Court Opinion

ID: 9391011
Source: CourtListenerOpinion
Date Created: 2023-04-28 21:02:34.487515+00
Date Added: 2024-06-11T17:18:38.816025
License: Public Domain

Slip Op. 23-65

                  UNITED STATES COURT OF INTERNATIONAL TRADE

CORINTH PIPEWORKS PIPE INDUSTRY SA
and CPW AMERICA CO.,

                       Plaintiffs,
             v.
                                                      Before: Leo M. Gordon, Judge
UNITED STATES,

                       Defendant,                     Court No. 22-00063
             and

THE AMERICAN LINE PIPE PRODUCERS
ASSOCIATION TRADE COMMITTEE,

                       Defendant-Intervenor.

                                        OPINION

[Commerce’s Final Results sustained.]

                                                                   Dated: April 28, 2023

      Kristin H. Mowry and Bryan P. Cenko, Mowry & Grimson, PLLC of
Washington, D.C., argued for Plaintiffs Corinth Pipeworks Pipe Industry S.A. and CPW
America Co. With them on the briefs were Jeffrey S. Grimson and Jill A. Cramer.

       Eric J. Singley, Trial Attorney, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice of Washington, D.C., argued for Defendant United States.
With him on the brief were Brian M. Boynton, Principal Deputy Assistant Attorney General,
Patricia M. McCarthy, Director, L. Misha Preheim, Assistant Director. Of counsel was
Christopher Kimura, Attorney, U.S. Department of Commerce, Office of Chief Counsel for
Trade Enforcement and Compliance of Washington, D.C.

      Timothy C. Brightbill and Laura El-Sabaawi, Wiley Rein LLP of Washington, D.C.,
argued for Defendant-Intervenor American Line Pipe Producers Association Trade
Committee.
Court No. 22-00063                                                                  Page 2

       Gordon, Judge: Plaintiffs Corinth Pipeworks Pipe Industry S.A. and CPW

America Co. challenge the U.S. Department of Commerce’s (“Commerce”) final results

of the first administrative review of the antidumping duty order covering large diameter

welded pipe from Greece. See Large Diameter Welded Pipe from Greece, 87 Fed. Reg.

7,120 (Dep’t of Commerce Feb. 8, 2022) (“Final Results”), and the accompanying Issues

and Decision Memorandum (Dep’t of Commerce Feb. 2, 2022), PR 1 96 (“Decision

Memorandum”); see also Large Diameter Welded Pipe from Greece, 84 Fed. Reg. 18,769

(Dep’t of Commerce May 2, 2019).

       Before the court is Plaintiffs’ motion for judgment on the agency record under

USCIT Rule 56.2. See Pls.’ Am. Mot. for J. on the Agency R., ECF No. 48 2 (“Pls.’ Br.”);

see also Def.’s Am. Resp. to Pls.’ Mot. for J. on the Agency R., ECF No. 49;

Def.-Intervenor Am. Line Pipe Producers Ass’n Trade Comm.’s Resp. Opp. Pls.’ Mot. for

J. on the Agency R., ECF No. 35; Pls.’ Am. Reply in Supp. of Mot. for J. on the Agency

R.,   ECF    No.   50   (“Pls.’   Reply”).     The   court   has    jurisdiction   pursuant

to Section 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C.

§ 1516a(a)(2)(B)(iii) (2018), 3 and 28 U.S.C. § 1581(c) (2018). For the reasons set forth

below, the court sustains Commerce’s Final Results.

1
  “PR” refers to a document contained in the public administrative record. See ECF
No. 19-1.
2
  All citations to parties’ briefs and the agency record are to their confidential versions
unless otherwise noted.
3
  Further citations to the Tariff Act of 1930, as amended, are to the relevant provisions
of Title 19 of the U.S. Code, 2018 edition.
Court No. 22-00063                                                                   Page 3

                                        I. Background

        Plaintiff Corinth Pipeworks Pipe Industry S.A. (“Corinth”) was the sole mandatory

respondent, and indeed the sole producer and/or exporter of the subject merchandise,

in the underlying administrative review. 4      Final Results, 87 Fed. Reg. at 7,121;

see also Large      Diameter   Welded    Pipe   from    Greece,   86   Fed.   Reg.   43,172

(Dep’t of Commerce Aug. 6, 2021) (“Preliminary Results”), and the accompanying

Preliminary Decision Memorandum (Dep’t of Commerce July 30, 2021), PR 73 (“PDM”).

The period of review was April 19, 2019 through April 30, 2020. PDM at 1.

        Commerce issued its initial antidumping questionnaire to Corinth in July 2020,

followed by two supplemental questionnaires in May and July 2021 respectively regarding

Corinth’s cost of production (“COP”) and constructed value (“CV”) data (Section D). Id.

at 2.       Corinth timely responded to both, but because its response to the second

supplemental questionnaire came shortly before the issuance of the Preliminary Results,

Commerce stated in the PDM that it would consider that response in the Final Results.

Id. at 2.

        In the initial questionnaire, Commerce directed Corinth to report per-unit COP and

CV figures based on the company’s “actual costs incurred . . . during the period of review

[“POR”], as recorded under [its] normal accounting system.”            Dep’t of Commerce

Questionnaire (July 17, 2020) at D-2, PR 11.            Commerce emphasized that “[t]he

4
  Plaintiff CPW America Co. is Corinth’s U.S. subsidiary and the U.S. importer of large
diameter welded pipe who participated in the underlying proceeding. See Summons,
ECF No. 1.
Court No. 22-00063                                                                    Page 4

CONNUM[5] specific COP and CV figures [provided] . . . must reconcile to the actual costs

reported in your company’s normal cost accounting system and to the accounting records

used by your company to prepare its financial statements.” Id. at D-10. To accomplish

this goal, Commerce provided a sample reconciliation for Corinth to follow, directing

Corinth to take “a ‘top-down’ approach (e.g., financial statements to per-unit cost), starting

with cost of sales from the financial statements and proceeding step-by-step down

through cost of manufacturing [(“COM”)] for the reporting period to the summation of the

reported per-unit costs.” Id. at D-12.

