Hung Vuong Corporation et al v. United States

Slip Op. 21-142
UNITED STATES
COURT OF INTERNATIONAL TRADE
Court No. 19-00055
HUNG VUONG CORPORATION, et al.,
Plaintiffs,
v.
UNITED STATES,
Defendant,
and
CATFISH FARMERS OF AMERICA, et al.,
Defendant-Intervenors.
Before: M. Miller Baker, Judge
OPINION
[The court sustains Commerce’s remand results and
enters judgment for Defendant and Defendant-Inter-
venors.]
Dated: October 12, 2021
Robert L. LaFrankie, Crowell & Moring LLP of Wash-
ington, DC, submitted comments for Plaintiffs.
Brian M. Boynton, Acting Assistant Attorney General;
Jeanne E. Davidson, Director; Patricia M. McCarthy,
Assistant Director; and Kara M. Westercamp, Trial
Counsel, 	Commercial 	Litigation 	Branch, 	Civil
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Division, U.S. Department of Justice of Washington,
DC, submitted comments for Defendant. Of counsel on
the comments was Ashlande Gelin, Attorney, Office of
the Chief Counsel for Trade Enforcement and Compli-
ance, U.S. Department of Commerce of Washington,
DC.
Jonathan M. Zielinski and James R. Cannon, Jr., Cas-
sidy Levy Kent (USA) LLP of Washington, DC, sub-
mitted comments for Defendant-Intervenors.
Baker, Judge: Like comets that orbit the sun, trade
cases make periodic return visits to the court. In this
return visit after a remand to the Department of Com-
merce in an administrative review, a Vietnamese fish
producer challenges Commerce’s continued applica-
tion of facts otherwise available with an adverse infer-
ence due to the company’s reporting deficiencies and
failure to cooperate. The court sustains the Depart-
ment’s remand results as supported by substantial ev-
idence.
Factual and Procedural Background
This is the sequel to Hung Vuong Corp. v. United
States, 483 F. Supp. 3d 1321 (CIT 2020), which ad-
dressed Hung Vuong’s challenge to Commerce’s final
determination in the 14th administrative review of an
antidumping order as to certain frozen fish fillets from
Vietnam. Summarized, the Department found, inter
alia, that it could not verify information the company
submitted, that the administrative record was incom-
plete in several respects, and that the information de-
ficiencies 	resulted 	from 	the 	company’s 	failure 	to
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cooperate to the best of its ability. Commerce therefore
rejected all the company’s submissions, resorted to the
use of total facts otherwise available with an adverse
inference, or total adverse facts available (in the De-
partment’s jargon, “total AFA”), and assigned Hung
Vuong a dumping margin of $3.87 per kilogram, or
about 100 percent. Id. at 1332–33.
This court sustained most of Commerce’s findings
underlying its application of total adverse facts avail-
able. Even so, the court remanded the case to Com-
merce 	to 	reconsider 	whether 	partial 	adverse 	facts
available might be necessary because two of the De-
partment’s findings were unsupported by substantial
evidence or contrary to law.
First, the Department could not rely on the failure
of Hung Vuong’s customers to respond to Commerce’s
questionnaires to apply total adverse facts available.
Id. at 1354–56. But because that finding by the De-
partment was just one of several reasons why it ap-
plied total adverse facts available, the court remanded
to Commerce to reconsider whether partial adverse
facts available might be necessary. Id.
Second, 	the 	Department’s 	rejection 	of 	Hung
Vuong’s factors of production because of concerns over
the company’s fish byproducts’ water-weight gain was
not supported by substantial evidence in view of Com-
merce’s failure to address the company’s explanation
for the problem. Id. at 1365–66. As “Commerce viewed
this issue as essential to its analysis,” the court could
not sustain the Department’s “decision to apply total
facts otherwise available as to Hung Vuong’s factors of
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production.” Id. at 1367. The court therefore remanded
for Commerce to address Hung Vuong’s explanation,
to consider whether it might be necessary to apply par-
tial, rather than total, facts otherwise available, and
by extension “to consider the extent to which its con-
clusion as to that submission affects its decision on the
adverse inference as to the factors of production, in-
cluding whether a partial or total adverse inference is
justified . . . .” Id.
