Slip Op. 04-32
UNITED STATES COURT OF INTERNATIONAL TRADE
________________________________________
:
TUNG FONG INDUSTRIAL CO., INC.,
:
Plaintiff,
:
v. Court No. 01-00070
:
UNITED STATES,
:
Defendant.
________________________________________:
[U.S. Department of Commerce’s antidumping duty determination is remanded for action consistent
with this opinion.]
Decided: April 7, 2004
Miller & Chevalier Chartered (Peter J. Koenig), for Plaintiff.
Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director, and Velta A.
Melnbrencis, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department
of Justice; William G. Iasi, Office of Chief Counsel for Import Administration, U.S. Department of
Commerce, Of Counsel; for Defendant.
OPINION
RIDGWAY, Judge:
This action contests the final affirmative antidumping determination of the U.S. Department
of Commerce, imposing substantial duties on certain stainless steel butt-weld pipe fittings
(“fittings”) produced in the Philippines and exported to the United States by companies including
plaintiff Tung Fong Industrial Company, Inc. (“Tung Fong”), a small, family-owned manufacturer
of such fittings. See Notice of Final Determination of Sales at Less Than Fair Value: Stainless Steel
Court No. 01-00070 Page 2
Butt-Weld Pipe Fittings From the Philippines, 65 Fed. Reg. 81,823 (Dec. 27, 2000) (“Final
Determination”), adopting the Issues and Decision Memo (Dec. 27, 2000), Pub. Doc. 141 (“Decision
Memo”).
Jurisdiction is predicated on 28 U.S.C. § 1581(c) (1994).1 In a matter such as this, the
Commerce Department’s findings, conclusions and determinations must be sustained unless they are
“unsupported by substantial evidence on the record, or otherwise not in accordance with law.” 19
U.S.C. § 1516a(b)(1)(B) (1994).
Pending before the Court is Plaintiff’s Motion for Judgment on the Agency Record, in which
Tung Fong urges the revocation of the antidumping duty order associated with the determination at
issue here, because the petition that ultimately led to that determination falsely alleged that Tung
Fong had “home market” sales of the relevant merchandise. See Plaintiff’s Memorandum of Law
in Support of Motion for Judgment on the Agency Record (“Pl.’s Brief”) at 1-4; Plaintiff’s Reply
to [the Department of Commerce’s] Opposition Memorandum (“Pl.’s Reply Brief”) at 2-3.
In the alternative, Tung Fong challenges both the Commerce Department’s decision to resort
to the use of “adverse facts available” in calculating the company’s dumping margin, and the
particular adverse facts selected by the agency for use in those calculations. See Pl.’s Brief at 4-6;
Pl.’s Reply Brief at 4-8. And, finally, Tung Fong disputes the Commerce Department’s “all others”
rate, charging that it impermissibly includes dumping margins based on “adverse facts available.”
See Pl.’s Brief at 6-7; Pl.’s Reply Brief at 8.
1
Except as otherwise expressly noted, statutory citations in this opinion are to the 1994
version of the U.S. Code. However, the pertinent text of the cited provisions remained the same at
all times relevant herein.
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Plaintiff’s motion is opposed by defendant, the United States (“the Government”), which
maintains that the determination at issue should be sustained in all respects. See Defendant’s
Memorandum in Opposition to Plaintiff’s Motion for Judgment Upon the Agency Record (“Def.’s
Brief”) at 1, 12-13, 35.
Plaintiff’s motion is granted in part. For the reasons discussed below, this action is remanded
to the Department of Commerce to enable it to reconsider the adequacy of the underlying
antidumping duty petition, and the consequences of the falsity of the petition’s allegations of home
market sales by Tung Fong; to allow the Department to reconsider its decision to resort to adverse
facts available in calculating Tung Fong’s antidumping duty margin (and, if appropriate, to
reevaluate the particular adverse facts selected); and to accord the agency the opportunity to fully
articulate the reasoning underlying its findings, conclusions and determinations.
I. Background
A. The Legal Framework
Dumping occurs when goods are imported into the U.S. and sold at a price lower than their
“normal value.” 19 U.S.C. §§ 1673, 1677(34). Normal value is calculated using either the exporting
market price (i.e., the price in the “home market” where the goods are produced), or an appropriate
third country market price, or the cost of production of the goods. 19 U.S.C. § 1677b. The
difference between the normal value of the goods and the U.S. price is the “dumping margin.” 19
U.S.C. § 1677(35). When goods imported into the U.S. are determined to have been dumped,
antidumping duties equal to the dumping margin may be imposed against the goods. 19 U.S.C. §
1673(2)(B).
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When normal value is based on sales of goods that are physically similar – but not identical
– to the goods sold in the U.S., adjustments may be made to normal value to account for the
differences in the goods’ costs of production. 19 U.S.C. §§ 1677(16) (B)-(C), 1677b(6)(C)(ii); 19
C.F.R. § 351.411. Those difference in merchandise (“difmer”) adjustments are calculated based on
the differences in the costs of materials, labor, and variable factory overhead attributable to the
physical differences in the goods. Antidumping Manual, Chap. 8 at 49-50 (Dept. of Comm., Jan.
22, 1998) (“AD Manual”).
A U.S. industry claiming injury due to dumping may petition the Department of Commerce
for an antidumping investigation into the alleged dumping. 19 U.S.C. § 1673a(b). The petition must
allege both dumping and injury to the industry as a result of that dumping, and must also include
“information reasonably available to the petitioner” supporting those allegations. 19 U.S.C. §§ 1673,
1673a(b)(1). In addition, to the extent that it is reasonably available, the petition must include
factual information (i.e., documentary evidence) relevant to, for example, the calculation of the
normal value of the allegedly dumped goods. 19 C.F.R. § 351.202(b)(7)(i)(B).
When an antidumping petition is filed with the Commerce Department, the agency must
verify that the petition includes the requisite allegations of dumping and injury. 19 U.S.C. §
1673a(c). Further, on the basis of sources readily available to it, the agency must confirm “the
accuracy and adequacy of the evidence provided in the petition.” 19 U.S.C. § 1673a(c)(1)(A)(i); 19
C.F.R. § 351.203(B)(1). If the Commerce Department determines that the petition fulfills all
statutory and regulatory requirements, an antidumping investigation is initiated. 19 U.S.C. §§
1673a(b)(1), 1673a(c)(1)(A)(i).
