The Chemours Company FC LLC v. United States

Slip Op. 19-82
UNITED STATES COURT OF INTERNATIONAL TRADE
THE CHEMOURS COMPANY FC LLC,
Plaintiff,
v.
UNITED STATES,
Defendant,
and
AGC CHEMICALS AMERICA, ET AL.,
Defendant-Intervenors.
Before: Mark A. Barnett, Judge
Consol. Court No. 18-00174
PUBLIC VERSION
OPINION AND ORDER
[Denying Plaintiff’s motion to supplement the administrative record, amend its
complaints, and remand the matter to the U.S. International Trade Commission.
Denying as moot Defendant-Intervenor’s motion to supplement the administrative
record.]
Dated: July 3, 2019
James R. Cannon, Jr., Mary J. Alves, Ulrika K. Swanson, and James E. Ransdell,
Cassidy Levy Kent (USA) LLP, of Washington, DC, for Plaintiff.
Karl S. Von Schriltz, Attorney-Advisor, Office of the General Counsel, U.S. International
Trade Commission, of Washington, DC, for Defendant. With him on the brief were
Andrea C. Casson, Assistant General Counsel for Litigation, and Roop K. Bhatti,
Attorney-Advisor.
John M. Gurley, Matthew M. Nolan, and Nancy A. Noonan, Arent Fox LLP, of
Washington, DC, for Defendant-Intervenor Gujarat Fluorochemicals Limited.
Jordan C. Kahn, Max F. Schutzman, Dharmendra N. Choudhary, and Eve Q. Wang,
Grunfeld Desiderio Lebowitz Silverman & Klestadt LLP, of New York, NY, for
Defendant-Intervenor PTFE Processors Alliance and Consolidated Defendant-
Intervenors Zhejiang Jusheng Fluorochemical Co., Ltd., Shandong Dongyue Polymer
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Material Co., Ltd., Shanghai Huayi 3F New Materials Sales Co., Ltd., Zhonghao
Chenguang Research Institute of Chemical Industry Co., Ltd., Jiangxi Lee & Man
Chemical Ltd., Jiangsu Meilan Chemical Co., Ltd., and China Chamber of Commerce of
Metals, Minerals & Chemical Importers.
Barnett, Judge: This matter is before the court on Plaintiff’s motion to
supplement the administrative record, amend its complaints, and remand the matter to
the U.S. International Trade Commission (“the ITC” or “the Commission”). Confidential
Mot. to Suppl. the Admin. R., to Am. the Compls., and to Remand the Case to the
Agency (“Pl.’s Mot.”), ECF No. 49. Defendant United States (“Defendant” or “the ITC”)
and Defendant-Intervenors oppose the motion. Confidential Def.’s Mem. in Opp’n to
Pl.’s Mot. to Suppl. the Admin. R., to Am. the Compls., and to Remand the Case to the
Agency (“Def.’s Opp’n”), ECF No. 60; Def.-Ints.’ Resp. in Opp’n to Pl.’s Mot., ECF No.
62; Confidential Gujarat Fluorochemicals Ltd.’s Resp. to Pl.’s Mot. to Suppl. the Admin.
R., to Am. the Complaints and to Remand the Case to the Agency and Gujarat
Fluorochemicals Ltd.’s Mot. to Suppl. the Admin. R. in the Event that the Court Grants
Pl.’s Mot. (“GFL’s Opp’n and Cross-Mot.”), ECF No. 64. Defendant-Intervenor Gujarat
Fluorochemicals Ltd. (“GFL”) cross-moves to supplement the administrative record in
the event the court grants Chemours’ motion. GFL’s Opp’n and Cross-Mot. at 28. For
the reasons discussed herein, Plaintiff’s motion is denied; GFL’s cross-motion is denied
as moot.
B ACKGROUND
In July 2018, the ITC issued a negative injury determining regarding
polytetrafluoroethylene resin (“PTFE resin” or “PTFE”) from India found by the U.S.
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Department of Commerce (“Commerce”) to be subsidized by the Government of India. 1
See Polytetrafluoroethylene Resin from China and India, Inv. Nos. 701-TA-588 and 731-
TA-1392-1393, USITC Pub. 4801 (July 2018) (final) (“ITC Final I”), PR 127, ECF No.
34. 2 In November 2018, the ITC issued a negative injury determination regarding PTFE
resin from the People’s Republic of China (“China”) and India found by Commerce to
have been sold in the United States at less than fair value. See Polytetrafluoroethylene
Resin from China and India, Inv. Nos. 731-TA-1392-1393, USITC Pub. 4841 (Nov.
2018) (final) (“ITC Final II”), SPR 138, ECF No. 51-1. In making its determinations
regarding material injury and threat of material injury, the ITC cumulated subject imports
from India and China. CVD Views at 29, 58. 3
1 Defendant filed a confidential administrative record (“CR”) and a public administrative
record (“PR”) associated with the countervailing duty (“CVD”) investigation at ECF Nos.
