Longkou Haimeng MacHinery Co., Ltd. v. United States

Slip Op. 08-114

UNITED STATES COURT OF INTERNATIONAL TRADE

Before: Nicholas Tsoucalas, Senior Judge
________________________________________
LONGKOU HAIMENG MACHINERY CO., LTD., :
LAIZHOU AUTO BRAKE EQUIPMENT COMPANY, :
LAIZHOU HONGDA AUTO REPLACEMENT :
PARTS CO., LTD., :
LAIZHOU LUQI MACHINERY CO., LTD., :
QINGDAO GREN (GROUP) CO., and :
LONGKOU TLC MACHINERY CO., LTD., :
:
Plaintiffs, : Consolidated
: Court No.: 07-00321
:
v. :
:
UNITED STATES OF AMERICA, :
:
Defendant, :
:
and :
:
COALITION FOR THE PRESERVATION OF :
AMERICAN BRAKE DRUM AND ROTOR :
AFTERMARKET MANUFACTURERS :
:
Defendant-Intervenor. :
________________________________________:

October 21, 2008

Held: The United States Department of Commerce’s Final
Determination is sustained in part and remanded in part.

Trade Pacific PLLC, (Robert G. Gosselink; Jonathan Michael Freed)
for Longkou Haimeng Machinery Co., Ltd.; Laizhou Auto Brake
Equipment Company; Laizhou Hongda Auto Replacement Parts Co., Ltd.;
Laizhou Luqi Machinery Co., Ltd.; and Qingdao Gren (Group) Co.,
Plaintiffs.

Venable LLP, (Lindsay Beardsworth Meyer) for Longkou TLC Machinery
Co. Ltd., Plaintiff.

Gregory G. Katsas, Assistant Attorney General, Commercial
Court No. 07-00321 Page 2

Litigation Branch, Civil Division, United States Department of
Justice; Jeanne Davidson, Director, Commercial Litigation Branch,
Civil Division, United States Department of Justice; Patricia M.
McCarthy; Assistant Director, Commercial Litigation Branch, Civil
Division, United States Department of Justice; Courtney Sheehan,
Trial Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice; Melanie A. Frank, Office of
Chief Counsel for Import Administration, United States Department
of Commerce; Stephen Carl Tosini, Commercial Litigation Branch,
Civil Division, United States Department of Justice, for the United
States, Defendant.

Porter, Wright, Morris & Arthur, LLP, (Renata Brandao Vasconcellos)
for The Coalition for the Preservation of American Brake Drum and
Rotor Aftermarket Manufacturers, Defendant-Intervenor.

OPINION

TSOUCALAS, Senior Judge: This matter is before the Court on a

motion for judgment upon the agency record brought by the

Plaintiffs pursuant to USCIT Rule 56.2.

Plaintiffs challenge numerous aspects of the U.S. Department

of Commerce’s (“Commerce’s”) final determination with respect to

the ninth administrative review of the antidumping order in Brake

Rotors From the People’s Republic of China: Final Results of

Antidumping Duty Administrative and New Shipper Reviews and Partial

Rescission of the 2005-2006 Administrative Review, 72 Fed. Reg.

42,386 (Aug. 2, 2007) Public Record Doc. No. 209 (“Final

Results”).1 Plaintiffs contend that certain aspects of Commerce’s

1
Hereinafter all documents in the confidential record will
be designated “CR,” and all documents in the public record
designated “PR.”
Court No. 07-00321 Page 3

determination is contrary to law, constitutes an abuse of

discretion and is not supported by substantial evidence on the

record. See Pls.’ R. 56.2 Mot. J. Upon Agency Rec. (“Pls.’

Brief.”). For the reasons set forth below, the Court sustains the

Final Results in part, and remands it in part.

JURISDICTION

The Court has jurisdiction over this matter pursuant to 19

U.S.C. § 1516a(a)(2) and 28 U.S.C. § 1581(c).

STANDARD OF REVIEW

When reviewing the final results in antidumping administrative

reviews “[t]he court shall hold unlawful any determination,

finding, or conclusion found . . . to be unsupported by substantial

evidence on the record, or otherwise not in accordance with law.”

19 U.S.C. § 1516a(b)(1)(B)(i). “Substantial evidence is more than

a mere scintilla.” Consol. Edison Co. v. NLRB, 305 U.S. 197, 229

(1938). “Substantial evidence is ‘such relevant evidence as a

reasonable mind might accept as adequate to support a conclusion.’”

Huaiyin Foreign Trade Corp. (30) v. United States, 322 F.3d 1369,

1374 (Fed. Cir. 2003) (quoting Consol. Edison Co., 305 U.S. at

229). In determining the existence of substantial evidence, a

reviewing Court must consider “the record as a whole, including

evidence that supports as well as evidence that ‘fairly detracts
Court No. 07-00321 Page 4

from the substantiality of the evidence.’” Huaiyin, 322 F.3d at

1374 (quoting Atl. Sugar, Ltd. v. United States, 744 F.2d 1556,

1562 (Fed. Cir. 1984)). The possibility of drawing two

inconsistent conclusions from the evidence does not prevent an

administrative agency’s finding from being supported by substantial

evidence. See Consolo v. Federal Maritime Comm’n, 383 U.S. 607,

620 (1966) (citations omitted).

BACKGROUND

Longkou Haimeng Machinery Co., Ltd. (“Haimeng”); Laizhou Auto

Brake Equipment Company (“LABEC”); Laizhou Hongda Auto Replacement

Parts Co., Ltd. (“Hongda”); Laizhou Luqi Machinery Co., Ltd.

(“Luqi”); Qingdao Gren (Group) Co. (“Gren”) (collectively “Haimeng

Plaintiffs”) and plaintiff Longkou TLC Machinery Co., Ltd. (“TLC”)

contest aspects of Commerce’s final determination. Plaintiffs are

producers and exporters of brake rotors subject to the antidumping

duty order on Brake Rotors from the People’s Republic of China

(“subject merchandise”) during the ninth administrative review.

See Final Results, 72 Fed. Reg. 42,386.

On April 3, 2006, Commerce published a notice of opportunity

to request an administrative review of the antidumping duty order

of brake rotors from the People’s Republic of China (“PRC”) for the

period April 1, 2005 through March 31, 2006 (“the period of review”

or “POR”). See Antidumping or Countervailing Duty Order, Finding,
Court No. 07-00321 Page 5

or Suspended Investigation; Opportunity to Request Administrative

Review, 71 Fed. Reg. 16,549 (Apr. 3, 2006). In conformance with

agency regulations, Commerce received timely requests for an

administrative review of the antidumping duty order in question.

On May 31, 2006, Commerce initiated the ninth administrative review

of brake rotors from China for twenty-seven individually named

firms. See Notice of Initiation of Antidumping and Countervailing

Duty Administrative Reviews and Request for Revocation in Part , 71

Fed. Reg. 30,864 (May 31, 2006) (PR 5).

On June 16, 2006, Commerce notified all interested parties

that “[d]ue to the large number of requests for administrative

review and the Department’s experience regarding the resulting

administrative burden to review each company for which a request

has been made, the Department is considering exercising its

authority to select respondents,” and requested that each company

subject to this administrative review submit certain company-

specific information. Letter to All Interested Parties (June 16,

2006), (PR 10). In response, Commerce received timely submissions

of the requested quantity and value data for all of the plaintiffs

involved. See Letters from Trade Pacific PLLC, (July 6, 2006), (CR

8, 9, 10, 11, 16); Letter from Venable LLP,(June 30, 2006), (PR

19).

