Pro-Team Coil Nail Enterprise Inc. et al v. United States

Slip Op. 19-169
UNITED STATES COURT OF INTERNATIONAL TRADE
PRO-TEAM COIL NAIL ENTERPRISE,
INC., ET AL.,
Plaintiffs,
UNICATCH INDUSTRIAL CO., LTD., ET
AL.,
Consolidated Plaintiffs,
and
S.T.O. INDUSTRIES, INC.,
Plaintiff-Intervenor,
v.
UNITED STATES,
Defendant,
and
MID CONTINENT STEEL & WIRE, INC.,
Defendant-Intervenor.
Before: Mark A. Barnett, Judge
Consol. Court No. 18-00027
PUBLIC VERSION
OPINION AND ORDER
[Remanding in part and sustaining in part the final results of the U.S. Department of
Commerce’s first administrative review of the antidumping duty order on certain steel
nails from Taiwan.]
Dated: December 19, 2019
Ned H. Marshak, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of New
York, NY, argued for Plaintiffs Pro-Team Coil Enterprise, Inc. and PT Enterprise Inc.,
Consolidated Plaintiffs Unicatch Industrial Co., Ltd. and TC International, Inc., and
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Consolidated Plaintiffs Hor Liang Industrial Corp., and Romp Coil Nails Industries Inc.
With him on the briefs were Max F. Shutzman and Andrew T. Schutz.
John R. Magnus, TradeWins LLC, of Washington, DC, argued for Consolidated Plaintiff
PrimeSource Building Products, Inc.
Ronald M. Wisla, Lizbeth R. Levinson, and Brittney R. Powell, Fox Rothschild LLP, of
Washington, DC, for Plaintiff-Intervenor S.T.O. Industries, Inc.
Sosun Bae, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, DC, argued for Defendant United States. With
her on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson,
Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was
Natan P.L. Tubman, Attorney, Office of the Chief Counsel for Trade Enforcement &
Compliance, U.S. Department of Commerce, of Washington, DC.
Adam Gordon, The Bristol Group LLC, of Washington, DC, argued for Defendant-
Intervenor Mid Continent Steel & Wire, Inc. With him on the brief was Ping Gong.
Barnett, Judge: This consolidated action is before the court on five motions for
judgment on the agency record pursuant to U.S. Court of International Trade (“CIT”)
Rule 56.2 challenging the final results of the U.S. Department of Commerce’s
(“Commerce” or “the agency”) first administrative review of the antidumping duty order
on certain steel nails from Taiwan. See Certain Steel Nails From Taiwan, 83 Fed. Reg.
6,163 (Dep’t Commerce Feb. 13, 2018) (final results of antidumping duty admin. review
and partial rescission of admin. review; 2015-2016) (“Final Results”), ECF No. 20-2, and
accompanying Issues and Decision Mem, A-583-854 (Feb. 6, 2018) (“I&D Mem.”), ECF
No. 20-3. 1
1 The administrative record for this case is divided into a Public Administrative Record
(“PR”), ECF No. 20-4, and a Confidential Administrative Record (“CR”), ECF No. 20-5.
Parties submitted joint appendices containing record documents cited in their briefs.
See Public J.A. (“PJA”), ECF No. 54; Confidential J.A. (“CJA”), ECF Nos. 55 (Vol. I), 55-
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Plaintiff Pro-Team Coil Nail Enterprise, Inc. (“Pro-Team”) is a Taiwanese
producer of subject merchandise; Plaintiff PT Enterprise Inc. (“PT”) is Pro-Team’s
affiliated exporter. PT and Pro-Team (together, “PT/Pro-Team”) contest Commerce’s
use of total facts otherwise available with an adverse inference (referred to as “total
adverse facts available” or “total AFA”) on the basis that PT/Pro-Team failed to timely
provide quantity and value (“Q&V”) figures concerning Pro-Team’s home market sales
and never provided the figures in the form and manner requested. Confidential Pls.’
Mot. for J. on the Agency R., ECF No. 30, and Confidential Mem. of Law in Supp. of []
Pls.’, Pro-Team Coil Nail Enter., Inc. and PT Enter. Inc. Mot. for J. on the Agency R.
(“PT/Pro-Team’s Mem.”), ECF No. 30; Confidential Pl. PT’s Reply to Def.’s Opp’n to
PT’s Mot. for J. on the Agency R. (“PT/Pro-Team’s Reply”), ECF No. 44.
Consolidated Plaintiff Unicatch Industrial Co., Ltd. (“Unicatch”) is a Taiwanese
producer of subject merchandise; Consolidated Plaintiff TC International, Inc. (“TC Int’l”)
is Unicatch’s affiliated U.S. reseller. Unicatch and TC Int’l (together, “TC/Unicatch”)
contest Commerce’s use of total AFA to determine Unicatch’s margin after concluding
that Unicatch failed to provide a complete cost reconciliation. Confidential Pls.’ Mot. for
J. on the Agency R., ECF No. 32, and Confidential Mem. of Law in Supp. of Consol.
Pls’, Unicatch Indus. Co., Ltd. and TC Int’l, Inc. Mot. for J. on the Agency R.
(“TC/Unicatch’s Mem.”), ECF No. 32; Confidential Pl. Unicatch’s Reply to Def.’s Opp’n
to Unicatch’s Mot. for J. on the Agency R. (TC/Unicatch’s Reply”), ECF No. 46.
1 (Vol. II), 55-2 (Vol. III), 55-3 (Vol. IV). The court references the confidential version of
the relevant record documents, unless otherwise specified.
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Consolidated Plaintiff PrimeSource Building Products, Inc. (“PrimeSource”), a
U.S. importer of subject merchandise, contests Commerce’s decision to assign PT/Pro-
Team and Unicatch rates based on total adverse facts available. Mot. for J. Upon the
Agency R. under Rule 56.2 of Consol. Pl. PrimeSource Building Prods., Inc., ECF No.
29, and Mem. of P&A in Supp. of Rule 56.2 Mot. for J. on the Agency R by Consol. Pl.
PrimeSource Building Prods. Inc. (“PrimeSource’s Mem.”), ECF No. 29-1; Pl.
PrimeSource’s Resp. to Def.’s Opp’n to Mot. for J. on the Agency R. (“PrimeSource’s
Reply”), ECF No. 43.
Consolidated Plaintiffs Hor Liang Industrial Corp. (“Hor Liang”) and Romp Coil
Nails Industries (“Romp”) (together, “HL/Romp”) are Taiwanese producers and
exporters of subject merchandise that were not selected for individual examination and
received the “all-others” rate based on PT/Pro-Team’s and Unicatch’s adverse rates.
HL/Romp challenge Commerce’s summary denial of their ministerial error allegation
and seek to preserve their right to obtain a revised rate in the event that PT/Pro-Team
or TC/Unicatch succeed in their challenges. Pls.’ Mot. for J. on the Agency R., ECF No.
34, and Mem. of Law in Supp. of Consol. Pls., Hor Liang Indus. Corp. and Romp Coil
Nails Indus. Inc. Mot for J. on the Agency R. (“HL/Romp’s Mem.”) at 2, ECF No. 34; Pls.
Hor Liang Indus. Corp. and Romp Coil Nails Indus. Inc.’s Reply to Def.’s Opp’n to Pls.’
Mot. for J. on the Agency R., ECF No. 48.
Plaintiff-Intervenor S.T.O. Industries, Inc. (“S.T.O. Industries”), a U.S. importer of
subject merchandise, supports the motions filed by PT/Pro-Team and TC/Unicatch.
See Pl.-Int.’s Mot. for J. on the Agency R. (“S.T.O.’s Mot.”), ECF No. 35.
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Defendant United States (“the Government”) and Defendant-Intervenor Mid
Continent Steel & Wire, Inc. (“Mid Continent”), a domestic producer of subject
merchandise and the petitioner in the underlying proceeding, defend the Final Results.
Confidential Def.’s Mem. in Opp’n to Pls.’ R. 56.2 Mots. for J. upon the Admin. R.
(“Gov’t’s Resp.”), ECF No. 37; Def.-Int.’s Resp. Br. (“Mid Continent’s Resp.”), ECF No.
42.
For the reasons discussed herein, the court remands Commerce’s use of the
facts otherwise available with respect to PT/Pro-Team; remands Commerce’s use of an
adverse inference when selecting from among the facts otherwise available with respect
to Unicatch; declines to reach HL/Romp’s first claim; and defers resolving HL/Romp’s
second claim.
