Court Opinion

ID: 2789083
Source: CourtListenerOpinion
Date Created: 2015-03-25 16:01:41.262694+00
Date Added: 2024-06-11T11:08:31.753726
License: Public Domain

Slip Op. 15-23

            UNITED STATES COURT OF INTERNATIONAL TRADE
________________________________
FENGCHI IMP. & EXP. CO., LTD.   :
OF HAICHENG CITY, FENGCHI        :
REFRACTORIES CO. OF HAICHENG     :
CITY, and FEDMET RESOURCES       :
CORPORATION,                     :
                                 :
          Plaintiffs,            : Before: Nicholas Tsoucalas,
                                 :          Senior Judge
     v.                          :
                                 : Court No.: 13-00186
UNITED STATES,                   :
                                 :
          Defendant,             :
                                 :
          and                    :
                                 :
RESCO PRODUCTS, INC., and        :
ANH REFRACTORIES COMPANY,        :
                                 :
          Defendant-Intervenors.:

                        OPINION and ORDER

[Plaintiffs’ motion for judgment on the agency record is denied.]

                                        Dated: March 25, 2015

Donald B. Cameron, Brady W. Mills, Julie C. Mendoza, Mary S.
Hodgins, R. Will Planert, and Sarah S. Sprinkle, Morris Manning &
Martin LLP, of Washington, DC, for plaintiffs.

Melissa M. Devine, Trial Attorney, Commercial Litigation Branch,
Civil Division, U.S. Department of Justice, of Washington, DC, for
defendant. With her on the brief were Stuart F. Delery, Assistant
Attorney General, Jeanne E. Davidson, Director, and Patricia M.
McCarthy, Assistant Director. Of counsel on the brief was Whitney
M. Rolig, Attorney, Office of the Chief Counsel for Trade
Enforcement & Compliance, U.S. Department of Commerce, of
Washington, DC.
Court No. 13-00186                                                 Page 2

Camelia C. Mazard, Robert W. Doyle, Jr., and Andre P. Barlow, Doyle
Barlow & Mazard PLLC of Washington, DC, for defendant-intervenor
Resco Products, Inc.

Joseph W. Dorn and Brian E. McGill, King & Spalding LLP, of
Washington, DC, for defendant-intervenor ANH Refractories Company.

          Tsoucalas, Senior Judge: Plaintiffs Fengchi Import and

Export Co., Ltd. of Haicheng City, Fengchi Refractories Co. of

Haicheng City, and Fedmet Resources Corporation (collectively

“Plaintiffs”), move for judgment on the agency record contesting

defendant United States Department of Commerce’s (“Commerce”)

determination in Certain Magnesia Carbon Bricks From the People’s

Republic of China: Final Results and Final Partial Rescission of

Antidumping Duty Administrative Review; 2010–2011, 78 Fed. Reg.

22,230 (Apr. 15, 2013) (“Final Results”).     Commerce and defendant-

intervenors, Resco Products Inc. and ANH Refractories Company,

oppose Plaintiffs’ motion.     For the following reasons, Plaintiffs’

motion is denied.

                               BACKGROUND

          Magnesia    carbon   bricks   (“MCBs”)   from    the   People’s

Republic of China (“PRC”) are subject to an antidumping duty order.

See Certain MCBs From Mexico and the PRC: Antidumping Duty Orders,

75 Fed. Reg. 57,257 (Sept. 20, 2010) (“Orders”).          On October 31,

2011, Commerce initiated an administrative review of the Orders,

covering sales of subject merchandise between March 12, 2010 and

August   31,   2011   (“2010-2011   Administrative   Review”).       See
Court No. 13-00186                                             Page 3

Initiation of Antidumping and Countervailing Duty Administrative

Reviews and Request for Revocation in Part, 76 Fed. Reg. 67,133,

67,135 (Oct. 31, 2011).    Commerce named Fengchi Import and Export

Co., Ltd. of Haicheng City and Fengchi Refractories Co. of Haicheng

City, as mandatory respondents. 1   Id.   Fedmet, a domestic importer

of Fengchi’s merchandise, joined the review as an interested party.

