Parties Push AFA for Problem Suppliers, Loper Bright as 'Intervening Legal Authority'

An exporter and a petitioner each filed an opposition to the Commerce Department’s final results upon remand for an antidumping duty review on Indian-origin steel pipe, in which the department provided a strong defense of adverse facts available as a tool to combat the problem of noncooperative unaffiliated suppliers (see 2407100037) (Garg Tube Export v. U.S., CIT # 21-00169).

Petitioner Nucor Tubular Products contested the department’s reversal of its use of AFA for the exporter. Exporter Garg Tube said the department was still unlawfully relying on the controversial Cohen’s dtest in calculating its antidumping duty -- and though it acknowledged its failure to exhaust the argument administratively, it argued that Loper Bright constitutes intervening legal authority that refreshes its ability to make the claim.

In mid-July, Commerce released the contested results after the Court of International Trade told it to explain either how its use of AFA either promoted an accurate AD or how Garg hadn’t cooperated with the department to the best of its ability (see 2404160037). In them, the department recalculated Garg’s rate without an adverse inference, reducing it from 13.9% to 4.2%.

But Commerce should have instead further supported its use of partial AFA for Garg, Nucor argued Aug. 7. The record showed Garg has leverage over a noncooperative supplier, it claimed. And, it said, this was now not the first review in which Garg turned out to be unable to hand over data from one of its suppliers.

The petitioner also supported Commerce’s overall thesis, saying that currently, “under the standard articulated by the Court and followed by Commerce, the behavior of Garg and its pipe suppliers is facilitated, if not encouraged.”

“Garg should not be able to tell their pipe suppliers that refusing to provide necessary cost data will affect their business relationship while also continuing to buy pipe from those same suppliers,” it said. “Otherwise, it is just an empty threat.”

It said it agreed with the department’s statement that it was acting under respectful protest.

The exporter, meanwhile, pointed out that the results on remand had still “declined to address Garg’s substantive challenge to the Cohen’s d differential pricing analysis employed on remand.” Instead, the department had only noted, as the court itself had, that the exporter hadn’t raised the issue in its administrative case brief.

But the court’s ruling was made prior to the overturning of Chevron, Garg pointed out. Loper Bright, it argued, is an “intervening legal authority” that “renders the exhaustion requirement inapplicable” to the Cohen’s d test argument. So far, the court has sustained use of Commerce’s Cohen’s d test only because it had concluded the department’s analysis was reasonable, Garg said.

It also argued that Loper Bright’s support of stare decisis in certain situations -- holding that prior cases relying on Chevron remain subject to statutory stare decisis -- doesn’t apply here, because Commerce’s use of the Cohen’s d test hasn’t yet been heard before the U.S. Court of Appeals for the Federal Circuit.

And it said it respectfully disagreed that “it was otherwise required to have raised differential pricing in its case brief.”

“This challenge was raised in comments on the draft remands after Commerce applied its differential pricing analysis, and Garg accordingly did ‘raise the issue at the appropriate time on remand’ in order ‘to exhaust its administrative remedies before Commerce,’” it said, citing the 2008 CAFC case Mittal Steel.