       Corinth responded timely to the initial questionnaire, but Commerce found that the

company’s response regarding Section D contained deficiencies. See Corinth’s Initial

Sec. D Questionnaire Resp. (Sept. 21, 2020), PR 34–35; Decision Memorandum at 12

(noting that Corinth’s reconciliation was not submitted as “one complete reconciliation”

as requested, but rather, “two separate reconciliations for different parts of the POR,” and

determining that the reconciliation provided “did not reconcile the expenses per the

audited income statement to its extended cost database,” “relied on amounts that

included the counting of product costs at both the semifinished stage and the finished

product stage, resulting in ‘double counted’ costs from intermediate stages,” and “did not

show the total extended POR COM from the COP database”).

5
  A “CONNUM” is a contraction of the term “control number,” and is Commerce jargon for
a unique product (defined in terms of a hierarchy of specified physical characteristics
determined in each antidumping proceeding). All products whose product hierarchy
characteristics are identical are deemed to be part of the same CONNUM and are
regarded as “identical” merchandise for purposes of the price comparison.
Court No. 22-00063                                                                   Page 5

       Accordingly, Commerce issued its first supplemental questionnaire, directing

Corinth, “[a]s requested, [to] provide worksheets in the format shown below, reconciling

the total POR COM to the total of the per-unit manufacturing costs submitted to

Commerce” and to “[i]dentify and quantify” various reconciling items. Dep’t of Commerce

Suppl. Sec. D Questionnaire (May 27, 2021) at 5, PR 55 (emphasis added);

see also Decision Memorandum at 12–13. Corinth’s first supplemental response again

included two partial reconciliations instead of a single complete reconciliation, which still

“failed to exclude the first quarter 2019 costs” and was also missing other reconciling

items. See Corinth’s First Suppl. Sec. D Questionnaire Resp. (June 22 & 25, 2021),

PR 62–63; Decision Memorandum at 13.

       Commerce then issued a second supplemental Section D questionnaire, warning

Corinth that its “section D and the supplemental D responses lacked adequate

descriptions of [its] response methodology.” Dep’t of Commerce Second Suppl. Sec. D

Questionnaire (“Second Suppl. Quest.”) (July 15, 2021) at 4, PR 65. Commerce further

explained that “[the company’s] extensive calculation worksheets and reconciliation are

difficult to interpret because of the lack of adequate descriptions as to the methodology

used in the normal records or in [its] reporting to Commerce.” Id. Commerce asked

Corinth to explain, inter alia, why Corinth found it necessary to include reported costs for

months outside the POR and why the company was “unable to generate a single COM

report from its system.” Id. at 3–4. Commerce also requested explanations for certain

steps, lines of data, and definitions contained in Corinth’s submitted worksheets. Id. at 4.
Court No. 22-00063                                                                Page 6

       In its second supplemental response, Corinth again insisted that it could not

combine multiple years in its SAP (cost accounting system) reporting, and thus needed

to submit separate reconciliations. Corinth’s Second Suppl. Sec. D Questionnaire Resp.

(“Corinth’s Second Suppl. Quest. Resp.”) (July 22, 2021) at 13, PR 69; see also Decision

Memorandum at 13. Further, Corinth confirmed that it could not “generate a single COM

report from its system because doing so would double or triple count costs when the

product passed through multiple phases.” Corinth’s Second Suppl. Quest. Resp. at 2;

Decision Memorandum at 14.         Corinth stated, however, that “[t]o demonstrate that

Commerce has complete cost data for this review which reconciles to [Corinth’s]

audited financial statements, [Corinth] prepared and submitted an annotated version

of its cost reconciliation exhibit for 2019,” ostensibly showing “a ‘road map’ for the

worksheets and source data contained in the exhibit.” Corinth’s Second Suppl. Quest.

Resp. at 14 (“On each sheet of the annotated version of [the exhibit, Corinth] inserted

a brief explanation of what information the sheet presents, the source of the data,

and how the sheet relates to the overall reconciliation.”).

       In the Preliminary Results, Commerce conducted the less than fair value (“LTFV”)

analysis by comparing the constructed export price of Corinth’s U.S. sales to normal value

based on CV. PDM at 7, 14 (“[19 U.S.C. § 1677b(e)] provides that CV shall be based

[in part] on the sum of the cost of materials and fabrication for the imported

merchandise . . . .”). Based on that analysis, Commerce “preliminarily determine[d] that

sales of the subject merchandise [had] not been made at prices less than normal value,”
Court No. 22-00063                                                                  Page 7

and that Corinth’s estimated weighted-average dumping margin was 0.00 percent.

Id. at 1; Preliminary Results, 86 Fed. Reg. at 43,172.

       After issuing the Preliminary Results and reviewing Corinth’s questionnaire

responses in their entirety, Commerce attempted “to piece together a meaningful

reconciliation” itself “[u]sing the voluminous worksheets, datafiles, and report downloads

submitted by Corinth.”       Decision Memorandum at 14; see Cost of Production

and Constructed Value Calculation Adjustments for Final Results (Feb. 2, 2022), PR 97

(“Final Results Calculation Memorandum”). From its analysis, Commerce identified four

flaws in Corinth’s cost responses: (1) that Corinth “failed to provide a proper cutoff

of accounting periods and one complete POR cost reconciliation worksheet”; (2) that,

even after the removal of amounts designated for exclusion, the total TOTCOM (total cost

of manufacturing) costs “still include[d] ‘double counted’ costs in the COP/CV file reported

by [Corinth] per their SAP [cost accounting] system”; (3) that, once the double counted

costs were removed, “the amounts contained in the COP/CV file include costs and

quantities that are not in accordance with [Corinth’s] GAAP compliant audited financial

statements”; and (4) that “significant differences in materials and conversion costs”

existed between the audited financial statements and the SAP system report.

