Slip Op. 03-52
United States Court of International Trade
CHINA STEEL CORPORATION and YIEH
LOONG,
Plaintiff,
v.
UNITED STATES, Before: Pogue, Judge
Defendant, Court No. 01-01040
and
BETHLEHEM STEEL CORPORATION; NATIONAL
STEEL CORPORATION; UNITED STATES STEEL
CORPORATION; GALLATIN STEEL COMPANY;
IPSCO STEEL INC.; NUCOR CORPORATION;
STEEL DYNAMICS, INC.; and WEIRTON STEEL
CORPORATION,
Defendant-Intervenors.
[Plaintiff’s motion for judgment on the agency record is denied.
The Court sustains the Department of Commerce’s final antidumping
determination in part, and remands in part.]
Decided: May 14, 2003
Miller & Chevalier Chartered (Karl Abendschein, Peter Koenig) for
Plaintiff.
Robert D. McCallum, Jr., Assistant Attorney General, David M.
Cohen, Director, Lucius B. Lau, Assistant Director, Commercial
Litigation Branch, Civil Division, U.S. Department of Justice,
Augusto Guerra, Attorney, Office of Chief Counsel for Import
Administration, U.S. Department of Commerce, Of Counsel, for
Defendant.
Dewey Ballantine LLP (Bradford Ward, Hui Yu) for Defendant-
Intervenors Bethlehem Steel Corporation, National Steel
Corporation, and United States Steel Corporation.
Court No. 01-01040 Page 2
Schagrin Associates (Roger B. Schagrin) for Defendant-Intervenors
Gallatin Steel Company, IPSCO Steel Inc., Nucor Corporation, Steel
Dynamics, Inc., and Weirton Steel Corporation.
Opinion
Pogue, Judge: This action is before the Court on the motion of
China Steel Corporation (“China Steel”) and Yieh Loong
(collectively “Plaintiff”) for judgment upon the agency record
pursuant to USCIT R. 56.2.1 Plaintiff contests the final
affirmative determination of sales at less than fair value (“LTFV”)
rendered by the International Trade Administration of the United
States Department of Commerce (“Commerce” or “Department”) in the
investigation of certain hot-rolled carbon steel (“HRCS”) flat
products from Taiwan for the period October 1, 1999 through
September 30, 2000 (“POI”). Certain Hot-Rolled Carbon Steel Flat
Products from Taiwan, 66 Fed. Reg. 49,618, 49,618-19 (Dep’t
1
For purposes of calculating a weighted-average margin,
Commerce concluded prior to the preliminary determination that
China Steel and Yieh Loong were affiliated under 19 U.S.C. §
1677(33)(E), and collapsed the two entities into a single
producer pursuant to 19 C.F.R. § 351.401(f) (2001). Dep’t of
Commerce Mem. from Patricia Tran to Joseph A. Spetrini,
Antidumping Duty Investigation on Certain Hot-Rolled Carbon Steel
Flat Products from Taiwan: Affiliation Issue regarding China
Steel Corporation (China Steel) and Yieh Loong Enterprise Co.,
Ltd. (Yieh Loong), C.R. Doc. 51, Def.’s Conf. Ex. 5 at 2, 4 (Apr.
19, 2001); see also Certain Hot-Rolled Carbon Steel Flat Products
from Taiwan, 66 Fed. Reg. 22,204, 22,207 (Dep’t Commerce May 3,
2001) (notice of preliminary determination of sales at less than
fair value) (“Prelim. Determ.”). As those two determinations are
not challenged in the instant action, the Court will refer to the
collapsed entity as “Plaintiff” or “CSC/YL;” all other references
to the two corporations by their proper names shall refer only to
the respective individual corporation.
Court No. 01-01040 Page 3
Commerce Sept. 28, 2001) (notice of final determination of sales at
LTFV) (“Final Determ.”). Specifically, Plaintiff contests four
aspects of Commerce’s final determination: (1) Commerce’s
affiliation determination regarding the Yieh Loong affiliates; (2)
Commerce’s decision to apply facts otherwise available; (3)
Commerce’s decision to apply adverse facts available; and (4)
Commerce’s conduct in investigating the antidumping petition. The
Court exercises jurisdiction pursuant to 28 U.S.C. § 1581(c)
(2000). For the reasons set forth below, the Court sustains in
part, and remands in part, the agency’s determination.
I. Background
On November 13, 2000, Gallatin Steel Company, IPSCO Steel
Inc., Nucor Corporation, Steel Dynamics, Inc., Weirton Steel
Corporation, Bethlehem Steel Corporation, U.S. Steel Group (a unit
of USX Corporation), National Steel Corporation, United
Steelworkers of America, LTV Steel Company, Inc., and Independent
Steelworkers Union (collectively “Domestic Producers”)2 initiated
2
U.S. Steel Group (a unit of USX Corporation), United
Steelworkers of America, LTV Steel Company, Inc., and Independent
Steelworkers Union are not parties to this action.
Bethlehem Steel Corporation, National Steel Corporation, and
United States Steel Corporation collectively will be referred to
as “Defendant Intervenors I,” while Gallatin Steel Company, IPSCO
Steel Inc., Nucor Corporation, Steel Dynamics, Inc., and Weirton
Steel Corporation collectively will be referred to as “Defendant
Intervenors II.”
Plaintiff’s counsel changed affiliation from Ablondi,
Foster, Sobin & Davidow, P.C., to Miller & Chevalier Chartered
Court No. 01-01040 Page 4
an antidumping investigation with Commerce. Certain HRCS Flat
Products from Argentina, India, Indonesia, Kazakhstan, the
Netherlands, the People’s Republic of China, Romania, South Africa,
Taiwan, Thailand, and Ukraine, 65 Fed. Reg. 77,568, 77,568 (Dep’t
Commerce Dec. 12, 2000) (notice of initiation of antidumping duty
investigations) (“Initiation Notice”). The Domestic Producers
alleged that imports of HRCS flat products from Argentina, India,
Indonesia, Kazakhstan, the Netherlands, the People’s Republic of
China, Romania, South Africa, Taiwan, Thailand, and Ukraine were
being or likely to be sold at LTFV.3 Id. at 77,569. On December
4, 2000, Commerce initiated an investigation to determine whether
prior to seeking judicial review of Commerce’s affirmative LTFV
determination with the Court.
3
An antidumping duty is imposed upon imported merchandise if
that merchandise is sold or is likely to be sold in the United
States at LTFV, and an industry in the United States is
materially injured or is threatened with material injury. See 19
U.S.C. § 1673. To determine whether merchandise is sold at LTFV,
Commerce compares the price of the imported merchandise in the
United States to the normal value for the same or similar
merchandise in the home market. See 19 U.S.C. § 1677b(a).
Normal value is the comparable price for a product like the
imported merchandise when first sold (generally, to unaffiliated
parties) “for consumption in the exporting country, in the usual
commercial quantities and in the ordinary course of trade and, to
the extent practicable, at the same level of trade as the export
price or constructed export price.” 19 U.S.C. §
1677b(a)(1)(B)(i). Export price is the “price at which the
subject merchandise is first sold . . . by the producer or
exporter of the subject merchandise outside of the United States
to an unaffiliated purchaser,” 19 U.S.C. § 1677a(a); constructed
export price means the “price at which the subject merchandise is
first sold . . . in the United States . . . [by a] producer or
exporter . . . to a purchaser not affiliated with the producer or
exporter.” 19 U.S.C. § 1677a(b).
Court No. 01-01040 Page 5
certain HRCS flat products were being sold at LTFV in the United
States. Prelim. Determ., 66 Fed. Reg. at 22,204. In their
petition for unfair trade relief, the Domestic Producers identified
China Steel and Yieh Loong as principal Taiwanese producers of the
subject merchandise. Initiation Notice, 65 Fed. Reg. at 77,576.
Commerce issued an antidumping duty questionnaire to China
Steel and Yieh Loong requesting responses to sections A (General
Information), B (Sales in the Home Market or to Third Countries),
C (Sales to the United States), and D (Cost of Production) on
January 4, 2001. Final Determ., 66 Fed. Reg. at 49,619; Letter
from Robert James, Program Manager, Int’l Trade Admin., to Ablondi,
Foster, Sobin & Davidow, P.C., P.R. Doc. 28, Pl.’s Ex. 2 at 2 (Jan.
4, 2001) (“Questionnaire I”).4 Commerce explicitly informed China
Steel and Yieh Loong that “[i]f [either respondent were] unable to
respond to this questionnaire within the specified time limits,
[the respondent] must formally request an extension of time.”
Questionnaire I, P.R. Doc. 28, Pl.’s Ex. 2 at 2. Questionnaire I
directed China Steel to provide affiliated parties’ resale
information if “sales to affiliates constituted more than five
percent of total home market sales.” Final Determ., 66 Fed. Reg.
at 49,621. That questionnaire defined “affiliated persons”
according to Section 771(33) of the Tariff Act of 1930, as amended,
4
Citations to the administrative record include references
to both public documents (“P.R. Doc.”) and proprietary documents
(“C.R. Doc.”).
Court No. 01-01040 Page 6
and §§ 351.102(b) and 351.401(f) of the Department’s regulations.
Questionnaire I, P.R. Doc. 28 at app. I.
China Steel requested to be excused from reporting home market
resales by affiliates on January 19, 2001, as sales to its
affiliates, China Steel Global Trading Corporation and China Steel
Chemical Corporation, constituted less than five percent of its
total home market sales. Final Determ., 66 Fed. Reg. at 49,621.
Commerce responded on January 29, 2001, stating that the agency
could not make a determination based on the information China Steel
provided, and requested China Steel to “document the total quantity
of subject merchandise sold to all affiliated parties.” Id.
China Steel and Yieh Loong submitted responses to section A of
Questionnaire I on February 2, 2001. Id. at 49,619. The following
day, China Steel and Yieh Loong requested a three week extension of
time to complete sections B, C, and D of Questionnaire I, stating
that the information required was extensive and complex, and the
employees answering the questions had also been finalizing the
respective companies’ accounts. Letter from Peter Koenig and
Kristen Smith, Ablondi, Foster, Sobin & Davidow, P.C., to U.S.
Sec’y of Commerce, P.R. Doc. 38, Pl.’s Ex. 3 at 1 (Feb. 3, 2001).
Commerce granted that request in part, extending the deadline to
February 22, 2001, and warning the two companies that the statutory
deadlines imposed on the agency were “mandatory, not optional in
nature.” See Letter from Robert James, Program Manager, Int’l
Court No. 01-01040 Page 7
Trade Admin., to China Steel Corporation and Yieh Loong Enterprise,
Co., Ltd., c/o Peter Koenig, Ablondi, Foster, Sobin & Davidow,
P.C., P.R. Doc. 115, Pl.’s Ex. 9 at 1-2 (Apr. 25, 2001) (“Denial
Letter”). China Steel and Yieh Loong again requested an additional
week of time on February 14, 2001 for the same reasons described
above to complete sections B and D of Questionnaire I. Letter from
Peter Koenig and Kristen Smith, Ablondi, Foster, Sobin & Davidow,
P.C., to U.S. Sec’y of Commerce, P.R. Doc. 43, Pl.’s Ex. 4 (Feb.
14, 2001).
On February 26, 2001, China Steel and Yieh Loong filed their
responses to sections B, C, and D of Commerce’s Questionnaire I.
Final Determ., 66 Fed. Reg. at 49,619. The following day, Commerce
issued supplemental section A questionnaires to China Steel and
Yieh Loong seeking, among other things, clarification of each
companies’ relationship with other companies. See Letter from
Robert James, Program Manager, Int’l Trade Admin., to Yieh Loong
Enterprise, Co., Ltd., c/o Peter Koenig, Ablondi, Foster, Sobin &
Davidow, P.C., C.R. Doc. 21, Def.’s Conf. Ex. 2 at 1, supp.
questionnaire para. 5, 8, 9 (Feb. 27, 2001); Letter from Robert
James, Program Manager, Int’l Trade Admin., to China Steel
Corporation, c/o Peter Koenig, Ablondi, Foster, Sobin & Davidow,
P.C., C.R. Doc. 22, Def.’s Conf. Ex. 3 at 1, supp. questionnaire
para. 3-4 (Feb. 27, 2001).
On March 15, 2001, Commerce issued supplemental sections B and
Court No. 01-01040 Page 8
C questionnaires to China Steel and Yieh Loong (collectively
“Questionnaire II”), seeking missing product characteristics
information. Final Determ., 66 Fed. Reg. at 49,620; Letter from
Robert James, Program Manager, Int’l Trade Admin., to Yieh Loong
Enterprise, Co., Ltd., c/o Peter Koenig, Ablondi, Foster, Sobin &
Davidow, P.C., P.R. Doc. 69, Def.’s Ex. 2 (Mar. 15, 2001)
(instructing that a “complete” response be provided by March 28,
2001) (emphasis in original) (“YL’s Questionnaire II”). Commerce
again requested that China Steel provide data containing “all
affiliated parties’ resale information, [which includes sales by]
(Yieh Loong, China Steel Chemical [Corporation], China Steel Global
[Trading Corporation], Yieh Phui [Enterprise Co. Ltd.], [and] Yieh
Hsing [Enterprise Co. Ltd.]) to the first unaffiliated party.”
