COVID-19 Did Not Allow Commerce to Buck Statutory Obligations, Plaintiffs Tell CIT

The COVID-19 pandemic did not give the Commerce Department cover to ignore its statutory obligation to conduct on-site verification in antidumping duty proceedings, the plaintiffs in an ADD case told the Court of International Trade in a Jan. 19 brief. Responding to the Department of Justice's defense of its decision to send an additional questionnaire instead of conducting on-site verification, the plaintiffs, led by Ellwood City Forge Company, said that DOJ's position is not entitled to Chevron deference and that the pandemic did not justify violating the statute (Ellwood City Forge Company v. U.S., CIT #21-00077).

"The COVID-19 pandemic did not amend the U.S. Constitution, confer upon Commerce authority to unilaterally amend Congress’ statute, or otherwise catapult Commerce into a lawmaking role," the brief said. "In short, none of Defendant’s arguments have merit."

The case challenges elements of Commerce's final results in the antidumping duty investigation of forged steel fluid end blocks from Germany. 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 this case, DOJ in a December 2021 brief said that Commerce's verification procedures were consistent with the statute since it does not tell Commerce how it is to conduct verification (see 2112230065).

"Defendant is doubly wrong," the plaintiffs responded. "... Put simply, because Commerce acknowledged on-site verification is 'provided for' under the statute, Chevron deference is not available to support appellate counsel’s alternate view." Ellwood argued that DOJ's position fails both steps of the Chevron deference test.

On "step one," the plaintiffs said that Congress established the requirements of on-site verification and a post-verification report without "genuine ambiguity" over the issues. "Regardless of circumstances, Commerce must verify," Ellwood said, clarifying that verification entitles using "all the traditional tools of construction," including a minimum of inspecting the site in a foreign country. The plaintiffs argued that Congress did not create the exceptions to this rule claimed by DOJ, including the idea that the statute allows Commerce to only conduct verification "where practicable." This exception is not available because of the compulsory word "shall" in the statute, the plaintiffs said.

The defense fails "step two" of the Chevron test as well, the brief said. "This slipperiest of slopes implies the untenable conclusion that Congress authorized Commerce to unilaterally determine when it will -- and will not -- follow the law," the plaintiffs said. "Pandemic-related staffing challenges cannot justify Commerce’s rewriting of minimum verification standards 'provided for' by statute in a manner that seriously prejudices a domestic industry materially injured by dumped imports. As the Supreme Court has recently made clear 'our system does not permit agencies to act unlawfully even in the pursuit of desirable ends,'" the brief said, citing the 2021 SCOTUS case Ala. Ass'n of Realtors v. HHS.

The plaintiffs also said that any flexibility afforded Commerce is not absolute. Real-time videoconferencing was floated as a possible substitute for on-site verification, but instead Commerce went with issuing one additional questionnaire, which failed to serve either purpose of approximating normal procedures and assessing the credibility of the exporter's data, the brief said.