Trade Courts Update for Week of November 4, 2015

United States Court of International Trade

 

Motion for Certification Denied

InIcdas Celik Enerji Tersane Ve Ulasim Sanayi, A.S. v. United States, Court No. 14-267, Slip Op. 15-121 (October 30, 2015), the court denied defendant-intervenor Rebar Trade Action Coalition’s (“RTAC”) motion for certifying questions for interlocutory appeal.  RTAC sought certification of questions arising from the court’s recent opinion and order granting plaintiff’s motion to amend the caption of its complaint and denying defendant’s and RTAC’s cross-motions to dismiss for lack of subject matter jurisdiction. Because such a motion would not materially advance the litigation, the court saw no need for the interlocutory appeal.  The court was also concerned that granting RTAC’s motion would result in piecemeal litigation because the interlocutory appeal would place Icdas’ action on a different track than RTAC’s companion action challenging the same administrative determination.  Therefore, it denied defendant-intervenor’s motion.

 

Remand Results Affirmed

In Mid-Continent Nail Corp. v. United States, Court No. 12-133, Slip Op. 15-122 (November 3, 3015), the court considered and reviewed the Final Results of Redetermination Pursuant to Court Remand, (hereinafter “Remand Results”) issued by the U.S. Department of Commerce (“Commerce” or “the government”).  The remand resulted from an order issued by the court on June 26, 2014, Mid Continent Nail Corp. v. United States, 38 CIT ___, 999 F. Supp. 2d 1307 (2014), where the court determined that Commerce failed to apply a regulation that it had improperly withdrawn without notice and comment, and thus remanded the case with instructions for Commerce to apply the former regulation. 

Plaintiff in this consolidated action was domestic nail producer Mid Continent Nail Corporation (“MCN” or “Plaintiff”). Defendant-Intervenors Dubai Wire FZE and Itochu Building Products Co., Inc. (collectively “Dubai Wire” or “DWE”) and Precision Fasteners, LLC (“Precision”) were producers of subject merchandise from the UAE. The court determined that Commerce had improperly applied the “targeted dumping” analysis. According to statute 19 U.S.C. § 1677f-1(d)(1)(A), Commerce “shall determine whether the subject merchandise is being sold in the United States at less than fair value” in one of two ways: by comparing “the weighted average of the normal values to the weighted average of the export prices (and constructed export prices) for comparable merchandise,” or by comparing “the normal values of individual transactions to the export prices (or constructed export prices) of individual transactions for comparable merchandise.” These price comparison methods are commonly called average-to average (“A-A”) and transaction-to-transaction (“T-T”). Commerce “may” make apply an average to transaction (“A-T”) analysis “by comparing the weighted average of the normal values to the export prices (or constructed export prices) of individual transactions for comparable merchandise” if two conditions are satisfied: (i) there is a pattern of export prices (or constructed export prices) for comparable merchandise that differ significantly among purchasers, regions, or periods of time, and (ii) [Commerce] explains why such differences cannot be taken into account using [average-to-average or transaction-to-transaction price comparisons]. 19 U.S.C. §1677f-1(d)(1)(B). There is also a Limiting Regulation, which prevents the use of A-T, if there are other means of finding targeted dumping.  The court explicitly stated that Commerce apply this limiting regulation on the use of A-T comparisons on remand.

On remand, Commerce applied under protest the Limiting Regulation and continued “to find that for both DWE and Precision, there was a pattern of export prices (or constructed export prices) for comparable merchandise that differed significantly among U.S. customers, regions, and time periods during the period of investigation.”  Commerce compared A-T and A-A results and found that the A-A method could not be used for DWE, and thus applied the A-T results above the de minimis threshold at 2.68% and because both results were de minimisregardless as to what analysis was used for Precision, it applied the A-A results at 0%.  As per the Statement of Administrative Action, because Commerce only has to explain its reasons for not using one of the standard comparison methods - either A-A or T-T, it limited its explanation as to why the A-A method was not used.  Thus, according to Commerce, it was not necessary for Commerce to explain its reasons for not using T-T analysis.   Because the court was not persuaded by the other parties’ reasoning in discrediting Commerce’s targeted dumping analysis – that there was no substantial evidence to support it or that Commerce incorrectly found targeting by time period based on increases in Dubai Wire’s prices,  the court upheld the remand results. 

 

Motion to Amend Complaint in Antidumping Lawsuit Granted

Allowing the plaintiff in a challenge to an antidumping determination to amend its Complaint to raise a new count did not unduly prejudice the defendants and would be allowed, according to a recent decision of the United States Court of International Trade.