Court No. 01-00070 Page 5
Generally, all known exporters and producers of the goods at issue are investigated
individually, and are therefore assigned individual dumping margins, unless it would be
impracticable to do so. 19 U.S.C. § U.S.C. 1677f-1(c); 19 C.F.R. § 351.204(c)(1). Where it would
be impracticable for the Commerce Department to individually investigate all known exporters and
producers, a subset of the exporters and producers may be selected for individual investigation. 19
U.S.C. § 1677f-1(c)(2); 19 C.F.R. § 351.204(c)(2). Exporters and producers that are not individually
investigated are assigned an estimated “all others” rate. AD Manual, Chap. 6 at 10. The “all others”
rate is a dumping margin equal to the weighted average of the dumping margins established for the
exporters and producers that are individually investigated (with certain exceptions not relevant here).
19 U.S.C. § 1673d(c)(5)(A).
Exporters and producers that are selected to be investigated individually are considered
“mandatory respondents.” AD Manual, Chap. 4 at 14-15. Exporters and producers that are not
selected as mandatory respondents may request to be designated “voluntary respondents.” AD
Manual, Chap. 4 at 14-15. Unless it would be “unduly burdensome” for the Commerce Department,
exporters and producers that request treatment as voluntary respondents are investigated individually.
19 U.S.C. § 1677m(a); 19 C.F.R. § 351.204(d)(2). However, voluntary respondents must submit the
same information required from mandatory respondents, on the same timetable. 19 U.S.C. §
1677m(a); 19 C.F.R. § 351.204(d)(2).
An antidumping questionnaire is issued to all mandatory respondents, as well as to those
exporters and producers requesting treatment as voluntary respondents. AD Manual, Chap. 4 at 14-
15. Generally, the antidumping questionnaire consists of five sections, numbered A through E, plus
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several appendixes. AD Manual, Chap. 4 at 2-8. Section A requires respondents to submit general
information about their corporate structure and business practices, as well as information concerning
the allegedly dumped goods. AD Manual, Chap. 4 at 2. Section B requires respondents to list sales
transactions of the goods in the appropriate foreign market (either the exporting “home country”
market or the third country market), in order to determine the normal value of the goods. AD
Manual, Chap. 4 at 3. Section C requires respondents to list U.S. sales transactions, for use in
determining the U.S. price against which normal value is compared. AD Manual, Chap. 4 at 6.
Section D, which is not required in all investigations, solicits information on the costs of producing
the goods under investigation. AD Manual, Chap. 6 at 6-7. Section E, also not required in every
investigation, seeks information about value added in the U.S. to the goods, prior to delivery to
unaffiliated U.S. customers. AD Manual, Chap. 4 at 7.
The antidumping questionnaire is designed to elicit all information necessary to determine
whether a respondent is dumping and, if so, to calculate the dumping margin. AD Manual, Chap.
6 at 11. However, where the Commerce Department is unable to obtain all of the necessary
information from a respondent, the agency may use “facts available” as a substitute. 19 U.S.C. §
1677e(a); 19 C.F.R. § 351.308. Thus, for example, the Commerce Department may use facts
available where a respondent withholds information or fails to provide it on time or in the form
requested, or where the information provided by the respondent cannot be verified. 19 U.S.C. §
1677e(a)(2); 19 C.F.R. § 351.308(a). The agency may use as “facts available” any acceptable
information it can find to substitute for the missing information. AD Manual, Chap. 6 at 11.
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Moreover, where a respondent affirmatively “fail[s] to cooperate by not acting to the best of
its ability” in responding to the agency’s requests for information, the Commerce Department may
resort to “adverse facts available,” by applying an inference that is adverse to that respondent in
selecting among the “facts available.” 19 U.S.C. § 1677e(b); 19 C.F.R. § 351.308(a). See also AD
Manual, Chap. 6 at 14-16. Where it is warranted, the Commerce Department may use “facts
available” or “adverse facts available” as a substitute for all or part of the information required to
calculate a respondent’s dumping margin. See 19 U.S.C. § 1677e; 19 C.F.R. § 351.308.
B. The Facts of This Case
The antidumping investigation here at issue was initiated based on a petition filed with the
Commerce Department and the International Trade Commission by a group of fitting manufacturers
in the United States (“Domestic Manufacturers”). See Initiation of Antidumping Duty Investigation:
Stainless Steel Butt-Weld Pipe Fittings from Germany, Italy, Malaysia and the Philippines, 65 Fed.
Reg. 4595 (Jan. 31, 2000). The petition alleged, in relevant part, that two Philippine producers –
Enlin Steel Corporation (“Enlin”) and Tung Fong – were selling fittings under 14 inches in diameter2
in the U.S. at less than their home market prices. Pub. Doc. 1 at 7.3 The petition further indicated
2
Stainless steel butt-weld pipe fittings are manufactured in a variety of shapes including
elbows, tees, reducers, stub-ends and caps. They are widely used in piping systems in, for example,
chemical plants, refineries, pharmaceutical plants, food processing facilities and waste treatment
facilities. See Antidumping Duty Petition: Certain Stainless Steel Butt-Weld Pipe Fittings From
Germany, Italy, Malaysia and the Philippines (Dec. 29, 1999), Pub. Doc. 1 at 11, 37.
3
The administrative record in this case consists of two sections, designated “Public” and
“Business Proprietary,” respectively. The “Public” section consists of copies of all documents in the
record of this action, with all confidential information redacted. The “Business Proprietary” section
Court No. 01-00070 Page 8
that Tung Fong and Enlin account for 100 percent of exports of the subject fittings from the
Philippines to the United States. Pub. Doc. 1 at 34-35.
1. The Domestic Manufacturers’Antidumping Petition
The allegations in the Domestic Manufacturers’ petition were based largely on a confidential
market research report commissioned by, and funded by, the Domestic Manufacturers. The report
purported to provide “prices for actual recent sales by [Tung Fong and Enlin] to unaffiliated end
users in the Philippines.” Pub. Doc. 1 at 34. Relying on the asserted “home market” price data in
that report, and comparing it to data on U.S. sales by Enlin and Tung Fong, the Domestic
Manufacturers estimated dumping margins ranging from 26.1% to 68.5%. Pub. Doc. 1 at 37.
Upon receipt of the Domestic Manufacturers’ petition, the Commerce Department reviewed
it – as required by statute – to evaluate, inter alia, the accuracy and adequacy of the evidence
provided by the Domestic Manufacturers. 19 U.S.C. § 1673a(c)(1)(A)(i). In a January 12, 2000
teleconference conducted as part of its review process, the Domestic Manufacturers’ market
researcher represented to Commerce Department personnel that he had obtained “home market”
sales information from specified highly reliable sources. Non-Pub. Doc. 7.
Based on the petition and on the assurances provided in its teleconference with the Domestic
Manufacturers’ market researcher, the Commerce Department concluded that the evidence provided
consists of complete, unredacted copies of only those documents that include confidential
information.