Final Determ., 66 Fed. Reg. at 49,621; see also Letter from Robert
James, Program Manager, Int’l Trade Admin., to China Steel
Corporation, c/o Peter Koenig, Ablondi, Foster, Sobin & Davidow,
P.C., C.R. Doc. 27, Def.-Int. II’s Conf. Ex. 3 at 1, supp.
questionnaire para. 3 (Mar. 15, 2001) (“CSC’s Questionnaire II”).
Commerce further directed China Steel to “[f]ully report the
[product] characteristics of ‘leeway’ and overrun merchandise
following the criteria specified in [the agency’s] [Q]uestionnaire
[I].” CSC’s Questionnaire II, C.R. Doc. 27, Def.-Int. II’s Conf.
Ex. 3 supp. questionnaire para. 5.
China Steel and Yieh Loong submitted their responses to the
Court No. 01-01040 Page 9
supplemental section A questionnaire on March 20, 2001 (“CSC’s Mar.
20 Response”). Final Determ., 66 Fed. Reg. at 49,619. On March
21, 2001 and March 26, 2001, China Steel and Yieh Loong submitted
additional responses to accompany their March 20, 2001 submission.
Id. Also on March 21, 2001, Commerce issued supplemental section
D questionnaires to China Steel and Yieh Loong. Id. at 49,620.
Both entities requested an extension of time to file their sections
B, C, and D supplemental responses on March 22, 2001, arguing that
the Department’s requests were extremely burdensome because of the
short deadlines and complex nature of the issues and transactions.
Letter from Peter Koenig and Kristen Smith, Ablondi, Foster, Sobin
& Davidow, P.C., to U.S. Sec’y of Commerce, P.R. Doc. 80, Pl.’s Ex.
6 (Mar. 22, 2001). Another extension of time was requested on
March 30, 2001 for ten days in order for China Steel to prepare
affiliate resale information pertaining to Commerce’s Questionnaire
II, because the affiliates’ records were kept in a system from
which China Steel could not easily extract the information. See
Letter from Peter Koenig and Kristen Smith, Ablondi, Foster, Sobin
& Davidow, P.C., to U.S. Sec’y of Commerce, P.R. Doc. 85, Pl.’s Ex.
7 (Mar. 30, 2001). The two companies each filed responses to
Questionnaire II on April 3, 2001. Final Determ., 66 Fed. Reg. at
49,620. China Steel and Yieh Loong then filed their responses to
the supplemental section D questionnaires on April 9, 2001. Id.
Questionnaire III was issued to China Steel and Yieh Loong on
Court No. 01-01040 Page 10
April 17, 2001 and April 18, 2001 with respect to each company’s
sections B, C, and D responses, requesting that China Steel supply
complete product characteristics and downstream sales information,
and that Yieh Loong supply downstream sales’ narratives and
supporting documentation for all expenses and adjustments. Id. On
April 23, 2001, China Steel and Yieh Loong filed a request seeking
a four day extension to file their responses to Commerce’s
Questionnaire III. Letter from Peter Koenig and Kristen Smith,
Ablondi, Foster, Sobin & Davidow, P.C., to U.S. Sec’y of Commerce,
P.R. Doc. 108, Pl.’s Ex. 8 at 2 (Apr. 23, 2001) (“Extension
Request”). That same letter also requested an extension of the
“preliminary and/or final” determinations to permit sufficient time
for the two companies to defend their cases, given that the
investigation was complex and the affiliated parties would not
cooperate with Plaintiff’s requests for resale information. Id. at
1-2. Nonetheless, the two corporations submitted their responses
to Questionnaire III on April 23, 2001. Final Determ., 66 Fed.
Reg. at 49,620. Commerce denied the four-day and preliminary
determination time extension requests on April 25, 2001. Denial
Letter, P.R. Doc. 115, Pl.’s Ex. 9 at 2.
On May 3, 2001, Commerce published its preliminary
determination of sales at LTFV. Prelim. Determ., 66 Fed. Reg. at
22,204. Among other things, Commerce concluded that China Steel
was affiliated with Yieh Loong’s affiliates, Yieh Hsing Enterprise
Court No. 01-01040 Page 11
Co. Ltd. (“YH”), and Yieh Phui Enterprise Co., Ltd (“YP”), as a
result of collapsing China Steel and Yieh Loong, and that China
Steel was required to report those two affiliates’ downstream sales
data. See id. at 22,207. Commerce also concluded that China Steel
failed to cooperate to the best of its ability “[i]n light of China
Steel’s repeated failure to provide affiliated sales information
and . . . all necessary product characteristics or to provide any
meaningful explanation of why such data could not be provided.”
Id. at 22,208. Accordingly, Commerce applied an adverse facts
available dumping margin to sales made by the collapsed entity.
Id.
A week later, on May 10, 2001, Commerce cancelled the sales
and cost verifications for the two companies. Final Determ., 66
Fed. Reg. at 49,620 (internal citation omitted). On May 30 and 31,
2001, China Steel and Yieh Loong submitted additional responses to
Commerce’s Questionnaire III. Id. Those responses subsequently
were returned to the respective companies by Commerce because the
Department found them untimely. Id. (internal citation omitted).
On July 17, 2001, Commerce published a postponement of the
final determination for this investigation. Certain HRCS Flat
Products from Taiwan, 66 Fed. Reg. 37,213, 37,214 (Dep’t Commerce
July 17, 2001) (postponement of final determination for antidumping
duty investigation) (“Postponement Notice”). The agency also
delayed its final determination by four days in light of the tragic
Court No. 01-01040 Page 12
events of September 11, 2001. Final Determ., 66 Fed. Reg. at
49,618-19. Commerce published its affirmative final determination
on September 28, 2001. Id. at 49,618.5
In rendering its affirmative LTFV determination, Commerce made
several findings. First, Commerce found that China Steel was
affiliated with Yieh Loong’s affiliates because “[c]ollapsed
companies constitute a single entity and therefore affiliates of
either company are affiliates of the collapsed entity.” Issues and
Decision Mem., P.R. Doc. 151, Def.’s Ex. 8 at 6; see also Final
Determ., 66 Fed. Reg. at 49,621. Accordingly, Commerce concluded
that China Steel’s home market sales to affiliated parties
constituted more than five percent of its total sales, thereby
requiring China Steel to report all resale information. See Final
Determ., 66 Fed. Reg. at 49,621.
Second, Commerce determined that the use of facts available
was appropriate pursuant to 19 U.S.C. § 1677e(a)(2)(A)-
1677e(a)(2)(C) because CSC/YL “withheld information requested by
the Department, failed to supply such information by the applicable
deadlines and has significantly impeded this proceeding,” and also
5
Commerce’s final determination incorporates by reference
the agency’s Issues and Decision Memorandum, which responds to
CSC/YL’s and the Domestic Producers’ comments filed during the
antidumping investigation. Dep’t of Commerce Mem. from Joseph A.
Spetrini to Faryar Shirzad, Issues and Decision Memo for the
Antidumping Investigation of Certain HRCS Flat Products from
Taiwan - October 1, 1999 through September 30, 2000, P.R. Doc.
151, Def.’s Ex. 8 (Sept. 21, 2001) (“Issues and Decision Mem.”).
Court No. 01-01040 Page 13
failed to request any modification of the reporting requirements.
See id. at 49,620. In particular, Commerce found that CSC/YL’s
affiliated party resales responses were “incomplete, deficient, and
inconsistent” because China Steel only reported downstream sales
made after February 21, 2000 by Yieh Loong, YP, and YH. See Final
Determ., 66 Fed. Reg. at 49,621. Moreover, Yieh Loong’s downstream
sales information failed to provide narratives and supporting
documentation for all expenses and adjustments. Id. Commerce
concluded that Plaintiff’s product characteristics data contained
deficiencies because the information failed to describe the
“quality, carbon, yield strength, thickness, and width
[characteristics for] a significant percentage of its home market
sales,” and that such merchandise was “prime quality,” which could
be matched to U.S. sales of prime quality merchandise. See id. at
49,621-22. Commerce stated that those deficiencies precluded the
sales data from being used for cost tests, model matching, or price
comparisons. Id. at 49,622. Without this information, the agency
stated that it was unable to accurately calculate a dumping margin.
Id. at 49,621. Finally, Commerce concluded that the sales
information provided by Plaintiff overall “was too incomplete to
form a reliable basis for making a determination and that
[Plaintiff] has not acted to the best of its ability in providing
information.” Id. at 49,620.
Third, Commerce determined that China Steel failed to
Court No. 01-01040 Page 14
cooperate to the best of its ability because it repeatedly ignored
instructions to submit complete product characteristics and
accurate downstream sales data, and “never provided alternatives or
reasonable explanations for why it could not report all downstream
sales.” Id. at 49,622. Without this information, Commerce stated
that it was unable to calculate an accurate margin, use China
Steel’s home database to match sales of identical or most similar
products, or properly perform a cost test for home market sales.
Id. Commerce also noted that Plaintiff “repeatedly told the
Department that the missing information would be forthcoming.” Id.
at 49,620. As Plaintiff’s deficient responses affected a
“significant” portion of its responses, Commerce found the
submitted data unusable for purposes of calculating a dumping
margin. Id. at 49,622. Commerce therefore determined that the
application of adverse facts available was appropriate pursuant to
19 U.S.C. § 1677e(a)(2)(B), (b). Id. at 49,620. Accordingly,
Commerce assigned Plaintiff an adverse facts available dumping
margin of 29.14 percent. Id. at 49,622.
II. Standard of Review
In reviewing final determinations in antidumping duty
investigations, the Court will hold unlawful those agency
determinations which are “unsupported by substantial evidence on
the record, or otherwise not in accordance with law.” 19 U.S.C. §
Court No. 01-01040 Page 15
1516a(b)(1)(B)(I) (2000).
III. Discussion
There are four issues presented. The Court must determine
whether: (1) Commerce’s affiliation determination is supported by
substantial evidence and in accordance with law, (2) Commerce’s
decision to apply facts available is in accordance with law, (3)
Commerce’s decision to use adverse facts available is supported by
substantial evidence and in accordance with law, and (4) Commerce’s
conduct during the investigation was arbitrary and capricious, or
an abuse of discretion.
A. Affiliation6
Commerce concluded that CSC/YL was affiliated with YH, YP, and
Persistence Hi-Tech Materials Inc. (“Persistence”) pursuant to 19
U.S.C. §§ 1677(33)(F), (G) on the basis of the following evidence:
(1) Yieh Loong, aware of the statutory definition of “affiliated
parties,” conceded affiliation with YH, YP, and Persistence in its
section A questionnaire responses; (2) Yieh Loong, YH, YP, and
Persistence shared a common chairman of the board; (3) Taiwanese
6
With the passage of Uruguay Round Agreement Act (“URAA”),
Congress modified U.S. trade law and replaced the concept of
“exporter” with the definition of “affiliated persons” as of
January 1, 1995. URAA, Pub. L. No. 103-465, 108 Stat. 4809,
4875-76 (1994); compare 19 U.S.C. § 1677(33) (2000) with 19
U.S.C. § 1677(13) (1988).
Court No. 01-01040 Page 16
law grants “extensive power” to chairmen of the board; and (4) Yieh
Loong, YH, and YP each own a minority stock interest in one
another. Issues and Decision Mem., P.R. Doc. 151, Def.’s Ex. 8 at
6-7; Dep’t of Commerce Mem. from Patricia Tran to File, Certain
HRCS Flat Products from Taiwan – China Steel Corporation (China
Steel), Yieh Loong Enterprise (Yieh Loong), and affiliated
resellers, C.R. Doc. 50, Def.’s Conf. Ex. 4 at 2 (Apr. 19, 2001)
(“Affiliated Resellers Mem.”). In reaching that conclusion,
Commerce first found that Yieh Loong is affiliated with YH, YP, and
Persistence. Issues and Decision Mem., P.R. Doc. 151, Def.’s Ex.
8 at 7. Commerce then concluded that “China Steel is affiliated
with Yieh Loong’s affiliates,” because “[c]ollapsed companies
constitute a single entity and therefore affiliates of either
company are affiliates of the collapsed entity.” See id. at 6-7.
In support of its determination, the Department cites Stainless
Steel Sheet and Strip in Coils from Germany, 64 Fed. Reg. 30,710
(Dep’t Commerce June 8, 1999) (final determination of sales at
LTFV).7 Issues and Decision Mem., P.R. Doc. 151, Def.’s Ex. 8 at
7
Commerce’s reliance on Stainless Steel and Strip in Coils
from Germany is misplaced, as the agency in that case found
affiliation based on Thyssen’s common control over its affiliates
and KTS pursuant to 19 U.S.C. § 1677(33)(E)-(F). See 64 Fed.
