Slip Op. 99-69
UNITED STATES COURT OF INTERNATIONAL TRADE
BEFORE: RICHARD W. GOLDBERG, JUDGE
HEVEAFIL SDN. BHD., RUBBERFLEX
SDN. BHD., RUBFIL SDN. BHD., AND
FILATI LASTEX ELASTOFIBRE
(MALAYSIA)
Court No. 97-07-01152
Plaintiffs,
v.
UNITED STATES OF AMERICA,
Defendant.
[Court remands the final results in the third administrative
review of the antidumping duty order of the U.S. Department of
Commerce.]
Dated: July 23, 1999
White & Case LLP, (Walter J. Spak, David E. Bond, Richard G.
King, and Edward Meyers) for plaintiffs Rubberflex Sdn. Bhd.,
Rubfil Sdn. Bhd., and Filati Lastex Elastofibre (Malaysia).
David W. Ogden, Acting Assistant Attorney General; David M.
Cohen, Director, Commercial Litigation Branch, Civil Division,
United States Department of Justice; Lucius B. Lau, Attorney,
Commercial Litigation Branch, Civil Division, United States
Department of Justice; Office of the Chief Counsel for Import
Administration, United States Department of Commerce (Mildred E.
Steward), of counsel, for defendant.
Court No. 97-07-01152 Page 2
OPINION
GOLDBERG, Judge: In this action, the Court reviews plaintiffs’1
challenges to the Department of Commerce’s (“Commerce”) final
determination for the third administrative review of an
antidumping duty order covering extruded rubber thread from
Malaysia. Extruded Rubber Thread From Malaysia; Final Results of
Antidumping Duty Administrative Review, 62 Fed. Reg. 33,588 (June
20, 1997) (“Final Results”). Plaintiff Rubberflex Sdn. Bhd.
(“Rubberflex”) argues that (1) the manner in which Commerce
administered the antidumping duty order and conducted the third
administrative review, particularly verification, prejudiced
Rubberflex; (2) Commerce was able to verify most of Rubberflex’s
responses and therefore should not have used total “facts
available” to assign Rubberflex a dumping margin; and (3)
Commerce incorrectly presumed that Rubberflex did not cooperate
to the best of its ability and therefore erred in applying
“adverse inferences” to the “facts available.” The Court
addresses these arguments in Section III(A).
Plaintiff Rubfil Sdn. Bhd. (“Rubfil”) argues that Commerce
1
The parties stipulated to the dismissal of Heveafil
Sdn. Bhd. from this action on November 7, 1997.
Court No. 97-07-01152 Page 3
double-counted its general and administrative and indirect
selling expenses in calculating constructed value. Plaintiff
Filati Lastex Elastofibre (Malaysia) (“Filati”) argues that
Commerce double-counted marine insurance in calculating U.S.
price. The Court addresses these arguments in Section III(B).
The Court exercises jurisdiction over this matter pursuant
to 28 U.S.C. § 1581(c) (1994). The Court remands the Final
Results to Commerce.
I.
BACKGROUND
On October 7, 1992, Commerce published an antidumping order
covering extruded rubber thread from Malaysia. See Antidumping
Duty Order and Amendment of Final Determination of Sales at Less
Than Fair Value: Extruded Rubber Thread from Malaysia, 57 Fed.
Reg. 46,150 (Oct. 7, 1992). On November 16, 1995, Commerce
initiated the third administrative review of the order (“third
review”).2 See Initiation of Antidumping and Countervailing Duty
Administrative Reviews, 60 Fed. Reg. 57,573 (Nov. 16, 1995)
2
The third review was initiated after December 31, 1994,
and thus the applicable statutory provisions are those that
existed on January 1, 1995, the effective date of the amendments
made by the Uruguay Round Agreements Act, Pub. L. No. 103-465,
108 Stat. 4809 (1994). See Torrington Co. v. United States, 68
F.3d 1347, 1352 (Fed. Cir. 1995).
