CIT Upholds Use of Expected Method in AD Review After 3 Remand Periods

The Commerce Department properly used the expected method to set the non-selected respondents rate in an antidumping duty case by weight-averaging two adverse facts available rates and a zero percent margin, the Court of International Trade ruled in a July 15 opinion. Issuing the ruling following three remands, Judge Mark Barnett said that the plaintiffs, led by Pro-Team Coil Nail Enterprise, did not present enough evidence to show that the mandatory respondents rates were not representative of the non-selected respondents' dumping margins.

The case stems from a challenge to the first administrative review of the antidumping duty order on certain steel nails from Taiwan in which Pro-Team Coil Nail and Bonuts Hardware Logistics were selected as mandatory respondents. After Bonuts said it wouldn't participate, Unicatch was tapped as a respondent. In the final results of the review, Commerce picked the mandatory respondents' rates using total adverse facts available and selected the highest dumping margin alleged in the petition.

On remand from CIT, Commerce calculated a company-specific dumping margin of zero percent for Pro-Team but continued with a total AFA rate of 78.17% for Unicatch. The agency then took a simple average of all three respondents' rates, including Bonuts' AFA rate, to derive the non-individually examined respondents rate, amounting to 39.09%. In the case's second opinion, Chief Judge Mark Barnett instructed Commerce to corroborate the petition rate, which the agency did using Pro-Team's transaction-specific margins. When Commerce simply averaged the three mandatory respondents' rates again, it gave the non-individually examined respondents a 52.11% rate.

In the case's second opinion, Barnett sustained Commerce's corroboration of the petition rate but remanded Commerce's departure from the expected method for finding the all-others rate (see 2108090026), the expected method being a weighted average of the respondents' rates, while Commerce used a simple average. The agency said it dropped the expected method because it didn't have sales value data from Bonuts. The judge said that while that would normally be grounds to depart from the expected method, in this case Commerce has CBP import volume data that can be substituted for the missing sales value data (see 2108090026).

Again on remand, Commerce then used a weighted average, using CBP entry data for one of the respondents and landing on a 35.50% rate for non-selected companies. In the July 15 opinion, Barnett upheld this position. First discussing the legal grounds of the expected method, the judge laid out two important assumptions: that the largest exporters are representative of the non-selected respondents, and that Commerce is expected to use their rates to find the margins for the non-selected respondents.

"These concepts, representativeness and expectedness, are connected," the opinion said. "Representativeness allows Commerce to select certain respondents for individual examination and, in so doing, decline to individually examine other respondents. By allowing Commerce to focus its resources on certain respondents, the statute necessarily creates the assumption of representativeness because Commerce often will lack further information about the non-selected respondents."

The plaintiffs, though, argued that there is evidence showing that the mandatory respondents do not represent the non-selected respondents and that the 35.50% is "punitive and 'aberrational compared to the margins calculated for cooperative respondents' in the periods before, during, and immediately after this administrative review." Barnett assessed this claim, ruling that the plaintiffs ignored the AFA rates given to certain respondents and that the existence of lower rates is not evidence against the weighted average of the mandatory respondents rates being reasonably reflective of non-examined companies' margins.

"Here, the 35.30 percent rate for non-individually examined respondents is not the highest rate determined in this administrative review; the AFA rates of 78.17 percent received by Unicatch and Bonuts are the highest rates determined during this administrative review," the judge ruled.

Further, the non-selected respondents sought to reopen the record to get additional data to calculate their rate. Barnett said that the court will not require a reopening of the record "simply based on a plaintiff's argument that better information is available." Given the interest of finality and the court's position that the expected method reasonably reflects the non-picked companies' rates, the court rejected the plaintiff's move to reopen the record.

(Pro-Team Coil Nail enterprise v. United States, Slip Op. 22-84, CIT Consol. #18-00027, dated 07/15/22, Judge Mark Barnett. Attorneys: Ned Marshak of Grunfeld Desiderio for consolidated plaintiffs Hor Liang Industrial Corp. and Romp Coil Nails Industries; Sosun Bae for the defendant U.S. government; Adam Gordon of The Bristol Group for defendant-intervenor Mid Continent Steel & Wire)