Citations to documents in the “Public” section of the administrative record are noted as “Pub.
Doc. ____.” Citations to documents in the “Business Proprietary” section are noted as “Non-Pub.
Doc. ____.” All page numbers refer to the original, internal pagination of the documents.
Court No. 01-00070 Page 9
by the Domestic Manufacturers was “sufficient to justify the initiation of [an] antidumping
investigation[ ].” Pub. Doc. 13 at 13-14. However, as the Commerce Department would soon learn,
neither Enlin nor Tung Fong actually had home market sales. The allegations of the Domestic
Manufacturers and their market researcher were false. And the Domestic Manufacturers’ petition
alleged no grounds other than “home market” sales to justify an antidumping investigation.
2. The Commerce Department’s Antidumping Questionnaires
As soon as the antidumping investigation was initiated, the Commerce Department sent
Enlin and Tung Fong section A of its antidumping duty questionnaire, seeking information regarding
the companies’ corporate structure and accounting practices, and general information regarding sales
of the goods under investigation. Pub. Docs. 17, 18. The agency required Enlin and Tung Fong to
submit their responses to Question 1 – regarding sales in the U.S., the home market, and third
country markets – by February 7, 2000, with the remainder of section A due one week later.
Enlin and Tung Fong returned timely responses to Question 1, each attesting – under oath
– that it had no home market sales of the merchandise at issue. Pub. Docs. 25, 26. Explaining that
it is a “very small company, with limited resources and staff, [who were] basically answering [the]
questions themselves,” Tung Fong sought – and was granted – a two-week extension of time to file
its responses to the remainder of section A of the questionnaire. Pub. Doc. 29 at 2; Pub. Doc. 31.
Indeed, Tung Fong emphasized that it was “by far” the smallest of all the respondents – not only in
the Philippines, but in the three other countries under investigation as well.4 Id. Enlin sought and
4
Although only Enlin and Tung Fong manufacture in the Philippines, the Commerce
Department was investigating 16 other fittings manufacturers in Germany, Italy, and Malaysia. See
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was granted the same extension of time to file the remainder of its response to section A of the
questionnaire. Pub. Docs. 30, 32.
As Tung Fong explained to the Commerce Department, the company “has no authority to sell
fittings in the home market – i.e., [it] is prohibited from doing so,” because of its status as an export
producer operating within a Philippine economic zone. Pub. Doc. 53 at 32. That status permits the
company to purchase raw materials duty-free, provided that its products are manufactured for export
only. Pub. Doc. 124 at 5.
Enlin and Tung Fong submitted their responses to the remainder of section A of the
questionnaire on February 22, 2000. Pub. Docs. 36, 38. Tung Fong responded in detail to each
question posed by the Commerce Department, consistently reiterating – where appropriate – the fact
of its lack of “home market” sales. Pub. Doc. 38 at 5.
Less than a week later, over the objections of Tung Fong, the Commerce Department selected
Enlin as the sole mandatory respondent for the Philippine investigation. The Commerce Department
asserted that, given its limited resources, it “would be able to investigate only one such company.”
The agency chose Enlin as the mandatory respondent “because it was the respondent with the
greatest export volume.”5 See Notice of Preliminary Determination of Sales at Less than Fair Value:
Stainless Steel Butt-Weld Pipe Fittings From the Philippines, 65 Fed. Reg. 47,393, 47,394 (Aug. 2,
Stainless Steel Butt-Weld Pipe Fittings From Germany, Italy, Malaysia and the Philippines, 65 Fed.
Reg. at 4597.
5
The Commerce Department’s Preliminary Determination refers to the agency’s “Respondent
Selection Memorandum,” dated March 1, 2000. Preliminary Determination, 65 Fed. Reg. at 47,394.
That document appears to be missing from the administrative record filed with the Court.
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2000) (“Preliminary Determination”) (further asserting that, given the “complexities expected to
arise” in the investigation, it “was not practicable . . . to examine all known producers/exporters of
the subject merchandise”). Tung Fong protested that it “wishe[d] to fully participate in [the]
investigation, answering [Commerce’s] questionnaires . . . .” Pub. Doc. 41.
On March 9, 2000, the Commerce Department issued to Enlin additional sections of the
agency’s antidumping duty questionnaire. Pub. Doc. 43. After seeking and being granted an
extension of time, Enlin responded on May 1, 2000. Although the Commerce Department had
denied it consideration as a mandatory respondent, Tung Fong also responded to sections B and C
of the questionnaire on the same schedule, “pursuant to [the Commerce Department’s] Respondent
Selection Memorandum as to voluntary respondents, in the hope that [the agency] [would] be able
to consider it[s] [response].” Pub. Doc. 51.
The Commerce Department did not respond to Tung Fong’s submissions and, instead,
continued to focus its investigation solely on Enlin. In early June 2000, the agency began
investigating Enlin’s costs of production, to account for differences between the company’s
merchandise sold in the U.S. and its third country sales. The Commerce Department therefore
requested that Enlin respond to section D of the agency’s questionnaire. See Preliminary
Determination, 65 Fed. Reg. at 47,394. On June 22, when its section D questionnaire responses were
already nearly a week overdue, Enlin informed the Commerce Department that it would not respond
to any further agency requests for information. Pub. Doc. 74.
Only then did the Commerce Department decide to investigate Tung Fong as a voluntary
respondent. Tung Fong responded to section D of the agency’s questionnaire, which required the
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company to supply extensive data on its production costs. Non-Pub. Doc. 68. Tung Fong’s
responses to section D – filed on July 5, 2000 – explained that the company did not have an
established “formal cost accounting system” to allocate costs between its many different products.
Id. at 10. Thus, for purposes of responding to the section D questionnaire, Tung Fong was required
to develop – for the first time – a methodology to allocate its raw material, labor, and overhead costs
for each type of fitting subject to the investigation.
In an attempt to allocate its costs of production, Tung Fong first “group[ed] its total
production into thirteen categories of fitting subgroups,” based on its analysis of which products
pass through which production processes. Non-Pub. Doc. 68 at 16. Tung Fong then allocated raw
material and labor costs among the 13 individual categories on the basis of the weight of the fittings,
reasoning that material and labor costs increase as the weight of the fittings increase. Id. at 17; Pub.
Doc. 105 at 47 However, in contrast to the weight-based methodology it used to allocate material
and labor costs, Tung Fong treated the depreciation of factory machinery differently, indicating that
it was “allocat[ing] depreciation per category based on the share of machine time used by each
production stage.” Non-Pub. Doc. 68 at 17 (emphasis added). Significantly, this usage of the phrase
“machine time” proved to be the source of much confusion on the part of the Commerce Department,
which was not fully resolved until the agency conducted its verification some months later.
