Slip O p. 10-128 UNITED STA TES COURT OF INTERNATIONAL TRADE

Before: Grego ry W. Carman, Judge Court No. 09-00205

[ Plaintiffs’motion for Judgment on the Agency Re cord is GRANTED IN PART and the Department of Commerce’ s fin al determination is REMANDED. ] deKieffer & Hor gan (Grego ry St ephen Menegaz; James Kevin H or gan) for Plainti ffs

. Tony West, Assi stant Att or ney General; Jeanne E. Davi dson, Di recto r; Patr i ci a M. McCart hy; Assi stant Di recto r, Co mmerci al Li tigati on Branch, Ci vil D i vis i on, Uni ted St ates Department o f Ju sti ce (D eli sa M. Sanchez; Jane Chan g Dempsey); D ani el J. Calhoun, Offi ce of the Chi ef Counsel f or Import Admini strat i on, Uni ted S tate s Department o f Commerce; for Defendant. Vory s, Sater , Sey mour and Pease LLP(Freder i ck Paul Wai te; K i mberly Rae Y oung) for Defendan t-Inter venor . Dated: Nove mber 16, 2010 O P I N I O N & O R D E R JIAXING BRO THER FASTENER CO., LTD., A.K.A. JIA XING BROTHER STANDARD PARTS CO., LTD., IFI & MO RGAN LTD., an d RMB F ASTENERS LTD.,

Plainti ffs

v. UNITED STATES,

Defendan t, and VULCAN THREADED PRODUCTS, INC.,

Defendan t-Inter venor .Court No. 09-00205 Page 2

C A R M A N , J U D G E : Plainti ffs Ji axin g Bro ther F astener Co ., Ltd. (also known as J i axin g Brot her S tandard Part s Co., Ltd.) (“Ji axin g Bro ther”), IF I & M or gan Ltd. (“IFI ”), and RMB F asteners Ltd. (“RMB”) (the thr ee compani es wi ll be referr ed to collectively as the “Brot her Co mpani es” or “Plai nti ffs ”) have brought thi s cas e to challen ge t he Department o f Commerce’s (“Commerce” or “the Department”) final determin ation of sales at less than fai r v alue in Cert ai n Stee l Threaded Rod fro m the People’s Republi c of Chi na, 74 Fed. Reg . 8,907 (Feb. 27, 2009) (“Final Determi nati on”), PR 189. The Brother 1 Compani es have moved for judgment o n the agency r ecord pursuant to Rule 56.2 of the Rules of the Uni ted S tate s Court o f Internat i onal Trade (“USCI T”). The Uni ted S tate s, Defendan t, and Vulc an Threaded Products, Inc. ( “Vulc an”), D efendant-Interv enor, oppose the mot i on. At is sue here i s wh ether Commerce chose the “best avail able information,” as required by 19 U.S.C. § 1677b(c)( 1), when s electi ng among t he financi al statements of 2

var i ous Indi an compani es as s urro gate sources of data for calculating the nor mal value of the subject merchandi se, steel threaded r od (“STR”) from Chin a. Of the fi nanci al statements at is sue in thi s cas e, Commerce rejected t hose of Deepak Fastener s Ltd. (“Deepak”), Mangal St eel Enterpr i ses, Ltd. (“Mangal”), Vi sakha Wi re Ro pes Ltd.

The pub li c admini strat i ve r ecord is refer red t o thr oughout t hi s opi ni on as “PR.” 1 All ci tation to t he Uni ted S tate s Code are t o the 2006 editi on. 2Court No. 09-00205 Page 3

(“Vi sakha”), and Rajrat an Global Wi re Lt d. (“Rajr atan”), but acc epted tho se of Lakshmi Preci si on Scre ws ( “Lakshmi ”) and Ster li ng Tools Ltd. (“St erling”). The Court affi rms the FinalDetermin ation to the ex tent t hat Commerce r ejecte d the fi nanci al statements of Deepak, Mangal, and Vi sakha and ac cepted the statements of Lakshmiand Ster li ng becaus e the Co urt fin ds that sub stanti al recor d evidenc e supports these deci si ons and that they ar e ot herwi se in acc or dance w i th law. However, t he Court finds that Commerce based i ts deci si on to rej ect the fi nanci al statement of Rajr atan on a mi stake as to the nature o f that company’s products, and that the deci si on was therefore no t supporte d by sub stanti al evidenc e on the r ecord. Plai nti ffs ’ motion i s there fore g ranted in part and the Final D eter minati on i s remanded to Co mmerce to reconsi der t he appropr i ateness of us i ng Raj rat an’s financi al statement by analyzing the comparabi li ty o f Rajr atan’s merchandi se to t he subject mer chand i se. I. P R O C E D U R A L H I S T O R Y Commerce began this i nvestigati on after receiving a petiti on from Vulcan seeki ng the im posi tion of anti dumping duti es on STR fro m China. (P etiti on from Law Firm of Vorys Sat er t o S ec of Commerce (Mar. 5, 2008), PR 2.) Commerce publi shed i ts prelim i nary det ermin ation of sal es at less than f ai r v alue (“LT FV”) on Octo ber 8, 2008 (Certain Steel Threaded Ro d from the People’s Republi c of China, 73 Fed. Reg . 58,931 (Oct. 8, 2008), PR 132), an d an amended p relim i nary det ermin ation later that monthCourt No. 09-00205 Page 4

(Certain Steel Threaded Ro d from the People’s Republi c of China, 73 Fed. Reg . 63,693 (Oct. 27, 2008), PR 146). After conducting ver i fi cati on and acc eptin g subm i ssi ons of factual information and c ase bri efs fro m intere sted parties, Commerce analyzed and made deci si ons in an Iss ues and Deci si on Memor andumreg ardin g all i ssu es rai sed. (Memo w/attachment(s) from DAS/I A to AS/I A i ssu es and dec i si on memo for F i nal Det of Sales LTFV (Feb. 20, 2009), PR 186 ( “IDM”).) Commerce then publi shed the Fi nal Determin ation in the Feder al Regis ter , i ncorpor atin g the I DM by refer ence. (Final Determin ation, 74 Fed. Reg. at8,907.) II. S T A N D A R D O F R E V I E W The Court “shall hold unlaw ful any dete rmi nati on, fi nding, or conclu si on found . . . to be unsupported by substanti al evidenc e on the r ecord, o r o therwis e not in accordance w i th law,” bu t ot herwi se sh all uphold Commerce’s determi nati on. 19 U.S.C. § 1516a(b)(1)(b)( i ); Dorbest Ltd. v. U ni ted S tate s, 604 F.3d 1363, 1371 (Fed. Ci r. 2010). Substanti al evidenc e “i s more than a mere sci nti lla. It means su ch relevant evidenc e as a reasonable mind mi ght accept as adequate to support a conclu si on.” Uni ver sal Camera Cor p. v. NLRB, 340 U.S . 474, 477 (1951) ( i nternal quot ations omi tte d). Under t hi s standard, the Court mus t ensure that C ommerce to ok “into account contradic tor y ev i dence or ev i dence from whi ch c onfli cti ng i nferences c ould be drawn.” See id. at 487. The reviewing court must also consi der “the recor d as a w hole, i nclu di ngCourt No. 09-00205 Page 5