Of the twenty seven companies for which a review was

originally initiated, Commerce received seven requests for
Court No. 07-00321 Page 6

rescission of review based on claims that the companies did not

have shipments of subject merchandise during the POR. See Brake

Rotors From the People’s Republic of China: Preliminary Results of

the 2005-2006 Administrative and New Shipper Reviews and Partial

Rescission of the 2005-2006 Administrative Review, 72 Fed. Reg.

7,405 (Feb. 15, 2007) (PR 182) (“Preliminary Results”). In

addition, Commerce determined that certain other separately listed

companies were to be considered the same entity for purposes of

this administrative review.2 See Antidumping Duty Administrative

Review of Brake Rotors from the People’s Republic of China:

Selection of Respondents, (Aug. 18, 2006) (PR 51) (“Respondent

Selection Memorandum”).

Two of the remaining seventeen companies, Qindao Rotec Auto

Parts Co., Ltd. (“Rotec”) and Xiangfen Hengtai Brake System Co.

Ltd. (“Hengtai”), did not respond to Commerce’s request for

quantity and value information. Because these companies did not

submit any information to establish their eligibility for a

separate rate, Commerce determined that they did not qualify for a

separate rate analysis, and were considered to be part of the PRC-

2
Commerce previously determined that Laizhou Auto Brake
Equipment Co., Ltd. is the successor-in-interest to Laizhou Auto
Brake Equipments Factory; Shangdong Huanri Group Co., Ltd. is the
successor-in-interest to Shangdong Huanri Group General Co.; and
Laizhou Huanri Automobile Co., Ltd. is part of the Shangdong
Huanri Group General Co. Thus, seventeen of the original twenty
seven companies remained. See Preliminary Results, 72 Fed. Reg.
7,405, 7,406.
Court No. 07-00321 Page 7

wide entity. Thus, both Rotec and Hengtai were assigned the China

country-wide rate.3

On August 18, 2006, based on a review of the quantity and

value data for the remaining fifteen companies, Commerce issued its

Respondent Selection Memorandum. Relying on section 777A(c)(2) of

the Tariff Act of 1930, as amended, 19 U.S.C. § 1677f-1(c)(2),

Commerce decided to exercise its statutory authority to limit its

examination of respondents in calculating individual dumping

margins. See Respondent Selection Memorandum, (Aug. 18, 2006) (PR

51). Commerce based its decision to restrict the respondent pool

on the ground that it lacked the administrative resources to

effectively examine all of the exporters-producers involved. See

id. at 3.

Commerce then informed the interested parties that, pursuant

to 19 U.S.C. §1677f-1(c)(2)(B), it would employ a sampling method

based on those respondents accounting for the largest volume of

subject merchandise exported or produced. See id. at 4.

Consequently, three companies cumulatively accounting for more than

fifty two percent of the exports of brake rotors from the PRC were

3
Where an interested party has failed to cooperate to the
best of its ability with a request for information, Commerce may
resort to the use of facts available with an adverse inference.
See 19 U.S.C. §1677e(b).
Court No. 07-00321 Page 8

chosen as mandatory respondents.4 In addition, Commerce indicated

that in the event “a mandatory respondent fails to participate, and

companies that wish to be treated as voluntary respondents have

submitted timely responses, we may at our discretion . . . select

a voluntary respondent for individual review.” Id. at 4. Commerce

further explained that to be selected as a voluntary respondent:

(1) the respondent must have met filing deadlines for information

requested (and otherwise comply with all other Department

deadlines); (2) if there is more than one potential voluntary

respondent, Commerce would select the respondent based on the order

of each company’s submission of voluntary respondent review; and

(3) once selected, a voluntary respondent would be subject to the

same requirements as mandatory respondents, including the use of

facts available under 19 U.S.C. § 1677e. See id. at 4-5.

On October 2 and October 3, 2006, respectively, both Hongda

and Luqi submitted voluntary response questionnaires to Commerce,

and requested that company specific antidumping margins be

calculated. See Hongda Voluntary Response, (Oct. 2, 2006) (CR 43);

Luqi Voluntary Response, (Oct. 3, 2006) (CR 44).

In the preliminary results, mandatory respondents Winhere and

4
Among the three companies chosen was Plaintiff Haimeng.
The remaining two companies included Yantai Winhere Auto-Part
Manufacturing Co. Ltd. (“Winhere”) and Qingdao Meita Automotive
Industry Co. Ltd. (“Meita”). Plaintiffs LABEC, Hongda, Luqi,
Gren, and TLC were not among those selected for review.
Court No. 07-00321 Page 9

Meita received zero or de minimis antidumping margins, and Haimeng,

the third mandatory respondent, received a rate of 3.43 percent.

See Preliminary Results, 72 Fed. Reg. 7,405, 7,415. Furthermore,

Commerce concluded that each of the remaining fifteen companies

involved in the proceeding were eligible for a “separate rate”

calculation.5 See id. at 7,408. Therefore, the twelve non-

selected respondents were assigned an “all-others” rate consistent

with 19 U.S.C. § 1673d(c)(5). This rate is based on the weighted

average of the calculated margins of the mandatory respondents,

excluding any zero and de minimis margins, or margins based

entirely on facts available. See 19 U.S.C. § 1673d(c)(5)(A);

Separate Rate Analysis for Respondents (Including Exporters Not

Individually Reviewed) at 3 (Feb. 9, 2007), (PR 178). Because

Winhere and Meita’s zero and de minimis margins were excluded from

the calculations, the non-selected respondents were assigned

Haimeng’s rate of 3.43 percent. Commerce did not calculate

company-specific margins based on Hongda and Luqi’s voluntary

responses.

For purposes of valuing the factors of production in the

5
In proceedings involving non-market economy (“NME”)
countries, Commerce employs a rebuttable presumption of state
control, and assigns the exporter a country-wide antidumping duty
rate. In order to rebut this presumption and qualify for a
separate, company-specific rate, an exporter must demonstrate
that it is sufficiently independent of government control. See
Sigma Corp. v. United States, 117 F.3d 1401, 1405 (Fed. Cir.
1997).
Court No. 07-00321 Page 10

calculation of normal value, Commerce relied on Indian import

statistics of pig iron as reported in the World Trade Atlas

(“WTA”). See Preliminary Results, 72 Fed. Reg. 7,405 (PR 182).

Following the Preliminary Results, Haimeng Plaintiffs submitted

data from Infodrive India in an effort to provide “more detailed

information regarding imports of pig iron into India during the

POR.” Pls.’ Brief at 4. Hongda and Luqi also submitted U.S. sales

and factors of production data “for Commerce to use to calculate

company-specific antidumping margins.” Id. at 13.

On August 2, 2007, Commerce issued its final determination in

which it made certain changes to the antidumping duties assessed in

the preliminary findings.6 See Final Results, 72 Fed. Reg. 42,386

(Aug. 2, 2007). As it did in its Preliminary Results, Commerce

assessed a dumping margin based upon the weighted average of the

dumping margins of the three mandatory respondents, exclusive of

any zero and de minimis assignments (i.e., Winhere and Meita). See

Issues and Decision Memorandum for the 2005-2006 Administrative and

New Shipper Reviews of the Antidumping Duty Order on Brake Rotors

From the People’s Republic of China at 25, cmt. 8 (“Issues and

Decision Memorandum”) (PR 211). In addition, Commerce continued

6
In the Final Results, both Winhere and Meita continued to
receive zero and de minimis margins respectively, whereas
Haimeng’s antidumping duty rate was changed from 3.43 to 4.22.
Thus, the separate rate for all non-selected respondents was
increased to 4.22 as well. See 72 Fed. Reg. at 42,388.
Court No. 07-00321 Page 11

to value Plaintiffs’ consumption of pig iron using only data

provided by the WTA, and declined to consider the additional

information submitted by Plaintiffs. See id. at 6, cmt. 1.

