US Blasts CIT's Reliance on 'Extra-Record' Info in Remanding Plwyood AD Investigation

The U.S. on May 10 told the U.S. Court of Appeals for the Federal Circuit that the Court of International Trade "improperly relied on extra-record information" in rejecting the Commerce Department's final determination in the antidumping duty investigation on hardwood plywood from China (Linyi Chengen Import and Export Co. v. United States, Fed. Cir. # 24-1258).

As a result, Commerce "had no realistic option but to deem" respondent Linyi Chengen Import and Export Co.'s log factors of production information "reliable and accurate" and "find that the criteria for applying the intermediate input methodology were not met," the government said in its opening brief. The government argued that the trade court "disregarded Commerce's authority to set its own procedures for the acceptance of documentation and substituted its judgment for that of Commerce."

During the investigation, Commerce discovered multiple issues with Chengen's log data during verification. As an example, the agency discovered that Chengen's logs were "measured using the log diameter from the smaller end of the log, even though the logs were not uniform in size." The agency thus questioned "how the entire volume of the log could be accurately captured."

After verification, Commerce said it would apply the "intermediate input methodology and directly value the veneers instead," due to Chengen's purportedly unreliable measurements of log volume and the company's failure to procure supplier-provided invoices for its poplar log purchases. The exporter on multiple occasions tried submitting information showing the conversion table and formula it relied on constituted the Chinese National Standard. The agency initially rejected these submissions as untimely. Chengen claimed that it tried submitting the information during verification but was rejected.

CIT relied on Chengen's statements that it tried to submit the information to Commerce's staff at verification in remanding the agency's conclusion, ultimately leading to the agency accepting the exporter's submissions.

On appeal, the government argued that the trade court erroneously relied on Chengen's submissions since the company "had every opportunity to submit relevant information in a timely manner, and Commerce acted within its discretion in declining to accept Chengen’s untimely filed information." CIT exceeded its "limited judicial role" and usurped the agency's authority to "set and enforce its own procedures."

The U.S. said the "court violated the restrictions on the evidence it may consider" when it relied on statements from Chengen's counsel during oral argument, particularly the "unsubstantiated allegations" that Chengen gave Commerce a "partially translated full version of the log volume formula document" and that the agency "had torn off the cover page, which counsel claimed contained the full translation." The government said this error is "especially troubling" since the exporter didn't allege that Commerce "had torn off" or rejected the additional pages "until after Commerce had completed its investigation."

The trade court also "impinged on Commerce’s role as factfinder when it instructed Commerce to find the documentation 'complete and accurate,' and told it to reconsider modifying Chengen’s margin," the brief said. Given that all of the documents claiming to support the quantity of Chengen's log purchases were in the company's sole control, the agency reasonably found that, without confirmation from an independent source, the documents could be subject to manipulation or alteration and weren't reliable, the brief said.

The U.S. also said that CIT erred in sustaining Commerce's separate AD rate only after the agency brought it to zero percent, "despite agreeing with Commerce that such a rate would not be reasonably reflective of the non-examined respondents’ dumping behavior."

The AD petitioner, Coalition for Fair Trade in Hardwood Plywood, also filed its opening brief, echoing the government's claims. The petitioner said that the court should reinstate Commerce's 57.36% dumping margin it set on the separate rate respondents, since it's commensurate with the "expected method" and otherwise reasonable.