evidenc e that support s as w ell as evi dence that ‘fai rly det racts from the substanti ali ty o f the ev i dence.’” HuaiyinFor ei gn Trade Co rp. (30) v. United Stat es, 322 F.3d 1369, 1374 (Fed. Ci r. 2003) (quotin g At l. Sugar , Ltd. v. U ni ted S tate s, 744 F.2d 1556, 1562 (Fed. Ci r. 1984)). However, “the po ssi bi li ty o f drawing two inc onsi stent conclus i ons from the evidenc e does not pr eventan admini strat i ve ag ency’s finding from bein g supporte d by sub stanti al evidenc e,” Consolo v . Fed. Mar i tim e Comm’n., 383 U.S. 607, 620 (1966) (ci tations omi tte d), so long as there is a “rat i onal connecti on between the facts found and the choi ce made” in the agency’s deter minati on. See Burli ngto n Truck Lines, Inc. v. Uni ted S tate s, 371 U.S. 156, 168 (1962). Thu s, in the speci fi c context o f reviewing Commerce’s deci si on reg ardin g whi ch information cons titutes the “best avai lable i nformation” un der 19 U.S .C. § 1677b(c )(1) , “the court ’s role ‘ i s not to evaluate whether the in formation Commerce used w as the best avai lable, bu t r ather whether a reasonable mind could c onclude that Commerce chose the best avail able information.’” Dorbest Ltd. v. U ni ted S tate s, 30 CIT 1671, 1676, 462 F. Supp. 2d 1262, 1269 (2006), aff’d-in-part, vacated-i n-part, and remanded on ot her gr ounds, 604 F.3d 1363 (qu oting Goldlink Indus. Co. v. United Stat es, 30 CIT 616, 619, 431 F. Supp. 2d 1323, 1327 (2006)). III. D I S C U S S I O N Thi s cas e centers on whether Co mmerce vi olated t he mandate, gi ven by 19 U.S .C. § 1677b(c )(1) , to choo se the “best avail able information” wi th i ts deter minati ons aboutCourt No. 09-00205 Page 6

whi ch proxy financi al statements from Indiansurrog ate compani es to accept and rej ect i n valui ng the factor s of producti on to calc ulate the nor mal value of the subject merchandi se. The parti es’ contentions reg ardin g the appr opriateness of the financi al data fro m each p ote nti al surrog ate company are set fort h below, along wi th the Co urt’s analysi s relating to that company. A. Deepak Commerce rej ected the fi nanci al statements of Deepak, an Indi an producer of merchandi se i denti cal to the subject merchandi se, bec ause Commerce found that Deepak mi ght hav e benefi tte d from counterv ai lable subsi di es and had sub mi tte d i ncomplete financi al statements.

1. Content i ons of the Parties Plainti ffs object t o Co mmerce’s rejection of Deepak’s financi al statements on three gr ounds. Fi rst, t he Brot her Co mpani es argue that Commerce mi stakenly i nterpr eted Annexur e XIX , i tem 4(c) of D eepak’s fi nanci al statement as showing Deepak’s “partici pation in the DEPB [Du ty Ent i tlement Pass B ook Scheme] s ubs i dy.” (Pls .’ Rule 56.2 Mem. inSupp. of Mo t. for J. Upon the Ag ency R. (“Pls .’ 56.2 Mem.”) 10- 12 (quoti ng IDM at10).) Acc or di ng to the Bro ther C ompani es, Annexure XI X “si mply li sts the broad accounti ng princ i ples appli ed i n preparing the financi al statements,” and does not indi cate whether DEPB s ubs i dy moneys were actually r ecei ved by Deepak.Court No. 09-00205 Page 7

(Id. at 10-11.) The Brother Compani es contend that Deepak’s pro fi t and loss statement i n Annexure XV “shows that, whi le Deepak di d recei ve [DEPB s ubs i dy moneys] i n fi scal year 2006,” i t did not r ecei ve any in fi scalyear 2007. (Id. at 11.) Defendan t, for i ts part, acknowledges that Deepak r ecei ved the DEP B sub si dy before t he POI, but arg ues that Commerce’s rej ecti on of Deepak’s fi nanci al statements was n onetheless proper becau se what matter s i s wh ether a company recei ved o r may hav e received a countervailable sub si dy at any poin t, and Deepak’s receip t of t he DEP B sub si dy in 2006 was s uffi ci ent to show i ts partici pation in the counterv ai lable subsi dy re gar dless of the ye ar in whi ch the fund s were recei ved. (Defendant’s Respons e in Opposi tion to Plainti ff’s [ si c] Motion for Judgment Upon the Admi ni strat i ve Re cord (“Def.’s 56.2 Opp.”) 10- 12 (ci tin g Omnib us Trade and Comp. Act of 1988, H.R. R E P . N O . 100-576, at 59 (1988) (Conf. Rep.) (stati ng that Co mmerce sh ould “avoid us i ng any prices whi ch i t has reason to beli eve o r suspec t may be dump ed or sub si di zed pric es”) ( emphas i s added) and Wooden Bedro om Furniture from the People’s Republi c of China, 73 Fed. Reg . 49,162 (Aug. 20, 2008), and accompanyin g IDM at cmt. 1c) .) Vul can c oncurs wi th the United Stat es, and als o asserts that Deepak’ s lac k of r evenue under “Li cens e Sale Entitlement” does not necessari ly mean that Deepak re cei ved no inc ome relat ed to t he DEP B sub si dy in2007, since s uch li cens es canbe sold on the secondary mark et and the inc ome book ed elsewh ere in the financi al statement. (Defendan t-Inter venor ’s Response Bri ef in Opposi tion to Plainti ff’sCourt No. 09-00205 Page 8

