Court Opinion

ID: 9941070
Source: CourtListenerOpinion
Date Created: 2024-02-15 20:02:19.655461+00
Date Added: 2024-06-11T13:46:11.896747
License: Public Domain

Slip Op. No. 24-16

          UNITED STATES COURT OF INTERNATIONAL TRADE

EURO SME SDN BHD,

       Plaintiff,

v.

UNITED STATES,
                                            Before: Stephen Alexander Vaden,
                                                          Judge
       Defendant,
                                               Court No. 1:22-cv-00108 (SAV)
       and

POLYETHYLENE RETAIL CARRIER
BAG COMMITTEE, HILEX POLY CO.,
LLC, and SUPERBAG CORP.,

       Defendant-Intervenors.

                                   OPINION

[Sustaining Commerce’s Final Determination.]

                                                        Dated: February 12, 2024

Kelly Slater, Appleton Luff Pte Ltd. of Washington, DC, for Plaintiff Euro SME Sdn
Bhd. With her on the brief were Jay Y. Nee and Edmund W. Sim.

Meen Geu Oh, Senior Trial Counsel, U.S. Department of Justice of Washington, DC,
for Defendant United States. With him on the brief were Brendan S. Saslow and
Kenneth G. Kays, Of Counsel, U.S. Department of Commerce.

Daniel L. Schneiderman, King & Spalding, LLP of Washington, DC, for Defendant-
Intervenors Polyethylene Retail Carrier Bag Committee; Hilex Poly Co., LLC; and
Superbag Corp. With him on the brief was J. Michael Taylor.
Court No. 1:22-cv-00108 (SAV)                                                   Page 2

      Vaden, Judge: Plaintiff Euro SME Sdn Bhd (Euro SME or Plaintiff), a

Malaysian manufacturer of packaging products, comes before the Court to challenge

the Department of Commerce’s (Commerce) 2019-2020 Administrative Review of its

antidumping duty order on retail bags from Malaysia. Retail Carrier Bags from

Malaysia, 87 Fed. Reg. 12,933 (Dep’t of Com. Mar. 8, 2022).         In its Motion for

Judgment on the Agency Record, Plaintiff argues that Commerce’s Final Results

must be remanded because substantial evidence does not support its findings. See

generally Pl.’s Br., ECF No 23. Euro SME alleges that the agency unlawfully relied

on facts available to adjust the actual weight quantities in Euro SME’s data. Id. at

7–11. It further contests Commerce’s reliance on an adverse inference to determine

certain inland freight expense data for U.S. sales that the agency deemed

unverifiable. Id. at 2–3. Finally, Euro SME contends that the agency should have

corrected a ministerial error that Plaintiff brought to its attention but that Commerce

rejected as untimely. Id. at 15–17. For the reasons set forth below, Plaintiff’s Motion

for Judgment on the Agency Record is DENIED; and Commerce’s Final Results are

SUSTAINED.

                                  BACKGROUND
      In August 2004, Commerce published an antidumping duty order on retail

carrier bags imported from Malaysia. Retail Carrier Bags from Malaysia, 69 Fed.

Reg. 48,203 (Dept. of Com. Aug. 9, 2004) (Order). The Order primarily covers the

ubiquitous plastic grocery bags that help shepherd our purchases home. Commerce
Court No. 1:22-cv-00108 (SAV)                                                   Page 3

published its annual notice of opportunity to request an administrative review of the

Order in August 2020. Notice of Opportunity, J.A. at 1,003–04, ECF No. 33; see also

19 U.S.C. § 1675(a)(1). In response, Defendant-Intervenor, the Polyethylene Retail

Carrier Bag Committee (the Committee), requested an administrative review of Euro

SME alleging that the company “may have produced or exported subject merchandise

that was sold into the United States at less than fair value during the period of

review.” Req. for Admin. Review, J.A. at 1,000–02, ECF No. 33. Commerce confirmed

that it would conduct an administrative review of Euro SME’s activities between

August 1, 2019 and July 31, 2020. Initiation of Antidumping and Countervailing

Duty Admin. Reviews, 85 Fed. Reg. 63,081–94 (Dep’t of Com. Oct. 6, 2020).

      On October 26, 2020, Commerce sent a letter to Euro SME informing the

company that it was initiating an investigation into whether it had imported or

produced merchandise that was then sold in the United States for less than fair value.

Notice of Investigation at 1–4, J.A. at 1,050–53, ECF No. 33. Commerce explained

that a failure to respond to the request for information “may result in the application

of partial or total facts available, pursuant to section 776(a) of the Act, which may

include adverse inferences, pursuant to section 776(b) of the Act.” Id. at 3–4, J.A. at

1,052–53. Attached to the letter was a questionnaire, comprised of five parts, which

Commerce requested Euro SME complete as part of the review.                     Initial

Questionnaire, J.A. at 1,050–1,207, ECF No. 33. The questions reflected the type of

information the agency would need in order to conduct a comparison of Euro SME’s

sales in its home market of Malaysia and the United States.
Court No. 1:22-cv-00108 (SAV)                                                 Page 4

      The method that Commerce used to run that analysis was the “average-to-

average method.” Prelim. Determination Memo at 3, J.A. at 1,845, ECF No. 33; see

also 19 C.F.R. § 351.414(b)(1). The average-to-average method is one of the three

approved methodologies for Commerce to compare subject companies’ sales in their

home market and in the United States. 19 C.F.R. § 351.414(b). The purpose of the

comparison is to determine whether the subject merchandise is being sold in the

United States for less than fair value. Of the three approved methods, the agency

employs the average-to-average approach “unless [Commerce] determines another

method is appropriate in a particular case.”     19 C.F.R. § 351.414(c)(1); see also

Dillinger France S.A. v. United States, 981 F.3d 1318, 1324 n.5 (Fed. Cir. 2020). The

average-to-average method is conducted by “compar[ing] the weighted average of the

respondent’s sales prices in its home country during the investigation period to the

weighted average of the respondent’s sales prices in the United States during the

same period.” Stupp Corp. v. United States, 5 F.4th 1341, 1345 (Fed. Cir. 2021); see

also 19 C.F.R. § 351.414(d)(1). To perform the calculation, Commerce must first

collect the company’s cost and sales data for both the home market and the United

States.

      Commerce sent its initial questionnaire on October 26, 2020.         Notice of

Investigation at 1–4, J.A. at 1,050–53, ECF No. 33. Section B focused on the data

related to Euro SME’s home market sales; Section C posed the same questions

concerning the company’s sales in the United States; and Section D inquired about

the costs associated with the production of the subject merchandise. Id. at 1,055–57.
Court No. 1:22-cv-00108 (SAV)                                                   Page 5

Initial Questionnaire Section B, C, D, J.A. at 1,080, 1,113, 1,149, ECF No. 33. In both

Sections B and C, Commerce instructed Euro SME to report “the sale quantity for

[each] transaction” and explained that the entry should be “the quantity of the

specific shipment or invoice line” of each corresponding sale. Id. at B-16, C-15, J.A.

at 1,097, 1,127. For all the data Euro SME submitted, Commerce also required the

company to provide supporting documentation. Id. at G-4, J.A. at 1,059. On the

instructions sheet, Commerce stated that the company was to “identify all units of

measurement” used in its “narrative response, worksheets, or other appendices” and

that it must “complete Appendix VII, which is a template providing a standard format

for reporting the units of measurement, currencies, and conversion factors.” Id. The

instructions also noted that “all information submitted may be subject to verification”

and that a “failure to allow full and complete verification of any information may

affect the consideration accorded to that or any other verified or non-verified item in

the responses.” Id. at G-9, J.A. at 1,064.

