Hyundai Electric & Energy Systems Co., Ltd. v. United States

Slip Op. 20-153
UNITED STATES COURT OF INTERNATIONAL TRADE
HYUNDAI ELECTRIC & ENERGY
SYSTEMS CO., LTD.,
Plaintiff,
v.
UNITED STATES,
Defendant,
and
ABB INC. AND SPX TRANSFORMER
SOLUTIONS, INC.,
Defendant-Intervenors.
Before: Mark A. Barnett, Judge
Court No. 20-00108
Public Version
OPINION AND ORDER
[Plaintiff’s motions to supplement the record and for leave to file a reply brief are
granted. Defendant’s request for leave to file a surreply or, in the alternative, for oral
argument is denied.]
Dated: October 30, 2020
David E. Bond, William J. Moran, and Ron Kendler, White & Case LLP, of Washington,
DC, for Plaintiff Hyundai Electric & Energy Systems Co., Ltd.
Kelly A. Krystyniak, Trial Counsel, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, DC, for Defendant United States. With her on
the brief were Jeffery Bossert Clark, Acting Assistant Attorney General, Jeanne E.
Davidson, Director, and L. Misha Preheim, Assistant Director. Of counsel on the brief
was David W. Richardson, Senior Counsel, Office of Chief Counsel for Trade
Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.
R. Alan Luberda, David C. Smith, and Melissa M. Brewer, Kelley Drye & Warren LLP, of
Washington, DC, for Defendant-Intervenors ABB Inc. and SPX Transformer Solutions,
Inc.
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Barnett, Judge: This matter is before the court on Plaintiff Hyundai Electric &
Energy Systems Co., Ltd.’s (“Hyundai”) motion to supplement the administrative record
in the U.S. Department of Commerce’s (“Commerce” or “the agency”) final results of the
sixth administrative review of the antidumping duty order on large power transformers
(“LPTs”) from the Republic of Korea for the period of review August 1, 2017, to July 31,
2018 (“the POR”). See Confidential Pl.’s Mot. to Suppl. the R. (“Hyundai’s Mot.”), ECF
No. 28; see generally Large Power Transformers From the Republic of Korea, 85 Fed.
Reg. 21,827 (Dep’t Commerce Apr. 20, 2020) (final results of antidumping duty admin.
review; 2017–2018) (“Final Results”), ECF No. 24-4, and accompanying Issues and
Decision Mem., A-580-867 (Apr. 14, 2020) (“I&D Mem.”), ECF No. 24-5. Defendant
United States (“the Government”) and Defendant-Intervenors ABB Inc. and SPX
Transformer Solutions, Inc. (together, “Defendant-Intervenors”) oppose Hyundai’s
motion to supplement. See Confidential Def.’s Opp’n to Pl.’s Mot. to Suppl. the Admin.
R. (“Gov’t’s Resp.”), ECF No. 32; Confidential Def.-Ints.’ Opp’n to Pl.’s Mot. to Suppl.
the Admin. R. (“Def.-Ints.’ Resp.”), ECF No. 35.
Hyundai also filed a motion for leave to file a reply brief. See Confidential Pl.’s
Mot. for Leave to File Reply to Def.’s Opp’n to Pl.’s Mot. to Suppl. the R. (“Hyundai’s
Mot. for Leave”), ECF No. 37. The Government filed a response to Hyundai’s motion
for leave in which it deferred to the court as to whether to grant the motion but
requested that the court allow the Government to file a surreply to Hyundai’s reply or, in
the alternative, permit oral argument should the court grant Plaintiff’s motion. See
Def.’s Resp. to Pl.’s Mot. For Leave to File Reply (“Gov’t’s 2nd Resp.”), ECF No. 39.
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For the following reasons, the court grants Hyundai’s motions for leave to file a
reply and to supplement the record. The court denies the Government’s request for
leave to file a surreply or for oral argument.
B ACKGROUND
In the Final Results, Commerce relied on total adverse facts available (or “total
AFA”) to determine Hyundai’s margin of 60.81 percent. 85 Fed. Reg. at 21,828.
Commerce’s reliance on total AFA was based, in part, on the agency’s finding that
Hyundai’s U.S. sales database was incomplete. I&D Mem. at 6. Commerce
“discovered [that] one LPT [] had been omitted from Hyundai’s U.S. sales database,
even though the associated documentation show[ed] that it was produced in Korea and
is covered by the [POR].” Id. At issue are documents related to the sale of that LPT.