In mid-July 2000, the Commerce Department sent Tung Fong a supplemental questionnaire,
following up on the company’s earlier responses to sections A through D (some of which had been
submitted to the agency as early as February 2000). Pub. Doc. 86. Among other things, the agency’s
21-page supplemental questionnaire probed the allocation of costs using product weight versus
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machine times. Specifically, the Commerce Department asked Tung Fong to “explain why machine
times cannot be used to allocate costs to each product rather than weight; provide a schedule that
identifies the machine times used to allocate costs to each product group; explain how these machine
times are determined and provide a sample copy of the source document used to determine these
times; and, clarify how the machine times have been used to allocate costs in the response.” Pub.
Doc. 86 at 18-19.
In the meantime, the Commerce Department’s affirmative Preliminary Determination issued
on August 2, 2000. Because the agency had not begun to investigate Tung Fong’s costs of
production until late in the process, it was unable to make a preliminary calculation of a company-
specific dumping margin. Instead, the agency assigned Tung Fong the non-adverse “all others” rate
– consisting of the simple average of the margins proposed in the petition (34.67%). Preliminary
Determination, 65 Fed. Reg. at 47,395-96.
Some of Tung Fong’s responses to the Commerce Department’s supplemental questionnaire
were filed within the amount of time initially specified by the agency. Tung Fong sought, and was
granted, additional time to respond to other supplemental questions, including the questions
concerning its cost allocation methodology. Pub. Docs. 93, 94. On that point, Tung Fong’s
supplemental questionnaire responses explained that the company did not have “machine times” for
the huge number of fittings that it produces, and that it simply was not feasible to generate such
machine times within the time constraints of the agency’s investigation:
Tung Fong is a very small company and does not maintain machine times on all
items it produces. To maintain machine times for over [700] different types of
fittings alone . . . is . . . an impossible task for Tung Fong. There is also a certain
level of difficulty in maintaining machine times as Tung Fong employees often
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perform above par when their performances are being monitored . . . . Tung Fong
does not have the resources to specially conduct a measurement of machine time in
order to provide a machine timetable for this response as this would entail the special
manufacture of [more than 700] different types of fittings.
Pub. Doc. 109 at 4.
Notwithstanding Tung Fong’s explanation of the impracticability of determining “machine
times” for its wide range of products, the Commerce Department sent the company a second
supplemental section D questionnaire dated September 1, 2000, directing Tung Fong to report its
costs of production using a “machine time” based method of allocation. See Pub. Doc. 113. Tung
Fong’s response to that second supplemental questionnaire clarified that, in fact, “machine times
were not used to allocate costs” – even for the depreciation of machinery. Pub. Doc. 117 at 6
(emphasis added). The reference to “machine times” in the company’s initial section D
questionnaire responses was actually shorthand for “machine time factors” derived from depreciation
expenses. Pub. Doc. 24 at 21. Indeed, Tung Fong explained that – although it had experimented
with machine times – it ultimately rejected their use, because it discovered that they led to grossly
disproportionate allocations of costs (actually erring in Tung Fong’s favor, by allocating too few
costs to the fittings under investigation, thus giving Tung Fong an “unfair advantage”). Pub. Doc.
117 at 6-7.
3. The Agency’s Verification Process
From September 25 through September 29, 2000, Commerce Department personnel
conducted a verification of Tung Fong’s cost of production and constructed value data, visiting the
company’s facility in the Philippines. In the course of the verification process, agency personnel
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confirmed that Tung Fong had no pre-existing cost accounting system that could be used to allocate
costs among its many products, and thus had been forced to develop such a system for the
investigation. Verification Report, Pub. Doc. 124 at 8. Commerce Department personnel further
confirmed that Tung Fong “had experimented with various allocation methods . . . not all of [which]
were used.” Id. at 20.
In particular, the Commerce Department personnel conducting the verification noted that
Tung Fong had initially attempted to allocate certain depreciation expenses by using so-called
“machine time factors.” But the agency personnel quickly discovered that they had misunderstood
the nature of those “machine time factors.” The “machine time factors” that Tung Fong had tried
to use were not, in reality, actual “machine times” as the agency generally understands the term.
Indeed, the agency personnel conducting the verification confirmed that Tung Fong in fact “does not
track machine times.” Id. at 20-21. The “machine time factors” that the company had initially
sought to use to allocate depreciation expense thus were not “machine times” at all but, rather,
reflected “each production process’ proportional share of total depreciation expense of the specific
machines used in the process.” Id. In any event, as agency personnel reported, Tung Fong had
ultimately rejected the use of “machine time factors” as inaccurate – that is, they “incorrectly
distributed too much depreciation to product groups made up of low-volume lightweight fittings,”
because higher volume (higher weight) products typically cost more to produce. Id. at 20-21.
Significantly, the Commerce Department’s verification personnel did not dispute Tung
Fong’s assessment that there were inherent inaccuracies in the use of “machine time factors,” as the
agency personnel now understood them. Indeed, the agency’s verification personnel expressly
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conceded that – while the company’s experimentation with “machine time factors” evidenced its
realization “that each [item under investigation] should not be assigned the same per-unit
depreciation cost” – the “machine time factors” methodology in particular “may or may not have
calculated reasonable costs.” Id. (emphasis added).
The Commerce Department’s verification personnel also reviewed Tung Fong’s attempt to
allocate per-unit direct labor costs for certain “time-driven” production processes by using “machine
time estimates.” The agency personnel found that, since Tung Fong does not track actual “machine
times,” the company had asked employees assigned to the specified processes “to estimate how much
time they spend on each fitting.” Id. (emphasis added). However, as agency personnel reported, that
cost allocation method was eventually rejected because, inter alia, it was unrealistic – that is, “the
time estimates provided by the employees would produce [a] production volume that exceeded the
actual capabilities of the machines.” Id.6
Significantly, the Commerce Department verification personnel did not dispute Tung Fong’s
conclusion that its employees’ “time estimates” were inaccurate. Thus, when the agency personnel
“compared the [discredited time estimates for select products] to those [times] reported in the cost
file [which had been generated using Tung Fong’s weight-based method of allocating costs],” it
should have been no surprise to anyone “that the results generated by Tung Fong’s weight and time-
based methods did not mirror each other” – precisely because the “time-based method[ ]” to which
the agency referred was based on the “time estimates” that had already been disavowed. Id. at 21.