B ACKGROUND
In July 2015, Commerce issued an order imposing antidumping duties on certain
steel nails from Taiwan. See Certain Steel Nails From the Republic of Korea, Malaysia,
the Sultanate of Oman, Taiwan, and the Socialist Republic of Vietnam, 80 Fed. Reg.
39,994, 39,996 (Dep’t Commerce July, 13, 2015) (antidumping duty orders). In
September 2016, Commerce initiated the first administrative review of that order.
Initiation of Antidumping and Countervailing Duty Admin. Reviews, 81 Fed. Reg. 62,720
(Dep’t Commerce Sept. 12, 2016). The period of review (“POR”) was May 20, 2015,
through June 30, 2016. Id. at 62,722.
Commerce initially selected PT and Bonuts Hardware Logistics Co., LLC
(“Bonuts”) as mandatory respondents. Selection of Respondents for the 2015–2016
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Admin. Review of the Antidumping Duty Order on Certain Steel Nails from Taiwan (Nov.
29, 2016) at 1, PR 38, CJA Vol. I, Tab 3. On February 9, 2017, Commerce selected
Unicatch as an additional mandatory respondent after Bonuts indicated its intent not to
participate in the review. Selection of Additional Mandatory Respondent (Feb. 9, 2017)
at 1, 3–4, PR 76, CJA Vol. II, Tab 17.
On August 7, 2017, Commerce published its preliminary results. Certain Steel
Nails From Taiwan, 82 Fed. Reg. 36,744 (Dep’t Commerce Aug. 7, 2017) (prelim.
results of antidumping duty admin. review and partial rescission of admin. review; 2015–
2016) (“Preliminary Results”), PR 154, PJA Tab 29. Commerce used total adverse
facts available to assign PT/Pro-Team and Bonuts preliminary weighted-average
dumping margins of 78.17 percent—the dumping margin alleged in the petition
underlying the original investigation. Id. at 36,744–45; Decision Mem. for Prelim.
Results of Antidumping Duty Admin. Review (July 31, 2017) (“Prelim. Mem.”) at 12–13,
PR 155, PJA Tab 30. Commerce preliminarily calculated a company-specific weighted-
average dumping margin of 34.20 percent for Unicatch. Prelim. Results, 82 Fed. Reg.
at 36,745. In accordance with 19 U.S.C. § 1673d, Commerce preliminarily assigned
Unicatch’s calculated rate to Romp and Hor Liang. Prelim. Results, 82 Fed. Reg. at
36,744. 2
2 To calculate dumping margins for non-examined companies—such as Romp and Hor
Liang—Commerce is guided by 19 U.S.C. § 1673d(c)(5). See Prelim. Results, 82 Fed.
Reg. at 36,744. By its terms, 19 U.S.C. § 1673d applies to market economy
investigations, not administrative reviews. As a general rule, however, Commerce looks
to section 1673d(c)(5) for guidance when calculating the rate for non-examined
companies in administrative reviews. See I&D Mem. at 5. Section 1673d(c)(5)(A)
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Commerce published the Final Results on February 13, 2018. In a change from
the Preliminary Results, Commerce used total AFA to determine the rate for Unicatch
as well as PT/Pro-Team and Bonuts; thus, all individually-examined respondents
received final dumping margins of 78.17 percent. Id. at 6,164. Consequently, the all-
others rate assigned to Romp and Hor Liang increased to 78.17 percent to reflect “the
rate determined for all mandatory respondents.” Id. at 6,164; see also supra, note 2.
On February 20, 2018, Romp and Hor Liang filed ministerial error comments
regarding Commerce’s calculation of the all-others rate. See Romp/HR Liang’s
Rejected Req. to Correct Clerical Error (Feb. 20, 2018), PR 196, PJA Tab 49. On
February 27, 2018, Commerce rejected Romp and Hor Liang’s ministerial error
allegation. Rejection of Submission (Feb. 27, 2018), PR 209, PJA Tab 54. Commerce
explained that it had not made a ministerial error as that term is defined by statute and
regulation, and, “[b]ased upon [its] analysis of the comments received, [] will not amend
[Romp’s and Hor Liang’s] margins.” Id. The following day, Commerce removed the
ministerial error allegation from the administrative record. Rejection of Submissions
provides that the “all-others rate” assigned to non-examined companies is calculated as
“the weighted average of the estimated weighted average dumping margins” assigned
to individually-examined companies, “excluding any zero and de minimis margins, and
any margins determined entirely under section 1677e of this title [i.e., on the basis of
adverse facts available].” 19 U.S.C. § 1673d(c)(5)(A). If, however, the dumping
margins assigned to all individually-examined companies are zero, de minimis, or based
on adverse facts available, Commerce “may use any reasonable method to establish
the estimated all-others rate for exporters and producers not individually
investigated, including averaging the estimated weighted average dumping margins
determined for the exporters and producers individually investigated.” Id.
§ 1673d(c)(5)(B).
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(Feb. 28, 2018), PR 207, PJA Tab 52. On March 15, 2018, Commerce denied
HL/Romp’s request to reinstate their ministerial error allegation on the administrative
record. Rejection of Submission (Mar. 15, 2018), PR 215, PJA Tab 57.
In February 2018, PT/Pro-Team, TC/Unicatch, HL/Romp, and PrimeSource
commenced actions challenging the Final Results. Summons, ECF No. 1; Unicatch
Indus. Co., Ltd., et al. v. United States, No. 18-cv-00028 (CIT Feb. 22, 2018); Hor Liang
Indus. Corp., et al. v. United States, No. 18-cv-00029 (CIT Feb. 22, 2018); PrimeSource
Building Prods., Inc. v. United States, No. 18-cv-00030 (CIT Feb. 23, 2018). On
September 24, 2018, the court denied the Government’s motion to dismiss HL/Romp’s
complaint pursuant to CIT Rule 12(b)(1) for lack of subject matter jurisdiction and
granted S.T.O. Industries’ motion to intervene. Hor Liang Indus. Corp. v. United States,
42 CIT ___, ___, 337 F. Supp. 3d 1310, 1329 (2018). The court also dismissed counts
one and three of HL/Romp’s amended complaint for failure to exhaust administrative
remedies. Id. at 1324–28. On September 27, 2018, the court consolidated the actions
under lead court no. 18-00027. Order (Sept. 27, 2018), ECF No. 25.
The court heard oral argument on the pending motions on November 21, 2019.
Docket Entry, ECF No. 60.
J URISDICTION AND S TANDARD OF REVIEW
The court has jurisdiction pursuant to section 516A(a)(2)(B)(iii) of the Tariff Act of
1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2012), 3 and 28 U.S.C. § 1581(c).
3 All citations to the Tariff Act of 1930, as amended, are to Title 19 of the U.S. Code,
and references to the U.S. Code are generally to the 2012 edition. However, The Trade
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The court will uphold an agency determination that is supported by substantial evidence
and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i).
DISCUSSION
I. 	Commerce’s Authority to Determine Margins Based on Total Adverse Facts
Available
When “necessary information is not available on the record,” or an interested
party “withholds information” requested by Commerce,” “fails to provide” requested
information by the submission deadlines “or in the form and manner requested,”
“significantly impedes a proceeding,” or provides information that cannot be verified,
Commerce “shall . . . use the facts otherwise available.” 19 U.S.C. § 1677e(a).
Commerce’s authority to use the facts otherwise available is subject to 19 U.S.C.
§ 1677m(d). See id. According to subsection 1677m(d), if Commerce
determines that a response to a request for information . . . does not
comply with the request, [Commerce] shall promptly inform the person
submitting the response of the nature of the deficiency and shall, to the
extent practicable, provide that person with an opportunity to remedy or
explain the deficiency in light of the time limits established for the
completion of investigations or reviews . . . .
Preferences Extension Act (“TPEA”), Pub. L. No. 114–27, § 502, 129 Stat. 362, 383–84
(2015), made several amendments to the antidumping and countervailing duty laws.
Section 502 of the TPEA amended 19 U.S.C. § 1677e. See TPEA § 502. The TPEA
amendments affect all antidumping duty determinations made on or after August 6,
2015. See Dates of Application of Amendments to the Antidumping and Countervailing
Duty Laws Made by the Trade Preferences Extension Act of 2015, 80 Fed. Reg. 46,793
(Dep’t Commerce Aug. 6, 2015). Accordingly, all references to 19 U.S.C. § 1677e are
to the amended version of the statute.
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Id. If the respondent’s subsequent submission is also deficient or untimely, Commerce
may “disregard all or part of the original and subsequent responses,” subject to
subsection 1677m(e). Id.