In AnGiang Fisheries Import and Export Joint Stock Company et al v. United States, Slip Op. 15-125 (November 3, 2015), a plaintiff moved for leave to amend its (already once-amended) Complaint to add a new count. The Complaint already alleged that the Commerce Department had incorrectly determined the dumping rate for a mandatory respondent during the annual review of the antidumping order against Certain Frozen Fish Fillets from the Socialist Republic of Vietnam. The plaintiffs’ proposed amendment would add an additional count to their Complaint charging that, since the “all others” rate was based on the incorrectly calculated rate for the mandatory respondent, that rate, too should be changed.

The government and the domestic petitioners opposed the amendment, charging that because the plaintiffs had not raised the argument at the administrative level, they had waived it, and that any amendment of the complaint would be futile. The Court noted that defendants would not be unduly prejudiced by the amendment, that allowing or denying leave to amend was in the discretion of the Court, and that the “failure to exhaust administrative remedies” argument was best considered in connection with the merits of the case. The Court, per Judge Clare Kelly, granted leave to amend.

 

Commerce’s Refusal to Allow Withdrawal of Review Request Unreasonable

“Every time I try to get out, they drag me back in”, is a line associated with  Mafia movies,  but might have been applied to the facts in Glycine & More Inv. v. United States, Slip Op. 15-124 (November 3, 2015).

The case involved an annual review of the antidumping duty order on Glycine from China. Baoding, a Chinese producer/exporter, requested an annual review of its exports. The domestic petitioner requested that Commerce conduct an annual review of all exporters.  Section 351.213(d)(1) of Commerce’s regulations indicate that a review request may be withdrawn within 90 days, and that this period may be extended in extraordinary circumstances. On the 90th day, the domestic petitioners withdrew their request for a review. Seven (7) days later, Baoding asked Commerce to extend the regulatory period for withdrawing a review request, and to allow it to withdraw its request. Baoding explained that, at the time the deadline for withdrawing the request passed, it did not know the results of the prior administrative review of the order.

Commerce told Baoding that it didn’t need to answer the agency’s questionnaires while Commerce considered the request for an extension. Subsequently, Commerce denied the request for an extension of time, conducted a review of Baoding’s entries, and assessed a 453.79% dumping rate for the company based on “facts available” – since Baoding had not answered the agency’s questionnaires.

Glycine & More, the importer of some of the glydine exported by Baoding, sued to challenge the final results of the review, arguing that Commerce had acted unreasonably when it denied Baoding’s request for an extension of time to withdraw its request. The Court, per Chief Judge Timothy Stanceu, agreed. Reviewing the regulatory history of 19 C.F.R. §351.213(d)(1), the Court found that while the regulation sought to prevent parties from “gaming” the system, or withdrawing review requests after Commerce had devoted considerable efforts to the review, the Court concluded that the regulation also contemplated situations like this one, where a party’s decision on whether to seek review would depend on the outcome of a prior review.  While Commerce’s interpretation of its regulation was entitled to considerable deference, the Court said, its interpretation in this case was not reasonable. The case was remanded to Commerce with instructions to rescind the administrative review.

 

Court Orders Remand in Prior Review of Glycine Antidumping Order to Correct Margin Errors

The Commerce Department erred in calculating the antidumping duty rate for a Chinese producer/exporter of glycine, the Court of International Trade recently held, remanding the agency’s determination for reconsidering.

Baoding Mangtong Fine Chemistry Ltd. v. United States, Slip Op. 15-124 (November 3, 2015) involved Commerce’s review of the antidumping order on glycine from China. In the preliminary results of the review, Commerce assigned Baoding a preliminary LTFV margin of zero. Then, making a “currency adjustment”, it revised its preliminary determination, setting a dumping rate of 457.74%. Thus was adjusted to a mere 453.79% in the final determination.

The CIT held that the enormous adjustment, and the resulting enormous antidumping rate, were unreasonable, and that Commerce had violated its statutory duty to determine the most accurate dumping margins possible.  Noting that, in reality, a 453.79% dumping margin was essentially “commercially impossible”, the Court indicated that a company selling goods at such margins would show enormous financial losses – while Baoding was profitable during the period of review.  Commerce, the Court said, had “lost sight of the purpose of the antidumping statute”, which is “remedial, not punitive”. The Court remanded the case to Commerce with instructions for the agency to determine a margin based on Baoding’s commercial reality.