Trade Court Says No Simple Average of de Minimis, AFA Rates for All-Others Rate

The Commerce Department cannot set the all-others rate in an antidumping duty review by taking a simple average of a de minimis and an adverse facts available rate, the Court of International Trade ruled in a Dec. 21 opinion. Sending the case back to Commerce for the fifth time, Judge Jennifer Choe-Groves cited a key U.S. Court of Appeals for the Federal Circuit ruling that made the same determination. The judge said that the court's rules "require the just and speedy determination of every action and proceeding," so the agency should refrain from "submitting the same unreasonable-as-applied, punitive all-others separate rate."

The case has 40 plaintiffs challenging the antidumping duty investigation into hardwood plywood products from China. During the proceeding, Commerce had assigned the two mandatory respondents, Linyi Chengen and Dongfang, a zero percent de minimis and 114.72% AFA dumping rate, respectively. The agency then established the all-others rate by departing from the expected method and simply averaging the two rates for a 57.36% rate.

In a past opinion, Choe-Groves upheld Commerce's decision to depart from the expected method, which is defined as weight averaging the zero, de minimis and AFA rates (see 2109240039). Following this method, the non-individually examined respondents would have received a zero percent dumping margin -- an outcome that Commerce said was not representative of the non-individually examined respondents' rates. However, in the case's fourth opinion, the judge said that Commerce cannot just average the de minimis and AFA rates since this does not use any company's actual data and does not represent the all-other respondents' dumping margins.

On remand, the agency continued this method for finding the all-others rate, claiming that it had to use a simple average given the scarcity and inadequacy of the alternatives (see 2111120039). Choe-Groves was not swayed by the explanation in the case's firth opinion, telling Commerce that it cannot rely on the scarcity of the information as a defense given that it caused this scarcity.

"As the Court noted in Linyi Chengen IV, Commerce created its own problem when it selected only two mandatory respondents, which resulted in sparse information on the record to support its assertions regarding the potential dumping margins of the separate rate respondents," the opinion said. "A speculative dumping margin using the average of a de minimis rate and an AFA rate cannot be upheld based on weak record evidence, particularly when Commerce itself created the scarcity of evidence."

Choe-Groves rooted her opinion in a 2013 Federal Circuit opinion, Yangzhou Bestpak Gift & Crafts Co. v. U.S., which said that Commerce cannot find the all-others rate by simply averaging a de minimis and AFA rate. "Following the principles established in Yangzhou Bestpak, this Court concludes that Commerce’s determination is unreasonable as applied and not supported by substantial evidence," the opinion said. As in that case, Choe-Groves said that the court finds that an all-others rate given to cooperating respondents that is 60 times higher than the only calculated rate "seems unfair and unduly punitive."

Seeing as this will be the fifth time the court has sent the case back to Commerce and the third time the court has found the 57.36% to be unreasonable, the judge said that the agency should not submit the same rate again "without new, substantial evidence in support." The agency "might choose to examine whether other evidence on the record supports a lower rate after the applicable rates are averaged."

(Linyi Chengen Import and Export Co. v. United States, Slip Op. 22-150, CIT Consol. #18-00002, dated 12/21/22, Judge Jennifer Choe-Groves. Attorneys: Gregory Menegaz of deKieffer & Horgan for plaintiff and consolidated plaintiffs; Jeffrey Neeley of Husch Blackwell for consolidated plaintiffs; Jeffrey Grimson of Mowry & Grimson for consolidated plaintiffs; Sonia Orfield for defendant U.S. government; Timothy Brightbill of Wiley Rein for defendant-intervenor Coalition for Fair Trade of Hardwood Plywood)