Reg. at 30,723-24. While Commerce relied on subsection (F) in
rendering its determination here, the Department’s decision also
was based on subsection (G). More importantly, Commerce does not
rely on “common control” pursuant to subsection (F) or equity
ownership pursuant to subsection (E) to support its affiliation
determination in this case. Thus, Commerce’s reliance on
Stainless Steel and Strip in Coils from Germany does not support
Court No. 01-01040 Page 17
7.
Plaintiff challenges Commerce’s conclusion that it is
affiliated with YH, YP, and Persistence, claiming that CSC/YL does
not “control” the resellers’ pricing. See Pl.’s Br. Supp. Mot. J.
Agency R. at 15 (“Pl.’s Br.”). Plaintiff argues that control is
lacking for several reasons. First, as stated in its certified
statement to Commerce, Plaintiff claims that the common chairman
between Yieh Loong, YH, YP, and Persistence is not responsible for
pricing or daily operations, but rather meets with the board of
directors several times a year to handle macroeconomic and
investment issues. Id. at 15-16. Second, although Yieh Loong, YH,
and YP retain a minority ownership interest of less than three
percent in each other, the common chairman only has influence to
the extent of that ownership percentage. Id. at 17. Third,
Plaintiff asserts that “[a] party’s statements on affiliation,
including in financial statements” do not support Commerce’s
affiliation determination. Id. at 18. Plaintiff’s final argument
contends that it is not required, as a matter of law, to submit
pre-affiliation downstream sales data where China Steel became
affiliated with Yieh Loong, and purportedly in turn to YP, YH, and
Persistence only on February 21, 2000, a point almost five months
into the POI. Pl.’s Br. at 20.
Affiliation is defined statutorily at 19 U.S.C. § 1677(33),
the Department’s determination here.
Court No. 01-01040 Page 18
stating, in relevant part:
[t]he following persons shall be considered to be
“affiliated” or “affiliated persons:”
. . .
(F) Two or more persons directly or indirectly
controlling, controlled by, or under common control with,
any person.
(G) Any person who controls any other person and
such other person.
19 U.S.C. § 1677(33); see also 19 C.F.R. § 351.102(b) (2001)
(defining “[a]ffiliated person; affiliated parties” according to 19
U.S.C. § 1677(33)). The statute further expounds that “a person
shall be considered to control another person if the person is
legally or operationally in a position to exercise restraint or
direction over the other person.” 19 U.S.C. § 1677(33); see also
Uruguay Round Agreements Act, Statement of Administration Action,
H.R. Doc. No. 103-465 at 838 (“SAA”).8
To determine whether “control” exists, Commerce’s regulations
direct the agency to consider the following factors, “among others:
corporate or family groupings; franchise or joint venture
agreements; debt financing; and close supplier relationships.” 19
C.F.R. § 351.102(b). Commerce, however, is precluded from finding
“control” on the basis of those factors “unless the relationship
8
The SAA represents “an authoritative expression by the
Administration concerning its views regarding the interpretation
and application of the Uruguay Round agreements . . . . [T]he
Administration understands that it is the expectation of the
Congress that future Administrations will observe and apply the
interpretations and commitments set out in this statement.” SAA
at 656.
Court No. 01-01040 Page 19
has the potential to impact decisions concerning the . . . pricing,
. . . of the subject merchandise.” Id. Commerce shall also
“consider the temporal aspect of a relationship in determining
whether control exists; normally, temporary circumstances will not
suffice as evidence of control.” 19 C.F.R. § 351.102(b); see also
Hontex Enter., Inc. v. United States, slip. op. 03-17 at 39 (CIT
Feb. 13, 2003).
Neither the statute nor Commerce’s regulations, however,
prescribe how Commerce should determine when a party is affiliated
with a collapsed entity. Thus, the Court must consider whether
Commerce’s affiliation determination is based on a permissible
construction of the antidumping statute. See AK Steel Corp. v.
United States, 22 CIT 1070, 1084-85, 34 F. Supp. 2d 756, 767-68
(1998).
Plaintiff claims that the existence of a common chairman
cannot support a determination of “control” here because that
individual is not responsible for pricing or daily operations, but
rather meets with the board of directors several times a year to
discuss macroeconomic and investment issues. Pl.’s Br. at 15; see
also Letter from Peter Koenig and Kristen Smith, Ablondi, Foster,
Sobin & Davidow, P.C., to U.S. Sec’y of Commerce, C.R. Doc. 54,
Pl.’s Conf. Ex. 9 supp. questionnaire para. 1 (Apr. 23, 2001)
(“YL’s Apr. 23 Response”) (certifying that “[t]he President
[instead of the board] makes the final determinations as to the
Court No. 01-01040 Page 20
pricing and slab purchasing of Yieh Loong”). In support of that
argument, Plaintiff contends that Commerce erroneously failed to
discuss Taiwan Company Law Article 193,9 which requires listed
companies, such as China Steel and Yieh Loong, to sell to
affiliates at the same market price as non-affiliates in order to
avoid price controls and conflicts of interest. Pl.’s Br. at 15-
17.10 Taiwan Company Law Article 193 deems directors personally
liable to the company for causing loss or damage for violations of
9
Article 193 states, in relevant part:
The board of directors, in conducting business,
shall act in accordance with laws and ordinances, [and]
the articles of incorporation . . . .
Where any resolution adopted by the board of
directors contravenes the aforesaid provisions, thereby
causing loss or damage to the company, all directors
taking part in the adoption of such resolution shall be
liable to compensate the company for such loss or
damage.
YL’s Apr. 23 Response, C.R. Doc. 54 at Ex. 22 art. 193; see also
Investment Laws of the World: Taiwan art. 193 (Int’l Ctr. for
Settlement of Inv. Disputes, ed. 1982).
10
Plaintiff also claims that “Commerce unreasonably and
unlawfully, failed to investigate further, . . . if it had
concerns as to [Yieh Loong’s] certified statement.” Pl.’s Br. at
17 (citing Olympia Indus., Inc. v. United States, 22 CIT 387,
392, 7 F. Supp. 2d 997, 1002 (1998)). Plaintiff’s reliance on
Olympia Indus. is misplaced. In that case, Commerce failed to
further investigate or explain its rejection of data submitted by
a party who believed that its submission was the best information
available. 22 CIT at 390, 392, 7 F. Supp. 2d at 1001-02. Here,
Commerce explicitly rejected Plaintiff’s certified statement and
supported that rejection by discussing the extensive power
granted to chairmen under Taiwan Company Law Articles 202 and
208. Issues and Decision Mem., P.R. Doc. 151, Def.’s Ex. 8 at 6-
7.
Court No. 01-01040 Page 21
the law or the company’s articles of incorporation. Investment
Laws of the World: Taiwan, supra note 9.
Plaintiff’s claim misstates the antidumping statute. Rather
than requiring actual exercise of control, the statute only
requires that a person is “legally or operationally in a position
to exercise restraint or direction over the other person.” 19
U.S.C. § 1677(33); SAA at 838 (same); see also Ta Chen Stainless
Steel Pipe, Ltd. v. United States, 23 CIT 804, 813 (1999) (“The
statute focuses on the capacity to control, rather than on the
actual exercise of control.”) (citing Ferro Union, Inc. v. United
States, 23 CIT 178, 192, 44 F. Supp. 2d 1310, 1324 (1999)). As
stated by Commerce in its explanatory comments to its final rule,
the agency “focus[es] on relationships that have the potential to
impact decisions concerning production, pricing or cost. This does
not mean however, that proof is required that a relationship in
fact has had such an impact.” Antidumping Duties; Countervailing
Duties, 62 Fed. Reg. 27,296, 27,297-98 (Dep’t Commerce May 19,
1997) (final rule).
In this case, Commerce did not base its finding of control on
actual proof that the common chairman influences the pricing
decisions of YH, YP, and Persistence. Instead, Commerce apparently
concluded that the common chairman was operationally in a position
to affect pricing decisions, because Taiwan law grants extensive
power to the chairman of the board. See Issues and Decision Mem.,
Court No. 01-01040 Page 22
P.R. Doc. 151, Def.’s Ex. 8 at 6-7. The record reveals that
Taiwanese law generally extends chairmen of the board “‘the power
to perform every act in connection with the business operations of
the company,’” and in practice, “‘may engage in significant
transactions without seeking approval of the company’s board of
directors.’” Affiliated Resellers Mem., C.R. Doc. 50, Def.’s Conf.
Ex. 4 at 2 (quoting Paul Cassingham and Nicholas Chen, Taiwan–Joint
Ventures in an Uncommon Law Jurisdiction, Int’l Tax Rev. (1992));
see also Investment Laws of the World: Taiwan, supra note 9 at art.
202 (granting the board of directors the power to transact all of
the company’s business).11 The record also reveals that Taiwanese
11
Plaintiff asserts that the article “is not in the
[Department’s] record of this proceeding, rendering its use
impermissible.” Pl.’s Reply to Opp’n. Mot. J. Agency R. at 10
n.13 (“Pl.’s Reply”). As the article is cited in the agency’s
Affiliated Resellers Memorandum, C.R. Doc. 50, Def.’s Conf. Ex. 4
at 2, and as that memorandum was created by the agency during the
course of this proceeding, the Court concludes that the article
is part of the record. 19 U.S.C. § 1516a(b)(2)(A) (noting that
the record consists of “all governmental memoranda pertaining to
the case”); 19 C.F.R. § 351.104(a) (stating that the Department
“will include in the official record all factual information . .
. or other material developed by, presented to, or obtained by
the [agency] during the course of a proceeding”). Moreover, the
article was available in the public domain during the agency’s
investigation of this case. Cassingham and Chen, supra p. 22, at
http://www.perkinscoie.com/resource/intldocs/uncommon.htm (Apr.
16, 2001).
Plaintiff further argues that the article is inapplicable
because it was published prior to the POI. See Pl.’s Reply at 10
n.13. The Court disagrees. Because the article was obtained by
the agency during the course of this proceeding, and because the
article was expressly incorporated into the Affiliated Resellers
Memorandum, the Court can properly review the affiliation
decisions using such information. Cf. Floral Trade Council v.
United States, 13 CIT 242, 243, 709 F. Supp. 229, 230-31 (1989)
Court No. 01-01040 Page 23
law grants chairmen the power to call and direct board meetings.
See Investment Laws of the World: Taiwan, supra note 9 at art. 208,
203 (stating that “[t]he chairman of the board of directors shall
internally preside at the meetings of . . . . the board of
directors” and that “[m]eetings of the board of directors shall be
convened by the chairman of the board”). Finally, the record
indicates Yieh Loong admitted that its board of directors conform
to these responsibilities. YL’s Apr. 23 Response, C.R. Doc. 54 at
2 (“Since Yieh Loong is a company duly organized and existing under
the law of [Taiwan], it follows [Taiwan] Company Law with respect
to the responsibilities of the Board of Directors.”). Thus, the
Court finds that Commerce’s determination that the common chairman
was operationally in a position to exercise direction over pricing
decisions is supported by substantial evidence.
The Department’s final determination and supporting memoranda
fail to explicitly address Article 193. It can be presumed,
however, that the agency considered this article in light of the
fact that the Department directly discusses other articles of
Taiwan Company Law in rendering its final determination. See
Issues and Decision Mem., P.R. Doc. 151, Def.’s Ex. 8 at 6-7; China
(finding that the record contains “those documents at the agency
which become sufficiently intertwined with the relevant inquiry .
. . no matter how or when they arrived at the agency,” and that
the agency’s express reference in its determination to “the
original investigations by the ITC and the Department”
incorporated all relevant information from those prior
investigations into the record) (internal citation omitted).
Court No. 01-01040 Page 24
Nat’l Mach. Imp. & Exp. Corp. v. United States, slip. op. 03-16 at
19 (CIT Feb. 13, 2003) (“[T]he agency is presumed to have
considered all of the evidence in the record, and the burden is on
the plaintiff to prove otherwise.”) (internal citations omitted);
see also Bowman Transp., Inc. v. Ark.-Best Freight Sys., Inc., 419
U.S. 281, 286 (1974) (holding that the Court may “uphold a decision
of less than ideal clarity if the agency’s path may reasonably be
discerned”) (internal citation omitted). Even though Article 193
seems to support Plaintiff’s certified statement that the common
chairman does not “control” pricing or daily operations, Commerce
determined that the common chairman was operationally in a position
of control under Taiwanese law. As Commerce ultimately bears the
responsibility of weighing the evidence, the Court may not
substitute its judgment for that of the agency. See Corus Staal BV
v. United States, slip. op. 03-25 at 11 (CIT Mar. 7, 2003). Even
if there is some evidence which detracts from the agency’s
conclusions, the Court need only determine whether the Department’s
conclusions are substantially supported by the record. See id.;
Olympia Indus., Inc., 22 CIT at 389, 7 F. Supp. 2d at 1000 (citing
Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1563 (Fed. Cir.
1984)).
Plaintiff’s second argument contends that control is lacking
because the common chairman only has the power to influence the
board of director’s decisions to the extent of the shares his
Court No. 01-01040 Page 25
company owns, which in this case is less than 3 percent. Pl.’s Br.
at 17. Plaintiff’s argument again incorrectly states the statutory
requirements, as it focuses only on a finding of actual control,
rather than the capacity for control. As such, the Court finds
this argument lacks merit.
