Case: 21-2312 Document: 57 Page: 1 Filed: 08/11/2022
NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
HYUNDAI ELECTRIC & ENERGY SYSTEMS, FKA
HYUNDAI HEAVY INDUSTRIES CO., LTD.,
Plaintiff-Appellee
ILJIN ELECTRIC CO., LTD., HYOSUNG HEAVY
INDUSTRIES CORPORATION, FKA HYOSUNG
CORPORATION,
Plaintiffs
v.
UNITED STATES,
Defendant
HITACHI ENERGY USA INC., FKA ABB
ENTERPRISE SOFTWARE INC.,
Defendant-Appellant
______________________
2021-2312
______________________
Appeal from the United States Court of International
Trade in No. 1:18-cv-00066-MAB, Judge Mark A. Barnett.
______________________
Decided: August 11, 2022
______________________
Case: 21-2312 Document: 57 Page: 2 Filed: 08/11/2022
2 HYUNDAI ELECTRIC & ENERGY SYSTEMS v. US
RON KENDLER, White & Case LLP, Washington, DC,
argued for plaintiff-appellee. Also represented by DAVID
EDWARD BOND.
ROBERT ALAN LUBERDA, Kelley Drye & Warren, LLP,
Washington, DC, argued for defendant-appellant. Also
represented by MELISSA M. BREWER, DAVID C. SMITH, JR.
______________________
Before NEWMAN, STOLL, and STARK, Circuit Judges.
NEWMAN, Circuit Judge.
This appeal is from the decision on the fourth adminis-
trative review of certain large power transformers manu-
factured in the Republic of Korea by Hyundai Electric &
Energy Systems and other entities (“Hyundai”), respond-
ents in this administrative review. Hitachi Energy USA,
Inc. appeals the final decision of the Court of International
Trade, setting a zero dumping margin. 1
Sale in the United States of imported products at less
than fair value is called “dumping.” The Department of
Commerce is authorized to impose duties measured as the
difference between the sales price in the foreign market
and in the United States. Dumping investigations may be
commenced on petition by “an interested party.” 19 U.S.C.
§ 1671a (citing definition at 19 U.S.C. § 1677(9)). Parties
to the administrative review may appeal to the Court of In-
ternational Trade and then the Federal Circuit.
BACKGROUND
The power transformers that are the subject of this re-
view were imported from August 2015 through July 2016.
Administrative reviews generally start with a
1 Hyundai Heavy Indus. Co. v. United States, 527 F.
Supp. 3d 1374 (Ct. Int’l Trade 2021) (“CIT Decision 3”).
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HYUNDAI ELECTRIC & ENERGY SYSTEMS v. US 3
questionnaire from Commerce. Hyundai responded to
Commerce’s questions, and reported price changes involv-
ing certain components of the transformers sold in Korea.
Hyundai provided records stating which components of its
home market transformers should be considered foreign
like products, and which should not. 2
In one reported sale, Hyundai identified two compo-
nents as non-subject merchandise, but Commerce later de-
termined that those components are foreign like products.
Commerce found that if complete sales figures were used
for these components, as would be required if the compo-
nents had been deemed foreign like products, the dumping
margin would increase.
Commerce found Hyundai’s reports reflected a misrep-
resentation of Commerce’s investigation. Commerce con-
sequently determined that Hyundai’s reported pricing in
Korea was “unreliable,” and Commerce applied total ad-
verse facts available and imposed a dumping margin of
60.81%, making an adverse inference, as the statute au-
thorizes. Hyundai Heavy Indus. Co. v. United States, No
1:18-cv-00066-MAB, (May 14, 2018), ECF 19-6 at 16–18, 22
(“Commerce Issues & Decision Memorandum”).
Hyundai appealed, and the Court of International
Trade vacated Commerce’s decision on the ground that
Hyundai had properly reported data related to “accesso-
ries” not at issue on this appeal. Hyundai Heavy Indus. Co.
v. United States, 393 F. Supp. 3d 1293, 1316–17 (Ct. Int’l
Trade 2019) (“CIT Decision 1”). The court remanded to
2 Identical goods sold in a respondent’s home market
are “foreign like product.” 19 U.S.C. § 1677(16). Goods
falling outside the scope are “non-subject merchandise.”
Id. at § 1677(25).
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4 HYUNDAI ELECTRIC & ENERGY SYSTEMS v. US
Commerce for more complete explanation. On remand,
Commerce largely affirmed its prior decision, stating that
Hyundai’s understatement of home market prices
by inconsistently treating a certain part as subject
merchandise for certain sales and nonsubject for
other home market sales, undermines Commerce’s
ability to calculate an accurate margin for Hyun-
dai, justifying, as described above, the use of total
adverse facts available for Hyundai’s margin calcu-
lation.
Department of Commerce Remand Results, Hyundai
Heavy Indus. Co. v. United States, No. 1:18-cv-00066, (Dec.
19, 2019), ECF 92-1 at 21–22 (“First Remand Dec.”).