Plaintiffs commenced this action on August 31, 2007.7

Plaintiffs seek judgment on the agency record under USCIT Rule 56.2

with respect to the following four issues:

1. Whether Commerce’s decision not to calculate company-
specific dumping margins for all voluntary respondents is
unsupported by substantial evidence, or otherwise not in
accordance with law;

2. Whether Commerce’s decision not to consider
Plaintiff’s U.S. sales and factors of production data in
the calculation of dumping rates assigned to the non-
selected respondents is unsupported by substantial
evidence, or otherwise not in accordance with law;

3. Whether Commerce’s decision not to incorporate the
zero and de minimis margins of the mandatory respondents
into the average rate assigned to the non-selected
respondents is arbitrary, capricious or an abuse of
discretion; and

4. Whether the methodology employed by Commerce in the
valuation of pig iron as a factor of production is
unsupported by substantial evidence.

Discussion

I. Commerce’s Decision Not to Calculate Company-Specific
Dumping Margins For All Voluntary Respondents Is Supported
By Substantial Evidence And In Accordance With Law.

a. Commerce’s Decision Is In Accordance With Law

7
This date reflects the initiation of two separate
actions, one carried under case number 07-00321, and the other
under case number 07-00333. Both actions were consolidated under
the former, pursuant to USCIT Rule 42(a), on October 19, 2007.
Court No. 07-00321 Page 12

In challenging Commerce’s decision not to calculate company-

specific margins, Plaintiffs contend that Commerce must accept

voluntary respondents when the agency limits the number of

mandatory respondents examined in an administrative review. See

Pls.’ Brief at 7-8. Plaintiffs argue that under the plain meaning

of the statute they are entitled to an individual weighted average

dumping margin. Though Plaintiffs acknowledge Commerce’s authority

to limit its review of mandatory respondents, pursuant to 19 U.S.C.

§ 1677f-1(c)(2)(B), they maintain that the inclusion of section

1677m(a) (voluntary respondents) was intentional, and is proof of

Congress’ intent to provide recourse to those companies not

selected for mandatory review. See Pls.’ Brief at 7.

Specifically, Plaintiffs point to the language of the statute

itself as evidence that it is not subject to administrative

interpretation by Commerce. See id. at 8. 19 U.S.C. § 1677m reads

in pertinent part:

(a) Treatment of voluntary responses in countervailing or
antidumping duty investigations and reviews

In any investigation . . . or a review . . .
in which the administering authority has,
under section 1677f-1(c)(2) . . . limited the
number of exporters or producers examined, . .
. the administering authority shall establish
. . . an individual weighted average dumping
margin for any exporter or producer not
initially selected for individual examination
under such sections who submits to the
administering authority the information
requested from exporters or producers selected
for examination, if-
Court No. 07-00321 Page 13

(1) such information is so submitted by the
date specified-

. . . and

(2) the number of exporters or producers who
have submitted such information is not so
large that individual examination of such
exporters or producers would be unduly
burdensome and inhibit the timely completion
of the investigation. (emphasis added).

Plaintiffs contend that because the statutory language is

mandatory, i.e., “shall,” Commerce violated its express mandate to

calculate an individual dumping margin when it refused to accept

the voluntary responses submitted by Hongda and Luqi. Pls.’ Brief

at 8. While acknowledging the exception in paragraph (2),

Plaintiffs reject Commerce’s reliance on this provision, as not

supported by substantial evidence. See id.

Commerce responds that although the applicable statutory

scheme establishes a preference for individual reviews, it

specifically includes exceptions in two separate provisions that

provide Commerce with broad discretion to limit the number of

respondents it chooses to examine. See Def.’s Resp. in Opp’n to

Pls.’ Mot. for J. Upon the Agency R. (“Def.’s Brief”) at 10.

Commerce first points to 19 U.S.C. § 1677f-1(c)(2) which provides

the agency with the authority to limit the number of reviews it

conducts when it is “not practicable” to examine all known

producers or exporters of subject merchandise. 19 U.S.C. § 1677f-
Court No. 07-00321 Page 14

1(c)(2); see also Def.’s Brief at 10. More specifically, Commerce

may limit its review by examining either:

(A) a sample of exporters, producers, or types of
products that is statistically valid based on the
information available to the administering authority at
the time of selection, or

(B) exporters and producers accounting for the largest
volume of the subject merchandise from the exporting
country that can be reasonably examined.

19 U.S.C. § 1677f-1(c)(2). Commerce further argues that section

1677m reaffirms its discretionary power to restrict the number of

voluntary respondents it reviews if the number of companies

submitting requests would impose an undue burden, or inhibit the

timely completion of the investigation. See 19 U.S.C. §

1677m(a)(2); Def.’s Brief at 10-11.

Plaintiffs rely on the statute to advance the argument that

Commerce is required to “establish an individual dumping margin for

any exporter or producer that submits voluntary responses and

requests an individual margin.” Pls.’ Brief at 7. At first blush,

it would appear that the core of Plaintiffs’ challenge in this

regard focuses on the proper construction of 19 U.S.C. § 1677m(a).

On the other hand, Plaintiffs concede that the same provision,

which forms the basis for this argument, also provides an exception

to this mandate. See id. Perhaps anticipating the incongruity of

this position, Plaintiffs argue in the alternative that “[i]t is

not plausible that Congress intended or expected ‘two’ to be a
Court No. 07-00321 Page 15

particularly high number.” Id. at 8. Therefore, Plaintiffs allege

that “[b]ecause the number of voluntary respondents was not large,

Commerce should have calculated individual weighted-average dumping

margins for both voluntary respondents: Hongda and Luqi.” Id.

Neither argument persuades the Court as the statute and the

legislative history are clear on this point. The provisions in

sections 1677m(a) and 1677f-1(c)(2) are clear expressions of

Commerce’s statutory authority to limit the number of respondents

it chooses to review. Moreover, Congress recognized both the

impracticality and impracticability of examining all producers and

exporters in all cases, and explained in its Statement of

Administrative Action accompanying the Uruguay Round Agreements

Act (“URAA”), that:

As a practical matter . . . Commerce may not be able to
examine all exporters and producers, for example, when
there is a large number of exporters and producers.
Statement of Administrative Action, H.R. 5110 (H.R. Doc.
No. 103-316) at 872 (1994) (“SAA”), reprinted in 1994
U.S.C.C.A.N. 4040, 4200.

Indeed, Congress was not only aware of the administrative burden

such a condition would impose, but more to the point, it

specifically rejected the notion of an examination requirement for

all exporters or producers. While acknowledging attempts by other

contracting parties to negotiate this stipulation into the URAA,

Congress made clear that these attempts were unsuccessful.

During the Uruguay Round negotiations, certain countries
Court No. 07-00321 Page 16

sought a requirement that national authorities examine
all firms producing or exporting a product subject to an
antidumping investigation. . . As negotiated, Articles
6.10 and 9.4 of the Antidumping Agreement largely reflect
existing U.S. law and practice. Id.