Plaintiff’s third argument that a party’s affiliation
statements, including those made in financial statements, are not
substantial evidence of affiliation is unfounded. In fact, only
one of the four agency determinations cited in Plaintiff’s Brief
lends support for CSC/YL’s claim, but even that determination only
stands for the limited proposition that admissions of affiliation
contained in an entity’s financial statements alone insufficiently
establish affiliation. Certain Hot-Rolled Flat-Rolled Carbon-
Quality Steel Products from Brazil, 64 Fed. Reg. 38,756, 38,769
(Dep’t Commerce July 19, 1999) (notice of final determination of
sales at LTFV) (“Certain Steel Products from Brazil”). Thus, the
Court finds Plaintiff’s third argument also lacks merit.
Plaintiff’s final contention is that it is not required, as a
matter of law, to submit pre-affiliation downstream sales data
where China Steel became affiliated with Yieh Loong, and
purportedly in turn to YP, YH, and Persistence, only on February
21, 2000. Pl.’s Br. at 20. Commerce’s own regulation requires
that it consider the temporal aspect of a relationship in
determining whether control exists. 19 C.F.R. § 351.102(b). In
Court No. 01-01040 Page 26
Hontex Enter., Inc., slip. op. 03-17 at 39-40, the Court refused to
sustain Commerce’s determination where the agency failed to address
the temporal aspect of the entities’ relationships, and explain why
that factor was not necessary to its determination. Here, too,
Commerce has failed to address the temporal aspect of the relevant
parties’ relationships, or to explain why that factor is not
necessary to its determination. Accordingly, the Court cannot
sustain Commerce’s determination. Torrington Co. v. United States,
82 F.3d 1039, 1049 (Fed. Cir. 1996) (“Commerce, like other
agencies, must follow its own regulations.”) (citing Fort Stewart
Sch. v. Fed. Labor Relations Auth., 495 U.S. 641, 654 (1990)
(internal citation omitted)). On remand, Commerce will have the
opportunity to reconsider the temporal aspect of the pertinent
parties’ relationships.
The Court therefore finds aspects of Commerce’s determination
that Yieh Loong is affiliated with YH, YP, and Persistence, and
that China Steel is affiliated with Yieh Loong’s affiliates,
supported by substantial evidence. The Court, however, remands the
decision because the agency failed to consider the temporal aspect
of the parties’ relationships, and as such, finds the agency’s
determination not in accordance with law.
B. Facts Otherwise Available
The second issue concerns Commerce’s decision to apply facts
Court No. 01-01040 Page 27
otherwise available. Commerce determined that the application of
facts available was appropriate in this case pursuant to 19 U.S.C.
§ 1677e(a)(2)(A)-(C), because CSC/YL “withheld information
requested by the Department, failed to supply such information by
the applicable deadlines and has significantly impeded this
proceeding,” and also failed to request any modification of the
reporting requirements with respect to the deficient downstream
sales and product characteristics information. See Final Determ.,
66 Fed. Reg. at 49,620. In particular, Commerce found deficiencies
in the downstream sales and product characteristics information
submitted by Plaintiff in response to the agency’s Questionnaires
I, II, and III. See id. Commerce concluded that CSC/YL’s
affiliated party resales responses were “incomplete, deficient, and
inconsistent” because China Steel only reported downstream sales
made after February 21, 2000 by Yieh Loong, YP, and YH. See id. at
49,621. Moreover, Yieh Loong’s downstream sales information failed
to provide narratives and supporting documentation for all expenses
and adjustments. Id. Commerce concluded that Plaintiff’s product
characteristics data contained deficiencies because the information
failed to describe the “quality, carbon, yield strength, thickness,
and width [characteristics for] a significant percentage of its
home market sales,” and that such merchandise was “prime quality,”
which should be matched to U.S. sales of prime quality merchandise.
See id. at 49,621-22.
Court No. 01-01040 Page 28
Plaintiff challenges Commerce’s facts otherwise available
determination as not in accordance with law. See Pl.’s Br. at 22.
Plaintiff raises several arguments supporting that contention.
First, Plaintiff contends that Commerce failed to provide Yieh
Loong notice and an opportunity to remedy China Steel’s deficient
information prior to applying facts available, because Commerce did
not notify Yieh Loong of China Steel’s deficient downstream sales
and missing product characteristics data until the agency decided
to collapse the two entities in its preliminary determination, and
because Commerce would not accept any additional information after
such date. Id. (citing Case Brief of Yieh Loong and China Steel
Corporation before the U.S. Dep’t of Commerce, P.R. Doc. 140, Pl.’s
Ex. 14 at 8 (“Case Br.”)).
Second, Plaintiff claims it notified Commerce in its first
response to sections B, C, and D that it was unable to report
certain home market “leeway” overrun product characteristics in
accordance with 19 U.S.C. § 1677m(c)(1), because that information
was not readily available. Pl.’s Br. at 30 (citing Letter from
Peter Koenig, Ablondi, Foster, Sobin & Davidow, P.C., to U.S. Sec’y
of Commerce, C.R. Doc. 17, Pl.’s Conf. Ex. 3 at 5-6 (Feb. 26, 2001)
(“CSC’s Feb. 26 Response”)). Plaintiff also claims that it
notified Commerce of the problems it encountered in collecting
downstream sales information. Pl.’s Br. at 30 (citing Letter from
Peter Koenig and Kristen Smith, Ablondi, Foster, Sobin & Davidow,
Court No. 01-01040 Page 29
P.C., to U.S. Sec’y of Commerce, C.R. Doc. 43, Pl.’s Conf. Ex. 8 at
2 (Apr. 10, 2001) (“CSC’s Apr. 10 Letter”)); Extension Request,
P.R. Doc. 108, Pl.’s Ex. 8 at 2. Thus, Plaintiff argues that
Commerce was required to simplify its requests for information and
offer assistance. See Pl.’s Br. at 30. Commerce responds that
Plaintiff failed to provide a full explanation of its difficulty
meeting reporting requirements and to suggest alternative forms in
which it was capable of providing the requested information.
Def.’s Mem. Opp’n to Mot. J. Agency R. at 30 (“Def.’s Mem.”).
Last, Plaintiff argues that Commerce should have considered
its deficient data because CSC/YL acted in accordance with 19
U.S.C. § 1677m(e). Pl.’s Br. at 30-31.
Title 19 U.S.C. § 1677e(a) permits Commerce to use “facts
otherwise available” in reaching determinations where “necessary
information is not available on the record,” or an interested party
withholds requested information, fails to submit the requested
information by the deadline or provide such information in the form
and manner requested, significantly impedes an investigation, or
provides the requested information in an unverifiable form. 19 U.
S.C. § 1677e(a). Before resorting to facts available, however, the
Department is required to comply with the notice and remedial
requirements of § 1677m(d).12 Id. Nonetheless, if the remedial
12
Section 1677m(d) requires the Department to “promptly
inform the person submitting the response of the nature of the
deficiency and . . . to the extent practicable, provide that
Court No. 01-01040 Page 30
response or explanation is found unsatisfactory or untimely, the
Department may, subject to § 1677m(e),13 “disregard all or part of
the original and subsequent responses” in favor of facts available.
19 U.S.C. § 1677m(d).14
person with an opportunity to remedy or explain the deficiency in
light of the time limits established for the completion of [the]
investigation[].” 19 U.S.C. § 1677m(d). See infra pp. 32-33.
13
Section 1677m(e) provides:
(e) Use of Certain Information
In reaching a determination under . . . this title the
administering authority . . . 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 . . . if –
(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 . . .
with respect to the information, and
(5) the information can be used without undue
difficulties.
19 U.S.C. § 1677m(e).
14
Section 1677m prevents Commerce’s unrestrained use of
facts available as to a firm that makes its best efforts to
cooperate with the Department. Borden, Inc. v. United States, 22
CIT 233, 262, 4 F. Supp. 2d 1221, 1245 (1998), aff’d sub nom.
F.LLI De Cecco Di Filippo Fara S. Martino S.p.A. v. United
States, 216 F.3d 1027 (Fed. Cir. 2000) (“Borden I”). This
section was enacted as a part of the URAA, Pub. L. 103-465, §
Court No. 01-01040 Page 31
If Commerce finds that an interested party failed to provide
requested information by the deadline or in the form and manner
requested, Commerce’s use of facts available is subject to 19
U.S.C. § 1677m(c)(1) and (e). 19 U.S.C. § 1677e(a)(2)(B).
Subsection (e) requires Commerce to consider deficient information
if the respondent satisfies five enumerated criteria. See supra
note 13. Subsection (c) requires a party to promptly notify
Commerce as to why it cannot comply with the agency’s
questionnaire. 19 U.S.C. § 1677m(c)(1).15 That subsection also
231, to implement portions of Annex II to the Antidumping
Agreement, which states, in relevant part, that information which
“may not be ideal,” should not be disregarded if the party “has
acted to the best of its ability.” Agreement on Implementation
of Article VI of the General Agreement on Tariffs and Trade,
Annex II para. 5, reprinted in U.S. Trade Representative, Final
Texts of the GATT Uruguay Round Agreements 168 (1994).
15
Title 19 U.S.C. § 1677m(c) states as follows:
(c) Difficulties in meeting requirements
(1) Notification by interested party
If an interested party, promptly . . . notifies the
administering authority . . . that such party is unable to
submit the information requested in the requested form and
manner, together with a full explanation and suggested
alternative forms in which such party is able to submit
the information, the administering authority . . . shall
consider the ability of the interested party to submit the
information . . . and may modify such requirements to the
extent necessary to avoid imposing an unreasonable burden
on that party.
(2) Assistance to interested parties
The administering authority . . . shall take into
account any difficulties experienced by interested
Court No. 01-01040 Page 32
requires parties to suggest alternative forms in which they are
able to comply with the request. Id.
In the instant case, neither China Steel nor Yieh Loong
individually contest Commerce’s efforts to comply with § 1677m(d)
prior to the preliminary determination in which the two entities
were collapsed. Put differently, Plaintiff concedes that Commerce,
in accordance with § 1677m(d), promptly informed each entity of
their respective deficiencies by issuing supplemental
questionnaires requesting the deficient information. See Pl.’s Br.
at 22; see also Letter from Robert James, Program Manager, Int’l
Trade Admin., to China Steel Corporation, c/o Peter Koenig,
Ablondi, Foster, Sobin & Davidow, P.C., C.R. Doc. 22, Def.’s Conf.
Ex. 3 (Feb. 27, 2001); YL’s Questionnaire II, P.R. Doc. 69, Def.’s
Ex. 2. At the point at which Commerce collapsed China Steel and
Yieh Loong, the two companies were no longer treated as separate
legal entities. Rather, China Steel and Yieh Loong collectively
constituted a single “producer”16 pursuant to 19 U.S.C. § 1677(28)
parties, particularly small companies, in supplying
information requested by the administering authority . . .
in connection with investigations and reviews under this
subtitle, and shall provide to such interested parties any
assistance that is practicable in supplying such
information.
19 U.S.C § 1677m(c).
16
Title 19 U.S.C. § 1677(28) defines the term “exporter” or
“producer” as the “exporter of the subject merchandise, the
producer of the subject merchandise or both where appropriate.”
Court No. 01-01040 Page 33
for purposes of conducting the antidumping investigation and
calculating a dumping margin. Final Determ., 66 Fed. Reg. at
49,620; see also Antidumping Duties; Countervailing Duties, 61 Fed.
Reg. 7,308, 7,330 (Dep’t Commerce Feb. 27, 1996) (proposed rule)
(stating that upon collapsing multiple separate legal entities,
Commerce treats the selected entities as a single entity for
calculation of a single weighted-average dumping margin). As a
result, Yieh Loong is not entitled to separately receive notice or
remedial opportunities after the two entities were collapsed, as
Yieh Loong is not an individual or separate producer in the
investigation. Thus, the Court finds Commerce’s actions consistent
with § 1677m(d).17
To support its second argument, its § 1677m(c)(1) contention,
Plaintiff points to responses indicating that it coded the
requested product characteristics data in new columns because such
information lacks “specific record.” CSC’s Feb. 26 Response, C.R.
Doc. 17, Pl.’s Conf. Ex. 3 at 5-6. With respect to the downstream
17
Plaintiff also contends that Commerce failed to again
provide it notice and an opportunity to remedy its deficiencies
prior to applying adverse facts available. See Pl.’s Br. at 22.
Plaintiff’s argument is based on a misinterpretation of the
statute. As described above, Commerce is only required to
provide notice of deficient responses and an opportunity to
remedy those deficiencies prior to applying facts available in
accordance with 19 U.S.C. §§ 1677(e)(a), 1677m(d). Commerce may
not apply adverse facts available until it has complied with the
requirements for applying facts available. Compare 19 U.S.C. §
1677e(a) with 19 U.S.C. § 1677e(b). Thus, Commerce is not again
required to extend notice and remedial opportunities after
reaching its facts available determination.