Section 1677m(e) provides that Commerce may not “decline to consider
information that is . . . necessary to the determination but does not meet all the
applicable requirements” when the information is timely submitted; “the information can
be verified”; “the information is not so incomplete that it cannot serve as a reliable basis
for reaching the applicable determination”; the proponent of the information “has
demonstrated that it acted to the best of its ability in providing the information and
meeting the requirements established by [Commerce]”; and “the information can be
used without undue difficulties.” Id. § 1677m(e).
Additionally, when Commerce determines that a respondent “has failed to
cooperate by not acting to the best of its ability to comply with a request for information,”
it “may use an inference that is adverse to the interests of that party in selecting from
among the facts otherwise available.” Id. § 1677e(b). “Compliance with the ‘best of its
ability’ standard is determined by assessing whether a respondent has put forth its
maximum effort to provide Commerce with full and complete answers to all inquiries in
an investigation.” Nippon Steel Corp. v. United States, 337 F.3d 1373, 1382 (Fed. Cir.
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2003); 4 see also Essar Steel Ltd. v. United States, 678 F.3d 1268, 1275–76 (Fed. Cir.
2012).
Commerce generally uses total adverse facts available to determine dumping
margins when “none of the reported data is reliable or usable.” Zhejiang DunAn Hetian
Metal Co., Ltd. v. United States, 652 F.3d 1333, 1348 (Fed. Cir. 2011) (citation omitted);
see also Nat’l Nail Corp. v. United States, 43 CIT ___, ___, 390 F. Supp. 3d 1356, 1374
(2019) (explaining that “Commerce uses ‘total adverse facts available’” when it applies
“adverse facts available not only to the facts pertaining to specific sales or information . .
. not present on the record, but to the facts respecting all of respondents’ production
and sales information that the [agency] concludes is needed for an investigation or
review”) (citation omitted).
II. 	Commerce’s Use of Total AFA to Determine PT/Pro-Team’s Margin
A. Additional Background
Dumping margins are determined generally from the difference between the
normal value and the export price or constructed export price of the subject
merchandise. See 19 U.S.C. § 1673. To calculate normal value, Commerce typically
uses “the price at which the foreign like product is first sold . . . for consumption in the
exporting country, in the usual commercial quantities and in the ordinary course of trade
and, to the extent practicable, at the same level of trade as the export price or
4 Nippon Steel predates the TPEA. However, the relevant statutory language discussed
in that case remains unchanged. Compare 19 U.S.C. § 1677e(b) (2012), with 19 U.S.C.
§ 1677e(b)(1) (2015).
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constructed export price.” Id. § 1677b(a)(1)(B)(i). However, if “the aggregate quantity
(or value) of the foreign like product sold in the exporting country . . . is less than 5
percent of the aggregate quantity (or value) of sales of the subject merchandise to the
United States,” id. § 1677b(a)(1)(C), Commerce may look to third country sales or base
normal value on constructed value (“CV”), 5 id. § 1677b(a)(1)(B)(ii), (a)(1)(C), (a)(4); see
also 19 C.F.R. § 351.404(a)–(b). 6
Accordingly, in order to ascertain the proper basis for determining normal value,
Commerce instructed PT/Pro-Team to report the quantity and value of subject
merchandise sold during the period of review in or to the United States. Req. for
Information (Nov. 29, 2016) at A-1, PR 39–41, CJA Vol. I, Tab 4. Commerce further
instructed:
If your home market does not meet the five percent threshold . . . , report
the sales to each of the three largest (by volume) third-country markets
(provided each meets the five percent threshold) in the [Q&V] chart . . . . If
the volume of your largest third-country market sales of the foreign like
product is also less than five percent of the volume of your sales to the
United States of the subject merchandise, do not report this market. If this
is the case, you are required to respond to section D of this questionnaire.
Id. at A-2. PT/Pro-Team reported that it had no sales in the home market or any third
country markets and, thus, Pro-Team would respond to Commerce’s section D
questionnaire. PT Enter. Sec. A Resp. (Jan. 4, 2017) (“PT’s AQR”) at 3, CR 8–16, PR
5 Constructed value consists of the cost of production, selling, general, and
administrative expenses, profit, and other expenses incidental to preparing the subject
merchandise for export to the United States. 19 U.S.C. § 1677b(e).
6 Commerce typically considers sufficiency in terms of the aggregate quantity of sales
in the home market but will consider the aggregate value of sales “if quantity is not
appropriate.” 19 C.F.R. § 351.404(b)(2).
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57–59, CJA Vol. I, Tab 10. PT/Pro-Team provided a Q&V chart reflecting PT’s sales to
the United States. Id. at Ex. A-1.
PT/Pro-Team’s section C questionnaire response contained additional
information regarding its sales to the United States. PT Enter. Sec. C Resp. (Jan. 19,
2017) (“PT’s CQR”), CR 23–25, PR 70, CJA Vol. II, Tab 12. However, the sales
reconciliation worksheet appended to that response contained a summary amount
reflecting POR sales of subject merchandise in the home market. Id.at Ex. C-2, Sales
Reconciliation Worksheet, Sec. II, Line Item I.4. 7 Accompanying spreadsheets
disaggregated PT’s and Pro-Team’s respective sales to U.S. and Taiwanese markets.
See id.
Commerce issued PT/Pro-Team a supplemental questionnaire seeking
clarification as to whether Pro-Team or PT sold “the merchandise under review” in the
domestic market and, if so, to identify all such products. PT Enter. Secs. A–D Suppl.
Questionnaire Resp. (Apr. 21, 2017) (“PT’s 1st Suppl. QR”) at 8–9, CR 37–38, PR 109,
CJA Vol. II, Tab 23. PT/Pro-Team responded that Pro-Team sold the merchandise at
issue to domestic resellers for export, but PT did not have any domestic sales. Id.
PT/Pro-Team submitted a list of all products sold by Pro-Team in the domestic market.
Id. at Ex. SA-7.
7 The worksheet indicates that Pro-Team sold NT$[[ 	]]—equal to
U.S.$ [[ 	]]—worth of subject merchandise in Taiwan for the combined
calendar year 2015 and January to June 2016. PT’s CQR at Ex. C-2, Sales
Reconciliation Worksheet, Sec. II, Line Item I.4. The domestic sales value equals about
[[ 	]] percent of PT’s U.S.$ [[ 	]] in sales to the United States. See id.
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Soon thereafter, Mid Continent submitted a letter to Commerce in which it
identified the inconsistency between PT/Pro-Team’s section A questionnaire response
regarding the lack of home market sales and PT/Pro-Team’s supplemental
questionnaire response acknowledging sales in the domestic market. Comments on PT
Enter. Inc. and Pro-Team Coil Nail Enter., Inc.’s Suppl. Secs. A, C, and D Questionnaire
Resp. (May 1, 2017) at 2, CR 45, CJA Vol. III, Tab 26. Mid Continent requested
Commerce to instruct PT/Pro-Team to provide revised Q&V data to the extent the
products sold in the home market constituted subject merchandise in order to “confirm
that its home market remains non-viable” as the basis for normal value. Id.
Commerce issued PT/Pro-Team a second supplemental questionnaire
requesting: (1) “a detailed description of each of the products listed” in Exhibit SA-7
(products sold in the home market by Pro-Team); (2) an explanation “why the product is
not subject merchandise”; (3) and, to the extent any products listed in Exhibit SA-7 are
subject merchandise, revised home market Q&V figures. Suppl. Questionnaire (May
16, 2017) at 4, CR 49, PR 119, CJA Vol. III, Tab 29. PT/Pro-Team responded that all
products listed in Exhibit SA-7 consisted of subject merchandise and provided a
detailed description of each in Exhibit SS-5. PT Enter. Second Suppl. Questionnaire
Resp. (June 6, 2017) (“PT’s 2nd Suppl. QR”) at 3, CR 56–65, PR 135–136, CJA Vol. III,
Tab 36. PT/Pro-Team did not, however, provide revised Q&V figures. See id.
Mid Continent alerted Commerce to PT/Pro-Team’s failure to provide the revised
Q&V figures and urged Commerce to use total AFA on the basis that PT/Pro-Team’s
omission “fully supports an inference that its home market in fact is viable, because
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otherwise PT would have reported the data requested.” Initial Comments on PT Enter.