Final Results Calculation Memorandum at 2–4.

       Consequently, Commerce concluded that Corinth’s cost data was unusable

because the company “failed to provide a proper reconciliation of the extended cost file

amounts    to   [cost   of   goods    sold]   per   their   audited   income    statement.”

Decision Memorandum at 10.        Commerce further determined that Corinth had “not
Court No. 22-00063                                                                   Page 8

cooperate[d] to the best of its ability in responding to Commerce’s requests for information

concerning its cost of producing the merchandise under consideration [(“MUC”)].” Id.

Accordingly, Commerce applied “total” adverse facts available (“AFA”) and selected,

as Corinth’s dumping margin, “the highest dumping margin alleged in the petition,”

41.04 percent. Id. at 7.

       Now before the court, Plaintiffs challenge the Final Results. Specifically, Plaintiffs

argue that Commerce unreasonably applied total AFA when determining Corinth’s

dumping margin because it did not permit an opportunity for comment by the parties

on the use of AFA, 6 erroneously rejected Corinth’s cost data, and ultimately selected

a unreasonable rate. For the reasons that follow, the court sustains the Final Results.

                                 II. Standard of Review

       For administrative reviews of antidumping duty orders, the court sustains

Commerce’s “determinations, findings, or conclusions” unless they are “unsupported by

substantial evidence on the record, or otherwise not in accordance with law.” 19 U.S.C.

§ 1516a(b)(1)(B)(i). More specifically, when 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.

6
  Following the Final Results, Corinth filed comments purporting to identify ministerial
errors in Commerce’s Final Results Calculation Memorandum. See Corinth’s Ministerial
Error Comments (Feb. 9, 2022), PR 101. Commerce determined that Corinth’s challenge
raised substantive issues that were methodological rather than ministerial and declined
to consider Corinth’s arguments. See Dep’t of Commerce Ministerial Error Memorandum
(Mar. 3, 2022), PR 110. Before the court, Plaintiffs do not challenge Commerce’s decision
to reject the comments as methodological.
Court No. 22-00063                                                               Page 9

474, 488 (1951) (“The substantiality of evidence must take into account whatever in the

record fairly detracts from its weight.”). Substantial evidence has been described 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)).

Substantial evidence has also been described as “something less than the weight of the

evidence, and the possibility of drawing two inconsistent conclusions from the evidence

does not prevent an administrative agency’s finding from being supported by substantial

evidence.” Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 620 (1966).

      Fundamentally, though, “substantial evidence” is best understood as a word

formula connoting reasonableness review. 3 Charles H. Koch, Jr., Administrative Law

and Practice § 9.24[1] (3d ed. 2023). Therefore, when addressing a substantial evidence

issue raised by a party, the court analyzes whether the challenged agency action

“was reasonable given the circumstances presented by the whole record.” 8A West’s

Fed. Forms, National Courts § 3.6 (5th ed. 2022).

                                    III. Discussion

                               A. 19 U.S.C. § 1677m(g)

      During the course of an administrative review, but before making a final

determination, Commerce “shall cease collecting information and shall provide the parties

with a final opportunity to comment on the information obtained by the administering

authority or the Commission (as the case may be) upon which the parties have not

previously had an opportunity to comment.” 19 U.S.C. § 1677m(g).
Court No. 22-00063                                                                  Page 10

       According to Plaintiffs, Commerce failed to satisfy the requirements of § 1677m(g)

because it did not give Corinth an opportunity to comment on its changed dumping margin

methodology—i.e., its application of total AFA—in the Final Results. See Pls.’ Br. 9

(“This provision requires Commerce to give parties an opportunity to comment on a post-

preliminary change in methodology (e.g., a different method of calculating the

respondent’s dumping margin) prior to its final determination/results.”).

       Importantly, Plaintiffs do not claim that Corinth lacked an opportunity to comment

on new information obtained by Commerce; rather, they object to Commerce’s failure to

allow comment on its interpretation of information already on the record. See, e.g., id. at 2

(“Because Commerce’s calculations and worksheets were not disclosed to [Corinth] prior

to the Final Results, [the company] had no opportunity to correct Commerce’s

fundamental misunderstandings or otherwise comment on the analysis and conclusions

underlying Commerce’s AFA findings.”).

       Based on their reading of § 1677m(g), Plaintiffs contend that Commerce’s decision

to apply total AFA in the Final Results was unreasonable, and that the matter should

therefore be remanded so that Commerce can consider Corinth’s arguments in the first

instance. Pls. Br. 2–4, 8–13 (“[B]y failing to provide [Corinth] with the chance to comment

on the change in methodology in the Final Results, Commerce deprived [Corinth] of the

ability to demonstrate that the cost data were complete.”). To support their position,

Plaintiffs cite decisions where the court either discussed Commerce’s obligations under

§ 1677m(g), or ordered remand to allow the parties to comment on new information

obtained by Commerce, changes in Commerce’s methodology, or other issues that were
Court No. 22-00063                                                                 Page 11

not raised at the administrative level. See Pls. Br. 9–10 (collecting cases). In particular,

Plaintiffs rely on Koyo Seiko Co. v. United States, wherein the court noted that Commerce

acted in accordance with § 1677m(g) when it provided the parties with an opportunity for

comment on its introduction of a new methodology—albeit in the 15th administrative

review—to determine which home market sales should be compared to sales made in the

United States. 31 CIT 1512, 1513, 1520, 516 F. Supp. 2d 1323, 1328, 1333–34 (2007).