[si c] Motion for Judgment Upon the Ag ency Record (“Def.-Int.’s 56.2 Opp.”) 6-9.) Second, Plainti ffs allege that Commerce arbitrarily and cap ric i ously departe d from its p ractic e of prefer ring financi al statements from compani es producing i denti cal merchandi se—even i n the face of evi dence of subsi di es—i f the alter nati ve r equi res the use of financi al statements from pro ducers of merely comparable products. (Pl’s 56.2 Mot . at 11-12 (ci tin g Issues an d Deci si on Memor andumfor t he Fin al Determin ation of Carbazole Violet Pi gment 23 fro m the People’s Republi c of China (Nov. 8, 2004), availab le at htt p://i a.i ta.doc.go v/frn/summary/prc/E4-3197-1.pdf (“CVB-23 ID M”) (last vis i ted Nov . 15, 2010), incorpor ated in to F i nal Determinati on of Car bazole Vi olet Pi gment 23 fro m the People’s Republi c of China, 69 Fed. Reg . 67,304 (Nov. 17, 2004) and 19 C.F.R. § 351.408(c)(4) ).) Acc or di ng to Plainti ffs, Deepak was the only pro ducer of i denti cal merchan di se in the prelim i nary det ermin ation, and Comm erce’s deci si on to rej ect Deepak’s financi al statement and accept instead that of S ter li ng (a producer o f merely comparable merchandi se) w as arbi tr ary and capri ci ous, and “led to a 15 percentage poin t in crease i n Brot her’s dumping margin” in the final determin ation. (Id. at 12.) Commerce rejects the charg e that it acted arbi tr arily and c apric i ously here, contendi ng that, by poli cy, the Department o nly accepts fi nanci al statements bearin g evidenc e of subs i di es wh ere t here is no alter nati ve, and thatNasc o S teel (“Nasco”), Lakshmi, and Ster li ng—all producers of comparable merchandi se—presented viabl eCourt No. 09-00205 Page 9

alter nati ve fin anci al statements. (Def .’s 56.2 Opp. at 12.) Vulc an concu rs wi th the Uni ted S tate s. (D ef.-Int.’s 56.2 Opp. at 9-10.) Thi rd, the Br other Compani es argue that Commerce wrong ly deter mined that Deepak’s financi al statement was incomplete. (Pl .’s 56.2 Mot . at 12-14.) Accordi ng to Plainti ffs, Commerce found that “schedu les V and XIV” fro m the “Consoli dated Profit and Loss Ac count for t he Year Endin g 31-03-07” were mi ssing, although t he documen ts (Annexures V and XIV to t he balanc e sheet secti on of the fin anci al statements) are found i n Docu ment 98 of the Publi c Record at pag es 23 and 25. ( Id. at 12-13.) Whi le Plainti ffs admi t that the gener i c nam e of Deepak’s princ i ple product—fasteners—was omi tte d from the “Balance Sheet A bstract and Company’s General Business Profi le page”

sum mary for m (a “s tandard for m und er t he Indi an Compani es Act that mere ly

sum mari zes on one page t he i nformation found elsewh ere in the financi al statements”), they no te t hat the fi nanci al statements never theless indi cate that “t otal sales rev enue relat ed to sales of ‘fasteners i tems’” and that the Di recto r Repo rti ndi cates “that Deepak oper ates i n the ‘Fastener s Indus tr y.’” (Id. at13-14.) P lai nti ffs also poi nt out t hat “ext ensi ve pr oduct i nformation” in the recor d showed that “Deepak produced steel threaded r od.” (Id. at 14.) Fr om this, Plainti ffs arg ue that Co mmerce’s final deter minati on, rej ecting Deepak’s financi al statement as i ncomplete, was not support ed by sub stanti al evidenc e. (Id.) Commerce contends that Plainti ffs are mis take n inCourt No. 09-00205 Page 10

beli eving that the pr esence of Annexures V and XIV to the Consolidated Balanc e Sheet on the r ecord solv es the i ncompleteness problem, since the i tems Commerce found to be mi ssing were Annexur es V and XIV to a different do cum ent (the Consolidated Profi t and Loss Ac count for t he Year Endin g 31-03-07), and remain unadd ressed by Plainti ffs

. (Def .’s 56.2 Opp. at 13.) Commerce also contends that its “w ell-found ed concerns . . . about the r eli abi li ty and integrity of Deepak’s fi nanci al statement” ar e not addr essed “just becaus e the omitted i nformation could potent i ally be gleaned from anot her source.” Vulc an di d not comment on the completeness of Deepak’s financi al statement.

2. Analysi s The anti dumping statute r equi res that, when establi shing the nor mal value of merchandi se in a nonmarketeconomy (“NME”), Commerce “shall determi ne the normal value o f the sub ject mer chand i se on the basi s of the values of the factors of production uti li zed i n producing the merchandi se and to whi ch s hall be added an amount for g eneral ex penses and profi t plus the cost of contai ners, cover i ngs, and other expenses.” 19 U.S.C. § 1677b(c) (1). The statute r estric ts the manner i n whi ch the fac tor s may be valued by stating that “the v aluati on . . . shall b e based on the best avai lable i nformation regar di ng the v alue of su ch f actor s in a marketeconomy country or countries consi dered t o be appro priate” by Commerce (in thi s instance, Indi a). Id. The factors of pro ducti on i nclu de, “but are not li mi ted to —(A) hours of labor required, (B)Court No. 09-00205 Page 11

quanti ties of raw mater i als empl oye d, (C) am ounts of energ y and ot her utili ties

consu med, and ( D) representative capi tal cost, in clud i ng depreciati on.” § 1677b(c) (3). Commerce has promulgated 19 C.F .R. § 351.408, a reg ulati on further elaborat i ng on the manner inwhi ch normal value for an NME is calc ulated from factor s of production in a su rr ogat e market economy country . That reg ulati on speci fi es that “[f]or manuf acturi ng ov erhead, ge neral expenses, and profi t, the S ecretar y nor mally wi ll us e non-propr i etar y in formation gather ed from pro ducers of i denti cal or comparable merchandi se in the surrog ate countr y.” § 351.408(c)( 4). Commerce has als o ar ticulated the polic y by whi ch i t appli es the statute and reg ulati on i n partic ular i nvestigati ons. The D epart ment’s poli cy i s gui ded by the conference repor t is sued b y the Co ngressi onal commi tte e charged wi th reconci li ng the House and Senate ver si ons of the Omnibus Trade and Competiti veness Act of 1988, whi ch s tate d, in regar d to calculating nor mal value by the factors of pr oducti on method, that “Co mmerce sh all avoid us i ng any prices whi ch i t has reason to beli eve o r suspec t may be . . . sub si di zed pric es. . . . [We] d o not i ntend for Co mmerce to conduct a formal i nvestigati on to ensure that suchpric es are not. . . sub si di zed, but rather i ntend that Commerce base i ts deci si on on in formation generally availab le to it at t hat time.” Omnibus Trade and Competiti veness Act of 1988, H.R. R E P . N O . 100-576, at 59, (1988)Court No. 09-00205 Page 12