In making the determination as to whether Commerce’s interpretation

and application of the antidumping statute is in accordance with

law, a Court must undertake the two step analysis prescribed by

Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467

U.S. 837 (1984) (“Chevron”). See Windmill Int’l Pte. v. United

States, 26 CIT 221, 222, 193 F. Supp. 2d 1303, 1305 (2002). Under

the first step, the Court reviews Commerce’s construction of a

statutory provision to determine whether Congress has spoken on

point as to the question at issue. See id. at 223, 193 F. Supp. 2d

at 1305. It is clear from the language of the SAA and the statute

itself, that Congress has spoken on the matter. The authority to

limit the number of respondents for examination rests “exclusively”

with Commerce. SAA, H.R. 5110 (H. Doc. No. 103-316) at 872; see

also 19 U.S.C. § 1677f-1(c)(2). Therefore, the Court finds that

Commerce’s determination to limit its review to three mandatory

respondents was within the bounds of its statutory authority.

b. Commerce’s Decision Is Supported By Substantial Evidence

In the alternate, Plaintiffs point to Congress’ declaration in

the SAA that Commerce should decline to examine voluntary

respondents only “‘where the number of exporters or producers is
Court No. 07-00321 Page 17

particularly high,’” and that “[b]ecause the number of voluntary

respondents was not large, Commerce should have calculated

individual weighted-average dumping margins for both voluntary

respondents: Hongda and Luqi.”8 Pls.’ Brief at 8; see also SAA,

H.R. 5110 (H.R. Doc. No. 103-316) at 873. Plaintiffs contend that

it is unreasonable to suggest that Congress envisaged a

circumstance in which only two companies would sufficiently tax the

resources of Commerce so as to place an undue burden on its ability

to conduct reviews. Pls.’ Brief at 8.

In support of this argument Plaintiffs cite to the record of

the underlying antidumping order. Both of the voluntary respondents

in the instant matter, were also respondents in several previous

administrative reviews. See Pls.’ Brief at 10. In each instance

where Hongda and Luqi were afforded separate company-specific

margins, Commerce determined that neither company was dumping. See

id. Thus, according to Plaintiffs, Commerce was familiar with both

companies, and this familiarity would serve to negate any undue

burden posed by Plaintiffs’ voluntary submissions. See id.

Moreover, Plaintiffs point to instances in certain previous

administrative reviews where Commerce was able to examine either

all of the companies involved, or at a minimum, a number greater

8
Originally, there were three voluntary respondents,
Hongda, Luqi and LABEC, however, only Hongda and Luqi challenge
Commerce’s determinations on this issue.
Court No. 07-00321 Page 18

than the three performed in the current proceeding.9 See id. at

11. Thus, Plaintiffs allege, because Commerce exhibited an ability

on these prior occasions to review a greater number of respondents,

Commerce’s decision to review only three companies in the

underlying proceeding is arbitrary and without justification. See

id. Plaintiffs further suggest that if Commerce extended the

deadline for completing its final results, as was permitted under

the statute, it would have been able to examine both voluntary

respondents. See id. at 12.

Plaintiffs logic in this regard is flawed. First, any

assessment of Commerce’s operational capabilities or deadline

rendering must be made by the agency itself. As the United States

Court of Appeals for the Federal Circuit (“CAFC”) has already

explained, “agencies with statutory enforcement responsibilities

enjoy broad discretion in allocating investigative and enforcement

resources.” Torrington v. United States, 68 F. 3d 1347, 1351 (Fed.

Cir. 1995). To find otherwise would put this Court in the position

of routinely second-guessing Commerce’s decisions regarding its own

administrative capacity. See id. This is “a role for which courts

are ill-suited and one that could be quite disruptive of Commerce’s

9
Prior to the eighth administrative review of brake rotors
from the PRC, Commerce examined every exporter or producer of
subject merchandise requesting such a review. See Pls.’ Brief at
11. During the eighth administrative review, Commerce limited the
number of respondents to five utilizing a sampling methodology.
See id.
Court No. 07-00321 Page 19

effort to establish enforcement priorities.” Id.

Second, the fact that Commerce was able to review a larger

number of respondents in previous administrative reviews has no

bearing on whether or not the agency has sufficient resources in

any subsequent proceeding. At most, all that these prior reviews

establish is a consistent adherence to the statutory preference of

individual weighted average dumping margins. A strict adherence to

one part of the statutory scheme does not detract from Commerce’s

authority to invoke another part of its statutory prerogative.

Third, the Court disagrees with Plaintiffs’ contention that

the acceptance of voluntary respondents would not have

significantly increased Commerce’s administrative burden. While

conducting an administrative review of an antidumping duty order

Commerce is charged with a number of different tasks. For example,

the analysis of each company’s response, the collection and

analysis of surrogate value data for each unique part used by each

respondent, and performing the margin calculations for each

respondent all require the expenditure of significant resources.

See Notice of Final Determination of Sales at Less Than Fair Value

and Negative Final Determination of Critical Circumstances: Certain

Color Television Receivers From the People’s Republic of China, 69

Fed. Reg. 20,594, cmt. 2 (Dep’t of Commerce) (Apr. 16, 2004) and

accompanying Issues and Decision Memorandum. Moreover, the Court

notes that even if Commerce determined that it had the resources to
Court No. 07-00321 Page 20

review two additional companies, it would not have selected either

of the two voluntary respondents, because based on the respondent

selection methodology, neither Hongda nor Luqi had the next largest

export sales volume. See Respondent Selection Memorandum, (August

18, 2006) (CR 19).

Lastly, Plaintiffs maintain that Commerce has “failed to offer

any evidence to support its claim that reviewing more than three

companies would have created an undue burden” Pls.’ Brief at 11.

The record, however, does not support Plaintiffs position on this

point. In fact, there is evidence to the contrary showing that

Commerce conducted a careful evaluation of its resource

capabilities. See Respondent Selection Memorandum, (August 18,

2006) (PR 51). Specifically, Commerce examined the number of

cases, respondents, and analysts it had at its disposal, and

determined that it did not have sufficient resources to conduct a

comprehensive analysis of all the interested parties. See id. at

3. Commerce explained that:

“[t]his office is conducting numerous concurrent
antidumping proceedings which place a constraint on the
number of analysts that can be assigned to this case. Not
only do these other cases present a significant workload,
but the deadlines for a number of the cases coincide
and/or overlap with deadlines in this antidumping
proceeding. In addition, because of the significant
workload throughout the Import Administration, we do not
anticipate receiving any additional resources to devote
to this antidumping proceeding.” Id.

Thus, Commerce demonstrated that it carefully considered all
Court No. 07-00321 Page 21

available options, and concluded that the most efficient use of its

resources was to limit the number of respondents it examined.

The specific determination a court makes in the substantial

evidence standard of review is “‘whether the evidence and

reasonable inferences from the record support the finding.’” Daewoo

Elecs. v. Int’l Union, 6 F.3d 1511, 1520 (Fed. Cir. 1993) (citing

Matsushita Elec. Indus. Co., Ltd. v. United States, 750 F.2d 927,

933 (Fed. Cir. 1984)). This standard has been easily met here, and

the Court finds that Commerce’s decision to limit its review in

this proceeding to the three mandatory respondents is reasonable,

and supported by substantial evidence.

II. Commerce’s Decision Not to Consider Plaintiffs’ U.S. Sales And
Factors of Production Data In The Calculation Of Dumping
Margins Assigned to the Non-Selected Respondents Is Supported
By Substantial Evidence And In Conformance With Law

a. Commerce’s Decision Is In Accordance With Law

In determining the rate to be applied to the non-selected

respondents, Commerce assigned the non-selected, cooperative

respondents a weighted-average percent margin based on the

calculated margins of the mandatory respondents, exclusive of any

zero or de minimis rates or rates based entirely on facts

available. See Def.’s Brief at 6; see also 19 U.S.C. §

1673d(c)(5)(A). Haimeng Plaintiffs challenge Commerce’s reliance

on this “all-others” methodology arguing that the record evidence
Court No. 07-00321 Page 22

demonstrates that this rate is not representative of the companies’

actual level of dumping. See Pls.’ Brief at 13. Rather,

Plaintiffs contend that Commerce should not have relied on the

margins assigned to the mandatory respondents, but instead used the

U.S. sales and factors of production data submitted by Hongda, and

Luqi to calculate company-specific margins.10 See id. Accordingly,

Plaintiffs allege that the rate “Commerce assigned to Hongda, Luqi,

and Gren was contrary to law because these companies submitted

information to Commerce that demonstrates that the average rate

assigned to them is not representative of their actual level of

dumping.” Pls.’ Brief at 13.