      Euro SME provided timely responses to the questionnaire, submitting its

response to Section A on November 23, 2020, and to Sections B, C, and D on December

11, 2020. Euro SME Sect. A Resp., J.A. at 80,000, ECF No. 31; Euro SME Secs. BCD

Resps., J.A. at 80,307, ECF No. 31.          In its narrative response explaining the

quantities and units of measurement for its sales data, Euro SME stated that it was

reporting both standard and actual weights in kilograms and that they included “both

for reconciliation purposes[.]” Secs. BCD Resp. at 14, J.A. at 80,326, ECF No. 31.

Euro SME added that it “also reported quantity in cartons … and quantity in 1,000
Court No. 1:22-cv-00108 (SAV)                                                    Page 6

bags[.]” Id. The company provided the same narrative explanation in Section C when

asked about the quantities of its sales in the United States. Id. at 34, J.A. at 80,346.

At oral argument, counsel for Euro SME explained the difference between the figures.

“Standard weight” refers to an approximated weight of the bags “based on the

thickness, the length, the width, the depth of the bag” and other metrics; while “actual

weight” refers to exactly that — the weight of the bags when those bags are weighed.

Oral Arg. Tr. at 18:4–8, 21:15–18, ECF No. 46. However, Euro SME explained that

the “actual weights” it submitted were not based on a literal weighing of each carton,

as the definition of the term would suggest. Instead, the company weighed a single

carton from each shipment and then multiplied the weight of that one carton by the

total number of cartons in the sale to arrive at the “actual weight.” Id. at 22:8-16.

The data Plaintiff proffered as “actual weight” was therefore an average based on a

random sampling rather than the actual weight of the product for each sale.

      When supplying its standard weight and “actual weight” data, Euro SME did

not make any objection to Commerce’s request for “the quantity of the specific

shipment[,]” nor did it express any concern about its ability to provide the requested

data. Sec. BCD Resp. at 14, 34, J.A. at 80,326, 80,346, ECF No. 31; see also Issues

and Decision Memo (IDM) at 8, J.A. at 2,165, ECF No. 33 (“At Commerce’s request,

Euro SME reported the actual weight for each transaction even though it does not

record that information during the ordinary course of business.         There was no

indication in the record prior to verification that there may be an issue with Euro

SME’s reporting[.]”). At the end of the narrative portion of Section BCD of the
Court No. 1:22-cv-00108 (SAV)                                                  Page 7

questionnaire, Euro SME provided Commerce with a series of attachments and

supporting documentation. Exhibit 1 contained Euro SME’s Home Market Sales

Listing, and Exhibit 8 contained its U.S. Sales Listing. In both exhibits, it provided

four measurements for the quantity of sales in the respective markets: standard

weight, actual weight, number of cartons, and per 1,000 bags. Sec. BCD Resp. at Ex.

1, Ex. 8, J.A. at 80,396–403, 80,439–53, ECF No. 31.        On September 2, 2021,

Commerce published its Preliminary Results and Preliminary Decision Memo (PDM).

Retail Carrier Bags from Malaysia, 86 Fed. Reg. 49,309 (Dep’t of Com. Sept. 2, 2021)

(Preliminary Results); Preliminary Issues and Decision Memo (Dep’t of Com. Aug.

27, 2021), J.A. 1,843–53, ECF No. 33. It calculated a dumping margin of 0.00% and

concluded that “sales of polyethylene retail carrier bags … were not made at less than

normal value during the period of review[.]” Preliminary Results, 86 Fed. Reg. at

49,309.

      In lieu of performing an on-site verification, Commerce sent Euro SME a

verification questionnaire (ILOV) on October 21, 2021, requesting documentation to

support the information the company had reported earlier, including the quantities

of its merchandise sold and its freight costs. ILOV Request for Information, J.A. at

81,836–42, ECF No. 31. To verify the sales data, Commerce randomly selected six

transactions — three from the Unites States and three from Malaysia — and

requested Euro SME provide supporting documents and a narrative explanation for

each transaction to verify the data that it had already submitted related to those

sales. Id. at 81,838–40. To verify the freight costs, Commerce requested supporting
Court No. 1:22-cv-00108 (SAV)                                                    Page 8

documentation to explain how the company recorded its freight expenses in two

different selected U.S. sales and two different Malaysian sales. Id. at 81,840. Euro

SME submitted its response on October 28, 2021. ILOV Resp., J.A. at 81,843–82,224,

ECF No. 31. It stated that the attached invoices contained the quantity information

in terms of the number of cartons and per one thousand bags. Another attachment,

labeled “loading advice,” provided “support for quantity in kilograms (actual

weight)[.]” Id. at 3, J.A. at 81,851. The company similarly explained that another

“loading advice” document contained quantity information about the relevant

merchandise “with actual weight,” in response to questions about its freight expenses.

Id. at 6, J.A. at 81,854. The attachments included handwritten calculations. Id. at

Ex. 1, 2, 3, 4, 5, 6, J.A. at 81,889, 81,934, 81,972, 82,015, 82,036, 82,061, ECF No. 31.

Although the documents themselves did not explain how the weights of each sale

broke down within the shipment, the handwritten calculations attempted to do so.

Id. Once again, Euro SME did not express a concern about its ability to provide the

requested information. See generally ILOV Resp., J.A. at 81,843–82,224, ECF No.

31. Plaintiff’s counsel explained at oral argument that those loading documents were

where the employee in charge of calculating the actual weight recorded the weight of

each shipment. She clarified that the handwritten notations were the employee’s

calculations “extrapolating” from the weight of a single box in the shipment the

weight of the entire sale by multiplying the weight of the box by the total number of

boxes. Oral Arg. Tr. at 25:11–26:20, ECF No. 46.
Court No. 1:22-cv-00108 (SAV)                                                    Page 9

      For five of the six documents, the weight of the overall shipment listed on the

document differed from what Euro SME had originally told Commerce in its

questionnaire response. See IDM at 6, J.A. at 2,163, ECF No. 33; ILOV Resp. at Ex.