In the First Remand Decision, Commerce declined to
consider certain information submitted by Hyundai, stat-
ing that “Hyundai’s reporting of its home market gross unit
prices, inclusive of the price of within-scope parts, has been
an issue in other administrative segments under this or-
der.” First Remand Dec. at 17–18. Commerce stated that
it does “not have the documentation to determine the accu-
racy of the sales prices for all the other home market sales”
provided by Hyundai. Id. On this ground, Commerce re-
jected Hyundai’s pricing information, holding that using
Hyundai’s potentially unreliable information would cause
undue difficulties. Id. at 19 (citing 19 U.S.C. §
1677m(e)(5)). Commerce also referred to Hyundai’s misre-
porting of certain price information in the Third Adminis-
trative Review, which covered the year before the sales at
issue on this appeal. See Hyundai Heavy Indus., Co. v.
United States, 332 F. Supp. 3d 1331 (Ct. Int’l Trade 2018).
In the First Remand, Commerce applied an adverse in-
ference against Hyundai, also because Commerce deter-
mined that Hyundai had not complied with Commerce’s
requests to the best of its ability. Commerce explained:
Hyundai had the opportunity to provide complete
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HYUNDAI ELECTRIC & ENERGY SYSTEMS v. US 5
and accurate information with respect to its report-
ing of home market gross unit prices, and indeed,
as the sample sales documentation demonstrates,
possessed the information, but failed to provide
such information to Commerce. Therefore, Com-
merce finds that Hyundai did not act to the best of
its ability and impeded Commerce’s conduct of the
review; accordingly, the use of adverse inference is
warranted in selecting from the available facts.
First Remand Dec. at 18–19.
Hyundai again appealed. The Court of International
Trade rejected Commerce’s determination, stating that,
Hyundai “provided the information to Commerce but disa-
greed with the agency as to whether it related to foreign
like product.” Hyundai Heavy Indus. Co. v. United States,
485 F. Supp. 3d 1380, 1400 (Ct. Int’l Trade 2020) (“CIT De-
cision 2”). In particular, the court stated that “Only after
issuing the Preliminary Results did Commerce question
whether the parts at issue were foreign like product.” Id.
at 1401. The court also stated that Commerce “could not
definitively ‘determine whether Hyundai understated [its]
home market gross unit prices.’” Id. (citing Commerce Is-
sues & Decision Memorandum at 17, alteration original).
The court further found an absence of substantial evidence
to support Commerce’s application of total adverse facts
available. CIT Decision 2, 485 F. Supp. 3d at 1389. The
court determined that the record supported only the appli-
cation of partial, neutral facts available to fill certain gaps
caused by Hyundai’s misunderstanding of the scope of
Commerce’s review. The court stated:
Commerce infers that [Hyundai]’s entire home
market sales database was unreliable based solely
on [Hyundai]’s failure to report properly its inclu-
sion of Parts A or B in just two of its home market
sales. Indeed, Commerce had documentation for
several other home market sales which did not
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6 HYUNDAI ELECTRIC & ENERGY SYSTEMS v. US
include Parts A or B. Not only are the two sales at
issue a limited portion of the document-supported
home market sales, it is not clear how these two
sales undermined the reliability of other docu-
mented sales which did not include Parts A or B.
CIT Decision 2, 485 F. Supp. 3d at 1399 (citations omitted).
Accordingly, the court determined that “Commerce’s find-
ing that it had ‘no basis in the record for determining what
[the] home market gross unit prices should be for the over-
whelming majority of sales’ is simply unsupported specula-
tion and not based on substantial evidence.” Id. (quoting
First Remand Dec. at 30–31, alteration original).
On the Second Remand, Commerce applied partial
neutral facts available and arrived at a dumping margin of
zero. Hyundai Heavy Indus. Co. v. United States, No. 1:18-
cv-00066, (Apr. 6, 2021) ECF 154 (“Second Remand Dec.”).
Hitachi appealed, but the Court of International Trade af-
firmed Commerce’s zero margin decision. This appeal fol-
lowed.
DISCUSSION
Hitachi seeks vacatur of CIT Decision 2 and CIT Deci-
sion 3, and reinstatement of the dumping margin of 60.81%
imposed by the First Remand Decision.
“The Court of International Trade reviews Commerce’s
determinations in an antidumping duty review to ascertain
if that decision is supported by substantial evidence on the
entirety of the record, and is in accordance with law.”
Sharp Corp. v. United States, 63 F.3d 1092, 1095 (Fed. Cir.
1995). The Federal Circuit applies the same standard of
review to Commerce’s determination. Id.
Hyundai argues that any past issues of compliance in
the Third Administrative Review should not be the basis
for applying an adverse inference in a subsequent review.
Hyundai states that it is improper to rely on assertedly
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HYUNDAI ELECTRIC & ENERGY SYSTEMS v. US 7
deficient past behavior to condemn a later administrative
review. Hyundai Br. 30–31. See, Qingdao Sea-Line Trad-
ing Co. v. United States, 766 F.3d 1378, 1387 (Fed. Cir.
2014) (“[E]ach administrative review is a separate exercise
of Commerce’s authority that allows for different conclu-
sions based on different facts in the record.”).