33 and 34, respectively. Defendant filed a supplemental confidential administrative
record (“SCR”) and a supplemental public administrative record (“SPR”) associated with
the antidumping duty (“AD”) investigation at ECF Nos. 52 and 51, respectively. The
respective administrative records contain the confidential versions of the relevant staff
report and views of the commission. See Confidential Views of the Commission (“CVD
Views”), CR 321, ECF No. 33-1; Confidential Staff Report (June 11, 2008) (“CVD Staff
Report”), CR 285, ECF No. 33-2; Confidential Views of the Commission (“AD Views”),
SCR 324, ECF No. 52-2; Confidential Staff Report (Oct. 24, 2018) (“AD Staff Report”),
SCR 323, ECF No. 52-1 (concerning the antidumping investigation). In the AD Views,
the Commission adopted the findings set forth in the CVD Views. See AD Views at 4-5.
The court references the confidential staff reports and views.
2 Subject PTFE resin consists of granular, dispersion, and fine powder PTFE. CVD
Staff Report at I-8—I-9. PTFE resin in the form of micropowder is excluded from the
scope of the investigation. See id. at I-9. GFL produces micropowder PTFE in addition
to in-scope PTFE. See, e.g., GFL’s Opp’n & Cross Mot. at 12 & n.22 (citation omitted)
3 To assess whether domestic producers are materially injured or threatened with
material injury “by reason of” the subject imports, 19 U.S.C. §§ 1671d(b)(1),
1673d(b)(1), the Commission considers “the volume of imports of the subject
merchandise”; “the effect of imports of [subject] merchandise on prices in the United
States for domestic like products”; and “the impact of imports of [subject] merchandise
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Plaintiff, The Chemours Company FC LLC (“Chemours”), initiated separate
actions challenging ITC Final I and ITC Final II, which the court consolidated under this
lead action. See Order to Consol. (Feb. 6, 2019), ECF No. 42. Chemours alleges that
the ITC’s determinations lack substantial evidence or are otherwise contrary to law with
respect to the Commission’s definition of the domestic injury and its analyses of material
injury and the threat of material injury. See, e.g., Compl. ¶¶ 34-49, ECF No. 8.
On March 8, 2019, Chemours filed the instant motion. See generally Pl.’s Mot.
Chemours seeks to supplement the administrative record to include “information
impugning the veracity of the foreign producer questionnaire[ responses] submitted by
[GFL], a foreign producer and exporter of [PTFE] from India.” Id. at 1. Chemours also
seeks leave to amend the complaints filed in the consolidated actions to reflect its
allegations of fraud in the questionnaire responses. Id. at 2. Chemours further requests
the court to remand ITC Final I and ITC Final II to the Commission to reconsider its
injury determinations in light of this information. See id. The court has jurisdiction
pursuant to Section 516A(a)(2)(B)(ii) of the Tariff Act of 1930, as amended, 19 U.S.C.
§ 1516a(a)(2)(B)(ii) (2012), and 28 U.S.C. § 1581(c) (2012). 4
on domestic producers of domestic like products . . . in the context of [domestic]
production operations,” id. § 1677(7)(B)(i). The ITC’s findings as to these factors rest
on data compiled from both subject countries. CVD Views at 42-43, 48, 58-61; see also
CVD Staff Report, Table VII-8.
4 Further citations to the Tariff Act of 1930, as amended are to the relevant portions of
Title 19 of U.S. Code, and all references to the U.S. Code are to the 2012 edition.
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LEGAL S TANDARDS
I. 	Supplementing the Administrative Record
The court’s review of an ITC determination is limited to the administrative record.
19 U.S.C. § 1516a(b)(1)(B)(i). The record consists of “all information presented to or
obtained by . . . the Commission during the course of the administrative proceeding, id.
§ 1516a(b)(2)(A)(i); 5 that is, “information which was before the relevant decision-maker
and was presented and considered at the time the decision was rendered,” Nucor Corp.
v. United States, 28 CIT 188, 229, 318 F. Supp. 2d 1207, 1244 (2004) (quoting Beker
Indus. Corp. v. United States, 7 CIT 313, 315 (1984)) (internal quotation marks
omitted). 6 Limiting the court’s review to the agency record furthers important efficiency
and finality considerations. See Vt. Yankee Nuclear Power Corp. v. Nat’l Res. Def.
Council, Inc., 435 U.S. 519, 554–55 (1978); Essar Steel Ltd. v. United States (“Essar
Steel I”), 678 F.3d 1268, 1277 (Fed. Cir. 2012). Nevertheless, supplementation of the
administrative record and a remand for reconsideration by the Commission may be
appropriate when “a party brings to light clear and convincing new evidence sufficient to
make a prima facie case that the agency proceedings under review were tainted by
5 The record also includes “a copy of the determination, all transcripts or records of
conferences or hearings, and all notices published in the Federal Register.” 19 U.S.C
§ 1516a(b)(2)(A)(ii).
6 Before issuing a final determination, the Commission must “cease collecting
information” and permit interested parties “a final opportunity” to submit comments on
information “the parties have not previously had an opportunity to comment.” 19 U.S.C.
