Trade Court Sends Back Commerce's 'Guise' of an AD Investigation Over Respondent Selection

The Commerce Department improperly used only one mandatory respondent in an antidumping duty investigation, the Court of International Trade ruled in a Feb. 16 opinion. Citing a recent U.S. Court of Appeals for the Federal Circuit ruling that held Commerce may not use just one respondent where multiple exporters have requested a review, Judge Timothy Stanceu sent back the agency's respondent selection decision. The judge also blasted Commerce's use of an adverse facts available rate, taken from the petitioner after the one respondent backed out of the investigation, which the agency used for the non-individually selected respondents and the all-others rate.

"In the guise of an actual antidumping duty investigation, Commerce merely took a rate advocated by the petitioner and applied it to all exporters and producers of the subject merchandise," Stanceu said.

The case concerns the antidumping duty investigation on wind towers from Spain. Commerce originally tapped Vestas Eolica as the sole mandatory respondent because it was the largest exporter of wind towers from Spain. Later in the investigation, the company said it would not continue to participate. Three weeks after that, plaintiff Siemens Gamesa filed a request to be a mandatory respondent. Commerce rejected the request, claiming it came too late -- only six weeks before the preliminary determination -- and the company did not look to participate as a voluntary respondent.

The agency then hit Vestas Eolica with a 73% AFA rate taken from the petitioner, and applied that rate to six other companies the agency said failed to cooperate to the best of their abilities and to all other companies. Stanceu took issue with Commerce at every step of this process, ultimately remanding the case for reconsideration.

Looking first to the agency's decision to pick only one respondent, Stanceu held that this move violates the Federal Circuit's August ruling in YC Rubber Co. (North America) v. U.S. (see 2208290026). In that decision, the appellate court held that Commerce cannot select just one mandatory respondent where multiple exporters have requested a review. While the facts of the case differ, the judge ruled this does not favor rejecting the opinion from consideration.

"In this case, Commerce announced its decision to examine individually only one respondent in the Respondent Selection Memorandum and never departed from that decision throughout the conduct of the entire investigation," the opinion said. "The Department’s assigning the 73.00% rate to Siemens Gamesa was a result of that unlawful decision, which, when viewed according to the holding YC Rubber, was not based on a permissible interpretation of 19 U.S.C. § 1677f-1(c)(2). Therefore, the court finds merit in plaintiff’s challenge to the Department’s respondent selection method."

Stanceu further ruled that Commerce illegally set the all-others rate by a "reasonable method" as required by 19 U.S.C. Section 1673d(c)(5)(B). The judge held that the AFA rate was not shown to be representative of any rate that could have been attributed to the respondents not selected for examination. "Congress entrusted Commerce with the responsibility to conduct an antidumping duty investigation, and to assign individual and, if necessary, all-others rates, according to the detailed requirements set forth in the Tariff Act," the opinion said. "Here, it was not lawful for Commerce to evade that investigative responsibility by outsourcing the critical determination to the petitioner."

Commerce illegally refused to investigate Siemens Gamesa, the judge added. Since the agency established its process as picking the largest exporters for review, Siemens Gamesa's status as the second-largest Spanish wind tower exporter qualified it to be selected. This decision "must be remedied by an individual investigation" of the exporter during the remand proceeding ordered by the trade court.

Danniel Cannistra, counsel for Siemens Gamesa, said that "we were grateful to see that the Court continues to hold Commerce to reasonable standards of fairness and equity."

(Siemens Gamesa Renewable Energy v. U.S., Slip Op. 23-18, CIT #21-00449, dated 02/16/23, Judge Timothy Stanceu. Attorneys: Daniel Cannistra of Crowell & Moring for plaintiff Siemens Gamesa; Sara Kramer for defendant U.S. government; Alan Price of Wiley for defendant-intervenor Wind Tower Trade Coalition)