Inc. and Pro-Team Coil Nail Enter., Inc.’s Second Suppl. Questionnaire Resp. (June 9,
2017) at 3–4, PR 139, PJA Tab 24. PT/Pro-Team sought to rebut Mid Continent’s
assertion, explaining that its omission of home market Q&V data from the chart
appended to its initial section A questionnaire response and its statement that it did not
sell the merchandise under review in the home market resulted from its failure to
account for Pro-Team’s home market sales. PT Enter./Pro-Team Resp. to Pet’r’s Initial
Comments on PT and Pro-Team’s Second Suppl. Questionnaire Resp. (June 14, 2017)
(“PT’s Rebuttal Cmts.”) at 2 n.1, CR 72–73, CJA Vol. IV, Tab 40. PT/Pro-Team also
stated that it had “inadvertently neglected” to include revised Q&V figures in its second
supplemental questionnaire response, id. at 2 n.2, and attached a schedule reflecting
Q&V data for Pro-Team’s POR domestic sales of subject merchandise, id. at Ex. P-2
(“the Q&V Schedule”). PT/Pro-Team further explained that Q&V data for Pro-Team’s
home market sales was on the record since it filed its original sections C and D
questionnaire responses in January 2017. Id. at 3–4 (citing PT’s CQR, Ex. C-2; PT
Enter. Sec. D Resp. (Jan. 19, 2017) (“PT’s DQR”) at Ex. D-7.2, CR 26–27, CJA Vol. II,
Tab 13). PT/Pro-Team noted that the total quantity of home market sales was “clearly
de minimis, well below the 5 [percent] threshold, and [] the [agency]’s use of constructed
value to determine normal value, as it did during the [original] investigation, is absolutely
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appropriate.” Id. at 4. 8 	Commerce rejected PT/Pro-Team’s arguments and
preliminarily used total AFA to determine PT/Pro-Team’s margin. Prelim. Results, 82
Fed. Reg. at 36,744–45.
PT/Pro-Team filed an administrative case brief in which it argued, inter alia, that
judicial precedent from the U.S. Court of Appeals for the Federal Circuit (“Federal
Circuit”) required Commerce to weigh the principles of finality and accuracy before
disregarding the Q&V Schedule and using total AFA. Admin. Case Br. of PT (Sept. 22,
2017) at 17–20, CR 93, PR 175, CJA Vol. IV, Tab 57 (discussing NTN Bearing Corp. v.
United States, 74 F.3d 1204, 1205, 1206–08 (Fed. Cir. 1995), Timken U.S. Corp. v.
United States, 434 F.3d 1345, 1346–48 (Fed. Cir. 2006), and their progeny). 9
Commerce denied PT/Pro-Team’s request and continued to use total AFA to determine
PT/Pro-Team’s final dumping margin. I&D Mem. at 11–15. Commerce reasoned that
NTN Bearing and Timken were inapplicable on the basis that the “issues” in this case
“go far beyond mere clerical errors.” Id. at 14 & nn.48–52 (citations omitted).
8 Specifically, Pro-Team sold [[ 	]] kilograms of subject merchandise in the home
market, which represents [[ 	]] percent of PT’s U.S. sales quantity. PT’s Rebuttal
Cmts. at 4.
9 NTN Bearing held that Commerce abused its discretion when it refused to consider
corrections to clerical errors based on the untimely submission of the corrective
information submitted soon after Commerce issued its preliminary determination. 74
F.3d at 1207–09. Timken found that Commerce erred in initially refusing to consider
correcting errors identified after the preliminary determination but before the final
determination. 434 F.3d at 1351–54 (affirming the CIT’s remand to the agency for
reconsideration of its initial position). Nevertheless, the Timken court sustained
Commerce’s subsequent decision not to utilize the corrective information. 434 F.3d at
1351–57.
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Regarding its authority to use the facts otherwise available, Commerce
concluded that PT/Pro-Team’s failure to submit home market Q&V information within
the time provided or in the form and manner requested meant that “the record lacks the
necessary information to determine the viability of PT/Pro-Team’s home market or the
accuracy of the reported data.” Id. at 13. Commerce further found that “PT/Pro-Team
withheld certain home market sales data that was requested by Commerce” and
“significantly impeded the proceeding by requiring multiple questionnaires to address
the basic threshold issue” of home market viability. Id. Commerce determined to use
total facts otherwise available “because ‘the missing information is core to the
antidumping analysis and leaves little room for the substitution of partial facts [available]
without undue difficulty.’” Id. at 14 & n.45 (quoting Mukand Ltd. v. United States, 767
F.3d 1300, 1308 (Fed. Cir. 2014)). Commerce further concluded that PT/Pro-Team’s
conduct surrounding its belated submission of home market Q&V figures meant that the
“requirements of [19 U.S.C. § 1677m(d) and (e)] have been satisfied” and the use of
“total AFA is warranted.” Id. at 14.
B. Commerce Must Reconsider its Decision to Use Total AFA
PT/Pro-Team contends that Commerce abused its discretion when it disregarded
the Q&V Schedule; Commerce’s conclusions that PT/Pro-Team withheld information,
failed to provide information within the time provided or in the form and manner
requested, or significantly impeded the proceeding are unsupported by substantial
evidence; and the record likewise does not support Commerce’s use of an adverse
inference. PT/Pro-Team’s Mem. at 19–44; PT/Pro-Team’s Reply at 8, 11–21.
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PrimeSource advances substantially similar arguments. See PrimeSource’s Mem. at 5–
17; PrimeSource’s Reply at 7–16. S.T.O. Industries adopts by incorporation PT/Pro-
Team’s arguments. S.T.O.’s Mot. at 1.
The court finds that Commerce’s determination that the “record lacks the
necessary information to determine the viability of PT/Pro-Team’s home market or the
accuracy of the reported data,” I&D Mem. at 13, is unsupported by substantial evidence.
Thus, this matter is remanded for further consideration.
As previously noted, Commerce did not reject the Q&V Schedule (or the rebuttal
comments to which it was appended) on the basis that it contained untimely filed factual
information pursuant to its regulatory authority to reject such information. See I&D
Mem. at 13–14; 19 C.F.R. § 351.302(d)(1)(i). 10 Rather, Commerce disregarded the
Q&V Schedule because PT/Pro-Team submitted the information seven days after the
deadline for its second supplemental questionnaire response and failed to submit the
information in the form and manner requested. See I&D Mem. at 13. 11 Section 1677e
10 For this reason, the Government’s assertion that Commerce properly disregarded the
Q&V Schedule because it contained untimely new factual information is impermissible
post hoc reasoning the court may not consider. See Burlington Truck Lines, Inc. v.
United States, 371 U.S. 156, 168–69 (1962); Gov’t’s Resp. at 23–24.
11 Commerce’s determination that PT/Pro-Team “withheld” home market sales data, I&D
Mem. at 13, is unsupported by substantial evidence. PT/Pro-Team provided information
related to Pro-Team’s domestic sales in its section C questionnaire response, first and
second supplemental questionnaire responses, and, finally, in the Q&V Schedule. See
PT’s CQR at Ex. C-2; PT’s 1st Suppl. QR at 8–9, Ex. SA-7; PT’s 2nd Suppl. QR at 3,
Ex. SS-5; Q&V Schedule.
Commerce’s determination that PT/Pro-Team “significantly impeded the
proceeding,” I&D Mem. at 13, 14, is also unsupported by substantial evidence.
Commerce supports its finding with several conclusory sentences but fails to specify
any particular impediment. See id. The issuance of supplemental questionnaires is not
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Consol. Court No. 18-00027 	Page 19
permits Commerce to use the facts otherwise available when a respondent “fails to
provide [necessary] information by the deadlines for submission of the information or in
the form and manner requested”; however, that authority is subject to 19 U.S.C.
§ 1677m(e) and a remand is required for Commerce to conduct the proper analysis
required by that statutory provision.
Commerce’s assertion that the statutory requirements for section 1677m(e)
“have been satisfied,” I&D Mem. at 14, is largely conclusory and there is no indication
that Commerce considered whether the Q&V Schedule “is not so incomplete that it
cannot serve as a reliable basis for reaching the applicable determination” or whether it
“can be used without undue difficulties,” 19 U.S.C. § 1677m(e)(3),(5). Moreover,
Commerce’s reliance on the untimeliness of PT/Pro-Team’s filing to disregard the
uncommon and, as Commerce has elsewhere acknowledged, while its “strive[s] to
make viability determinations early in an investigation or review, . . . there may be
instances in which the [agency] must delay or reconsider a decision on viability.”