Court No. 01-01040 Page 34
sales information, Plaintiff points to responses indicating that it
“had pushed hard to get [YH] to fully report its resale data,” and
that YH was unable to submit complete data because of financial
cutbacks. CSC’s Apr. 10 Letter, C.R. Doc. 43, Pl.’s Conf. Ex. 8 at
2.
Plaintiff’s two responses do not meet the threshold
requirements of 19 U.S.C. § 1677m(c)(1), as Plaintiff neither
explains in detail the difficulties it experienced, nor suggests
alternatives for supplying the deficient information. Compare
Kawasaki Steel Corp. v. United States, 24 CIT 684, 691, 110 F.
Supp. 2d 1029, 1036 (2000) (holding that respondent failed to
provide a full explanation why requested information could not be
submitted and failed to suggest alternatives for providing such
information where the respondent simply asked to be excused from
answering a section of the questionnaire) with World Finer Foods,
Inc. v. United States, 24 CIT 541, 542-44 (2000) (holding that
respondent Arrighi provided a detailed explanation in accordance
with § 1677m(c) when the company explained to Commerce that it
ceased exportation of pasta to the United States and was unable to
submit full responses to the agency’s questionnaire because the
company was not financially in a position to spare personnel to
compose such responses, and then offered to supply limited
information the Department might find worthwhile or helpful).
In fact, the record suggests that Plaintiff was capable of
Court No. 01-01040 Page 35
complying with the Department’s requests, because Plaintiff asked
for numerous extensions of time in order to collect and submit the
requested information. E.g., Final Determ., 66 Fed. Reg. at 49,620
(stating that Plaintiff “repeatedly told the Department that the
missing information would be forthcoming”); Supplemental Section B
Response from China Steel Corporation before the Int’l Trade
Admin., P.R. Doc. 92, Def.-Int. II’s Ex. 6 para. A3,(seeking an
extension of time to file the deficient downstream sales
information with Plaintiff’s supplemental section D responses), A4
(indicating that product characteristics such as “overrun, prime,
carbon, yield strength etc. can be identified from the production
record, inventory record as well as the product code system . . .
while . . . paint, thickness, width, cut-to-length, pickled, edge
trim and patterns in relief can be identified with customers’
orders”) (Apr. 3, 2001); Letter from Peter Koenig and Kristen
Smith, Ablondi, Foster, Sobin & Davidow, P.C., to U.S. Sec’y of
Commerce, C.R. Doc. 52, Pl.’s Conf. Ex. 10 at 5-6 (Apr. 23, 2001)
(“CSC’s Apr. 23 Response”) (describing Plaintiff’s efforts to
collect the information and expressly requesting the opportunity
“to refine the data submitted before making the final
determination”). Moreover, Plaintiff also claims that it
ultimately, albeit tardily, submitted all of the deficient data.
See Pl.’s Br. at 30.
Because Plaintiff failed to provide a full, detailed
Court No. 01-01040 Page 36
explanation and suggest alternatives for providing the information,
however, the Court finds Commerce’s duty to “assist interested
parties experiencing difficulties” was not triggered. World Finer
Foods, 24 CIT at 544 (internal citation omitted).
Contrary to Plaintiff’s third argument, Commerce ultimately
rejected Plaintiff’s submitted responses because it failed to
provide complete product characteristics and accurate downstream
sales information. See Final Determ., 66 Fed. Reg. at 49,620-21.
Commerce concluded that Plaintiff’s submitted data were “too
incomplete to form a reliable basis for making a determination”
pursuant to 19 U.S.C. § 1677m(e)(3). Id. at 49,620. Without the
requested data, Commerce stated that it was unable to calculate an
accurate margin, nor could it use China Steel’s home market
database to match sales of identical or most similar products,
compare prices of the merchandise, or properly perform a cost test
for home market sales. Id. at 49,622. Because Commerce is charged
with calculating dumping margins “‘as accurately as possible,’”
Lasko Metal Prods. Inc. v. United States, 43 F.3d 1442, 1446 (Fed.
Cir. 1994) (quoting Rhone Poulenc, Inc. v. United States, 899 F.2d
1185, 1191 (Fed. Cir. 1990)), and because the agency was inhibited
from doing so without the requested information, the Court finds
Commerce’s decision to apply facts available in accordance with
Court No. 01-01040 Page 37
law.18
C. Adverse Facts Available
The third issue concerns Commerce’s application of adverse
facts available. The Department concluded that Plaintiff “has not
cooperated by acting to the best of its ability.” Final Determ.,
66 Fed. Reg. at. 49,620-21. Commerce reached this conclusion
because China Steel repeatedly ignored instructions to submit
complete product characteristics and accurate downstream sales
data, and “never provided alternatives or reasonable explanations
for why it could not report all downstream sales.” Id. at 49,622.
This information was necessary to calculate an accurate margin, to
match sales of identical or most similar products, and to perform
a cost test for home market sales. Id. Commerce also noted that
Plaintiff “repeatedly told the Department that the missing
information would be forthcoming.” Id. at 49,620. As CSC/YL’s
deficient responses affected a “significant” portion of its
responses, Commerce found the submitted data unusable for purposes
of calculating a margin. Id. at 49,622. Commerce therefore
determined that the application of adverse facts available was
18
Although Commerce also concluded that Plaintiff failed to
act to the best of its ability, Final Determ., 66 Fed. Reg. at
49,620-21, the Court will address that issue in subsection C
below, discussing adverse inferences. Regardless, as Plaintiff
has not demonstrated that all five of the elements contained in §
1677m(e) are satisfied, the Department’s decision to apply facts
available is reasonable. See 19 U.S.C. § 1677m(e).
Court No. 01-01040 Page 38
appropriate under 19 U.S.C. § 1677e(a)(2)(B), 1677e(b). Id.
Plaintiff challenges Commerce’s decision to apply adverse
facts available as unsupported by substantial evidence and not in
accordance with law, asserting that the agency merely repeated that
Plaintiff had problems in timeliness and completeness without
finding that its refusal to cooperate was willful. Pl.’s Br. at
12, 22, 29. Plaintiff further argues that the Department failed to
consider the difficulties Plaintiff experienced in tracing the
requested product characteristics data and extracting and
collecting the requested affiliate reseller information. See id.
at 13. Last, Plaintiff contends that Commerce failed to provide it
with a meaningful opportunity to respond to the Department’s
requests for product characteristics and affiliate downstream sales
data. Pl.’s Br. at 23.
Once Commerce determines that facts available is warranted, §
1677e(b) permits Commerce to apply an “adverse inference” if the
Department makes an additional finding that a party 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 Fujian
Mach. and Equip. Imp. & Exp. Corp. v. United States, 25 CIT __, __,
178 F. Supp. 2d 1305, 1332 (2001) (internal citations omitted).
This finding must be “reached by ‘reasoned decisionmaking,’
including . . . a reasoned explanation supported by a stated
connection between the facts found and the choice made.” Elec.
Court No. 01-01040 Page 39
Consumers Res. Council v. Fed. Energy Regulatory Comm’n, 747 F.2d
1511, 1513 (D.C. Cir. 1984) (citing Burlington Truck Lines, Inc. v.
United States, 371 U.S. 156, 168 (1962)). Otherwise, “the
Department’s decision-making process will be arbitrary and
capricious.” Steel Auth. of India, Ltd. v. United States, 25 CIT
__, __, 149 F. Supp. 2d 921, 929 (2001).19
In making its determination that an interested party did not
act “‘to the best of its ability,’ [Commerce] cannot merely recite
the relevant standard or repeat its facts available finding.”
Steel Auth. of India, Ltd., 25 CIT at __, 149 F. Supp. 2d at 930
(internal citation omitted); see also Kawasaki Steel Corp., 24 CIT
at 689, 110 F. Supp. 2d at 1034 (“It has been well established by
the court that a ‘mere recitation of the relevant [adverse facts
available] standard is not enough for Commerce to satisfy its
obligation under the statute.’”) (internal citation omitted).
Rather, to satisfy its statutory obligations, the Department must
be explicit in its reason for applying adverse inferences. See
Ferro Union, Inc., 23 CIT at 200, 44 F. Supp. 2d at 1331. For the
19
The Court considers not only the Department’s
interpretation of the statute, but its decision-making process as
well. See Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto.
Ins. Co., 463 U.S. 29, 42-43 (1983) (describing the role of
rationality in reviewing an agency’s decision-making process).
This review differs from Chevron review in that it focuses
on whether the Department “articulate[d] with reasonable clarity
its reasons for decision[,]” rather than on the reasonableness of
the Department’s statutory interpretation. Steel Auth. of India,
Ltd., 25 CIT at __, 149 F. Supp. 2d at 929 n.10 (internal
citation omitted) (alterations in original).
Court No. 01-01040 Page 40
Department’s decision to be supported by substantial evidence,
Commerce must clearly articulate “‘why it concluded that a party
failed to act to the best of its ability, and explain why the
absence of this information is of significance to the progress of
[the agency’s] investigation.’” Nippon Steel Corp. v. United
States, 24 CIT 1158, 1170, 118 F. Supp. 2d 1366, 1378 (2000)
(“Nippon Steel Corp. I”) (quoting Mannesmannrohren-Werke AG v.
United States, 23 CIT 826, 839, 77 F. Supp. 2d 1302, 1313-14
(1999)). Commerce’s explanation must include, “[a]t a minimum,” a
determination “that a respondent could comply, or would have had
the capability of complying if it knowingly did not place itself in
a condition where it could not comply.” Nippon Steel Corp. I, 24
CIT at 1171, 118 F. Supp. 2d at 1378-79 (internal citation
omitted). Furthermore, Commerce “must also find either a willful
decision not to comply or behavior below the standard for a
reasonable respondent.” 24 CIT at 1171, 118 F. Supp. 2d at 1379.
Here, Commerce appears to conclude that Plaintiff could comply
with the agency’s requests. Final Determ., 66 Fed. Reg. at 49,620-
21 (noting that Plaintiff “repeatedly told the Department that the
missing information would be forthcoming” and that Plaintiff failed
to provide any proof that it was unable to comply with the
requests); see also Bowman Transp., Inc., 419 U.S. at 286 (holding
that the Court may “uphold a decision of less than ideal clarity if
the agency’s path may reasonably be discerned”).
Court No. 01-01040 Page 41
Commerce’s decision, however, failed to make the required
additional finding that Plaintiff failed to act to the best of its
ability. Commerce neglected to explain or analyze whether
Plaintiff willfully decided not to comply with its requests, or
alternatively, whether Plaintiff’s behavior fell below the standard
for a reasonable respondent. See Nippon Steel Corp. I, 24 CIT at
1170-71, 118 F. Supp. 2d at 1378-79. Instead, Commerce supports
its use of adverse facts available by repeating its facts available
reasoning, although using slightly different words. Compare Final
Determ., 66 Fed. Reg. at 49,622 (finding that China Steel failed to
cooperate to the best of its ability because it repeatedly ignored
the agency’s instructions to submit downstream sales and product
characteristics data, and never provided alternatives or
explanations for why it could not report the information) with id.
at 49,620-21 (holding that use of facts available was proper
because Plaintiff withheld and failed to supply downstream sales
and product characteristic information requested by the Department
without seeking modification of the reporting requirements). In so
doing, Commerce conflates the prerequisites for use of facts
available with the additional findings required to use an adverse
inference. See Nippon Steel Corp. v. United States, 25 CIT __, __,
146 F. Supp. 2d 835, 840 (2001) (“Commerce may not in this manner
‘simply repeat[] its 19 U.S.C. § 1677e(a)(2)(B) finding, using
slightly different words,’ in lieu of making the requisite
Court No. 01-01040 Page 42
additional findings before drawing an adverse inference.”) (citing
Borden I, 4 F. Supp. 2d at 1246); see also Steel Auth. of India,
Ltd., 25 CIT at __, 149 F. Supp. 2d at 930; Kawasaki Steel Corp.,
24 CIT at 689, 110 F. Supp. 2d at 1034 (internal citations
omitted). The Court therefore finds the Department’s “best of
ability” determination not in accordance with law. See Steel Auth.
of India, Ltd., 25 CIT at __, 149 F. Supp. 2d at 930-31.
The Department’s “best of ability” determination fails for an
additional reason. In its Case Brief before Commerce, Plaintiff
described the difficulties it experienced in gathering and
submitting the requested information. Case Brief, P.R. Doc. 140,
Pl.’s Ex. 14 at 2-3 (stating that “the case is highly complex,
involving over 100,000 transactions from nine separate sales data
bases, about three million individual figures,” and multiple
tracings through up to 70 transactions for requested product
characteristics). The Department, however, fails to address this
claim in reaching its “best of ability” determination. As “the
agency must examine the relevant data and articulate a satisfactory
explanation for its action including a ‘rational connection between
the facts found and the choice made,’” Commerce failed to clearly
identify its reasons for discounting Plaintiff’s claims in making
its best of ability determination. Motor Vehicle Mfrs. Ass’n, 463
U.S. at 43 (internal citation omitted).