See Letter to Commerce re: Antidumping Duty Order on Certain MCBs

from the PRC, Administrative Review (3/12/10–8/31/11): Entry of

Appearance and APO Application (Oct. 31, 2012), Public Rec. 2 137

at 1.     On March 14, 2012, Commerce issued its standard nonmarket

economy questionnaire to Fengchi, seeking information on Fengchi’s

factors of production and U.S. sales of subject merchandise.     See

MCBs from the PRC: Antidumping Duty Questionnaire, (Mar. 14, 2012)

PR 62 at 1.

            Concurrent   with   2010-2011    Administrative   Review,

Commerce conducted a scope inquiry to determine whether magnesia

alumina carbon bricks (“MACBs”) from the PRC were subject to the

Orders.     See Certain MCBs from the PRC: Issues and Decision

1 Fengchi Import and Export Co., Ltd. of Haicheng City is a Chinese
exporter of MCBs, and Fengchi Refractories Co. of Haicheng City is
its affiliated producer.     See Final Results, 78 Fed. Reg. at
22,230.   Throughout the opinion, the court will refer to them
collectively as “Fengchi.”
2 Hereinafter, documents in the public record will be designated
“PR” and documents in the confidential record designated “CR”
without further specification except where relevant.
Court No. 13-00186                                              Page 4

Memorandum for the Final Results of the 2010–2011 Administrative

Review, (Apr. 9, 2013) PR 148 at 1–2 (“IDM”).       On July 2, 2012,

Commerce issued the final results of its scope inquiry, determining

that MACBs were within the scope of the Orders.      See Certain MCBs

from the PRC and Mexico: Final Scope Ruling — Fedmet Resources

Corporation at 1–2, Case Nos. A-201-837, A-570-954 and C-570-955

(July 2, 2012) (“MACB Scope Ruling”).

          After issuing the MACB Scope Ruling, Commerce sent a

supplemental questionnaire to Fengchi indicating its intention to

consider sales of MACBs as part of the 2010-2011 Administrative

Review.   See First Antidumping Administrative Review of Certain

MCBs from the PRC: Sections C and D Supplemental Questionnaire, 3

(Aug. 3, 2012) CR 46 at 3.      Moreover, Commerce requested that

Fengchi confirm whether it had reported all sales of subject

merchandise,   including   MACBs,   in   its   initial   questionnaire

responses, and if not, it requested that Fengchi provide such

3 Petitioner ANH Refractories Company (“ANH”) requested that
Commerce include MACB sales in the 2010-2011 Administrative Review
after Commerce issued the preliminary results of the scope inquiry.
See Letter to Commerce re: MCBs from China: Scope of the
Administrative Review, (Apr. 18, 2012) CR 22 at 2.          Fengchi
responded that Commerce’s preliminary scope ruling was not a final
determination and thus Commerce should not require Fengchi to
provide information on its MACB sales. See Letter to Commerce re:
Antidumping Order on Certain MCBs from the PRC; Antidumping Duty
Administrative Review, PR 67 at 1–3 (Apr. 23, 2012).       However,
Commerce did not request information on Fengchi’s MACB sales during
the 2010-2011 Administrative Review until after it issued the MACB
Scope Ruling. See CR 46 at 3.
Court No. 13-00186                                                     Page 5

information.     See id.     Additionally, Commerce provided Fengchi

with sales data it acquired from U.S. Customs and Border Protection

(“CBP”) indicating that Fengchi made entries of MACBs during the

period of review (“POR”).        See id., att. 2 at 1.

           Fengchi did not provide information on its MACB sales in

its   response   to   the   supplemental    questionnaire,      but   instead,

submitted a series of letters to Commerce in which it insisted

that Commerce’s request was improper.         See Letter to Commerce re:

Antidumping Order on Certain MCBs from the PRC; Antidumping Duty

Administrative Review (3/12/10-8/31/11), (Aug. 9, 2012) PR 104 at

1–5; Letter to Commerce re: Antidumping Order on Certain MCBs from

the PRC; Antidumping Duty Administrative Review (3/12/10-8/31/11),

(Aug. 14, 2012) PR 106 at 1–2; Letter to Commerce re: Antidumping

Order on Certain MCBs from the PRC; Antidumping Duty Administrative

Review (3/12/10–8/31/11), (Aug. 29, 2012) PR 114 at 2–4.              Fengchi

argued that Commerce’s request was “extremely unreasonable” and

“well past the 90-day deadline” under 19 C.F.R. § 351.225(l)(4),

because Commerce initiated the 2010-2011 Administrative Review

eight months before it issued the MACB Scope Ruling.              See PR 104

at 3, 4.   Commerce offered to extend the deadline for Fengchi to

provide MACB sales information on multiple occasions, but Fengchi

continuously     declined   to    comply   with   Commerce’s    request   for

information.       See   Letter    to   Fengchi   re:   First    Antidumping
Court No. 13-00186                                                     Page 6

Administrative Review of Certain MCBs from the PRC, (Sept. 7, 2012)

PR 125 at 1–2.

