Court Opinion

ID: 9908513
Source: CourtListenerOpinion
Date Created: 2023-12-08 23:01:08.19664+00
Date Added: 2024-06-11T12:49:13.289195
License: Public Domain

Slip Op. No. 23-172

             UNITED STATES COURT OF INTERNATIONAL TRADE

 KISAAN DIE TECH PRIVATE
 LIMITED, et al.,

                          Plaintiffs,
                                                 Before: Timothy C. Stanceu, Judge
               v.
                                                 Consol. Court No. 21-00512
 UNITED STATES,

                          Defendant.

                                OPINION AND ORDER

      [Remanding an agency decision concluding an administrative review of an
antidumping duty order on stainless steel flanges from India]

                                                               Dated: December 8, 2023

      Duane W. Layton, Mayer Brown LLP, of Washington, D.C., for plaintiff Kisaan
Die Tech Private Limited.

     Peter J. Koenig, Squire Patton Boggs (US) LLP, of Washington, D.C., for plaintiff
Chandan Steel Limited.

       Jeremy W. Dutra, Squire Patton Boggs (US) LLP, of Washington, D.C., for
plaintiffs Echjay Forgings Private Limited, Jai Auto Pvt. Ltd., Goodluck India Limited,
Jay Jagdamba Forgings Private Limited, Hilton Metal Forging, Limited, Jay Jagdamba
Limited, Jay Jagdamba Profile Private Limited, Shree Jay Jagdamba Flanges Pvt. Ltd.,
Balkrishna Steel Forge Pvt. Ltd., Pradeep Metals Limited, and Bebitz Flanges Works
Private Limited. With him on the brief was Peter J. Koenig.

       Geoffrey M. Long, Senior Trial Counsel, Commercial Litigation Branch, Civil
Division, U.S. Department of Justice, of Washington, D.C., for defendant. With him on
the brief were Brian M. Boynton, Principal Deputy Assistant Attorney General, Patricia
M. McCarthy, Director, and Tara K. Hogan, Assistant Director. Of counsel on the brief
Consol. Court No. 21-00512                                                           Page 2

was Ashlande Gelin, Office of the Chief Counsel for Trade Enforcement & Compliance,
U.S. Department of Commerce, of Washington, D.C.

       Stanceu, Judge: Plaintiffs contest a decision issued by the International Trade

Administration, U.S. Department of Commerce (“Commerce” or the “Department”) to

conclude a review of an antidumping duty (“AD”) order on stainless steel flanges from

India. Because Commerce unlawfully chose to examine only one respondent

individually and unlawfully assigned an unreasonable rate to the respondents it did not

individually examine, the court orders corrective action.

                                     I. BACKGROUND

                            A. The Contested Determination

       Commerce published the contested determination (the “Final Results”) as

Stainless Steel Flanges From India: Final Results of Antidumping Duty Administrative Review:

2018–2019, 86 Fed. Reg. 47,619 (Int’l Trade Admin. Aug. 26, 2021) (“Final Results”).

Commerce incorporated into the Final Results by reference an explanatory “Issues and

Decision Memorandum.” Stainless Steel Flanges from India: Issues and Decision

Memorandum for the Final Results of the Antidumping Duty Administrative Review;

2018–2019 (Int’l Trade Admin. Aug. 20, 2021), P.R. 116 (“Final I&D Mem.”).1

       1
        Documents in the Joint Appendix (May 26, 2022), ECF Nos. 60 (confidential),
61 (public) are cited “P.R. __” (for public documents). The information disclosed in this
Opinion and Order was obtained from the public versions of the record documents.
Consol. Court No. 21-00512                                                              Page 3

                         B. Prior Administrative Determinations

       The review at issue in this case was the first administrative review of an

antidumping duty order (the “Order”). Stainless Steel Flanges From India: Antidumping

