CIT OKs Decision Not to Revoke AD Order on Exporter in Sunset Review Due to 'd' Test

The Court of International Trade on Aug. 19 sustained the Commerce Department's decision not to amend the antidumping duty order on softwood lumber from Canada to revoke the order as to exporter Resolute FP Canada in the sunset review of the order.

Resolute argued that the jurisprudence from both the trade court and the U.S. Court of Appeals for the Federal Circuit regarding the use of the Cohen's d test in identifying "masked" dumping compelled the revocation of the order on the company. Judge Jane Restani said that since neither CIT nor CAFC has outright invalidated Commerce's use of the d test, the agency can rely on the test in assessing Resolute's AD margin. As a result, the decision not to amend the AD order wasn't arbitrary and capricious, the court said.

The exporter had claimed that Commerce's use of the test was overruled by recent Federal Circuit case law, basing its claim on two decisions in particular: Stupp Corp. v. U.S. and Mid Continent Steel & Wire v. U.S. However, Restani said that both of thosee cases are distinguishable from Resolute's suit.

In Stupp, the Federal Circuit was concerned about the efficacy of the d test when certain statistical assumptions, including normal distributions, adequate sample sizes and roughly equal variances, weren't present. Restani said in this case the appellate court remanded the case to Commerce, and the trade court affirmed the agency's explanation.

In Mid Continent, the Federal Circuit remanded the use of the d test due to the presence of academic literature undermining Commerce's preference for a simple average in the denominator of the test. Restani distinguished this case from Resolute's, since this academic literature is not on the record here and in Mid Continent, CIT affirmed Commerce's explanation of its practice.

The court said "Resolute’s reliance on Federal Circuit precedent to question the reasonableness of Commerce’s methodology is overstated." If and until the appellate court invalidates the "standard use of Cohen's d," the agency "is free to utilize it if adequately explained."

Resolute next said CAFC precedent amounted to "good cause" under the statute to revisit the sunset review. Restani disagreed, finding again that neither CIT nor CAFC have set aside the standard use of the d test at the time of the opinion. "Accordingly, Resolute’s argument that ongoing litigation invalidates (or will invalidate) Commerce’s use of Cohen’s d is merely speculative," the decision said.

The exporter also argued that CAFC's jurisprudence on the issue amounts to "extraordinary circumstances" warranting revoking the order for Resolute. The trade court extraordinary circumstances have previously been found by Commerce "where there have been explicit changes in departmental policy or jurisprudence, or when outside factors create a very high likelihood that existing margins are inaccurate." Assuming a change in law could amount to extraordinary circumstances, these "circumstances are not present here" because, again, CAFC hasn't set aside the use of the test "the way Resolute alleges," the court said.

Lastly, Resolute contested Commerce's failure to address an expert report submitted by the exporter purportedly showing that the agency misused the test. Restani said that while Commerce didn't explicitly address the report, it responded to the substance of the report and included an analysis of ongoing case law.

"The court concludes that considering this is an expedited sunset review, Commerce adequately addressed the concerns raised by the Hedges Report," the decision said.

(Resolute FP Canada v. United States, Slip Op. 24-95, CIT # 23-00095, dated 08/19/24; Judge: Jane Restani; Attorneys: Elliot Feldman of Baker & Hostetler for plaintiff Resolute FP Canada; Stephen Tosini for defendant U.S. government; Zachary Walker of Picard Kentz for defendant-intervenor Committee Overseeing Action for Lumber International Trade Investigations or Negotiations; David Ross of Wilmer Cutler for defendant-intervenor Sierra Pacific Industries)