined an antidump-
ing duty against the exporter in question, and thus there
was no occasion for the court to consider the presumption
that an exporter’s prior margin continues to be valid if the
exporter fails to cooperate in a subsequent proceeding.
That presumption applies in this case, and it was not
rebutted.
Moreover, in Gallant Ocean this court concluded that
the AFA margin that Commerce selected “did not and
does not represent commercial reality” and ruled that
Commerce “may not use the petition rate to establish the
dumping margin when its own investigation revealed that
the petition rate was not credible.” Gallant Ocean, 602
F.3d at 1323. In this case, King Pac’s failure to cooperate
deprived Commerce of the most direct evidence of King
Pac’s actual dumping margin. In the first administrative
review, however, Commerce was able to fill that eviden-
tiary gap by looking to “high-volume transaction-specific
margins for cooperative companies” that were higher than
and close to the 122.88 percent rate, from which Com-
merce concluded that the AFA margin “does not lie out-
side the realm of actual selling practices.” In light of King
Pac’s failure to cooperate in the second administrative
review or provide any contrary evidence as to its export
transactions for that period of review, we hold that sub-
KYD v. US 14
stantial evidence supports the antidumping margin
assessed against King Pac (and thus against KYD).
B
KYD next asserts that the AFA rate is so high that it
is punitive in nature and for that reason must be vacated
in light of the Supreme Court’s decision in Exxon Ship-
ping Co. v. Baker, 128 S. Ct. 2605 (2008), which imposed
limits on the imposition of punitive damages in federal
cases as a matter of federal common law. However, we
rejected the same argument in PAM S.p.A., 582 F.3d at
1341, where we held that “[n]othing in Exxon Shipping, a
case with a very different fact pattern and legal issues,
requires us to impose new limits on the discretion Con-
gress granted to the Department of Commerce.” We
likewise reject the Exxon-based argument here. The
antidumping laws “are remedial not punitive,” NTN
Bearing Corp. v. United States, 74 F.3d 1204, 1208 (Fed.
Cir. 1995), and an antidumping rate based on AFA is
designed “to provide respondents with an incentive to
cooperate, not to impose punitive . . . margins,” DeCecco,
216 F.3d at 1032. For that reason, an AFA dumping
margin determined in accordance with the statutory
requirements is not a punitive measure, and the limita-
tions applicable to punitive damages assessments there-
fore have no pertinence to duties imposed based on
lawfully derived margins such as the margin at issue in
this case.
C
Finally, KYD argues that Commerce should have as-
signed it an assessment rate different from the antidump-
ing duty rate assigned to King Pac. KYD asserts that
Commerce should apply AFA rates only against uncoop-
erative parties and that a cooperative, independent im-
15 KYD v. US
porter should not be required to pay an assessment based
on an AFA dumping margin imposed on an uncooperative
producer/exporter.
We find that argument unpersuasive. Under the an-
tidumping duty statutes, Commerce is directed to set the
assessment rate based on the calculated dumping margin.
See 19 U.S.C. §§ 1673e(c)(3), 1675(a)(2)(C); 19 C.F.R. §
351.212(b). By statute and regulation, the importer is
legally responsible for paying the assessed duties associ-
ated with the goods it imports. See 19 U.S.C. §
1673g(b)(4); 19 C.F.R. § 141.1(b)(1) (“liability for duties,
both regular and additional, constitutes a personal debt
due from the importer to the United States”). KYD does
not point to any statute or regulation that would entitle
independent importers to a different assessment rate
from the rate for importers that are affiliated with the
foreign producer/exporters of the goods they import.
Moreover, KYD’s argument would allow an uncoop-
erative 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. The prospect that domes-
tic importers will have to pay enhanced antidumping
margins because of the uncooperativeness of the exporters
from whom they purchase goods may, in some cases,
result in the imposition of costs on an individual importer
that the importer is unable to avoid. 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.
KYD v. US 16
Because we find none of KYD’s arguments for reduc-
ing the antidumping margin to be persuasive, we uphold
the decision of the Court of International Trade.
AFFIRMED
United States Court of Appeals
for the Federal Circuit
__________________________
KYD, INC.,
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Appellee,
AND
POLYETHYLENE RETAIL CARRIER BAG
COMMITTEE,
HILEX POLY CO., LLC, AND SUPERBAG
CORPORATION,
Defendants-Appellees.
__________________________
2009-1366
__________________________
Appeal from the United States Court of International
Trade in case no. 07-00456, Judge Evan J. Wallach.
DYK, Circuit Judge, concurring-in-part and dissenting-in-
part.
I concur in large part with the majority opinion. My
one area of disagreement relates to the holding that
Commerce properly presumed that the rate established
for King Pac Industrial Co., Ltd. (“King Pac”) in the first
administrative review was still valid for the period of the
second administrative review such that it could be applied
KYD v. US 2
against KYD, Inc. (“KYD”), an unrelated importer. See
Majority Op. 12-13.
Here, King Pac (formerly Zippac), the exporter, par-
ticipated but did not cooperate during the first adminis-
trative review and was assigned an extraordinarily high
dumping margin of 122.88% based on adverse facts avail-
able. See 19 U.S.C. § 1677e(b). King Pac did not partici-
pate in the second administrative review, again refusing
to cooperate. Commerce nonetheless presumed that the
122.88% dumping margin assigned to King Pac was still
valid for the period of the second administrative review
and used this dumping margin to calculate an assessment
rate for importer KYD. The question is whether the
presumption can be applied without corroborating data
for the period of the second administrative review.