Court No. 97-07-01152 Page 4
(Extruded Rubber Thread from Malaysia). The review covered
entries made during the period October 1, 1994 through September
30, 1995.
Commerce issued the preliminary results of its review on
December 10, 1996, see Notice of Preliminary Results of
Antidumping Administrative Review: Extruded Rubber Thread From
Malaysia, 61 Fed. Reg. 65,019 (Dec. 10, 1996), and on June 20,
1997, Commerce issued its Final Results. See 62 Fed. Reg.
33,588. It assigned Rubberflex a dumping margin of 20.38%, using
adverse, total facts available. See id. at 33,601. It assigned
Rubfil a dumping margin of 54.31%. See id. Finally, it assigned
Filati a dumping margin of 8.11%. See id.
II.
STANDARD OF REVIEW
The court will sustain Commerce’s Final Results if they are
supported by substantial evidence and are otherwise in accordance
with law. See 19 U.S.C. § 1516a(b)(1)(B) (1994). Further, the
court “review[s] verification procedures employed by Commerce in
an investigation for abuse of discretion.” Micron Tech., Inc. v.
United States, __ Fed. Cir. (T) __, __, 117 F.3d 1386, 1396
(1997).
Court No. 97-07-01152 Page 5
III.
DISCUSSION
A. Rubberflex
Rubberflex moves for judgment upon the agency record
pursuant to USCIT R. 56.2(c). It challenges Commerce’s Final
Results for the third review on substantially the same grounds as
the second review. See Rubberflex Sdn. Bhd. v. United States,
No. 97-12-02180, slip op. 99-68 (July 23, 1999) (“Rubberflex I”).
Namely, it alleges that Commerce conducted the administrative
review in an extremely disorganized, irresponsible and
prejudicial manner, and that Commerce was able to verify most of
Rubberflex’s responses and therefore should not have used total
facts available to assign a dumping margin. Likewise, with
respect to verification, Rubberflex alleges that (1) Commerce
never checked whether its time frame for verification was
feasible for Rubberflex or its attorneys, and refused to
reschedule verification to a mutually convenient time; (2)
Commerce gave Rubberflex only two business days to prepare for
verification; (3) at verification, Commerce tacitly accepted
Rubberflex’s proposal to submit all corrections at the conclusion
of verification and then refused to accept such submissions; (4)
Commerce case handlers conducted verification according to an
Court No. 97-07-01152 Page 6
undisclosed methodology; (5) Commerce case handlers were not
adequately prepared for verification, thereby causing delay; and
that (6) despite such delays, Commerce case handlers refused to
work past 5:00 p.m. or on weekends.
In addition to the complaints common to both reviews,
Rubberflex lodges several specific to the third review. First,
Rubberflex claims that Commerce was forced to extend the deadline
for issuing its preliminary determination, as defined by statute,
because Commerce repeatedly “put this proceeding on the back
burner while attending to what it perceived to be more important
matters.” Br. of Pl. Rubberflex Sdn. Bhd. in Supp. of Mot. for
J. Upon the Agency R. (“Pl.’s Br.”), at 3 (internal quotation
marks omitted).
Second, it notes that Commerce misplaced Rubberflex’s
business proprietary cost and sales data and requested additional
copies. Rubberflex emphasizes that despite Commerce’s
mishandling of its business proprietary data, it cooperated fully
and promptly submitted additional copies. Pl.’s Br., at 16.
Third, Rubberflex alleges that it requested a copy of
Commerce’s verification report on December 6, 1996 and several
times thereafter, but that Commerce did not furnish it with a
Court No. 97-07-01152 Page 7
copy until February 14, 1997. Pl.’s Br., at 9. Rubberflex
deduces from the delay that “Commerce did not complete the
Verification Report until three months after the preliminary
determination was issued,” and thus that “Commerce quickly made a
determination, and then spent weeks attempting to construct a
rationale for that determination.” Pl.’s Br., at 19 (emphasis in
original).
