Court Opinion

ID: 9896613
Source: CourtListenerOpinion
Date Created: 2023-11-13 21:02:47.788898+00
Date Added: 2024-06-11T09:15:10.761041
License: Public Domain

Slip Op. No. 23-158
          UNITED STATES COURT OF INTERNATIONAL TRADE

 SAHA THAI STEEL PIPE PUBLIC
 COMPANY LTD.,

                Plaintiff,
 and

 THAI PREMIUM PIPE CO. LTD.,

           Plaintiff-Intervenor,
                                             Before: Stephen Alexander Vaden,
 v.                                                          Judge

 UNITED STATES,                              Court No. 1:21-cv-00627

               Defendant,

 and

 NUCOR TUBULAR PRODUCTS, INC.
 and WHEATLAND TUBE CO.,

       Defendant-Intervenors.

                                       OPINION

[Plaintiffs’ Motion for Judgment on the Agency Record is granted in part and denied
in part.]

                                                          Dated: November 13, 2023

Daniel L. Porter, Curtis, Mallet-Prevost, Colt & Mosle LLP, of Washington, DC, for
Plaintiff. With him on the brief were James P. Durling, James C. Beaty, and Ana
Amador.

Robert G. Gosselink, Trade Pacific PLLC, of Washington, DC, for Plaintiff-Intervenor.
With him on the brief was Aqmar Rahman.
Court No. 1:21-cv-00627                                                       Page 2

Elizabeth Anne Speck, Senior Trial Attorney, Commercial Litigation Branch, Civil
Division, U.S. Department of Justice, of Washington, DC, for Defendant United
States. With her on the brief were Brian M. Boynton, Principal Deputy Assistant
Attorney General, Patricia M. McCarthy, Director, Commercial Litigation Branch,
Franklin E. White, Assistant Director, Commercial Litigation Branch, and
JonZachary Forbes, Office of Chief Counsel for Trade Enforcement and Compliance,
U.S. Department of Commerce.

Robert E. DeFrancesco, III, Wiley Rein LLP, of Washington, DC, for Defendant-
Intervenor Nucor Tubular Products Inc. With him on the brief were Alan H. Price
and Theodore P. Brackemyre.

Elizabeth J. Drake, Schagrin Associates, of Washington, DC, for Defendant-
Intervenor Wheatland Tube Company. With her on the brief were Roger B. Schagrin,
Christopher T. Cloutier and Saad Y. Chalchal.

      Vaden, Judge: Saha Thai Steel Pipe Public Company Ltd. (Saha Thai or

Plaintiff) filed this case under Section 516A of the Tariff Act of 1930, as amended.

Saha Thai challenges the Final Determination issued by the U.S. Department of

Commerce (Commerce) after the agency conducted an administrative review of its

1986 antidumping duty order on circular welded carbon steel pipes and tubes

imported from Thailand. See Circular Welded Carbon Steel Pipes and Tubes from

Thailand: Final Results of Antidumping Duty Administrative Review and Final

Determination of No Shipments; 2019–2020 (Final Determination), 86 Fed. Reg.

69,620 (Dec. 8, 2021).    It challenges (1) Commerce’s decision to apply adverse

inferences drawn from facts otherwise available to find that Saha Thai was affiliated

with seven customers and (2) Commerce’s inclusion of out-of-scope merchandise in its

calculation of the final antidumping margin. See Compl. ¶¶ 18–31, ECF No. 39; 19

U.S.C. § 1677e(b)(1)(A). For the reasons set forth below, the Court GRANTS IN
Court No. 1:21-cv-00627                                                             Page 3

PART and DENIES IN PART Plaintiff’s Motion and REMANDS the Final

Determination to Commerce to act consistently with the Court’s opinion.

                                    BACKGROUND

       Saha Thai is a foreign producer and exporter of welded carbon steel pipes and

tubes. Compl. ¶ 3, ECF No. 39. The relevant antidumping order defines covered

pipes and steel tubes:

              [C]ertain circular welded carbon steel pipes and tubes
              (referred to in this notice as ‘pipes and tubes’), also known
              as ‘standard pipe’ or ‘structural tubing,’ which includes
              pipe and tube with an outside diameter of 0.375 inch or
              more but not over 16 inches, of any wall thickness, as
              currently provided in items 610.3231, 610.3234, 610.3241,
              610.3242, 610.3243, 610.3252, 610.3254, 610.3256,
              610.3258, and 610.4925 of the Tariff Schedules of the
              United States Annotated (TSUSA).

Antidumping Duty Order: Circular Welded Carbon Steel Pipes and Tubes from

Thailand, 51 Fed. Reg. 8341 (Mar. 11, 1986). 1

                    I.    The Disputed Final Determination

       Commerce issued the original antidumping order on circular welded carbon

steel pipes and tubes from Thailand (Order) in 1986. See Antidumping Duty Order;

Circular Welded Carbon Steel Pipes and Tubes from Thailand, 51 Fed. Reg. 8,341

(Mar. 11, 1986). The subject of that Order and the products at issue in this case are

standard pipes imported from Thailand to the United States. The International

Trade Commission (ITC) explained the differences between standard pipe and line

1 This definition, which appears in the text of the original 1986 Order, is cited to for the

“Scope” in Commerce’s Notice of the Final Results of the Administrative Review. See Final
Determination, 86 Fed. Reg. at 69,620.
Court No. 1:21-cv-00627                                                          Page 4

pipe in its original investigation:

               Standard pipe is manufactured to American Society of
               Testing and Materials (ASTM) specifications and line pipe
               is manufactured to American Petroleum Institute (API)
               specifications. Line pipe is made of higher grade steel and
               may have a higher carbon and manganese content than is
               permissible for standard pipe. Line pipe also requires
               additional testing. Wall thicknesses for standard and line
               pipes, although similar in the smaller diameters, differ in
               the larger diameters. Moreover, standard pipe (whether
               imported or domestic) is generally used for low-pressure
               conveyance of water, steam, air, or natural gas in
               plumbing, air-conditioning, automatic sprinkler and
               similar systems. Line pipe is generally used for the
               transportation of gas, oil, or water in utility pipeline
               distribution systems.

Certain Welded Carbon Steel Pipes and Tubes from Thailand and Venezuela, Inv.

Nos. 701-TA-242 and 731-TA-252 and 253 (Preliminary), USITC Pub. 1680 (Apr.

1985).

         Commerce initiated the 2019-2020 administrative review of the Order in May

2020. See Initiation of Antidumping and Countervailing Duty Administrative

Reviews, 88 Fed. Reg. 26,931 (May 6, 2020). It selected Saha Thai and Blue Pipe

Steel Center 2 (Blue Pipe) as mandatory respondents. See Circular Welded Carbon

Steel Pipes and Tubes from Thailand: Preliminary Results of Antidumping Duty

Administrative Review and Preliminary Determination of No Shipments; 2019-2020

(Preliminary Results), 86 Fed. Reg. 30,405, 30,406 (June 8, 2021).

         Seeking to collect information on potential affiliates, Commerce issued Section

A of its Initial Antidumping Questionnaire to Saha Thai on October 13, 2020. Section

2 Blue Pipe is not a party to this action.
Court No. 1:21-cv-00627                                                          Page 5

A Questionnaire at A-1, J.A. at 3,307, ECF No. 56. Commerce requested that Saha

Thai:

             Identify all suppliers, (sub)contractors, lenders, exporters,
             distributors, resellers, and other persons involved in the
             development, production, sale and/or distribution of the
             merchandise under review which Commerce may also
             consider affiliated with your company, in accordance with
             section 771(33) of the Act and sections 351.102(b) and
             351.401(f) of the regulations.

Id. at A-6, J.A. at 3,312.    In Section B of its Questionnaire, Commerce further

requested that:

             If you had sales to an affiliated party that consumed all or
             some of the merchandise (i.e., used it in the production of
             merchandise that does not fall within the description
             provided in Appendix III), then report all of your sales to
             that affiliate, whether the merchandise was consumed or
             resold by the affiliate.

Section B Questionnaire Response at 5, J.A. at 8,197, ECF No. 56.