            Commerce issued the Preliminary Results of the 2010-2011

Administrative Review in October 2012.         See Certain MCBs From the

PRC: AD Administrative Review; 2010-2011, 77 Fed. Reg. 61,394 (Oct.

9, 2012) (“Preliminary Results”).         See also Decision Memorandum

for Preliminary Results of Antidumping Duty Administrative Review:

Certain MCBs from the PRC, PR 132 (Oct. 1, 2012) (“PRM”). Commerce

determined that Fengchi’s refusal to provide information on its

MACBs sales constituted a failure to cooperate with the review to

the best of its ability and applied total adverse facts available

(“AFA”).    PRM at 8–9.   It selected an AFA rate of 236%, based on

the petition rate from the investigation.        PRM at 10.

            Commerce   issued   the   Final    Results    in   April   2013,

upholding   the   Preliminary   Results   in   their     entirety.     Final

Results, 78 Fed. Reg. at 22,230; see IDM at 1.

                  JURISDICTION and STANDARD OF REVIEW

            The Court has jurisdiction pursuant to 28 U.S.C. §

1581(c) (2012) and section 516A(a)(2)(B)(iii) of the Tariff Act of

1930, 4 as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2012).              The

court will uphold Commerce’s final determination in an antidumping

4Further citations to the Tariff Act of 1930 are to the relevant
portions of Title 19 of the U.S. Code, 2006 edition, and all
applicable amendments thereto.
Court No. 13-00186                                                        Page 7

duty    administrative    review    unless     it   is    “unsupported       by

substantial evidence on the record, or otherwise not in accordance

with law.”    19 U.S.C. § 1516a(b)(1)(B)(i).        Substantial evidence

“means such relevant evidence as a reasonable mind might accept as

adequate to support a conclusion.” Universal Camera Corp. v. NLRB,

340 U.S. 474, 477 (1951).

            Additionally, when reviewing an agency’s interpretation

of its regulations, the court must give substantial deference to

the    agency’s   interpretation,   Michaels    Stores,    Inc.      v.   United

States, 766 F.3d 1388, 1391 (Fed. Cir. 2014) (citing Torrington

Co. v. United States, 156 F.3d 1361, 1363-64 (Fed. Cir. 1998)),

according it “‘controlling weight unless it is plainly erroneous

or inconsistent with the regulation.’” Thomas Jefferson Univ. v.

Shalala, 512 U.S. 504, 512, (1994) (citations omitted); accord

Viraj Group v. United States, 476 F.3d 1349, 1355 (Fed. Cir. 2007).

In this context, “[d]eference to an agency’s interpretation of its

own    regulations   is   broader   than   deference      to   the    agency’s

construction of a statute, because in the latter case the agency

is addressing Congress’s intentions, while in the former it is

addressing its own.”       Viraj, 476 F.3d at 1355 (quoting Gose v.

U.S. Postal Serv., 451 F.3d 831, 837 (Fed. Cir. 2006).

                               DISCUSSION

            Plaintiffs contests the following aspects of the Final

Results:     Commerce’s request for sales information on MACBs;
Court No. 13-00186                                           Page 8

Commerce’s application of AFA; Commerce’s selection of 236% as the

AFA rate.     See Pls.’ Br. Supp. Mot. J. Agency R. at 8–23 (“Pls.’

Br.”).