As 	the 	court 	directed 	Commerce 	to 	reconsider
whether application of total facts otherwise available
remained reasonable, the court also directed the De-
partment on remand to reconsider the rate applied to
Hung Vuong, which was based on the finding of total
adverse facts available. Id.
Proceedings on Remand
On remand, Hung Vuong submitted comments to
Commerce and included a new “corrected” U.S. sales
database it claims addressed the Department’s con-
cerns. ECF 88, at 9–10. Commerce rejected the data-
base as “untimely filed new factual information” and
ultimately reaffirmed its original determination ap-
plying total facts otherwise available with an adverse
inference and an antidumping rate of $3.87/kg. See
ECF 75-1, at 9, 30 (remand results).
A. Total 	versus 	partial 	facts 	otherwise
available with an adverse inference
Critically, on remand Commerce concluded that
Hung Vuong’s control number reporting deficiencies
“and failure to retain documents, alone, warranted
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continued application of total [facts otherwise availa-
ble with an adverse inference].” Id. at 13 (emphasis
added). The Department noted that the court had sus-
tained Commerce’s finding that Hung Vuong’s data-
bases were unreliable for calculating a dumping mar-
gin. Id. “Reliable sales and [factors-of-production] da-
tabases form the foundation of Commerce’s dumping
analysis, and without them Commerce cannot calcu-
late an accurate dumping margin for [Hung Vuong].”
Id.
As to Hung Vuong’s reporting deficiencies regard-
ing its customer relationships, the Department contin-
ued to find that “total AFA is warranted” even without
consideration of the customers’ failure to respond to
Commerce’s 	questionnaires—one 	of 	the 	issues 	re-
manded by the court. Id. at 15. The Department qual-
ified this determination, however, by also relying on
the company’s “failure to report accurate [control num-
ber] information” to apply total adverse facts availa-
ble. Id.
As to the byproducts issue on which the court also
remanded, Commerce stated that although it believed
Hung Vuong’s “explanation does not plausibly account
for the observed weight difference, we find that [the
company’s] other verification failures are so substan-
tial that it is unnecessary to rely on this verification
finding in our determination that [the company’s fac-
tors-of-production] data are unusable, and that total
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AFA remains appropriate as a result of those other
failures.” Id. at 18. 1
Thus, the Department withdrew its reliance on the
“customer questionnaires” 	and “byproducts” issues,
but determined that its overall findings of “numerous
deficiencies” that the court already sustained “demon-
strate that the application of total AFA is still war-
ranted.” Id. at 18. Commerce cited a section of its is-
sues 	and 	decision 	memorandum 	related 	to 	Hung
Vuong’s failure to report accurate control numbers
(which 	the 	court 	sustained, 	see 	483 	F. 	Supp. 	3d
at 1357–63) that read, in part, “we find that we do not
have correct Section C and Section D databases with
which 	to 	calculate 	an 	accurate 	margin 	for 	[Hung
Vuong],” ECF 75-1, at 18 (quoting ECF 25-5, at 32),
and also cited a discussion of how substantial portions
of Hung Vuong’s data were unverifiable because of
failure 	to 	maintain 	source 	documents, 	id. 	(citing
ECF 25-5, at 19–21).