§ 1677m(g). By regulation, the administrative record is closed on the date that final
comments are due. 19 C.F.R. § 207.30(b). There are exceptions to that rule, though
none are relevant here. See id.
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material fraud.” Home Prods. Int’l, Inc. v. United States, 633 F.3d 1369, 1378 (Fed. Cir.
2011).
II. 	Amending the Complaints
Pursuant to U.S. Court of International Trade (“USCIT”) Rule 15(a), a plaintiff
may amend its complaint after 21 days of serving it “only with the opposing party’s
written consent or the court’s leave.” USCIT Rule 15(a)(2) (applicable to pleadings);
see also USCIT Rule 7(a)(1) (a complaint is a pleading). 7 Whether to grant leave to
amend a complaint is committed to the court’s discretion. See, e.g., Foman v. Davis,
371 U.S. 178, 182 (1962); Fuwei Films (Shandong) Co. v. United States, 35 CIT 1229,
1229, 791 F. Supp. 2d 1381, 1383 (2011). “The court should freely give leave when
justice so requires.” USCIT Rule 15(a)(2). Leave may be denied when the court finds
“undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to
cure deficiencies by amendments previously allowed, undue prejudice to the opposing
party by virtue of allowance of the amendment, [or] futility of amendment.” Foman, 371
U.S. at 182.
7 Rule 15 permits amendments to pleadings without leave of court “once . . . within: (A)
21 days after serving it, or (B) if the pleading is one to which a responsive pleading is
required, 21 days after service of a responsive pleading or 21 days after service of a
motion under Rule 12(b), (e), or (f), whichever is earlier.” USCIT Rule 15(a)(1). A
responsive pleading is not required in an action arising under the court’s jurisdiction
pursuant to 28 U.S.C. § 1581(c), see USCIT Rule 7(a)(2), and no motions were filed
pursuant to Rule 12.
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DISCUSSION
I. 	Chemours’ Motion to Supplement the Administrative Record, Amend its
Complaints, and Remand the Matter to the ITC 8
A. Parties’ Contentions
Chemours contends that the information it seeks to add to the administrative
record provides clear and convincing evidence that GFL submitted fraudulent foreign
producer questionnaire responses that were material to the Commission’s negative final
determination. Pl.’s Mot. at 4-13. 9 Chemours further contends that leave to amend its
complaints should be granted because it was not until the Commission released its
determinations that Chemours’ company officials were alerted to discrepancies between
business intelligence it routinely collected on GFL and the Commission’s findings
concerning GFL’s questionnaire responses. Id. at 14-15.
The ITC contends that leave to amend and a remand should be denied because
Plaintiff failed to exhaust its administrative remedies by timely alerting the Commission
to the information during the pendency of the investigations. Def.’s Opp’n at 9-15. The
ITC further contends that Chemours has failed to satisfy the standards for
8 The court considers Chemours motion without regard to GFL’s proposed record
documents, which GFL seeks to introduce into the record solely on a contingent basis.
In other words, the court does not weigh the degree to which GFL’s evidence detracts
from Chemours’ evidence when deciding whether Chemours has met its burden.
9 Subject producers, including GFL, reported information to the Commission based on
“[a]ctual experience” for the years 2015 through 2017 and provided projections for 2018
and 2019. CVD Staff Report at VII-19, Table VII-8. Chemours argues that GFL’s
allegedly fraudulent questionnaire responses were material to various aspects of the
Commission’s findings regarding the threat of material injury to domestic producers.
Pl.’s Mot. at 5-6.
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supplementation of the record and remand as established by the Federal Circuit. Id. at
15-20. The ITC also contends that Chemours has not provided clear and convincing
evidence that GFL’s questionnaire responses were fraudulent or materially incorrect.
Id. at 20-32. 10
GFL contends that Chemours has not supplied clear and convincing new
evidence of fraudulent questionnaire responses, GFL’s Opp’n and Cross-Mot. at 3, and
materially misstates facts regarding GFL’s capacity and production, id. at 4-6. GFL
further asserts that Chemours’ allegations, even if true, are immaterial to the
Commission’s injury determination. Id. at 6-7. GFL contends that it responded to the
Commission’s foreign producer questionnaires truthfully and accurately. Id. at 9; see
also id. at 11-13 (arguing that Chemours capacity and production allegations are
incorrect); id. at 13-26 (responding to the evidence underlying Chemours’ allegations).
GFL cross-moves the court to supplement the administrative record with additional
documents in the event the court grants Chemours’ motion. Id. at 28. 11 GFL further
contends that leave to amend the complaints should be denied on the basis of undue
delay, lack of good faith by Chemours, and prejudice. Id. at 8.
10 Consolidated Defendant-Intervenors that were interested parties in the Commission’s
investigation into PTFE from China adopted the ITC’s opposition by reference. Def.-
Ints.’ Resp. in Opp’n to Pl.’s Mot. at 1-2.