        Saha Thai submitted its Section A Response to Commerce on November 10,

2020. Section A Resp., J.A. at 82,816 ECF No. 57. In its narrative response, Saha

Thai explained that it divided its answer into the following three categories: “(1) sales

to unaffiliated customers, (2) sales to potentially affiliated entities for consumption,

and (3) sales to affiliated resellers.” Id. at 3, J.A. at 82,819. The company then

attached a table listing several companies as affiliated and indicating whether those

companies resold the subject merchandise or bought it for consumption. Id. at Ex. A-

1, J.A. at 82,854. It also reported that 16.68% of Saha Thai was owned by the

Ratanasirivilai family, 24.32% of the company was owned by the Karuchit family,
Court No. 1:21-cv-00627                                                            Page 6

and that each family had two members serving as corporate directors. Id. at Ex. A-

3, A-5, J.A. at 82,857, 83,667–8.

      Needing more information from Saha Thai about certain reported affiliates,

Commerce issued its First Supplemental Questionnaire, requesting Saha Thai

“provide a detailed history, from January 1, 2015, through the present, of your

business relationships with Blue Pipe [and other companies].”                 First Suppl.

Questionnaire at 1 (Feb. 3, 2021), J.A. at 90,946, ECF No. 58. Saha Thai complied

with this request and submitted its response on February 24, 2021. First Suppl.

Questionnaire Resp., J.A. at 92,359, ECF No. 58. The agency then issued a Second

Supplemental Questionnaire requesting revisions to Saha Thai’s previously

submitted customer list, including a request to “add a column to identify whether the

customer is an affiliate.” Second Suppl. Questionnaire at 1 (Mar. 11, 2021), J.A. at

96,071, ECF No. 58. Commerce issued a Third Supplemental Questionnaire on April

13, 2021. Third Suppl. Questionnaire, J.A. at 96,233, ECF No. 58. There, the agency

requested Plaintiff:

            Please submit a list of all stockholders and their equity
            positions, managers, directors, officers, and department
            heads for both Saha Thai . . . and Saha Thai’s affiliates.
            Please state whether any stockholder, manager, director,
            officer, or department head is also a stockholder, manager,
            director, officer, or department head at any other company
            involved in the development, production, sale and/or
            distribution of the merchandise under review.

            Please provide a complete family tree for . . . Saha Thai . . .
            . Please identify any member of these families that has any
            role in any company involved in the development,
            production, sale and/or distribution of the merchandise
            under review. For each such family member, please specify
Court No. 1:21-cv-00627                                                       Page 7

            their role in the company, the English and Thai name of the
            company, and state whether that company is an affiliated
            party.

Id. at 1, J.A. at 96,235 (paragraph break added for readability).

      Saha Thai submitted its response to the Third Supplemental Questionnaire in

two parts. Third Suppl. Questionnaire Resp. Part 1 (Third Resp. Part 1) (May 4,

2021), J.A. at 96,420, ECF No. 58; Third Suppl. Questionnaire Resp. Part 2 (Third

Resp. Part 2) (May 6, 2023), J.A. at 96,459, ECF No. 58. In its response, the company

affirmed that “none of the individuals in the family grouping that owns Saha Thai is

involved in the production, development, sale or distribution of merchandise under

review other than the reported affiliations in Saha Thai’s Section A response to the

Department.” Third Resp. Part 2 at 2, J.A. at 96,467, ECF No. 58. Saha Thai also

affirmed that “none of its or its affiliates’ employees, stockholders, managers,

directors, officers, or department heads currently is employed with any other

company that develops, produces, sells and/or distributes the merchandise under

review other than those affiliations already described in Saha Thai’s Section A

response.” Id. at 2–3, J.A. at 96,467–68.

      Defendant-Intervenor Wheatland Tube then filed several hundred pages of

public documents as rebuttal information, pertaining to Thai companies potentially

affiliated with Saha Thai. Wheatland Tube Rebuttal of Saha Thai (Rebuttal of Saha

Thai) (June 1, 2021), J.A. at 97,105, ECF No. 58. That same day, Wheatland Tube

also filed rebuttal information against fellow respondent Blue Pipe’s supplemental

questionnaire responses regarding its affiliations. Wheatland Tube Rebuttal of Blue
Court No. 1:21-cv-00627                                                          Page 8

Pipe (Rebuttal of Blue Pipe) (June 1, 2021), J.A. at 97,685, ECF No. 58. In its

submission against Saha Thai, Wheatland Tube quoted Saha Thai’s supplemental

questionnaire response — in which the company stated that “none of its or its

affiliates’ employees, stockholders, managers, directors, officers, or department heads

currently is employed with any other company that develops, produces, sells and/or

distributes merchandise under review” — and explained that the information

Wheatland Tube now proffered was intended to “rebut, clarify, or correct [those]

statements[.]” Rebuttal of Saha Thai at 1, J.A. at 97,109, ECF No. 58. Wheatland

Tube explained that its submission would “[shed] light on the owners and directors

which impact[] Saha Thai’s claims of affiliation[.]” Id. Wheatland Tube provided a

series of fifteen exhibits outlining the corporate structure, board membership, and

other publicly available information for specific companies that had not been

identified as affiliates by Saha Thai in its questionnaire response. Id. at 1–2, J.A. at

97,109–10.   In its case brief, Wheatland Tube explained that its June 1, 2021

submission revealed that “Saha Thai’s three largest home market customers now

appear to be affiliated with Saha Thai, and these three companies represent some 50

percent of home market sales yet account for 95 percent of the sales matched to export

sales in Commerce’s standard margin program.” Petitioner Case Brief at 2, J.A. at

99,011, ECF No. 58. Wheatland Tube also explained that Exhibit 4 from its Rebuttal

to Blue Pipe and Exhibits 8, 10, and 14 from its Rebuttal to Saha Thai illustrate that

four companies listed as Saha Thai’s home market customers — C.S. Steel Product

Co. Ltd., Nawapon Kanka Sakon Co. Ltd., Tac-M Group Co. Ltd., and Metallic Section
Court No. 1:21-cv-00627                                                         Page 9

Steel Co. Ltd. — “are affiliated through total or near total stock ownership and board

membership of the Ratanasirivilai Family” and that another two companies — Paisan

Steel Co. Ltd. and JHP International Co. Ltd. — “appear to be affiliated through stock

ownership and board members of the Kruchit (Krujit) Family.” Id. at 11–12, J.A. at

99,020–21; see also Rebuttal of Blue Pipe at Exs. 4-5, J.A. at 97,997–98,011, 98,013–

42, ECF No. 58; Rebuttal of Saha Thai at Exs. 2, 8, 10, 14, J.A. at 97,116–134, 97,301–

347, 97,404–477, 97,592–669, ECF No. 58. This revelation was significant because

Saha Thai had reported in its questionnaire responses that those same two families

owned significant portions Saha Thai, and each family had members serving on Saha

Thai’s board. Sect. A Resp. at Ex. A-3, A-5, J.A. at 82,857, 83,667–68, ECF No. 57.

      Because Wheatland Tube submitted this rebuttal information only seven days

before Commerce published its preliminary determination, the agency did not

analyze Wheatland Tube’s submission in its preliminary results. See Preliminary

Results, 86 Fed. Reg. 30,405 (June 8, 2021).      In that determination, Commerce

assigned Saha Thai a dumping margin of 7.23% based in part on the application of a

particular market situation adjustment to Saha Thai’s costs.           Id. at 30,406;

Preliminary Decision Memorandum (PDM) at 8–11, J.A. at 13,684–67, ECF No. 56.

Shortly after publication of the preliminary determination, Saha Thai submitted its

own rebuttal information on June 21, 2021. Saha Thai’s Rebuttal of Wheatland Tube

(Saha Thai Rebuttal), J.A. at 98,778, ECF No. 58. Saha Thai argued that Wheatland

Tube’s “submission is wholly irrelevant for the purposes of this administrative review
Court No. 1:21-cv-00627                                                           Page 10

because none of the entities identified by Petitioners produce, sell or distribute

merchandise under review.” Id. at 7, J.A. at 98,785.

       Commerce addressed the new information submitted by Wheatland Tube and

Saha Thai in its Final Determination and accompanying Issues and Decision

Memorandum and Final Calculation Analysis. See Final Determination, 86 Fed. Reg.

