Commerce Misunderstands Admin Exhaustion Regulations on Remand, Importer Tells CAFC

The Commerce Department's arguments to the U.S. Court of Appeals for the Federal Circuit that say that pencil importer Prime Time Commerce failed to exhaust its administrative remedies in an antidumping duty review mistake the agency's regulatory requirements, Prime Time said in an Aug. 26 reply brief. Having already requested certain "gap-filling" information that only Commerce could provide five other times in the review, Prime Time did not need to request a sixth time to have argued for a separate rate in the review, the brief said.

The spat is over Commerce's conduct in the 2015-16 administrative review of the antidumping duty order on cased pencils from China in which Prime Time's Chinese supplier, Ningbo Homey, was selected as the sole individually examined respondent. Prime Time sought to submit information it thought would aid Ningbo Homey's questionnaire responses in the review, only to be denied by Commerce. Ningbo Homey failed to answer Commerce, leading the agency to impose the China-wide rate on its pencils.

Prime Time appealed this decision to CIT, which found that Commerce's rejection of Prime Time's questionnaire responses and decision to not calculate an importer-specific rate for Ningbo Homey were unsupported. Commerce then accepted Prime Time's information but continued to reject an importer-specific rate. Only after the final remand did Prime Time challenge Commerce's continued refusal to calculate the importer-specific rate.

The court, though, said Prime Time's argument that Commerce insufficiently explained its practices was barred because the company did not initially raise the arguments before Commerce. Prime Time cannot now argue that its past attempts to get Commerce to reconsider its questionnaire responses rendered any further attempt at reconsideration “futile” simply because the circumstances changed, CIT said (see 2105260054).

DOJ backed this contention in the Federal Circuit, holding that Prime Time failed to exhaust its administrative remedies and that this exhaustion doctrine applies to remand proceedings (see 2108120024). But Commerce had a "full opportunity" to respond to Prime Time's arguments, the importer said in reply. Prime Time said five previous times that Commerce should put the gap-filling information on the record: in the (1) initial filing for the review, (2) request for reconsideration, (3) case brief, (4) briefing and oral argument at CIT and (5) the remand filing before the draft redetermination. Raising it again would have been futile, Prime Time said.

CIT said that Commerce was not given ample chance to respond to Prime Time's arguments in its remand results, identifying that Prime Time's argument for gap-filling information was newly raised. "Prime Time acknowledged that its filing was incomplete, but argued that the suggested gap-filling information made its filing not so incomplete as to allow Commerce to ignore it," the brief said. "Without the gap-filling information on the record, however, it was impossible for Prime Time to explain why. Contrary to the Trade Court’s finding, Prime Time’s argument was the same throughout the proceeding, and was raised during the remand proceeding. Thus, the Trade Court abused its discretion because it 'exercised its judgment on clearly erroneous findings of material fact.'"

Commerce said its regulations require Prime Time to have raised all the arguments after getting the draft remand results. But this misunderstands its own regulations and prior case law, the importer said. "Commerce claims that exhaustion was required because Commerce may have considered Prime Time’s argument had Prime Time raised it a fifth or sixth time," the brief said. "This Court in [Itochu Bldg. Prods. v. United States] dismissed the notion that an argument must also be raised after a preliminary decision or draft remand despite significant prior efforts raising the argument."