CSC/YL’s last argument contends that Commerce failed to afford
Court No. 01-01040 Page 43
Plaintiff a meaningful opportunity to respond to the agency’s
requests to submit the data in question. Generally, Commerce
affords interested parties at least 30 days to respond to the full
initial questionnaire from the date of receipt. 19 C.F.R. §
351.301(c)(2)(iii). Notwithstanding that regulation, our case law
has established that “parties must be given a reasonable and
meaningful opportunity to participate in the review and provide
complete responses.” Mitsui & Co. v. United States, 18 CIT 185,
202 (1994) (internal citation omitted).
In Am. Silicon Tech. v. United States, 24 CIT 612, 624-25, 110
F. Supp. 2d 992, 1003 (2000), the Court found that Commerce’s use
of adverse facts was inappropriate because it was “not clear” that
the “numerous opportunities” afforded to respondent Eletrosilex
were meaningful opportunities to respond. The Department in that
case issued an initial questionnaire and a supplemental
questionnaire, to which Eletrosilex responded promptly. 24 CIT at
620, 110 F. Supp. 2d at 998-99. Thereafter, Commerce sought
additional information on “certain topics” by issuing a second and
third questionnaire that required responses within one week of
issuance, because of the statutory deadline for filing the
preliminary decision. 24 CIT at 620, 110 F. Supp. 2d at 999.
Eletrosilex failed to respond to either supplemental questionnaire.
Id. Instead, the respondent informed the Department that it was
being acquired, and that it was unable to file timely responses to
Court No. 01-01040 Page 44
the supplemental questionnaires because of management reviews and
changes in staffing. Id. The Court found that it was unclear
whether Plaintiff was afforded a meaningful opportunity to respond,
because the questionnaires required responses within one week of
issuance in light of the approaching preliminary determination
deadline, and Eletrosilex notified the agency upon receipt of the
questionnaires that it was being acquired and that it was unable to
submit timely responses because of management reviews and staffing
changes. 24 CIT at 624-25, 110 F. Supp. 2d at 1002-03.
Similarly, in Mitsui & Co., 18 CIT at 202, the Court held that
Commerce failed to afford respondent a meaningful opportunity to
respond to the Department’s requests because the agency requested
5 years of information to be submitted in 83 days, and the
Department failed to provide the respondent notice of the alleged
deficiencies in its submission. The Court in Melex USA, Inc. v.
United States further held that Commerce’s resort to “best
information available”20 was not in accordance with law because the
respondents were expected to submit data covering several years of
sales which occurred over ten years before the initiation of the
investigation, and the Department failed to give some indication
20
The “best information available” (“BIA”) standard preceded
the current “facts available” standard. See Ferro Union, Inc.,
23 CIT at 198 n.41, 44 F. Supp. 2d at 1329 n.41. Pursuant to the
URAA, Pub. L. No. 103-465, 108 Stat. 4809 (1994), the terminology
was changed, and the Department was instructed to make more
discriminating judgments then previously mandated under the BIA
standard. Id.
Court No. 01-01040 Page 45
whether the information submitted satisfied the agency’s requests.
See 19 CIT 1130, 1142, 899 F. Supp. 632, 642 (1995) (indicating the
investigation was initiated in April 1991 for the period of July 1,
1976 through June 10, 1980).
The instant case, however, is factually dissimilar from our
“meaningful opportunity” jurisprudence. Here, it is undisputed
that Commerce notified Plaintiff of its deficient Questionnaire I
responses. Thereafter, Commerce continued to seek the same product
characteristics and downstream sales data, providing Plaintiff with
notice of deficiencies and issuing repeated supplemental
questionnaires. Even though Plaintiff was only given several days
to complete Commerce’s Questionnaires II and III, Plaintiff, in
fact, received a total of more than four months to respond to
Commerce’s request for data describing sales which occurred within
the same year of the Department’s initiation of the antidumping
investigation. The Court therefore finds that Commerce afforded
Plaintiff a meaningful opportunity to respond to the Department’s
requests.
Accordingly, the Court remands Commerce’s adverse facts
available decision so that the Department may make specific
findings as to whether CSC/YL willfully decided not to cooperate or
behaved below the standard of a reasonable respondent, or otherwise
reconsider its decision to apply an adverse inference in choosing
Court No. 01-01040 Page 46
the available data to calculate the dumping margin.21
D. Additional Arguments Contesting Commerce’s Application of
Adverse Facts Available
1. “Overrun” Product Characteristics
Plaintiff also argues that Commerce may not resort to adverse
facts available because the missing product characteristics data
are “insignificant or irrelevant.” Pl.’s Br. at 6. Plaintiff
asserts three arguments in support of its contention. First,
Plaintiff challenges Commerce’s conclusion that the “leeway
overrun” merchandise in question is “prime quality merchandise,”
which should be matched to U.S. sales, as unsupported by
substantial evidence. Id. at 9. Plaintiff’s second argument is
that its “leeway overrun” merchandise is sold outside the ordinary
course of trade.22 Id. at 8. Third, Plaintiff argues that the
“leeway overrun” merchandise in question is sold only in the home
market, and as such, the Department should have excluded that
21
Plaintiff also claims that Commerce failed to corroborate
the selected adverse facts available margin. Pl.’s Br. at 31.
Because the Court remands this matter for reconsideration of the
inferences drawn adversely against Plaintiff, any ruling on the
corroboration of the adverse facts available dumping margin would
be premature.
22
“Ordinary course of trade,” a variable considered in
calculating normal value, is defined by 19 U.S.C. § 1677(15) as
“the conditions and practices which, for a reasonable time prior
to the exportation of the subject merchandise, have been normal
in the trade under consideration with respect to merchandise of
the same class or kind.”
Court No. 01-01040 Page 47
merchandise from use in calculating the dumping margin in
accordance with agency practice. Id. at 6-7.
The Department’s questionnaires do not request product
characteristics data for “leeway overrun” products. Instead, the
agency sought product characteristic data for all products
Plaintiff classifies as “leeway” merchandise and specifically for
Plaintiff’s “overrun” merchandise. See, e.g., CSC’s Questionnaire
II, C.R. Doc. 27, Def.-Int. II’s Conf. Ex. 3 supp. questionnaire
para. 5; YL’s Questionnaire II, P.R. Doc. 69, Def.’s Ex. 2 supp.
questionnaire para. 2. Commerce defines “overrun” merchandise as
“excess production from [a] particular purchase order, regardless
of the manner in which [the product] is ultimately sold.” Id.
In the normal course of business, Plaintiff, however, does not
appear to individually catalogue data for overrun merchandise.
Rather, Plaintiff classifies overrun as a possible source of
“leeway” merchandise, because that product lacks a purchase order.
CSC’s Feb. 26 Response, C.R. Doc. 17, Pl.’s Conf. Ex. 3 at 3.
“Leeway” merchandise derives from four possible sources, according
to Plaintiff, including: (1) overrun, (2) prime products that do
not meet customers’ original specifications, (3) prime products
produced after cancelled orders, and (4) newly developed products.
CSC’S Apr. 3 Response, C.R. Doc. 39, Pl.’s Conf. Ex. 6 para. 5. In
one questionnaire response, Plaintiff describes “leeway”
merchandise as both prime and non-prime quality merchandise, id.
Court No. 01-01040 Page 48
para. 6, while at various other places in the record, Plaintiff
insists that “leeway” products are prime quality. CSC’s Mar. 20
Response, C.R. Doc. 31, Pl.’s Conf. Ex. 4 at 24 (indicating that
“[i]rregular miscellaneous leeway” product is “prime finished
goods” and that such product “would be reported as overrun prime in
the sales listings”); CSC’s Apr. 3 Response, C.R. Doc. 39, Pl.’s
Conf. Ex. 6 para. 5; CSC’s Apr. 23 Response, C.R. Doc. 52, Pl.’s
Conf. Ex. 10 at 5. With regards to overrun merchandise, CSC/YL
defines overrun as excess production that is either non-prime or
prime quality merchandise. See Pl.’s Br. at 5; Letter from
Ablondi, Foster, Sobin & Davidow, P.C., to U.S. Sec’y of Commerce,
C.R. Doc. 39, Pl.’s Conf. Ex. 6 para. 5-6 (Apr. 3, 2001) (“CSC’s
Apr. 3 Response”). Plaintiff also stated in CSC’s Apr. 3 Response
that a substantial percentage of the overrun merchandise in
question is prime quality. CSC’s Apr. 3 Response, C.R. Doc. 39
para. 7.
Here, Commerce concluded that contrary to Plaintiff’s
characterization of the subject merchandise as “leeway” sales, “the
merchandise in question is not ‘secondary’ quality merchandise
which should not be matched to prime quality merchandise. The
merchandise in question is prime quality; it has simply not been
purchased by the customer to whose specifications it was originally
produced.” Final Determ., 66 Fed. Reg. at 49,621. In other words,
as a result of excess production, the merchandise is sold to other
Court No. 01-01040 Page 49
customers from Plaintiff’s inventory. Id.
Commerce’s determination that the merchandise in question is
prime quality is supported by substantial evidence. While the
record indicates that overrun merchandise may be either prime or
non-prime quality merchandise, it clearly indicates that a
substantial percentage of the overrun merchandise in question is
prime quality. Moreover, the record reveals Plaintiff only once
stated that “leeway” merchandise, a category which contains the
overrun merchandise in question, is either prime or non-prime
quality merchandise; in all other instances, the record indicates
that “leeway” merchandise is prime quality. For these reasons, the
Court finds Commerce’s determination is supported by substantial
evidence.
With regards to Plaintiff’s second argument contending that
leeway overrun merchandise is outside the ordinary course of trade,
Commerce responds that the Court should decline to review this
argument because Plaintiff failed to exhaust its administrative
remedies. Def.’s Mem. at 29. The Court will address the agency’s
argument first.
“The exhaustion doctrine requires a party to present its
claims to the relevant administrative agency for the agency’s
consideration before raising these claims to the Court.” Timken
Co. v. United States, 26 CIT __, __, 201 F. Supp. 2d 1316, 1340
(2002) (internal citation omitted). There is, however, “no
Court No. 01-01040 Page 50
absolute requirement of exhaustion in the Court of International
Trade in non-classification cases.” Consol. Bearings Co. v. United
States, 25 CIT __, __, 166 F. Supp. 2d 580, 586 (2001) (internal
citation omitted). Rather, Congress vested the Court with
discretion to determine the circumstances under which it is
appropriate to require the exhaustion of administrative remedies
pursuant to 28 U.S.C. § 2637(d).
While a plaintiff cannot circumvent the require-
ments of the doctrine . . . by merely mentioning a broad
issue without raising a particular argument, plaintiff’s
brief statement of the argument is sufficient if it
alerts the agency to the argument with reasonable clarity
and avails the agency with an opportunity to address it.
Luoyang Bearing Factory v. United States, 25 CIT __, __, 240 F.
Supp. 2d 1268, 1297 (2002) (internal citations omitted). The sole
fact that the agency failed to address a plaintiff’s argument does
not invoke the exhaustion doctrine and shall not preclude a
plaintiff from seeking judicial relief. Id. at 1298. “An
administrative decision not to address the issue cannot be
dispositive of the question whether or not the issue was properly
brought to the agency’s attention.” Id.
Here, Plaintiff properly exhausted its administrative
remedies. In its Case Brief before the Department, Plaintiff
raised its challenge contending that the “leeway overrun”
merchandise was sold outside the ordinary course of trade.
Specifically, Plaintiff argued that Commerce discards “similar
overruns sold at a discount in the dumping margin calculation, as
Court No. 01-01040 Page 51
. . . not in the ordinary course of trade” and cited three agency
determinations to support its position. Case Brief, P.R. Doc. 140,
Pl.’s Ex. 14 at 7. Even though Plaintiff’s statement of its
position was brief, Plaintiff articulated its “ordinary course of
trade” challenge with reasonable clarity, and provided the
Department with an opportunity to address that argument in the
final determination. Thus, the Court finds that Plaintiff has
properly presented its claim here. Cf. NSK Ltd. v. United States,
25 CIT __, __, 170 F. Supp. 2d 1280, 1291 (2001) (finding that
respondent NSK sufficiently exhausted its administrative remedies
by bringing forth the issue in its case brief before Commerce).
The Court now turns to the merits of Plaintiff’s second contention.
