DOJ Further Defends Dropping On-Site Verification in AD Investigations Due to COVID-19

The Court of International Trade should sustain the Commerce Department's decision not to conduct an on-site verification in an antidumping review, the Department of Justice told the trade court in a Dec. 17 brief. Defending the COVID-era practice in yet another case, DOJ said that the plaintiffs, led by Ellwood City Forge Company, failed to raise the issue of on-site verification to Commerce during the proceeding, and that even if the court were to consider this challenge, the off-site verification procedures were consistent with the law and necessary, given the pandemic (Ellwood City Forge Company v. U.S., CIT #21-00077).

The case challenges elements of Commerce's final results in the antidumping duty investigation of forged steel fluid end blocks from Germany. Three of the plaintiffs' issues concern whether the decision not to conduct an on-site verification is backed by substantial evidence, Commerce's application of its differential pricing methodology and the agency's particular market situation adjustments.

In another case, also brought by Ellwood, CIT granted Commerce's voluntary remand request over the issue of on-site verification (see 2110180029). The agency said a remand was appropriate so that it could consider whether its decision to replace on-site verification during the pandemic with a reliance on supplemental questionnaire responses was appropriate.

While no such remand request has surfaced in Ellwood's other challenge, DOJ continued its defense of Commerce's pandemic policies. The first of such defenses consists of the argument that Ellwood failed to exhaust its administrative remedies by failing to present the challenge against Commerce's verification procedures during the investigation. "Even though Ellwood now contends that Commerce conducted no verification at all, Ellwood referred to Commerce’s efforts as 'verification' during the administrative proceeding," the brief said. Typically, a futility exception applies in these instances, where raising the issue with Commerce would've been futile.

"Here, no exception to the exhaustion requirement applies," DOJ said. "The record does not show that it would have been futile for Ellwood to challenge Commerce’s verification procedures. The issue before the Court is not a pure legal question, given that the validity of Commerce’s decision depends partly on the agency’s justifications, and evaluating those justification[s] requires consideration of unique facts of this case."

DOJ also said that Commerce's verification procedures were "consistent with the statute and necessary due to the exigencies of the COVID-19 pandemic." The statute does not tell Commerce how it is to conduct verification, so it is up to the agency to sort through it, the brief said. "And given the COVID-19 pandemic, even if Commerce had departed from its own regulations, which it did not, the agency was justified in doing so," DOJ argued.