69,620; IDM at 4–10, J.A. at 14,291–97, ECF No. 56; Final Calculation Analysis at

1–7, J.A. at 99,504–510, ECF No. 56. Commerce decided to draw adverse inferences

from facts otherwise available because Saha Thai had “home-market customers [that]

may, in fact, be affiliated with Saha Thai and . . . Saha Thai did not report them as

affiliated customers, nor did it report certain family members that had a role with

respect to those customers.” IDM at 8–9, J.A. at 14,295–96, ECF No. 56. The agency

found that there was a gap in the record justifying the use of facts otherwise available

because, even with the documentation provided by Wheatland Tube, it lacked

“complete details on the ties between Saha Thai and these customers to make

affiliation determinations.” Id. at 9, J.A. at 14,296. Commerce “determine[d] that,

by withholding this information [concerning potential affiliates], Saha Thai . . . has

not acted to the best of its ability[.]” Id. It found that Saha Thai had failed to identify

the home-market customers flagged by Wheatland Tube as affiliates. Id. Commerce

also drew an adverse inference to find that all the customers in question were

involved in sales or production of subject merchandise because “the record does not

establish that any of the home-market customers in question unquestionably did or

did not re-sell some or all their purchases from Saha Thai.” Id. at 10, J.A. at 14,297.
Court No. 1:21-cv-00627                                                           Page 11

Thus, Commerce drew the adverse inference that “the customers in question are all

affiliated with Saha Thai.” Id. at 9, J.A. at 14,296. It continued to apply a particular

market situation adjustment to Saha Thai’s costs of production. Id. at 23–28, J.A. at

14,310–15. Together, these determinations led Commerce to assign Saha Thai an

updated antidumping margin of 36.97%.           Final Determination, 86 Fed. Reg. at

69,621.

       The Final Calculation Analysis provided further details about the agency’s

reasoning.   Final Calculation Analysis at 1–7, J.A. at 99,504–510, ECF No. 58.

Commerce, drawing on Wheatland Tube’s submission of publicly available

information, explained:

              The record shows that following [sic] Saha Thai home
              market customers are affiliated through majority stock
              ownership and board membership of the Ratanasirivilai
              family: C.S. Steel Product Co. Ltd., Nawapon Kanka Sakon
              Co., Ltd., Tac-M Group Co., Ltd., and Metallic Section Steel
              Company Limited. The record further indicates that
              members of the Khruchit . . . family are shreholders of JHP
              International Co., Ltd. With respect to Paisan Steel Co.,
              Ltd., one of the directors is “Somchai Karuchit” who is also
              one of the directors of Saha Thai. Thus, the record suggests
              that Saha Thai is affiliated with the home market
              customers identified above. 3

Id. at 2, J.A. at 99,505.

       In addition to the six companies for which Wheatland Tube provided extensive

ownership documentation to support its allegation of affiliation, the agency also found

an affiliation between Saha Thai and a seventh customer, BNK Steel Co. Ltd. (BNK),

3 At oral argument, the parties agreed that this information, which was marked confidential

in the Final Calculation Analysis, is not confidential because it is publicly available
information. Oral Arg. Tr. at 22:5–15, ECF No. 80.
Court No. 1:21-cv-00627                                                       Page 12

based on a single shared human resources manager. Id. Commerce acknowledged

Saha Thai’s response that this single shared employee did not “[amount] to a

traditional leadership position” and that “Wheatland Tube . . . has not proven that it

entails a legal or operational position allowing for the exercise of control.”     Id.

However, Commerce concluded that Saha Thai should have identified BNK when it

was asked “to ‘state whether Saha Thai’s or any of Saha Thai’s affiliates’ employees,

stockholders, managers, directors, officers, or department heads has an equity or a

debt position in any other company involved in the development, production, sale,

and/or distribution of the merchandise under review.’”        Id.   This omission left

Commerce to rely only on Wheatland Tube’s submission which, Commerce observed,

“was limited to public records in its research[.]”   Id. On that basis, Commerce

concluded that “we cannot assume that there are no other ties between Saha Thai

and BNK which Saha Thai failed to disclose[, and as] a result we cannot determine

that Saha Thai is necessarily not affiliated with BNK.” Id.

                             II.    The Present Dispute

       Saha Thai filed a Complaint challenging Commerce’s Final Determination on

December 20, 2021. ECF No. 6. On April 8, 2022, Saha Thai amended its complaint

to incorporate Commerce’s remand redetermination pursuant to this Court’s opinion

in Saha Thai I, which “confirmed that dual-certified pipe is not within the scope of

the order under review in the administrative proceeding at issue here.” Pl.’s First

Am. Compl. ¶¶ 26-31, ECF No. 39; see also Saha Thai Steel Pipe Pub. Co. Ltd. v.

United States, 547 F. Supp. 3d 1278 (CIT 2021) (Saha Thai I). Of Plaintiff’s claims,
Court No. 1:21-cv-00627                                                          Page 13

the following remain at issue:         (1) whether Commerce’s application of adverse

inferences to find that Saha Thai is affiliated with certain customers is unsupported

by substantial evidence; (2) whether the agency’s decision to permit Wheatland Tube

to file new factual information rebutting Saha Thai’s questionnaire responses was an

abuse of discretion; and (3) whether the antidumping margin calculation includes

products outside the scope of the antidumping order. 4 Pl.’s Br. at 22–54, ECF No. 40.

       In its response brief, the Government argued that its decision to draw adverse

inferences from facts otherwise available was lawful because (1) Saha Thai impeded

the investigation; (2) the agency gave adequate notice to Saha Thai through its

issuance of supplemental questionnaires; and (3) it properly accepted Wheatland

Tube’s submission of new factual information. Def.’s Resp. at 10–31, ECF No. 47.

Wheatland Tube filed a response brief largely echoing Commerce’s arguments. Def.-

Int Wheatland Tube’s Resp. at 4–22, ECF No. 50. Defendant-Intervenor Nucor

Tubular also submitted a brief fully adopting the positions of Wheatland Tube. Def.-

Int. Nucor Tubular’s Resp. at 1, ECF No. 49. Saha Thai replied that (1) it had fully

cooperated with all of Commerce’s requests for information; (2) there was no gap in

the record regarding affiliated companies and therefore no justification for

Commerce’s reliance on facts otherwise available; (3) Commerce never notified it of

any deficiencies in its responses as the governing statute requires; and (4) the

antidumping rate must be revised because it contains out-of-scope merchandise. Pl.’s

Reply at 11–32, ECF No. 53.

4 Plaintiff-Intervenor Thai Premium Pipe Company fully adopted Saha Thai’s positions.   See
Pl.-Int. Reply Br. at 1, ECF No. 55.
Court No. 1:21-cv-00627                                                        Page 14

       The parties were able to solve one count of the Complaint before argument.

Saha Thai cited the Federal Circuit’s decision in Hyundai Steel Co. v. United States,

19 F.4th 1346 (Fed. Cir. 2021) — which confirmed that Commerce lacked the

authority to make particular market situation adjustments under 19 U.S.C. §

1677b(b) — and argued that Commerce’s adjustment here similarly was illegal. Pl.’s

Br. at 10–12, ECF No. 40. Commerce replied to this argument by requesting a

remand to remove the particular market situation adjustment. Def.’s Resp. at 41,

ECF No. 47. Wheatland Tube also agreed to a voluntary remand. Def.-Int Wheatland

Tube’s Resp. at 21–22, ECF No. 50.

       The Court granted Commerce’s request for a voluntary remand so that it could

remove the particular market situation adjustment. ECF No. 60. In Hyundai Steel,

the Federal Circuit affirmed the consistent position of the Court of International

Trade and held that applying a particular market situation adjustment to the

calculation of the cost of production under 19 U.S.C. § 1677b(b) for sales below cost is

illegal.   Hyundai Steel, 19 F.4th at 1352.            Commerce filed its Remand

Redetermination on November 29, 2022, removing the particular market situation

adjustment. ECF No. 61. No party contests its removal. See, e.g.¸ Pl.’s Remand

Comments at 3, ECF No. 63 (“Saha Thai agrees that the change in weighted-average

dumping margin correctly reflects removal of the PMS cost adjustment.”).