In calculating the antidumping margin, Commerce generally
excludes home market sales of overrun merchandise from U.S. sales
comparisons where the agency determines that the overrun
merchandise is sold outside the ordinary course of trade. E.g.,
Certain Cut-to-Length Carbon-Quality Steel Plate Products from
Italy, 64 Fed. Reg. 73,234, 73,236-37 (Dep’t Commerce Dec. 29,
1999) (notice of final determination of sales at LTFV); Certain
Steel Products from Brazil, 64 Fed. Reg. at 38,771. In evaluating
whether sales of overrun merchandise are outside the ordinary
course of trade, the agency typically examines all of the
circumstances particular to the sales in question. See, e.g.,
Certain Steel Products from Brazil, 64 Fed. Reg. at 38,770. For
Court No. 01-01040 Page 52
example, the agency has considered several factors, no one of which
is dispositive, including: (1) an average price comparison between
an overrun sale and a commercial sale; (2) a comparison between the
ratio of overrun sales to total home market sales; (3) the volume
of sales and number of buyers in the home market; (4) whether the
merchandise is “off-quality” or produced according to unusual
specifications; (5) whether the merchandise is sold at unusually
high profits or according to unusual terms of sale; or (6) whether
the merchandise is sold to affiliated parties at non-arm’s length
prices. Id.; Mantex, Inc. v. United States, 17 CIT 1385, 1403, 841
F. Supp. 1290, 1305-06 (1993); Circular Welded Non-Alloy Steel Pipe
from the Republic of Korea, 65 Fed. Reg. 76,218, 76,221 (Dep’t
Commerce Dec. 6, 2000) (preliminary results and rescission in part
of antidumping administrative review). It follows that Commerce
would be unable to determine whether a producer’s overrun sales
were sold outside the ordinary course of trade until the agency has
actually evaluated the producer’s complete overrun sales data. See
id.
The Department here could not conduct such an examination of
Plaintiff’s overrun merchandise. Because Plaintiff failed to
submit complete product characteristics data, Commerce concluded
that it was unable to use Plaintiff’s submissions to conduct price
comparisons and accurately compute a dumping margin. Final
Determ., 66 Fed. Reg. at 49,621. In other words, without the
Court No. 01-01040 Page 53
products characteristics data, the agency was unable to consider
all of the circumstances particular to Plaintiff’s overrun sales to
determine whether those sales were sold outside the ordinary course
of trade. Moreover, the agency’s inaction is consistent with its
obligation to calculate accurate dumping margins. Lasko Metal
Prods. Inc., 43 F.3d at 1446 (quoting Rhone Poulenc, Inc., 899 F.2d
at 1191). The Court therefore finds that Commerce’s failure to
make an ordinary course of trade determination was reasonable.
The Court finds Plaintiff’s third argument unpersuasive. As
evidence of the Department’s practice to exclude home market
overrun sales from the dumping margin where a producer has no U.S.
overrun sales, CSC/YL incorrectly cites to Certain Steel Products
from Brazil, 64 Fed. Reg. at 38,770-71.23 Pl.’s Br. at 7. In that
determination, Commerce concluded that, although producer CSN’s
home market overruns were sold only in the home market, and
represented “such an insignificant portion” of CSN’s total home
23
Plaintiff also cites to Hot-Rolled Flat-Rolled Carbon-
Quality Steel Products from Japan, 64 Fed. Reg. 24,329, 24,341
(Dep’t Commerce May 6, 1999) (notice of final determination of
sales at LTFV) for support of its contention. Pl’s Br. at 7.
The Department in that determination found that the producer’s
home market overrun merchandise was outside the ordinary course
of trade and should be excluded from the dumping margin for three
reasons. Id. One of those reasons included the fact that the
Department found sufficient matches of U.S. and home market non-
overrun prime merchandise sold in the ordinary course of trade.
Id. The agency, however, did not find, nor does the
determination suggest, that the overrun sales were excluded from
the margin because the producer had not sold any overrun
merchandise in the U.S. See id. Therefore, the Court finds this
determination unsupportive of Plaintiff’s contention.
Court No. 01-01040 Page 54
market sales during the period of investigation that the data’s
effect on the margin was negligible, the merchandise did not
warrant exclusion from the home market database. 64 Fed. Reg. at
38,771. Because none of the factors the Department considers in
determining whether overrun sales are outside the ordinary course
of trade were germane to the producer’s overrun sales, Commerce
decided to include the overrun sales data. Id.
It can reasonably be inferred, however, that the agency’s
decision in Certain Steel Products from Brazil was based on its
evaluation and verification of complete overrun sales information.
See id. Accordingly, the instant case is factually
distinguishable. The agency here neither found that the missing
overrun sales were only sold in the home market, nor that those
sales constituted “such an insignificant portion” of CSC/YL’s home
market sales that the merchandise’s effect would be “negligible.”
Certain Steel Products from Brazil, 64 Fed. Reg. at 38,771; Final
Determ., 66 Fed. Reg. at 49,621 (indicating that the missing
product characteristics data affected a “significant” portion of
China Steel’s home market sales and that such merchandise could be
matched to U.S. sales). More importantly, unlike Certain Steel
Products from Brazil, CSC/YL failed to provide complete overrun
sales information during the investigation, which resulted in
Commerce’s inability to consider whether those sales were made only
in the home market, and consequently, outside the ordinary course
Court No. 01-01040 Page 55
of trade. See supra pp. 51-53. For these reasons, the Court finds
that Commerce’s decision to include the overrun sales in the
dumping margin was in accordance with law.
2. Downstream Sales Data
Plaintiff raises two additional arguments supporting its
contention that Commerce erroneously used adverse facts available
with respect to the downstream sales data. Plaintiff first argues
that Commerce erred because its total home market sales to
affiliates do not meet the five percent threshold required in 19
C.F.R. § 351.403(d), and thus, the missing affiliate reseller data
would not be used in calculating the dumping margin. See Pl.’s Br.
at 19. Plaintiff’s second argument contends that the agency failed
to consider whether the sales to the affiliates were arm’s length
transactions pursuant to 19 C.F.R. § 351.403(c),(d) and agency
practice. See Pl.’s Br. at 18-19. Plaintiff argues that Commerce
should have made this decision prior to requesting the affiliate
downstream sales information. Id. at 19.
With regards to CSC/YL’s first argument, Commerce “normally
will not calculate normal value based on the sale by an affiliated
party if sales of the foreign like product by an exporter or
producer to affiliated parties account for less than five percent
of the total value (or quantity) of the exporter’s or producer’s
sales.” 19 C.F.R. § 351.403(d). Here, the agency concluded that
Court No. 01-01040 Page 56
“China Steel’s sales to affiliates constituted approximately one-
fifth of its total home market sales;” particularly, Commerce
determined that sales to Yieh Loong, YH, and YP constituted more
than five percent of China Steel’s home market sales, or a
“significant percentage.” Final Determ., 66 Fed. Reg. at 49,621-
22; see also Dep’t of Commerce Mem. from Patricia Tran, Dep’t
Commerce to File, The Use of Adverse Facts Available for China
Steel Corporation (China Steel) and Yieh Loong Enterprise Co., Ltd.
(Yieh Loong), C.R. Doc. 55, Def.’s Conf. Ex. 7 at 5-6 (Apr. 23,
2001). Commerce, however, included Yieh Loong in its affiliate
reseller calculation, even though that entity was collapsed with
China Steel. As discussed above in subsection B, once the two
entities are collapsed, Commerce must treat them as a single
producer for purposes of calculating the dumping margin. See supra
pp. 32-33. Because Yieh Loong’s sales were included in the
calculation, Commerce’s determination may have been erroneous, and
the Court is unable to review that determination. Accordingly, the
Court remands this issue to Commerce for reconsideration.
The Court finds Plaintiff’s second argument lacks merit. The
plain language of the regulation indicates that Commerce may
calculate normal value based on affiliate reseller data, although
the Department normally will not do so if the exporter’s or
producer’s sales to affiliates constitute less than 5 percent of
its home market sales or were arm’s length transactions. 19 C.F.R.
Court No. 01-01040 Page 57
§ 351.403(d) (emphasis supplied). Further, the Department may
calculate normal value based on sales to affiliates if the agency
is satisfied that the transactions were made at arm’s length. See
19 C.F.R. § 351.403(c) (emphasis supplied).24 Thus, Commerce has
discretion to calculate normal value pursuant to subsections (c)
and (d). Neither the regulations nor the Department’s practice,
however, support Plaintiff’s contention that Commerce is required
to conduct an arm’s length test prior to requesting affiliate
reseller data. Rather, it seems that the agency could not conduct
an arm’s length test without first receiving the requisite
affiliate reseller data. Thus, Commerce’s failure to conduct an
arm’s length test prior to requesting affiliate reseller data in
the instant case was permissible.
3. World Trade Organization Obligations
a. 19 U.S.C. § 3512
As a preliminary matter, Commerce argues that 19 U.S.C. §
3512(c) prohibits Plaintiff, as a private party, from challenging
any government action brought under any provision of law as
inconsistent with any of the World Trade Organization (“WTO”)
24
19 C.F.R. § 351.403(c) states that the “[i]f an exporter
or producer sold the foreign like product to an affiliated party,
the [Department] may calculate normal value based on that sale
only if satisfied that the price is comparable to the price at
which the exporter or producer sold the foreign like product to a
person who is not affiliated with the seller.” 19 C.F.R. §
351.403(c).
Court No. 01-01040 Page 58
Agreements. See Def’s Mem. at 31-32. As the Court determined in
Timken Co. v. United States, 26 CIT __, __, 240 F. Supp. 2d 1228,
1238 (2002) (“Timken I”), Plaintiff is not bringing this action
under any WTO agreement; instead, Plaintiff argues that Commerce’s
application and interpretation of U.S. law violates its
international obligations pursuant to a WTO agreement.
CSC/YL is certainly “‘free to argue that Congress would never
have intended to violate an agreement it generally intended to
implement, without expressly saying so.’” Timken I, 26 CIT at __,
240 F. Supp. 2d at 1238 (quoting Gov’t of Uzbekistan v. United
States, slip. op. 01-114 at 11 (CIT Aug. 30, 2001)). As in those
two cases, Commerce’s reliance here on § 3512(c) is an “‘erroneous
technical bar.’” Id. Therefore, Plaintiff’s arguments are
properly before the Court.
b. WTO Panel Reports
Plaintiff argues that Commerce’s application of adverse facts
available violates U.S. obligations to the WTO, rendering its
decision not in accordance with law. Pl.’s Br. at 14, 23. With
respect to the product characteristics data, Plaintiff argues that
for Commerce to “demand all this [data], and to require that it all
be perfect under penalty of hair-trigger application of ‘[facts
available]’ within significantly accelerated deadlines, is the
epitome of unreasonable government action.” Id. at 14 (citing WTO
Court No. 01-01040 Page 59
Dispute Settlement Report on United States – Anti-Dumping Measures
on Certain Hot-Rolled Steel Products from Japan, 29 Bernan’s Annot.
Rep. 163 (Feb. 28, 2001) (“Certain HR Products from Japan”)).25
Plaintiff’s reliance on Certain HR Products from Japan,
however, is misplaced, as the Panel in that case did not find that
the Department “unduly accelerated the proceeding” in violation of
U.S. international obligations. 29 Bernan’s Annot. Rep. at 85-86.
Rather, the Panel held that it “simply [could] not see any basis on
which to find that [Commerce] failed to administer the anti-dumping
law in a uniform, impartial, and reasonable manner simply because
[the agency] chose to act faster than it normally did in issuing
the questionnaires in this investigation.” Id. at 86. Put
differently, the Panel held the Department’s 25-day acceleration of
the investigation in accordance with law. Id.
Similarly, the Court does not find Commerce’s requests for
product characteristics data in the time frame at issue here to be
“unreasonable government action.” Unlike Certain HR Products from
Japan, here, Commerce did not significantly accelerate the
deadlines for initiating the investigation, issuing its initial
questionnaire, and rendering a preliminary and final determination.
25
Plaintiff further argues that a respondent cooperates to
the best of its ability when the respondent asks a third-party to
cooperate and that party fails to do so, even if the respondent
could have done more to induce the third-party’s cooperation.
Pl.’s Br. at 23. Because the Court found Commerce’s “best of
ability” determination not in accordance with law in subsection C
above, the Court declines to reach this argument.
Court No. 01-01040 Page 60
In particular, the Department initiated the investigation here 21
days after receiving the petition, see Prelim. Determ., 66 Fed.
Reg. at 22,204; Initiation Notice, 65 Fed. Reg. at 77,568, whereas
in Certain HR Products from Japan, the agency initiated the
investigation the day after the petition was filed, or five days
earlier than normal. 29 Bernan’s Annot. Rep. at 85. Although the
Department sent questionnaires to the respondents in Certain HR
Products from Japan only four days after initiating the
investigation, 29 Bernan’s Annot. Rep. at 85, the agency here
waited the normal thirty days. See Prelim. Determ., 66 Fed. Reg.
at 22,205. As discussed in more detail below in subsection E,
Commerce’s preliminary determination was made within the
statutorily mandated time frame of 140 days, infra pp. 67-68,
unlike the Department’s actions in Certain HR Products from Japan,
in which a preliminary decision was rendered 120 days after the
initiation of the investigation. 29 Bernan’s Annot. Rep. at 85.
Rather than accelerating the deadline for the final determination,
the Department here postponed its final determination an additional
60 days beyond the statute’s prescribed 75 days. Postponement
Notice, 66 Fed. Reg. at 37,213-14. Accordingly, the Court does not
find that Commerce “unduly accelerated the proceeding” in violation
of U.S. international obligations, but rather acted in conformity
with the statutorily mandated norms for instituting, investigating,
and rendering a LTFV determination. 19 U.S.C. §§ 1673b(b)(1)(A),
Court No. 01-01040 Page 61
1673b(c), 1673d(a)(2).