Hitachi argues that the Court of International Trade
substituted its own view for that of Commerce, in charac-
terizing Commerce’s analysis as speculative. Hitachi
states that Commerce had the authority to penalize Hyun-
dai in this Fourth Administrative Review for Hyundai’s
lack of cooperation in the Third Administrative Review.
Hitachi stresses that Hyundai bore the burden of establish-
ing the administrative record in this Fourth Review.
Hyundai is correct that the information provided for
each review must be evaluated independently. In the
Third Review Hyundai did “not directly challenge Com-
merce’s factual finding that [Hyundai] withheld infor-
mation, such as the proper reporting of the part in
question.” Third Review, 332 F. Supp. 3d at 1345. Here,
in contrast, Hyundai denies withholding any information,
and Commerce did not charge Hyundai with withholding
any information at any stage of this review. Instead, “Com-
merce requested and [Hyundai] provided documentation
for certain home market sales, including a complete break-
down between foreign like product and non-foreign like
product along with detailed narrative explanation and sup-
porting documentation for the relevant categorization.”
CIT Decision 2, 485 F. Supp. 3d at 1401 (internal quotation
marks omitted). Commerce’s reference to “an issue” with
Hyundai’s reporting in the Third Administrative Review
does not suggest present misfeasance in the context of
Hyundai’s responses here. First Remand Dec. at 18. The
Court of International Trade correctly so held.
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8 HYUNDAI ELECTRIC & ENERGY SYSTEMS v. US
The decision in Deacero S.A.P.I. de C.V. v. United
States, 996 F.3d 1283, 1297 (Fed. Cir. 2021), on which Hi-
tachi relies, is not to the contrary. There the respondent
provided “at best, inconsistent representations, and fail[ed]
to timely explain and meaningfully support those represen-
tations,” and Commerce found that the behavior was par-
ticularly egregious in a party “knowledgeable of the
process” of administrative reviews. Id. at 1292. This court
conducted a thorough review of the respondent’s actions be-
fore affirming. See id. at 1297. Here, in contrast, the rec-
ord supports the Court of International Trade’s
determination that Hyundai’s misunderstanding of the
scope of Commerce’s request was limited, and reflected the
best of Hyundai’s ability. Hyundai’s past behavior did not
warrant application of an adverse inference and did not
create undue difficulty in using Hyundai’s data.
Substantial evidence does not support Commerce’s ini-
tial decision to disregard all of Hyundai’s price information
as unreliable. As the Court of International Trade dis-
cussed, there were two components of the transformers
that Hyundai stated were not subject merchandise, and
these components affected the price of only one home mar-
ket sale. CIT Decision 2, 485 F. Supp. 3d at 1399. Hitachi
argues that Hyundai’s misclassification of certain compo-
nents as non-subject merchandise was “methodological”
and called into question the rest of Hyundai’s data. How-
ever, substantial evidence supported Commerce’s Second
Remand finding: that using Hyundai’s data did not cause
undue difficulties.
The Court of International Trade applied the rule that
“Commerce can only use facts otherwise available to fill a
gap in the record.” Zhejiang DunAn Hetian Metal Co. v.
United States, 652 F.3d 1333, 1348 (Fed. Cir. 2011). Here,
the gap was small, and the record shows that Hyundai’s
mistake affected only one sale. In Zhejiang, we reversed
the decision allowing Commerce to use total adverse facts
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HYUNDAI ELECTRIC & ENERGY SYSTEMS v. US 9
available where a respondent’s reporting created only a
small gap in the record. Id. Accordingly, the Court of In-
ternational Trade correctly determined that Commerce’s
initial application of total adverse facts available was spec-
ulative in light of the record, which demonstrated that
most of Hyundai’s price information was reliable. CIT De-
cision 2, 485 F. Supp. 3d at 1399.
Hitachi disputes this reasoning and argues that the
higher tariff should be reinstated. Commerce’s final deci-
sion held that an adverse inference was not warranted, and
that absent an adverse inference, a dumping margin was
not established. As the Court of International Trade con-
cluded, there was not substantial evidence on which to base
an adverse inference. CIT Decision 2, 485 F. Supp. 3d. at
1401. The First Remand, in which Commerce had applied
adverse inferences, did not identify any evidence that
Hyundai did not cooperate to the best of its ability. In Nip-
pon Steel Corp. v. United States, 337 F.3d 1373, (Fed. Cir.
2003), this court recognized that compliance to the best of
a respondent’s ability “does not require perfection and rec-
ognizes that mistakes sometimes occur.” Id. at 1382.
The Court of International Trade found that Hyundai
complied with Commerce’s requests to the best of its abil-
ity, and that any mistakes were inadvertent and were cor-
rected without undue difficulty. CIT Decision 2, 485 F.
Supp. 3d at 1400–01. Substantial evidence supported this
finding and Commerce’s Second Remand determination of
zero dumping margin.
CONCLUSION
We affirm the decision of the Court of International
Trade, affirming Commerce’s Second Remand decision,
which determined that a dumping margin was not estab-
lished.
AFFIRMED
Hyundai Electric & Energy Systems v. United States
Combined Opinion