(Conf. Rep.), reprinted in 1988 U.S.C.C.A .N. 1547, 1623-24. In accordance wi th this 3 statement o f legi slati ve intent, Commerce’s establi shed practi ce i s “to dis reg ard financi al statements where we have reason t o suspec t that the company has recei ved acti onable sub si di es, and where there is other usab le data on t he recor d.” (IDM at 8 (ci tin g Issues an d Deci si on Mem. for the Antidum pi ng Inv. o f Certain NewPneum atic Off-the-Road Ti res from t he People’s Rep. of China (Ju l. 7, 2008), avai lable at http://ia.i ta.doc.go v/frn/summary/PRC/E8-16156-1.pd f, at 37 (“OTR Ti res IDM”) (last vis i ted Nov . 15, 2010), incorpor ated in to C ert ai n New P neumati c Off- The-Road Ti res from the People’s Republi c of China: Fi nal Affi rmative Determinati on of Sales at Less Than Fai r Value and Parti al Affi rmative Determinati on of Cr i tic al Ci rcums tances, 73 Fed. Reg . 40,485, 40,486 (Ju l. 15, 2008)).) Plainti ffs arg ue that § 1677b(c) (1) m eans that Commerce, inselecting the “best availab le i nformation,” mu st priori tize data regar di ng i denti cal merchan di se over data pert ai ning to merely comparable merchandi se. Plainti ffs ’ i nterpr etat i on i s su pport ed solely by ci tation to t he CVB-23 IDM. A readin g of t he CVB-23 IDM, however, r eveals that Plai nti ffs mi sinterpr et t hat evidenc e of agency pr acti ce. Contr ary to Plain tiffs’ i nterpr etat i on, the CVB-23 IDM expr essed the Department’s preference for data The repor t also states, “[i ]n addi tion, Commerce sh ould seek to use, i f possi ble, 3 data based on producti on of the same gener al clas s or k i nd of merchandi se us i ng si mi lar levels of technolog y and at si mi lar lev els of volume as the producers subject t o i nvestigati on.” Id.Court No. 09-00205 Page 13

reg ardin g either i denti cal or comparable merchandi se versus Reserve Bank of Indi a data agg reg atin g fi nanci al ratios of many hun dreds of pro ducers of all m anner of merchandi se. See CVB-23 IDM at 3-8. Whi le i solated quote s from the CVB-23 IDM appear to expr ess a preference solely for dat a reg ardin g iden tic al merchandi se, read in 4 context i t is clear that t hose quotations merely eli de the “or comparable” phrase of “i denti cal or comparable,” and that t he CVB-23 IDM does not adopta prefere nce for data fro m i denti cal merchan di se over data fro m comparable merchan di se. Id. The Court has found no su pport for any pr eference between i denti cal versus comparable merchandi se. The s tatut e does not speak t o this di sti ncti on. See 19 U.S.C. § 1677b(c ). Commerce’s regulation does not for bi d tre atment of identi cal and comparable merchandi se as equ i valent. S ee 19 C.F.R . § 351.408(c) (4) ( “[T] he Secret ary normally wi ll us e non-propr i etar y in formation gather ed from pro ducers of i denti cal or comparable merchandi se”). Commerce’s s tate d practic e i s to ex clud e “financi al statements where ther e i s evi dence that the company received counterv ai lable subsi di es and there ar e ot her suffi ci ent re li able and representative data o n the recor d”; when 5

See CVB-23 IDM at7 (“[T ]he Department’s preference is to use, where possi ble, 4 the fi nanci al data of surro gate producers of id entic al merchandi se, prov i ded that t he surrog ate v alue data are not di stor ted or other wi se unreli able.”). Cert ai n Seamless Carbon and Alloy St eel St andard, Li ne, and Press ure Pi pe 5 from the People’s Rep. o f China: Issu es and D eci si on Mem. for the Final D eter minati on, (Sept. 10, 2010), available at http://i a.i ta.doc.go v/frn/summary/PRC/2010-23549-1.pdf at 35 (“Seamless P i pe IDM”) (last vi si ted Nov . 15, 2010), incorpor ated in to C ert ai nCourt No. 09-00205 Page 14

deter mining whether t here ar e ot her suffi ci ent re li able and representative data o n the

recor d, Commerce appears to tr eat data r egar di ng i denti cal and c omparable merchandi se as equ ally adequate alter nati ves to data re flecting subs i di es. 6 The Court o f Appeals f or the Feder al Ci rcui t (“CAFC ”) has recently stat ed that the re qui rement in § 1677b (c) (1) that Commerce use the best avai lable information “i s ambi guous,” Dorbest Ltd. v. U ni ted S tate s, 604 F.3d 1363, 1373 (Fed. Ci r. 2010), and Commerce has broad di screti on to deter mine whi ch information i s the best avai lable, Nation Ford Chem. Co. v . Uni ted S tate s, 166 F.3d 1373, 1377 (Fed. Ci r. 1999) (ci tin g

cases ). Beari ng this i n mind, the Court conclu des that Commerce’s consi stent practices of rej ecti ng fi nanci al statements that suggest subsi di es and treating financi al statements reg ardin g iden tic al and comparable m erchandi se as equ ally acceptable alternatives are reasonable i nterpr etat i ons of the statuto ry mandate to use the best availabl e i nformation. For thi s reason, the Cour t fi nds that Commerce acted wi thi n i ts di screti on Seamless Carbon and Alloy S teel S tandard, Lin e, and Pressu re Pi pe from the People’s Rep. of Chi na: Fi nal Determi nati on of Sales at Less Than Fai r Value and Criti cal Ci rcums tances, in Part, 75 Fed. R eg. 57,449, 57,450 (Sept . 21, 2010). See S eamless Pi pe IDM at Cmt . 6; Issues and Dec i si on Mem. for the 6 Antidu mping Duty Inv esti gation of Cert ai n Oi l Country Tub ular Goods from the People’s Rep. of Chi na (Apr. 8, 2010), avail able at http://ia.i ta.doc.go v/frn/summary/ PRC/2010-8994-1.pd f, at 81 (“OCTG IDM”) (las t v i si ted Nov . 15, 2010), incorpor ated in to Cert ai n Oi l Country Tub ular Goods from the People’ s Rep. of China, 75 Fed. Reg . 20,335 (Apr. 19, 2010) (notin g that the thr ee compani es wh ose financi al statements were under consi derat i on “each produce merchandi se that isi denti cal and/or comparable to t he subject mer chand i se.”).Court No. 09-00205 Page 15

i n excluding the Deepak fin anci al statement due to the possibi li ty t hat Deepak re cei ved acti onable sub si di es, and that Commerce reasonably used financi al statements from manuf acturers of comparable merchandi se instead. The Court t herefor e upholds thi s aspect of the Fin al Determin ation. 7 B. Lakshmi and St erling In the Final D eter minati on, Commerce dete rmined that the fin anci al statements of Lakshmiand Ster ling were among t he best avai lable information, and u sed them in valui ng Plainti ffs ’ factors of pr oducti on.