E. Commerce’s Conduct during the Investigation
The final issue concerns Commerce’s actions in conducting the
investigation. Plaintiff raises three arguments. First, Plaintiff
contends that Commerce abused its discretion in rejecting its May
30-31, 2001 submission, which allegedly provided all deficient
affiliate downstream sales and product characteristics information,
in addition to its response to the agency’s verbal, post-
preliminary determination request for warranty costs on a
transaction-specific basis for over 100,000 sales. See Pl.’s Br.
at 24-25. This new information in particular, Plaintiff contends,
should not have been rejected, as the agency never provided a
deadline for its submission. Id. at 25. Thus, Plaintiff contends
that Commerce’s actions were not in accordance with law. Id.
Next, Plaintiff argues that Commerce’s conclusion that the
agency had insufficient time to use CSC/YL’s May 30-31, 2001
submission in calculating the dumping margin within the postponed
time frame for rendering the final determination is inconsistent
with its prior statement that the agency would analyze Plaintiff’s
April 23 Responses and make its final decision within 75 days of
the publication of the preliminary decision. Therefore, Plaintiff
argues that Commerce’s claim is unsupported by substantial evidence
and not in accordance with law. See Pl.’s Br. at 25-26. Plaintiff
Court No. 01-01040 Page 62
relies on ALTX, Inc. v. United States, 25 CIT __, __, 167 F. Supp.
2d 1353, 1363 (2001) for the proposition that Commerce “may not
reach inconsistent conclusions as to different points in the
investigation.” Pl.’s Br. at 26.
Third, Plaintiff claims that Commerce unnecessarily limited
the investigation time frame in this case. According to CSC/YL,
Commerce should have postponed the preliminary determination an
additional 50 days to allow sufficient time for the questionnaire
process to lead to an accurate dumping margin in this
“extraordinarily complicated” case. Pl.’s Br. at 26-27.
With respect to Plaintiff’s first contention, the regulations
clearly state that a submission of factual information is due no
later than 7 days before verification is scheduled in final
antidumping determinations. 19 C.F.R. § 351.301(b)(1). “[A]t any
time prior to [that] deadline,” however, any interested party “may
submit factual information to rebut, clarify, or correct factual
information submitted by any other interested party.” 19 C.F.R. §
351.301(c)(1). The Department, moreover, may request any party to
submit factual information at any time during the proceeding. 19
C.F.R. § 351.301(c)(2)(I). The regulations do not govern
Commerce’s issuance of verbal requests, but the case law
establishes that “the administrative record is limited to the
information that was presented to or obtained by the agency making
the determination during the particular review proceeding for which
Court No. 01-01040 Page 63
section 1516 authorizes judicial review.” Neuweg Fertigung GmbH v.
United States, 16 CIT 724, 726, 797 F. Supp. 1020, 1022 (1992)
(internal citations omitted).
Plaintiff’s May 30-31, 2001 submission purportedly contains
two sets of information: the deficient downstream sales and product
characteristics data and warranty costs on a transaction-specific
basis for over 100,000 sales. Commerce denied the entire response
as untimely, because this submission constituted a new response and
would require additional analysis and investigation to properly
administer the case. Final Determ., 66 Fed. Reg. at 49,618; Letter
from Robert James, Program Manager, Int’l Trade Admin., to China
Steel Corporation and Yieh Loong Enterprise Co. Ltd., c/o Peter
Koenig, Ablondi, Foster, Sobin & Davidow, P.C., P.R. Doc. 131,
Def.-Int. I’s Ex. 15; Issues and Decision Mem., P.R. Doc. 151,
Def.’s Ex. 8 at 13.
With regards to the product characteristics and downstream
sales information, the record reveals that Commerce scheduled
verification for Yieh Loong and China Steel to commence on April
30, 2001 and May 7, 2001 respectively. Letter from Neal Halper,
Director, Office of Accounting, Int’l Trade Admin., to Peter
Koenig, Ablondi, Foster, Sobin & Davidow, P.C., C.R. Doc. 49 at 1
(Apr. 19, 2001); Letter from Neal M. Halper, Director, Office of
Accounting, Int’l Trade Admin., to Peter Koenig, Ablondi, Foster,
Sobin & Davidow, P.C., C.R. Doc. 56 at 1 (Apr. 26, 2001). For
Court No. 01-01040 Page 64
Plaintiff’s submission to be timely, Plaintiff should have filed
its responses seven days before the commencement of each companies’
respective verification. 19 C.F.R. § 351.301(b)(1). As the
submission was filed on May 30-31, 2001, approximately one month
after the regulatory deadline for timely submissions, Plaintiff’s
submission of this factual information was properly rendered
untimely and rejected by the agency.
With regards to the warranty costs information, as Commerce
may request factual information from any interested party at any
time during the proceeding, Commerce properly issued this request.
The agency, however, requested the information orally on May 3,
2001 without setting a deadline for its submission. See Letter
from Peter Koenig and Kristen Smith, Ablondi, Foster, Sobin &
Davidow, P.C., to U.S. Sec’y of Commerce, P.R. Doc. 138, Pl.’s Ex.
13 at 1-2 (June 21, 2001); Dep’t of Commerce Mem. from Patricia
Tran to File, Telephone Conversation with Counsel for Yieh Loong
Enterprise Co., Ltd. (Yieh Loong) and China Steel Corporation
(China Steel), P.R. Doc. 122, Def.-Int. I’s Ex. 13 (May 9, 2000).
Consequently, Plaintiff could not have made a timely submission of
the warranty costs information, as the Department requested that
information after the regulatory deadline for filing factual
information. Moreover, Commerce rejected that data as untimely,
even though the agency failed to provide a deadline for its
submission, and Plaintiff submitted the request within a month of
Court No. 01-01040 Page 65
its verbal issuance. Accordingly, on these facts, the Court finds
that Commerce abused its discretion in rejecting Plaintiff’s
warranty costs data. Therefore, the Court instructs the agency to
reopen the record for further consideration of the warranty costs
data.26
Plaintiff’s reliance on ALTX, Inc. in support of its second
argument is misplaced. In that case, the International Trade
Commission (“ITC”) supported its determination that subject import
volumes were not significant with a finding that “nonsubject
imports were so significant as to have displaced subject imports
and the domestic like product,” focusing specifically on the latter
half of the period of investigation. 25 CIT at __, 167 F. Supp. 2d
26
Plaintiff further contends that Commerce’s rejection of
the May 30-31, 2001 submission violates Article 6.8 of the WTO
Antidumping Code, and is therefore, not in accordance with law,
because Plaintiff made that submission in time to allow for its
verification and use in the final determination. Pl.’s Br. at
28-29 (citing Certain HR Products from Japan, 29 Bernan’s Annot.
Rep. at 28, 33-34). The instant case, however, is factually
dissimilar from Certain HR Products from Japan. There, because
the respondents submitted their questionnaire responses almost
two weeks before verification, and because those responses did
not present new information, the Panel found that the
submissions, although untimely, were made within a reasonable
time as required by Article 6.8. Certain HR Products from Japan,
29 Bernan’s Annot. Rep. at 28 (indicating that respondent NSC
submitted the information 14 days before verification, while
respondent NKK submitted the information 9 days beforehand), 33
(citing Article 6.8) (stating that determinations may be made on
the basis of facts available if parties do not supply requested
information within a reasonable time). Here, however, Plaintiff
filed its submission approximately one month after the scheduled
verification. Accordingly, the Court finds Plaintiff’s reliance
on that panel decision misguided.
Court No. 01-01040 Page 66
at 1363. The Court found that the ITC failed to rationally support
its conclusion, because the application of the agency’s rationale
to the first half of the period of investigation produced a
contrary conclusion. Id. at 1362-63. In particular, the Court
stated:
Having employed a rationale to interpret data from the
later part of the [period of investigation] in such a
manner as to support its conclusion, the Commission may
not ignore the fact that the same rationale applied to
data from the earlier part of the [period of
investigation] weakens its conclusion with regard to
nonsubject imports. Further explanation is required on
remand for the agency to support its reasoning that
nonsubject imports were so significant as to have
displaced subject imports and the domestic like product.
25 CIT at __, 167 F. Supp. 2d at 1363. Put differently, the Court
held that the agency must provide further explanation to
substantially support its rationale when that rationale would
produce two inconsistent conclusions from the evidence. See id.
The instant case, however, is distinguishable from ALTX, Inc.
Commerce’s conclusion that it lacked sufficient time to use the
data in calculating the dumping margin within the postponed time
frame for rendering the final determination is inconsistent with
its prior statement that the agency would analyze Plaintiff’s
responses to Questionnaire III and make its final decision within
75 days of the publication of the preliminary decision. The
Department’s conclusion, nevertheless, is reasonable. Unlike the
agency in ALTX, Inc., Commerce sufficiently supported its
conclusion by providing a detailed explanation of its rationale.
Court No. 01-01040 Page 67
The record reveals that reasoning.
The May 30 and 31, 2001 submissions . . . would
constitute such a major revision of China Steel/Yieh
Loong’s questionnaire as to qualify as a completely new
response. It would involve significant new subsets of
home market sales, and accompanying narrative, submitted
for the first time. The same holds true for the missing
model match data. Even with the extended final
determination, the Department would not be able to
properly administer the investigation of this case. To
[do so], the Department must: analyze the new
submissions; allow an opportunity for comments from
interested parties; issue additional supplemental
questionnaires; conduct cost and sales verification of
China Steel/Yieh Loong; issue verification reports; and
allow interested parties to comment and request a
hearing.
Issues and Decision Mem., P.R. Doc. 151, Def.’s Ex. 8 at 13. The
Court therefore finds that Commerce’s conclusion that it lacked
sufficient time to use CSC/YL’s May 30-31, 2001 submission is in
accordance with law.
The Court finds that Plaintiff’s third argument lacks merit.
Commerce is not required to extend the preliminary determination’s
deadline beyond the normal 140 day limitation. See 19 U.S.C. §
1673b(b)(1)(A). Commerce may, however, extend that deadline “if”
the agency determines that the parties are cooperating, additional
time is needed to make the preliminary decision, and the case is
“extraordinarily complicated.” 19 U.S.C. § 1673b(c)(1)(B).27 The
27
The statute also permits the agency to extend the deadline
for making the preliminary determination in “extraordinarily
complicated cases” if the petitioner files a timely request for
an extension. 19 U.S.C. § 1673b(c)(1)(A). As the Domestic
Producers did not file such a request in the instant case, that
subsection is irrelevant here.
Court No. 01-01040 Page 68
agency determines that a case is “extraordinarily complicated” by
considering “(I) the number and complexity of the transactions to
be investigated or adjustments to be considered, (II) the novelty
of the issues presented, or (III) the number of firms whose
activities must be investigated.” Id. Thus, Commerce has
discretion to extend the deadline where it finds that a case is
extraordinarily complicated. See id.
Here, Commerce did not find this case extraordinarily
complicated, even though Plaintiff repeatedly asserted that
Commerce’s data requests required review and submission of
thousands of transactions. See Denial Letter, P.R. Doc. 115, Pl.’s
Ex. 9 at 2; Pl.’s Br. at 26-27. Instead, the record reveals that
Commerce determined that the instant matter was controlled by the
statutorily defined time limitations. Denial Letter, P.R. Doc.
115, Pl.’s Ex. 9 at 1-2. As the statute clearly grants the agency
discretion to determine whether the instant matter was
extraordinarily complicated and there is no indication that
Commerce’s determination was unreasonable, the Court defers to the
Department’s decision not to postpone the preliminary determination
deadline. Accordingly, the Court finds Plaintiff’s argument
unpersuasive.
IV. Conclusion
For the foregoing reasons, the court sustains the agency’s
Court No. 01-01040 Page 69
determination in part and remands in part for reconsideration in
accordance with this opinion. Specifically, on remand, Commerce
shall reconsider their affiliation determination in light of the
fact that China Steel only became affiliated with Yieh Loong and in
turn with the Yieh Loong affiliates, on February 21, 2000.
Commerce’s affiliation determination must consider this temporal
aspect of Plaintiff’s relationship with the Yieh Loong affiliates
or explain why that factor is not necessary to its determination in
accordance with the agency’s regulations. The agency shall also
make specific findings as to whether CSC/YL willfully decided not
to cooperate or behaved below the standard of a reasonable
respondent, or otherwise reconsider its decision to apply an
adverse inference in choosing the available data to calculate the
dumping margin. Commerce shall also reconsider whether the missing
affiliate reseller data should be used in calculating the dumping
margin. In particular, the agency must reconsider whether
Plaintiff’s home market sales to affiliates satisfy the five
percent threshold required in the agency’s regulations. The agency
may not, however, include home market sales from China Steel to
Yieh Loong in that calculation. Finally, Commerce must reopen the
record for further consideration of the warranty costs data
requested orally by the agency on May 3, 2001.
Commerce shall have 60 days to submit its remand
determination. The parties shall have 15 days to submit comments
Court No. 01-01040 Page 70
on the remand determination. Rebuttal comments shall be submitted
within 7 days thereafter.
Donald C. Pogue
Judge
Dated: May 14, 2003,
New York, New York