1, 2, 3, 4, 5, 6, J.A. at 81,889, 81,934, 81,972, 82,015, 82,036, 82,061, ECF No. 31. In

those five cases, the handwritten notes attributed the entirety of the discrepancy to

the sales in the shipment that Commerce was not spot-checking. See IDM at 6–7,

J.A. at 2,163–64, ECF No. 33; ILOV Resp. at Ex. 1, 2, 3, 4, 5, 6, J.A. at 81,889, 81,934,

81,972, 82,015, 82,036, 82,061, ECF No. 31. For the sales Commerce was spot-

checking, the handwritten numbers matched what Euro SME originally told

Commerce down to the hundredth of a kilogram; but the sales Commerce was not

spot-checking were off by tens or hundreds of kilograms. See IDM at 6, J.A. at 2,163,

ECF No. 33; ILOV Resp. at Ex. 1, 2, 3, 4, 5, 6, J.A. at 81,889, 81,934, 81,972, 82,015,

82,036, 82,061, ECF No. 31; Pet’r’s Case Br. at Att. 1, J.A. at 82,239–40, ECF No. 31

(chart comparing reported figures to verification exhibits).

      The story was similar when Commerce tried to verify Euro SME’s inland

freight expenses. Commerce chose to spot-check the same six sales it used to verify

actual weight, plus an additional two home market sales. IDM at 9, J.A. at 2,166,

ECF No. 33.       All five home market sales differed between the verification

documentation and what Euro SME originally reported to Commerce. Id. at 10–11,

J.A. at 2,167–68; Pet’r’s Case Br. at Att. 2, J.A. at 82,241–43, ECF No. 31 (chart

comparing reported figures to verification exhibits).          Again, the verification

documents attributed all discrepancies to sales Commerce was not spot-checking and
Court No. 1:22-cv-00108 (SAV)                                                Page 10

reported a perfect match for the transactions Commerce was spot-checking. IDM at

10–11, J.A. at 2,167–68; Pet’r’s Case Br. at Att. 2, J.A. at 82,241–43, ECF No. 31

(chart comparing reported figures to verification exhibits). However, for four of the

five sales, the discrepancies were negligible and possibly attributable to rounding

decisions. IDM at 10–11, J.A. at 2,167–68.

      Euro SME declined to submit a case brief in response to the Preliminary

Results. Def.’s Br. at 28 n.9, ECF No. 25. However, on December 13, 2021, the

Committee sent Commerce a case brief arguing that (1) “Commerce should apply

partial adverse facts available (‘AFA’) as a result of Euro SME’s inability to

substantiate reported sales quantities and inland freight expenses” and (2)

“Commerce should also correct a ministerial error in the preliminary margin program

by which freight revenue was double counted.” Pet’r’s Case Br., J.A. at 2,097–110,

ECF No. 33.

      Euro SME then submitted a rebuttal brief, arguing that Commerce had

committed a ministerial error in its freight revenue cap calculation. J.A. at 82,244,

ECF No. 31. Because that issue had not been raised in the Committee’s brief,

Commerce “rejected that segment of Euro SME’s rebuttal brief on the ground that

the challenge was a standalone argument and not rebutting anything petitioners had

said.” Def.’s Resp. Br. at 28 n.9, ECF No. 25. On January 7, 2022, Euro SME

submitted a revised rebuttal brief focusing instead on its claim that the company

“ha[d] submitted ample and accurate information” and that “the discrepancies noted

by the Petitioners with regard to actual weight, which also affect[] Malaysian inland
Court No. 1:22-cv-00108 (SAV)                                                Page 11

freight, are small and immaterial.” Pl.’s Rebuttal Case Br. at 1, J.A. at 2,130, ECF

No. 33. Euro SME argued that any revisions to the Preliminary Results would be

“either unnecessary or should be limited in scope.” Id. It also asserted that, in the

absence of the verifiable actual weight data that the agency requested, Commerce

could have performed its calculation with the standard weight or number of bags data

that the company did provide. Id. at 10–15, J.A. at 2,139–44.

        After consideration of both parties’ briefs, Commerce published its Final

Results and its accompanying Issues and Decision Memo. See IDM, J.A. at 2,158–

172, ECF No. 33; Retail Carrier Bags from Malaysia: Final Results of the Admin.

Dumping Review; 2019-2020, 87 Fed. Reg. 12,933–12,935 (Dep’t of Com. Sept. 2,

2021), J.A. at 2,173–75, ECF No. 33 (Final Results). The Final Results differed

significantly from the Preliminary Results, most notably in the conclusion that “Euro

SME Sdn. Bhd. made sales of subject merchandise at less than normal value (NV)

during the period of review (POR).” Final Results at 12,934, J.A. at 2,174, ECF No.

33. Commerce concluded that there was a 6.47% weighted dumping margin. Id. In

the accompanying Issues and Decision Memo, Commerce explained the three

adjustments that it made. See generally IDM, J.A. at 2,158–72, ECF No. 33.

        The first adjustment concerned the calculation of Euro SME’s sales weight

data and the discrepancy that Commerce observed when it attempted to verify the

data.   For those figures, Commerce decided that “it is appropriate to use facts

otherwise available in relation to Euro SME’s reporting of actual weight and for gross

unit price and sales expenses, which are reported on a per-kilogram actual weight
Court No. 1:22-cv-00108 (SAV)                                                 Page 12

basis across both the home market and U.S. sales databases[.]” IDM at 7, J.A. at

2,164, ECF No. 33. This was because “there were discrepancies between the reported

actual weights and the ‘loading advice’ document for five of the six sales traces. Euro

SME did not explain how it allocated the total weight across the transactions covered

by the ‘loading advice’ documents.” Id. Commerce declined to draw any adverse

inference here. Despite the discrepancies, Commerce did not feel “that Euro SME

[had] failed to cooperate by not acting to the best of its ability to comply with

Commerce’s request for information.” Id.

      The second adjustment pertained to freight costs. IDM at 9, J.A. at 2,166.

Those figures fell into two categories: (1) inland freight expenses in the home market

of Malaysia (INLFTCH), incurred when merchandise moved from the manufacturer

to the distribution warehouse, and (2) U.S. inland freight expenses (DINLFTPU),

incurred between the manufacturing plant and the port of exportation. Id. For each

category, Commerce requested documentation to verify the figures that Euro SME

initially submitted.   ILOV Questionnaire, J.A. at 81,838–40, ECF No. 31.          The

documents it provided failed to explain how the company allocated the costs between

those sales and why certain deductions appeared on the company’s summary pages.

IDM at 9–10, J.A. at 2,166–67, ECF No. 33.      Commerce also asked for supporting

documentation on two additional Malaysian sales, and Euro SME’s response to that

request contained the same shortcomings.        In both cases, Euro SME provided

handwritten notations on the supporting documents that attempted to attribute all
Court No. 1:22-cv-00108 (SAV)                                                  Page 13

discrepancies in the data to sales that the agency had not selected for verification.

Id. at 10, J.A. at 2,167.

       Despite those discrepancies, Commerce once again declined to apply adverse

inferences against Euro SME when filling the gaps related to home market inland

freight expenses associated with the three transactions it selected for spot-checking.

It explained, “[i]n the three home market sales traces, the variance between what

was reported in the database and the supporting documentation is very small, and

we find that the variance could plausibly be the result of rounding.” Id. at 10, J.A. at

2,167. Commerce also found “no basis to apply facts available to [the inland freight

expenses] throughout the home market database because the variances between the

supporting documentation and what was reported in the database appear largely

immaterial.” Id. at 11, J.A. at 2,168. However, with regard to one of the two

additional home market transactions, the agency did “find it appropriate to apply

facts available to the transactions … given that the size of that variance cannot be

explained by rounding, and there is no explanation regarding that variance on the

record.” Id. Though Commerce opted to apply facts available to that single sale, it

once again did “not find that Euro SME failed to cooperate to the best of its ability”

and therefore did “not find that the application of an adverse inference [was]

warranted[.]” Id.