Antidumping Duties; Countervailing Duties, 62 Fed. Reg. 27,296, 27,358 (Dep't
Commerce May 19, 1997) (final rule); see also id. at 27,335 (noting several
circumstances potentially delaying viability determinations, such as when initial section
A questionnaire responses “are so incomplete as to hinder a party’s ability to make a
market viability allegation, or the information necessary to make a market viability
allegation is not available as part of the section A response”). Commerce’s conclusion
that PT/Pro-Team’s conduct “resulted in Commerce having to fully extend the deadline
for the preliminary results,” I&D Mem. at 14, is also unsupported by substantial
evidence. Commerce extended the deadline for several reasons, including the “need
[for] additional time to fully consider petitioner’s comments on the questionnaire
responses of the respondents” and because of the complexity of the case with regard to
“home market sales reporting, database revisions, and other issues such as the
appropriate calculation of constructed value profit.” Extension of Time Limit for Prelim.
Results of Antidumping Duty Admin. Review (June 27, 2017) at 1–2, PR 151, PJA Tab
27. Moreover, Commerce never specified how extending the deadline for the
preliminary determination constituted a significant impediment.
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Consol. Court No. 18-00027 	Page 20
information contained therein was an abuse of discretion and the agency’s finding that
PT/Pro-Team failed to act to the best of its ability lacks substantial evidence. I&D Mem.
13–15; see also 19 U.S.C. § 1677m(e)(1),(4).
Regarding the issue of untimeliness, it is well-settled that a deadline-setting
regulation that “is not required by statute may, in appropriate circumstances, be waived
and must be waived where failure to do so would amount to an abuse of discretion.”
NTN Bearing, 74 F.3d at 1207. Commerce erred in disregarding NTN Bearing and
Timken based on the agency’s conclusion that PT/Pro-Team had not made a clerical
error. I&D Mem. at 14; Gov’t’s Resp. at 22–23. 12 “Commerce is free to correct any type
of [respondent] error—clerical, methodology, substantive, or one in judgment—in the
context of making an antidumping duty determination, provided that the [respondent]
seeks correction before Commerce issues its final results and adequately proves the
need for the requested corrections.” Timken, 434 F.3d at 1353 (emphasis added); see
also Fischer S.A. Comercio, Industria and Agricultura v. United States, 34 CIT 334, 346,
700 F. Supp. 2d 1364, 1375 (2010) (“Timken and NTN Bearing both stress that, at the
preliminary results stage, Commerce abuses its discretion where it refuses to let a
respondent establish an accurate dumping margin by correcting mistakes in its
response.”).
12 The Government’s assertion that Commerce conducted the balancing required by
NTN Bearing and Timken when it “grant[ed] PT/Pro-Team multiple time extensions to
provide complete and accurate information” is disingenuous. Gov’t’s Resp. at 23 (citing
I&D Mem. at 12–14). Commerce clearly sought to distinguish NTN Bearing and Timken
and thereby avoid conducting that balancing. I&D Mem. at 14.
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Consol. Court No. 18-00027 	Page 21
When “reviewing Commerce’s decision to reject corrective information” the court
may consider “Commerce’s interest in ensuring finality, the burden of incorporating the
information, and consideration of whether the information will increase the accuracy of
the calculated dumping margins.” Bosun Tools Co. v. United States, Slip Op. 19-125,
2019 WL 4599805, at *4 (CIT Sept. 23, 2019). An evaluation of these factors has led
the court to remand Commerce’s refusal to consider corrective information (including
information to correct an omission) submitted early in the proceeding. See, e.g., id. at
*4–5; Grobest & I-Mei Indus. (Vietnam) Co. v. United States, 36 CIT 98, 123–25, 815 F.
Supp. 2d 1342, 1365–67 (2012); Fine Furniture (Shanghai) Ltd. v. United States, 36 CIT
1206, 1219–21, 865 F. Supp. 2d 1254, 1267–69 (2012); Fischer S.A., 34 CIT at 346–
50, 700 F. Supp. 2d at 1375–77.
Applying those principles here leads to the conclusion that Commerce must
reconsider its disregard of the Q&V Schedule. Finality concerns are not implicated
because PT/Pro-Team submitted the Q&V Schedule before Commerce issued the
Preliminary Results and almost eight months before Commerce issued the Final
Results. Cf. Timken, 434 F.3d at 1353 (“This court, however, has never discouraged
the correction of errors at the preliminary result stage; we have only balanced the desire
for accuracy in antidumping duty determinations with the need for finality at the final
results stage.”). Any burden would appear to be minimal given that the Q&V Schedule
summarized information already on the record and confirmed PT/Pro-Team’s early
assertion that normal value would be based on constructed value. See PT’s AQR at 3;
PT’s CQR, Ex. C-2 (reflecting a de minimis Taiwanese dollar amount of home market
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Consol. Court No. 18-00027 	Page 22
sales); Q&V Schedule (reflecting a de minimis volume of home market sales). Lastly,
Commerce’s summary assertion that “the record lacks the necessary information to
determine . . . the accuracy of the reported data,” I&D Mem. at 13, is unaccompanied by
any examination of record evidence relevant to that assessment, see PT’s Rebuttal
Cmts. at 3–4 (explaining how the Q&V figures were derived from existing record
evidence). Absent any reason to question the veracity of the Q&V figures, accuracy
concerns favor accepting the Q&V Schedule for the purpose of determining PT/Pro-
Team’s antidumping duty rate. Cf. F.lli De Cecco Di Filippo Fara S. Martino S.p.A. v.
United States, 216 F.3d 1027, 1032 (Fed. Cir. 2000) (noting that adverse rates contain
“some built-in increase intended as a deterrent to non-compliance”). Accordingly,
Commerce erred in disregarding the Q&V Schedule based on its untimeliness.
Regarding the issue of whether PT/Pro-Team acted to the best of its ability,
Commerce’s explanation for its decision to use an adverse inference consisted of a
single paragraph that mischaracterized record facts and largely restated its reasons for
using neutral facts available. See I&D Mem. at 14. Commerce faulted PT/Pro-Team for
submitting conflicting information regarding its domestic sales in response to the
agency’s supplemental questionnaires intended to afford PT/Pro-Team the
“opportunit[y] to remedy and explain the deficiencies in its reporting.” See id.
Commerce never identified the inconsistencies, however, and record evidence
demonstrates that PT/Pro-Team consistently reported Pro-Team’s home market sales
of the merchandise at issue in its first and second supplemental questionnaire
responses. PT’s 1st Suppl. QR at 8–9; PT’s 2nd Suppl. QR at 3. Commerce further
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Consol. Court No. 18-00027 	Page 23
found that “PT/Pro-Team did not respond to Commerce’s multiple requests to revise its
quantity and value data within the appropriate deadlines.” I&D Mem. at 14 (emphasis
added). However, Commerce issued a single request to PT/Pro-Team to revise its Q&V
figures in the agency’s second supplemental questionnaire. PT’s 2nd Suppl. QR at 3.
More importantly, while Commerce concludes that these issues “significantly
impeded Commerce’s ability the determine if there is a viable comparison market until
well into the proceeding,” I&D Mem. at 14, it offers no further justification for its finding
that PT/Pro-Team failed to cooperate to the best of its ability in order to support the
agency’s use of an adverse inference. Commerce must do more than simply restate its
findings ostensibly supporting the use of neutral facts available to support the use of
adverse facts available. See, e.g., Nat’l Nail Corp., 390 F. Supp. 3d at 1380; Steel
Auth. of India, Ltd. v. United States, 25 CIT 482, 488, 149 F. Supp. 2d 921, 930 (2001)
(remanding an AFA determination when the court could not discern Commerce’s
reasons for finding that the respondent, “specifically, did not put forth its maximum
effort”).
“[T]he antidumping laws are remedial not punitive.” NTN Bearing, 74 F.3d at
1208 (citing Chaparral Steel Co. v. United States, 901 F.2d 1097, 1103–1104 (Fed. Cir.
1990)). Consistent with this notion, “[t]he purpose of the adverse facts statute is ‘to
provide respondents with an incentive to cooperate’ with Commerce’s investigation, not
to impose punitive damages.” Essar Steel, 678 F.3d at 1276 (quoting F.lli De Cecco Di
Filippo Fara S. Martino S.p.A., 216 F.3d at 1032). While “inattentiveness” or
“carelessness” may merit a finding that a respondent has failed to cooperate, the statute
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Consol. Court No. 18-00027 	Page 24
“does not require perfection and recognizes that mistakes sometimes occur.” Nippon
Steel, 337 F.3d at 1382. “Commerce must devise a non-arbitrary way of distinguishing
among errors” that merit an adverse inference and errors that do not. Nippon Steel
Corp. v. United States, 25 CIT 377, 382 n.10, 146 F. Supp. 2d 835, 841 n.10 (2001).