Duty Order, 83 Fed. Reg. 50,639 (Int’l Trade Admin. Oct. 9, 2018) (“Order”).2 Issuance of

the Order followed the Department’s final determination of sales at less than fair value,

Stainless Steel Flanges From India: Final Affirmative Determination of Sales at Less Than Fair

Value and Final Affirmative Critical Circumstance Determination, 83 Fed. Reg. 40,745

(Aug. 16, 2018) (“Final LTFV Determination”), and a September 28, 2018 notification to

Commerce by the U.S. International Trade Commission (“ITC”) of the ITC’s affirmative

determination of injury to the domestic industry, see Order, 83 Fed. Reg. at 50,639 &

50,639 n.2.

       Commerce initiated the first administrative review in late 2019. Initiation of

Antidumping and Countervailing Duty Administrative Reviews, 84 Fed. Reg. 67,712 (Int’l

Trade Admin. Dec. 11, 2019). It pertained to entries of stainless steel flanges from India

(the “subject merchandise) made during a period of review (“POR”) of March 28, 2018

       2
         The “Scope of the Order” is defined as “certain forged stainless steel flanges,
whether unfinished, semi-finished, or finished” that are made of “alloy steel containing,
by actual weight, 1.2 percent or less of carbon and 10.5 percent or more of chromium,
with or without other elements.” Stainless Steel Flanges From India: Antidumping Duty
Order, 83 Fed. Reg. 50,639, 50,640 (Int’l Trade Admin. Oct. 9, 2018). “The scope includes
six general types of flanges.” Id. (listing “Weld neck,” threaded,” “slip-on,” “lap joint,”
“socket weld,” and “blind” with their general uses). “Specifically excluded . . . are cast
stainless steel flanges.” Id. “The sizes . . . of the flanges within the scope . . . range from
one-half inch to twenty-four inches nominal pipe size.” Id.
Consol. Court No. 21-00512                                                             Page 4

through September 30, 2019. Id., 84 Fed. Reg. at 67,714; Final Results, 86 Fed. Reg.

at 47,619.

       Commerce published “Preliminary Results” of the first administrative review in

early 2021. Stainless Steel Flanges From India: Preliminary Results of Antidumping Duty

Administrative Review; 2018–2019, 86 Fed. Reg. 11,233 (Int’l Trade Admin. Feb. 24, 2021)

(“Preliminary Results”).

                                         C. The Parties

       Plaintiff Chandan Steel Limited (“Chandan”) was the sole mandatory

respondent, i.e., the only exporter or producer of subject merchandise selected by

Commerce for individual examination in the first administrative review. Antidumping

Duty Administrative Review of Stainless Steel Flanges from India, 2018–2019: Respondent

Selection at 1 (Int’l Trade Admin. Mar. 13, 2020) (“Respondent Selection Mem.”). In the

Final Results, Commerce assigned Chandan a dumping margin of 145.25% ad valorem.

Final Results, 86 Fed. Reg. at 47,619.

       Commerce assigned a 145.25% ad valorem rate to the respondents it did not

examine individually in the review, which Commerce based on the rate it assigned to

Chandan. Id. Twelve of the unexamined respondents are plaintiffs in this consolidated

action.3 They are: (1) Kisaan Die Tech Private Limited (“Kisaan”), (2) Echjay Forgings

       3
        Consolidated under the lead case are Court Nos. 21-00540 and 21-00542. Order
(Nov. 30, 20201), ECF No. 18.
Consol. Court No. 21-00512                                                            Page 5

Private Limited, (3) Jai Auto Pvt. Ltd., (4) Goodluck India Limited, (5) Jay Jagdamba

Forgings Private Limited, (6) Hilton Metal Forging, Limited, (7) Jay Jagdamba Limited,

(8) Jay Jagdamba Profile Private Limited, (9) Shree Jay Jagdamba Flanges Pvt. Ltd.,

(10) Balkrishna Steel Forge Pvt. Ltd., (11) Pradeep Metals Limited, and (12) Bebitz

Flanges Works Private Limited.