       Plaintiff’s scope claim — by contrast — became messier. Commerce asserted

that administrative exhaustion bars Saha Thai’s argument. Def.’s Resp. at 41–43,

ECF No. 47. Saha Thai responded that administrative exhaustion did not bar its
Court No. 1:21-cv-00627                                                       Page 15

argument because it was only after the filing of its initial case brief here that

“Commerce issued its remand redetermination in the scope proceeding in which

Commerce changed its scope determination, concluding that dual-certified line pipe

was not covered by this AD order.” Pl.’s Reply at 28, ECF No. 53. Saha Thai noted

that it was not until August 25, 2022, that “this Court rendered its final judgment

affirming Commerce’s remand redetermination” regarding the scope of the Order.

Id.; see also Saha Thai Steel Pipe Pub. Co. Ltd. v. United States, 592 F. Supp. 3d 1299

(CIT 2022) (Saha Thai II). Plaintiff asserts that “Commerce is under an affirmative

obligation to correct the Final Results” of the disputed review to reflect the scope

determination. Pl.’s Reply at 28, ECF No. 53. Saha Thai alleges that two exceptions

to administrative exhaustion — futility and pure question of law — should apply to

excuse its failure to raise the issue before the agency. Id. at 29.

      The Court ordered Commerce to respond to Saha Thai’s argument that it met

one of the exceptions to administrative exhaustion. ECF No. 67; see also Pl.’s Reply

at 29, ECF No. 53. In its sur-reply brief, Commerce argued that, because Saha Thai

never challenged the appropriateness of the inclusion of dual-stenciled pipe before

the agency, the futility exception to administrative exhaustion does not apply. Def.’s

Sur-Reply at 4, ECF No. 68. Commerce also noted that the appeal of this Court’s

determination that dual-stenciled pipe is not within the Order’s scope remains

pending before the Federal Circuit and requested that “[t]o the extent that the Court

determines Saha Thai’s arguments raise a pure question of law . . . this Court should

wait until after the issuance of the final mandate by the Federal Circuit before ruling
Court No. 1:21-cv-00627                                                          Page 16

on this issue.” Id. at 5–6; see also Saha Thai Steel Pipe Public Co. Ltd. v. United

States, No. 22-2181 (Fed. Cir.) (argued Nov. 7, 2023). The Government did not,

however, articulate any substantive response to Plaintiff’s argument that the pure

question of law exception should apply. In Wheatland Tube’s sur-reply, it contended

that the pure question of law exception to administrative exhaustion does not apply

because scope rulings are highly factual inquiries. Def.-Int.’s Sur-Reply at 4, ECF

No. 70.

      With the supplemental briefing complete, the Court held oral argument on

July 13, 2023. ECF No. 78. There, the parties clarified their positions on whether

administrative exhaustion prohibits Plaintiff’s arguments regarding the scope of

Commerce’s review or whether an exception to that doctrine applies.              Plaintiff

reaffirmed its position that, despite its failure to preserve the issue before the agency,

the matter falls under the pure question of law exception and should therefore not be

barred. Oral Arg. Tr. at 12:18-20, ECF No. 80. Counsel argued that 19 U.S.C. § 1675,

which provides the statutory framework for Commerce’s calculation of antidumping

margins, empowers the agency to calculate those margins only on “covered

merchandise.” Thus, where the agency includes non-covered merchandise in its

calculation, it has exceeded its statutory authority and must be reversed as a matter

of law. Id. at 13:5-17. Meanwhile, the Government conceded it had failed to address

this argument in its sur-reply. When asked to state its position, the Government

explained that it could “see it from both sides” but ultimately agreed with Plaintiff

and “thought it could be a question of law.” Id. at 18:5–18. Because the Government
Court No. 1:21-cv-00627                                                        Page 17

wishes any remand redetermination to reflect the forthcoming decision of the Federal

Circuit on the scope issue, it requested that the Court structure any remand to allow

it to align the agency’s position with that of the Federal Circuit. Id. at 72:11–17.

      The parties also discussed the omission of seven companies as potential

affiliates in Plaintiff’s questionnaire responses and whether those omissions

constituted noncooperation by Saha Thai. Regarding the six companies for which

Wheatland Tube provided extensive documentation, counsel for Saha Thai conceded

that their omission was error.      Id. at 29:4–5 (“Straight up, that was likely a

mistake.”). Plaintiff’s counsel also stated that it would not make a difference for Saha

Thai whether Commerce’s finding of affiliation regarding those six companies was

affirmed. Nonetheless, Plaintiff declined to withdraw its challenge on that issue. Id.

at 25:13–14 (“The punch line is as follows. Your decision on the six companies has no

bearing on the result.”); 27:3–25; 74:1–2 (“honestly whatever they do with six, don’t

really care”). With this scrambled set of party positions as the background, the Court

applies the law.

                   JURISDICTION AND STANDARD OF REVIEW

      The Court has jurisdiction over Plaintiffs’ challenge to the administrative

review under 19 U.S.C. § 1516a(a)(2)(B)(i) and 28 U.S.C. § 1581(c), which grant the

Court authority to review actions contesting final determinations in antidumping

orders.   The Court must sustain Commerce’s “determinations, findings, or

conclusions” unless they are “unsupported by substantial evidence on the record, or

otherwise not in accordance with law[.]” 19 U.S.C. § 1516a(b)(1)(B)(i). If they are
Court No. 1:21-cv-00627                                                      Page 18

unsupported by substantial evidence or not in accordance with the law, the Court

must “hold unlawful any determination, finding, or conclusion found.” Id. “[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.” See New American Keg v. United States, No. 20-00008, 2021

WL 1206153, at *6 (CIT Mar. 23, 2021).

      Reviewing agency determinations, findings, or conclusions for substantial

evidence, the Court assesses whether the agency action is reasonable given the record

as a whole. Nippon Steel Corp. v. United States, 458 F.3d 1345, 1350–51 (Fed. Cir.

2006); see also Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951) (“The

substantiality of evidence must take into account whatever in the record fairly

detracts from its weight.”). The Federal Circuit has described “substantial evidence”

as “such relevant evidence as a reasonable mind might accept as adequate to support

a conclusion.” DuPont Teijin Films USA v. United States, 407 F.3d 1211, 1215 (Fed.

Cir. 2005) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).

                                  DISCUSSION

                                 I.      Summary

      The present case raises three issues: (1) whether administrative exhaustion

bars the argument that dual-stenciled pipe was improperly included in the

calculation of Saha Thai’s antidumping margin; (2) whether Commerce complied with

the statutory prerequisites for drawing adverse inferences from facts otherwise

available with respect to six of Saha Thai’s customers; and (3) whether substantial
Court No. 1:21-cv-00627                                                       Page 19

evidence supports the agency’s finding that BNK is affiliated with Saha Thai. See

Pl.’s Reply at 11–33, ECF No. 53. The first issue is easily disposed of because the

Government took the position that it would need to reconsider the question of

whether to include dual stenciled pipe in light of intervening judicial decisions. Oral

Arg. Tr. at 18:12–23, ECF No. 80; see Saha Thai I, 547 F. Supp. 3d at 1281 (holding

that dual-stenciled pipe was not within the scope of the Order). The Court therefore

interprets Commerce’s request as one for a voluntary remand regarding the question

of exhaustion and GRANTS that request.

      The second issue is similarly straightforward. Saha Thai never named the six

companies as potential affiliates even though it had notice that Commerce was

requesting information about companies that may have been affiliated. See Section

A Resp. at 3. J.A. at 82,819, ECF No. 57. At oral argument, counsel for Saha Thai

conceded that the omission of the six companies was in error. Oral Arg. Tr. at 29:4–

5, ECF No. 80 (In response to the Court’s observation that Commerce was never told

about the six companies, Plaintiff’s counsel stated, “Straight up, that was likely a

mistake.”). This omission left a gap in the record that rendered Commerce unable to

complete its affiliation analysis, warranting the use of facts otherwise available with

an adverse inference. See 19 U.S.C. § 1677e(a)(1)–(2). Substantial evidence therefore

supports Commerce’s findings regarding the six potentially affiliated companies such

that the Court will SUSTAIN Commerce’s related determinations.