1. Content i ons of the Parties Plainti ffs clai m that Commerce should have rej ected the fi nanci al statements of Lakshmiand Ster li ng. The fi rst pr ong o f thi s argument i s easi ly di sposed of bec ause i t hinges on the prior ar gument reg ardin g Deepak: Plai nti ffs contend that Deepak’ s data,

unc ontestedly from the o nly pro ducer of i denti cal merchan di se in the recor d, was better than the data fro m Lakshm iand Ster li ng, whi ch only produced arguably comparable merchandi se. Thi s argument i s un availing, since the Courthas already held that Commerce acted wi thi n i ts di screti on i n determining not t o use the Deepak data due to the possibi li ty t hat i t r eflected subsi di es. It isalso unavai li ng becaus e, as di scu ssed

Havin g concluded that Commerce permis si bly excluded the Deepak financi al 7 statement due to sub si di es, the Court need not r each the questi on of whether Deepak’ s financi al statement was incomplete.Court No. 09-00205 Page 16

above, Co mmerce’s practi ce of treat i ng data r egar di ng i denti cal and c omparable merchandi se i s reasonable. The sec ond pro ng of Plainti ffs ’ arg ument i s that Lakshmiand Ster li ng manuf acture hi gh tensi le automot i ve fasteners (“HTAF”), a product thatPlainti ffs contend i s not eve n comparable to S TR. Comparabi li ty is n ot defined in the anti dumping statute o r t he reg ulati on. Commerce’s ty pi cal practi ce in analyzi ng comparabi li ty is to consi der t he si mi lariti es in producti on, end uses, and physi cal characteris tic s between two products. (P ls.’ 56.2 Mem. at 16 (ci tation omi tte d).) Plainti ffs clai m that Commerce did n ot analy ze the factor s in thi s cas e. (Id. at 17.) If i t had, Plainti ffs assert, evidenc e on the r ecord would have shown that HTAFs are

cus tom-made i n sm all batches, “mus t meet v ery stric t speci fi cati ons for str ength, reliab i li ty and str ucture” to withs tand “hi gh-stress cri tic al appli cati ons,” and thus have “a si gni fi cantly more adv anced and costly manufac turing process” resulting i n fac tor y

ov erhead r atios m or e than ten times that o f STR. (Id. at 17-21.) The Brother Compani es clai m that this evidenc e was n ot r ebutted at t he admini strat i ve lev el and argue that, as a result, the F i nal Determi nati on i s un supp or ted by subs tantial evi dence on the recor d. (Id. at 21.) The Uni ted S tate s and Vulcancounter t hat, given that Deepak’s fi nanci al statements were pro perly r ejecte d due to subs i dy, the Lak shm iand Ster li ng fi nanci alCourt No. 09-00205 Page 17

statements were the best av ai lable information. Commerce contends that i t consi dered the di fferences an d si mi lariti es between HT AF and STR and dete rmi ned that they were comparable becau se they were bot h fas tener s, and w ere made using “si mi lar r aw materials and producti on pro cess es.” (D ef.’s 56.2 Opp. at 20.) Commerce di d not i gnor e the ev i dence regar di ng di fferences b etween the pro ducts, b ut conclu ded that HTAF are comparable t o S TR, “albei t mor e speci ali zed.” (Id. at 21.) Commerce there fore ex erci sed i ts di screti on to “choose among i mperfect alter nati ves.” (Id. (internal quot ation omi tte d.)) Wi th reg ard to Commerce’s deci si on to use Lakshmi ’s financi al statement, Plainti ffs also contend that Co mmerce acted arbi tr arily and c apric i ously becau se i t rej ected Deepak’s financi al statements due to a subs i dy on the one hand, wh i le accepting Lakshmi ’s financi al statements despi te r ecord ev i dence that Lakshmireceived a sub si dy on t he other hand. (P ls.’ 56.2 Mem. at 22-23.) The Uni ted S tate s and Vulcan contend that t hi s las t is sue i s not pro perly befor e the Co urt because the Brot her Compani es fai led to r ai se i t inthe admi ni strat i ve pr oceedi ngs and P lai nti ffs thus fai led to e xhaust thei r admi ni strat i ve r emedi es. (D ef.’s 56.2 Opp. at 21-23; Def.- Int.’s 56.2 Opp. at 18-21.)Court No. 09-00205 Page 18 2. Analysi s The statute, 19 U.S .C. § 1677b(c ), and the regulation, 19 C.F.R. § 351.408(c)(4) , do not defin e the te rm “comparable.” Commerce’s practic e i n determining whether t wo products are comparable is “to apply a three -prong t est that consi ders: (1) physi cal characteris tic s; (2) end- us es [s i c], an d (3) producti on pro cess es.” Seamless P i pe IDM at 33. These f actor s were not ignored by Co mmerce in the IDM as alleged by Plai nti ffs

. Commerce, i n finding that Lak shm iand Ster li ng “are pr oducers of merchandi se comparable to t he sub

ject S TR,” noted t he “affi davits provided b y the [Plai nti ffs ] . . . di scu ssing the difference between hi gh-tensi le fasteners and the STR pro duced b y [Plainti ffs ].” IDM at 11. Co ntrar y to Defendan t’s arg ument that Commerce found HTAF and STR to be made us i ng “si mi lar r aw material s and producti on pro cess es,” (Def .’s 56.2 Opp. at 20), Commerce actually note d that “[w]hi le hi gh-tensi le fasteners for the automo tive i ndus tr y may be di fferent than the fasteners pro duced b y [Plainti ffs ] in ter ms of raw materi als and p ro cess . . . recor d evidenc e demonstrat es that both [Lakshm i ] and [ St erling] n ever theless produce steel threaded fasteners, and thus, of the remain i ng fi nanci al statements, are manufac turer s of products that are comparable, albei t mor e speci ali zed.” IDM at 11. It is c lear fro m thi s analysi s that Commerce consi dered the evidenc e on the

recor d that fai rly det racted fro m a finding of comparabi li ty, as well as the eviden ce thatCourt No. 09-00205 Page 19

ulti mately led Co mmerce to conclude that HTAF and STR were comparable. Commerce, noting the di fferences b etween the two pr oducts, ulti mately deci ded that both pro ducts are “steel threaded fasteners” and thus vi ewed the two pro ducts asmore si mi lar than different. I d. After close cons i derat i on, the Co urt fin ds that Commerce’s deci si on that HTAF and STR are comparable is supp or ted by subs tantial evi dence in the recor d and took adequate notice of the contrar y ev i dence. Although the Co urt might not have come t o the same conc lusi on were t he deci si on for t he Court to mak e, Commerce oper ates in thi s area wi th a gr eat deal of dis cretion, wh i ch the Court is b ound to r espect. Review i ng the IDM, the Co urt is convin ced that a reasonable deci si onmaker could have come to t he

same c onclus i on as Commerce. The Court t herefor e upholds the Final Determi nati on to the ext ent thati t chose to use the fi nanci al statements of Lakshmiand Ster li ng as producers of comparable merchandi se. As to Plai nti ffs ’ arbitrary -and- capri ci ous clai m agai nst us e of Lakshmi ’s financi al statement, t hi s Court is m andated to , “where appropr i ate, r equi re t he exhausti on of admini strat i ve r emedi es” in trade cases. 28 U.S.C. § 2637(d). As the CAFC has explain ed, “[a]lthough that statut or y in juncti on i s not absolute, i t in di cates a congressi onal intent t hat, absent a strong contrar y r eason, the court should i nsi st that parties exhaus t their remedies before t he pertinent admini strat i ve ag enci es.” CorusCourt No. 09-00205 Page 20