       As a threshold matter, Plaintiffs misunderstand the requirements of § 1677m(g).

While Plaintiffs assert that § 1677m(g) “requires Commerce to give parties an opportunity

to comment on a post-preliminary change in methodology (e.g., a different method

of calculating the respondent’s dumping margin) prior to its final determination/results,”

the provision’s mandate is confined to information obtained by Commerce on which the

parties have not yet had an opportunity to comment. The court has previously explained

this distinction, observing that “[w]hen Commerce calculates margins ‘it generates

information; it does not collect information.’”         Tri Union Frozen Prods., Inc.

v. United States, 40 CIT ___, ___, 163 F. Supp. 3d 1255, 1289 (2016) (citation omitted)

(“[T]he statute requires Commerce to provide an opportunity to comment only on

information it collects or obtains externally, not findings that it makes or generates

internally. . . . Commerce’s interpretation of factual information does not lead to the

conclusion that its final determination is subject to comment.”). Here, Commerce’s review

of the information already on the record led it to conclude that Corinth’s margin should be

calculated based on total AFA. See Decision Memorandum at 15 (“Although we relied

on Corinth’s cost data in the Preliminary Results, after further evaluating the information
Court No. 22-00063                                                                 Page 12

on the record of this proceeding and in light of parties’ submissions, . . . . [w]e conclude

that the necessary information for Corinth is not available on the record and that Corinth

failed to provide such information in the form or manner requested and, thus, significantly

impeded the proceeding.”).

       Likewise, Plaintiffs’ reliance on what they view as the applicable caselaw

is misplaced.     The decisions cited by Plaintiffs either involve distinguishable

circumstances warranting compliance with § 1677m(g), or do not invoke § 1677m(g)

at all. See Home Prods. Int’l, Inc. v. United States, 32 CIT 337, 339, 556 F. Supp. 2d

1338, 1340 (2008) (granting Commerce’s voluntary remand request where interested

parties had not had opportunity to comment on new information on record); Bristol Metals,

L.P. v. United States, Court No. 09-00127, Order Dated Oct. 23, 2009, ECF No. 39

(granting Commerce’s voluntary remand request without discussing § 1677m(g)); Nan Ya

Plastics Corp. v. United States, 37 CIT 188, 194, 905 F. Supp. 2d 1348, 1354 (2013)

(remanding because court could not sustain Commerce’s determination based only on

counsel’s post hoc rationalizations); CC Metals & Alloys, LLC v. United States, 40 CIT

___, ___, 145 F. Supp. 3d 1299, 1308 (2016) (same); see also Pls.’ Br. 9–10 (citing all

the foregoing).

       The case on which Plaintiffs primarily rely, Koyo Seiko, is likewise unavailing.

See 31 CIT at 1520, 516 F. Supp. 2d at 1333–34; Pls.’ Br. 9. Koyo Seiko relied, as do

Plaintiffs, on Shikoku Chemicals Corp. v. United States for the proposition that

“[p]rinciples of fairness prevent Commerce from changing its methodology at this late
Court No. 22-00063                                                                 Page 13

stage [i.e., the final results].” 16 CIT 382, 388, 795 F. Supp. 417, 421 (1992); see Koyo

Seiko, 31 CIT at 1520, 516 F. Supp. 2d at 1333; Pls.’ Br. 9.

       The Court of Appeals for the Federal Circuit has recognized, however, that Shikoku

turned on a showing of detrimental reliance. SKF USA, Inc. v. United States, 537 F.3d

1373, 1381 (Fed. Cir. 2008).      Beyond citing to Koyo Seiko and Shikoku, Plaintiffs’

argument based on detrimental reliance is lacking. See generally Pls.’ Br. (not discussing

detrimental reliance); Pls.’ Reply 9 (“[Corinth] relied on the methodology verified and

followed by Commerce in the initial investigation when reconciling its reported costs. . . .

[Corinth] cannot be faulted for not clarifying a record that it believed was clear based on

the methods that Commerce had previously accepted.”). Plaintiffs’ argument ignores that

“each administrative review is a separate exercise of Commerce’s authority that allows

for different conclusions based on different facts in the record.”         Jiaxing Brother

Fastener Co. v. United States, 822 F.3d 1289, 1299 (Fed. Cir. 2016) (citation omitted).

As the court has discussed, Commerce was entitled to generate calculations and conduct

its analysis based on the information on the record before it. This remains true even if

Commerce reached different conclusions than it did in the original investigation, or,

as here, in the Preliminary Results. Further, Plaintiffs’ assertion that Corinth reasonably

believed that the record in this review was clear is undermined by the fact that Commerce

indicated, by means of its supplemental questionnaires, that Corinth’s cost responses

needed clarification.   See, e.g., Second Suppl. Quest. at 4 (“[Corinth’s] extensive

calculation worksheets and reconciliation are difficult to interpret because of the lack

of adequate descriptions as to the methodology used in the normal records or in [its]
Court No. 22-00063                                                                   Page 14

reporting to Commerce.”). Thus, Plaintiffs “cannot properly analogize [their] situation

to that in Shikoku, where ‘[t]he record contain[ed] evidence that plaintiffs adjusted their

prices in accordance with methodology consistently applied by Commerce in an attempt

to comply with United States antidumping law.’”             SKF USA, 537 F.3d at 1381

(quoting Shikoku, 16 CIT at 386, 795 F. Supp. at 420).

