Commerce Used 'Identical' Reasoning as in Previously Remanded Case, Steel Exporter Argues

The Commerce Department unlawfully relied on the Cohen's d test and incorrectly applied partial adverse facts to Indian exporter Garg Tube on remand in an antidumping duty case on welded carbon steel standard pipes and tubes from India, Garg said in a July 31 motion for judgment at the Court of International Trade (Garg Tube Export v. U.S., CIT # 21-00169).

Garg argued that the court should remand Commerce's decision because the department admitted that it used an "identical rationale" to a previously remanded review.

That rationale was Commerce's reliance on the Cohen's d test to determine whether Garg had engaged in targeted dumping. Garg said Commerce unlawfully used the analysis as questioned by the U.S. Court of Appeals for the Federal Circuit in Stupp Corp. v. U.S., in which Garg said the court required "that Commerce conclude that reliance on Cohen’s d is contrary to law." Since Stupp was decided in 2021, after Garg filed its summons and complaint in this litigation, the case "falls squarely within the futility, question of law, and intervening judicial decision changing the law exceptions to the exhaustion doctrine."

In its Issues and Decision Memorandum, Commerce admitted that its decision in the 2018-2019 review was based on an "identical rationale" to its decision in the 2017-2018 review regarding the test, which CIT remanded for further analysis, Garg said. The exporter said the court should therefore remand the investigation and instruct Commerce to follow that same rationale.

Commerce failed to explain that Garg's U.S. sales satisfied the statutory criteria for applying the d test, the exporter argued. Commerce may resort to the statutory exception and rely on the average-to-transaction method only if there was a pattern of export prices for comparable merchandise that differed significantly among purchasers, regions or periods of time. Commerce did not show that was the case here, the brief said.

On remand, Commerce said Garg did not raise the differential pricing analysis issue in its administrative case brief before the agency, but Commerce did not resort to that analysis until remand. Garg said that it "appropriately challenged" the pricing analysis after it was aware of the draft remand. By applying its differential pricing analysis to recalculate Garg’s rate on remand, Commerce opened the door to judicial review of the issue "irrespective of whether it had earlier been challenged during the initial calculation of Garg’s AR18-19 ADD rate," the exporter argued.

Additionally, Garg challenged Commerce's use of AFA based on an unnamed and unaffiliated vendor's failure to respond to information requests. Commerce calculated the costs of inputs provided to Garg by that vendor and, although the vendor failed to respond to questionnaires, Garg said it fully cooperated in the investigation and repeatedly asked its vendor to submit cost data to Commerce. "Commerce expressly held that its decision to rely on AFA was based on [the vendor's] failure to reply to Commerce’s questionnaire, rather than Garg’s failure to submit the data. Yet, [at] the same time, Commerce reasoned that Garg failed to put forth its maximum efforts in inducing [the vendor] to cooperate," the exporter said.