Plaintiffs rely on 19 U.S.C. § 1677m(e) for the proposition

that such an approach is consistent with the statutory goal of

establishing the most accurate antidumping margins possible. The

statute reads as follows:

In reaching a determination under section 1671b, 1671d,
1673b, 1673d, 1675, or 1675b of this title the
administering authority and the Commission shall not
decline to consider information that is submitted by an
interested party and is necessary to the determination
but does not meet all the applicable requirements
established by the administering authority or the
Commission, if-

10
Plaintiffs challenging this portion of Commerce’s
decision include Hongda, Luqi, Gren and TLC. While Hongda and
Luqi rely on their U.S. sales and factors of production data and
TLC on its voluntary response data, Gren relies solely on the
quality and value information it submitted at the commencement of
the proceeding.
Court No. 07-00321 Page 23

(1) the information is submitted by the deadline
established for its submission,

(2) the information can be verified,

(3) the information is not so incomplete that it cannot
serve as a reliable basis for reaching the applicable
determination,

(4) the interested party has demonstrated that it acted
to the best of its ability in providing the information
and meeting the requirements established by the
administering authority or the Commission with respect to
the information, and

(5) the information can be used without undue
difficulties.

19 U.S.C. § 1677m(e).11 Plaintiffs assert that Hongda and Luqi

submitted timely responses within the required deadline, and the

information was otherwise in accord with section 1677m(e).12 In

addition, Plaintiffs maintain that although they were not selected

for review, Commerce should have nevertheless relied upon their

respective data submissions for purposes of calculating company-

specific antidumping margins.

11
Plaintiffs similarly rely on Commerce’s own regulations
which state in part that, “the Secretary will not decline to
consider information that is submitted by an interested party and
is necessary to the determination but does not meet all the
applicable requirements established by the Secretary if the
conditions listed under section 782(e) of the Act are met.” 19
C.F.R. §351.308(e).
12
Hongda and Luqi calculated their own dumping margins
using the data they submitted to Commerce. These self executed
margin calculations resulted in zero or de minimis dumping rates
for Hongda and Luqi. See Pls.’ Brief at 14.
Court No. 07-00321 Page 24

Once again Plaintiffs’ logic is flawed. As Commerce

accurately restates the argument, “Plaintiffs . . . suggest that

[section] 1677m(e) (the requirement to consider certain deficient

submissions) trumps the exception provided in section 1677m(a)(2)

(the exception for calculating individual margins for voluntary

respondents where doing so would be unduly burdensome).” Def.’s

Brief at 23. In the first instance, the Court agrees with Commerce

that section 1677m(e) is applicable only on those occasions where

such information submitted by interested parties does not meet

certain requirements established by Commerce. Commerce’s denial of

Plaintiffs’ data submissions was based not on a failure to meet

applicable requirements, but rather on the status of its

administrative capabilities. Therefore, this provision is

inapposite for purposes of this proceeding. See Def.’s Brief at

22. In the second instance, the statute directs Commerce to

consider such information only if “the information can be used

without undue difficulties.” 19 U.S.C. § 1677m(e)(5). Commerce

explained in its Issues and Decision Memorandum, that agency

resource constraints were such that it could only examine three

respondents in this administrative review. See Issues and Decision

Memorandum at 22, cmt. 6 (PR 211). Having already found that

Commerce is in the best position to assess its own administrative

capabilities, the Court agrees with Commerce that even if section

1677m(e) were to apply here it would not require consideration of
Court No. 07-00321 Page 25

Plaintiffs’ questionnaire responses.

To give effect to Plaintiffs’ understanding that section

1677m(e) defeats the relevant portions of section 1677m(a) would be

to render nugatory Commerce’s statutory authority to limit the

number of respondents it reviews in any given proceeding. One of

the basic rules of statutory construction is that “[a] statute is

passed as a whole and not in parts or sections and is animated by

one general purpose and intent. Consequently, each part or section

should be construed in connection with every other part or section

to produce a harmonious whole.” Norman J. Singer, 2A Sutherland

Stat. Const., § 46:5 (7th ed. 2007). The exceptions set forth in

both sections 1677m(a)(2) and 1677m(e)(5) are clear expressions by

Congress conferring the authority upon Commerce to decline

acceptance of company-specific submissions when those reviews would

create either an “undue burden” or “undue difficulties.” These

provisions are neither in conflict with each other, nor with the

statute as a whole.

The Court finds that Commerce’s decision not to consider the

Plaintiffs’ data submissions was a proper exercise of its authority

and in accordance with the clear language of the statute.

b. Commerce’s Decision Is Supported By Substantial Evidence

Although briefly mentioning the phrase “substantial evidence”

the Plaintiffs do not put forth any argument claiming that

Commerce’s determination itself was not supported by substantial
Court No. 07-00321 Page 26

evidence. See Pls.’Brief at 15 (“The information provided showed

that the companies were not dumping at the level calculated for

Haimeng, and Commerce’s decision to ignore the record evidence and

to assign Haimeng’s rate to these companies was not supported by

substantial evidence.”); contra Def.’s Brief at 21 (“Commerce’s

reliance upon the rate it calculated and verified during the course

of the administrative review was supported by substantial

evidence.”). Rather, their argument centers primarily upon whether

the rate applied by Commerce to the non-selected respondents was

based on the best available information. Plaintiffs rely on this

Court’s decision in Yantai Oriental Juice Co., v. United States,

stating that Commerce “must insure that any methodology it employs

in any particular investigation ‘is based on the best available

information and establishes antidumping margins as accurately as

possible.’” 27 CIT 477, 487, (2003) (citing Shakeproof Assembly

Components, Div. of Ill. Tool Works, Inc. v. United States, 268

F.3d 1376, 1382 (Fed. Cir. 2001)). Plaintiffs argue that “[g]iven

the information Plaintiffs provided to Commerce in the underlying

proceeding, . . . and given Commerce’s failure to use or even admit

the existence of this information, Commerce did not rely on the

best available information or establish antidumping margins as

accurately as possible.” Pls.’ Brief at 14-15 (internal quotation

marks omitted).

Plaintiffs reliance on this Court’s decision in Yantai is
Court No. 07-00321 Page 27

specious. The circumstances in that decision are not analogous to

those present in the case at bar. Yantai involved a remand

determination whereby Commerce abandoned the methodology used in

its final results when calculating a new all-others rate for non-

selected respondents. In so doing, Commerce failed to justify the

use of the latter methodology, and was unable to make a “rational

connection” between the facts found and its new approach. Yantai,

27 CIT at 488. In the underlying administrative review, however,

Plaintiffs do not contest Commerce’s reliance on the largest

exporter by volume methodology. Instead, Plaintiffs maintain that

Commerce erred in declining to review the information they

submitted in their questionnaire responses, and failing to assign

Plaintiffs company-specific margins. In other words, Plaintiffs

request removal from the effects of the sampling methodology

altogether. While this is framed as a substantial evidence

argument, it sounds dissonantly familiar to Plaintiffs’ assertion

that Commerce is required to calculate company-specific margins

because the statute requires them to do so - an argument the Court

has addressed supra. Because Plaintiffs sporadically include the

phrase “substantial evidence” with regard to this point, the Court

summarily addresses the issue. As demonstrated supra, Commerce

pointed to substantial record evidence and explained its decision

to limit the number of respondents the agency chose to review.

