Commerce Has Burden to Back Use of Expected Method, Steel Nail Importer Tells CAFC

The Court of International Trade overlooked the principle that the Commerce Department has the burden to support its use of the expected method in antidumping cases, importer PrimeSource Building Products argued in a reply brief at the U.S. Court of Appeals for the Federal Circuit. The non-selected respondent filed the suit to challenge Commerce's decision to weight average two adverse facts available rates when calculating the non-selected respondents' rate in an administrative review on steel nails from Taiwan (PrimeSource Building Products v. United States, Fed. Cir. # 22-2128).

The statute mandates that Commerce use a reasonable method appropriate for the circumstances, the brief said. When selecting this rate, Commerce's rate calculations for non-individually examined, cooperating respondents "must also bear some relationship to their actual dumping margins," PrimeSource said, quoting the Federal Circuit's opinion in Yangzhou Bestpak Gifts & Crafts Co. v. U.S. While the trade court said the burden was on the respondent, PrimeSource said the statute says otherwise. In Bestpak, the Federal Circuit said Commerce may not select unreasonably high rates having no relationship to the respondent's actual margin.

The U.S. claimed that Bestpak is distinguishable from the present case since the all-others rate in Bestpak was 123.83%, which is nearly twice as high as the 78.17% rate in this case (see 2304030061). In response, PrimeSoruce said that regardless of whether the rate was 78.17% instead of 123.83%, "Commerce’s methodology must reasonably reflect the potential dumping margins of the non-selected respondents." PrimeSource added that there is no record evidence showing that Commerce used a weighted average as opposed to a simple average in the proceeding, further requiring a remand of the supposed use of the expected method in this case.

PrimeSource also argued that it rebutted the presumption that the mandatory respondents are representative of all the other respondents in the proceeding. "By showing that its potential dumping margin was significantly lower than the AFA rate assigned to the mandatory respondents, Liang Chyuan," a separate rate respondent in the case, "rebutted the presumption of representativeness of the mandatory respondents," the brief said.

PrimeSource also claimed that there were at least two other methods in front of Commerce to ensure its rate reasonably reflected Liang Chyuan's potential dumping mark. These options would have had Commerce ask for more information from Liang Chyuan or pull forward its past rate from the third review. "Contrary to the arguments by the United States, calculating a rate for Liang Chyuan does not defeat the purposes of the respondent selection process but instead ensures that Liang Chyuan receives a rate that reasonably reflected its potential dumping margin," the brief said.

"Instead, Commerce relied on the expected method, which resulted in a rate that did not reasonably reflect Liang Chyuan’s potential dumping margin and the CIT should not have sustained Commerce’s determination."