Commerce Has Right to Define 'Producers' When Finding Industry Support for AD/CVD Cases, CIT Says

The Commerce Department properly found that it had enough industry support to initiate antidumping and countervailing duty investigations into quartz surface products (QSP) from India, the Court of International Trade said in an Oct. 7 decision. Issuing a partial opinion in the case solely to address the concerns of M S International (MSI), Judge Leo Gordon said that Commerce legally interpreted "producers" of QSPs as excluding QSP fabricators.

Commerce requires that producers representing over 25% of domestic production back petitions for AD/CVD cases prior to initiation, but the statute is silent on the definition of "producers." MSI claimed that, among other things, Commerce abused its discretion by excluding fabricators from its definition of "producers," for the sake of determining proper industry support to initiate the AD/CVD investigations.

Gordon said that the U.S. Court of Appeals for the Federal Circuit and CIT have previously ruled that Commerce is afforded Chevron deference in regards to how it determines which companies are "producers," of the merchandise in question. So, Commerce decided to use the "sufficient production-related activities" test, which employs a six-factored test to find if a company has enough production-related actives to quality as a domestic producer.

"Plaintiff fails to point to any basis on which the court could conclude that Commerce’s interpretation of who constitutes a producer is unreasonable," the judge said. "Accordingly, the court sustains Commerce’s use of the 'sufficient production-related activities' test as a reasonable interpretation of the term 'producers.'"

MSI also argued that Commerce needed to poll the industry to find out if it had enough domestic industry support to take up the AD/CVD petition -- a notion the judge had already dispelled in a letter to the litigants (see 2108160054). Gordon doubled down on this take, finding that when Commerce rules that a petition has met the industry support threshold, no polling is required.

The judge then addressed MSI's contention that Commerce's finding that QSP fabricators failed the "sufficient production-related activities" test was unreasonable. MSI merely ignored Commerce's findings in the context of a comparison of fabricators to QSP slab producers, Gordon held. "Despite MSI’s contention that Commerce did not consider MSI’s information on the record, Plaintiff is unable to point to anything other than Commerce’s adverse finding that fabricators are not 'producers' as evidence of Commerce’s alleged failure to consider the evidence," the judge said. "Consequently, Commerce’s finding that fabricators are not 'producers' is reasonable."

(Pokarna Engineered Stone Limited, et al. v. United States, Slip Op. 21-138, CIT Consol. #20-00127, dated 10/07/21, Judge Leo Gordon. Attorneys: Jonathan Stoel of Hogan Lovells for consolidated plaintiff M S International; Joshua Kurland for defendant U.S. government)