Accordingly, the Court finds that Commerce’s decision not to
Court No. 07-00321 Page 28

consider data submitted by Plaintiffs in the calculation of

antidumping margins for non-selected respondents is reasonable and

supported by substantial evidence.

III. Commerce’s Decision Not to Incorporate the Zero and De minimis
Rates Of the Mandatory Respondents Into the Average Rate
Assigned to the Non-selected Respondents Is Not Arbitrary,
Capricious or An Abuse of Discretion

In the case at bar, Commerce exercised its statutory

prerogative to limit the number of company-specific margins it

would assign. In such cases, 19 U.S.C. § 1673d(c)(1)(B)(i)(II)

specifies that Commerce shall “determine, in accordance with

paragraph (5), the estimated all-others rate for all exporters and

producers not individually investigated.” Paragraph 5 of that

section establishes the method for determining the estimated all-

others rate.

[T]he estimated all-others rate shall be an amount equal
to the weighted average of the estimated weighted average
dumping margins established for exporters and producers
individually investigated, excluding any zero and de
minimis margins, and any margins determined entirely
under section 1677e [facts available].

19 U.S.C. §1673d(c)(5)(A). After investigating the three mandatory

respondents, Commerce calculated the all-others rate for non-

selected respondents by using the methodology set forth in
Court No. 07-00321 Page 29

paragraph 5.13 See Issues and Decision Memorandum at 25, cmt. 8 (PR

211). This resulted in the assignment of a dumping margin of 4.22

percent for the non-selected respondents.

Plaintiffs challenge Commerce’s exclusion of zero and de

minimis antidumping margins in the calculation of the margins

assigned to non-selected respondents, arguing that the statutory

all-others methodology is applicable only to investigations, and

therefore is not appropriate for use in administrative reviews.

See Pls.’ Brief at 17. Plaintiffs aver that “Congress’ decision to

limit this methodology to investigations - where only estimated

duty deposits and not final antidumping duties are at issue - was

intentional, and reflected a codification of past Commerce

practice.” Id. In support of this argument, Plaintiffs point to

this Court’s decision in Serampore Indus. Pvt. Ltd. v. United

States, 12 CIT 825, 696 F. Supp. 665 (1988). Plaintiffs claim that

the reasons provided by Commerce in Serampore, for excluding zero

and de minimis margins from the all-others rate in antidumping

investigations, do not apply to this administrative review. See

Pls.’ Brief at 19. While the Court agrees with Plaintiffs’

analysis of Commerce’s rationale in Serampore, the underlying

principles of this rationale have been superceded by more recent

13
As previously noted, the three mandatory respondents,
Haimeng, Winhere and Meita each received dumping margins of 4.22
percent, 0.03 percent and 0.00 percent respectively.
Court No. 07-00321 Page 30

enactments to the antidumping statute. Because this case pre-dates

the amendments to the URAA, provisions relevant to the case at bar

were not yet codified by Congress.14 For example, the provisions

relating to voluntary respondents (section 1677m(a)), the exception

allowing Commerce to limit the number of respondents chosen for

review (section 1677f-1(c)), and the method for determining the

all-others rate (section 1673d(c)(5)) had not yet been adopted.

The absence of these statutory provisions means that the Court’s

analysis in Serampore was confined to Commerce’s rationale without

the benefit of any statutory guidance. In other words, Serampore

was decided in the context of Commerce’s construction and

application of the antidumping statute as it existed at that time.

The Court’s analysis today, however, must seek to determine whether

Commerce’s interpretation and application of these specific

provisions are reasonable and in accordance with law by applying

the two-step analysis prescribed in Chevron. Thus, Serampore does

not advance Plaintiffs argument.

Commerce defends its position by arguing that the “practice

of employing an ‘all others’ methodology in non-market economy

administrative reviews was lawful and consistent with prior

practice.” Def.’s Brief at 20. Although there are no cases

14
The trade agreements contained in the URAA were enacted
by Congress on September 27, 1994. See SAA, H.R. 5110 (H. Doc.
No. 103-316) (1994), reprinted in 1994 U.S.C.C.A.N. 4040.
Court No. 07-00321 Page 31

directly on point,15 Commerce relies on Certain Fresh Cut Flowers

from Colombia: Final Results of Antidumping Duty [Tenth]

Administrative Review, 63 Fed. Reg. 31,724 (Dep’t of Commerce June

10, 1998) (“Certain Fresh Cut Flowers”), and Certain Fresh Cut

Flowers from Colombia; Final Results of Antidumping Duty [Ninth]

Administrative Review, 62 Fed. Reg. 53,287 (Dep’t of Commerce Oct.

14, 1997). Id. at 19. All parties agree that, unlike antidumping

investigations, there is no over-arching rule in administrative

reviews as to the inclusion or exclusion of zero or de minimis

margins in the calculation of the all-others rate. See Def.’s

Brief at 20; see also Trade Pacific Respondents Case Brief, May 21,

2007 at 21 (CR 11). While section 1677f-1(c)(2) provides Commerce

with the authority to determine margins by limiting its examination

to a statistically valid sample of exporters or the largest volume

exporters of subject merchandise, it is silent as to the method for

establishing the rate for non-selected respondents. Having

established an ambiguity in the statute, Commerce’s generally

conferred authority permits the agency to address the uncertainty.

See United States v. Mead, 533 U.S. 218, 229 (2001). Thus, the

Court’s focus turns to the second step under Chevron.

15
Commerce submits Kaiyuan Group Corp. v. United States, 28
CIT 698, 343 F. Supp. 2d 1289 (2004) suggesting that this Court
affirmed the use of the all-others rate in NME administrative
reviews. While there does appear to be some recognition of this
practice, the Court did not specifically rule on this issue and
its comments were confined to dicta.
Court No. 07-00321 Page 32

A reviewing court “is obliged to accept the agency’s position

if Congress has not previously spoken to the point at issue and the

agency’s interpretation is reasonable.” Id. at 229. This Court’s

decision in Coalition for the Pres. of Am. Brake Drum and Rotor

Aftermkt. Mfrs. v. United States, 23 CIT 88, 44 F. Supp. 2d 229

(1999) (“Coalition”) is instructive in this regard. In Coalition,

the court affirmed Commerce’s extension of an all-others rate to

NME investigations explaining that the amended provisions of the

antidumping statute “indicate Congressional support for the ‘all-

others’ rate without distinction for NME or non-NME contexts.”

Coalition, 23 CIT at 110, 44 F. Supp. 2d 229, 250 (citing UCF

America Inc. v. United States, 919 F. Supp. 435, 441 (1996)).

Similarly, the legislative history indicates Congressional support

for the applicability of an all-others rate in both administrative

reviews and investigations.16 Thus, Commerce’s approach also

comports with the statutory scheme under the URAA as articulated by

Congress.