6
As the Commerce Department personnel noted, there would be at least one additional
problem with a cost allocation methodology relying on “time estimates” – its “fail[ure] to account
for the production of non-subject merchandise and caps.” Id.
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But, instead, the Commerce Department verification personnel inexplicably seized on the
discrepancy as an indictment of Tung Fong’s weight-based methodology, emphasizing that the
company had earlier advised the Department “that the [company’s] weight-based method should
provide similar results as a time-based approach.” Verification Report, Pub. Doc. 124 at 21. The
agency personnel apparently misunderstood the point that Tung Fong had sought to make – that,
since heavier fittings generally take longer to process, the relative weights of various fittings should
be a rough proxy for time in allocating costs among the company’s products. In other words, Tung
Fong’s point was that its “weight-based method should provide similar results as [an accurate] time-
based approach” – not just any time-based approach (and certainly not an approach based on
employees’ “time estimates,” which the company had first explored and then rejected as inaccurate).
The Commerce Department verification personnel offered no justification or other
explanation for their reliance on already discredited “machine time estimate” data as a basis for
attempting to discredit other data. Nor did they offer any explanation as to why – even if the
machine time estimate data had not been discredited – a discrepancy between those data and Tung
Fong’s “weight-based” data would necessarily mean that the machine time estimate data were more
reliable.
4. The Commerce Department’s Final Determination
The Commerce Department’s affirmative Final Determination assigned Tung Fong a
dumping margin of 33.81 % – the highest margin calculated for any company in all the countries
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investigated, and the same margin assigned to Enlin Steel and to “All Others.” See Final
Determination, 65 Fed. Reg. at 81,825; Antidumping Duty Orders: Stainless Steel Butt-Weld Pipe
Fittings From Italy, Malaysia, and the Philippines, 66 Fed. Reg. 11,257, 11,258 (Feb. 23, 2001), Pub.
Doc. 153.
In calculating Tung Fong’s dumping margin, the Commerce Department used the company’s
sales data where fittings sold in the U.S. had identical matches in the third country. However, the
Department rejected the weight-based data proffered by Tung Fong for the agency’s use in making
“differences in merchandise” – “difmer” – adjustments where there were no such identical matches.
Deeming Tung Fong’s weight-based data inaccurate, and asserting that the “time-based allocation
method” that the company had abandoned “provided per-unit costs at a greater level of detail than
the [company’s] reported [weight-based] method because it relied on each model’s unique process
and production time,” the Commerce Department concluded that Tung Fong had withheld relevant
information requested by the agency. Accordingly, the Department resorted to “facts available” for
all non-identical price-to-price comparisons. Decision Memo at 7, Pub. Doc. 141 at 7.
Indeed, the Commerce Department not only resorted to “facts available,” it used “adverse
facts available” against Tung Fong. Specifically, the agency concluded that – because Tung Fong
did not allocate costs using a “time-based allocation method” – the company “failed to cooperate [in
the investigation] by not acting to the best of its ability.” Id. at 8. The agency further asserted that
the company “fail[ed] to perform due diligence on its assertions,” reasoning that “[h]ad Tung Fong
performed a simple comparison of its submitted costs developed using time-based [cost allocations],
it would have found that the two methods do not calculate similar results, as [agency personnel]
Court No. 01-00070 Page 19
found at verification.” Id. The Commerce Department maintained that Tung Fong had the
information necessary to generate the type of time-based cost allocation data requested by the
agency, and that the verification personnel had demonstrated that the calculations could be
performed with the information supplied by the company. Id. at 8.
In addition, the Commerce Department found that Tung Fong “hindered the proceeding by
providing untimely responses,” noting that the agency granted the company “several extensions on
its already extended deadlines for responding to questionnaires.” The agency concluded that Tung
Fong should “easily have been able to calculate the necessary [time-based cost] allocations within
the extended time allotted.” Id.
Based on its determination that Tung Fong had “failed to cooperate by not acting to the best
of its ability” to comply with the agency’s requests for information, the Commerce Department
applied an adverse inference in selecting the “facts available” used to calculate Tung Fong’s
dumping margin. Thus, for all non-identical price-to-price comparisons, the agency used the highest
margin found for any U.S. sale whose margin was calculated from an identically matched price-to-
price comparison. Id.
Tung Fong filed a timely appeal, and this litigation ensued.
II. Analysis
A. The Sufficiency of the Domestic Manufacturers’ Petition
As a threshold matter, Tung Fong attacks the adequacy of the Domestic Manufacturers’
antidumping petition, asserting that it was insufficient to justify the initiation of the investigation at
issue here. Pl.’s Brief at 1. In particular, Tung Fong argues that an antidumping petition must
Court No. 01-00070 Page 20
include evidence of dumping, and that the Domestic Manufacturers’ petition failed to meet that
burden because it was based on the false premise that Tung Fong had home market sales. Id. at 1-4.
In support of its argument, Tung Fong points to the statute, which provides, in relevant part,
that “[a]n antidumping proceeding shall be initiated whenever an interested party . . . files a petition
with [the Commerce Department] which alleges the elements necessary . . . and which is
accompanied by information reasonably available to the petitioner supporting those allegations.”
Pl.’s Brief at 1-2 (quoting 19 U.S.C. § 1673a (b)(1) ). Tung Fong notes that Commerce Department
regulations require that the agency “determine that the petition satisfies the relevant statutory
requirements before initiating an antidumping . . . investigation.” 19 C.F.R. § 351.203(a); Pl.’s
Brief at 2. Tung Fong further emphasizes that the regulations require that an antidumping petition
include:
[a]ll factual information (particularly documentary evidence) relevant to the
calculation of . . . the normal value of the foreign like product (if unable to furnish
information on foreign sales or costs, provide information on production costs in the
United States, adjusted to reflect production costs in the country of production of the
subject merchandise).
Pl.’s Brief at 2; 19 C.F.R. § 351.202(b)(7)(i)(B) (emphasis added)
Tung Fong bolsters its argument with references to the United States’ international
obligations, which require that antidumping petitions contain “evidence of . . . dumping,” and which
specify that “[s]imple assertion, unsubstantiated by relevant evidence, cannot be considered
sufficient . . . ” to warrant the initiation of an investigation. Pl.’s Brief at 2 (emphasis added) (citing
Agreement on Implementation of Article VI of the GATT 1994, Part 1, Articles 5.2 and 5.3).