11 Chemours filed a response indicating its support for GFL’s cross-motion. Confidential
Pl.’s Resp. to Def. GFL’s Apr. 12, 2019 Contingent Mot. to Suppl. the Admin. R. at 1,
ECF No. 72. However, as discussed below, GFL’s cross-motion is moot.
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B. Chemours Failed to Exhaust its Administrative Remedies Before the
Commission; Thus, Supplementation of the Record Must Be Denied
“[T]he Court of International Trade shall, where appropriate, require
the exhaustion of administrative remedies.” 28 U.S.C. § 2637(d). The statute “indicates
a congressional intent that, absent a strong contrary reason, the court should insist that
parties exhaust their remedies before the pertinent administrative agencies.”
Boomerang Tube LLC v. United States, 856 F.3d 908, 912 (Fed. Cir. 2017) (citation
omitted). This permits the agency to address the issue in the first instance, prior to
judicial review. See id. at 912–13; Vinh Hoan Corp. v. United States, 40 CIT ___, ___,
179 F. Supp. 3d 1208, 1226 (2016) (exhaustion “allow[s] the agency to apply its
expertise, rectify administrative mistakes, and compile a record adequate for judicial
review—advancing the twin purposes of protecting administrative agency authority and
promoting judicial efficiency”) (citation omitted); Diamond Sawblades Mfrs. Coalition v.
United States, 33 CIT 48, 65-66 (2009) (requiring a respondent to have exhausted its
arguments before the ITC). There are exceptions to the exhaustion requirement, such
as when “the party had no opportunity to raise the issue before the agency.” Essar
Steel, Ltd. v. United States (“Essar Steel II”), 753 F.3d 1368, 1374 (Fed. Cir. 2014)
(internal quotation marks and citation omitted).
The exhaustion requirement is complemented by the recognition that reopening
the record may be appropriate when “there is new evidence indicating that the original
record was tainted by fraud.” Home Prods., 633 F.3d at 1379 (emphasis added); see
also id. at 1379-80 (joining the U.S. Court of Appeals for the Ninth Circuit in permitting
supplementation of the record when there is “[n]ewly discovered evidence of fraud . . . in
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an administrative proceeding” and “administrative remedies have been exhausted”).
Nevertheless, the court exceeds its authority when it orders an agency to reopen the
record to include documents a respondent withheld during an investigation. Essar Steel
I, 678 F.3d at 1275-1279.
The factual record for the AD and CVD investigations closed on June 15, 2018.
See Polytetrafluoroethylene (PTFE) Resin From China and India, Scheduling of the
Final Phase of Countervailing Duty and Anti-Dumping Duty Investigations, 83 Fed. Reg.
12,815, 12,816 (ITC March 23, 2018) (noting the Commission’s deadline for disclosing
factual information on which parties have not had an opportunity to comment).
Nevertheless, even after the factual record closes, for good cause the Commission may
accept additional written submissions. See id. Those submissions may include action
requests pursuant to 19 C.F.R. § 201.12, which allows “[a]ny party to a nonadjudicative
investigation [to] request the Commission to take particular action with respect to that
investigation.” A review of the evidence submitted in support of Chemours’ motion
demonstrates that Chemours had the opportunity to present the evidence to the
Commission during the investigations or, at a minimum, alert the Commission to the
existence of the evidence and request reopening of the record.
Chemours’ motion to supplement relies heavily on a June 2017 Pre-Feasibility
Report GFL prepared with respect to expanding PTFE production capacity (“Pre-
Feasibility Report”), GFL’s third quarter fiscal year 2018 conference call with analysts
and investors (“Q3 FY18 Conference Call”), which occurred in February 2018, and an
environmental impact assessment report (“EIA”) issued in March 2018. See generally
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Pl.’s Mot. at 7-13; see also id., App. 1, ECF No. 49-1 (the Pre-Feasibility Report); id.,
App. 2, ECF No. 49-1 (the EIA); id., App. 4, ECF No. 49-2 (transcript of the Q3 FY18
Conference Call). All three documents are dated prior to the close of the factual record.
Indeed, Chemours acknowledges that the Pre-Feasibility Report and EIA were obtained
“through an online environmental clearance portal,” id., App. 6 (Decl. of Denise Dignam)
(“Dignam Decl.”) ¶ 8, suggesting ease of access and a lack of due diligence in obtaining
or submitting the information in a timely manner. Cf. Jacobi Carbons AB v. United
States, 41 CIT ___, ___, 222 F. Supp. 3d 1159, 1195 (2017) (denying motion to
supplement when respondent “ha[d] not shown that it could not have obtained the
information in question in time to submit it to the agency, but rather, that it did not obtain
the information until it had the financial incentive to do so”).
In addition to the documents discussed above, Chemours had in its possession
corporate intelligence on GFL’s operations before it appealed ITC Final I to this court.
See Pl.’s Mot., App. 3, ECF No. 49-2 (intelligence report dated July 20, 2018);
Summons, ECF No. 1 (dated Aug. 9, 2018). Two additional documents were also
available before Chemours appealed ITC Final II to this court. See Pl.’s Mot., App. 5,
ECF No. 49-2 (an August 2018 investor presentation (“Investor Presentation”)); id., App.