       In sum, Plaintiffs attempt to broaden the reach of § 1677m(g) to obligations that

the statute was not intended to create. 7 Relatedly, Plaintiffs have failed to point to any

statutory requirement outside of § 1677m(g) requiring Commerce to issue

a “post-preliminary” decision other than the final results. Pls.’ Br. 11–13 (“Commerce

could have resolved any concerns surrounding the reconciliation of [Corinth’s] reported

data by issuing a post-preliminary decision, which Commerce often does when important

issues remain undecided in its preliminary decision.”).          The court will not impose

requirements on Commerce’s administrative process that are not found in the statute,

especially where it is well established that “Commerce may change its stance on issues

decided preliminarily in its final determinations, so long as it explains the reasoning for the

change and ‘its decision is supported by substantial evidence and in accordance with

law.’” Gov’t of Argentina v. United States, 45 CIT ___, ___, 542 F. Supp. 3d 1380, 1391

7
  Indeed, Plaintiffs’ argument urging the court to remand this matter “so that the Court
does not have to do the agency’s work in attempting to discern how Commerce may
respond to the deficiencies raised by [Corinth] that must be raised for the first time here”
might have been better made under § 1677m(d). Section 1677m(d) requires Commerce
to “promptly inform” a person who has made a deficient submission “of the nature of the
deficiency and shall, to the extent practicable, provide that person with an opportunity
remedy or explain the deficiency.” Commerce proactively explained how its determination
complied with that subsection. Decision Memorandum at 4.
Court No. 22-00063                                                                   Page 15

(2021) (quoting Hyundai Steel Co. v. United States, 42 CIT ___, ___, 319 F. Supp. 3d

1327, 1343 (2018)); see also, e.g., JBF RAK LLC v. United States, 38 CIT ___, ___,

991 F. Supp. 2d 1343, 1352 (2014) (holding, in context of post-preliminary

determinations, that “Commerce enjoys considerable discretion in the conduct of its

administrative proceedings”).

         Accordingly, the court rejects Plaintiffs’ argument that Commerce unreasonably

changed its methodology in the Final Results and turns to the issue of whether

Commerce’s decision to rely on total AFA in the Final Results was reasonable.

                                B. Application of Total AFA

         Commerce may rely on “facts otherwise available” if, among other things,

an interested party “withholds information” that Commerce has requested, fails “to provide

such information . . . in the form and manner requested,” or “significantly impedes

a proceeding.” 19 U.S.C. § 1677e(a). Additionally, if Commerce “finds that an interested

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

for information,” Commerce “may use an inference that is adverse to the interests of that

party in selecting from among the facts otherwise available.” Id. § 1677e(b)(1).

         Here, Commerce determined that the use of facts otherwise available was

warranted because Corinth failed to submit “a complete and usable cost reconciliation”

in the   form   and   manner     requested,   thus   withholding    “information   necessary

to demonstrate that all costs were either appropriately included or excluded from the

reported cost database.” Decision Memorandum at 4. For Commerce, “[b]y failing

to correct deficiencies in its cost reconciliation, Corinth . . . significantly impeded
Court No. 22-00063                                                                Page 16

the proceeding because reconciling items were unidentified and unsupported by the

record.” Id.

       As for drawing an adverse inference in selecting from among the facts otherwise

available, Commerce concluded that Corinth failed to cooperate because, “even after

multiple requests, Corinth did not submit a complete cost reconciliation.”        Id. at 6.

Corinth’s failure to follow Commerce’s requested reconciliation format, combined with the

fact that the company “did not, for example, alert Commerce that it would have any

difficulty” reconciling “its audited financial statement cost of manufacturing . . . to the

reported cost database,” led Commerce to find that “Corinth did not act to the best of its

ability to comply with a request for information.” Id.

       Finally, Commerce used total rather than partial AFA because the absence of a

complete and useable cost reconciliation rendered “the information that Corinth provided

. . . too incomplete to serve as a reliable basis for reaching a determination,” and cited

the court’s recognition that “cost information is a vital part of [Commerce’s] dumping

analysis.”     Id. at 5 (citing Mukand, Ltd. v. United States, 37 CIT 443, 454 (2013)

(not reported in Fed. Supp.)) (“Additionally, Commerce has previously found that failure

to provide a cost reconciliation warrants use of total AFA.”). Commerce explained that,

“[w]ithout the ability to reasonably establish that all costs were properly included

or excluded, the entire cost response is called into question and leaves Commerce

without the ability to use the per-unit costs in the cost database, as no adjustment to

remedy the deficiency can be reasonably identified.” Decision Memorandum at 5.
Court No. 22-00063                                                                     Page 17

                                       1. Facts Available

       As   an     initial   matter,   Plaintiffs   concede   that      Corinth’s   Section   D

responses—specifically, its cost reconciliation—were not submitted in the form

and manner Commerce requested.                Plaintiffs admit that Corinth submitted data

for months outside the POR, and added a step to Commerce’s reconciliation structure

by adjusting for double-counted costs contained in its cost accounting system’s data.

Pls.’ Br. 18 (“[Corinth] did not isolate those costs associated with the months prior to the

POR as a separate step because [it] did not produce MUC in those three months. . . .

The only other step in which [Corinth] provided an alternate to Commerce’s preferred

reconciliation structure was the last step where [Corinth] added the cost of consumption

to the total costs reported in the financial accounting and then deducted the cost

of production    for   merchandise      not   under   consideration.”     (emphasis    added)).

While acknowledging these deviations from Commerce’s instructions, Plaintiffs argue that

Commerce should have accepted Corinth’s data because it was “usable.” Id.

