Slip Op. 04 - 36
UNITED STATES COURT OF INTERNATIONAL TRADE
- - - - - - - - - - - - - - - - - - - x
ELKEM METALS COMPANY and GLOBE METAL-
LURGICAL INC., :
Plaintiffs, :
v. :
UNITED STATES, : Consolidated
Court No. 01-00098
Defendant, :
-and- :
COMPANHIA BRASILEIRA CARBURETO DE :
CÁLCIO,
:
Intervenor-Defendant.
- - - - - - - - - - - - - - - - - - - x
Memorandum & Order
[Upon motion for relief from results of
antidumping-duty administrative review,
remand to International Trade Administration.]
Decided: April 15, 2004
Verner, Liipfert, Bernhard, McPherson and Hand, Chartered
(William D. Kramer, Jessie Marie Brooks and Virginia C. Dailey) for
the plaintiffs.1
Peter D. Keisler, Assistant Attorney General; David M. Cohen,
Director, Commercial Litigation Branch, Civil Division, U.S. De-
partment of Justice (Reginald T. Blades, Jr.); and Office of Chief
Counsel for Import Administration, U.S. Department of Commerce
(John F. Koeppen), of counsel, for the defendant.
Dorsey & Whitney LLP (Philippe M. Bruno and Rosa S. Jeong) for
the intervenor-defendant2 and Eletrosilex S/A.
1
Samuel J. Waldon and Matthew T. West of Baker Botts LLP,
counsel for Elkem Metals Company and Globe Metallurgical Inc. in
CIT No. 01-00082, which has been consolidated herein, have filed
papers in opposition to the motion of Eletrosilex S/A for judgment
on the agency record.
2
Subsequent to the service of his motion papers herein,
Philippe M. Bruno filed a notice of substitution of attorneys for
this party by Greenberg Traurig, LLP.
Consolidated
Court No. 01-00098 Page 2
AQUILINO, Judge: This case commenced pursuant to 19
U.S.C. §§ 1516a(a)(2)(A)(i)(I) and (B)(iii) and 28 U.S.C. §§
1581(c) and 2631(c) consolidates complaints filed by Companhia
Brasileira Carbureto de Cálcio ("CBCC") and Eletrosilex S/A, CIT
No. 01-00082, and by Elkem Metals Company and Globe Metallurgical
Inc., CIT No. 01-00098, each praying for relief from Silicon Metal
From Brazil; Final Results of Antidumping Duty Administrative Re-
view and Determination Not To Revoke in Part, 66 Fed.Reg. 11,256
(Feb. 23, 2001), promulgated by the International Trade Administra-
tion, U.S. Department of Commerce ("ITA").3 In pertinent part,
those Final Results were weighted average antidumping-duty margins
of 0.63 percent for CBCC and 93.20 percent for Eletrosilex. See 66
Fed.Reg. at 11,257. The former led to the following reported
rationale:
After review of the record, the Department deter-
mines that although CBCC has had zero or de minimis
dumping margins for the previous two review periods,
during the current review CBCC's weight-averaged dumping
margin is determined to be 0.63 percent, above the de
minimis rate . . . 0.50 percent . . .. Consequently,
CBCC has not made sales of subject merchandise "at not
less than NV for a period of at least three consecutive
years" as required by the Department's regulations.
Because one of the requirements to qualify for revocation
has not been met, . . . we determine not to revoke this
order with respect to CBCC.
3
The above-encaptioned plaintiffs ("Elkem & Globe") were
granted leave to intervene as parties defendant in the first
matter, from which resultant adverse posture they interposed a
motion to dismiss Eletrosilex as a party with any actionable claim,
alleging lack of standing. That motion has been denied per the
court's slip opinion 02-34, 26 CIT , 196 F.Supp.2d 1367 (2002),
familiarity with which is presumed.
Consolidated
Court No. 01-00098 Page 3
Id. at 11,256-57. The notice of the Final Results adopts the
ITA's Issues and Decision Memorandum for discussion of the points
pressed by the parties, including Eletrosilex. See id. at 11,256.