             As an initial matter, the Court of Appeals for the

Federal Circuit (“CAFC”) issued an opinion overturning the MACB

Scope Ruling on June 20, 2014, after the completion of briefing in

this case.    See Fedmet Res. Corp. v. United States, 755 F.3d 912,

914 (Fed. Cir. 2014).      Plaintiffs argue in their brief that a

reversal of the MACB Scope Ruling will resolve the issues in this

case because “there would be no lawful basis for Commerce to impose

antidumping duties on [MACBs] under the [Orders], and thus, no

lawful basis for Commerce to have directed Fengchi to report sales

of [MACBs] in the administrative review.”      Id.   The court must

reject this argument.     The Fedmet litigation concerned the MACB

Scope Ruling.     Fedmet, 755 F.3d at 914.   In contrast, this case

concerns Commerce’s ability to request information on products

subject to a scope ruling during an administrative review and its

imposition of AFA after Fengchi declined to comply with that

request.    Thus, the CAFC’s decision in Fedmet does not resolve the

legal issues raised in the instant case.

   I. Commerce’s Request for Information on Fengchi’s MACB Sales

             The first issue before the court is whether Commerce

properly requested that Fengchi provide information on its sales

of MACBs during the review.     As noted above, Fengchi declined to
Court No. 13-00186                                                    Page 9

provide such information on the theory that Commerce’s request

violated 19 C.F.R. § 351.225(l)(4).             As a result of Fengchi’s

refusal to provide information, Commerce imposed AFA.             Plaintiffs

claim that Commerce’s request was inconsistent with 19 C.F.R. §

351.225(l)(4) because Commerce issued the scope ruling on MACBs

245 days after the initiation of the review.               Pls.’ Br. at 8.

Alternatively,       Plaintiffs    claim    that    even     if   Commerce’s

interpretation of the regulation was proper, it was nevertheless

impractical for Commerce to request that information so late in

the review.     Id. at 14–16.

      A. Commerce’s interpretation of 19 C.F.R. § 351.225(l)(4)
                           was reasonable.

           Under 19 C.F.R § 351.225(l)(4), where Commerce issues a

scope ruling that a product is within the scope of an order within

ninety days of the initiation of an administrative review of that

same order, Commerce, “where practicable, will include sales of

that product for purposes of the review and will seek information

regarding such sales.”        19 C.F.R § 351.225(l)(4).      However, where

Commerce issues the scope ruling more than ninety days after the

initiation of the administrative review, Commerce “may consider

sales of the product for purposes of the review on the basis of

non-adverse facts available.”       Id.    “However, notwithstanding the

pendency   of    a    scope    inquiry,    if   [Commerce]    considers   it

appropriate, [Commerce] may request information concerning the
Court No. 13-00186                                                           Page 10

product that is the subject of the scope inquiry for purposes of

a review . . . .”        Id.

              Here, Commerce issued the scope ruling on MACBs 245 days

after initiating the administrative review at issue.                      See PRM at

8.    As noted above, Commerce requested information on Fengchi’s

MACB sales shortly after issuing the scope ruling, see CR 46 at 3,

but Fengchi declined to provide the information, insisting that

Commerce’s request was improper.                  See PR 104 at 1.          Commerce

insisted       that     its     request     was       consistent    with     section

351.225(l)(4) because the regulation does not prohibit Commerce

from soliciting information on products that are subject to a scope

ruling issued over ninety days after the review begins.                    IDM at 4–

5.    Rather, according to Commerce, the regulation permits Commerce

to decline to collect information in such situations and instead

consider sales of the product on the basis of non-adverse facts

available.      Id.

              Plaintiffs insist that Commerce’s reading of section

351.225(l)(4) is unreasonable.              Instead, Plaintiffs suggest that

the regulation creates a “bright-line rule”: if the scope ruling

is    issued    within        ninety    days     of    the   initiation     of    the

administrative review, then Commerce will request information on

the product subject to that scope ruling if practicable, but if

the   scope    ruling    is    issued     more    than   ninety    days   after   the

initiation of the review, then Commerce may not request information
Court No. 13-00186                                                   Page 11

on the product and may only consider sales of the product based on

non-adverse facts available.       See Pls.’ Br. at 8–11.    According to

Plaintiffs, Commerce’s interpretation renders the ninety-day time

limit,    and   therefore   much   of   the   regulation   itself,    “mere

surplusage.” Id. at 13. Moreover, Plaintiffs insist that Commerce

indicated that their reading of the regulation was proper during

promulgation of the regulation, and in fact, acted in a manner

consistent with this interpretation in a prior administrative

review.   See id. at 11–14.

