Post Hoc Rationalization Argument Is a 'Red Herring,' DOJ Argues in Glass Subsidy Case

The Commerce Department's decision to countervail glass subsidies on remand improperly relied on post hoc rationalization, plaintiff-appellant Guangzhou Jangho Curtain Wall System Engineering said during July 10 oral arguments at the U.S. Court of Appeals for the Federal Circuit (Taizhou United Imp. & Exp. Co. v. U.S., Fed. Cir. # 22-2000).

A group led by Jangho is appealing a decision by the Court of International Trade to uphold the finding that glass was countervailable even though it was an input of curtain walls but not of the aluminum extrusions, which are another curtain wall input (see 2212070073).

The government argued the entire post hoc rationalization argument is a "red herring" because Commerce's rationale did not change. Instead, Commerce was forced to issue a new decision based on CIT's remand order and the remand order was a new agency action. Commerce never offered a new analysis, DOJ argued, it "merely complied with the trial court's order." The government also alleged that Jangho had failed to exhaust its arguments both before Commerce and at the trial court.

CAFC asked whether Jangho had forfeited the entire post hoc rationalization argument because it wasn't raised at the lower court. Jangho said that because the government never argued over the issuing agency and because CIT had created that reasoning "on its own," in its opinion Jangho did not have a chance to address that aspect. It is irrelevant which entity offered this post hoc rationale, Jangho said. "There has to be a reason to allow it, and in this case there is none."

In its initial 2013 determination, Commerce found that glass was an input for the aluminum extrusions. On remand, Commerce continued to find that the glass purchases were countervailable, even though they weren't inputs for the aluminum extrusions. CIT then upheld that finding in February (see 2202180042).