CIT: Commerce Abused Discretion With AFA for Exporter That Lost Three Employees to COVID

The Commerce Department abused its discretion by denying an exporter’s supplemental questionnaire extension request amid the COVID-19 pandemic’s 2021 delta variant wave, Court of International Trade Judge Stephen Vaden ruled April 25. He pointed out that, by the time of the rejection, three of Simec’s key accountants had died of the disease and a fourth was "hospitalized and intubated."

And when the exporter, Simec, later attempted to submit the information it hadn’t been able to get into its initial supplemental questionnaire response in time, Commerce rejected the filing for untimeliness, Vaden said. But “despite having no time for further information from Simec,” the department issued another supplemental questionnaire to the review’s other mandatory respondent more than two weeks later, he said, and didn’t release its own preliminary decision for another three months.

COVID-19 vaccines were much less accessible in Mexico than in the U.S. in 2021, Vaden said. And, during the review, Commerce sought large amounts of information, much of which had to come from on-site records, he said.

The department gave Simec and Deacero, two mandatory respondents in the review, initial questionnaires Feb. 8, 2021. Simec received several extensions for that questionnaire after one of its accountants died of COVID-19, an at-risk pregnant employee and several infected workers had to be isolated and a Texas winter storm knocked out the power, heat and internet access at Simec’s facilities, Vaden said.

In late July 2021, Commerce issued Simec two supplemental questionnaires that together contained 275 questions; all parties agreed they were extensive, he said. Simec was given a week to respond to one and three weeks for the other.

Simec received a couple of extensions in August 2021. In letters sent Aug. 28, a Saturday, and again the following Monday, the company asked Commerce to push back its deadline for six questions regarding affiliate and downstream sales. COVID-19 restrictions meant that “entry summaries and other documents [were] not readily accessible,” and the downstream sales questions “required manually reviewing more than 800 invoices, Vaden said.

By then, two more of Simec’s most experienced accountants had died and one was under intubation, Vaden said. He added that the company’s counsel was in India, unable to return, and Mexico’s delta variant outbreak was worsening.

Commerce gave Simec until Sept. 7, 2021, to file the questionnaire that included those six questions. As the deadline approached, Simec desperately requested extensions two more times for the affiliate and downstream sales questions. Its employees had been “sleep depriv[ed] for days and weeks” trying to pull everything together, it noted in the request.

The department rejected both requests, saying that it had already extended the questionnaire’s deadline by three weeks. Simec, unable to answer the six questions, filed what it could, Vaden said.

The company continued working on gathering the missing information, however, and tried to file it Oct.18, 2021. It was rejected for untimeliness. But the other mandatory respondent had submitted its own supplemental questionnaire responses that same day -- after receiving several extensions itself for what Vaden called “more generic claims of difficulty” -- and the department didn’t release its preliminary decision for another three months, the judge said.

“Commerce’s interest in finality nearly three months before releasing the Preliminary Results was not just at a nadir; it was nearly zero,” Vaden said.

Deacero received a de minimis AD rate, while Simec got an AD rate of 66.7% based on AFA. The review’s other two participants were given a review average rate of 33.35%.

In his decision, Vaden called Commerce’s decision to reject Simec’s final request “unjustified” and said the department illegally treated Simec worse than Deacero.

Commerce had even conceded during oral argument that “it was unaware of any other COVID-era respondent that experienced the level of hardship Simec did,” Vaden said. Meanwhile, Deacero faced comparatively minor difficulties; none of its employees died or were hospitalized, he said. But Commerce continued to grant Deacero’s requests “well after it denied Simec’s September 7 extension request on the grounds that time was of the essence,” he said.

“Commerce faced two respondents in this review,” he said. “One confronted calamitous consequences because of COVID-19. The other experienced disruptions akin to those of any respondent in the pandemic era. Commerce chose to reward Deacero’s more generic descriptions of difficulty with extensions while downplaying the much more severe difficulties Simec faced.”

And even if it were not an abuse of discretion, Commerce’s decision wouldn't have been supported by substantial evidence because the department failed to take into account record evidence that detracted from it, Vaden said.

In all its writings, the closest Commerce came to actually addressing Simec’s “death toll” came in a statement the department made that it “appreciated the burden that Grupo Simec has previously expressed it was experiencing due to the effects of COVID-19, including the loss of staff,” Vaden said.

“Read in the context of the remainder of the decision, a disinterested reader would likely surmise that Simec experienced normal workforce attrition, not three deaths and a hospitalization,” he said.

(Grupo Simec v. U.S., Slip Op. 24-52, CIT Consol. # 22-00202, dated 4/25/2024; Judge: Stephen Vaden; Attorneys: James L. Rogers of Nelson, Mullins for plaintiff Grupo Simec; Irene Chen of VCL Law for consolidated plaintiff Grupo Acerero; Craig Lewis of Hogan Lovells for plaintiff-intervenor Gerdau Corsa; Kara Westercamp for defendant U.S. government; Maureen Thorson of Wiley Rein for defendant-intervenor Rebar Trade Action Coalition)