While the statute and regulations allow the use of ad-
verse facts available against a non-cooperating party, see
id.; 19 C.F.R. § 351.308, the presumption on which the
majority relies does not appear in the statute or regula-
tions, but is a product of agency decision making. See Ta
Chen Stainless Steel Pipe, Inc. v. United States, 298 F.3d
1330, 1339 (Fed. Cir. 2002) (“In cases in which the re-
spondent fails to provide Commerce with the most recent
pricing data, it is within Commerce’s discretion to pre-
sume that the highest prior margin reflects the current
margins.”). We have sustained the use of this presump-
tion as being within the agency’s discretion on the theory
that “it reflects a common sense inference that the highest
prior margin is the most probative evidence of current
margins because, if it were not so, the importer, knowing
of the rule, would have produced current information
showing the margin to be less.” Rhone Poulenc, Inc. v.
United States, 899 F.2d 1185, 1190 (Fed. Cir. 1990) (em-
phasis in original). But those are cases in which the
exporter was a party to the proceeding. That is not the
case here. They are also not cases in which an importer
3 KYD v. US
challenged the use of the presumption to establish a
dumping margin.
KYD has a clear right to challenge the antidumping
margin for the exporter, King Pac. See 19 U.S.C. §
1677(9) (defining United States importers of subject
merchandise as “interested part[ies]”); see also id. § 1516a
(providing that “an interested party who is a party to the
proceeding in connection with which the matter arises
may commence an action in the United States Court of
International Trade . . . contesting any factual findings or
legal conclusions upon which the determination is
based”). Under the circumstances of this case, I think
that applying the presumption against KYD is arbitrary
and capricious.
First, KYD did not participate in the first administra-
tive review, in which the 122.88% dumping margin for
King Pac was established, and there has been no showing
that KYD was then an “interested party” and could have
participated in that review. KYD also did not refuse to
cooperate with the investigation in the second adminis-
trative review; it was King Pac that failed to cooperate.
Second, there has been no showing that KYD did
have, or could have had, access to records that would have
enabled Commerce to compute a more accurate dumping
margin for King Pac. As noted above, KYD is not related
to King Pac. The majority faults KYD for its failure to
produce such information, stating that “KYD offered no
evidence regarding King Pac’s activities during the period
of review for the second administrative review that would
rebut [the] presumption [that the rate established for
King Pac was still valid].” Majority Op. 12-13. But this
seems unfair if KYD did not have access to this informa-
tion. The entire theory of the presumption is that the
party injured had access to more recent data, and would
have produced that data if it would have resulted in a
more favorable dumping margin.
KYD v. US 4
Third, the dumping margin assigned to King Pac is
more than sixty-five times higher than the next highest
dumping margin imposed in the second administrative
review. This court has expressed concerns in the past
over disproportionately high dumping margins calculated
on the basis of adverse facts available. See F.lli De Cecco
di Filippo Fara S. Martino S.p.A. v. United States, 216
F.3d 1027, 1032 (Fed. Cir. 2000) (noting that the purpose
of adverse facts available is “to provide respondents with
an incentive to cooperate, not to impose punitive, aberra-
tional, or uncorroborated margins”); see also Gallant
Ocean (Thailand) Co. v. United States, 602 F.3d 1319,
1324 (Fed. Cir. 2010) (holding that an adverse facts
available rate that was more than ten times higher than
the average dumping margin for cooperative respondents
was punitive, aberrational, or uncorroborated, and exces-
sive in view of the cooperative respondents’ dumping
rates).
The high dumping margin here is not corroborated by
any current data. There is no reason to believe that this
margin continues to be accurate for the period of the
second administrative review. There was no determina-
tion by Commerce that the market conditions prevailing
during the second administrative review were the same as
those prevailing during the period of the first administra-
tive review. And it is noteworthy in this connection that
the dumping margins for other exporters declined sub-
stantially from 1.41-16.43% to 0.80-1.87% from the first to
the second administrative review. See Polyethylene
Retail Carrier Bags from Thailand, 72 Fed. Reg. 1982,
1983 (Dep’t of Commerce Jan. 17, 2007) (final results of
first administrative review); Polyethylene Retail Carrier
Bags from Thailand, 72 Fed. Reg. 64,580, 64,581 (Dep’t of
Commerce Nov. 16, 2007) (final results of second adminis-
trative review). The government has argued that the
dumping margins decreased as the result of the incentives
5 KYD v. US
of the first administrative review antidumping order, and
it has also admitted that this same “incentive” to reduce
the dumping margin applied to King Pac.
In this situation, Commerce should be barred from us-
ing the presumption for the period of the second adminis-
trative review without corroborating data for the period in
question. In the second administrative review, Commerce
was of course permitted to use adverse facts available
because King Pac refused to cooperate. See 19 U.S.C. §
1677e(b). But, our cases make clear that the dumping
margin must be corroborated by “secondary information
that has some grounding in commercial reality.” See
Gallant Ocean, 602 F.3d at 1324. 1 In the light of this
governing principle, I think that Commerce, in making a
determination, must corroborate using current facts, that
is, not simply data from the first administrative review.
Commerce’s failure to do so in the second administrative
review, in my view, renders its determination arbitrary
and capricious, at least, where, as here, the complaining
party had no access to the necessary data.
1 See Gallant Ocean, 602 F.3d at 1323 (over-
turning an adverse facts available margin based on an
adjusted petition rate where “Commerce incorrectly
presumed that the adjusted petition rate was reliable in
the face of much more reliable information”); see also F.lli
De Cecco, 216 F.3d at 1032 (“[Congress] intended for an
adverse facts available rate to be a reasonably accurate
estimate of the respondent’s actual rate, albeit with some
built-in increase intended as a deterrent to non-
compliance. Congress could not have intended for Com-
merce’s discretion to include the ability to select unrea-
sonably high rates with no relationship to the
respondent’s actual dumping margin.”).