6, ECF No. 49-2 (GFL’s second quarter fiscal year 2019 conference call (“Q2 FY19
Conference Call”), which occurred in November 2018). With the exception of the Q2
FY19 Conference Call, all of the documents were available to Chemours before the
Commission’s October 31, 2018 vote in the AD investigation. See AD Staff Report at I-
2 (noting the scheduled date for the Commission’s vote in the AD investigation). Thus,
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Chemours could have alerted the Commission to the existence of the documentation
and requested reopening of the record in either the CVD or AD investigations. See 19
C.F.R. § 201.12; cf. Home Prods., 633 F.3d at 1377 (recognizing an agency’s inherent
authority to reopen the record to consider evidence of fraud prior to the filing of an
appeal); Sebacic Acid From China, 70 Fed. Reg. 4,150 (ITC Jan. 28, 2005) (reopening
the record of the subject review).
Chemours’ argument that it was unaware of the need to submit additional
information to the Commission before the record closed because company officials did
not have access to the proprietary questionnaire responses is unpersuasive. See Pl.’s
Mot. at 14. Chemours’ counsel had access to the proprietary responses and access to
the information in Chemours’ possession. Chemours acknowledges that the company
“routinely collect[s] intelligence about the operations of [its] competitors, including [GFL]”
in “the ordinary course of business.” Dignam Decl. ¶ 6. It was incumbent upon
Chemours and its counsel to exercise due diligence and ensure that all relevant
information in Chemours’ possession was identified and submitted to the Commission in
a timely manner. Supplementing the administrative record is not a remedy for a lack of
due diligence. See id. ¶ 11 (explaining that Chemours provided documents to legal
counsel after the Commission rendered its determinations when it found that its
“competitive intelligence and experience in the market” differed from the ITC’s findings).
Allowing Chemours to supplement the record at this late date would undermine the
Commission’s investigatory deadlines and reward Chemours for failing to share
potentially relevant information with its counsel in a timely fashion.
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In sum, Chemours had the opportunity to present arguments and evidence to the
Commission and, thus, is not excused from exhausting its administrative remedies. See
Essar Steel II, 753 F.3d at 1374. For the same reasons, supplementation of the record
must be denied. See Essar Steel I, 678 F.3d at 1275-1279.
C. Chemours’ Failure to Present Clear and Convincing Evidence of Fraud
Provides an Additional Basis for Denying the Motion
Fraud is a serious allegation, one which concerns conduct that has been
characterized as “conscious wrongdoing, an intention to cheat or be dishonest.” United
States v. Wunderlich, 342 U.S. 98, 100 (1951). Accordingly, a prima facie case of fraud
in the agency proceedings must be established by clear and convincing evidence—
more than a mere preponderance. See Home Prods., 633 F.3d at 1378. Evidence is
clear and convincing when it “creates in the trier of fact ‘an abiding conviction that the
truth of a factual contention is highly probable.’” SKF USA Inc. v. United States, 29 CIT
969, 971, 391 F. Supp. 2d 1327, 1329 (2005) (quoting Price v. Symsek, 988 F.2d 1187,
1191 (Fed. Cir. 1993) (internal quotation marks omitted)). Chemours’ motion focuses
on GFL’s allegedly fraudulent reporting with respect to (1) Tetrafluoroethylene (“TFE”)
capacity; 12 (2) PTFE capacity and production; and (3) GFL’s home market growth
projections. Pl.’s Mot. at 6-7. Even if the court did not find that Chemours failed to
exhaust its administrative remedies, Chemours has not met its burden with respect to
any of the contested areas of inquiry.
12 TFE is used to produce PTFE. See, e.g., CVD Staff Report at I-15.
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i. 	TFE Capacity
Chemours asserts that GFL’s Q3 FY18 Conference Call and the EIA show that
GFL understated its capacity to produce TFE, implicating its reported capacity to
produce PTFE. 13 Id. at 6, 8-9. In the Q3 FY18 Conference Call, GFL reported on the
company’s efforts to increase TFE capacity from 50 metric tons (“MT”) per day to 90-95
MT per day by May 2018. Id., App. 4 at 6-7. Chemours relies on these figures to assert
that GFL’s annual capacity to produce TFE would almost double, from 18,250 MT up to
34,675 MT, which would increase GFL’s ability to produce PTFE because PTFE
production consumes the majority of GFL’s TFE. See id. at 8-9 & n.24 (citing id., App. 2
at 2.9, 2.12-2.13).