            The court must reject Plaintiffs’ interpretation because

it alters the plain meaning of the regulation.              According to

Plaintiffs, where Commerce issues a scope ruling more than ninety

days after the initiation of an administrative review, Commerce

may consider sales of the product for purposes of the review, “but

only on the basis of non-adverse facts available.”              Id. at 8

(emphasis added).     This “bright-line rule” reads the word “only”

into the second sentence of the regulation.            However, section

351.225(l)(4) provides that in such situations, Commerce “may

consider sales of the product for purposes of the review on the

basis of non-adverse facts available.”        19 C.F.R. § 351.225(l)(4)

(emphasis added).     The language of the regulation is permissive

and does not proscribe Commerce’s power to request information in

the manner Plaintiffs suggest.
Court No. 13-00186                                                           Page 12

           Furthermore,      Plaintiffs        reliance    on     the    regulatory

history of section 351.225(l)(4) is misplaced.                        According to

Plaintiffs,     Commerce   adopted       their    interpretation        of   section

351.225(l)(4) at the preliminary rule making stage.                   Pls.’ Br. at

10–12.   In particular, Plaintiffs rely on Commerce’s comment that,

when a final scope ruling is issued more than ninety days after

initiation of a review, it is “not practicable” to collect sales

information and therefore Commerce “will rely on non-adverse facts

available.”     Id. at 11 (citing Antidumping Duties; Countervailing

Duties: Proposed Rules, 61 Fed. Reg. 7308, 7322 (Feb. 27, 1996)).

However, Commerce clearly departed from this interpretation by the

final    rule   making     stage.         Commerce      stated       that    section

351.225(l)(4) “provides, among other things, that if [Commerce]

determines after [ninety] days of the initiation of a review that

a product is included within the scope of an order or suspended

investigation, [Commerce] may decline to seek sales information

concerning the product for purposes of the review.”                     Antidumping

Duties; Countervailing Duties: Final Rule, 62 Fed. Reg. 27,296,

27,330 (May 19, 1997) (“Preamble”).            Thus, at the final rulemaking

stage, Commerce did not limit itself to reliance on non-adverse

facts available, but instead provided itself with flexibility to

determine whether to collect information.               See id.

           Plaintiffs      also   rely    on     two   separate      statements    by

Commerce   at    the   final      rule    making       stage    to    support     its
Court No. 13-00186                                                      Page 13

interpretation.      First, Plaintiffs note that Commerce rejected a

request to extend the ninety-day period when it extends the

deadline for the preliminary results of a review, indicating that

Commerce did not intend to collect information where the scope

ruling is issued after the ninety-day period.                See Pls.’ Br. at

11.      Plaintiffs       misinterpret     Commerce’s    decision;     Commerce

rejected the request because it generally makes the decision to

extend a deadline for the preliminary results of a review right

before that deadline expires and well after the ninety-day period

ends.    Preamble, 62 Fed. Reg. at 27,330.            Second, Plaintiffs note

that Commerce rejected a suggestion that it collect information

for a subsequent review when the scope ruling is issued after the

ninety-day period.         See Pls.’ Br. at 11–12.        This decision also

does    not   support     Plaintiffs’     argument;   Commerce    rejected    the

suggestion because it was unwilling to collect information for a

future review.     Preamble, 62 Fed. Reg. at 27,330.

              Moreover,     the   prior     administrative       decision    that

Plaintiffs cite does not support their position.              Plaintiffs rely

on Final Results of Antidumping Duty Administrative Review for Two

Manufacturers/Exporters: Certain Preserved Mushrooms From the PRC,

65 Fed. Reg. 50,183 (Aug. 17, 2000). See Pls.’ Br. at 12. However,

in that case, Commerce issued the scope ruling within ninety days

of initiating the review, and thus Commerce did not address the

situation before the court in the instant case.                     Issues and
Court No. 13-00186                                                         Page 14

Decision   Memorandum       for   the   Administrative      Review    of   Certain

Preserved Mushrooms from the PRC – May 7, 1998, through January

31, 2000; Final Results at comment 1 (Aug. 17, 2000).

             Ultimately,      Commerce’s        interpretation       of    section

351.225(l)(4)       was   consistent    with    the   plain   language     of   the

regulation.       Section 351.225(l)(4) does not proscribe Commerce’s

power to collect information on a respondent’s sales of a product

subject to a scope ruling issued over ninety-days after the

initiation of the review, so long as it is practicable to do so.