St aal BV v. Uni ted S tate s, 502 F.3d 1370, 1379 (Fed. Ci r. 2007). The Courtof Inter nati onal Trade gener ally enforces the exhaustion requi rement str i ctly in tr ade

cases . Id. (ci tin g cases) . In addi tion to the stat utor y admoni tion that the Co urt o f Inter nati onal Trade re qui re ex haus tion, Commerce by regulation requi res that “all arg uments that conti nue in the sub mi tte r’s view to be relev ant to the . . . fi nal deter minati on or final results” mu st be rais ed i n the part y’s case bri ef, whi ch i s sub mi tte d after t he prelim i nary det ermin ation bu t before the fi nal determin ation. 19 C.F.R. § 351.309(c)(2)

. In defining the scope of i ts di screti on to enter tain unexhaus ted clai ms u nder 28 U.S.C. § 2637(d), the Co urt has descri bed certainci rcums tances in whi ch exhaus tion w i ll not be r equi red: where ex haus tion w ould be fu tile, or i nequi table and an insi stence of a useles s formali ty; where a court deci si on i ssu ed after t he admini strat i ve det ermin ation mi ght hav e materially affec ted the ag ency’s acti ons; where entert ai ning the is sue w ould not intrude upon the agency’s prer ogat i ves becaus e i t is a pure questi on of law not requiring further factual development; and where the plainti ff had no reason t o suspec t that t he agency would refuse to adhere t o clearly applic able precedent. Consol. Bearings Co. v. Uni ted S tate s, 25 CIT 546, 552-53, 166 F. Supp. 2d 580, 586 (2001) (ci tations omi tte d). Another line of cas es indi cates that the Co urt o f Internat i onal Trade wi ll deci de an unexhaus ted is sue on the meri ts when the party r ai sing the is sue had noCourt No. 09-00205 Page 21

oppor tuni ty t o do so befor e the age ncy. See g enerally, e.g ., Qin gdao Taif a Group Co., Ltd. v. U ni ted S tate s, 33 CIT ___, 637 F. Supp. 2d 1231 (2009). None of these exceptions apply to the pr esent case. Futi li ty do es not apply here , for if P lai nti ffs had rai sed thi s i ssu e before Co mmerce below, i t is di ffi cult to see how Commerce would have justifi ed conti nuing to use Lakshmi ’s subsi di zed financi al statement whi le rej ecti ng Deepak’s. There is no i nterv eni ng court decis i on appli cable here. The i ssu e i s not one o f pure law, b ecaus e settling i t r equi res consi derat i on of the particu lar facts regar di ng the t wo financi al statements, not si mply the analysi s of a statute usi ng standard to ols of statuto ry constructi on. See Consoli dated Bearings, 166 F. Supp. 2d. at 587. Plainti ffs have not i denti fi ed some clear judi ci al precedent thatappli ed to t he i ssu e, nor ar gued that Plai nti ffs fai led to r ai se the arg ument in the expectat i on that Co mmerce would f ollow that clear precedent. It is true that plain tiffs m ay r ai se arguments before the Co urt o f Internat i onal Trade that wer e not r ai sed in a cas e brief before Co mmerce “i f Commerce di d not address the i ssu e unti l i ts final deci si on,” where the r esult was that t he party di d “not have . . . a full and f ai r o pport uni ty t o r ai se the i ssu e at t he admini strat i ve lev el.” Qin gdao Taif a Group Co., Lt d. v. United Stat es, 33 CIT ___, 637 F. Supp. 2d 1231, 1236 (2009) ( ci tin g LTV Stee l Co. v . Uni ted S tate s, 21 CIT 838, 868-69, 985 F. Supp. 95, 120 (1997)) . At t he core o f thi s i ssu e i s Pl ai nti ffs desi re t o ex clud e the Lakshmifinanci alCourt No. 09-00205 Page 22

statement, a positi on that Plain tiffs previous ly asserted in thei r case bri ef before Commerce. (Brief

Fr om Law Fi rm of DeKeiffer Hor gan to Sec of Commerce (Jan. 16, 2009), PR 176, at 15-17). At that t i me, Plainti ffshad ever y r eason to r ai se the i ssu e of Lakshmi ’s recei pt of subs i di es; yet, whi le rais i ng ot her challenges to Lakshmi ’s financi al statement, nowhere in thei r case bri ef di d Plainti ffs menti on Lakshmi ’s recei pt of a counterv ai lable subsi dy. (See id.) Thi s fai lure i s all the more str i kin g since P lai nti ffs di d, i n fac t, r ai se the sub si di zation i ssu e i n arguin g for the exclusi on of the fin anci al statements of two o ther compani es, Sarda Ener gy and M i nerals Ltd. and Welspu n Power and Ste el Ltd. (Id. at 19-21, 23.) Furt hermor e, Plainti ffs di d not r ai se the sub si di zation i ssu e reg ardin g Lakshmii n thei r r ebuttal brief . (See Brief From Law Firm of DeKi effer Horg an to S ec of Commerce (Jan. 26, 2009) PR 182, at 15-16.) Given this

recor d, the Cour t fi nds that Plainti ffs si mply fai led to use the oppo rt uni ty o f thei r case and rebuttal briefs to ar gue to Commerce that Lak shm i ’s financi al statement should be excluded due to Lakshmi ’s recei pt of counter vailab le sub si di es. Becau se Commerce

never had the oppor tuni ty t o deci de the is sue in i ts admini strat i ve pr oceedi ngs, the Court wi ll not enter tainthi s un exhausted questi on. C. Mangal In the Final D eter minati on, Commerce dete rmined that Mang al had recei ved a counterv ai lable subsi dy and thus rejecte d i ts financi al statement when valuingCourt No. 09-00205 Page 23

Plainti ffs ’ factors of pr oducti on.