To that end, in the Issues and Decision Memorandum, Commerce stated that it
has a practice of “consider[ing], in employing adverse inferences, the extent to which a
party may benefit from its own lack of cooperation.” I&D Mem. at 12 & n.32 (citations
omitted). There is good reason for this practice, because it seeks to ensure that a
“party does not obtain a more favorable result by failing to cooperate than if it had
cooperated fully.” Viet I–Mei Frozen Foods Co. v. United States, 839 F.3d 1099, 1109
(Fed. Cir. 2016) (citation omitted). There is no indication, however, that Commerce
considered this issue in connection with its decision to disregard all of PT/Pro-Team’s
reported information and use total AFA. Without more, Commerce’s conclusion that
PT/Pro-Team failed to “participate to the best of its ability,” I&D Mem. at 15, is
unsupported by substantial evidence, see Nippon Steel, 337 F.3d at 1382.
In sum, Commerce’s authority to use the facts otherwise available—neutral or
adverse—is circumscribed by 19 U.S.C. § 1677m(e). In disregarding the Q&V
Schedule, Commerce elevated form over substance without examining whether the
information was sufficiently complete and usable without undue difficulties. Commerce
also failed to balance finality and accuracy considerations before dismissing the Q&V
Schedule as untimely. Finally, Commerce’s determination that PT/Pro-Team failed to
cooperate to the best of its ability lacks substantial evidence and reasoned explanation.
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Consol. Court No. 18-00027 	Page 25
Accordingly, Commerce’s decision to use total AFA to determine PT/Pro-Team’s
dumping margin must be remanded for reconsideration.
III. 	Commerce’s Use of Total AFA to Determine Unicatch’s Margin
A. Additional Background
Commerce requests complete cost reconciliations from mandatory respondents
in order to “meaningfully analyze” the respondent’s “section D questionnaire cost
response and calculate a reliable margin.” I&D Mem. at 16. Accordingly, Commerce
instructed Unicatch on how to reconcile its per-unit cost of production and constructed
value figures reported in the cost database “to the amounts recorded in [the
respondent’s] cost accounting system and to the cost of manufacturing recorded in [the
respondent’s] financial accounting system.” Req. for Information (Nov. 29, 2016) (“Initial
QRE”) at D-10, PR 42–44, CJA Vol. I, Tab 5. Taking what it called a “top down”
approach, Commerce instructed Unicatch to submit reconciliation worksheets that
began with the “fiscal year income statement” and, ultimately, ended with the “total of
the per-unit manufacturing costs submitted to the [agency].” Id. at D-12 to D-13.
Additionally, Commerce instructed Unicatch to “identify and quantify the following
reconciling items”: (1) the “differences between the reporting methodology and the
normal books and records”; (2) the “cost of merchandise not under consideration,” i.e.,
non-subject merchandise; (3) the “cost of merchandise under consideration not sold in
the United States or comparison market”; (4) the “cost of merchandise under
consideration sold in the U.S. or comparison market that you have been excused from
reporting”; and (5) “all other reconciling items.” Id. at D-13.
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On January 19, 2017, Unicatch responded to the questionnaire. Unicatch Sec.
[D] Resp. (Jan. 19, 2017) (“Unicatch’s DQR”), CR 30–32, CJA Vol. II, Tab 15. Unicatch
submitted a worksheet that reconciled the cost of sales reported in its financial
accounting system to its “POR Warehouse-Entries in Regular Production.” Id. at 28, Ex.
D-16. Unicatch also submitted a worksheet listing the per-unit cost of manufacture for
all products it produced, which included subject and non-subject merchandise. Id. at
Ex. D-17. Unicatch informed Commerce that the costs reported in Exhibit D-17 “can tie”
to the data reported in its CV calculation worksheet. Id. at 30, Ex. D-20.
Commerce issued Unicatch a supplemental questionnaire in which it requested
Unicatch to revise its cost reconciliation. Suppl. Questionnaire (Mar. 27, 2017)
(“Unicatch’s 1st Suppl. QRE”) at 9, CR 36, CJA Vol. II, Tab 20. Commerce explained
that the submitted reconciliation “does not reconcile the sales from Unicatch’s audited
financial statements . . . to the extended TOTCOM [i.e., total cost of manufacturing] in
the submitted cost database.” Id. In response, Unicatch identified a clerical error in the
amount reported for its cost of sales and explained that its initial worksheet reconciled
its cost of sales to Unicatch’s total cost of production for subject and non-subject
merchandise. Unicatch Sec. A, C, D Suppl. Resp. (Apr. 25, 2017) (“Unicatch’s 1st
Suppl. QR”) at 17, CR 40–44, CJA Vol. II, Tab 25 (citing Unicatch’s DQR, Ex. D-16).
Unicatch resubmitted an exhibit (Exhibit D-16 as Exhibit SD-9A) and provided additional
exhibits and information seeking to demonstrate that its reported per-unit costs
reconcile to its CV costs. Id. at 17–18, Exs. SD-9B to SD-9E.
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Consol. Court No. 18-00027 	Page 27
Commerce issued Unicatch a second supplemental questionnaire seeking further
clarification regarding Unicatch’s cost reconciliation. Specifically, Commerce directed
Unicatch to “revise [its] cost reconciliation in Exhibit SD-9A/Exhibit D-16” to, among
other things, “ensure that it starts with the cost of sales per your audited financial
statements . . . and ends with the total extended TOTCOM as per the submitted cost
database,” and “[e]xplain and provide documentary support for each reconciling item.”
Second Suppl. Questionnaire (May 16, 2017) (“Unicatch’s 2nd Suppl. QRE”) at 6, CR
48, CJA Vol. III, Tab 28.
Unicatch submitted a revised cost reconciliation worksheet that began with the
cost of sales from its financial statements and ended with its POR cost of production for
subject and non-subject merchandise. Unicatch Sec. A, C, D Second Suppl. Resp.
(June 7, 2017) (“Unicatch’s 2nd Suppl. QR”) at Ex. SSD-3, CR 66–70, CJA Vol. IV, Tab
37. The worksheet contained line items representing the aggregate cost of production
for different products that tied to unit costs reported in a separate worksheet (Exhibit
SSD-4) which, in turn, tied to Unicatch’s revised CV costs (Exhibit SSD-2). Id. at 15–16,
Exs. SSD-2, SSD-4. Commerce relied on this information to calculate Unicatch’s cost
of production for purposes of calculating a preliminary dumping margin. Prelim. Mem.
at 20; see also Analysis for the Prelim. Results of the 2015–2016 Antidumping Duty
Admin. Review of Certain Steel Nails from Taiwan: Unicatch Indus. Co. Ltd. (July 31,
2017) at 3, CR 83–85, CJA Vol. IV, Tab 48.
In its administrative case brief, Mid Continent argued that Commerce should
apply partial AFA to Unicatch’s reported costs because Unicatch failed to reconcile fully
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Consol. Court No. 18-00027 	Page 28
its cost of sales to the total cost of manufacturing reported in the cost database. Case
Br. (Sept. 22, 2017) at 36, CR 95, PR 177, CJA Vol. IV, Tab 59 (averring that Unicatch’s
cost reconciliation “fails to demonstrate the final, crucial step of the reconciliation down
to the submitted costs”). Mid Continent also argued that Unicatch failed to fully explain
all “reconciling items” reflected in its cost reconciliation worksheet. Id. Mid Continent
suggested different ways in which Commerce might apply partial AFA to Unicatch’s
reported costs. Id. at 37.
In response, Unicatch explained that the cost of sales from its financial
statements and reflected in Exhibit SSD-3 links to its CV costs (detailed in Exhibit SSD-
2) through Exhibit SSD-4, which contains Unicatch’s POR cost of production for all
product types it produces. Admin. Reply Br. of Unicatch (Sept. 27, 2017) at 37, CR 97,
PR 180, CJA Vol. IV, Tab 61. Unicatch explained further that the costs reported in
Exhibit SSD-2 differed from the costs in the cost database by an amount consisting of
the cost of four product types that it sold, but did not produce, during the period of
review. Id. at 38.
