DOJ Urges Federal Circuit to Uphold Use of AFA for Failure to Report Data as Directed in AD Case

The U.S. Court of Appeals for the Federal Circuit should uphold a lower court ruling establishing that the Commerce Department can apply total adverse facts available for a mandatory respondent's failure to provide its factors of production (FOP) data on a control number (CONNUM)-specific basis in an antidumping duty case, the Department of Justice argued in a Dec. 22 brief. DOJ said that the Court of International Trade correctly held that Commerce's requirement for CONNUM-specific reporting isn't subject to notice-and-comment rulemaking requirements, as the plaintiff-appellant Shanxi Pioneer Hardware Industrial argues, but rather an exercise of Commerce's discretion (Xi'an Metals & Minerals Import & Export Co. v. U.S., Fed. Cir. #21-2205).

In the 10th administrative review of the antidumping duty order on certain steel nails from China, Commerce selected three mandatory respondents. Pioneer, along with one of the other mandatory respondents, received a total AFA duty margin of 118.04% for its failure to report its FOP data on a CONNUM-specific basis. A weighted average was taken from that AFA rate and the 2.15% rate calculated for the third mandatory respondent to derive the non-individually investigated respondent rate of 41.75%.

Commerce found that Pioneer's refusal to submit its FOP data in the requested form and manner impeded the administrative review and justified the use of total AFA. Pioneer challenged this practice as "unlawful and unreasonable." However, since this had been Commerce practice since the third administrative review of steel nails, Pioneer should have understood it as the proper method in which to submit the FOP data, the trade court ruled (see 2106090048).

DOJ argued that, contrary to Pioneer's contentions, the requirement of CONNUM-specific reporting isn't the implementation of a legislative rule, requiring notice-and-comment. "The Court of International Trade has regularly shut down various attempts by respondents to characterize Commerce’s practice, policies, and other actions as rulemaking subject to APA notice-and-comment procedures," the brief said. "... There is no reason for this Court to depart from the trial court’s well-trod and reasoned holdings in this regard."

DOJ also argued that the trade court was right to uphold the use of AFA for the respondents' lack of CONNUM-specific data. "As Commerce reasonably determined, Pioneer, in not responding to Commerce’s multiple requests and providing no more than cursory excuses, failed to cooperate by not acting to the best of its ability," the brief said. In its effort to discredit this position, Pioneer has also raised three issues that it has failed to bring up before Commerce or even CIT. DOJ argued that they shouldn't be considered.