Court No. 01-00070 Page 21
The United States’ international obligations are reflected in the history of the Commerce
Department’s regulations implementing the Uruguay Round Agreements Act, which had as its
purpose bringing this country into conformity with its WTO obligations. There, the Commerce
Department expressly rejected the notion that “the mere provision of any documentation [by a
domestic industry] is . . . necessarily sufficient” (emphasis in the original), and emphasized the
agency’s “statutory obligation to examine the accuracy and adequacy of the evidence provided in
[a] petition” to determine whether initiation of an investigation is warranted. Final Rule:
Antidumping Duties; Countervailing Duties, 62 Fed. Reg. 27,296, 27,307 (May 19, 1997) (emphasis
added).
In an effort to minimize its “statutory obligation to examine the accuracy and adequacy of
the evidence” set forth in a petition, the Government asserts that the Commerce Department may
decline to initiate an investigation only where the investigation would be “clearly frivolous” or where
the petitioner has failed to provide information reasonably available to it. See Def.’s Brief at 14-15.
The Government further asserts that, once an investigation is launched, the process marches
inexorably on – absent an intervening negative determination by either the Commerce Department
or the International Trade Commission – until a final affirmative determination is made and an
antidumping duty order is issued. Def.’s Brief at 15-16.
It is true that Commerce Department personnel in this case telephoned the Domestic
Manufacturers’ market research firm on January 12, 2000 to verify, inter alia, the statements
concerning Tung Fong’s alleged home market sales. Pub. Doc. 12. But the fact remains –
undisputed by the Government – that, contrary to the Domestic Manufacturers’ claims and without
Court No. 01-00070 Page 22
regard to any assurances given by the Domestic Manufacturers’ market research firm in the course
of the January 12, 2000 telephone call, Tung Fong had no home market sales. And, by February 7,
2000 at the latest, Tung Fong had put the Commerce Department squarely on notice of that fact.
Pub. Doc. 26.
The Government relies heavily on a pair of cases to argue, in essence, that after-acquired
information concerning inaccuracies in a petition does not require the Commerce Department to
rescind the initiation of an investigation. See Def.’s Brief at 20-21 (citing Luciano Pisoni Fabbrica
Accessori Instrument Musicali and Enzo Pizzi, Inc. v. United States, 10 CIT 424, 427-28, 640 F.
Supp. 255, 258 (1986) (finding that the “statutory scheme offers no basis for [the] position that
Commerce is required to rescind a notice of initiation of an investigation upon discovering
inaccuracies in a petition.”) and United States v. Roses Inc., 1 Fed. Cir. 39, 706 F. 2d 1563, 1566
(1983) (“[W]hen there is a petition sufficient on its face, and as checked against other ‘facts within
the public domain,’ even if the investigation would appear unwarranted to one who knew all the
facts, surely the investigation must still be commenced.”)). But those cases are simply inapposite
here, for at least three reasons.
First, the “inaccurate” information supplied in the instant petition did not concern some
minor, peripheral, collateral or ancillary point. Rather, that information was the very linchpin of the
investigation. Because their petition alleged no other basis for an investigation, the truth of the
Domestic Manufacturers’ claims of Tung Fong’s home market sales was absolutely indispensable
to the adequacy of the petition. Moreover, the source of the Domestic Manufacturers’ claims of
home market sales by Tung Fong was not some external, third party source, but – rather – research
Court No. 01-00070 Page 23
expressly commissioned, and paid for, by the Domestic Manufacturers themselves. Thus, they
cannot be heard to disclaim responsibility for its reliability. Finally, it elevates form over substance
to characterize as merely “inaccurate” the false information at issue here. The spectre of fraud hangs
heavy in the air. At a bare minimum, the record suggests that someone very close to the Domestic
Manufacturers was making damaging allegations with full knowledge of their consequences and a
reckless disregard for their truth.
The Government’s reading of the statute and the regulations would seem to leave the
Commerce Department and innocent respondents at the mercy of hypothetical unscrupulous
petitioners willing to fabricate evidence and able to sustain their lie at least long enough to get an
investigation launched. But there can be no suggestion that Congress intended to license domestic
industries to prevaricate in order to initiate investigations, which could then be used as “fishing
expeditions” in a quest for other, truthful evidence of dumping.
Although Tung Fong asserts that, under the circumstances here, “[t]he anti-dumping order
resulting from [the] investigation must be revoked,” the case on which it relies does not support that
proposition. Pl.’s Brief at 4 (citing Mitsui v. United States, 18 CIT 185 (1994)). As discussed
below, this action must be remanded to the Commerce Department for other reasons. On remand,
both at the administrative level and then before the Court, the parties will have ample opportunity
to grapple with the consequences of the falsehoods tainting the petition underlying this matter.
B. The Agency’s Use of “Adverse Facts Available”
Tung Fong also asserts that – assuming, arguendo, that the investigation here was proper –
the Commerce Department’s use of “adverse facts available” in calculating the company’s dumping
Court No. 01-00070 Page 24
margin was not in accordance with law. Specifically, Tung Fong disputes the Department’s
determination that the company “failed to cooperate by not acting to the best of its ability” in
responding to the agency’s requests for information. Pl.’s Brief at 5.7
As summarized in section I.A above, the statute restricts the Commerce Department’s use
of “facts available” to situations where “necessary information is not available” or where a party
withholds information, fails to provide requested information by the deadline or in the form and
manner requested, significantly impedes the investigation, or where the proffered information cannot
be verified. 19 U.S.C. § 1677e(a); 19 C.F.R. § 351.308(a).
As section I.A explains, the statute also restricts the Commerce Department’s discretion in
selecting among the “facts available.” Thus, the agency may invoke an “adverse inference” in
selecting among facts available only if it makes the further finding that the party in question has
“failed to cooperate by not acting to the best of its ability to comply with a request for information.”
19 U.S.C. § 1677e(b); see also Borden, Inc. v. United States, 22 CIT 233, 263-64, 4 F. Supp. 2d
1221, 1246 (1998) (faulting Commerce Department’s failure to adequately consider whether the
respondent was capable of responding to agency’s data requests). Any such finding must be
“reached by ‘reasoned decisionmaking,’ including . . . a reasoned explanation supported by a stated
7
Tung Fong asserts, in the alternative, that the Commerce Department’s selection of “a high
aberrant calculated dumping margin as adverse [facts available]” was unwarranted. Pl.’s Brief at 5.
Tung Fong thus challenges both the use of “adverse facts available” and the particular adverse facts
selected by the agency for use in calculating the company’s dumping margin.
However, as explained more fully below, the Commerce Department failed to adequately
justify its resort to adverse facts available against Tung Fong. There is, therefore, no need to reach
the company’s alternative claim.
Court No. 01-00070 Page 25
connection between the facts found and the choice made.” Elec. Consumers Res. Council v. Fed.
Energy Reg. Comm., 747 F.2d 1511, 1513 (D.C. Cir. 1984) (citing Burlington Truck Lines, Inc. v.