      The same cannot be said for Commerce’s decision to apply adverse inferences

to find that the seventh omitted company — BNK — was also affiliated with Saha
Court No. 1:21-cv-00627                                                       Page 20

Thai. Commerce drew that adverse inference based on a single human resources

manager that was shared between BNK and Saha Thai.             See Final Calculation

Analysis at 2, J.A. at 99,505, ECF No. 58. Instead of explaining how a single shared

employee whose position is not obviously involved in overseeing the manufacture of

subject merchandise could be evidence of affiliation, Commerce merely speculated

that there could be other links between the two companies. Id. Bare speculation is

not substantial evidence. The Court must REMAND Commerce’s determination of

affiliation for further analysis and explanation in conformance with this opinion.

              II.    Remand Because of Intervening Legal Decision

      Plaintiff first asks the Court to remand Commerce’s decision with instructions

to remove dual-stenciled pipe from the scope of the administrative review. In Saha

Thai I, this Court held that the scope governing this administrative review did not

bring dual-stenciled pipe within its ambit. 547 F. Supp. 3d at 1281. Saha Thai notes

that, at the time of the administrative proceedings in this case, “the law was that the

dual-certified pipe was within the scope of the order.” Pl.’s Reply at 28, ECF No. 53.

Because of the Court’s subsequent ruling in Saha Thai I, Plaintiff argues that the

pure question of law exception to administrative exhaustion applies to excuse its

failure to raise the issue of the scope’s proper coverage during the administrative

review. Pl.’s Reply at 29–31, ECF No. 53. Commerce failed to offer a substantive

response to this argument in its brief and, instead, merely noted that the question is

still on appeal at the Federal Circuit. Def.’s Sur-Reply at 5, ECF No. 68 (noting that

the “relevant scope issue is still on appeal in the Federal Circuit in Saha Thai Steel
Court No. 1:21-cv-00627                                                          Page 21

Pipe Public Co. Ltd. v. United States, No. 22-2181 (Fed. Cir.)”).            Conversely,

Wheatland Tube was unequivocal that the pure question of law exception does not

apply because the construction of the scope of the Order is not a purely legal question.

Def.-Int.’s Sur-Reply at 4, ECF No. 70; see also Oral Arg. Tr. at 19:3–8, ECF No. 80

(“It’s our position that . . . Commerce would have to engage in a fact-specific inquiry

and in fact, make new calculations, and that would go beyond what the pure question

of law doctrine would allow.”).

       The Court sought to clarify the Government’s position at oral argument. After

much throat-clearing, Commerce stated that the agency would need to reconsider the

scope’s coverage if this Court’s ruling is affirmed on appeal. Oral Arg. Tr. at 17:12–

14, ECF No. 80 (“[I]f the Court says it’s in scope, then Commerce will have to reach a

decision telling us you’ll have to correct it . . . .”). Government counsel then confirmed

that Commerce believes the pure question of law exception applies. Id. at 18:21–23

(responding “yes, Your Honor” when asked by the Court whether the Government

“agree[d] that it is a question of law”).

       Under Federal Circuit precedent, an agency may request a remand “because of

intervening events outside of the agency’s control, for example, a new legal decision

or the passage of new legislation.” SKF USA Inc. v. United States, 254 F.3d 1022,

1028 (Fed. Cir. 2001). “A remand is generally required if the intervening event may

affect the validity of the agency action.” Id. The Court is “free, within reasonable

limits, to set the parameters of the remand.” Trent Tube Div., Crucible Materials

Corp. v. Avesta Sandvik Tube AB, 975 F.2d 807, 814 (Fed. Cir. 1992).
Court No. 1:21-cv-00627                                                       Page 22

       The present circumstances justify a remand. Plaintiff has pointed to this

Court’s intervening legal decision; and Commerce has taken the position that, if the

Federal Circuit affirms that decision, Commerce should align its scope determination

here with the Court’s decision. Oral Arg. Tr. at 72:12–17, ECF No. 80. Given the

Government’s concessions at oral argument, this Court GRANTS a voluntary

remand to the agency so that it may reconsider whether Saha Thai’s dual-stenciled

pipe sales were properly included in the administrative review.          The Remand

Redetermination will not be due until after the mandate issues in the pending

Federal Circuit appeal to promote administrative and judicial economy.

                  III.   Six of the Seven Potential Affiliates

      Commerce found that Saha Thai failed to disclose seven companies as potential

affiliates despite multiple questionnaires seeking that information.        See Final

Calculation Analysis at 2, J.A. at 99,505, ECF No. 58; Def.’s Resp. at 13–19, ECF No.

47. Wheatland Tube found publicly available data that shed light on the seven

potential affiliates and filed that information with Commerce. Rebuttal of Saha Thai,

J.A. at 97,105, ECF No. 58. Commerce used that publicly available information to

draw adverse inferences against Saha Thai and find that all seven companies were

affiliated with Plaintiff. Final Calculation Analysis at 2, J.A. at 99,505, ECF No. 58.

Saha Thai counters that Commerce never asked for information about potential

affiliates so that no necessary information was missing from the record. Pl.’s Reply

at 12, ECF No. 53. However, at oral argument, Saha Thai’s counsel admitted that it

was an error not to include six of the seven companies in its response to Commerce’s
Court No. 1:21-cv-00627                                                        Page 23

Initial Questionnaire. Oral Arg. Tr. at 29:4–7, ECF No. 80 (“Straight up, that was

likely a mistake . . . . They should have been [reported] in category 2.”).

      Commerce must determine whether a given customer is affiliated with a

respondent because “an overriding purpose of Commerce’s administration of

antidumping laws is to calculate dumping margins as accurately as possible[.]”

Parkdale Int’l v. United States, 475 F.3d 1375, 1380 (Fed. Cir. 2007). To calculate the

antidumping margin, the agency must compare the U.S. price and the normal value

of the subject merchandise. 19 U.S.C. § 1675(a)(2)(A). Normal value is the sale price

of the foreign like product sold “for consumption in the exporting country, in the usual

commercial quantities and in the ordinary course of trade.”               19 U.S.C. §

1677b(a)(1)(B)(i). In other words, Commerce must determine if the company under

investigation sells the same product in its home country for more than its selling price

in the United States. Sales to affiliated companies raise the question of whether the

transactions reflect true market price. Commerce may only consider a company’s

sales to affiliates if Commerce is “satisfied that the price is comparable to the price

at which the exporter or producer sold the foreign like product to a person who is not

affiliated with the seller.” 19 C.F.R. § 351.403(c). When examining sales to affiliated

parties, Commerce applies an arm’s length test to determine whether the

transactions were truly made in the ordinary course of trade. See Timken Co. v.

United States, 26 CIT 1072, 1079-80 (2002) (describing the arm’s length test). When

transactions with affiliated customers are found to be not at arm’s length, Commerce

excludes them from the calculation of normal value; and those transactions play no
Court No. 1:21-cv-00627                                                             Page 24

role in the calculation of the final antidumping margin. Id. It is therefore vital that

parties identify to Commerce all potentially affiliated companies so that Commerce

will only use arm’s length transactions when calculating normal value.

       The test for whether a company is considered “affiliated” is defined by statute.

19 U.S.C. § 1677(33) defines “affiliated persons” as:

               “Members of a family . . . any officer or director of an
              organization and such organization[,] partners[,] employer
              and employee[,] any person directly or indirectly owning,
              controlling, or holding with power to vote, 5 percent or
              more of the outstanding voting stock or shares of any
              organization and such organization[,] two or more persons
              directly or indirectly controlling, or controlled by, or under
              common control with, any person[, and] any person who
              controls any other person and such other person.”