For the Final Results, Commerce disregarded Unicatch’s submitted data and
determined a dumping margin based on total AFA. I&D Mem. at 16–19. Commerce
concluded that Unicatch failed to reconcile the difference between the cost of sales
reflected in its financial statements and the extended total cost of manufacturing
reported in the cost database. Id. at 16. At most, according to Commerce, Unicatch
indicated how Commerce might complete the reconciliation using a schedule containing
non-subject merchandise. Id. at 19. Commerce rejected Mid Continent’s “gap-filling
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alternative adjustment” because “it only leads to more questions regarding the
completeness of the reconciliation, the reconciling items, and whether all costs were
properly included or excluded. Id. at 18. Commerce explained that its practice is to
reject all of a respondent’s submitted information “when flawed and unreliable cost data
renders any price-to-price comparison impossible.” Id. at 18 & n.65 (quoting Issues and
Decision Mem. for the Final Determination of the Investigation of Prestressed Concrete
Steel Wire Strand from Mexico, A-201-831 (Dec. 8, 2003) (“Wire Strand from Mexico
Mem.”) at 13, available at https://enforcement.trade.gov/frn/summary/mexico/03-30384-
1.pdf (last visited Dec. 19, 2019)).
Commerce further found that Unicatch’s “fail[ure] to submit a complete cost
reconciliation” reflected less than full cooperation and merited use of an adverse
inference. Id. at 20; see also id. (“Unicatch had multiple chances to answer
Commerce’s questionnaires and simply did not answer the questions asked. It further
instructed Commerce how to get the completed reconciliation without actually providing
it.”). Commerce assigned Unicatch the dumping margin alleged in the petition
underlying the original investigation based on its practice, which “is to select, as an AFA
rate, the higher of: (1) the highest dumping margin alleged in the petition, or (2) the
highest calculated rate of any respondent in the investigation.” Id. at 21–22 & n.80
(citation omitted).
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B. Substantial Evidence Supports Commerce’s Use of Total Facts
Otherwise Available; However, Commerce’s Use of an Adverse
Inference Must be Remanded
TC/Unicatch asserts that Commerce’s use of the facts otherwise available with
an adverse inference lacks substantial evidence; Commerce failed to comply with 19
U.S.C. § 1677m(d) and (e) before turning to the facts available; Commerce erred in
disregarding all of Unicatch’s submitted data—both sales and costs—to instead rely on
total AFA; and the agency failed to comply with the statutory requirement to evaluate
whether Unicatch’s conduct merited selection of the highest rate. TC/Unicatch’s Mem.
at 20–44; TC/Unicatch’s Reply at 6–23. PrimeSource and S.T.O. Industries adopt by
incorporation Unicatch’s arguments. PrimeSource’s Mem. at 17; S.T.O.’s Mot. at 1.
The court sustains Commerce’s decision to use total facts otherwise available to
determine Unicatch’s margin; however, Commerce’s use of an adverse inference lacks
substantial evidence. For that reason, the court declines to reach TC/Unicatch’s
arguments regarding Commerce’s selection of an adverse rate.
1. 	Commerce’s Use of the Facts Otherwise Available
On three occasions, Commerce instructed Unicatch to submit a complete cost
reconciliation that began with the cost of sales reflected in the company’s financial
statements and ended with the reported per-unit costs submitted to the agency. Initial
QRE at D-12 to D-13; Unicatch’s 1st Suppl. QRE at 9; Unicatch’s 2nd Suppl. QRE at 6.
TC/Unicatch does not dispute Commerce’s core finding that Unicatch failed to complete
the requested cost reconciliation. See I&D Mem. at 16, 19; TC/Unicatch’s Mem. at 20
(stating that “all of the information necessary to reconcile” the financial statements down
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to the reported costs was on the record) (emphasis added); id. at 25 (recognizing the
need to reconcile the difference between the figures specific to subject merchandise
and the reported figures for subject and non-subject merchandise); TC/Unicatch’s Reply
at 17 (noting the missing “numerical summary of Unicatch’s [narrative] explanation of
the differences”).
TC/Unicatch’s argument that Commerce failed to afford Unicatch an opportunity
to remedy its deficient cost reconciliation is unpersuasive. TC/Unicatch’s Mem. at 28–
34; TC/Unicatch’s Reply at 9, 15–16. TC/Unicatch advocates for leniency on the basis
that Commerce now provides—but did not then provide—a template for completing a
cost reconciliation. TC/Unicatch’s Mem. at 33. 13 However, Commerce’s first
supplemental questionnaire explicitly instructed Unicatch to reconcile its cost of sales
from the financial statements down “to the extended TOTCOM in the submitted cost
database” and identified the (proprietary) ending value. Unicatch’s 1st Suppl. QRE at 9.
Commerce repeated its request for a complete cost reconciliation in the second
supplemental questionnaire. Unicatch’s 2nd Suppl. QRE at 6. At no time did
TC/Unicatch express a lack of understanding of the request or seek further guidance
from Commerce on how to respond to the request.
TC/Unicatch objects further that Commerce failed to identify the reconciling items
for which it needed explanations and, thus, it reasonably believed that it did not need to
13 TC/Unicatch appended a copy of the template to its moving brief. See TC/Unicatch’s
Mem., Ex. 1 at D-13. The template is not, however, part of the administrative record
before the court and will be afforded no further consideration. 19 U.S.C.
§ 1516a(b)(1)(B)(i).
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explain certain offsets to product-specific costs for internal consumption of non-subject
merchandise. TC/Unicatch’s Reply at 8–9. However, Commerce expressly requested
explanations for “all [] reconciling items.” Initial QRE at D-13; see also Unicatch’s 2nd
Suppl. QRE at 6 (requesting explanations and “documentary support for each
reconciling item”). The line items reflecting costs for internal consumption of non-
subject merchandise are necessary to reconcile Unicatch’s total cost of production to its
product-specific costs. See Unicatch’s 2nd Suppl. QR at Ex. SSD-3. Thus, substantial
record evidence supports Commerce’s conclusion that it lacked explanations for each
reconciling item. I&D Mem. at 17 & n.61; Final Results Analysis of the 2015–2016
Antidumping Duty Admin. Review of Certain Steel Nails from Taiwan: Unicatch Indus.
Co. Ltd. (Unicatch) (Feb. 6, 2018) (“Unicatch’s Final Analysis Mem.”) at 2, CR 98–99,
CJA Vol. IV, Tab 67. In sum, Unicatch had three opportunities to submit a complete
cost reconciliation; Commerce was not required to provide a fourth opportunity. See,
e.g., Maverick Tube Corp. v. United States, 857 F.3d 1353, 1361 (Fed. Cir. 2017)
(finding that Commerce complied with 19 U.S.C. § 1677m(d) when it issued a
supplemental questionnaire informing respondent of the defective submission). 14
14 TC/Unicatch’s reliance on Hyundai Heavy Industries, Co. v. United States, 42 CIT
___, ___, 332 F. Supp. 3d 1331, 1347–48 (2018), and Borusan Mannesmann Boru
Sanayi v. Ticaret A.S. v. United States, 39 CIT ___, ___, 61 F. Supp. 3d 1306, 1348–49
(2015), for the proposition that Commerce’s supplemental questionnaires failed to
adequately apprise Unicatch of the deficiencies lacks merit. See TC/Unicatch’s Mem. at
30–33. Not only were the supplemental questionnaires specific as to the requirements
for completing the cost reconciliation, but the cited cases are inapposite. Hyundai
Heavy faulted Commerce for its finding that a respondent withheld information regarding
accessories to subject merchandise “that was specifically requested” when the agency
never defined the term “accessories” in response to the respondent’s requests for a
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TC/Unicatch’s argument that Unicatch’s cost reconciliation met the requirements
for use pursuant to 19 U.S.C. § 1677m(e) also lacks merit. TC/Unicatch’s Mem. at 24–
25. Following Commerce’s issuance of the Preliminary Results and in light of Mid
Continent’s expressed concerns, Commerce attempted to complete the reconciliation
but found a discrepancy in the data. Unicatch’s Final Analysis Mem. at 1–2. While
TC/Unicatch asserts that Commerce simply misunderstood the submitted data and
ignored Unicatch’s explanation for the discrepancy, TC/Unicatch’s Reply at 10, it was
Unicatch’s responsibility to build a clear record—not Commerce’s, QVD Food Co. v.