Plaintiffs further argue that “Commerce’s decision to extend

16
The operative language in the SAA provides that “[u]nder
existing practice, Commerce attempts to calculate individual
dumping margins for all producers and exporters . . . who are
subject to an antidumping investigation or for whom an
administrative review is requested. . . . Commerce will calculate
individual dumping margins for those firms selected for
examination and an ‘all others’ rate to be applied to those firms
not selected for examination.” SAA H.R. 5110 (H.R. Doc. No. 103-
316) at 872.
Court No. 07-00321 Page 33

to administrative reviews its approach of excluding zero and de

minimis rates from the calculation of the average rate assigned to

non-selected respondents . . . leads to absurd and arbitrary

antidumping results.” Pls.’ Brief at 20. For illustrative

purposes, Plaintiffs offer a scenario in which mandatory

respondents Meita and Winhere each receive antidumping rates

slightly above the de minimis threshold. Under the express

language of the statute, these rates would now be included in the

average rate calculation. Thus, an increase in the mandatory

respondents level of dumping would have actually resulted in a

lower average rate assigned to the non-selected respondents. This

incongruity, according to Plaintiffs, demonstrates the arbitrary

nature of Commerce’s decision to exclude zero and de minimis rates

from their calculation of the all-others rate. Plaintiffs maintain

that “there is no reason why an antidumping margin of 0.51 percent

should be included and an antidumping margin of 0.49 percent be

excluded from the calculation of the average rate assigned to non-

selected respondents.” Pls.’ Brief at 20-21. While it is true

that under certain circumstances a mandatory respondent’s increased

level of dumping may actually reduce the rate assigned to a non-

selected respondent, this is an inherent and accepted part of any

sampling methodology. By its nature a sampling rate cannot attain

the precision of an individualized rate as to any given party.

Therefore, Plaintiffs argument is more appropriately directed at
Court No. 07-00321 Page 34

the legislature. The exclusion of zero and de minimis margins in

section 1673d(c)(5)(A) is an assignation by Congress not Commerce.

The scope of review under the abuse of discretion standard is

a narrow one, and a reviewing court will afford considerable

deference to an agency decision. See Consolidated Fibers, Inc. v.

United States, 535 F. Supp. 2d 1345, 1354 (2008) (“[T]his standard

is generally considered to be the most deferential of the APA

standards of review.”) In the present case, there is no question

that Commerce had the authority to choose the method for

calculating the rates for non-selected respondents. The only issue

here is whether the agency’s discharge of that authority was

reasonable. “An abuse of discretion occurs where the decision is

based on an erroneous interpretation of the law, on factual

findings that are not supported by substantial evidence, or

represents an unreasonable judgment in weighing relevant factors.”

Star Fruits S.N.C. v. United States, 393 F.3d 1277, 1281 (Fed. Cir.

2005).

Here, all Commerce did was adopt an approach that parallels

the statutorily mandated formula for calculating the all-others

rate in NME investigations. See 19 U.S.C. §1677d(c)(5). The

agency conducted a review of past practice and determined that the

conditions present in the underlying proceeding were most analogous

to those extant in NME investigations. Noting that the touchstone

of the abuse of discretion standard is “rationality,” Hyundai
Court No. 07-00321 Page 35

Elecs. Indus. Co. v. ITC, 899 F.2d 1204, 1209 (Fed. Cir. 1990), the

Court finds that Commerce’s decision to conform its methodology to

the statutory norm is not arbitrary, capricious or an abuse of

discretion.

IV. Commerce’s Valuation Of Pig Iron Is Unsupported By Substantial
Evidence And Not In Accordance With Law

In an antidumping investigation, Commerce calculates a dumping

margin by determining the amount by which the “normal value” of the

imported merchandise exceeds the “export price” for that same

merchandise. 19 U.S.C. § 1677(35)(A). Whereas normal value

typically equals the domestic price of the product in the exporting

country, id. § 1677b(a)(1)(B), the export price generally refers to

the price at which the subject merchandise is first sold by the

producer or exporter before importation into the United States.

Id. § 1677a(a). When the subject merchandise is exported from a

NME, however, the domestic sales may not be reliable indicators of

market value. In such instances, Commerce must “determine the

normal value of the subject merchandise on the basis of the value

of the factors of production utilized in producing the merchandise

and to which shall be added an amount for general expenses and

profit plus the cost of containers, coverings, and other expense.”

Id. § 1677b(c)(1). In valuing the factors of production under this

section, Commerce “shall utilize, to the extent possible, the
Court No. 07-00321 Page 36

prices or costs of factors of production in one or more market

economy countries that are- (A) at a level of economic development

comparable to that of the nonmarket economy country, and (B)

significant producers of comparable merchandise.” Id. §

1677b(c)(4). The statute requires Commerce to base its valuation

of the factors of production on the “best available information

regarding the values of such factors in a market economy country or

countries considered appropriate by the administering authority.”

Id. § 1677b(c)(1).

In the underlying review, Commerce relied on publicly

available Indian surrogate values for each input. See Def.’s Brief

at 25. With respect to pig iron, the agency used Indian import

statistics obtained from the World Trade Atlas (“WTA”), “a

published data source that tracks global imports and exports.”17

Id. Commerce selected the Harmonized Tariff System (“HTS”)

category 7201.1000 as the product most similar to the reported type

of pig iron used by respondents. See Issues and Decision

Memorandum at 6, cmt. 1 (PR 211). This subheading covers non-alloy

pig iron with a phosphorous content of less than or equal to 0.5

percent. Id.

17
The World Trade Atlas is a database of commodities using
all levels of the Harmonized Tariff Schedule. It enables users to
determine the value of a specific product and identify countries
to or from which the product is being exported or imported. See
http://www.gtis.com/wta.htm.
Court No. 07-00321 Page 37

Plaintiffs contest Commerce’s reliance on the WTA data as

unsupported by substantial evidence and contrary to law. See Pls.’

Brief at 21. Instead, Plaintiffs aver, that Commerce should have

used the financial statements of Indian steel producer, Steel

Authority of India Limited (“SAIL”) as the basis for valuing

Plaintiffs’ pig iron consumption. See Pls.’ Brief at 33.

Plaintiffs’ characterize the central issue as several sub-issues,

namely that there is record evidence which indicates that the

imported pig iron was 1) not specific to the pig iron used in the

production of subject merchandise, 2) was not imported in

commercially significant quantities, and 3) was not consumed by the

Indian brake rotor casting industry. See id. at 22. Because the

Court’s holding is premised on the first of these arguments,

Plaintiffs alternate arguments need not be addressed.

Plaintiffs claim that “approximately seventy percent of the

pig iron imported into India during the POR was Sorelmetal, a high-

purity, ductile iron that is not used, and cannot be used, to

produce the subject merchandise.” See Pls.’ Brief at 25. This

claim is premised on evidence Plaintiffs submitted which indicates

that the entirety of Indian imports from South Africa,18 under HTS

7201.1000, were of Sorelmetal an ingredient in the manufacture of

18
Plaintiffs rely on Infodrive India (“Infodrive”), which
is a database of Indian export-import activity, that provides
line-by-line data on the physical characteristics of the precise
goods listed under HTS 7201.1000.
Court No. 07-00321 Page 38

ductile iron. It was these imports that accounted for close to

seventy percent of the total pig iron imports into India. See

Surrogate Value Submission for the Final Results, Exhibits 1, 2

(March 28, 2007) (PR 193). According to Plaintiffs, the underlying

antidumping duty order is limited to “brake rotors made of gray

cast iron,” and that ductile iron brake rotors are not subject to

that order. Pls.’ Brief at 26; see also Final Results, 72 Fed.

Reg. 42,386 (August 2, 2007) (PR 217). Thus, Plaintiffs argue that

Commerce erred in its determination that Indian pig iron imports

are specific to the gray pig iron Plaintiffs use to produce the

subject merchandise. See Pls.’ Brief at 26.

In defense of its position, Commerce simply states that “as

demonstrated above, the respondents failed to place anything on the

record of the review that indicated that Sorelmetal is different

from the pig iron used by respondents.” Def.’s Brief at 30.