Responding 	to 	the 	parties’ 	administrative 	case
briefs 	on 	remand, 	the 	Department 	rejected 	Hung
Vuong’s arguments that application of partial facts
otherwise 	available 	(with 	or 	without 	an 	adverse
1 Commerce also observed its prior finding of total adverse
facts available based on deficiencies in Hung Vuong’s fac-
tors of production reporting was based on the water weight
discrepancy and deficiencies in the company’s labor report-
ing, the latter of which the court sustained. ECF 75-1, at
15–16. The Department continued to find Hung Vuong’s la-
bor reporting deficiencies warranted an adverse inference,
id. at 16, but notably did not apply total adverse facts avail-
able based on these deficiencies.
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inference) was a viable way to resolve Commerce’s con-
cerns:
Unverifiable source documents and misrepre-
sentations regarding customers [sic] relation-
ships are not the type of quantifiable deficiencies
that can be addressed with modifications to the
existing databases—rather, they speak funda-
mentally to the credibility of the reported data
themselves. Because we have determined (and
the Court has sustained our determination) that
[Hung Vuong’s] data are unusable, it is not pos-
sible to use any of [Hung Vuong’s] data to deter-
mine its final dumping margin using partial
AFA.
Id. at 26.
In short, the Department concluded that it would
continue to apply total facts otherwise available with
an adverse inference to Hung Vuong despite no longer
relying on its findings on the “customer questionnaire”
and “byproduct reporting” issues.
B. The rate applied
Commerce 	then 	addressed 	its 	selection 	of 	the
$3.87/kg rate. First, the Department rejected Hung
Vuong’s 	argument 	that 	the 	circumstances 	under
which the rate was calculated—a “new shipper review”
from the eighth administrative review of the same an-
tidumping 	order—rendered 	the 	rate 	inappropriate,
noting that the relevant statute allows Commerce to
use any dumping margin from any segment of the pro-
ceeding, “including the highest such margin,” without
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regard to what the margin might have been had the
offending respondent fully cooperated and without re-
gard to that respondent’s “alleged commercial reality.”
Id. at 26–27.
Second, Commerce rejected Hung Vuong’s argu-
ment that the $3.87/kg rate was so high as to be “ab-
errational” and thus inappropriate, noting that part of
the analysis in a “new shipper review” involves “a ‘to-
tality of the circumstances test’ to determine if a sale
involved in [a new shipper review] is ‘unrepresentative
or extremely distortive,’ so as to suggest the transac-
tion should be excluded as a non–bona fide sale,” and
explained that in the review leading to the $3.87/kg
rate the Department made no finding that the sales in
question “were atypical, aberrational, or distortive,
nor that they did not otherwise reflect commercial re-
ality.” Id. at 27.
Third, Commerce rejected Hung Vuong’s conten-
tion that the Department had failed to “evaluate the
situation” as required by 19 U.S.C. § 1677e(d)(2). 2
ECF 75-1, at 26. Citing POSCO v. United States, 335
F. Supp. 3d 1283, 1285–86 (CIT 2018), Commerce
stated that it interprets the phrase “evaluation of the
situation” to require it, “as part of its determination of
applying the highest rate, to review the record to
2 This provision directs that Commerce may use any dump-
ing margin from any segment of the proceeding under the
applicable antidumping order, “including the highest such
rate or margin, based on the evaluation by [the Department]
of the situation that resulted in [Commerce] using an ad-
verse inference in selecting among the facts otherwise avail-
able.” 19 U.S.C. § 1677e(d)(2) (emphasis added).
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determine if there was something inappropriate or
otherwise unreasonable about that rate, given the sit-
uation leading to the application of an adverse infer-
ence.” ECF 75-1, at 28.
Commerce further explained that it applied total
adverse facts available because it could not use Hung
Vuong’s information in its calculations, and the com-
pany failed to correct the deficiencies despite having
the opportunity to do so. Commerce also noted that the
statute allows for the selection of any dumping margin
from any prior segment of the proceeding, including
the highest margin, as an “adverse inference rate.” Id.
at 29. “Thus, the only question outstanding is if the
record suggests that the rate applied to [Hung Vuong],
$3.87/kg, is otherwise inappropriate.” Id.