Chemours’ calculations wrongly assume that GFL produces TFE 365 days per
year, thereby overstating any increase in TFE capacity. See GFL’s Opp’n & Cross-Mot.
at 12-13. In fact, GFL’s facilities operate less than a full year. 14 More importantly, TFE
is not the subject of this investigation and the Commission did not request data on TFE-
specific capacity or production. See id. at 16. TFE is used by GFL to produce subject
and non-subject merchandise. Id. at 9, Ex. 2 at II-4d. Any increase in TFE capacity
does not necessarily mean an increase in GFL’s capacity to produce PTFE, which is
13 GFL reported that (1) [[
]]; (2) GFL has “[[
]]”; and (3) “GFL is
[[
]].” GFL’s Opp’n & Cross-Mot., Ex. 2 at II-4d (excerpt of GFL’s
questionnaire response).
14 GFL reported that its production facilities operate “[[
]].” Id., Ex. 2 at II-4b—4c; CVD Staff Report, Table VII-6.
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subject to several additional constraints. 15 Increased TFE capacity is, however,
consistent with GFL’s ability to increase production of subject PTFE resin up to its PTFE
production capacity, which is consistent with GFL’s questionnaire responses. 16
Accordingly, Chemours has not presented clear and convincing evidence that GFL
made fraudulent statements with respect to TFE.
ii. 	PTFE Capacity and Production
Chemours asserts that GFL understated its 2019 projections for PTFE capacity
and production volumes. Pl.’s Mot. at 9-12. To support this assertion, Chemours relies
on the Pre-Feasibility Report, EIA, Investor Presentation, Q3 FY18 Conference Call,
and Q2 FY19 Conference Call. Id. at 10-12. In that Q2 FY19 Conference Call, GFL
reported that it anticipated producing about 1,300 MT of PTFE per month in 2018; 1,550
to 1,600 MT per month in 2019; and 1,750 MT per month in 2020, which represents
GFL’s “fully expanded capacity of PTFE.” Id., App. 6 at 6. Chemours claims that these
figures show that GFL wildly understated its PTFE capacity. See id. at 11-12. 17
15 Additional constraints include the [[
]]. GFL’s Opp’n & Cross-Mot., Ex. 2 at II-4d.
16 GFL projected [[ 	]] in its production of PTFE resin for 2018 and
2019. See CVD Staff Report, Table VII-6 (compiling GFL’s questionnaire responses
regarding the three forms of subject PTFE resin). GFL also reported [[ 	]]
capacity utilization from 2017 ([[ 	]] percent) to 2019 ([[ 	]] percent). Id.
17 Specifically, Chemours asserts that prior to filing its final questionnaire response, GFL
told investors it would be producing about 42.3 million pounds of PTFE in 2019, which is
“[[ 	]].” Pl.’s Mot. at 12 & n.36 (citing CVD
Staff Report, Table VII-6). Chemours presumably calculated “42.3 million pounds” by
multiplying 1,600 by 12 months, and then multiplying the result by 2204 to convert the
figure from metric tons to pounds. See GFL’s Opp’n & Cross-Mot. at 19 (converting the
figures).
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In fact, Chemours misstates GFL’s reported 2019 production volume and errs in
its comparison to the Q2 FY19 Conference Call information. 18 The amounts stated in
the Q2 FY19 Conference Call also appear to include all forms of PTFE, which would
include non-subject PTFE micropowder. See id., App. 6 at 6. GFL also informed
investors in 2018 that it “expects a ramp up in volumes of new grades of PTFE,” id.,
App. 5 at 18, which is consistent with GFL’s questionnaire response. 19 The seven
months of time between the questionnaire response and the Q2 FY19 Conference Call
could also have caused some changes in the information used to make the projections.
Compare GFL’s Opp’n & Cross-Mot., Ex. 2 (cover page), with Pl.’s Mot., App. 6 at 1. 20
Any differences in the figures also appear to be immaterial to the Commission’s
negative determination, which was based on cumulated subject imports. CVD Views at
42-43, 58-61; see also CVD Staff Report, Table VII-8. 21 A minor increase in cumulated
production totals for 2019 is unlikely to affect the “appreciable quantities of excess
capacity” the Commission identified in the subject industries but deemed immaterial
18 Contrary to Chemours’ assertion, GFL projected producing [[ 	]] pounds,
or roughly [[ 	]] MT in 2019. See CVD Staff Report, Table VII-6.
19 GFL reported its efforts to “[[
]],” GFL’s Opp’n & Cross-Mot., Ex. 2
at II-4d, which could include PTFE micropowder due to its need for “further processing,”
CVD Staff Report at I-9.
20 GFL based its projections on several variables, including “[[
]].” GFL’s Opp’n & Cross-Mot., Ex. 2 at II-9a—9c.
21 Cumulated subject producers’ projected PTFE resin production volume for 2019
totaled [[ 	]] pounds, CVD Staff Report, Table VII-8, which is about [[ 	]] MT.
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because “responding subject producers’ export shipments to the United States
increased only from 2016 to 2017, when U.S. demand rose.” CVD Views at 59.
The Pre-Feasibility Report discusses a proposed increase in PTFE production,
with construction beginning once GFL obtained regulatory approvals and taking roughly
18 to 24 months to complete. Pl.’s Mot., App. 1 at 5, 11. 22 The Terms of Reference
(“TOR”) appended to the EIA indicate that some approvals were obtained in February
2018, id., App. 2, TOR (cover page), permitting GFL to increase PTFE production from
1,500 MT to 2,000 MT per month, id., App. 2, TOR at 1. Chemours relies on these
documents to assert that “GFL expanded production of PTFE by 500 MT per month.”
