Trade Court Lets Commerce Add Deficiencies Analysis to Record of Rebar AD Review

The Court of International Trade in a Jan. 27 order let the Commerce Department add a questionnaire deficiencies analysis to the record in an antidumping duty case. The order said the memorandum is appropriately part of the record because the agency used it in coming up with the review's final results. Judge Stephen Vaden held that omitting the analysis would "frustrate judicial review," and that, despite respondent Grupo Simec's claims, Commerce did not act in bad faith by leaving the review off the record.

"We believe the Court appropriately allowed the Commerce Department to add its Deficiencies Memorandum to the administrative record," said Jack Shane, counsel for defendant-intervenor Rebar Trade Action Coalition. "As the Court determined, the document was part of the record of the proceeding, the addition would not prejudice plaintiffs, and to do otherwise would have frustrated judicial review."

The case concerns the administrative review of the antidumping duty order on steel concrete reinforcing bar from Mexico in which Simec and Deacero served as the mandatory respondents. During the review, Simec timely submitted its questionnaire responses, but it filed multiple requests for deadline extensions; Commerce granted some. The plaintiffs said Simec's supplemental response was submitted "under extreme time-constraints." The agency then rejected Simec's request to file additional relevant factual information in the review, resulting in a zero margin for Deacero and a 66.7% adverse facts available rate for Simec.

Commerce prepared a deficiencies analysis for Simec on which it based the AFA rate, though the agency did not add this memo to the record. After the plaintiffs, including Simec, appealed to the trade court, Commerce moved to add the document to the record because the agency frequently referenced the document in making its rate determinations. The government also initially moved to add the document to the record claiming it had the plaintiffs' consent, when it did not. The plaintiffs opposed the motion, arguing, in part, that Commerce cannot supplement the record with the deficiencies analysis because the agency never gave the parties a chance to comment about the document (see 2212050037).

Vaden sided with Commerce, permitting the agency to add the document to the record. The judge held that the memorandum is properly part of the record since the agency's decisions memorandum references the deficiencies analysis "extensively." Vaden said that the plaintiffs are incorrect to argue that Commerce's violation of the statute prevents it from now correcting the record.

While the agency violated two statutes -- one over what is in the record and one concerning what Commerce must publish when it makes a determination -- "the statute does not explain how to remedy the apparent conflict," the opinion said. "The statute offers no reason to conclude that a document that is part of the record cannot be added to correct the record for review when mistakenly omitted. As the Federal Circuit has explained, statutes establishing procedural requirements that do not prescribe remedies or consequences for their breach do not grant enforceable rights."

Finding the appropriate remedy for the situation is the correction of the record, Vaden turned to the question of whether adding document to the record would frustrate judicial review, ultimately finding that it would not. The plaintiffs concede Commerce's rationale for its final results is "significantly clearer" when looked at with the deficiencies analysis, so without the analysis, the final results may be incomplete, the judge said.

Vaden further held that the plaintiffs are not prejudiced by the inclusion of the document to the record and that Commerce did not act in bad faith by moving to add the document to the record four months after the final results were released. The plaintiffs were not prejudiced by the late inclusion of the document because they do not have an opportunity to comment on the final results of an administrative review, with any non-ministerial objections only finding a home at federal court.

As for the bad faith claim, Vaden held that "[b]ad faith requires evidence, not mere allegation. ... Given 'the presumption that government officials act in good faith,' fanciful allegations unsupported by evidence are insufficient to provide the required 'clear and convincing evidence' of bad faith. Commerce did not act in bad faith."

(Grupo Acerero v. U.S., Slip Op. 23-11, CIT Consol. # 22-00202, dated 01/27/23, Judge Stephen Vaden. Attorneys: James Rogers of Nelson Mullins for joint plaintiffs Grupo Acerero, Grupo Simec and Gerdau Corsa; Kara Westercamp for defendant U.S. government; John Shane of Wiley for defendant-intervenor Rebar Trade Action Coalition)