                                     II. DISCUSSION

       Before the court are plaintiffs’ motions for judgment on the agency record,

brought according to USCIT Rule 56.2. In its motion, Chandan claims that Commerce

misapplied section 776 of the Tariff Act of 1930, as amended (“Tariff Act”), 19 U.S.C.

§ 1677e,4 in assigning it a margin of 145.25% based on the “total” use of “facts otherwise

available” under § 1677e(a) and “adverse inferences” under § 1677e(b).5 In their Rule

56.2 motions, all other plaintiffs contest the Department’s assigning them the 145.25%

rate as respondents not selected for individual examination.

       For the reasons discussed herein, the court denies Chandan’s Rule 56.2 motion

and grants the Rule 56.2 motions of the other plaintiffs.

       Citations to the United States Code herein are to the 2018 edition. Citations to
       4

the Code of Federal Regulations are to the 2020 edition.

       The term “adverse facts available,” or “AFA,” is often used when a
       5

determination is made to apply both provisions.
Consol. Court No. 21-00512                                                           Page 6

                         A. Jurisdiction and Standard of Review

       The court exercises jurisdiction under section 201 of the Customs Courts Act of

1980, 28 U.S.C. § 1581(c), pursuant to which the court exercises jurisdiction of actions

commenced under section 516A of the Tariff Act, 19 U.S.C. § 1516a, including an action

contesting a final determination that concludes an administrative review of an

antidumping duty order, id. § 1516a(a)(2)(B).

       In reviewing a final determination, the court “shall hold unlawful any

determination, finding, or conclusion found . . . to be unsupported by substantial

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

§ 1516a(b)(1)(B)(i). Substantial evidence refers to “such relevant evidence as a

reasonable mind might accept as adequate to support a conclusion.” SKF USA, Inc. v.

United States, 537 F.3d 1373, 1378 (Fed. Cir. 2008) (quoting Consol. Edison Co. v. NLRB,

305 U.S. 197, 229 (1938)).

   B. Use of “Total Adverse Facts Available” to Determine the Antidumping Duty
                                Margin for Chandan

           1. Findings upon which Commerce Based Its Use of “Total AFA”

       Commerce based its use of facts otherwise available and adverse inferences on

three groups of factual findings. First, Commerce found that Chandan repeatedly

misreported the information on its foreign sales, which information Commerce requires

for calculation of a dumping margin. Final I&D Mem. at 5–11. Second, Commerce

found that Chandan failed to report, on a control-number (“CONNUM”) specific basis,
Consol. Court No. 21-00512                                                          Page 7

as Commerce had requested, information on the cost of production of the merchandise

in its foreign sales. Id. at 14–19. Third, Commerce found that Chandan’s responses to

information requests “contained additional deficiencies relating to its reporting of gross

unit price, quantity discounts, other discounts, and duty refunds” that Chandan failed

to remedy. Id. at 19–22.

      Commerce concluded that the “fundamental reporting deficiencies” affecting

Chandan’s responses to its questionnaires justified the use of “facts otherwise available”

according to 19 U.S.C. § 1677e(a). Id. at 5. Specifically, Commerce found that

Chandan’s inadequate responding, even after Commerce allowed an opportunity to

explain and to take remedial action, constituted the withholding of requested

information as described in 19 U.S.C. § 1677e(a)(2)(A) and the failure to provide

information “in the form and manner requested,” id. § 1677e(a)(2)(B). Final I&D Mem.

at 5. Commerce found, further, that Chandan’s misreporting “significantly impeded

the proceeding” within the meaning of 19 U.S.C. § 1677e(a)(2)(C). Id. (footnote

omitted). Commerce concluded, further, that the use of an adverse inference, 19 U.S.C.