1. Content i ons of the Parties Plainti ffs contend that Co mmerce erre d when i t r ejecte d the fi nanci al statement of Mangal upon fi nding that M angal received countervailable s ubs i di es. (P ls.’ 56.2 Mot

. at 23-24.) The Brother Compani es argue that the subs i di es recei ved by M angal compri sed only 3% of the company’s gr oss global sales rev enue, and therefor e “were the United Stat es to investi gate Mangal S teel, sales of subject merchandi se to t he Uni ted St ates mi ght well be at a de mi ni mi s (2% or less) level o f subsi di zation; [s i c] h ence not counterv ai lable at all.” (Id. at 23-24 (emph asi s in origi nal).) Defendan t r ei ter ates that receip t of t he DEP B sub si dy, re gar dless of the amount of t hat subs i dy, is a suffi ci ent basi s for Commerce to rej ect the company’s financi al statements, and argues that t he amount of the subs i dy is i rr elevant t o the leg al standard gov ernin g this deci si on. (Def.’s 56.2 Opp. at 15-16.) Defendan t-Inter venor agr ees wi th Defendant, and points out that Plainti ffs have, wi th this arg ument, conc eded that M angal received subsi di es. (D ef.- Int.’s 56.2 Opp. at21-25.) Plainti ffs also clai m that “to the ext ent Mang al’s financi al statement r eflects any sub si di es that infact would b e counterv ai lable, thi s i s already adve rse to [the Brot her Compani es] in the rat i o calcul ations becau se the Department’s practice i s to offset

rev enue from sub si di es agai nst G&A expense.” (Pl s.’ 56.2 Mot . at 24 (emphasi s inCourt No. 09-00205 Page 24

or i gin al).) In response, D efendant ass ert s that the o ffs ett i ng of subs i dy re venue agains t G&A expenses i s i rr elevant t o the det ermin ation of wh at consti tutes the best available i nformation wh en calc ulating the factor s of producti on. (Def.’s 56.2 Opp. at 15.) Defendan t-Inter venor objects that Plainti ffs ’ pro posal i s contrary to C ommerce’s practic e, unprecedented, and would b e i mpossi ble to r eali ze i n a non-market econo my. (Def .-Int.’s 56.2 Opp. at 24-25.) Plainti ffs final argument re lated to the fi nanci al statement of M angal i s that Commerce err ed becau se, regar dless of sub si dy, Mang al’s financi al statement was sti ll the “best availab le i nformation,” gi ven that Mangal pr oduced merchan di se i denti cal to that pr oduced by the Brot her Co mpani es, and gi ven that Mangal had the same level of production experienc e as the Brot her Co mpani es. (P ls.’ 56.2 Mot . at 25-26.)

2. Analysi s As explai ned regar di ng Deepak, Commerce acted per mi ssi bly i n rej ecti ng Mangal’s fi nanci al statement due to evidenc e that M angal may have r ecei ved a counterv ai lable subsi dy. Plainti ffs ’ arg ument that the subsi dy Mang al recei ved “mi ght well” not be counterv ai lable were Mangal investigated is besi de the point. Commerce need not t urn the search for sui table pro xy finan ci al statements i nto a full-bl own counterv ai li ng duty investi gation before it may rej ect a financi al statement that i ndi cates that the company may have received subsi di es. And Commerce does not er rCourt No. 09-00205 Page 25

i n rej ecting such a financi al statement where an in ter ested part y offers mere speculati on that t he sub si dy “mi ght well” be at a de mi ni mi s level were a counter vailing duty i nvestigati on conducted. Pl ai nti ffs ci te no autho rity to supp or t their confus ed clai m that Mangal’s re cei pt of a subs i dy already counts agai nst i t; and, as di scu ssed ab ov e i n relat i on to Deepak, Commerce di d not er r in choosi ng statements fro m manu facturers of comparable merchandi se over Mangal, whi ch m anufac tured identi cal merchan di se. The Court t herefor e affi rms the FinalDetermin ation in regar d to M angal. D. Rajrat an 1. Content i ons of the Parties Plainti ffs contest Commerce’s deci si on to rej ect the fi nanci al statement of Rajr atan. (Pls .’ 56.2 Mem. at 27-29.) As to R ajr atan, Commerce state d i n the IDM that “the Department ag rees wi th [Vulc an] that the fi nanci al statements of compani es that produce i nputs—whi ch are consu med in manu facturi ng the subject merchandi se— would not capture the do wns tr eam costs of producing STR.” I DM at 9. But Vulcan

never arg ued before the ag ency that Raj rat an’s product was ani nput to S TR (See gener ally Brief From Law Fi rm of Vor ys Sat er t o S ec of Commerce (Jan. 16, 2009) , PR 178 (“Vul can Cas e Brief”; s ee Brief From Law Fi rm of Vor ys Sat er t o S ec of Commerce (Jan. 23, 2009) , PR 181 (“Vu lcan Rebu ttal Br i ef”) at 7-9). Wi thout ex pli ci tly saying that Rajr atan pro duced aninput to S TR, Commerce appears to have found so as a bas i s forCourt No. 09-00205 Page 26

rej ecti ng Raj rat an’s financi al statement. S ee IDM at9-10 (s tating that “[w]i re r od is a gener al production m ater i al i nput that oft en i nvolv es value-added f urther manuf acturi ng i n order to pr oduce a fini shed ( or semi -fini shed) steel pro duct, inclu di ng STR, and i s thus less c omparable to STR than compani es that pro duce fi ni shed s teel product . . . [t]herefor e . . . the Depart ment finds that the 07/08 Raj rat an Global . . . financi al statements are not appropr i ate sources for t he surrog ate fi nanci al ratios”). Thi s i s als o the po si tion D efendant argues i n i ts bri ef before the Co urt. (Def.’s 56.2 Opp. at 16 (“Commerce excluded Rajr atan’s financi al statement . . . becaus e Raj rat an produces wi re r od, an i nput consu med in the manuf acturi ng of the subject merchandi se” (c i tin g IDM at 9)).) Plainti ffs contend that Co mmerce erre d becau se Rajr atan’s financi al statement shows that it does not manufac ture Plai nti ffs ’ i nput, steel rod, but r ather manufactures “p.c. [p restr essed c oncrete ] wi re” and “ty re bead wi re.” (Pls.’ 56.2 Mem. at 27; Pls.’ Reply M em. at 13-14.) Rajr atan’s financi al statement inthe admini strat i ve r ecord confi rms that the company pr oduces “P .C. Wi re” and “Tyr e Bead Wi re.” (Lett er w/attachment(s ) from Law Fi rm of deKieffer & Ho rg an to S ec of Commerce Ji axin g Brot her S urro gate Data, (Dec . 12, 2008), PR 165 at Ex. 3, p. 27.) Plainti ffsarg ue that, contrar y to the fi ndings in the IDM, bot h Rajr atan and the Bro ther C ompani es us e the same input, steel rod, as an i nput in the manuf acture of si mple downs tr eam products.Court No. 09-00205 Page 27

(Pls .’ 56.2 Mem. at 27; Pls.’ Reply M em. at 13-14.) Vulc an does not challenge Plainti ffs on this questi on. As menti oned above , Vulc an di d not ar gue i n i ts case b rief b efore C ommerce that R ajr atan pro duced ani nput to S TR, but rather that “[a] wi re company wi ll not have t he same m anufac turing costs as a producer o f steel threaded r od or other fasteners.” (Vu lcan Rebu ttal Br i ef at 8.) Vulc an concedes here t hat the Br other Compani es and Rajrat an us e the same input. (Def .-Int.’s 56.2 Opp. at 26 (“The prim ary i nput for the pr oducti on of steel wi re is wi re

ro d—the same input that is used f or the pro ducti on of steel thr eaded ro d.”).) Vulcan then makes the same arguments to t he Court that it made to the ag ency: that altho ugh Plainti ffs begi n the STR manufac turing process b y drawin g steel r od in puts, as d o steel wi re manufac turer s su ch as Rajr atan, Plainti ffs then perfor m addi tional process i ng on the drawn ro d whi ch m akes STR inc omparable to the steel wi re manufac tured by Rajr atan. (Id.)