19 C.F.R. § 351.225.        It does, however, permit Commerce to decline

to collect such information and instead rely on non-adverse facts

available.        Id.     Contrary to Plaintiffs’ argument, Commerce’s

interpretation does not render any language in the regulation

meaningless: if the scope ruling is issued within ninety-days of

the initiation of the review, Commerce, where practicable, will

collect information on the product subject to that scope ruling;

if the scope ruling is issued more than ninety-days after the

initiation of the review, Commerce may collect information on the

product,     if    practicable,     but   may     decline     to   consider     the

respondent’s information and rely instead on non-adverse facts

available.        See id.   As discussed above, this interpretation is

consistent with Commerce’s discussion of section 351.225(l)(4)

when promulgating the final rule.              See Preamble, 62 Fed. Reg. at

27,330.    Because Commerce’s interpretation of the regulation was
Court No. 13-00186                                                  Page 15

not plainly erroneous or inconsistent with the regulation, the

court defers to Commerce’s reading of 19 C.F.R § 351.225(l)(4).

See Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512, (1994)

(citations omitted); accord Viraj Group v. United States, 476 F.3d

1349, 1355 (Fed. Cir. 2007).

    B.   Commerce reasonably determined that it was practicable to
                    request MACBs sales information.

             Having   determined   that   Commerce’s    interpretation     of

section 351.225(l)(4) was reasonable, the court now considers

whether it was practicable for Commerce to request information on

Fengchi’s MACBs sales.        Plaintiffs insist that there was not

sufficient time remaining in the review for Commerce to consider

Fengchi’s sales of MACBs.          Pls.’ Br. at 14–17.       Specifically,

Plaintiffs argue that because consideration of its MACB sales data

would require Commerce to modify the CONNUM 5 product hierarchy,

surrogate    country,   and   surrogate    value    data,   there   was   not

sufficient time remaining in the review.           Id. at 15–16.

             The court must reject Plaintiffs’ assertion because it

was practicable for Commerce to request information on Fengchi’s

MACB sales in this proceeding.            Here, Commerce requested that

Fengchi provide information on its MACB sales on August 3, 2012,

CR 46 at 3, well before the October 1, 2012 deadline for its

5 CONNUM stands for “control number,” which refers to a specific
product.
Court No. 13-00186                                                        Page 16

preliminary determination.         PRM at 3.   Commerce repeatedly offered

to extend the deadline for Fengchi to provide the requested

information, See, e.g., Letter to Fengchi re: First Antidumping

Administrative Review of Certain MCBs from the PRC: Extension of

Time for Supplemental Questionnaire, PR 111 at 1 (Aug. 24, 2012),

but Fengchi declined to comply with Commerce’s request.                   See PR

104; PR 106; PR 114.         On September 7, 2012, Commerce offered

Fengchi one final opportunity to comply, requesting that Fengchi

either provide MACB sales information or submit a request for an

extension by September 17, 2012.         See PR 125 at 1–2.           Once again,

Fengchi declined to provide its MACB sales information. See Letter

to Commerce re: Antidumping Order on Certain MCBs from the PRC:

Antidumping Administrative Review (3/12/10-8/31/11), PR 130 at 1–

2 (Sept. 17, 2012).

           Furthermore,      the     court     does    not     find    merit   to

Plaintiffs’ argument that Commerce would have to modify the CONNUM

product hierarchy, surrogate country, and surrogate value data in

order to consider information on Fengchi’s MACB sales.                  Commerce

determined that MACBs were MCBs within the scope of the Orders,

and   therefore   it   was   unnecessary       to     modify   CONNUM     product

hierarchy, surrogate country, and surrogate value data.                  See IDM

at 8. Because it was practicable to consider Fengchi’s MACBs sales
Court No. 13-00186                                                 Page 17

at the time of the MACB Scope Ruling, Commerce reasonably requested

that data during the review. 6   See 19 C.F.R. § 351.225(l)(4).

       II. Commerce’s Application of Adverse Facts Available

          The next issue is whether Commerce properly relied on

AFA when determining Fengchi’s dumping margin.          As noted above,

Commerce found that AFA was appropriate because Fengchi refused to

provide information on its MACB sales.

          Commerce may apply AFA where “an interested party has

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).

“Compliance with the ‘best of its ability’ standard is determined

by assessing whether the respondent has put forth its maximum

effort to provide Commerce with full and complete answers” to a

request for information.   Nippon Steel Corp. v. United States, 337

F.3d 1373, 1382 (Fed. Cir. 2003).