       For inland freight costs for U.S. sales, however, Commerce agreed with the

Committee’s position and applied an adverse inference. The agency justified this

because “Euro SME failed to cooperate to the best of its abilities” by (1) continuing
Court No. 1:22-cv-00108 (SAV)                                                 Page 14

“to report domestic inland freight expenses that did not correspond to the underlying

documentation on the record even after Commerce notified Euro SME that there were

discrepancies in its reporting” and (2) not properly explaining how it allocated the

charges on its freight invoices among the selected transactions. Id. at 14, J.A. at

2,171. Commerce therefore “increased all reported domestic inland freight expenses

… by the largest percent variance calculated on an exhibit-wide basis among the

three U.S. sales traces.” Id.

      The third adjustment that Commerce made between the Preliminary and Final

Results was the correction of a ministerial error highlighted by the Committee in its

case brief. Pet’r’s Case Br. at 12, J.A. at 2,108, ECF No. 33. Commerce agreed that,

in calculating its Preliminary Results, it had “double-counted freight revenue in the

calculation of net U.S. price[.]” IDM at 14, J.A. at 2,171, ECF No. 33. The agency

corrected its mistake, replacing the gross unit price variable that was inclusive of

freight revenue to one that excluded freight revenue. Id.

      After Commerce published the Final Results, Euro SME filed its own

ministerial error allegation. Allegation of Ministerial Error at 1, J.A. at 82,766, ECF

No. 31. Euro SME repeated the claim it originally made in its rebuttal brief, arguing

that Commerce had mistakenly excluded certain logistic expenses from its U.S.

freight revenue expense cap. Id. at 2, J.A. at 82,767. In its letter to Commerce, Euro

SME asserted that “setting the cap at just international freight … would erroneously

omit [a large percentage] of the freight costs associated with moving the product to

the U.S. customer[.]” Id. at 4, J.A. at 82,797. Because Commerce had “performed the
Court No. 1:22-cv-00108 (SAV)                                                 Page 15

same freight revenue cap calculation” in its Preliminary Results and Euro SME failed

to raise the issue until after publication of the Final Results, Commerce rejected the

allegation as untimely. Commerce Resp. to Ministerial Error Allegation at 3–4, J.A.

at 2,226–27, ECF No. 33.        Citing 19 C.F.R. § 351.224(c)(1) and 19 C.F.R. §

351.309(c)(2), it explained that the alleged error was “discoverable earlier in the

proceeding” and therefore should have been raised in Plaintiff’s case brief. Id. Euro

SME’s decision to not submit a case brief forfeited the issue. Id. at 3.

      The Court held oral argument on May 12, 2023. ECF No. 39. Plaintiff clarified

that it did not challenge Commerce’s use of a verification questionnaire in lieu of an

on-site verification despite extensive discussion of that decision in its briefs. Oral

Arg. Tr. 7:3-22, ECF No. 46 (stating that “we do not contest the use of the ILOV …

questionnaire”). The Committee confirmed that it had not filed a cross-complaint or

in any other way challenged Commerce’s decision to resort to facts available rather

than draw an adverse inference. Id. at 8:15-20. Plaintiff’s counsel also clarified that

she was not challenging Commerce’s inland freight calculations for Euro SME’s home

market sales. Id. at 58:7-14 (when asked to confirm that Euro SME was “not objecting

to what [Commerce] did” in calculating one of the home market freight expenses,

responding “we are not.”). Finally, the parties gave their consent for the Court to

consider prior administrative reviews of Euro SME despite those reviews not being
Court No. 1:22-cv-00108 (SAV)                                                        Page 16

formally admitted into the record. Id. at 11:7-16; see also 44 U.S.C. § 1507 (“The

contents of the Federal Register shall be judicially noticed[.]”).1

       On the issue of Euro SME’s quantity data, however, the parties were not able

to agree on (1) whether Euro SME’s standard weight submissions had been verified;

(2) whether it would have been possible for Commerce to perform its calculations with

the standard weights that Plaintiff submitted; and (3) whether there was a “gap” in

the record for Commerce to fill. On those questions, the Court ordered the parties to

submit supplemental briefing. ECF No. 38.

       Euro SME submitted its letter brief on June 5, 2023. Pl.’s Supp. Br., ECF No.

41. It first asserted that its standard weights had been verified because neither

Commerce nor the Committee challenged the data. Id. at 3. Next, Euro SME argued

that the verified standard weights could have been used in Commerce’s entire

calculation because the agency already used standard weights in its below cost test,

disproving Commerce’s claim that “it was impossible or impractical to use standard

weights in its calculations.” Id. at 3–5. Euro SME concluded that, under the Federal

Circuit’s opinion in Zhejiang DunAn Hetian Metal Co. v. United States, Commerce

could not resort to facts available because there was no “gap” to be filled. Id. at 8

(citing 652 F.3d 1333, 1346 (Fed. Cir. 2011) (“The use of facts otherwise available …

1 The parties agreed that the Court could take judicial notice of the existence of prior
administrative investigations to which Euro SME had been subject, as those documents are
publicly available.    However, the full administrative records associated with the
investigations were not formally placed onto the record and are not considered in this matter.
Court No. 1:22-cv-00108 (SAV)                                                  Page 17

is only appropriate to fill gaps when Commerce must rely on other sources of

information to complete the factual record.”)) (internal citations omitted).

      The Government submitted its response on June 22, 2023. Def.’s Supp. Br.,

ECF No. 44. It argued that standard weight figures were not provided for all the data

points that were requested and were necessary to complete Commerce’s calculation.

Commerce claimed that Euro SME reported its sales expenses in both the Malaysian

and U.S. markets only on an actual weight basis — figures that proved to be

unverifiable. Id. at 4. With “no other usable metrics available on the record” for those

data points, the Government argued that Commerce faced a “gap” and lawfully relied

on facts available. Id. at 5. In its brief, the Committee added that a “conversion” of

all the figures to standard weights — as Plaintiff proposed — would have been

impossible without “an actual quantity field,” which Commerce had determined “at

verification to be unreliable.” Def.-Int.’s Supp. Br. at 2, ECF No. 47. With these

clarifications, the Court applies the law.

                JURISDICTION AND STANDARD OF REVIEW
      This Court has jurisdiction over the Plaintiff’s challenge of Commerce’s Final

Results in its Administrative Review under 19 U.S.C. § 1516a(a)(2)(B)(iii) and 28

U.S.C. § 1581(c). 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 the law.” 19 U.S.C. § 1516a(b)(1)(B)(i). Where they

fail to meet that standard, the Court must “hold unlawful any determination, finding,

or conclusion found.” Id. As this Court has articulated, “the question is not whether
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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). Furthermore, “the possibility of drawing two inconsistent conclusions

from the evidence does not prevent an administrative agency’s finding from being

supported by substantial evidence.” Matsushita Elec. Indus. Co. v. United States, 750

F.2d 927, 933 (Fed. Cir. 1984).