The same statute also explains that “a person shall be considered to control another

person if the person is legally or operationally in a position to exercise restraint or

direction over the other person.” Id. The accompanying regulation expounds on this

definition, explaining that “in determining whether control over another person

exists . . . [the agency] will not find that control exists . . . unless the relationship has

the potential to impact decisions concerning the production, pricing, or cost of the

subject merchandise or foreign like product.”         19 C.F.R. § 351.102(b)(3).      When

carrying out its mandate to calculate the subject company’s dumping margin, it is

this definition that Commerce must apply to determine whether customers are

affiliated. Commerce collects information from respondents to calculate antidumping

margins through voluntary responses to questionnaires, which reflect the statutory

definition of affiliation.
Court No. 1:21-cv-00627                                                       Page 25

      When Commerce is missing data necessary to calculate the normal value of

merchandise subject to an antidumping investigation — whether it be related to

affiliation or any other information necessary for the agency’s analysis — the statutes

provide a two-part process to fill the gap. See 19 U.S.C. § 1677e(a). The statute

enables Commerce to use “facts otherwise available” in place of the missing

information if:

      (1) Necessary information is not available on the record, or

      (2) An interested party or any other person —

          (A) Withholds information that has been requested by [Commerce],

          (B) Fails to provide such information by the deadlines for submission of the

             information or in the form and manner requested, . . .

          (C) Significantly impedes a proceeding under this subtitle, or

          (D) Provides such information but the information cannot be verified[.]

Separately, 19 U.S.C. § 1677e(b) permits those facts otherwise available to be chosen

with an adverse inference if “an interested party has failed to cooperate by not acting

to the best of its ability to comply with a request for information from [Commerce].”

Although § 1677e(a) and § 1677e(b) are often collapsed into “adverse facts available”

or “AFA,” the two statutory processes require distinct analyses rather than the single

analysis implied by the term “AFA.” Commerce first must determine that it is

missing necessary information; and, if it wishes to fill the resulting gap with facts

that reflect an adverse inference against an interested party, Commerce must

secondarily determine that the party has failed to cooperate by not acting to the best
Court No. 1:21-cv-00627                                                      Page 26

of its ability. See Zhejiang DunAn Hetian Metal Co. v. United States, 652 F.3d 1333,

1346 (Fed. Cir. 2011).

      Before using facts available, however, Commerce must give the respondent an

opportunity to rectify the deficiency. See 19 U.S.C. § 1677m(d). The agency shall

“promptly inform the person submitting the response of the nature of the deficiency”

and “provide that person with an opportunity to remedy or explain the deficiency.”

Id. If those further responses are also unsatisfactory or untimely, Commerce may

disregard the information respondents have provided and “use the facts otherwise

available in reaching the applicable determination.” 19 U.S.C. §§ 1677m(d), 1677e(a);

see also Diamond Sawblades Mfrs.’ Coal. v. United States, 986 F.3d 1351, 1362–64

(Fed. Cir. 2021) (analyzing the statutory framework).

      Commerce’s Section A Questionnaire requested that Saha Thai “[i]dentify all

suppliers, (sub)contractors, lenders, exporters, distributors, resellers, and other

persons involved in the development, production, sale and/or distribution of the

merchandise under review which Commerce may also consider affiliated with your

company[.]” Section A Questionnaire at A-6, J.A. at 3,312, ECF No. 56 (emphasis

added). Saha Thai did not identify any of the six companies now at issue in its answer

to that question. See Section A Resp. at Ex. A-1, J.A. at 82,854 ECF No. 57. Nor did

Saha Thai identify those companies in response to Commerce’s Third Supplemental

Questionnaire, which asked “whether any stockholder, manager, director, officer, or

department head is also a stockholder, manager, director, officer, or department head

at any other company involved in the development, production, sale and/or
Court No. 1:21-cv-00627                                                        Page 27

distribution of the merchandise under review.” Third Suppl. Questionnaire at 1, J.A.

at 96,235, ECF No. 58. Instead, Saha Thai asserted that, “Other than the affiliations

reported in Saha Thai’s Section A response, no other stockholders, managers,

directors, officers, or department heads at Saha Thai are related to any other

company that produces, develops, distributes or sells [the subject merchandise].” Id.;

Third Resp. Part 2 at 1, J.A. at 96,466, ECF No. 58. Wheatland Tube’s submission

of public data demonstrated Saha Thai’s response was less than forthcoming. IDM

at 9, J.A. at 14,296, ECF No. 56. Namely, the public records showed that four of Saha

Thai’s home market customers — C.S. Steel Product Co. Ltd., Nawapon Kanka Sakon

Co. Ltd., Tac-M Group Co. Ltd., and Metallic Section Steel Company Ltd. — “are

affiliated through majority stock ownership and board membership of the

Ratanasirivilai family”; that “members of the Khruchit . . . family are shareholders”

of another of Saha Thai’s home market customers, JHP International Co., Ltd.; and

that, for a sixth home market customer, Paisan Steel Co. Ltd, “one of the directors . .

. is also one of the directors at Saha Thai.” Final Analysis Memo at 2, J.A. at 99,505,

ECF No. 58. All of this offers strong support of affiliation in light of Saha Thai’s own

admission “that members of the Ratanasirivilai family own 16.68% of Saha Thai and

members of the Karuchit family own 24.32% of Saha Thai” and that “of Saha Thai’s

six directors, two are members of the Ratanasirivilai family and two are members of

the Karuchit family.” Id.; see also 19 U.S.C. § 1677(33) (listing persons who “shall be

considered ‘affiliated’” including “members of a family” and “any person directly or

indirectly owning, controlling, or holding with power to vote, 5 percent or more of the
Court No. 1:21-cv-00627                                                          Page 28

outstanding voting stock or shares of any organization and such organization”).

However, the publicly available information was insufficient for Commerce to do a

full affiliation analysis because the agency still lacked the “complete details on the

ties between Saha Thai and these customers to make affiliation determinations.”

IDM at 9, J.A. at 14,296, ECF No. 56. In other words, although the publicly available

documents provided by Wheatland Tube regarding the shared ownership and

executive ties between Saha Thai and other companies served as strong evidence of

affiliation, it could not entirely fill the gap left by Saha Thai’s omissions. The failure

to provide this information therefore inhibited Commerce in fulfilling its statutory

mandate to analyze the affiliation status of each of the six companies. See 19 U.S.C.

§ 1677(33) (“The following persons shall be considered to be ‘affiliated’ . . . .”)

(emphasis added).

      Saha Thai first raises a procedural defense against use of Wheatland Tube’s

submission. See Pl.’s Mot. at 23–28, ECF No. 40. Plaintiff argues that Wheatland

Tube violated the requirement that submitters of rebuttal information provide a

written summary of that information. Id. at 24 (citing 19 C.F.R. § 351.301(b)(2)).

However, that regulation does not require the submission of a complete narrative

summarizing all the submitted documents. Instead, it requires the submitter to

“provide a written explanation identifying the information which is already on the

record that the factual information seeks to rebut, clarify, or correct.” 19 C.F.R. §

351.301(b)(2). Wheatland Tube stated on the first page of its submission that it was

providing information to rebut specific statements and exhibits in Saha Thai’s Third
Court No. 1:21-cv-00627                                                             Page 29

Supplemental Questionnaire Response. In fact, Wheatland Tube went as far as to

quote the responses from Saha Thai’s questionnaire response that it sought to rebut.

See Rebuttal of Saha Thai at 1, J.A. at 97,109, ECF No. 58 (“On pages 2–3 of its

supplemental questionnaire response dated May 6, 2021, respondent Saha Thai . . .

informed Commerce that “none of its or its affiliates’ employees, stockholders,

managers, directors, officers, or department heads currently is employed with any

other company that develops, produces, sells and/or distributes merchandise under

review” except as described in the company’s Section A response.”).             Wheatland

Tube’s submission then proceeded to do just that by providing a series of documents

outlining the ownership and executive ties between Saha Thai and companies it failed

to identify as potential affiliates in its responses. Id. at 1–2, J.A. at 97,109–10.

Wheatland Tube’s summary put Saha Thai on sufficient notice of which of its claims

was challenged. Wheatland Tube therefore complied with the regulation. 5

       Saha Thai next objects that Commerce did not give it notice of its deficient

affiliation responses or an opportunity to remedy those deficiencies as required by

statute. Pl.’s Reply at 21–24, ECF No. 53. The burden to provide timely notice before

the agency publishes its final determination lies with Commerce. See 19 U.S.C.