Commerce’s only other statement in this regard is that it “found

that the imports from South Africa (those comprised primarily of

Sorelmetal) had the same range of average unit values as those from

all of the other six countries in the WTA data.”19 Id. Although

the antidumping statute does not define the phrase “best available

information” this Court has previously held that “the statute

19
Throughout this portion of the argument, Commerce cites
to its Issues and Decision Memorandum as support for its
position. While this may be instructive in certain respects, it
does not provide a legal basis for the agency’s decision.
Court No. 07-00321 Page 39

grants to Commerce broad discretion to determine the ‘best

available information’ in a reasonable manner on a case-by-case

basis.” Timken Co. v. United States, 25 CIT 939, 944, 166 F. Supp.

2d 608, 616 (2001); see also Nation Ford Chemical Co. v. United

States, 166 F.3d 1373, 1377 (Fed. Cir. 1999) (“While § 1677b(c)

provides guidelines to assist Commerce in this process, this

section also accords Commerce wide discretion in the valuation of

the factors of production in the application of those

guidelines.”). To assist it in the calculation of normal value of

subject merchandise from nonmarket economy countries, Commerce

“normally will use publicly available information to value factors

[of production].” 19 C.F.R. § 351.408(c)(1). In addition,

Commerce has developed policy preferences in the selection of data

for valuation purposes.20 See Issues and Decision Memorandum at

6, cmt. 1 (PR 211).

Commerce explains that the WTA data “was the best available

data to value pig iron because it was contemporaneous with the

period of review, specific to the raw material (defined as pig iron

containing less than or equal to 0.5 percent phosphorous) consumed

by the respondents in the production of subject merchandise.”

20
These preferences include surrogate values that are (1)
non-export average values; (2) contemporaneous with the period
being examined; (3) product-specific; and (4) tax exclusive. See
Notice of Final Determination of Sales at Less Than Fair Value:
Bicycles From the People’s Republic of China, 61 Fed. Reg. 19,026
(April 30, 1996).
Court No. 07-00321 Page 40

Def.’s Brief at 27 (internal quotation marks omitted). Commerce

further explains its selection of HTS category 7201.1000 “as the

product most similar to the reported type of pig iron used by

respondents based on respondents’ questionnaire responses

indicating that they used pig iron with a phosphorous content of

less than or equal to 0.5 percent in the production of subject

merchandise.” Issues and Decision Memorandum at 6, cmt 1 (PR 211).

Hence, the question for the Court is whether Sorelmetal is specific

to the pig iron being used in the production of subject

merchandise. The record evidence indicates that Sorelmetal is an

ingredient in the composition of ductile iron.21 See Surrogate

Value Submission for the Final Results, Exhibit 4 (March 28, 2007)

(PR 193) While the Court agrees with Plaintiffs that ductile iron

is dissimilar to the type of pig iron used by respondents, the

issue is whether Sorelmetal differs in some material way from pig

iron so as to preclude its use in the manufacture of subject

merchandise. The evidence Plaintiffs submit makes clear that

Sorelmetal is designed, manufactured and marketed for the express

purpose of producing a higher grade of ductile iron. See id. Its

low concentration of certain undesirable elements (i.e., carbon)

21
Ductile iron is one of several commercial grades of cast
iron. Cast iron is a generic term describing a family of iron
alloys containing 1.8-4.5 percent carbon. See 3 McGraw-Hill
Encyclopedia of Science and Technology, 547 (9th ed. 2002). Other
forms include gray iron, white iron, and malleable iron each with
various applications. See id.
Court No. 07-00321 Page 41

allow it a higher ductility, a quality especially desirable in

ductile iron. See id. Pig iron, on the other hand, has a

relatively high content of carbon, thus making it very brittle, and

not useful directly except for limited applications. See The

Making, Shaping and Treating of Steel 1, 1066-68 (9th ed. 1971).

The central of these applications is as an ingredient of cast iron.

See id. at 1066.

The Court agrees with Plaintiffs that “although the

phosphorous content of pig iron may be the defining characteristic

in the Indian HTS category, it is not the defining characteristic

of the pig iron that Plaintiffs consumed.” Pls.’ Brief at 27.

While the Indian HTS classification is the mechanism by which

Commerce attempts to assign a surrogate value for any given input,

the underlying rationale is to achieve the statutory objective of

assigning dumping margins “as accurately as possible.” Lasko Metal

Prods. Inc. v. United States, 43 F.3d 1442, 1446 (Fed. Cir. 1994).

Should this practice somehow produce less accurate results,

Commerce’s use of this information may be deemed unreasonable. See

Lasko Metal Prods. Inc. v. United States, 16 CIT 1079, 1081, 810 F.

Supp. 314, 317 (1992). The evidence that Plaintiffs cite weakens

Commerce’s determination as to the representativeness of the data

the agency relied on. Commerce does not rejoin Plaintiffs’

argument that Sorelmetal is a product different from the subject

pig iron other than to compare its average unit value with other
Court No. 07-00321 Page 42

WTA countries. See Def.’s Brief at 30. This does not address the

question of whether or not the pig iron imports into India, under

HTS 7201.1000, are consistent with the pig iron consumed by

Plaintiffs. Therefore, the Court finds that Commerce failed to

adequately explain whether the Indian imports under HTS 7201.1000

are the best available information for valuing pig iron consumed by

the Plaintiffs in the production of subject merchandise. In light

of the record evidence indicating that Sorelmetal is a product

fundamentally different from the pig iron consumed by Plaintiffs,

Commerce’s use of the WTA data fails the criteria it adopted in

Notice of Final Determination of Sales at Less Than Fair Value:

Bicycles From the People’s Republic of China, 61 Fed. Reg. 19,026

(Dep’t of Commerce April 30, 1996) for valuing factors of

production. Namely, that the data be product-specific.

Accordingly, the Court finds that Commerce’s determination that the

WTA data constituted the best available information for valuing pig

iron was unsupported by substantial evidence on the record.

Alternatively, Plaintiffs argue that the data contained in the

audited financial statement of SAIL more accurately represents the

pig iron consumed by respondents. See Pls.’ Brief at 24. This

Court has stated previously that “Commerce need not prove that its

methodology was the only way or even the best way to calculate

surrogate values for factors of production as long as it was a

reasonable way.” Coalition, 23 CIT at 118, 44 F. Supp. 2d 229,
Court No. 07-00321 Page 43

258. In the present case, while Commerce adequately detailed the

numerous reasons why the SAIL data was not preferable, the agency

failed to explain its reliance on the WTA data as reasonable.

Commerce explained, for instance, that the SAIL financial statement

only provides information regarding sales of pig iron without

reference to the phosphorous content of the merchandise. See

Issues and Decision Memorandum at 8, cmt 1 (PR 211). Therefore,

the information in the SAIL financial statement was not verifiable

as to product specificity. In addition, Commerce points to the

fact that the SAIL data did not reflect whether the company

received subsidies or whether it purchased raw materials from NME

suppliers. See id. Lastly, Commerce notes that the WTA data

reflects a broader overall more representative data source as

opposed to the financial statement of just one company. See Def.’s

Brief at 29.

The Court therefore remands back to Commerce to specifically

address (i) Plaintiffs’ argument that Sorelmetal is fundamentally

different from the pig iron consumed by respondents and cannot be

used in the production of subject brake rotors; or alternately (ii)

whether pig iron imports into India under HTS 7201.1000 are the

best available information for valuing the pig iron consumed by

Plaintiffs in the production of subject brake rotors.
Court No. 07-00321 Page 44
CONCLUSION

In accordance with the foregoing, the Court affirms Commerce’s

determination in part and remands in part.

/s/ Nicholas Tsoucalas
NICHOLAS TSOUCALAS
SENIOR JUDGE

Dated: October 21, 2008
New York, New York