      In 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
      Plaintiff Euro SME argues that Commerce’s Final Results should be remanded

based on the agency’s unlawful application of facts otherwise available and adverse

inferences. First, Euro SME challenges Commerce’s adjustment of the actual weight

figures.   Pl.’s Br. at 7, ECF No. 23.   Second, Plaintiff claims that Commerce’s

application of adverse inferences to the domestic inland freight costs for U.S. sales
Court No. 1:22-cv-00108 (SAV)                                                  Page 19

was unlawful. Id. at 10. Third, Euro SME alleges that Commerce’s calculation of the

company’s domestic freight costs reflected a ministerial error. Id. at 15. Euro SME

claims that it fully cooperated with the agency’s requests throughout the

investigation and that any discrepancies in its data were because the company does

not maintain records in the form that the agency requested. Id. at 7; Pl.’s Reply Br.

at 1–3, ECF No. 28. Euro SME further explains that the agency’s decision to forego

an on-site verification and instead issue a verification questionnaire hampered its

ability to clarify any discrepancies. Pl.’s Reply Br. at 9–10, ECF No. 28. Nonetheless,

the company does not challenge the legality of Commerce’s use of a questionnaire.

Oral Arg. Tr. 7:3-22, ECF No. 46. Finally, Euro SME disputes Commerce’s finding

that there was a “gap” in the record to fill with either facts otherwise available or an

adverse inference.   Though some of its figures may have contained errors, the

company maintains that the same information was provided in different units of

measurement and that Commerce could have used that data to complete its

calculation. Pl.’s Br. at 12–15, ECF No. 23; see also Pl.’s Supp. Br. at 3–8, ECF No.

41.

                                   I.     SUMMARY

      To determine whether Euro SME was selling its subject merchandise at less

than fair value in the United States, Commerce conducted its investigation using the

“average-to-average” method. PDM at 3, J.A. at 1,845, ECF No. 33. That method is

essentially calculating and then comparing the “weighted average” of the company’s

home market and U.S. sales. 19 C.F.R. § 351.414(d). The data that Commerce draws
Court No. 1:22-cv-00108 (SAV)                                                         Page 20

from in performing its calculation is the data that it receives from responding

companies. The questionnaires that Commerce sends companies under investigation

identify what data it needs and in what form. Companies that have been subject to

regular administrative reviews become familiar with the types of information they

are expected to keep and provide to the agency. Euro SME and its predecessor

company, Euro Plastics, have been subject to regular administrative reviews since

2007. 2

          When Commerce determines that parties have failed to provide information

necessary for its analysis such that information is missing from the record, federal

law provides a two-part process for the agency to fill the resulting gap. See 19 U.S.C.

§ 1677e(a). First, Commerce may 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

2 Although these prior administrative reviews were not formally entered onto the record, the

parties agreed at oral argument that the Court could take judicial notice of them for the
limited purpose of confirming Plaintiff’s participation in prior reviews. Oral Arg. Tr. at 9:15–
11:16, ECF No. 46; see, eg., Polyethylene Retail Carrier Bags from Malaysia: Final Results of
Antidumping Duty Administrative Review 2005-2006, 72 Fed. Reg. 44,825 (Dep’t of Com. Aug.
9, 2007) through Polyethylene Retail Carrier Bags from Malaysia: Final Results of
Antidumping Duty Administrative Review 2018-2019, 86 Fed. Reg. 22,019 (Dep’t of Com. Apr.
26, 2021).
Court No. 1:22-cv-00108 (SAV)                                                 Page 21

          (D) Provides such information but the information cannot be

             verified[.]

Id. Second, 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

of its ability. See Zhejiang DunAn Hetian Metal Co., 652 F.3d at 1346. The Federal

Circuit has explained that acting to the best of one’s ability involves using “maximum

effort to provide Commerce with full and complete answers to all inquiries in [its]

investigation.” Nippon Steel Corp. v. United States, 337 F.3d 1373, 1382 (Fed. Cir.

2003). It also requires companies to “take reasonable steps to keep and maintain full

and complete records” of their transactions in anticipation of Commerce’s

administrative reviews. Id.; see also Qingdao Sea-Line Int’l Trading Co. v. United

States, 503 F. Supp. 3d 1355, 1371 (CIT 2021). A company that has been subject to

many investigations becomes familiar with the types of information Commerce needs,

making it more difficult to justify a failure to provide the requested information in

the manner Commerce has consistently requested it. Compare Def.’s Br. at 15, ECF
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No. 25 (describing the number of annual administrative reviews Euro SME has been

subject to and, in turn, the company’s familiarity with the process), with Nippon Steel

Corp., 337 F.3d at 1382 (stating that “inattentiveness, carelessness, or inadequate

record keeping” all constitute non-compliance and that the standard “assumes that

importers are familiar with the rules and regulations that apply to the import

activities undertaken and requires that importers … take reasonable steps to keep

and maintain full and complete records documenting the information that a

reasonable importer should anticipate being called upon to produce[.]”).

      In response to Commerce’s initial questionnaire and each of its subsequent

requests for information, Euro SME proffered timely submissions that appeared

responsive. Only at verification did it emerge that the data Euro SME submitted

contained errors and discrepancies.     After determining that Euro SME’s actual

weight and inland freight data were unverifiable, Commerce was left with numerous

gaps in the record. Commerce gave Euro SME opportunities to provide it with

verifiable data, but Euro SME failed to do so. The agency’s reliance on facts available

therefore was lawful under the statute. See 19 U.S.C. § 1677e(a).

      Commerce then had to consider whether it would go the further step of

applying an adverse inference based on a finding of non-cooperation. As Commerce

explained in its Issues and Decision Memo, it found that most discrepancies in Euro

SME’s data did not “rise to the level of warranting an adverse inference.” IDM at 8,

J.A. at 2,165, ECF No. 33. However, with one set of figures — the inland freight costs

for United States sales — the agency found otherwise. The divergence between the
Court No. 1:22-cv-00108 (SAV)                                                  Page 23

data from the company’s records and its verification responses combined with an

apparent effort to mask those discrepancies constituted a “fail[ure] to cooperate”

warranting the application of an adverse inference. Id. at 11–14, J.A. at 2,168–71;

see 19 U.S.C. § 1677e(b)(1) (allowing the drawing of an adverse inference where a

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

request for information”). Commerce’s limited finding of non-cooperation regarding

specific discrepancies in Euro SME’s submission was similarly lawful. It adequately

explained in the Issues and Decision Memo what distinguished those discrepancies

from others where it declined to apply an adverse inference. IDM at 13, J.A. at 2,170,

ECF No. 33. Because Commerce’s actions were supported by substantial evidence,

the Court will SUSTAIN Commerce’s determination.

