AD Respondent's Corrections Were Not Minor, CAFC Rules in Upholding Commerce's Rejection

The Commerce Department properly rejected data corrections submitted by exporter Goodluck India in an antidumping duty investigation on cold-drawn mechanical tubing from India, the U.S. Court of Appeals for the Federal Circuit said in an Aug. 31 opinion, reversing the Court of International Trade's decision. The corrections were not “minor,” meaning that Commerce was justified when it originally rejected the revisions and hit Goodluck with an adverse facts available AD duty rate, a three-judge panel at the appellate court said.

"We are extremely pleased with the decision by the Court of Appeals for the Federal Circuit in the Goodluck case," said Alan Luberda of Kelley Drye, counsel for the antidumping petitioners. "The Court reaffirmed the Commerce Department’s authority to apply adverse facts available where a respondent has not cooperated to the best of its ability in providing the agency with requested information – consistent with how that standard has previously been defined by the Court. This decision is important because the adverse facts available tool in the statute is critical to Commerce’s ability to build complete and accurate records in antidumping and countervailing duty cases."

During the investigation, Commerce sent Goodluck questionnaires to properly calculate the exporter's dumping rate. The questionnaires require that Goodluck assign a control number for each good and use the same CONNUM for any products with identical physical features, reported across all the data fields. One such field, wall thickness, was to be originally reported in nine different thickness ranges.

Unsatisfied with the nine ranges, the antidumping duty petitioners requested the number of ranges for wall thickness be upped to 14. Having received no objection from Goodluck, Commerce did so. After the preliminary determination, Goodluck realized it had not adjusted its wall thickness data to fit within the new 14-range requirements. So, the exporter submitted corrections to 682 misreported values in its Section B database to Commerce.

The agency rejected these corrections, finding that they did not adhere to Commerce regulations of accepting only minor fixes, among other things. The new Goodluck data would have caused changes to the reported physical characteristics of 24 CONNUMs and the addition of 13 CONNUMs, Commerce said. The agency also hit Goodluck with AFA since it did not act to the best of its ability when complying with Commerce's information requests. It called the scope of errors the result of “inattentiveness and carelessness.”

CIT sided with Goodluck, ruling that Commerce abused its discretion by not accepting the corrected submissions. Judge Gary Katzmann said Goodluck's coding errors “could have been addressed through a 'straightforward mathematical adjustment' even though the 'effect of these mistakes was compounded' by how Commerce used the incorrect CONNUMS.” The AFA application was also erroneously applied as Goodluck was not an unresponsive respondent, Katzmann said.

Judges Jimmie Reyna, Raymond Clevenger and Kara Stoll reversed that decision on appeal, holding that Commerce rightly rejected the corrections since they were not in fact minor fixes. “Goodluck’s revisions were a systemic change to the entire reported database,” the opinion said. “The revisions were not singular, such as a missing word or an error in arithmetic. The record reflects that Goodluck’s coding errors resulted in 24 misreported CONNUMs and 13 unreported CONNUMs, thereby resulting in misreported CONNUMs for 682 sales in Goodluck’s home market database. It was therefore rational for Commerce to find that 'any attempts to correct these errors would involve both extensive SAS programming and complex calculations to Goodluck’s cost database.' ... Such corrections are not 'minor.'”

Substantial evidence also backs Commerce's contention that Goodluck failed to act to the best of its ability, the Federal Circuit held. Goodluck failed to update its responses to incorporate the wall thickness changes despite clear instructions from Commerce, the panel held. The judges also agreed with the petitioners that CIT “improperly substituted its judgment for that of Commerce” when it found that the errors could've been handled through a simple mathematical adjustment. The U.S. did not participate in the litigation at the Federal Circuit.

(Goodluck India Limited v. United States, Fed. Cir. #20-2017, dated 08/31/21, Judges Reyna, Clevenger and Stoll. Attorneys: Ned Marshak of Grunfeld Desiderio for plaintiff-appellee Goodluck India; Robert Alan Luberda of Kelley Drye for defendants-appellants)