§ 1677e(b), was warranted because, it found, Chandan did not act to the best of its

ability in responding to the Department’s information requests. Id. As a basis for “total

adverse facts available,” Commerce found that “the level of inattentiveness and

inaccuracy of Chandan’s reporting throughout this review undermines the reliability of

the company’s responses as a whole and, in accordance with section 776(b) of the Act
Consol. Court No. 21-00512                                                           Page 8

[19 U.S.C. § 1677e(b)], warrants the application of an adverse inference in selecting from

the facts available.” Id. (footnote omitted). As an adverse inference, and as it did in the

Preliminary Results, Commerce assigned Chandan a rate of 145.25%, which was the rate

it had assigned in the antidumping duty investigation to a respondent it found to be

uncooperative, reasoning that “to create a proper deterrent against future

non-cooperation, Commerce continues to find that the application of the highest rate

assigned under this order is appropriate.” Id. at 31.

        2. Chandan’s Challenge to the Use of “Total Adverse Facts Available”

       Chandan challenges the Department’s assigning it the 145.25% rate on several

grounds. It argues that “[i]t is unlawful for Commerce to use total adverse facts where

at best (and erroneously) the record only supports applying partial adverse facts to

some U.S. sales.” Pl. Chandan’s Mot. for J. on the Agency R. 6 (June 30, 2022), ECF

No. 37 (“Chandan’s Mot.”). It maintains, further, that the use of an adverse inference

was unlawful because: (1) there was no gap in information that needed to be filled by

the use of facts otherwise available, id. at 5–25; (2) Commerce unlawfully used adverse

facts available without notifying Chandan of deficiencies in the submissions of

information to Commerce and allowing Chandan an opportunity to address them, id.

at 25–27; (3) Chandan acted to the best of its ability in responding to the Department’s

information requests, and any errors are insufficient for the use of adverse inferences,
Consol. Court No. 21-00512                                                              Page 9

id. at 27–35; and (4) the adverse inferences Commerce used were unlawfully “punitive,”

id. at 35–40.6

3. Chandan’s Omissions of “Window Period” and Small-Size Sales when Reporting
                    its Comparison Market Sales Database

       In calculating a weighted average dumping margin, Commerce ordinarily

compares “U.S. price,” which is determined on an export price (“EP”) or constructed

export price (“CEP”) basis from prices of the exporter’s subject merchandise in sales to

the United States, with a group of sales of the “foreign like product,” see 19 U.S.C.

§ 1677(16), that the exporter made in the “comparison” market. The “comparison

market” normally is the home market of the exporter, but if the home market is not

“viable,” see 19 U.S.C. § 1677b(a)(1)(C), Commerce may use the exporter’s sales in a

market in a third country, id. § 1677b(a)(1)(B)(ii). See 19 C.F.R. §§ 351.404 (selection of

comparison market), 351.414 (comparison of normal value with U.S. price). In the first

review, Commerce used a third country, the Netherlands, as a comparison market.

Chandan’s Mot. 6.

       Commerce is directed to identify comparison market sales of the foreign like

product according to criteria set forth in 19 U.S.C. § 1677(16). Ideally, comparison

market sales will be sales of “merchandise which is identical in physical characteristics

       6
          In an unrelated claim, Chandan argues that antidumping and countervailing
duty cash deposits should not have been deducted from U.S. price. Pl. Chandan’s Mot.
for J. on the Agency R. 40–41 (June 30, 2022), ECF No. 37. The court addresses this claim
later in this Opinion and Order.
Consol. Court No. 21-00512                                                           Page 10

with, and was produced in the same country by the same person as,” the subject

merchandise. Id. § 1677(16)(A). If Commerce cannot make a determination

satisfactorily on that basis, Commerce may base its comparison on sales of

“[m]erchandise—(i) produced in the same country and by the same person as the

subject merchandise, (ii) like that merchandise in component material or materials and

in the purposes for which used, and (iii) approximately equal in commercial value to

that merchandise.” Id. § 1677(16)(B). If Commerce cannot compare sales on the basis of

this second category, Commerce instead may base its comparison on sales of

“[m]erchandise—(i) produced in the same country and by the same person and of the

same general class or kind as the subject merchandise, (ii) like that merchandise in the

purposes for which used, and (iii) which the administering authority determines may

reasonably be compared with that merchandise.” Id. § 1677(16)(C).