Hyundai stated that production for the LPT was transferred from Korea to the
United States and, thus, its sales database was reliable. See id. at 7. At verification, a
Commerce analyst requested information supporting this statement. See id.; Statement
of Joshua DeMoss Under 28 U.S.C. § 1746 (“DeMoss Decl.”) ¶ 3, ECF No. 32-1.
Hyundai provided two documents: a test report (“the Test Report”)1 and a nameplate
document (“the Nameplate”), both related to the sale of the LPT. See Statement of
Justin R. Becker Under 28 U.S.C. § 1746 (“Becker Decl.”) ¶¶ 5–6, ECF No. 28-2;
DeMoss Decl. ¶ 3; Statement of John K. Drury Under 28 U.S.C. § 1746 (“Drury Decl.”) ¶
3, ECF No. 32-2; Hyundai’s Mot. at 1, Attachs. 1, 2. The Commerce analyst reviewed
the documents and discussed them with another Commerce analyst at verification. See
1 The Test Report was issued by Hyundai Power Transformers, located in Alabama.
See Hyundai’s Mot at 2.
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DeMoss Decl. ¶ 3; Drury Decl. ¶ 3. The two Commerce analysts determined that the
documents did not contain information regarding where the LPT was produced and, for
that reason, did not include the documents as verification exhibits. DeMoss Decl. ¶ 3;
Drury Decl. ¶ 3.
Commerce did not discuss either document in its determination. See I&D Mem.
at 6–8 (discussing the basis for Commerce’s finding that Hyundai failed to report that
the LPT at issue was produced in Korea and imported to the United State). Commerce
did discuss other evidence related to this issue and determined that such evidence
failed to substantiate Hyundai’s contention that the LPT was manufactured in the United
States. See id. Thus, Commerce found that Hyundai’s failure to report the importation
and sale of this LPT undermined the reliability of Hyundai’s U.S. sales database,
warranting total AFA. See id. at 8, 14.
D ISCUSSION
I. 	The Court Grants Hyundai’s Motion for Leave to File a Reply
Absent leave of court, parties may not file a reply brief to a non-dispositive
motion. See U.S. Court of International Trade (“USCIT”) Rule 7(d); Retamal v. United
States Customs & Border Prot., 439 F.3d 1372, 1377 (Fed. Cir. 2006) (noting that the
court may allow reply briefs for non-dispositive motions). Here, Hyundai’s proposed
reply brief aids the court’s understanding of the disagreement between the Parties with
respect to the circumstances surrounding the presentation of the documents at
verification and Commerce’s decision not to include them in the verification exhibits.
See generally Confidential Pl.’s Reply to Def.’s Opp’n to Pl.’s Mot. to Suppl. the R.
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(“Hyundai’s Reply”), ECF No. 37-2. Thus, the court grants Hyundai’s motion for leave to
file a reply brief.
While the court grants Hyundai’s motion for leave, the court denies the
Government’s request to file a surreply or, in the alternative, oral argument to address
Hyundai’s motion for leave. The Government does not raise any objections to
Hyundai’s motion but requests permission to file a response to Hyundai’s reply should
the court grant Hyundai’s motion. Gov’t’s 2nd Resp. at 1–2. Again, the court has
discretion whether to allow a reply—or in this case, a surreply—for non-dispositive
motions. See Retamal, 439 F.3d at 1377. The Government’s contention that Hyundai’s
reply contains new factual and legal assertions is unsubstantiated2 and, thus, fails to
persuade the court to grant the Government’s request. See Gov’t’s 2nd Resp.
The Government alternatively requested the opportunity to respond to Hyundai’s
reply at oral argument. Gov’t’s 2nd Resp. at 2. However, the court has already
declined the Parties’ proposal for oral argument on Hyundai’s motion to supplement
during a teleconference regarding the Parties’ proposed scheduling order. See Order
(Aug. 10, 2020), ECF No. 27 (entering a scheduling order that does not provide for oral
argument on the motion to supplement as proposed the Parties’ Proposed Scheduling
Order (Aug. 6, 2020), ECF No. 26-1). Moreover, oral argument is unnecessary to the
court’s ruling.
2 The Government did not submit a proposed surreply to aid in the court’s consideration
of the request.
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For these reasons, the court grants Hyundai’s motion for leave to file a reply and
denies the Government’s request to file a surreply.
II. 	The Administrative Record is Incomplete
A. Legal Framework
The court’s review of the Final Results is limited to the record upon which
Commerce’s determination is based. See 19 U.S.C. § 1516a(b)(1)(B)(i) and (b)(2); cf.