That memorandum explains the margin for this exporter, in part, as
follows:
Eletrosilex, an experienced participant in the
antidumping proceedings since the 1991-1992 POR[] was on
notice as provided by the Department's past practice that
if it failed to act to the best of its ability, and the
Department applied adverse FA, the rate selected could
very well be the highest calculated rate in the proceed-
ing, i.e., the 93.20 percent rate obtained in the LTFV
investigation. In determining the FA rate here, the
Department considered the fact that, in the 1993-1994 and
1994-1995 PORs, [it] calculated dumping margins of 61.58
percent for CBCC and 81.61 percent for RIMA, respec-
tively, while at the same time, calculating zero or
single digit rates for other respondents, demonstrating
that in this particular market, some companies may
continue to dump at substantial margins while others have
eliminated or substantially lowered their margins. The
fact that these disparate rates have continued throughout
the reviews since the original LTFV investigation,
combined with [] Eletrosilex's failure to respond to the
request for information, supports our conclusion that the
93.20 percent rate from the investigation remains
reasonable and relevant. The Department's determination
here is in accordance with [it]s policy of selecting the
highest calculated rate in the entire proceeding in order
to induce future cooperation of a respondent.4
I
The plaintiffs Elkem & Globe have interposed a motion for
judgment upon the ITA record pursuant to USCIT Rule 56.2. The sole
4
Appendix 8 to Brief in Opposition to Plaintiff Eletrosilex's
Motion for Judgment Upon the Agency Record, p. 15. The references
"POR", "FA", "LTFV", and "RIMA" are abbreviations for "period of
review", "facts available", "less than fair value", and for the
respondent "Rima Industrial S.A.", respectively.
Consolidated
Court No. 01-00098 Page 4
thrust of the motion is that the agency failed to fulfill its
statutory obligation of calculating the cost of production ("COP")
and constructed value ("CV") based on the actual costs incurred by
the producer or exporter under investigation, which failure,
according to them, has given rise to the issue of
whether the Department erred in calculating the financial
expenses included in COP and CV for CBCC, the producer
and exporter of the subject merchandise, based on the
financial statements of its indirect Belgian parent,
Solvay & Cie, when the actual financial costs incurred by
CBCC greatly exceeded the financial costs calculated by
the Department.
Plaintiffs' Brief, p. 2.
The defendant and CBCC each accept this as the issue
between them and the plaintiffs for resolution. See Defendant's
Memorandum, p. 2; Defendant-Intervenor's Brief in Opposition, p. 1.
And each defends the ITA's approach on the basis of existing agency
practice and case law. Their papers, understandably, cite and dis-
cuss the litigation sub nom. American Silicon Technologies v.
United States, CIT No. 97-02-00267, one of a series of suits
contesting the final results of ITA administrative reviews of the
same antidumping-duty order. The action bearing that CIT docket
number entails judicial review of the ITA's reliance, in re CBCC,
on the consolidated financial statements of Solvay & Cie of
Belgium, not Brazil. See, e.g., American Silicon Technologies v.
United States, 23 CIT 237, 244-45 (1999). That opinion rejected as
Consolidated
Court No. 01-00098 Page 5
without merit the agency's claimed established practice of using
such consolidated statements of a respondent's parent corporation,
rather than those of the respondent itself, whenever the record
establishes, prima facie, parental corporate control. The court
also was unable to find the requisite substantial evidence on the
record in support of that approach, whereupon it remanded
the calculation of CBCC's financial expenses with the
instruction that Commerce base those expenses upon the
consolidated financial statements of CBCC and its im-
mediate parent Solvay do Brasil.
Id. at 245. The ITA complied with the court's order, and the
results of the remand on that issue were affirmed. See American
Silicon Technologies v. United States, 25 CIT , , Slip Op.
01-109, pp. 3-6 (Aug. 27, 2001).
By the time of that affirmance, the actions comprising
this consolidated case had commenced, and, a few months later,
CBCC, a party to those prior proceedings, noticed a timely appeal
from that affirmance that has resulted in the following decision,
to quote from it in part:
. . . [T]he trial court . . . remand . . . limited
Commerce's examination to CBCC's transactions with
Brasil. This order prevented Commerce from further
assessing the relationship between Brasil and Solvay or
CBCC and Solvay. This limit on the remand methodology
further inhibited Commerce's ability to ensure an
accurate assessment of CBCC's financial costs. As
Commerce notes on appeal, during the remand proceedings,
Commerce gathered more information about the relationship
between CBCC and Brasil, but not with regard to the
relationship between CBCC or Brasil and Solvay. Thus,
Consolidated
Court No. 01-00098 Page 6
the record in the remand is deficient because Commerce
could not compare the consolidated statements of Solvay
with the consolidated statements of Brasil. By sharply
limiting Commerce's inquiry, the trial court's remand
actually prevented Commerce from undertaking a fully
balanced examination that might have produced more
accurate results.
Therefore, this court reverses and remands with
instructions to require Commerce to carry out its
statutory duty of accurately assessing "general costs"
. . ..
