Commerce Must Conduct Verification in AD Case or Explain Its Failure Not to Do So, CIT Says
The Commerce Department must either conduct verification in an antidumping case, even if virtually, or more fully explain why it didn't conduct virtual verification in the face of a request to do so, the Court of International Trade said in a Feb. 2 decision. Judge Stephen Vaden expressed doubts over whether Commerce could complete the latter option, given that the agency failed to respond to the request for virtual verification. Commerce said no verification was conducted due to COVID-19-related restrictions. Vaden lambasted Commerce over this rationale given high-level U.S. officials' trips to India, the location of the would-be verification.
The opinion concerns the antidumping duty investigation into forged steel fittings from India in which Shakti Forge Industries served as the sole mandatory respondent. Due to COVID travel restrictions, Commerce said it couldn't conduct on-site verification. The agency issued supplemental questionnaires instead, took Shakti at its word and then used "facts available," resulting in a zero percent dumping margin for the respondent. A group of U.S. producers, led by Bonney Forge, filed suit at CIT, arguing Commerce can't shirk its responsibility to conduct verification (see 2107090055).
Of particular concern to the plaintiffs, and Vaden, was that during the investigation, plaintiffs requested that Commerce conduct virtual verification, but the agency didn't respond. This lack of verification is "at the heart" of all of the plaintiffs' arguments, but there is no record answer as to why Commerce rejected this method, Vaden said. Accordingly, the judge remanded the case for the agency to either conduct the verification or explain why it believes some form of virtual verification is impossible.
Vaden specified that any reconsideration of the possibility of verification must be discussed in present terms and in the face of any current restrictions, and not those of the investigation period. The judge illustrated this consideration by discussing the recent travel of other U.S. officials who have made the trip to India for their official business. Vaden cited DOJ's Deputy Assistant Attorney General Arun Rao and his stop in India to discuss consumer protection and U.S. Trade Representative Katherine Tai's trip to New Delhi.
These trips -- Rao's in particular -- don't mesh with the absence of Commerce trips since the DOJ's policy is to permit only "mission-critical" travel, which is the same standard for Commerce verification visits, the judge said. "Under the Government’s explanation of this standard, it is 'mission critical' for political appointees to take discretionary trips to India; but it is not 'mission critical' for Commerce Department civil servants to travel to India, virtually or otherwise, to carry out their statutory responsibilities," the judge said. "It is apparently currently safe to conduct high-level negotiations but not safe to ensure the terms of those deals are actually enforced, despite the destinations being the same."
The judge gave Commerce a full 150-day remand period in which the agency can either "do its job and perform some type of verification," or "explain why its decision to fail to verify is both legal and not an abuse of discretion."
This same challenge was also raised in another antidumping case -- this one brought by the Ellwood City Forge -- where Vaden is also presiding (see 2201200032). Ellwood also argues that COVID-19 didn't allow Commerce to buck its statutory obligations to conduct verification.
(Bonney Forge v. United States, Slip Op. 22-8, CIT #20-03837, dated 02/02/22, Judge Stephen Vaden. Attorneys: William Fennell of Schagrin Associates for plaintiffs; Kara Westercamp for defendant U.S. government; Matthew McGrath of Barnes Richardson for defendant-intervenor Shakti Forge Industries Pvt. Ltd.)