The Department found that no record evidence un-
dermined the rate’s reasonableness and that while the
company 	complained 	that 	the 	rate 	was 	extremely
high, “suggesting that it was aberrational or distor-
tive, [Hung Vuong] provides no evidence to substanti-
ate that claim.” Id. Accordingly, Commerce concluded
that it would continue (1) to apply total facts otherwise
available with an adverse inference to Hung Vuong de-
spite no longer relying on its findings on the “customer
questionnaire” and “byproduct reporting” issues and
(2) to apply the $3.87/kg rate. Id. at 29–30.
Jurisdiction and Standard of Review
The 	court 	has 	jurisdiction 	under 	19 	U.S.C.
§ 1516a(a)(2)(B)(iii) and 28 U.S.C. § 1581(c), which
vest this court with authority over actions contesting
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Commerce’s final determination in an administrative
review of an antidumping duty order. The court is to
uphold Commerce’s determination unless it is “unsup-
ported by substantial evidence on the record, or other-
wise not in accordance with law . . . .” 19 U.S.C.
§ 1516a(b)(1)(B)(i).
“Substantial evidence” has the same meaning it
does in a pre-remand proceeding. “[T]he question is
not whether the court would have reached the same
decision on the same record—rather, it is whether the
administrative record as a whole permits Commerce’s
conclusion.” Hung Vuong, 483 F. Supp. 3d at 1343.
Substantial evidence has been defined as more
than a mere scintilla, as such relevant evidence
as a reasonable mind might accept as adequate
to support a conclusion. To determine if substan-
tial evidence exists, we review the record as a
whole, including evidence that supports as well
as evidence that fairly detracts from the sub-
stantiality of the evidence.
Id. (quoting Nippon Steel Corp. v. United States, 337
F.3d 1373, 1379 (Fed. Cir. 2003)).
Discussion
Hung Vuong asserts two challenges to Commerce’s
remand results. First, the company argues that the
Department’s continued application of total facts oth-
erwise available with an adverse inference, or “total
AFA,” is unsupported by substantial evidence and con-
trary to law. ECF 88, at 11–29. Second, Hung Vuong
contends that Commerce failed to adequately explain
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Ct. No. 19-00055 	Page 11
or justify its selection of the $3.87/kg rate dumping
rate. Id. at 29–34.
I.
A.
Hung Vuong’s first line of attack on Commerce’s
continued finding of total adverse facts available is
that because the company submitted a revised and cor-
rected Section C database “resolving the [control num-
ber] net weight issues, which was the single biggest
deficiency in its sales and cost databases other than
the byproduct” issue, id. at 18, the Department could
have “determine[d] the feasibility of applying partial
AFA.” Id. Commerce, however, declined to do so be-
cause the database was “unsolicited new factual infor-
mation.” Id. Hung Vuong contends that this rejection
was “arbitrary and unreasonable because it could have
resolved the main remaining reporting deficiency in
the data (i.e. [control numbers]), thus rendering the
sales and costs data at least partially usable.” Id. at 19
(citing Remand Appx1439–1441).
The government, in response, argues that Hung
Vuong has offered no authority, nor is the government
aware of any, “that would permit a party to cure a de-
ficiency in a remand proceeding by submitting un-
timely new factual information despite the Court al-
ready sustaining a finding of an adverse factual infer-
ence.” ECF 89, at 19 (emphasis in original) (citing 483
F. Supp. 3d at 1363).
Whether to allow Hung Vuong to submit a revised
database was a decision for Commerce, not for the
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court: “The decision whether to reopen the record is
ordinarily one for the agency to make . . . .” GGB Bear-
ing Tech. (Suzhou) Co. v. United States, 279 F. Supp.