American Silicon Technologies v. United States, 334 F.3d 1033,
1038-39 (Fed.Cir. 2003).
While the facts underlying that contested ITA administra-
tive review are still sub judice5, the issue posited above by the
plaintiffs Elkem & Globe in this case has been resolved as a matter
of law by the court of appeals adversely to their position, viz.:
As a legal matter, the Court of International Trade
had an obligation to defer to Commerce's reasonable
methodology in the first place, but no such deference was
afforded. Thus, according proper deference, Koyo Seiko
Co. v. United States, 36 F.3d 1565, 1570, 1575 (Fed.Cir.
1994), this court sustains as reasonable Commerce's well
established practice of basing interest expenses and in-
come on fully consolidated financial statements.
Id. at 1038. Hence, plaintiffs' motion for judgment upon the
agency record must be, and it hereby is, denied.
5
This court notes in passing that, pursuant to the order
of remand, American Silicon Technologies v. United States, 27 CIT
, Slip Op. 03-109 (Aug. 25, 2003), the ITA has filed its
determination of 0.37 percent as the weighted-average margin for
CBCC for the particular period of review at issue. See Silicon
Metal from Brazil: Final Results of Redetermination Pursuant to
Court Remand, p. 6 (Dec. 15, 2003).
Consolidated
Court No. 01-00098 Page 7
II
The motion of CBCC and Eletrosilex for such a judgment on
their behalf propounds the following issues for the court's adjud-
ication:
1. Whether . . . Commerce's selection of the sur-
rogate interest rate to calculate CBCC's imputed credit
expense was supported by substantial evidence on the
record and otherwise in accordance with law.
2. Whether . . . Commerce's rejection of the in-
terest rate based on CBCC's borrowing experience was sup-
ported by substantial evidence on the record and other-
wise in accordance with law.
3. Whether the Department's use of adverse inference
in applying total fact[s] available to Eletrosilex was
supported by substantial evidence on the record and
otherwise in accordance with law.
4. Whether the Department properly corroborated the
total facts available applied to Eletrosilex as total
facts available, in accordance with law.
A
On its part, the defendant would compress the first two
of these enumerated issues into one, namely, whether the ITA prop-
erly calculated CBCC's home-market imputed credit expense based
upon an established Brazilian commercial reference rate rather than
a higher rate based upon a CBCC loan that was due after only
several days. Defendant's Memorandum, p. 3. This formulation
apparently has been derived from that part of the controlling
Decision Memorandum that sets forth the ITA's determination to use
Brazil's Taxa Referencial ("TR") rate to calculate CBCC's imputed
Consolidated
Court No. 01-00098 Page 8
home-market credit costs.6 Be that as it may, defendant's counsel
eschew any defense now on this issue, requesting instead a remand
to the ITA for reconsideration and to give this determination "full
and fair consideration under the applicable law." Id. at 2.
CBCC welcomes this request, while the plaintiffs take the
position that the TR is an appropriate surrogate rate for calculat-
ing Brazilian home-market credit expenses when a respondent does
not have short-term borrowings during the period under review. See
Plaintiffs' Brief in Opposition to Defendant-Intervenor's Motion
for Judgment passim.
Having perused and carefully considered that entire
brief, the court nonetheless concludes that defendant's remand re-
quest should be granted, in part in the light of the ITA's Silicon
Metal from Brazil; Final Results of Antidumping Duty Administrative
Review, 67 Fed.Reg. 6,488 (Feb. 12, 2002), which was published just
prior to that and the other briefs at bar and in which the
accompanying Issues and Decision Memorandum found that the TR is
"the index for savings accounts" and therefore concluded that it
was "not reasonable to use the TR rate as a surrogate interest rate
for short-term commercial borrowings". A-351-806, ARP 7/1/99-
6/30/00 (Feb. 12, 2002) (Comment 1), available at http://ia.ita.-
doc.gov/frn/summary/2002feb.htm.
6
See Appendix 8 to Brief in Opposition to Plaintiff
Eletrosilex's Motion for Judgment Upon the Agency Record, p. 19.
Consolidated
Court No. 01-00098 Page 9
B
Given the protracted and continuing administrative and
judicial proceedings centered on the ITA's antidumping-duty order
governing imports into the United States of silicon metal from
Brazil and its administrative reviews thereof, the adverse infer-
ences spelled out by Congress in 19 U.S.C. §1677e(b) and drawn by
the agency and the courts upon failure to provide information
within the meaning of section 1677e(a) surely have been, and
continue to be, well-understood by all the parties there- and here-
to. Indeed, experienced counsel do not claim otherwise.