    II.    COMMERCE’S RELIANCE ON FACTS OTHERWISE AVAILABLE

      Under the statute, Commerce may “use the facts otherwise available” in an

administrative review if information is not available on the record or if a party

withholds requested information, fails to provide information “in the form and

manner requested,” significantly impedes the review, or if the information cannot be

verified. 19 U.S.C. § 1677e(a). The existence of a “gap” in the record, such that

Commerce must look elsewhere for the information, is a prerequisite for the use of

facts otherwise available. Zhejiang DunAn Hetian Metal Co., 652 F.3d at 1346.

      Euro SME argues that none of the preconditions required by the statute are

present here because the data that the company provided, though imperfect, could

have been used to calculate the company’s margins. Pl.’s Reply Br. at 8–9, ECF No.
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28; Oral Arg. Tr. at 29:6-10, ECF No. 46. According to Euro SME, “there were no

gaps in the data, just several different versions of the data presented in different

forms in accordance with Commerce’s various requirements” so that Commerce was

not permitted to use facts otherwise available. Pl.’s Reply Br. at 8–9, ECF No. 28. At

oral argument, Plaintiff conceded that “there’s a gap on the record with regard to

actual weight” but maintained that, because it provided the same information in

other forms, i.e., in standard weight and number of bags, “the Department could have

used that information and avoided” any gap. Oral Arg. Tr. at 29:6-10, ECF No. 46.

The Government responds that Plaintiff’s unverifiable data created a gap that needed

to be filled by the agency in order to complete its calculations. Id. at 31:4–32:8.

      Both parties reiterate these positions in their supplemental briefing. Euro

SME argues that it is in the same position as the plaintiff in Zhejiang and that no

“gap” existed for Commerce to fill. See Zhejiang DunAn Hetian Metal Co., 652 F.3d

at 1348. The Government contests that claim, arguing that several data sets, such

as sales expenses in both the Malaysian and U.S. markets, were reported only on an

actual weight basis and proved unverifiable. Def.’s Supp. Br. at 4–5, ECF No. 44.

The Government explains:

             [F]or sales expenses, Euro SME reported its relevant
             numbers … solely on a per-kilogram actual weight basis ….
             That is similarly true for the gross unit price variable,
             which Euro SME reported only on an actual weight and per
             carton basis …. The consistent metric unifying these sales-
             related variables is that Euro SME reported those
             expenses to Commerce using actual weight …. Thus, when
             Commerce was unable to verify the actual weight data that
             Euro SME had provided in support of these responses, it
Court No. 1:22-cv-00108 (SAV)                                                   Page 25

             concluded that there was a gap in the record that prevented
             it from conducting its calculations[.]
Id. (emphasis in the original); see also IDM at 5–8, J.A. at 2,162–2,165, ECF No. 33.

      In Zhejiang, the Federal Circuit held that Commerce’s reliance on facts

available was unlawful — despite the discrepancies in the company’s records —

because the data Commerce needed in verifiable form was available elsewhere in the

record. Thus, the Federal Circuit held there was no “gap” to fill; the agency simply

had to look elsewhere in the company’s submissions to find the data it needed.

Zhejiang, 652 F.3d at 1348. Here, as the agency explained in its Issues and Decision

Memo, its reliance on facts available was a result of its inability to perform the margin

calculation because of an absence of verifiable data.

      In its initial questionnaire, Commerce requested data related to the quantities

of merchandise Euro SME sold in the United States and in the company’s Malaysian

home market. Initial Questionnaire, J.A. at 1,050–1,207, ECF No. 33. Euro SME

responded with various documents from both markets, including sample invoices and

packing lists. Euro SME Sec. A Resp. at Ex. 1, 6, 7, J.A. at 80,028, 80,046–63, ECF

No. 31. What the invoices reflect is that Euro SME quantifies its merchandise by the

number of units (bags), the number of cartons, and the number of units in each carton.

Euro SME Sec. A Resp. at Ex. 6, 7, J.A. at 80,047, 80,053, ECF No. 31; see also Pl.’s

Brief at 8, ECF No. 23. Weight does not appear on the invoices because “Euro SME

does not sell to the customer by weight in any way[.]” Pl.’s Br. at 8, ECF No. 23.

However, weight does appear on the company’s packing lists. Plaintiff explains that

the weights that appear on those documents are calculated by multiplying the
Court No. 1:22-cv-00108 (SAV)                                                    Page 26

“standard weight per carton” by the number of cartons in the sale — not by

individually weighing each carton. Id. Standard weight therefore represents, at best,

an average. Euro SME provided Commerce with actual weights, but those actual

weights also were more of an average. It weighed one carton from each sale shipment

and multiplied that weight by the total number of cartons in the shipment to arrive

at the “actual weight.” Id. at 10; Oral Arg. Tr. at 22:8-16, ECF No. 46. Euro SME

concedes that “variations between standard weight and actual weight can result in

discrepancies to some degree, since actual weights and standard weights may

differ[.]” Pl.’s Br. at 11, ECF No. 23. However, the company insists that “on an

aggregate basis” those discrepancies are “immaterial” and do not evince any “attempt

by Euro SME to manipulate or misrepresent its reported quantity information[.]” Id.

      Although it may be true that Commerce could have conducted its calculation

with a full and verifiable dataset of either the actual or standard weight, it had

neither. Instead, the agency had some data in the form of standard and actual weight

and other data only in terms of actual weight, which proved impossible to verify. IDM

at 6–8, J.A. at 2,163–65, ECF No. 33 (discussing which units Commerce had for each

data set, and which of those data sets the agency was able to verify). No conversion

ratio appears in the record, meaning that Commerce could not convert unverifiable

data into a different measurement unit such as standard weight or number of bags.

Id. at 8, J.A. at 2,165; Def.’s Br. at 14–15, ECF No. 25; see also Oral Arg. Tr. at 44:13–

45:1, ECF No. 46. Euro SME is an experienced participant in administrative reviews.

That is why it sought to proffer its data in terms of actual weight without being
Court No. 1:22-cv-00108 (SAV)                                                  Page 27

prompted by Commerce: It was the same metric requested and used in past reviews.

Def.’s Br. at 15, ECF No. 25. Compare Initial Questionnaire at B-16–17, J.A. at

1,097–98, ECF No. 33 (Commerce requesting quantity data without any further

specification), with Initial Questionnaire Resp. at 14, J.A. 1,352, ECF No. 33 (Euro

SME providing the data in “actual weight”). Experienced respondents are expected

to maintain their books in a manner that permits Commerce to glean the necessary

data for its analysis. Nippon Steel Corp. v. United States, 337 F.3d 1373, 1382 (Fed.

Cir. 2003).   By its own admission, Euro SME failed to do so and instead sought to

use averages instead of actual weights. Oral Arg. Tr. at 25:11–26:20, ECF No. 46

(Plaintiff’s counsel explaining how the “actual weights” were calculated by

extrapolating from a single carton’s weight rather than weighing each carton.).

When Euro SME’s actual weight data failed to verify, Commerce had a gap to fill. See

19 U.S.C. § 1677e(a)(2)(D) (failure of information to verify permits Commerce to

resort to facts available). Because the actual weight figures proffered by Euro SME

proved unverifiable and no other complete data set appeared on the record that would

allow Commerce to convert the data into a consistent unit of measurement,

Commerce lawfully resorted to the use of facts available to adjust the actual weight

data. IDM at 6–8, J.A. at 2,163–65, ECF No. 33.