United States, 371 U.S. 156 (1962)). Commerce Department actions which are unsupported by
reasoned explanation may be deemed “arbitrary and capricious.” See Steel Auth. of India, Ltd. v.
United States, 25 CIT ___, ___ n.10, 149 F. Supp. 2d 921, 929 n.10 (2001).
The essence of the Commerce Department’s justification for the use of “adverse facts
available” here is its claim that Tung Fong withheld information. The Department found that Tung
Fong “had the information necessary to perform a time-based calculation [] before the initiation of
the case, and certainly at the time it received the [antidumping investigation] questionnaire.”
Decision Memo at 8, Pub. Doc. 141 at 8. But the agency’s determination that Tung Fong could have
provided “time-based” cost allocation data (based on “machine times”) cannot be squared with the
record facts.
As discussed in section I.B above, the Commerce Department was understandably confused
by Tung Fong’s use of the term “machine times” in its initial section D questionnaire responses.
However, as section I.B further explains, there was no longer any room for confusion by the time the
agency had completed its verification. The Commerce Department verification personnel
specifically confirmed that Tung Fong does not track actual “machine times.” The agency personnel
further determined that the “machine time factors” that the company initially attempted to use to
calculate depreciation expense were not, in fact, machine times. In addition, they determined that
Court No. 01-00070 Page 26
the “machine times” that Tung Fong had considered, then rejected, as a basis for allocating certain
direct labor costs were actually “machine time estimates”– estimates that, according to Tung Fong’s
uncontroverted statements of explanation, were unreliable. Verification Report at 21, Pub. Doc. 124
at 21.
There is thus no basis in fact – much less the record – for the finding in the Commerce
Department’s Decision Memo that Tung Fong had “model specific processing times available” and
refused to “explain why it would not provide this information.” Verification Report at 7, Pub. Doc.
124 at 7. Certainly the agency verification personnel knew that the company did not have such
“machine times” available; all the company had were “machine time estimates” – and even those
were not available for all fittings and processes. Even more importantly, as Tung Fong advised the
Commerce Department, the estimates were proven to be unreliable.
Although its precise position is somewhat unclear, the Government appears to suggest that
– even if Tung Fong did not have true “machine times” available for all of its 700-plus fittings at the
beginning of the investigation – it had ample time to obtain the data in the course of the
investigation, notwithstanding its “limited number of employees.” Def.’s Brief at 28. “After all,”
the Government concludes, “Commerce’s verifiers were able to allocate costs using the time method
for 13 products without difficulty during the verification.” Id. (citation omitted). There are at least
two flaws in such a position.
First, the Commerce Department made no findings on the extent of Tung Fong’s resources
(or lack thereof), and pointed to no evidence to support the Department’s conclusory assertion that
Court No. 01-00070 Page 27
– notwithstanding the company’s limited resources – “had it chosen to do so, [the company] would
easily have been able to calculate the necessary allocations” within the time allotted. Nothing in the
record effectively refutes Tung Fong’s claim that:
Tung Fong, an extremely small family-owned Philippine company, run by one
person, was not able to provide [the Commerce Department with the] requested cost
data within the limited time available given (a) Tung Fong’s lack of a cost accounting
system; and (b) [the fact that] Tung Fong sold over 700 different types of fittings,
making the development of any allocation of cost[s] based on observed processing
time to produce each type of fitting difficult.
Pl.’s Brief at 5 (emphasis added).
Nor does the handful of allocation calculations performed by the Commerce Department’s
verification personnel – which the Government appears to cite as evidence – prove anything about
the feasibility of obtaining true “machine times” for all of Tung Fong’s fittings. As discussed above,
the verification personnel used mere “machine time estimates” – not actual, observed “machine
times,”as the Government seems to suggest. And those “machine time estimates” were data that
Tung Fong had on hand; the agency verification personnel did nothing to collect the data. Moreover,
the estimates were incomplete (i.e., there were estimates for only a limited number of processes) and,
in any event, they had been proven to be unreliable.
In short, the record is simply devoid of evidence to support either the Commerce
Department’s finding that Tung Fong withheld critical information that it had in its possession, or
the agency’s finding that it would have been – as a practical matter – feasible for Tung Fong to have
obtained actual “machine times” to respond to the agency’s request for time-based cost allocation
data during the course of the investigation.
Court No. 01-00070 Page 28
The Government maintains that the Commerce Department’s resort to “adverse facts
available” was also justified because Tung Fong allegedly “fail[ed] to perform due diligence on its
assertions about the accuracy and reliability” of the weight-based cost allocation data that the
company provided to the Department. Def.’s Brief at 23 (citing Decision Memo at 7). In an effort
to support that charge, the Government points to the analysis performed by Commerce Department
verification personnel, which concluded that “the results generated by Tung Fong’s weight and time-
based methods did not mirror each other.” Def.’s Brief at 29 (quoting Verification Report at 21).
The Commerce Department criticizes Tung Fong for not performing that analysis itself.
However, for all the reasons detailed in section I.B above, the Commerce Department’s
reasoning on this point is fundamentally flawed. In sum, the discrepancy between the verification
personnel’s cost allocation calculations using the discredited “machine time estimate” data and those
using Tung Fong’s weight-based methodology was to be expected. And Tung Fong can hardly be
faulted as lacking in “due diligence” simply because it failed to perform an illogical analysis using
data which had been proven to be unreliable, which would – at most – have established what the
company already knew (and, indeed, had told the Commerce Department).
Moreover, as section I.B explains, the discrepancy identified by the verification personnel’s
analysis does nothing to cast doubt on the reliability of Tung Fong’s weight-based cost allocation
methodology. Thus, there can be no suggestion that the use of adverse facts available was warranted
because Tung Fong provided Commerce with an alternate allocation method that was found at
Court No. 01-00070 Page 29
verification to be inaccurate.” Def.’s Brief at 29 (emphasis added). Contrary to the Government’s
claims, the Commerce Department has pointed to no evidence to substantiate its accusation that
Tung Fong “provid[ed] an inaccurate cost allocation methodology.” Id.
In the alternative, the Government argues that the Commerce Department was entitled to
resort to adverse facts available because Tung Fong assertedly “fail[ed] to provide information [to
the agency] in a timely manner.” Def.’s Brief at 23. According to the Government:
Commerce also found that Tung Fong was uncooperative because of the frequency
with which it responded in an untimely manner to Commerce request[s] for
information. Moreover, Tung Fong filed untimely responses despite numerous
extensions that were granted by Commerce. Finally, there were several instances
where Tung Fong submitted responses to questions after the required deadline, in
effect granting itself an extension.