Camp v. Pitts, 411 U.S. 138, 142 (1973) (stating that the administrative record is the
“focal point” of the court’s review). The administrative record is defined to include “all
information presented to or obtained by the [agency] . . . during the course of the
administrative proceeding.” 19 U.S.C. § 1516a(b)(2)(A)(i); see also USCIT Rule
73.2(a)(1).
The administrative record is not necessarily “those documents that the agency
has compiled and submitted as ‘the’ administrative record”; rather the administrative
record “consists of all documents and materials directly or indirectly considered by
agency decision-makers and includes evidence contrary to the agency’s position.” F. Lli
De Cecco Di Filippo Fara San Martino S.P.A. v. United States (“F. Lli De Cecco”), 21
CIT 1124, 1128–29, 980 F. Supp. 485, 488–89 (1997) (citation omitted) (denying the
agency’s motion to strike affidavits because the affidavits constituted part of the record).
The court will consider matters outside of the administrative record submitted by
the agency when “there has been a strong showing of bad faith or improper behavior on
the part of the officials who made the determination or when a party demonstrates that
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there is a reasonable basis to believe the administrative record is incomplete.”3 F. Lli
De Cecco, 21 CIT at 1226, 980 F. Supp. at 487 (citation omitted).
B. Parties’ Arguments
Hyundai argues that because the Commerce analyst reviewed the Test Report
and the Name Plate, both documents should have been included in the record. See
Hyundai’s Mot. at 2 (citing 19 U.S.C. § 1516a(b)(2)(A)(i)). Hyundai avers that without
the Test Report and the Nameplate, the record is incomplete, thereby frustrating judicial
review of the Final Results. See id. at 4. Hyundai also argues that the court should
allow the documents to be added to the record pursuant to the “bad faith or improper
behavior” exception. See id. at 5 (citing Jacobi Carbons AB v. United States, 41 CIT
___, ___, 222 F. Supp. 3d 1159, 1194 (2017)).
The Government argues that the versions of the documents attached to
Hyundai’s motion differ materially from the versions presented to Commerce at
verification. See Gov’t’s Resp. at 5–6 (asserting that the “nameplate” pages of the
3 Defendant-Intervenors urge the court to deny Hyundai’s motion to supplement the
record because the court may only allow supplementation of the record in limited
circumstances, which are not present here. See Def.-Ints.’ Resp. at 4 (citing as
examples instances when “there is new, changed, or extraordinary information that was
not available during the investigation, or when the party makes a strong showing of bad
faith or improper behavior by agency decision makers”). Defendant-Intervenors are
mistaken. Hyundai asserts that the record submitted by Commerce is incomplete, not
that the court should supplement an otherwise complete record. See Hyundai’s Mot. at
1 (asserting that documents are missing from the record). As Defendant-Intervenors
are aware, the court may “order completion . . . of the record in light of clear evidence
that the record was not properly designated or [on] the identification of reasonable
grounds that documents considered by the agency were not included in the record.”
Def.-Ints.’ Resp. at 5 (quoting JSW Steel (USA) Inc. v. United States, Slip Op. 20-111,
2020 WL 4515923, at *6 (CIT Aug. 5, 2020)).
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documents were not offered and are not referenced in the table of contents). The
Government argues further that if Hyundai had offered the versions of the documents
attached to its motion and explained how the documents support its contention that the
LPT at issue was produced in the United States, Commerce would have included such
an explanation in the verification report. See id. at 6. The Government also argues that
Commerce appropriately declined to accept the documents that Hyundai attempted to
place in the record because the documents (in the form submitted at verification) were
not responsive to Commerce’s request for information supporting Hyundai’s contention
that the LPT at issue was produced in the United States. See id. at 7. Finally, the
Government argues that Hyundai has not satisfied its burden of demonstrating that
Commerce’s behavior was improper. See id. at 10; see also Def.-Ints.’ Resp. at 8–9.
C. Analysis
The record is defined to include all the information “presented or obtained” by
Commerce during the administrative review. 19 U.S.C. § 1516a(b)(2)(A)(i); USCIT Rule
73.2(a)(1). While Commerce may exclude certain documents from the record, see e.g.,
Acciai Speciali Terni S.p.A. v. United States, 24 CIT 1211, 1214–15, 120 F. Supp. 2d
1101, 1104 (2000) (affirming Commerce’s exclusion of untimely filed sales information),
nevertheless, the record is not limited to information that Commerce finds convincing or
plans to rely on for its determination, to the exclusion of information which Commerce
finds unconvincing or chooses not to rely on. The substantial evidence standard of
review demands a broad approach to the record because it requires Commerce to
consider evidence that “fairly detracts” from the agency’s findings. Universal Camera
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Corp. v. N.L.R.B., 340 U.S. 474, 488 (1951); Nippon Steel Corp. v. United States, 458
F.3d 1345, 1351 (Fed. Cir. 2006). Here, the court finds that the administrative record is
incomplete because it lacks information presented to and evaluated by Commerce
officials in relation to the agency’s decision regarding the place of production for the
LPT in question.