2. Analysi s Commerce’s rej ecti on of Raj rat an’s financi al statement was bas ed on the mi staken fi nding that R ajr atan manuf actured an upstream product used as ani nput i n the pro ducti on of STR. Thi s finding i s not supported by substanti al evidenc e on the

recor d, whi ch s hows that Rajr atan pro duces p.c. w i re and ty re bead wi re, not steel ro d. Defendan t points to nothing in the recor d i ndi cati ng that R ajr atan manuf actures steelCourt No. 09-00205 Page 28

ro d; and Vu lcan c oncedes that Raj rat an does not pro duce s teel r od. The recor d i s utter ly devo i d of any evidenc e that R ajr atan does so. Commerce, having mi stakenly conclu ded that Raj rat an’s product was ani nput us ed in Plainti ffs ’ STR manufac ture, rej ected Raj rat an’s financi al statement for that r eason. The Court t hus finds that Commerce’s deci si on to rej ect Raj rat an’s financi al statement is not support ed by sub stanti al evidenc e on the r ecord. Thi s asp ect of the F i nal Determi nati on i s therefor e remanded to C ommerce. Commerce is di rected, o n remand, to r econsi der t he appropr i ateness of us i ng Raj rat an’s financi al statement by analyzing the comparabi li ty of Raj rat an’s merchan di se to t he subject mer chand i se. E. Visakha Wi re Ropes Ltd. 1. Content i ons of the Parties As for Vi sakha Wi re Ro pes Ltd. (“Vi sakha”), P lainti ffsstate that Commerce “did not ar ticulate a factual b asi s for i ts deci si on or any ot her r eason,” (Pl s.’ 56.2 Mem. at 27- 28), apart fro m “baldl y assert[in g] that wire rope is n ot ‘ comparable’ to subject merchandi se” (P ls.’ 56.2 Reply at 14). Plainti ffs there fore ar gue that t he deci si on i s “defecti ve and must be remanded for a pro per ex planati on of the Depart ment’s reasonin g based on recor d evidenc e.” (Pls .’ 56.2 Mem. at 28.) Commerce’s art i culated rationale for rej ecti ng the Vis akha fi nanci al statement was that “the Department ag rees wi th [Vulc an] that the company does not appear toCourt No. 09-00205 Page 29

manuf acture pro ducts c omparable to STR.” (IDM at 9-10.) That appears to be t he 8 ext ent of the analysis relat i ng to Vi sakha in the IDM. Defendan t, ini ts bri ef, quotes Commerce’s IDM summ ary of Vulc an’s posi tion in

sum mari zi ng Commerce’s fi ndings. (D ef.’s 56.2 Opp. at 17-18.) Acc or di ng to Defendan t, “[t]hro ugh adoption of Vul can’s u nrebutted po si tions backed by recor d evidenc e, Commerce in di cated a reasonable and di scerni ble bas i s for i ts deci si on.” (Id. at 18 (ci tin g NMB S i ng. Ltd. v . Uni ted S tate s, 557 F.3d 1316, 1319 (Fed. Ci r. 2009) for t he propo si tion that the ex planati on for ho w Commerce reached i ts deci si on need only be reasonably dis cernable, not perfect.) Vulcanarg ues that Vi sakha manu factures wi re

ro pe by “strandin g or brai di ng multi ple steel wi res to get her” and that “t here is no i ndi cati on i n the company’s financi al statement—or anywhere else in the recor d—that [Vi sakha] produces s teel t hreaded ro d or any other type o f steel fas tener .” (Def .-Int.’s 56.2 Opp. at 28.) Cont ending that “[t ]here are no si mi lariti es between” the processing used to make steel r ope and that used to mak e STR, Vulcan as serts that C ommerce

corr ectly r ejecte d Vi sakha’s financi al statement. (Id.)

Earlier in the IDM, Co mmerce su mmari zed Vulc an’s posi tion—the argument 8 wi th whi ch Commerce purport s to agr ee i n deci di ng to rej ect Vi sakha’s financi al statement—in thes e words: “that t he company i s a producer of steel wi re r ope, whi ch i s a downstream product made from steel wi re, but has an enti rely di fferent pro ducti on process from STR” and that “t he manu facturi ng pro cess i s wh olly dis si mi lar, and not comparable to S TR.” IDM at 3.Court No. 09-00205 Page 30 2. Analysi s Although t he IDM does not pr esent Commerce’s reasonin g inthe most luci d ter ms, i t does in di cate that Co mmerce acc epts Vulc an’s posi tion in rej ecti ng Vi sakha’s financi al statement. In doing so, Commerce i mpli ci tly indi cates that it finds that wi re

ro pe i s not a comparable product to the subject merchandi se due to the differences in production process. G i ven that Commerce, i n maki ng such deci si ons, operat es wi thi n a wi de area o f di screti on, and given that Commerce r eferenced the recor d and Vu lcan’s arg uments fro m the recor d i n articu latin g its dec i si on, the Co urt fin ds that Commerce’s deci si on i s bas ed on subs tantial evi dence. P lai nti ffs ’ motion i s therefor e deni ed wi th reg ard to the rejection of Vi sakha’s financi al statement. IV. C O N C L U S I O N For the re asons di scu ssed ab ov e, i t is hereby ORDERED that Plai nti ffs ’ motion i s granted in part, and thi s cas e i s remanded to Commerce, whi ch i s di rected t o r econsi der t he appropr i ateness of us i ng Raj rat an’s financi al statement by analyzing the comparabi li ty o f Rajr atan’s merchandi se to t he subject mer chand i se; and i t is hereby ORDERED that Co mmerce fi le wi th the Co urt a r emand redeter minati on that is consi stent wi th thisopin i on by Decemb er 16, 2010, t hat Plainti ffs fi le any comments on the re mand redeter minati on by January 6, 2011, that Defendan t and Defendan t-Court No. 09-00205 Page 31

Inter venor fi le any responses to Plai nti ffs ’ comments by January 20, 2011, and that Plainti ffs ’ comments, and the responses of Defendan t and Defendan t-Inter venor , shall not ex ceed 15 pages in length; and i t isfurther ORDERED that Plai nti ffs ’ motion i s deni ed in all other r espects.

/s/Gregor y W. Car man Grego ry W. Carman, Judge Dated: Nove mber 16, 2010

New York , NY