          Although   Fengchi   concedes   that    it   did   not   provide

information on its MACB sales, Plaintiffs argue that Commerce

erroneously applied AFA because the request itself was improper.

See Pls.’ Br. at 18–21.    As noted above, Plaintiffs insist that

Commerce’s request for Fengchi’s MACB sales information violated

6Commerce also argues that it had the authority to request MACB
sales information at “any time during the proceeding” pursuant
to 19 C.F.R § 351.301(c)(2) (2012). Because Commerce properly
requested MACB sales information under 19 C.F.R § 351.225(l)(4),
the court declines to consider this alternative justification.
Court No. 13-00186                                                      Page 18

19 C.F.R. § 351.225(l)(4). Plaintiffs conclude that Commerce could

not impose AFA based on Fengchi’s failure to comply with an

inappropriate request for information.                   See Pls.’ Br. at 18.

Plaintiffs rely on Laclede Steel Co. v. United States, 18 CIT 965

(1994), where the Court overturned Commerce’s decision to impose

AFA because Commerce’s request for information was improper.                   See

Pls.’ Br. at 19 (citing Laclede Steel, 18 CIT at 973).

               Plaintiffs’ argument is unconvincing.          As this court has

already determined, Commerce’s request for Fengchi’s MACB sales

information was proper.              Accordingly, Plaintiffs’ reliance on

Laclede   Steel       is   misplaced.      Ultimately,   Fengchi’s   refusal    to

provide information on its MACB sales demonstrated a failure to

comply with Commerce’s request for information, and thus, Commerce

reasonably applied AFA.             See 19 U.S.C. § 1677e(b); Nippon Steel,

337 F.3d at 1382.

                   III. The Adverse Facts Available Rate

               Having determined that Commerce properly relied on AFA

to determine Fengchi’s dumping margin, the court now considers

whether Commerce properly selected the petition rate of 236% as

the AFA rate.      Consistent with its practice, Commerce selected the

petition rate as the AFA rate.               See PRM at 10.     Commerce found

that the petition rate was reliable because it calculated the 236%

figure    as    the   AFA    rate    for   the   PRC-wide   entity   during    the

investigation, which it then corroborated using model-specific
Court No. 13-00186                                                         Page 19

margins of a cooperating respondent.                See First Administrative

Review of MCBs from the PRC: Corroboration Memorandum (Oct. 1,

2012), CR 68 at 2–3 (unchanged in final).                   Commerce determined

that the rate was relevant to Fengchi by comparing the CBP data

for Fengchi’s five MACB sales with the data Commerce used to

determine the petition rate.            Id. at 3.      Specifically, Commerce

found that the U.S. sales price from the petition rate was within

the range of the average unit values for Fengchi’s entries.                    Id.

Additionally, Commerce found that the usage rates for the factors

of production in the petition were within the range of values of

Fengchi’s reported usage rates.              Id.   Because the rate was both

reliable and relevant to Fengchi, Commerce found that it adequately

corroborated the petition rate of 236%.               Id.

             When    selecting   an    AFA    rate,    Commerce   may   rely    on

information         from   the        petition,       investigations,       prior

administrative reviews, or “any other information placed on the

record.” 19 U.S.C. § 1677e(b).            However, Commerce cannot select

any rate as the AFA rate, but rather, must select an AFA rate that

is “a reasonably accurate estimate of the respondent's actual rate,

albeit with some built-in increase intended as a deterrent to non-

compliance.”    F.lli De Cecco Di Filippo Fara S. Martino S.p.A. v.

United States, 216 F.3d 1027, 1032 (Fed. Cir. 2000). “Commerce

must select secondary information that has some grounding in

commercial    reality.”    Gallant      Ocean      (Thailand)   Co.   v.   United
Court No. 13-00186                                                       Page 20