Id. at 10 & n.31 (citing id., App. 2, TOR at 2).
While the EIA and the Pre-Feasibility Report indicate preparation for increased
capacity, they are not evidence of actual increases in either capacity or production. The
Pre-Feasibility Report indicates that construction would take 18 to 24 months from the
time that GFL obtained certain regulatory approvals, which did not occur until February
2018. See id., App. 1 at 11; id., App. 2, TOR (cover page). Chemours points to no
evidence that construction began, see id., App. 1 at 11, 23 and any increased production
22 GFL was required to obtain an “Environment Clearance” from the State Level Expert
Appraisal Committee and a “No Objection Certificate” from the Gujarat Pollution Control
Board. Pl.’s Mot., App. 1 at 11; see also id., App. 2 at xi (abbreviations and acronyms).
Production could not begin until GFL also obtained a “Consent & Authorization” from the
Gujarat Pollution Control Board. Id., App. 1 at 11.
23 Chemours attempts to link the estimated cost of the project to capital expenditures
discussed in the Q2 FY19 Conference Call to bolster its contention that the proposed
expansion project must be underway. See id. at 11-12 & n.35 (citing id., App. 6 at 9);
id., App. 1 at 11 (containing the cost estimate for the project). However, there is no
indication that the capital expenditures discussed in the Q2 FY19 Conference Call are
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could not occur until GFL obtained a “Consent & Authorization” from the Gujarat
Pollution Control Board, and Chemours provides no evidence this occurred either, see
id.
In the Q3 FY18 Conference Call, GFL reported on “increased [] PTFE capacity”
and noted that, “in the next 6 to 8 months[, GFL] will see even [its] expanded PTFE
capacity being fully-utilized.” Id., App. 4 at 6. GFL also referenced the development of
“new PTFE grades,” id., App. 6 at 12, and the existence of a “blueprint” to expand its
PTFE capacity at an additional site, id., App. 6 at 9, 15. In the Investor Presentation,
GFL reported on “[g]rowth in PTFE,” including increased “volumes of the new grades of
PTFE.” Id., App. 5 at 18. Chemours reliance on these statements to support its claims
that GFL submitted fraudulent questionnaire responses, id. at 11-12, are also
unpersuasive.
That GFL expected to see its “expanded PTFE capacity being fully-utilized” in
“the next 6 to 8 months” does not mean that GFL failed to report an increase in PTFE
capacity to the Commission. See id., App. 4 at 6. In fact, evidence submitted by
Chemours reflects that GFL increased PTFE capacity between 2013 and 2017,
coincident with increased production. See id., App. 3 at 46. GFL’s questionnaire
responses are not inconsistent with its statements in the Q3 FY18 Conference Call
regarding capacity utilization. 24 Chemours’ reliance on GFL’s “blueprint” for expansion
related to the PTFE expansion discussed in the Pre-Feasibility Report. As GFL points
out, the capital expenditures discussed in the Q2 FY19 Conference Call covered GFL’s
entire “Chemicals business.” Id., App. 6 at 9; GFL’s Opp’n & Cross-Mot. at 18.
24 GFL anticipated reaching [[ 	]] percent capacity utilization in 2019, CVD Staff Report,
Table VII-6, thus [[ 	]].
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similarly indicates nothing more than a plan that may or may not come to fruition. See
id. at 12 & n.37 (citing, inter alia, id., App. 6 at 9, 15). Indeed, in the Q2 FY19
Conference Call, GFL explained that the blueprint pertained to fiscal year 2020 and was
“yet to be finalized.” Id., App. 6 at 9, 15.
Accordingly, Chemours has not presented clear and convincing evidence that
GFL made fraudulent statements with respect to PTFE.
iii. 	Home Market Growth Projections
Chemours asserts that GFL overstated its home market growth to the
Commission, thereby understating the extent to which its U.S. exports are likely to
increase. 25 Id. at 12-13. Chemours relies primarily on GFL’s Investor Presentation in
which GFL explained that the “domestic market [is] growing at around 12-15 [percent]
per annum.” Id. at 12-13, App. 5 at 15. According to Chemours, “[g]iven these growth
rates in its domestic market, GFL would have to increase its exports in order to achieve
its projected production levels.” Id. at 12; see also id. at 13 & n.41 (pointing to GFL’s
assertion in the Q2 FY19 Conference Call that it “expect[s a] fairly significant increase in
sales in the [United States]”) (citing id., App. 6 at 8). Chemours’ assertions are
unconvincing.
The market growth reported in the Investor Presentation applies to all
fluoropolymers sold by GFL. See id., App. 5 at 15 (titled, “GFL positioning in the
fluoropolymer market”); id. at 19-26 (discussing the range of fluoropolymers produced).