All that is claimed by the government herein is that
"Eletrosilex chose not to respond to the Department's . . . sup-
plemental questionnaire".7 However, as discussed in Mannesmann-
rohren-Werke AG v. United States, 23 CIT 826, 842, 77 F.Supp.2d
1302, 1316 (1999), for example,
failing to respond does not have to be read negatively.
A respondent can fail to respond because it was not able
to obtain the requested information, did not properly
understand the question asked, or simply overlooked a
particular request. Thus, without further explanation by
Commerce, the Court will not infer that a respondent's
failure to respond constitutes substantial evidence that
it failed to cooperate to the best of its ability.
That is, the agency must "articulate why it concluded that a party
failed to act to the best of its ability, and explain why the
absence of th[at] information is of significance to the progress of
7
Id. at 12 (emphasis added). See Defendant's Memorandum, p.
36.
Consolidated
Court No. 01-00098 Page 10
its investigation". 23 CIT at 839, 77 F.Supp.2d at 1313-14. See
Nippon Steel Corp. v. United States, 337 F.3d 1373, 1382-83 (Fed.
Cir. 2003).
Upon reading the ITA's reported reasoning8 and reviewing
the record filed herein, such as it is, the court cannot concur
that the supplemental information requested was "critical"9. To be
sure, the agency's responsibility of prescribing mathematical mar-
gins of dumping is always a most daunting task. But, as indicated,
this consolidated case is not proceeding on an empty slate. For
example, in American Silicon Technologies v. United States, 24 CIT
612, 624, 110 F.Supp.2d 992, 1002 (2000), both the ITA and the
court seemingly recognized "Eletrosilex's history of compliance".
See, e.g., Silicon Metal From Brazil: Preliminary Results of Anti-
dumping Duty Administrative Review, 63 Fed.Reg. 42,001, 42,007
(Aug. 6, 1998):
. . . In the past, Eletrosilex has demonstrated an
understanding for requests of additional information by
the Department.
In fact, that history led the court to opine that it actually
supports the claim that Eletrosilex was unable to respond to the
no-less-than-three supplemental agency requests for information at
issue. See 24 CIT at 624, 110 F.Supp.2d at 1002. That is,
it does not follow that simply because Eletrosilex was
able to respond to prior questionnaires it was able to
8
See supra, note 6, pp. 11-15.
9
Id. at 13.
Consolidated
Court No. 01-00098 Page 11
respond to the . . . questionnaires at issue here . . .
when viewed in light of Eletrosilex's notification to
Commerce that "it is undergoing top to bottom management
reviews, and because of changes in staffing, it is not
able to respond in a timely manner".10
In sum, the court concluded:
Commerce has not made the necessary finding that
Eletrosilex failed to respond to the best of its ability.
After reviewing Commerce's reasoning, the Court con-
cludes that the primary basis for its determination was
the mere fact that Eletrosilex failed to respond to the
two supplemental questionnaires. As previously noted in
Borden[, Inc. v. United States, 22 CIT 233, 4 F.Supp.2d
1221 (1998),] and Mannesmannrohren-Werke, supra, this is
only a recitation of the standard for the application of
facts available under 19 U.S.C. § 1677e(a)(2)(B) and is
inadequate justification for making an adverse inference
pursuant to 19 U.S.C. § 1677e(b). Accordingly, the Court
remands this issue for reconsideration and instructs
Commerce to reopen the administrative record and collect
additional evidence concerning Eletrosilex's claimed in-
ability to respond to the supplemental questionnaires.
24 CIT at 625, 110 F.Supp.2d at 1003 (emphasis in original).
After this remand (and commencement of this consolidated
case), the court was able to find substantial evidence developed on
the record in support of the ITA's approach:
10
24 CIT at 624, 110 F.Supp.2d at 1002 (emphasis in original).
The excuses proffered by Eletrosilex herein are not dissimilar.
See, e.g., Brief in Support of [CBCC & Eletrosilex] Plaintiffs'
Rule 56.2 Motion, p. 31.
On their part, the gist of Elkem & Globe's motion to dismiss
Eletrosilex from this consolidated case for lack of standing was
that it
no longer manufactures, produces or exports silicon
metal. Thus, pursuant to the plain language of . . . 19
U.S.C. § 1516a . . ., Eletrosilex is not an interested
party and cannot participate in this appeal, as a matter
of law.