       Commerce requested in its initial questionnaire (the “March 13, 2020

Questionnaire”) that Chandan “report all sales of the foreign like product during the

three months preceding the earliest month of U.S. sales, all months from the earliest to

the latest month of U.S. sales, and the two months after the latest month of U.S. sales.”

Final I&D Mem. at 5 (quoting Antidumping Duty Admin. Review: Request for Information

at B-1 (Int’l Trade Admin. Mar. 13, 2020), P.R. 28–29).7 In requiring reporting of

       7
        Commerce issued several questionnaires during the administrative review,
which, as are the responses, are identified herein by dates of issuance and citations to
record documents.
Consol. Court No. 21-00512                                                          Page 11

comparison market sales that occurred during the five-month “window period,”

including those that may have occurred outside the actual POR, Commerce was

effectuating its “average-to-transaction” method of comparing sales. See 19 C.F.R.

§ 351.414; Final I&D Mem. at 8 (“. . . in administrative reviews, Commerce normally

compares the export price (EP) or constructed export price (CEP) of an individual U.S.

sale to an average normal value (NV) based on a contemporaneous month in the

comparison market.”). Under this method, the “comparison month” is the same month

as the U.S. sale or, if no matching sales occurred during that month, then the

comparison month is “the most recent of the three months prior to the month of the U.S.

sales in which there was a sale of the foreign like product.” 19 C.F.R. § 351.414(f)(2). “If

there are no sales of the foreign like product during any of these months,” the

comparison month will be “the earlier of the two months following the month of the

U.S. sales in which there was a sale of the foreign like product.” Id. § 351.414(f)(3). As

discussed below, Chandan did not submit a comparison market database correctly

during the entire questionnaire process, even though Commerce pointed out Chandan’s

errors and allowed the opportunity for correction.

       Chandan’s response to the March 13, 2020 Questionnaire (the “June 30, 2020

Response”) did not include a complete list of the requested sales in the comparison
Consol. Court No. 21-00512                                                            Page 12

market.8 See Certain Stainless Steel Flanges from India, Section-B and Section-C response

(June 30, 2020), P.R. 67. Commerce found that in Exhibit B-2 of that submission, which

contained the comparison market sales, “Chandan reported to Commerce only the

comparison market sales that it made during the POR itself, i.e., not for the window

period.” Final I&D Mem. at 5 (footnote omitted). Chandan does not dispute that its

June 30, 2020 Response failed to report the sales outside the POR but gives as a

justification for its misreporting that “Chandan has not done a Commerce

administrative review for fifteen years” and states, further, that “the concept of window

period sales was novel to Chandan.” Chandan’s Mot. 11.

       Commerce addressed Chandan’s misreporting in an “August 19, 2020

Supplemental Questionnaire” and gave Chandan an opportunity to correct its error by

allowing it to resubmit its comparison market database to include any window period

sales that occurred outside the POR. Antidumping Duty Administrative Review of Stainless

Steel Flanges from India: Section B and C Supplemental Questionnaire at 4 ¶ 21 (Int’l Trade

Admin. Aug. 19, 2020), P.R. 80. Chandan’s “September 11, 2020 Response” to this

       8
         “Section A” of the antidumping duty questionnaire (“Organization, Accounting
Practices, Markets, and Merchandise”) requests general company information.
Antidumping Duty Admin. Review: Request for Information at A-1 (Int’l Trade Admin. Mar. 13,
2020), P.R. 28–29. Pertinent to this case, “Section B” of the questionnaire requests
information on “Sales in the Home Market or to a Third Country”; “Section C” requests
information on “Sales to the United States”; and “Section D” requests information on
“Cost of Production and Constructed Value.” See Def.’s Resp. to Pl.’s Mots. for J. on the
Agency Record 3 (Oct. 14, 2022), ECF No. 52.
Consol. Court No. 21-00512                                                              Page 13

questionnaire also was unsatisfactory. Final I&D Mem. at 5 & 5 n.27 (citing Certain