§ 1677m(d). Commerce may refuse to provide notice when it can demonstrate bad

faith on the respondent’s part but not when it merely alleges that some information

5 Saha Thai also argues that Wheatland Tube violated Commerce’s regulations by failing to

provide translations of its documents. Pl.’s Mot. at 26, ECF No. 40. Saha Thai fails to point
to any prejudice resulting from the lack of translated versions. Hence, this violation was
harmless error. See PAM S.p.A. v. United States, 463 F.3d 1345, 1348 (Fed. Cir. 2006)
(requiring a showing of substantial prejudice when Commerce violated its own regulation
that required it to give notice to a foreign exporter).
Court No. 1:21-cv-00627                                                       Page 30

it wanted was not provided. See Saha Thai Steel Pipe Pub. Co., Ltd. v. United States,

605 F. Supp. 3d. 1348, 1366 (CIT 2022) (citing Papierfabrik Aug. Koehler SE v. United

States, 843 F.3d 1373, 1384 (Fed. Cir. 2016)).       The statute does not “compel[]

Commerce to treat intentionally incomplete data as a ‘deficiency’ and then to give a

party that has intentionally submitted incomplete data an opportunity to ‘remedy’ as

well as to ‘explain.’” Papierfabrik, 843 F.3d at 1384; see also ABB Inc. v. United

States, 355 F. Supp. 3d 1206, 1222 (CIT 2018) (“When a respondent provides

seemingly complete, albeit completely inaccurate, information, § 1677m(d) does not

require Commerce to issue a supplemental questionnaire seeking assurances that the

initial response was complete and accurate.”).

      Commerce complied with § 1677m(d) by virtue of its series of questionnaires

in which the agency repeatedly asked for information about Saha Thai’s potential

affiliates. Saha Thai’s own answers demonstrate that it understood the questions to

include not only companies that, in Saha Thai’s view, clearly were affiliates but also

companies for which the question of affiliation might be disputed.        Commerce’s

Section A Questionnaire requested that Saha Thai identify all customers that

“Commerce may consider” affiliated with Saha Thai. Section A Questionnaire at A-

6, J.A. at 3,312, ECF No. 56. Plaintiff’s narrative response explained that it was

reporting “sales to potentially affiliated entities for consumption,” yet Saha Thai did

not include any of the six companies in its response. Section A Resp. at 3, J.A. at

82,819, ECF No. 57 (emphasis added). Saha Thai answers that it did not have to

report the six companies because Commerce never asked Saha Thai to report
Court No. 1:21-cv-00627                                                      Page 31

potential affiliates that were not involved in the sale, development, or production of

the subject merchandise. Pl.’s Reply at 13–14, ECF No. 53. Once again, the plain

text of Commerce’s questions belies Saha Thai’s claim.        Commerce’s Section B

Questionnaire asked Saha Thai to “report all of your sales to that affiliate, whether

the merchandise was consumed or resold by the affiliate.” Section B Questionnaire

Response at 5, J.A. at 8,197, ECF No. 56 (emphasis added). Thus, Commerce did not

limit its query to companies that sold, developed, or produced pipe but also included

those companies that may have only consumed or resold it. See Section A Resp. at

Ex. A-1, J.A. at 82,854 ECF No. 57.

      Commerce gave Saha Thai yet another opportunity to remedy the deficiencies

in its initial response when it issued the Third Supplemental Questionnaire. There,

Commerce asked Saha Thai to list any companies that had overlapping directors,

significant stockholders, and board members with Saha Thai. Third Supp. Quest. at

1, J.A. at 96,235, ECF No. 58 (“Please submit a list of all stockholders, managers,

directors, officers, and department heads” and state whether any of those individuals

“is also a stockholder, manager, director, officer, or department head at any other

company involved in the development, production, sale, and or distribution” of the

covered merchandise.). Plaintiff again declined to disclose any information about the

six companies in question and stated that “none of the individuals in the family

grouping that owns Saha Thai is involved in the production, development, sale or

distribution of merchandise under review other than the reported affiliations in Saha

Thai’s Section A response to the Department.” Third Response Part 2 at 2, J.A. at
Court No. 1:21-cv-00627                                                      Page 32

96,467, ECF No. 58. Saha Thai’s counsel removed any doubt about the clarity of

Commerce’s requests when he admitted that it was an error not to report the six

companies as potential affiliates. Oral Arg. Tr. at 29:4–5, ECF No. 80. Having given

Plaintiff at least two opportunities to report the companies’ information, Commerce

was not required to “issue a[n] [additional] supplemental questionnaire to the effect

of, ‘Are you sure?’” ABB Inc., 355 F. Supp. 3d at 1222. The agency’s multiple requests

for the information complied with the notice requirements of Section 1677m(d).

      As a final attack, Saha Thai argues that the missing information was not

necessary because Commerce could have marked those six companies as affiliated in

the sales database and calculated the margin without further information from Saha

Thai. Pl.’s Reply at 16, ECF No. 53 (“Here, for those home-market customers that

did not re-sell the subject merchandise, Commerce had all of the data needed to

calculate an accurate antidumping margin, regardless of whether the home-market

customer was considered affiliated or unaffiliated.”).     This is sophistry.    Even

accepting the premise that Commerce had all the data it needed to calculate an

accurate antidumping margin, the agency lacked the data necessary to flag the

companies as affiliates until Wheatland Tube provided the rest of the story. See IDM

at 9, J.A. at 14,296, ECF No. 56. That Commerce could have calculated the margin

if the companies in question are affiliated with Saha Thai does not answer the

question of whether they actually are affiliated — an analysis that the agency is

required to perform as part of its investigation. Moreover, the record lacks evidence

of whether the companies in question resold the subject merchandise precisely
Court No. 1:21-cv-00627                                                          Page 33

because Saha Thai never identified the companies to Commerce, preventing it from

requesting additional information about their downstream sales in the Thai market.

See IDM at 9–10, J.A. at 14,296–97, ECF No. 56. Saha Thai’s contrary argument is

meritless.

      Saha Thai’s failure to provide the requested information to Commerce justified

the agency’s drawing of an adverse inference from the facts otherwise available.

When a party “has failed to cooperate by not acting to the best of its ability to comply

with a request for information,” the agency “may use an inference that is adverse to

the interests of that party in selecting from among the facts otherwise available.” 19

U.S.C. § 1677e(b)(1). To show that a party has failed to cooperate, Commerce:

             must make an objective showing that a reasonable and
             responsible importer would have known that the requested
             information was required to be kept and maintained under
             the applicable statutes, rules, and regulations” and “a
             subjective showing that the respondent under
             investigation[’s] . . . failure to fully respond is the result of
             . . . either: (a) failing to keep and maintain all required
             records, or (b) failing to put forth its maximum efforts to
             investigate and obtain the requested information from its
             records.

Nippon Steel Corp. v. United States, 337 F.3d 1373, 1382–83 (Fed. Cir. 2003).

      Although “intentional conduct, such as deliberate concealment or inaccurate

reporting, surely evinces a failure to cooperate, the statute does not contain an intent

element.” Id. at 1383. Saha Thai understood it had a duty to report potential

affiliates. See Section A Resp. at 3, J.A. at 82,819, ECF No. 57 (Saha Thai explaining

it is reporting “sales to potentially affiliated entities for consumption”) (emphasis

added). Despite having at least two distinct opportunities to report the six companies
Court No. 1:21-cv-00627                                                           Page 34

to Commerce, it refrained from doing so. This led Commerce to conclude that Saha

Thai “failed to cooperate by not acting to the best of its ability to comply with a request

for information.” 19 U.S.C. § 1677e(b)(1). Saha Thai’s failure to identify companies

in which its owners also held substantial equity interests justifies the application of

an adverse inference. See Nippon Steel, 337 F.3d at 1382 (requiring respondents “to

put forth [their] maximum efforts to investigate and obtain the requested

information”). Commerce’s affiliation determination regarding the six companies is

therefore SUSTAINED.

                  IV.    The Adverse Inference Regarding BNK

   Although Commerce’s application of adverse inferences to find affiliation

regarding the first six companies was proper, its application of an adverse inference

to find that the seventh company — BNK — was also an affiliate is problematic.