3d 1233, 1251 (CIT 2017). The remand order here nei-
ther instructed the Department to reopen the record
nor prohibited Commerce from doing so. The Depart-
ment need not reopen the record with respect to issues
the court has already decided. See Jinxiang Yuanxin
Imp. & Exp. Co v. United States, 71 F. Supp. 3d 1338,
1355 (CIT 2015).
Despite complaining that Commerce did not accept
the revised database, Hung Vuong nowhere argues
that the Department was obligated to do so, or that
Commerce abused its discretion, aside from the five-
word conclusory statement “[t]his was arbitrary and
unreasonable.” 	ECF 	88, 	at 	19. 	Contrary 	to 	Hung
Vuong’s unsupported assertion, Commerce’s exercise
of its discretion to decline to receive the company’s new
information was neither arbitrary nor unreasonable,
as it was for the Department to determine how to con-
duct proceedings on remand.
B.
Hung Vuong next challenges Commerce’s reliance
on the company’s deficiencies in its reported labor fac-
tors of production and customer relationship docu-
ments 	for 	finding 	total 	adverse 	facts 	available.
ECF 88, at 19–22. The company’s arguments, how-
ever, are misplaced because the Department’s remand
results do not rely on either the labor or customer re-
lationship reporting deficiencies alone to apply total
adverse facts available. See ECF 75-1, at 15 (applying
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Ct. No. 19-00055 	Page 13
total adverse facts available based on the customer re-
porting deficiencies coupled with the company’s “fail-
ure to report accurate [control number] information”);
see also above note 1 (explaining that Commerce did
not apply total adverse facts available based on the la-
bor reporting deficiencies).
C.
Hung Vuong’s third and final challenge to Com-
merce’s continued application of total adverse facts
available is that the Department overlooked all the
contrary evidence in the record contradicting its con-
tinued 	application 	of 	total 	adverse 	facts 	available
based on the company’s control number reporting de-
ficiencies 	and 	failure 	to 	retain 	source 	documents.
ECF 88, at 22–77. This line of attack, however, seeks
to impermissibly relitigate issues the court already re-
solved in its prior opinion sustaining Commerce’s find-
ings on those issues.
* * *
The government argues, and the court agrees, that
Commerce’s determination that it did not need to rely
on the remanded issues to apply total adverse facts
available “was consistent with the Court’s remand or-
der.” ECF 89, at 29. The Department reconsidered its
determination to apply adverse facts available and ex-
plained how the record supported its determination
even without reliance on the remanded issues. Id. Sub-
stantial evidence supports that determination, and
therefore the court sustains the Department’s remand
results applying total adverse facts available based on
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Hung Vuong’s control number reporting deficiencies
“and failure to retain documents.” ECF 75-1, at 13.
II.
The remaining issue is Commerce’s selection of the
$3.87/kg rate, which Hung Vuong characterizes as
“highly punitive.” ECF 88, at 32. 3 The company chal-
lenges that rate on three grounds.
First, Hung Vuong argues that Commerce violated
the statutory requirement that it undertake an appro-
priate “evaluation of the situation.” ECF 88, at 30 (dis-
cussing 19 U.S.C. § 1677e(d)(2)). Citing POSCO v.
United States, 296 F. Supp. 3d 1320 (CIT 2018), the
company argues that “some additional evaluation is
required beyond that which justified the adverse infer-
ence.” ECF 88, at 31 (double emphasis in the original
and quoting POSCO, 296 F. Supp. 3d at 1349).
3 That the $3.87/kg rate is significantly higher than the
$2.39/kg Vietnam-wide rate is not disqualifying because
the Federal Circuit “has made clear . . . that Commerce
need not select, as the AFA rate, a rate that represents the
typical dumping margin for the industry in question.”
KYD, Inc. v. United States, 607 F.3d 760, 765–66 (Fed. Cir.
2010); see also id. at 766 (“Significantly, we have held that
Commerce is permitted to use a ‘common sense inference
that the highest prior margin is the most probative evi-
dence of current margins because, if it were not so, the im-
porter, knowing of the rule, would have produced current
information showing the margin to be less.’ ” (quoting
Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1190
(Fed. Cir. 1990) (emphasis in Rhone Poulenc))).