      III.    COMMERCE’S APPLICATION OF ADVERSE INERENCES TO
                DOMESTIC INLAND FREIGHT COSTS FOR U.S. SALES
      Under the statute, Commerce may only apply an adverse inference against a

party after first determining that there is a gap in the record and then separately

finding that the party has “failed to cooperate by not acting to the best of its ability
Court No. 1:22-cv-00108 (SAV)                                                 Page 28

to comply with a request for information.” See 19 U.S.C. § 1677e(b). The inference

that Commerce draws must be selected “from among the facts otherwise available.”

Id. Commerce is not required to make any determination or adjustment “based on

any assumptions about information the interested party would have provided if the

interested party had complied with the request for information.” Id. § 1677e(b)(1)(B).

      The Government argues that Euro SME’s repeated failure to provide verifiable

data for its inland freight costs associated with its United States sales justified its

application of an adverse inference under the statute. Commerce recalls that “Euro

SME’s domestic inland freight data for U.S. sales could not be verified” and that “Euro

SME had repeatedly failed to act to the best of its ability and seemingly tried to mask

material discrepancies between the figures it reported and its own back-up

documents.” Def.’s Br. at 7, ECF No. 25. Those allegations refer to Euro SME’s

response to the verification questionnaire and the supporting documents the

company offered to explain the data. Commerce found that the figures Euro SME

offered to support its data for the randomly selected sales did not match the numbers

the company proffered in its initial questionnaire response. IDM at 10, J.A. at 2,167,

ECF No. 33. Though the company offered “some narrative discussion of how the

documents supported what was reported in the database[,]” that explanation “fail[ed]

to explain how the freight costs were allocated to the associated transactions[.]” Id.

Commerce found that Euro SME attempted to mask material discrepancies with

handwritten notations that appeared on the attached supporting documents. Those

notations “assigned any variance to non-selected transactions so that the selected
Court No. 1:22-cv-00108 (SAV)                                                  Page 29

transaction would appear consistent with Euro SME’s freight invoices[.]” Id. The

agency argues that the application of an adverse inference was appropriate because

Commerce had sent Euro SME “clear and repeated requests … to correct noted

discrepancies,” and Euro SME “made no serious effort” to do so. Def.’s Br. at 21–22,

ECF No. 25.

      Euro SME disputes the allegation, claiming that “the administrative record is

replete with evidence that Euro SME cooperated to the best of its ability at all times

in the underlying administrative review[.]” Pl.’s Reply Br. at 3, ECF No. 28. It insists

that the circumstances surrounding the Covid-19 Pandemic, which prevented an on-

site verification, deprived the company of the opportunity to participate in a process

with the agency whereby “those gaps [in the record] could have been fully explained

and digested by Commerce officials[.]” Id. at 4. Plaintiff argues that “pre-verification

preparations routinely involve making notations (handwritten or otherwise) on

photocopies of sales and/or other internal records highlighting reconciling figures for

ease of reference and to expedite the on-site verification process.” Id. at 6. The

Government’s claims that the notations are indicative of an attempt to “mask” issues

in the company’s data reveals, according to Euro SME, “a fundamental

misunderstanding about how the on-site verification process usually works.” Id. at 5.

      At oral argument, Euro SME clarified that it did not object to the agency’s use

of a verification questionnaire in lieu of an on-site verification but rather wanted to

highlight the inherent shortcomings of that alternative verification method. Oral

Arg. Tr. 7:3-22, ECF No. 46.      It also clarified that its primary objection to the
Court No. 1:22-cv-00108 (SAV)                                                  Page 30

application of adverse inferences to the U.S. sales data was the inconsistency with

Commerce’s finding that other, similar discrepancies that appeared in the home

market sales data did not demonstrate a failure to cooperate. Id. at 55:11-15; see also

id. at 57:24–58:23 (responding “[c]orrect” when asked if it was true that the company

highlighted the agency’s action to demonstrate that “the calculations for inland

freight expenses in the home market and what [they] did with domestic inland freight

expenses for United States sales [were] apples to apples … and yet [were] being

treated differently”). Plaintiff argues that this differential treatment — whereby one

discrepancy is found not to demonstrate a lack of cooperation while a similar

discrepancy with another data set warrants the drawing of an adverse inference —

constitutes an arbitrary and unlawful application of adverse inferences. Id.

      In its Issues and Decision Memo, Commerce adequately explained the basis for

its differential treatment of the discrepancies that appeared in Euro SME’s inland

freight expenses for home market sales and the larger inconsistency that it found in

the U.S. sales data. Commerce explained, “Unlike the variances relating to inland

freight in the home market, which were generally very small or could be explained by

rounding differences, the variance between the supporting documentation and the

domestic inland freight expenses reported in the database for the three U.S. sales

traces were not immaterial.” IDM at 13, J.A. at 2,170, ECF No. 33. “Under the

arbitrary and capricious standard, the court … determine[s] whether an agency’s

decision was based on a consideration of the relevant factors and whether there has

been a clear error of judgment.” Baroque Timber Indus. (Zhongshan) Co. v. United
Court No. 1:22-cv-00108 (SAV)                                                  Page 31

States, 38 CIT 448, 456 n.27 (2014) (internal citations omitted). Here, Commerce

explained the basis for its differential treatment of the various discrepancies that

appeared in Euro SME’s data. Where discrepancies were small and could potentially

be explained by rounding, Commerce found drawing an adverse inference was

unwarranted. IDM at 10– 11, J.A. at 2,167– 68, ECF No. 33. Where the discrepancy

was larger, could not be explained by rounding, and included handwritten notations

that appeared designed to obscure the discrepancy’s origin, Commerce did apply an

adverse inference. Id. at 11–14, J.A. at 2,168–71. The Court finds that Commerce

considered all relevant factors, drew a rational distinction based on the relative size

of the discrepancies, and supported its determination with substantial evidence.

Consequently, the Court will not second guess Commerce’s application of an adverse

inference to the largest discrepancy within the U.S. freight expense data set.

                            IV.     MINISTERIAL ERROR
      The final issue for the Court’s review is Euro SME’s ministerial error

allegation. Pl.’s Br. at 15, ECF No. 23. 19 U.S.C. § 1675(h) requires Commerce to

“establish procedures for the correction of ministerial errors … [which] shall ensure

opportunity for interested parties to present their views regarding any such errors.”

The same statute defines a ministerial error as “an error in addition, subtraction, or

other arithmetic function, clerical error resulting from inaccurate copying,

duplication, or the like, and any other similar type of unintentional error[.]” Id.; see

also 19 C.F.R. § 351.224(f).      Commerce’s regulations implementing the statute

mandate that “[c]omments concerning ministerial errors made in the preliminary
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results of a review should be included in a party’s case brief.”             19 C.F.R. §

351.224(c)(1). Parties may submit case briefs to the agency “30 days after the date of

publication of the preliminary results of review[.]” 19 C.F.R. § 351.309(c)(1)(ii). “The

case brief must present all arguments that continue in the submitter’s view to be

relevant to the [agency’s] final determination[.]” Id. § (c)(2). Requiring ministerial

errors that appear in the preliminary results to be raised in the party’s case brief

ensures that other parties have an opportunity to respond to the allegation and that

Commerce is able to “analyze any comments received and, if appropriate, correct any

significant ministerial error by amending the preliminary determination or … the

final determination[.]” 19 C.F.R. § 351.224(e).