Wheatland Tube’s proffered information demonstrated only a single link between

BNK and Saha Thai: a shared a human resources manager. Commerce argues that

it “could not assume that this was the only tie between Saha Thai and BNK.” Def.’s

Resp. at 29, ECF No. 47. Saha Thai retorts that Wheatland Tube’s submissions

contained no evidence of overlapping shareholders or directors between Saha Thai

and BNK and that “neither Commerce nor Defendant could point to evidence that

established affiliation [with] BNK.” Pl.’s Reply at 18, ECF No. 53. Because the

sharing of a single human resources manager is insufficient for a reasonable mind to

conclude that Saha Thai and BNK are affiliated, the Court cannot sustain

Commerce’s adverse inference on this point. See Consol. Edison, 305 U.S. at 229
Court No. 1:21-cv-00627                                                       Page 35

(defining substantial evidence as “such relevant evidence as a reasonable mind might

accept as adequate to support a conclusion”).

      The Court reviews Commerce’s decisions and findings for substantial evidence.

19 U.S.C. § 1516a(b)(1)(B)(i). In the context of affiliation determinations, the agency

must explain how the facts on the record fulfill the statutory requirements of 19

U.S.C. § 1677(33), which provides the definition of an affiliate. See Hyundai Heavy

Indus. Co. v. United States, 393 F. Supp. 3d 1293, 1319 (CIT 2019) (holding that

Commerce failed to explain how an adverse inference of affiliation met the statutory

definition when all the agency cited was a single shared employee with a shared email

address). Commerce’s explanation of its affiliation finding concerning BNK consisted

of a single paragraph, reproduced in full below:

             In addition, Saha Thai reported that [an employee] is its
             HR Manager; documents which BNK Steel Co., Ltd. (BNK)
             submitted to the Thai Labor Department show that that
             [same employee] is BNK’s Human Resource Manager and
             that this individual can be contacted at a Saha Thai e-mail
             address . . . . Although Saha Thai dismisses this as not
             amounting to a traditional leadership position such as
             Chairman or Chief Executive Officer and Wheatland Tube
             Company (Wheatland) has not proven that it entails a legal
             or operational position allowing for the exercise of control,
             as discussed in the Issues and Decision Memorandum, we
             asked Saha Thai to “state whether Saha Thai’s or any of
             Saha Thai affiliates’ employees, stockholders, managers,
             directors, officers, or department heads has an equity or a
             debt position in any other company involved in the
             development, production, sale and/or distribution of the
             merchandise under review.” Moreover, this information
             only came to light as a result of Wheatland’s research of
             public records. Because Wheatland was limited to public
             records in its research, we cannot assume that there are no
             other ties between Saha Thai and [BNK] which Saha Thai
Court No. 1:21-cv-00627                                                          Page 36

             failed to disclose. As a result, we cannot determine that
             Saha Thai is necessarily not affiliated with BNK.

Final Calculation Analysis at 2, J.A. at 99,505, ECF No. 58 (emphasis added).

      This Court’s previous decision in Hyundai Heavy Industries is instructive in

evaluating Commerce’s explanation. There, the Court held that Commerce’s bare

citation to a shared employee with a shared email was insufficient to uphold

Commerce’s finding of affiliation through the application of an adverse inference. 393

F. Supp. 3d at 1319. Commerce had found that the respondent had impeded its

review by failing to disclose a shared sales agent with a customer and drew an adverse

inference to find that the customer was affiliated with the respondent. Id. Commerce

cited this lone fact to support its affiliation finding and failed to “explain how that

‘fact’ fulfilled the statutory definition of affiliation pursuant to section 1677(33)(D).”

Id.

      Here, too, the agency has offered no explanation of how a single shared human

resources manager meets the statutory definition of affiliation. See Final Calculation

Analysis at 2, J.A. at 99,505, ECF No. 58. Assumptions and speculations are not

evidence. OSI Pharms., LLC v. Apotex Inc., 939 F.3d 1375, 1382 (Fed. Cir. 2019)

(quoting Dickinson v. Zurko, 527 U.S. 150, 162 (1999) and Intellectual Ventures I LLC

v. Motorola Mobility LLC, 870 F.3d. 1320, 1331 (Fed. Cir. 2017) (“The Supreme Court

‘has stressed the importance of not simply rubber-stamping agency factfinding’ . . . .

‘Mere speculation’ is not substantial evidence.”)). Even if they were, Commerce

misuses its “fact.” The agency is required to find whether two entities are affiliated.

See 19 U.S.C. § 1677(33) (listing seven ways to meet the affiliation test). Rather than
Court No. 1:21-cv-00627                                                        Page 37

attempt to explain how one shared human resources employee meets the statutory

test, Commerce instead declares it “cannot determine that Saha Thai is necessarily

not affiliated with BNK.” Final Calculation Analysis at 2, J.A. at 99,505, ECF No.

58. “Necessarily not affiliated” is not the statutory standard; it is instead Commerce’s

attempt to dodge the standard. Commerce’s finding therefore not only fails to provide

substantial evidentiary support, it also fails to apply the proper legal standard found

in the statute. Cf. 19 U.S.C. § 1677(33). Commerce’s prior findings regarding the six

other companies are instructive. There, Commerce could point to shared ownership

interests and shared directors as facts meeting the affiliation standard. Compare id.

(“Members of a family,” shared “officer[s] or director[s] of an organization,” and

anyone who has “power to vote[] 5 percent or more” of the stock of an organization

are affiliated), with Final Analysis Memo at 2, J.A. at 99,505, ECF No. 58 (“Saha Thai

reported that members of the Ratanasirivilai family own 16.68% of Saha Thai and

members of the Karuchit family own 24.32% of Saha Thai . . . . The record shows that

. . . Saha Thai home market customers are affiliated through majority stock

ownership and board membership of the Ratanasirivilai family . . . [and] that

members of the Karuchit family are shareholders of [certain home market

customers.]”). No such analysis or information is present regarding BNK. See Final

Calculation Analysis at 2, J.A. at 99,505, ECF No. 58 (quoted in full above). Because

Commerce’s finding is both factually unsupported and legally improper, it may not

stand. The Court therefore GRANTS Plaintiff’s Motion for Judgment on the Agency
Court No. 1:21-cv-00627                                                        Page 38

Record on this issue and REMANDS to Commerce to perform a proper affiliation

analysis regarding the relationship between Plaintiff and BNK.

                                   CONCLUSION

      This case must return to the agency for further consideration. Commerce’s

request to reconsider the scope of the administrative review following the forthcoming

decision of the Federal Circuit in Saha Thai Steel Pipe Public Co. Ltd. v. United

States, No. 22-2181 is GRANTED. On remand, Commerce must also reconsider its

affiliation analysis regarding BNK, apply the proper statutory test for affiliation, and

explain how the facts on the record support its determination. Commerce’s affiliation

analysis of the six other companies is SUSTAINED as having substantial

evidentiary support and complying with all legal standards.

      On consideration of all papers and proceedings held in relation to this matter,

and on due deliberation, it is hereby:

      ORDERED that Plaintiffs’ Motion for Judgement on the Agency Record is

GRANTED IN PART and DENIED IN PART; and it is further

      ORDERED that Commerce, no later than 90 days from the issuance of the

mandate in Saha Thai Steel Pipe Public Co. Ltd. v. United States, No. 22-2181 (Fed.

Cir.), shall submit a Second Remand Redetermination in compliance with this

Opinion and Order; and it is further

      ORDERED that Defendant shall supplement the administrative record with

all additional documents considered by Commerce in reaching its decision in the

Remand Redetermination;
Court No. 1:21-cv-00627                                                     Page 39

         ORDERED that Plaintiff and Plaintiff-Intervenor shall have 30 days from the

filing of the Remand Redetermination to submit comments to the Com·t;

         ORDERED that Defendant shall have 30 days from the date of Plaintiffs'

filing of comments to submit a response; and

         ORDERED that Defendant-Intervenors shall have 15 days from the date of

Defendant's filing of comments to submit their responses.

         SO ORDERED.

                                               Stephen Alexander Vaden, Judge

Dated:           /3 2o l3
         New York, New York