Finally, Rubberflex argues that Commerce used adverse facts
available to assign Rubberflex a dumping margin, but did not make
an explicit finding, as required by statute, that Rubberflex
“failed to cooperate by not acting to the best of its ability.”
Pl.’s Br., at 12-14. Moreover, Rubberflex contends that it is
illogical for Commerce to claim that Rubberflex did not cooperate
in the third review, when it found that Rubberflex had cooperated
in the second review and verification for both reviews was
conducted simultaneously. Pl.’s Br., at 17.
The Court was faced with a number of the same arguments in
Rubberflex I. There, it held that Commerce’s issuance of a
verification outline to Rubberflex two days prior to the start of
verification constituted an abuse of discretion. See Rubberflex
I, No. 97-12-02180, slip op. 99-68, at 31.
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In this case, the record clearly demonstrates that Commerce
issued Rubberflex a verification outline on September 18, 1996,
and began verification on September 23, two business days later.
Accordingly, for substantially the same reasons articulated in
Rubberflex I, the Court holds that Commerce’s issuance of a
verification outline to Rubberflex two days prior to the start of
verification was an abuse of discretion. Therefore, the Court
remands to Commerce to repeat verification.
The Court orders the parties to confer and file a scheduling
order within ten days of the date of publication of this opinion.
That scheduling order shall list the dates on which (1) Commerce
will issue Rubberflex a verification outline, (2) Commerce will
conduct verification, and (3) Commerce will file remand results
with the Court. Remand results must be filed with the Court no
later than ninety (90) days after the date of publication of this
opinion. The Court emphasizes that it is allowing the parties
more time than for the typical remand and does not anticipate any
requests for extensions.3
3
For a full discussion of the Court’s expectations on
remand, see Rubberflex I, No. 97-12-02180, slip op. 99-68, at 31-
33.
Court No. 97-07-01152 Page 9
B. Rubfil & Filati
Rubfil and Filati move for judgment upon the agency record
pursuant to USCIT R. 56.2. Both plaintiffs contend that
Commerce’s Final Results are neither supported by substantial
evidence on the record nor are in accordance with law.
In Rubfil’s case, Commerce used Rubfil’s constructed value
(“CV”) as normal value. Rubfil complains, however, that Commerce
miscalculated CV. It argues that, as indicated in its
questionnaire response, it included general and administrative
costs (“G&A”) and indirect selling expenses in both the GNA and
the INDIRSH fields. Nonetheless, Rubfil contends, Commerce
included both GNA and INDIRSH in Rubfil’s CV, thereby double-
counting Rubfil’s G&A and indirect selling expenses. For this
reason, Rubfil asks the Court to remand the case.
Commerce agrees that it counted Rubfil’s G&A and indirect
selling expenses twice in its calculation of CV. It asks the
Court to remand the case to correct for the double-counting and
to recalculate Rubfil’s constructed value. Accordingly, the
Court remands the case with respect to Rubfil.
Filati, too, complains that Commerce erroneously double-
counted data. It claims that it listed international freight
Court No. 97-07-01152 Page 10
charges for its U.S. sales on a sale-by-sale basis. According to
Filati, it clearly indicated that international freight
charges included marine insurance. Nonetheless, in calculating
Filati’s U.S. price, Commerce allocated 0.5% of the gross price
to insurance on U.S. sales. Because Commerce deducted this
amount (0.5% of gross price) as well as the reported
international freight charges from U.S. price, Filati claims
Commerce double-counted marine insurance expenses.
Commerce concedes that it erroneously double-counted
Filati’s marine insurance and asks for a remand to correct the
error. Accordingly, the Court remands the case with respect to
Filati, so that Commerce may eliminate the double-counting of
marine insurance in its calculation of Filati’s dumping margin.
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IV.
CONCLUSION
For all of the foregoing reasons, the Court remands the
Final Results to Commerce. A separate order will be entered
accordingly.
_______________________
Richard W. Goldberg
JUDGE
Date: July 23, 1999
New York, New York