Consolidated
Court No. 01-00098 Page 12
. . . [T]he reason Eletrosilex could not answer Com-
merce's supplemental questionnaires was because it
dedicated the personnel capable of answering those
questions to preparing information requested by Eletrosi-
lex's potential purchaser. . . . The record shows that
Eletrosilex decided to suspend certain operations,
including participation in antidumping proceedings,
during the period in question in order to curtail costs
in anticipation of the sale of the company. . . . While
Eletrosilex was facing bankruptcy during the period in
question, the fact remains that it allocated its re-
sources toward satisfying the requests of the prospective
purchaser rather than Commerce.
American Silicon Technologies v. United States, 26 CIT , ,
240 F.Supp.2d 1306, 1311 (2002).
C
Given this overlap of cases and related claims, the
question arises as to whether or not this court can assume similar
results of any remand on the issue of Eletrosilex's ability to have
provided the requested supplemental information to the ITA. Pre-
suming it can, the related question remains whether the 93.20
percent margin sought to be imposed is "relevant, and not outdated,
or lacking a rational relationship". Ferro Union, Inc. v. United
States, 23 CIT 178, 205, 44 F.Supp.2d 1310, 1335 (1999). Stated
another way, an adverse-facts-available rate should be "a reason-
ably accurate estimate of the respondent's actual rate, albeit with
some built-in increase intended as a deterrent to non-compliance."
F.lli De Cecco di Filippo Fara S. Martino S.p.A. v. United States,
216 F.3d 1027, 1032 (Fed.Cir. 2000). Accord: Ta Chen Stainless
Steel Pipe, Inc. v. United States, 298 F.3d 1330, 1340 (Fed.Cir.
2002).
Consolidated
Court No. 01-00098 Page 13
The court's slip opinion 02-123 in American Silicon
Technologies points out that the actual margins calculated for
Eletrosilex in other ITA administrative reviews fluctuated between
18.87 and 51.84 percent. Also, the
highest calculated rates for the first through fifth
administrative reviews were 53.63 percent, 51.84 percent,
61.58 percent, 67.93 percent, and 39.00 percent respec-
tively. . . . The Court also finds it significant that
the period of review in question began six years after
the Less Than Fair Value Investigation in which the 93.20
percent margin was calculated. This fact along with the
fact that this margin is 25.27 percent higher than the
highest margin calculated based on actual information in
the intervening administrative reviews (i.e. the 67.93
percent margin calculated in the fourth administrative
review) leads the Court to conclude that the 93.20
percent margin is inconsistent with actual commercial
practices at and around the time in question . . . [and]
is so far removed from being "a reasonably accurate
estimate of the respondent's actual rate" that it is
disproportionately punitive in nature.11
Whereupon that matter was remanded a second time to the ITA, which
thereafter duly reported a revised rate of 67.93 percent that has
been affirmed by the court, American Silicon Technologies v. United
States, 27 CIT , 273 F.Supp.2d 1342 (2003).
III
While the court in that case has since stayed the
judgment of affirmance therein
11
26 CIT at , 240 F.Supp.2d at 1213-14. Cf. Reply of
Plaintiffs [CBCC & Eletrosilex] in Support of Their Motion for
Judgment Upon the Agency Record, pp. 6-8.
Consolidated
Court No. 01-00098 Page 14
pending the final determination of the dumping margins in
the fourth administrative review of the antidumping duty
order on silicon metal from Brazil, sub nom. American
Silicon Technologies v. United States, Consolidated Court
No. 97-02-00267[,12]
this court hereby grants the USCIT Rule 56.2 motion of CBCC and
Eletrosilex13 to the extent of remand now to the defendant of this
consolidated case to impute anew (1) CBCC's home-market credit
costs and (2) Eletrosilex's margin of dumping for the period of
review implicated that is in accordance with law and supported by
substantial evidence on the record.
Should this remand at this time not be in the interests
of advancement of all of the existing, related Brazilian silicon
metal matters to final resolution, the parties to this particular
consolidated case may confer and propose to this court a mutually-
more-desirable schedule. Otherwise, the defendant may have 45 days
herefrom within which to carry out this remand and to report the
results thereof to the court and the other parties, which may then
comment thereon within 30 days of receipt thereof.
So ordered.
Decided: New York, New York
April 15, 2004
Thomas J. Aquilino, Jr.
Judge
12
American Silicon Technologies v. United States, 27 CIT
, , Slip Op. 03-144, p. 2 (Oct. 30, 2003).
13
The quality of the papers filed in support of and opposition
to this motion and the motion of the plaintiffs obviated any need
to grant their joint motion for oral argument.