Stainless Steel Flanges from India, Section B & C Supplemental Questionnaire Response for

question 21 (Sept. 21, 2020), P.R. 91). The Department’s “November 25, 2020

Supplemental Questionnaire” concluded that Chandan’s reporting of the window

period sales occurring outside the POR did not include flanges of nominal pipe size

below 1.5 inches and, therefore, failed to include sales of subject flanges that were of a

smaller nominal size. See Antidumping Duty Administrative Review of Stainless Steel

Flanges from India: Supplemental Questionnaire at 1 ¶ 1 (Int’l Trade Admin. Nov. 25, 2020),

P.R. 104; Order, 83 Fed. Reg. at 50,640 (“The sizes . . . of the flanges within the scope . . .

range from one-half inch to twenty-four inches nominal pipe size.”).

       Chandan concedes that its September 11, 2020 Response omitted sales of the

foreign like product of nominal size less than 1.5 inches. Chandan’s Mot. 11 (“Chandan

originally reported sales for 1.5 to 24 inch flanges, believing that was what was

requested.”). In its “December 9, 2020 Response” to the November 25, 2020

Supplemental Questionnaire, Chandan submitted a database to correct for this error,

Certain Stainless Steel Flanges from India, Section B & C Supplemental Questionnaire

Responses to questions 1 through 30 at 1 (Dec. 9, 2020), P.R. 111, but Commerce again

found a deficiency because “Chandan once again submitted a comparison market

database without including sales covering the full five-month window period.” Final

I&D Mem. at 6 (footnote omitted). Chandan objects, to no avail, that Commerce did not
Consol. Court No. 21-00512                                                           Page 14

“explicitly” request reporting of window period sales outside the POR in the

November 25, 2020 Supplemental Questionnaire. Chandan’s Mot. 11 (“Chandan thus

provided the information for the POR, as it had done in the initial response.”). In the

earlier, August 19, 2020 Supplemental Questionnaire, Commerce already had placed

Chandan on notice that it was necessary that Chandan report window period sales

occurring outside the POR.

       As it did before Commerce, Chandan argues before the court that Commerce

should have allowed it to correct the error in the December 9, 2020 Response of omitting

the window period sales of flanges less than 1.5 inches in nominal size that occurred

outside the POR. Chandan argues that Commerce was placed under an obligation to do

so by section 782(d) of the Tariff Act, 19 U.S.C. § 1677m(d), but failed to comply with

this statutory directive. Chandan contends that it “submitted the window period sales

as to the 0.5-to-1.5 inch flanges as soon as Commerce first specifically alerted Chandan

to the issue in its preliminary decision.” Chandan’s Mot. 14 (citing Claimed Minor Errors

In Reporting Comparison Market Sales and Cost Build-Ups—No New Facts Filing (Mar. 16,

2021), P.R. 120). Chandan argues that Commerce impermissibly rejected this

information as untimely submitted new factual information. Id. (citing Antidumping

Duty Administrative Review of Stainless Steel Flanges from India: Rejection of New Factual

Information (Int’l Trade Admin. Mar. 24, 2021), P.R. 127).
Consol. Court No. 21-00512                                                            Page 15

       For the Final Results, Commerce rejected the arguments that it should have

notified Chandan and should have accepted the corrected database Chandan submitted

on March 16, 2021, concluding that “Chandan did not provide a substantial amount of

information after multiple explicit requests from Commerce for such information,” Final

I&D Mem. at 10, that certain precedent relied upon by Chandan was inapplicable,

id. at 10–11, and that “Chandan’s interpretation would essentially require that

Commerce permit any party to correct deficiencies of any magnitude, at any time

during an administrative proceeding—including after Commerce has already issued a

preliminary decision,” id. at 11.