First, the Government concedes that the Commerce analyst requested, obtained,
and considered a version of the Test Report and Nameplate but did include them in the
exhibits to the verification report. See Gov’t’s Resp. at 10; DeMoss Decl. ¶ 3; Drury
Decl. ¶ 3. Under these circumstances, the analyst’s consideration of the documents
was sufficient to trigger Commerce’s obligation to include the documents presented to
him in the administrative record. See 19 U.S.C. § 1516a(b)(2)(A)(i) (requiring
Commerce to include in the administrative record “all information presented to or
obtained by the [agency] . . . during the course of the administrative proceeding”)
(emphasis added); USCIT Rule 73.2(a)(1). Therefore, without the documents, the
administrative record is incomplete.
Second, the court rejects the Government’s contention that the versions of the
documents attached to Hyundai’s motion to supplement the record materially differ from
the versions presented to Commerce. See Gov’t’s Resp. at 5–6. As discussed above,
the record should have included the documents provided in response to the Commerce
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analyst’s request. Commerce’s failure to include those documents deprives the court of
a credible basis upon which evaluate the Government’s contention. 4
Third, excluding the documents in question from the administrative record would
frustrate meaningful judicial review. The documents at issue relate to Commerce’s
finding that the LPT in question was produced in Korea rather than the United States.
While the Government asserts that the documents only speak to where the LPT was
tested and not where it was produced, see Gov’t’s Resp. at 11, as Hyundai notes, the
verification report indicates that many of Hyundai’s customers travel to Korea to observe
the testing of LPTs prior to shipment to the United States, suggesting a relationship
between the place of production and the place of testing, see Hyundai’s Reply at 6; see
also [Hyundai’s] Submission of the Test Report Reviewed by the Dep’t at Verification
(Dec. 30, 2019) at 2, ECF No. 37-3 (asserting that the Test Report shows the LPT was
produced in Alabama). Thus, excluding the documents inhibits the court’s ability to
determine whether the record supports Commerce’s finding that Hyundai failed to
provide documentation supporting its contention that the LPT in question was produced
in the United States.5 See I&D Mem. at 6–8.
4 The Government avers that the declarations by the analysts establish that the
documents attached to Hyundai’s motion to supplement the record differ from those
provided at verification. See Gov’t’s Resp. at 7–8; see also DeMoss Decl. ¶¶ 5–6; Drury
Decl. ¶¶ 5–6. Hyundai, however, offers a declaration attesting that the documents
attached to its motion are copies of the documents reviewed by Commerce at
verification. See Becker Decl. ¶ 5. The court does not have a basis to find one
declaration more credible than another.
5 The Government appears to argue that the court should deny Hyundai’s motion to
supplement the administrative record based on Commerce’s discretion to reject
untimely submitted new factual information. See Gov’t’s Resp. at 8, 12. However,
Commerce requested additional documentation at verification and then declined the
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Because the court finds that the administrative record is incomplete, the court
need not consider whether to allow supplementation based on the “bad faith or improper
behavior” exception. See Jacobi Carbons, 222 F. Supp. 3d at 1194.
C ONCLUSION AND ORDER
In accordance with the foregoing, it is hereby
ORDERED that Hyundai’s motion for leave to file a reply (ECF No. 37) is
granted; and it is further
ORDERED that Hyundai’s motion to supplement the record (ECF No. 28) is
granted and the court accepts the two documents attached thereto (ECF No. 28-2) as
part of the administrative record.
The court will contact the parties to schedule a status conference.
/s/ 	Mark A. Barnett
Mark A. Barnett, Judge
Dated: October 30, 2020
New York, New York
proffered information as non-responsive to its request for information on the location of
the LPT’s production. See, e.g., DeMoss Decl. ¶ 3. Commerce did not reject the
documents at verification as untimely new factual information. In this situation, the court
is not intruding upon the agency’s authority to enforce its regulatory deadlines; rather,
under the circumstances presented here, documents that the analysts considered
irrelevant to their verification exercise are asserted to be relevant to the court’s review.
The court is unable to review the agency’s determination, including that of the analysts’
finding that the documents were not determinative of the production location of the LPT
in question, in the absence of the documents themselves.
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