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The court reads POSCO as holding that Commerce
may not simply rely on its adverse inference to select
a rate. Instead, the Department must “evaluate the
situation 	that 	resulted 	in” 	the 	adverse 	inference.
19 U.S.C. § 1677e(d)(2).
Commerce did that here: “As we explain above . . .
[the Department] was unable to use the information
[Hung Vuong] provided in is calculations,” and the
company “failed to correct its deficiencies when it had
the opportunity,” and “otherwise failed to act to the
best of its ability.” ECF 75-1, at 28–29; see also id. at 26
(“Because we have determined (and the Court has sus-
tained our determination) that [Hung Vuong’s] data
are unusable, it is not possible to use any of [that] data
to determine its final dumping margin . . . .”); cf. Deac-
ero S.A.P.I. de C.V. v. United States, 996 F.3d 1283,
1300–01 (Fed. Cir. 2021) (“Commerce considered the
unique factual circumstances of Deacero’s situation
and its level of culpability and concluded that the high-
est Petition rate was appropriate.”) (cleaned up).
Second, Hung Vuong complains that Commerce
disregarded the extent of the company’s cooperation
with the review. The Federal Circuit has emphasized,
however, that there is no fixed single formula Com-
merce must use in deciding what rate is appropriate
for an uncooperative respondent—“neither the statute
nor the pertinent regulations address the weight to be
given to different degrees of cooperation.” Heveafil
Sdn. Bhd. v. United States, 58 F. App’x 843, 849–50
(Fed. Cir. 2003). In Heveafil, the court rejected a re-
spondent’s 	contention 	that 	its 	partial 	cooperation
meant Commerce could not apply the possible highest
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margin. It follows, therefore, that, in this case, the De-
partment permissibly selected the highest possible
rate 	notwithstanding 	the 	company’s 	production 	of
many documents and participation in an extensive
verification on site in Vietnam.
Hung Vuong’s final challenge is that Commerce
“failed to look at any other rates.” ECF 88, at 32. Hung
Vuong offers no suggestion as to what “range of rates”
Commerce should have considered (other than a vague
reference to “some other rates,” id. at 34) nor any cita-
tion to the administrative record that might justify
some other figure. Cf. Shanghain Taoen Int’l Trading
Co. v. United States, 360 F. Supp. 2d 1339, 1348 n.13
(CIT 2005) (“Total facts available is therefore appro-
priate because Commerce has no reliable factors of
production information with which to calculate Ta-
oen’s antidumping margin. Whether another substi-
tute margin would be more rationally related to the
‘actual’ margin is not before the court because plaintiff
has not suggested one, and one is not readily apparent
in the record.”).
Here, the statute permitted Commerce to choose
“any dumping margin from any segment of the pro-
ceeding 	under 	the 	applicable 	antidumping 	order.”
19 U.S.C. § 1677b(d)(1)(B). That’s what the Depart-
ment did: it applied the calculated rate from the eighth
administrative review of Commerce’s original anti-
dumping order. See ECF 75-1, at 19. Thus, in selecting
$3.87/kg, “Commerce acted within its discretion in its
selection of that AFA rate.” Deacero, 996 F.3d at 1300.
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The administrative record allowed the Department
to select $3.87/kg as a “total adverse facts available”
rate for Hung Vuong. The court therefore sustains
Commerce’s selection of that rate.
Conclusion
For the reasons explained above, the court SUS-
TAINS Commerce’s remand results. Doing so resolves
the outstanding issues in this case, so the court will
enter judgment for the government and Catfish Farm-
ers. See USCIT R. 58(a).
Dated: 	October 12, 2021 	/s/ M. Miller Baker
New York, NY 	M. Miller Baker, Judge
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