Companies Owned by Same Estranged Family Not Affiliated, CIT Says in Upholding Commerce Ruling

The Commerce Department properly held that three companies owned by the same, although estranged, family are not affiliated for purposes of collapsing the entities in an antidumping case, the Court of International Trade said in an Aug. 20 opinion. The agency's contention that the companies did not clear any of the three standards for collapsing multiple companies for purposes of calculating a dumping margin was proper, Judge Gary Katzmann ruled.

The dispute arises from the antidumping duty investigation of stainless steel flanges from India and China, which included entries from the plaintiff Echjay Forgings Private Limited. Echjay is owned by members of the Doshi family. Commerce then investigated all companies owned by the Doshi family since the family had "fractured into three camps," the three being Echjay Forgings Industries Private Limited, the plaintiff and Spire Industries Private Limited, which were separated concurrent with rulings from the Bombay High Court.

Commerce originally collapsed the companies for purposes of calculating a dumping margin, but reversed itself following litigation and a remand submission. The agency said that the companies did not clear the three hurdles allowing Commerce to collapse the entities. The agency must find that "(1) the companies are affiliated; (2) they share 'production facilities for similar or identical products that would not require substantial retooling of either facility in order to restructure manufacturing priorities;' and (3) there is 'a significant potential for the manipulation of price or production' between the affiliated companies."

Going one-by-one, Katzmann upheld Commerce's findings that Echjay didn't meet the collapsing requirements, citing the famous first line from the novel Anna Karenina: “All happy families are alike; each unhappy family is unhappy in its own way.” Due to the legal arrangements, the Doshi family cannot influence the operations of the other companies and are thus not affiliated, Katzmann said. EFIPL and Spire cannot produce the same subject merchandise without "substantial retooling," and there is no longer any inconsistency with Commerce's past collapsing determinations, the judge said.

(Echjay Forgings Private Limited v. United States, Slip Op. 21-105, CIT # 18-00230, dated 08/20/21, Judge Katzmann. Attorneys: Peter Koenig for plaintiff Echjay; Geoffrey Long for defendant U.S. government)