Def.’s Brief at 29 (citing Decision Memo at 7-8).
To be sure, the Commerce Department may resort to “facts available” where a party fails to
make timely submissions. See Seattle Marine Fishing Supply Co. v. United States, 12 CIT 60, 71,
679 F. Supp. 1119, 1128 (1988). However, the agency may resort to “adverse facts available” only
where it finds that the party failed to act to the best of its ability. See, e.g., Nippon Steel Corporation
v. United States, 24 CIT 1158, 1169, 118 F. Supp. 2d 1366, 1377 (2000), vacated in part on other
grounds after remand, 337 F.3d 1373 (Fed. Cir. 2003). The Government points to no evidence here
which would support such a finding.
In seeking extensions of time, Tung Fong explained, for example, that the questionnaire
process was “overwhelming for a small company the size of Tung Fong,” emphasizing that the
“individual answering the questionnaire [was] also running the company.” Pub. Doc. 98. The
burden on Tung Fong was further compounded by the fact that – as the Commerce Department
Court No. 01-00070 Page 30
confirmed – the company had no pre-existing accounting system allocating costs among the more
than 700 different fittings in its product line. Verification Report, Pub. Doc. 124 at 20.
As discussed above, the Commerce Department failed to point to any concrete evidence to
substantiate its charge that Tung Fong could have complied with the agency’s requests for
information in a more timely fashion. Indeed, the record suggests that even the most well-heeled
respondent might have had trouble meeting the tight deadlines that the Commerce Department
imposed on Tung Fong in this investigation.
As discussed above in section I.B, the Commerce Department did not treat Tung Fong even
as a voluntary respondent until late in the investigation, after Enlin (the agency’s designated
“mandatory respondent”) withdrew from the investigation. Thus, the Commerce Department did
not even begin the supplemental questionnaire process vis-a-vis Tung Fong until late July 2000 –
several months later than the other respondents in the other countries subject to the investigation.
Pub. Doc. 139 at 7. Indeed, in opposing Tung Fong’s participation as a voluntary respondent in the
investigation, the Domestic Manufacturers themselves expressed concern that – even with an
“aggressive timetable” – a full investigation of Tung Fong could not “reasonably be completed”
within the time then remaining on the statutory clock for the investigation. Pub. Doc. 75 at 29.
As noted elsewhere, the Commerce Department made no findings on the extent of Tung
Fong’s resources (or lack thereof), and pointed to no evidence to support its conclusory assertion that
– notwithstanding Tung Fong’s limited resources – the company could have responded to the
agency’s requests for information in a more timely fashion. Accordingly, like the agency’s other
proffered justifications for resort to adverse facts available, this rationale too must fail.
Court No. 01-00070 Page 31
In sum, based on the record compiled in this matter, the Commerce Department improperly
resorted to adverse facts available – instead of using the weight-based cost allocation data provided
to the agency by Tung Fong – in calculating the company’s dumping margin.
C. The Calculation of the “All Others” Rate
Tung Fong’s final argument challenges the “all others” dumping margin for non-investigated
Philippine producers, which the Commerce Department set at equal to the weighted-average
dumping margin for Tung Fong. 8 The “all others” rate thus reflects the use of “adverse facts
available.” Final Determination, 65 Fed. Reg. at 81,825. Tung Fong maintains that the Commerce
Department may not include dumping margins based on adverse facts available in the calculation
of the “all others” rate, because – according to the company – such a use of adverse facts available
is prohibited by the antidumping statute and the related Statement of Administrative Action, and
contravenes the United States’ WTO obligations. Pl.’s Brief at 8.
The Government, notably, does not defend the propriety of the Commerce Department’s
calculation of the “all others” rate. Rather, the Government argues that, because Tung Fong was
individually investigated and assigned its own margin rate, the company “has not been injured in fact
8
Although Tung Fong’s briefs frame its argument on this point in terms of the use of adverse
facts available in calculating its dumping margin, the Commerce Department also resorted to adverse
facts available in calculating Enlin’s margin. Decision Memo at 11, Pub. Doc. 141 at 11. The
conclusion in section II.B above thus does not moot Tung Fong’s argument, since the “all others”
rate will reflect the use of adverse facts available even if they are not used to calculate Tung Fong’s
rate.
Court No. 01-00070 Page 32
and [therefore] lacks constitutional standing” to raise this argument. Def.’s Brief at 34. The
Government reasons, in other words, that because Tung Fong is not subject to the “all others” rate,
it may not challenge it.
Tung Fong counters that it is affected by the “all others” rate, because – in the future – other
Philippine companies intending to export to the United States conceivably could subcontract the
manufacture of fittings to Tung Fong. Tung Fong reasons that, since any such companies would be
subject to the “all others” rate, “[t]he ‘all others’ rate [would] affect[] . . . Tung Fong’s ability to
enter into [subcontracting] transactions.” Pl.’s Reply Brief at 8.
Quite apart from the issue of the legality of the calculation of the “all others” rate in this case,
a party granted its own dumping margin generally lacks standing to challenge the “all others” rate.
See Torrington Co. v. United States, 21 CIT 251, 263, 960 F. Supp. 339, 349 (1997); Fag Italia S.p.a.
v. United States, 20 CIT 1377, 1384-85, 948 F. Supp. 67, 73 (1996). Tung Fong advances no
compelling reason why that principle should not apply with equal force here.
Tung Fong’s argument that it may, in the future, enter into subcontracts with companies
subject to the “all others” rate is simply too speculative. See, e.g., Lujan v. Defenders of Wildlife,
504 U.S. 555, 560-61 (1991) (holding that environmental groups that might someday return to a
contested habitat did not meet the “actual or imminent” standard required for “injury in fact”). Thus,
because there is no showing that Tung Fung may suffer cognizable injury as a result of the “all
others” rate, the company’s challenge to the calculation of that rate must be rejected for lack of
standing.
Court No. 01-00070 Page 33
III. Conclusion
For the reasons set forth above, Plaintiff’s Motion for Judgment on the Agency Record is
granted in part. This action is remanded to the Department of Commerce to enable it to reconsider
the adequacy of the Domestic Manufacturers’ petition, and the consequences of the falsity of their
allegations of home market sales by Tung Fong; to allow the Department to reconsider its decision
to resort to adverse facts available in calculating Tung Fong’s antidumping duty margin (and, if
appropriate, to reevaluate the particular adverse facts selected by the agency); and to accord the
Department the opportunity to fully articulate the reasoning underlying its findings, conclusions and
determinations.
A separate order will enter accordingly.
/s/ Delissa A. Ridgway
Judge
Decided: April 7, 2004
New York, New York