       Despite its belief that these changes were necessary to properly reconcile its costs,

Corinth did not “notify Commerce that it was unable to submit [its cost] information in the

form and manner requested in Commerce’s supplemental questionnaires.” Decision

Memorandum at 4.         Rather, according to Commerce, Corinth preferred “to provide

a voluminous dump of different reports, worksheets, and tables.” Id. Plaintiffs now

contend that Corinth’s cost reconciliation—deviations included—was “submitted . . . in the

‘form and manner’ requested by Commerce.” Pls.’ Br. 17. For Commerce, however,

while Corinth’s “data files (with tens of thousands of lines of data) and worksheets
Court No. 22-00063                                                                Page 18

(showing significant amounts of costs repeatedly being swapped in and out of

calculations) . . . [were] voluminous and complex,” they were not “responsive to

Commerce’s specific requests,” nor did “the files provide a clear reconciliation of the

reported data.” Decision Memorandum at 11 (“Merely providing a bulk of information

does not constitute a response to inquiries requesting that a party clearly explain how its

submitted cost data reconcile to their audited financial statement COM.”).

       When discussing Corinth’s failure to respond in the “form and manner requested,”

Commerce explained its rationale for requesting a reliable reconciliation of respondents’

cost data:

              Commerce must . . . ensure that the aggregate amount of the
              reported costs (i.e., summation of the unit costs extended by
              the corresponding production quantities) captures all costs
              incurred by the respondent in producing the MUC during the
              period under consideration. A major point of the reconciliation
              is to establish that the reported unit costs and production
              quantities square with the financial accounting system, the
              cost accounting system, and the production records, as
              required by the statute.

Id.

       Commerce noted that it could not reconstruct Corinth’s submitted reconciliation,

finding: (1) double-counted costs, (2) mismatches between cost categories that it believed

should reconcile, and (3) inclusion of months of data outside the POR. Specifically,

              Commerce undertook a long and exhaustive analysis of
              [Corinth’s] cost reconciliation exhibits. We analyzed the cost
              reconciliations given by [Corinth] to determine whether
              Commerce could reasonably rely on [Corinth’s] cost
              information on the record. . . . Our analysis started with
              [Corinth’s] 2019 audited financial statement COM amount and
              then grossed the amount up by adding the “double counting”
              reconciliation line items to reconcile to the total costs per SAP
Court No. 22-00063                                                                Page 19

             System (i.e., 2019 SAP cost report). Then we removed each
             identifiable overstated cost in order to get to a total reportable
             costs figure. Our analysis not only demonstrates that the total
             COM provided by [Corinth] does not reconcile to the cost of
             reportable merchandise under consideration (MUC) but
             brings to light certain other issues that might have been
             addressed if [Corinth] had been responsive to our multiple
             requests for a proper reconciliation.

Final Results Calculation Memorandum at 2.

      Plaintiffs devote a significant portion of their briefing and their argument

to challenging the findings Commerce reached in its Final Results Calculation

Memorandum and identifying the errors Commerce made in reconstructing Corinth’s cost

reconciliation. See Pls.’ Br. 18–36; Oral Argument at 01:00–25:20, ECF No. 51 (Apr. 19,

2023). According to Plaintiffs, Commerce mistakenly identified costs as “double-counted”

when all double-counted costs were already removed; Commerce believed at key points

of its analysis that it was comparing data from Corinth’s cost and financial accounting

systems, when it was in fact relying only on data from the cost accounting system;

Commerce also failed to recognize when it was comparing data derived from different

product pools; and Commerce assumed Corinth’s submission of cost accounting system

reports from months outside of the POR meant that Corinth had submitted data regarding

the MUC for months outside of the POR. Pls.’ Br. 18–36.

      In Plaintiffs’ view, had Commerce complied with Corinth’s instructions as to how

to read its submissions, a full reconciliation of the company’s costs would have been

possible. Id. at 17 (“[Corinth] presented a detailed step-by-step summary of its cost

reconciliation with screenshots and narrative explanations in its second supplemental

section D questionnaire response.”); see also id. at 22 (“In Exhibit 1, [Corinth]
Court No. 22-00063                                                                 Page 20

demonstrates step-by-step using Commerce’s own reconciliation from the Calculation

Memorandum that [the company’s] reported costs do reconcile with its SAP cost system

and that the final step undertaken by Commerce in its attempted cost reconciliation was

incorrect and resulted in Commerce’s erroneous determination that [Corinth’s] costs

did not reconcile.”).   Plaintiffs also contend that Corinth could have corrected any

deficiencies if Commerce had provided adequate notice thereof: “To the extent that

[Corinth’s] explanation [of its cost data] needed further clarification, [Corinth] could and

would have resolved outstanding issues if it had notice that this explanation

was not sufficient and not understood.” Id. at 24.

       Plaintiffs’ focus on Commerce’s alleged inability to understand and replicate

Corinth’s calculations is misplaced. “[T]he burden of creating an adequate record lies

with interested parties and not with Commerce.” Nan Ya Plastics Corp. v. United States,

810 F.3d 1333, 1337–38 (Fed. Cir. 2016) (quoting QVD Food Co. v. United States,

658 F.3d 1318, 1324 (Fed. Cir. 2011)). Further, “[t]he mere failure of a respondent

to furnish requested information—for any reason—requires Commerce to resort to other

sources of information to complete the factual record on which it makes its determination.”

Nippon Steel Corp. v. United States, 337 F.3d 1373, 1381 (Fed. Cir. 2003).

Thus, Plaintiffs bear the burden of showing that Commerce acted unreasonably in

rejecting Corinth’s cost data.

       Plaintiffs have failed to make such a demonstration. Their attempts to clarify

the record by detailing Commerce’s alleged errors only serve to support the finding that

Corinth’s submissions were inadequate. For example, Plaintiffs point to Commerce’s
Court No. 22-00063                                                                Page 21

allegedly erroneous “additional deduction from the fully reconciled costs” intended

to account for double-counting, while later acknowledging—as the court has noted—that

Corinth deviated from Commerce’s “preferred reconciliation structure” to “eliminate

double-counted costs recorded in SAP” itself. Pls.’ Br. 5, 18. Likewise, Plaintiffs claim

that Corinth’s failure “to exclude costs from the first quarter of 2019 that fell outside

the POR” did not justify the application of total AFA, placing the onus on Commerce

to interpret the over-inclusive data and conclude that “no production of MUC took place”

during those months. See id. at 5, 29–31. These arguments, and Plaintiffs’ additional

descriptions of Corinth’s preferred reconciliation methods, at best, provide an alternative

means of analyzing the submitted data—an alternative which, by Plaintiffs’ own

admission, was not wholly consistent with Commerce’s instructions.         See id. at 18.