States, 602 F.3d 1319, 1324 (Fed. Cir. 2010).            Although a higher

AFA rate creates a stronger incentive to cooperate, “Commerce may

not select unreasonably high rates having no relationship to the

respondent’s actual dumping margin.” Id. at 1323 (citing De Cecco,

216 F.3d at 1032).

              The   requirements   articulated     by   the    CAFC      are   an

extension of the statute’s corroboration requirement.                    See De

Cecco, 216 F.3d at 1032. Under 19 U.S.C. § 1677e(c), when Commerce

relies   on    secondary    information,   it    “shall,      to   the    extent

practicable, corroborate that information from independent sources

that are reasonably at [its] disposal.”          19 U.S.C. § 1677e(c).         To

corroborate secondary information, Commerce must find that it has

“probative value.” See KYD, Inc. v. United States, 607 F.3d 760,

765 (Fed. Cir. 2010).      Secondary information has “probative value”

if it is “reliable” and “relevant” to the respondent. Mittal Steel

Galati S.A. v. United States, 31 CIT 730, 734, 491 F. Supp. 2d

1273, 1278 (2007); see KYD, 607 F.3d at 765–67.

              Plaintiffs argue that the AFA rate was unreasonable,

overly punitive, and did not reflect commercial reality.                   Pls.’

Br. at 21–23.       According to Plaintiffs, “Commerce never calculated

the actual dumping margin . . . on Fengchi’s reported MCBs sales,

electing instead to apply [AFA] to all of Fengchi’s sales of

subject merchandise. . . .”        Id. at 22.    Plaintiffs conclude that

“in selecting among possible AFA rates, Commerce blinded itself to
Court No. 13-00186                                           Page 21

Fengchi’s actual dumping margin on the MCB sales it had reported

even as it ostensibly considered whether the AFA rate from the

petition reflected commercial reality.”     Id. at 22–23.

             While the instant case was before the court, the Federal

Circuit issued a decision in Fedmet Resources Corp. v. United

States, 755 F.3d. 912, (Fed. Cir. 2014) (mandate issued on Feb. 4,

2015), holding that certain MACBs from the PRC were outside the

scope of the antidumping order.      Fedmet, 755 F.3d at 922.   As a

consequence of the Federal Circuit’s holding in Fedmet, the court

has become concerned with Commerce’s potentially unreasonable use

of out of scope MACB sales to corroborate the AFA rate.     Although

the court requested that the parties provide it with supplemental

briefing to address this issue, Commerce’s responses present post

hoc rationalizations that do not bear on the reasonableness of the

explanations set forth in the IDM.      See Burlington Truck Lines,

Inc. v. United States, 371 U.S. 156, 168-69 (1962) ("The courts

may not accept . . . counsel's post hoc rationalizations for agency

action; . . . an agency's discretionary order [must] be upheld, if

at all, on the same basis articulated in the order by the agency

itself.").      Commerce does not appear to have considered the

possibility that the entries it used to corroborate the AFA rate

were of out-of-scope merchandise.      Because the Federal Circuit’s

decision in Fedmet may potentially affect the reasonableness of

Commerce’s corroboration of the AFA rate, the court must remand so
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that Commerce has the opportunity to address this concern at the

administrative level with the benefit of comment from Plaintiffs

and Defendant-Intervenors.      See SKF USA Inc. v. United States, 254

F.3d 1022, 1028-29 (Fed. Cir. 2001) (“A remand is generally

required if the intervening event may affect the validity of the

agency action.”) (citing Ethyl Corp. v. Browner, 989 F.2d 522, 524

(D.C. Cir. 1993)).

                       IV. Conclusion and Order

             Upon consideration of Plaintiffs’ motion for judgment on

the   agency     record,     Defendant’s    and    Defendant-Intervenors’

responses,     Plaintiffs’   reply,   and   all   papers    and   proceedings

herein, and in accordance with the court’s opinion issued on this

date, it is hereby

             ORDERED that this case is remanded to Commerce for

further explanations regarding the corroboration of the AFA rate

in light of the Federal Circuit’s decision in Fedmet Resources

Corp. v. United States, 755 F.3d. 912 (Fed. Cir. 2014); and it is

further

             ORDERED that the Final Results is sustained for all other

issues discussed above; and it is further

             ORDERED that remand results are due within sixty (60)

days of the date this opinion is entered.                  Any responses or

comments are due within thirty (30) days thereafter.              Any rebuttal
Court No. 13-00186                                        Page 23

comments are due within fifteen (15) days after the date responses

or comments are due.

          SO ORDERED.

                                          /s/ Nicholas Tsoucalas
                                            Nicholas Tsoucalas
                                                Senior Judge
Dated: March 25, 2015
       New York, New York