United States, 658 F.3d 1318, 1324 (Fed. Cir. 2011). Commerce’s finding that it lacked
complete and reliable cost data that could be used without undue difficulties is
supported by substantial evidence and, thus, Commerce was within its discretion to
disregard Unicatch’s cost information for the Final Results. I&D Mem. at 18; NTN
Bearing, 74 F.3d at 1208 (“[P]reliminary determinations are ‘preliminary’ precisely
because they are subject to change.”); Hyundai Steel Co. v. United States, 42 CIT ___,
___, 319 F. Supp. 3d 1327, 1343 (2018) (“Commerce has the flexibility to change its
position from the preliminary to the final results, provided it explains the basis for the
clear definition. 332 F. Supp. 3d at 1345–48 (emphasis added). In Borusan, the court
remanded Commerce’s use of AFA when the respondent informed Commerce that
certain requested data was unnecessary to the determination and overly burdensome to
collect and Commerce failed to address the respondent’s concerns in its supplemental
questionnaire. 61 F. Supp. 3d at 1344–46. The court reasoned that Commerce’s
obligation to explain the “nature of the deficiency” included explaining why requested
information is “necessary.” Id. at 1348. Here, however, Unicatch never alerted
Commerce to any lack of clarity regarding the appropriate ending value for its
reconciliation and never averred that the requested reconciliation was unnecessary.
See I&D Mem. at 17.
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change and its decision is supported by substantial evidence and in accordance with
law.”) (internal quotation marks and citation omitted). Thus, substantial evidence
supports Commerce’s threshold finding that Unicatch’s failure to submit a complete cost
reconciliation triggered the agency’s authority to use the facts otherwise available.
2. 	Commerce’s Use of Total Facts Otherwise Available
TC/Unicatch summarily argues that Commerce erred in rejecting all sales and
cost data submitted by Unicatch based on imperfections in the cost reconciliation.
TC/Unicatch’s Mem. at 41. However, judicial and agency precedent support
Commerce’s decision to use total facts available. I&D Mem. at 18 & nn.64–66 (citing
Mukand, Ltd. v. United States, Slip Op. 13-41, 2013 WL 1339399, at *8 (CIT Mar. 25,
2013); Issues and Decision Mem. for the Final Affirmative Determination in the Less-
Than-Fair-Value Investigation of Finished Carbon Steel Flanges from Italy, A-475-835
(June 23, 2017) (“Steel Flanges from Italy Mem.”) at 10–16, available at
https://enforcement.trade.gov/frn/summary/italy/2017-13629-1.pdf (last visited Dec. 19,
2019); Wire Strand from Mexico Mem. at 18–14); see also Steel Auth. of India, 25 CIT
at 485–87, 149 F. Supp. 2d 921 at 926–928 (sustaining Commerce’s use of total AFA
when the respondent’s submission of unreliable cost of production or constructed value
information rendered impossible the price-to-price comparisons necessary to calculate
an accurate dumping margin).
When, as here, “the U.S. price cannot be compared to home market prices, the
[agency] compares the U.S. price to [constructed value]” to examine whether the
subject merchandise is sold in the United States for less than fair value. Wire Strand
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from Mexico Mem. at 13. However, “because most of the cost elements are the same
for [cost of production] and [constructed value],” the submission of unreliable cost
information impairs Commerce’s ability to calculate constructed value and establish a
basis for comparison to U.S. price. Id.; see also Steel Flanges from Italy Mem. at 13. In
that situation, requiring Commerce to use partial, rather than total, facts available would
permit respondents “to manipulate the process by submitting only beneficial information”
and would place “ultimate control to determine what information would be used for the
margin calculation” in the hands of respondents rather than Commerce. Steel Auth. of
India, 25 CIT at 487, 149 F. Supp. 2d at 928; see also Wire Strand from Mexico Mem. at
13. Absent substantive arguments from TC/Unicatch as to why those concerns are not
warranted here, substantial evidence supports Commerce’s resort to total facts
otherwise available.
3. 	Commerce’s Use of an Adverse Inference
Commerce based its decision to use an adverse inference on Unicatch’s failure
to submit a complete cost reconciliation in response to Commerce’s supplemental
questionnaires. I&D Mem. at 20. However, “[a]n adverse inference may not be drawn
merely from a failure to respond” to a request for information, “but only under
circumstances in which it is reasonable for Commerce to expect that more forthcoming
responses should have been made; i.e., under circumstances in which it is reasonable
to conclude that less than full cooperation has been shown.” Nippon Steel, 337 F.3d at
1383. “A respondent can fail to respond because it was not able to obtain the
requested information, did not properly understand the question asked, or simply
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overlooked a particular request,” and such failure is not necessarily grounds for an
adverse inference. Mannesmannrohren-Werke AG v. United States, 23 CIT 826, 841–
42, 77 F. Supp. 2d 1302, 1316 (1999) (remanding AFA determination when Commerce
never identified why a respondent’s failure to respond to two aspects of the
questionnaire “were anything more than inadvertent omissions” and the “respondent
sought to correct its deficiencies in responding to a supplemental questionnaire”).
Rather, to determine whether “less than full cooperation has been shown,” Commerce
should “examine [the] respondent’s actions and assess the extent of [the] respondent’s
abilities, efforts, and cooperation in responding to Commerce’s requests for
information.” Nippon Steel, 337 F.3d at 1382. Such examination “make[s] it possible
for a reviewing court to discern [Commerce’s] reasons for finding that [the respondent],
specifically, did not put forth its maximum effort before employing adverse inferences.”
Nat’l Nail Corp., 390 F. Supp. 3d at 1380.
Here, Commerce failed to account for evidence demonstrating Unicatch’s
attempts to comply with Commerce’s supplemental questionnaire or apprise the court of
its reasons for nevertheless finding less than full cooperation. See I&D Mem. at 20;
Nippon Steel, 337 F.3d at 1379 (directing the reviewing court to consider “the record as
a whole, including evidence that supports as well as evidence that ‘fairly detracts from
the substantiality of the evidence’”) (quoting Atl. Sugar, Ltd. v. United States, 744 F.2d
1556, 1562 (Fed. Cir. 1984)). Rather, as with PT/Pro-Team, Commerce appears to
have considered anything less than perfection as a failure to cooperate to the best of
one’s ability. The statute, however, “does not require perfection and recognizes that
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mistakes sometimes occur.” Nippon Steel, 337 F.3d at 1382. Commerce might have
bolstered its decision by complying with its stated practice of “consider[ing] . . . the
extent to which [Unicatch] may benefit from its own lack of cooperation,” but Commerce
failed to do so. See I&D Mem. at 20 & n.74 (citations omitted). Thus, while the court
sustains Commerce’s use of total neutral facts otherwise available to determine
Unicatch’s margin, Commerce’s decision to use an adverse inference lacks substantial
evidence and is remanded for reconsideration or further explanation. Accordingly, the
court will defer resolution of TC/Unicatch’s arguments regarding the adverse rate
Commerce selected pending Commerce’s redetermination on remand.
IV. 	Commerce’s Calculation of the All-Others Rate
In the event the court remands Commerce’s use of total AFA as to one or more
mandatory respondents, HL/Romp urge the court to order Commerce to recalculate the
rate assigned to non-examined respondents based on any company-specific rates
calculated in the remand proceeding. HL/Romp’s Mem. at 15–19; HL/Romp’s Reply at
2–3. The Government did not respond to this aspect of HL/Romp’s moving brief;
however, at oral argument, the Government stated that Commerce’s practice is to
recalculate the all-others rate when one or more mandatory respondents’ rates change.
Oral Arg. at 02:02:07–02:02:29 (reflecting the time stamp from the recording). In the
absence of a live dispute as to the correct method of calculating the all-others rate, the
court will not further address this issue. See Camreta v. Greene, 563 U.S. 692, 717
(2011) (the “judicial [p]ower” is to be used “to render dispositive judgments, not advisory
opinions”) (citation omitted). Additionally, HL/Romp concede that their second claim
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regarding Commerce’s summary rejection of the ministerial error allegation “is moot” in
the event the court remands Commerce’s use of total AFA to determine PT/Pro-Team’s
and Unicatch’s margin. HL/Romp’s Mem. at 23. Because the court has remanded
Commerce’s use of total AFA with respect to both mandatory respondents, the court will
not consider HL/Romp’s claim at this time.
CONCLUSION AND O RDER
In accordance with the foregoing, it is hereby:
ORDERED that Commerce’s Final Results are sustained in part and remanded
in part to the agency; and it is further
ORDERED that, on remand, Commerce shall, consistent with this opinion,
reconsider or further explain its decision to use the facts otherwise available with
respect to PT/Pro-Team and its decision to use an adverse inference when selecting
from among the facts otherwise available with respect to Unicatch; and it is further
ORDERED that Commerce shall file its remand results on or before March 18,
2020; and it is further
ORDERED that subsequent proceedings shall be governed by USCIT Rule
56.2(h); and it is further
ORDERED that any comments or responsive comments must not exceed 5,000
words.
/s/ 	Mark A. Barnett
Mark A. Barnett, Judge
Dated: December 19, 2019
New York, New York
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