That Plaintiffs may have identified “another possible reasonable choice” for the form and

manner of its submissions falls short of the mark, especially where, as here, Plaintiffs’

preferred means of reconciliation is confusing and requires Commerce to sift through

unrequested and irrelevant information.         See, e.g., Uttam Galva Steels Ltd.

v. United States, 44 CIT ___, ___, 476 F. Supp. 3d 1387, 1393 (2020) (quoting Tianjin

Wanhua Co. v. United States, 40 CIT ___, ___, 179 F. Supp. 3d 1062, 1071 (2016)).

“[W]here two different, inconsistent conclusions may reasonably be drawn from the

evidence in record, an agency’s decision to favor one conclusion over the other is the

epitome of a decision that must be sustained upon review.”           Pokarna Engineered

Stone Ltd. v. United States, 56 F.4th 1345, 1349 (Fed. Cir. 2023) (quoting In re Jolley,

308 F.3d 1317, 1329 (Fed. Cir. 2002)).
Court No. 22-00063                                                               Page 22

       Therefore, based on its description of its own attempts to reconcile Corinth’s

information, and its explanation as to why a cost reconciliation was a necessary

component underpinning its LTFV analysis as a whole, Commerce’s decision to rely

on facts available when determining Corinth’s dumping margin was reasonable.

See, e.g., Macao Com. & Indus. Spring Mattress Mfr. v. United States, 44 CIT ___, ___,

437 F. Supp. 3d 1324, 1332 (2020) (accepting cost reconciliation requirement where

Commerce “fully described why the cost reconciliations it sought were vital for its . . .

determinations and why [Commerce] could not accept Plaintiff’s claimed inability

to comply with Commerce's request for cost reconciliations”).

                                 2. Adverse Inferences

       To justify the use of adverse inferences, Commerce must show that “a reasonable

and responsible importer would have known that the requested information was required

to be kept and maintained under the applicable statutes, rules, and regulations,” and that

the particular respondent has failed “to put forth its maximum efforts to investigate and

obtain the requested information from its records.” Nippon Steel, 337 F.3d at 1382–83

(citation omitted).   Intent is irrelevant when determining whether a respondent has

cooperated to the best of its ability. Id. at 1383 (“The statutory trigger for Commerce’s

consideration of an adverse inference is simply a failure to cooperate to the best

of respondent’s ability, regardless of motivation or intent.”); see also, e.g., Ferrostaal

Metals Gmbh v. United States, 45 CIT ___, ___, 518 F. Supp. 3d 1357, 1375–76 (2021)

(rejecting plaintiffs’ argument that “timely, but noncompliant” responses demonstrate

cooperation).
Court No. 22-00063                                                                   Page 23

       In the Final Results, Commerce concluded that, despite “multiple chances”—i.e.,

supplemental questionnaires—“Corinth refused to provide the reconciliation in the format

requested.” Decision Memorandum at 7 (“In addition, based on our analysis of the record

information, there is a large unreconciled difference between Corinth’s audited financial

statement COM and its reported costs.”).          As one example of Corinth’s lack of

cooperation, Commerce found that

              While Corinth may not have been able to generate a cost
              report for a period that spans two fiscal years, Corinth admits
              that it can extract an SAP costing report for a range of months
              in the same year. Thus, Corinth could have generated data
              for the last nine months of 2019 as it did for the first four
              months of 2020. . . . This exercise would have removed the
              costs incurred during the first three months of the POR.

Id. at 13–14 (emphasis added).

       Corinth has failed to explain why it could not cooperate by generating cost reports

for the ranges of months that Commerce requested. It is telling that, as proof of Corinth’s

cooperation, Plaintiffs point to the company’s reliance on the approach it followed at the

investigation stage, not on Commerce’s instructions in the current review. See Pls.’ Br. 38

(“[Corinth] followed the same general approach from              the original investigation

in responding to Commerce’s cost questionnaires in the first administrative review.

[Corinth’s] cost responses were fully verified during an on-site verification in the original

investigation and [it] believed it was acting to the best of its ability by following the same

approach from the original investigation.” (emphasis added)); id. at 6 n.3 (“The original

investigation cost verification report is on the record of this administrative review

in [Corinth’s] Rebuttal Factual Information Submission.”). Plaintiffs’ arguments again fail
Court No. 22-00063                                                                Page 24

to recognize that Commerce is entitled to reach different findings during separate

segments of its administrative proceedings.      See, e.g., Jiaxing, 822 F.3d at 1299.

Here, Commerce was not required to find that Corinth cooperated in the administrative

review based on Commerce’s findings about the company’s information at the

investigation stage.

       Plaintiffs have failed to persuade the court that Commerce’s decision to apply total

AFA was unreasonable.       In the Decision Memorandum, Commerce both explained

the crucial nature of the information it deemed missing and incomplete—the cost

reconciliation—and described Corinth’s multiple instances of uncooperative behavior.