       Euro SME declined to submit a case brief after Commerce’s publication of the

preliminary results. Def.’s Resp. Br. at 28 n.9, ECF No. 25. After the Committee

submitted a brief to the agency, however, Euro SME submitted a rebuttal brief in

which it responded to issues raised in the Committee’s brief and attempted to raise

for the first time its allegation of a ministerial error. Id.; see also J.A. at 82,244, ECF

No. 31. Because rebuttal briefs “may respond only to arguments raised in case briefs”

and are barred from raising new issues, Commerce rejected Euro SME’s submission

and required it to resubmit its rebuttal with the ministerial error allegation redacted.

See 19 C.F.R. § 351.309(d)(2). Following Commerce’s publication of the Final Results,

Euro SME again tried to raise its ministerial error allegation. On March 7, 2022, the

company submitted a brief alleging that Commerce erred in its Final Results by

capping the company’s freight revenue expenses. Commerce had only included the
Court No. 1:22-cv-00108 (SAV)                                                   Page 33

international freight expenses associated with the reviewed transactions. Euro SME

Ministerial Error Memo at 2, J.A. at 82,767, ECF No. 31. Euro SME argued that it

should have also included the freight expenses incurred within the United States to

transport the goods to their final destination. Plaintiff’s data had included those

United States transportation expenses, and omitting the expenses resulted in a

deceptively low expense calculation from which to compare Plaintiff’s production

expenses. The result is a potentially inaccurately high dumping margin. Id.

      Commerce filed its response to the allegation on March 29, 2022, arguing that

Euro SME failed to raise the issue in a timely fashion and thereby forfeited the

objection. Commerce Resp. to Ministerial Error at 3–4, J.A. 2,226–27, ECF No. 33.

Citing 19 C.F.R. § 351.224(c)(1) and 19 C.F.R. § 351.309(c)(2), Commerce found that

parties alleging ministerial error in the preliminary results must do so in their case

briefs to the agency. Id. at 3, J.A. at 2,226. Euro SME declined to submit any initial

case brief following the agency’s publication of its Preliminary Results. That left Euro

SME only the post-Final Results process to raise its objection. Once again, the

complaint was untimely because 19 C.F.R. § 351.224(c)(1) requires parties to raise

any issues that are detectable in the Preliminary Results in their initial case briefs.

      The Committee agrees with the Government that Euro SME’s failure to timely

raise its allegation constitutes forfeiture, but it also presents an alternative basis on

which to uphold Commerce’s decision.        It argues that “the alleged error is not

‘ministerial’ in nature” but is instead “a factual and methodological question.” Def.-

Int.’s Br. at 10, ECF No. 27. Noting that ministerial errors can only be errors “in
Court No. 1:22-cv-00108 (SAV)                                                     Page 34

addition, subtraction, or other arithmetic function, clerical error resulting from

inaccurate copying, duplication, or the like[,]” the Committee posits that Commerce’s

decision not to include certain categories of expenses cannot be a ministerial error.

See 19 C.F.R. § 351.224(f). Methodological choices are not unintentional errors and

therefore cannot be raised using the ministerial error process.

      The Court agrees that the allegation was both untimely and not properly

characterized as “ministerial.” When faced with a similar question, the Federal

Circuit has held that the inclusion or exclusion of certain figures in a calculation that

are “not an arithmetic or clerical error or similar inadvertent mistake … do[] not fall

within the statutory definition of ‘ministerial error.’” QVD Food Co., Ltd. v. United

States, 658 F.3d 1318, 1328 (Fed. Cir. 2011). In QVD Food, the plaintiff filed a

ministerial error allegation following the publication of Commerce’s Final Results,

alleging that the agency had mistakenly “double counted” certain expenses in its

calculations. Id. at 1322. On appeal, the court rejected its allegation on two separate

grounds. First, the Federal Circuit held that, by failing to raise its concern regarding

Commerce’s calculation before the publication of the Final Results, QVD had forfeited

the issue. Id. at 1328. “[W]hen the alleged mistake was discoverable during earlier

proceedings but was not pointed out to Commerce during the time period specified by

regulation,” it may not be raised after the publication of the Final Results as a

ministerial error. See id. (noting that the alleged error was “necessarily present in

the preliminary results,” yet the plaintiff did not object in its case brief). Second, even

if QVD had not forfeited its claim, the Federal Circuit explained that the alleged error
Court No. 1:22-cv-00108 (SAV)                                                          Page 35

was not ministerial. Citing the statutory definition, it held that Commerce’s decision

to include certain figures in its calculation “is not an arithmetic or clerical error or

similar inadvertent mistake” and therefore could not qualify as a “ministerial error.”

Id.

       The present case is on all fours with QVD Foods. Like QVD, Euro SME

forfeited its allegation by opting not to file a case brief following Commerce’s

publication of the Preliminary Results. See id. (holding that, where an error is

discoverable in the Preliminary Results, parties must raise it in their brief to

Commerce). However, even if Euro SME had timely field its allegation, its claim

would still fail because the methodological decision made by Commerce to exclude

certain costs in its calculations is not “an arithmetic or clerical error or similar

inadvertent mistake[.]” 3     See id. (holding that “methodological” choices are not

ministerial errors). As both grounds support Commerce’s rejection of Euro SME’s

allegation, the Court SUSTAINS Commerce’s determination.

                                          CONCLUSION

       Euro SME alleges that Commerce threw the book at it. Instead, Commerce

acted with deliberation, patience, and arguably stayed its hand when it could have

drawn adverse inferences more broadly against such a seasoned respondent. For the

reasons set forth above, the Court SUSTAINS Commerce’s Final Results as

3 Consideration of whether the allegation made by Euro SME constitutes a “ministerial error”

is resolvable as a pure question of law because the question is purely legal in nature, requires
no further development of the record or any additional agency action, and it does not result
in undue delay or expenditure of resources. See Saha Thai Steel Pipe Pub. Co., Ltd. v. United
States, 605 F. Supp. 3d 1348, 1366 (CIT 2022); see also Husteel Co. v. United States, 426 F.
Supp 3d 1376, 1382 n.5 (CIT 2020).
                                  6OLS2S1R

            UNITED STATES COURT OF INTERNATIONAL TRADE

    
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                                      OPINION

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LQXQGXHGHOD\RUH[SHQGLWXUHRIUHVRXUFHVSee Saha Thai Steel Pipe Pub. Co., Ltd. v. United
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                                     ERRATA

Euro SME Sdn Bhd v. United States, Case No. 22-00108, Slip-Op. 24-16, dated
February 12, 2024.

Page 35:  In line 9, change “field” to “filed” in the sentence “However, even if
Euro SME had timely…”

February 14, 2024