25 GFL projected a [[ 	]] percent [[ 	]] in its home market shipments from 2017 to
2018 and [[ 	]] of [[ 	]] percent from 2018 to 2019. Id.
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Accordingly, direct comparisons between the figures in the Investor Presentation and
those reported to the Commission (which are limited to subject PTFE) are misplaced.
Moreover, the Investor Presentation does not specify the precise timeframe covered by
the reference to 12 to 15 percent annual growth, see id., App. 5 at 15, so a comparison
to GFL’s questionnaire response is speculative. 26
Chemours’ focus on the Q2 FY19 Conference Call also ignores the context in
which GFL’s comments were made. In the seven months between GFL’s questionnaire
response and the conference call, the United States imposed additional duties on PTFE
imported from China. See GFL’s Opp’n & Cross Mot. at 25 & n.94 (citing Notice of
Action Pursuant to Section 301: China's Acts, Policies, and Practices Related to
Technology Transfer, Intellectual Property, and Innovation, 83 Fed. Reg. 40,823, 40,826
(USTR Aug. 16, 2018)). Indeed, the transcript of the conference call demonstrates that
GFL premised its expectations on events that occurred after April 2018: the ITC’s
negative injury determination in this proceeding and the implementation of the afore-
mentioned duties on Chinese PTFE. See Pl.’s Mot., App. 6 at 8. Accordingly,
Chemours has not presented clear and convincing evidence that GFL made fraudulent
statements with respect to its home market growth.
In sum, Chemours has failed to present “clear and convincing new evidence
sufficient to make a prima facie case that the agency proceedings under review were
26 GFL’s projected [[ 	]] percent [[ 	]] in home market shipments of PTFE resin
from 2018 to 2019 is not necessarily inconsistent with the projected 12 to 15 percent
annual domestic growth contemplated for all fluoropolymers. See id; Pl.’s Mot., App. 5
at 15.
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tainted by material fraud” on the part of GFL. See Home Prods., 633 F.3d at 1378.
Instead, Chemours offers arguments of interpretation in connection with evidence that
Chemours could—and should—have presented to the Commission in the first instance,
underscoring the importance of due diligence and the exhaustion of administrative
remedies. Countenancing Chemours’ dilatory tactics would undermine the efficiency
and finality interests that are served by limiting the court’s review to the agency record.
See Vt. Yankee, 435 U.S. at 554-55; Essar Steel I, 678 F.3d at 1277. Accordingly,
Chemours’ motion to supplement the administrative record is denied.
D. Chemours’ Motion for Leave to Amend its Complaints is Also Denied
Leave to amend a complaint may be denied when the amendment would be
futile. See, e.g., Foman, 371 U.S. at 182. Amendment is futile when the claims would
not survive a motion to dismiss for failure to state a claim upon which relief may be
granted. See United States v. Active Frontier Int’l, Inc., Slip Op. 13-8, 2013 WL 174254,
at *2 (CIT Jan. 16, 2013) (citing Kemin Foods v. Pigmentos Vegetales Del Centro, 464
F.3d 1339, 1354–55 (Fed. Cir. 2006)); cf. Cultor Corp. v. A.E. Staley Mfg. Co., 224 F.3d
1328, 1333 (Fed. Cir. 2000) (additional claims futile when they lacked any “colorable
argument of possible success”).
The court’s review of the determinations at issue here is limited to the
administrative record. 19 U.S.C. § 1516a(a)(2)(A). Chemours seeks to amend its
complaint to allege that fraudulent evidence submitted by GFL renders the
Commission’s determinations unsupported by substantial evidence and unlawful. See
[Proposed] Am. Consol. Compl. ¶ 59, ECF No. 48. Because the court has denied
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Chemours’ related motion to supplement the administrative record with documentation
relevant to this claim, assessing the merits of this claim would require the court to
consider evidence outside of the record, which it cannot do. See 19 U.S.C.
§ 1516a(b)(2)(A); S. Rep. No. 96-249, at 248 (1979), 1979 U.S.C.C.A.N. 381, 633 (“The
court is not to conduct a trial de novo in reviewing [agency] determinations” pursuant to
19 U.S.C. § 1516a). Because Chemours’ proposed claim thus fails to state a claim
upon which the court may grant relief, amendment would be futile. Accordingly,
Chemours’ motion is denied.
II. 	GFL’s Contingent Cross-Motion
GFL moved to add several additional documents to the administrative record “[i]n
the event that the [c]ourt grants Chemours’ motion.” GFL’s Opp’n & Cross-Mot. at 28.
Because the court is denying Chemours’ motion, GFL’s motion is denied as moot.
CONCLUSION AND O RDER
For the foregoing reasons, Chemours’ motion to supplement the administrative
record, amend its complaints, and remand the matter to the ITC is hereby DENIED.
GFL’s contingent cross-motion to supplement the administrative record is hereby
DENIED AS MOOT.
/s/ 	Mark A. Barnett
Mark A. Barnett, Judge
Dated: July 3, 2019
New York, New York
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