Decision Memorandum at 6 (“Because Corinth failed to submit a complete cost

reconciliation, we find that Corinth did not provide Commerce with full and complete

answers to Commerce’s inquiries in this proceeding.     Furthermore, because Corinth did

not provide the reconciliation in the format requested and, thus, did not reconcile

its audited financial statement cost of manufacturing . . . to the reported cost database,

and Corinth did not, for example, alert Commerce that it would have any difficulty doing

so, we find that Corinth did not act to the best of its ability to comply with a request

for information.”). It was “reasonable for Commerce to expect . . . more forthcoming

responses,” and to use total AFA when it did not receive such responses. Nippon Steel,

337 F.3d at 1383. The court therefore sustains Commerce’s use of total AFA based on

Corinth’s failure to submit, in the form and manner requested, the information necessary

to reconcile its costs.
Court No. 22-00063                                                              Page 25

                                  C. Dumping Margin

      Plaintiffs lastly contend that, even if the court sustains Commerce’s determination

to apply AFA, the AFA rate selected by Commerce was unreasonable. Plaintiffs maintain

that the 41.04 percent rate—the highest alleged in the Petition—was “excessive, punitive,

and unjustified.” Pls.’ Br. 40 (“In selecting an AFA rate, Commerce must not ‘impose

punitive, aberrational, or uncorroborated margins’ and an AFA rate should ‘be

a reasonably accurate estimate of the respondent’s actual rate, albeit with some built-in

increase intended as a deterrent to non-compliance.’” (quoting BMW of N. Am. LLC,

926 F.3d 1291, 1297, 1300 (Fed. Cir. 2019))).

      Under 19 U.S.C. § 1677e(b)(2), Commerce is empowered to rely on various

sources of information for adverse inferences, including the petition. When Commerce

relies on information derived from the petition, it “shall, to the extent practicable,

corroborate that information from independent sources that are reasonably at [its]

disposal.” Id. § 1677e(c)(1). “Corroborate means that the Secretary will examine whether

the secondary Information to be used has probative value.” 19 C.F.R. § 351.308(d)

(2022). The corroboration requirement captures Congress’s intent for an AFA “rate to be

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);

see also Hubscher Ribbon Corp. v. United States, 38 CIT ___, ___, 979 F. Supp. 2d 1360,

1366 (2014) (“[Corroboration is] a substantial evidence question in which the court

reviews the reasonableness of Commerce's actions against a known legal standard given
Court No. 22-00063                                                                Page 26

the facts and circumstances of the administrative record.”). “An AFA rate is punitive if it

is not ‘based on facts’ and ‘has been discredited by the agency’s own investigation.’”

Qingdao Taifa Grp. v. United States, 35 CIT 820, 826, 780 F. Supp. 2d 1342, 1349

(2011) (quoting De Cecco, 216 F.3d at 1033).

       Plaintiffs’ arguments here fail to demonstrate that the selected AFA rate was

unreasonable. Relying only on broad assertions that the selected rate was “drastically

overstated, punitive and unjustified,” as well as on their prior arguments opposing

Commerce’s application of total AFA, Plaintiffs fail to persuasively explain how

Commerce’s selection of the 41.04 percent rate was unsupported by the record.

See Pls.’ Br. 41 (arguing that Corinth was cooperative respondent, and citing timeliness

of Corinth’s responses, its adherence to “same approach from the original investigation,”

and Commerce’s purported failure to issue additional questionnaires between

the Preliminary Results and the Final Results, as proof that “Commerce erred” by

selecting petition rate). Without more, Plaintiffs have failed to develop an argument as to

what, if any, “mitigating circumstances” might call into question Commerce’s choice

of rate. See Pls.’ Br. 41; cf. BMW, 926 F.3d at 1302 (noting “unique factual circumstances

surrounding BMW’s failure to return the quantity-and-value questionnaire” that warranted

further explanation by Commerce to justify a change in rate from 1.43 percent

to 126.44 percent (emphasis added)).

       Plaintiffs suggest that Commerce should have adopted an alternative rate, namely

Corinth’s dumping margin of 10.26 percent from the original investigation, which “required

no secondary confirmation but instead was a calculated rate.” Pls.’ Br. 42. For Plaintiffs,
Court No. 22-00063                                                                Page 27

this rate is “sufficiently adverse given that [Corinth’s] dumping margin in this

administrative review would have been 0.00 percent had Commerce used [Corinth’s]

actual reported data.” Id. Corinth is not entitled, however, to a rate that it would have

received if it had fully cooperated in the review. 19 U.S.C. § 1677b(d)(3)(A). Nor is

Plaintiff entitled to a calculated rate that does not require secondary confirmation.

See, e.g., Hubscher Ribbon, 38 CIT at ___, 979 F. Supp. 2d at 1369 (acknowledging that

use of petition rates is authorized by statute).

       Further, contrary to Plaintiffs’ assertion that Commerce failed to link the petition

rate to Corinth itself, Commerce specifically found that the 41.04 percent rate was

“within the range of transaction-specific margins calculated for Corinth in the

investigation, and, thus, the 41.04 percent rate is both reliable and relevant.” Decision

Memorandum at 8. While Commerce’s explanation relies on a single link between the

rate and the respondent, this can come as no surprise where there is only one

respondent—and where that respondent has been uncooperative.                 “Under such

circumstances, Commerce’s corroboration may be less than ideal because the

uncooperative acts of the respondent [have] deprived Commerce of the very information

that it needs to link an AFA rate to [respondent’s] commercial reality.” Hubscher Ribbon,

38 CIT at ___, 979 F. Supp. 2d at 1369 (quoting Qingdao Taifa, 35 CIT at 826, 780 F.

Supp. 2d at 1349). Accordingly, the court sustains as reasonable Commerce’s selection

of the petition rate as the AFA rate.
Court No. 22-00063                                                              Page 28

                                    IV. Conclusion

      For the foregoing reasons, the court concludes that Commerce reasonably applied

total AFA in determining Corinth’s antidumping duty margin in the Final Results.

Therefore, the court sustains the Final Results. Judgment will enter accordingly.

                                                              /s/ Leo M. Gordon
                                                           Judge Leo M. Gordon

Dated: April 28, 2023
       New York, New York