       The statutory provision at issue reads as follows:

               If the administering authority . . . determines that a response to a
       request for information under this subtitle does not comply with the
       request, the administering authority . . . shall promptly inform the person
       submitting the response of the nature of the deficiency and shall, to the
       extent practicable, provide that person with an opportunity to remedy or
       explain the deficiency in light of the time limits established for the
       completion of investigations or reviews under this subtitle. If that person
       submits further information in response to such deficiency and either—
       (1) the administering authority . . . finds that such response is not
       satisfactory, or (2) such response is not submitted within the applicable
       time limits, then the administering authority . . . may, subject to
       subsection (e), disregard all or part of the original and subsequent
       responses.

19 U.S.C. § 1677m(d). Chandan argues that accepting the March 16, 2021 database

would not have been impracticable in that the Final Results were published on

August 26, 2021. Chandan’s Mot. 14.
Consol. Court No. 21-00512                                                          Page 16

      The court concludes that Commerce did not act contrary to 19 U.S.C. § 1677m(d)

in declining to accept the revised home market database Chandan submitted on

March 16, 2021. Commerce first requested that database a year earlier (on March 13,

2020). By the time Chandan made its March 16, 2021 submission, Chandan had

submitted that database three times before: on June 30, 2020, when it incorrectly

omitted the window period sales outside of the POR, on September 11, 2020, when

Chandan responded to the Department’s notifying it of that error by adding such sales

but then erroneously omitted sales of the foreign like product of nominal size less than

1.5 inches, and on December 9, 2020, when it again omitted window period sales

outside the POR when correcting for that error. In all three instances, Chandan failed to

follow the Department’s instructions for reporting the same requested information,

despite the Department’s identifying the errors and allowing for correction. Chandan’s

fourth submission of information to complete the comparison market sales database on

March 16, 2021 occurred nearly eleven months after the initial due date for the original

submission. By that time, Commerce already had issued the Preliminary Results (on

February 24, 2021). Commerce identified the error in the December 9, 2020 submission

in issuing the Preliminary Results, but this was the second time Chandan committed the

same reporting error, i.e., omission of window period sales outside the POR, even after

Commerce brought that error to Chandan’s attention in the August 19, 2020

Supplemental Questionnaire.
Consol. Court No. 21-00512                                                          Page 17

      As 19 U.S.C. § 1677m(d) requires, Commerce not only identified the “window

period” reporting error but allowed Chandan the opportunity to correct it. Similarly,

Commerce allowed Chandan to correct its failure to report the sales in the smaller sizes

that were within the scope of the Order. The Tariff Act does not require Commerce to

allow two opportunities to correct the same error. By the time Chandan attempted to

correct, again, its non-POR window period misreporting error, the Preliminary Results

had been issued (again notifying Chandan of the window-period reporting error), and

the submission of information necessary to correct that error was no longer within the

due date for submission of information in response to the November 25, 2020

Supplemental Questionnaire. See 19 U.S.C. § 1677m(d) (allowing rejection of a response

“not submitted within the applicable time limits”); 19 C.F.R. § 351.301. As explained in

the Statement of Administrative Action (“SAA”) accompanying the Uruguay Round

Agreements Act:

               New section 782(d) requires Commerce and the Commission to
      notify a party submitting deficient information of the deficiency, and to
      give the submitter an opportunity to remedy or explain the deficiency.
      This requirement is not intended to override the time-limits for completing
      investigations or reviews, nor to allow parties to submit continual
      clarifications or corrections of information or to submit information that
      cannot be evaluated adequately within the applicable deadlines. If
      subsequent submissions remain deficient or are not submitted on a timely
      basis, Commerce and the Commission may decline to consider all or part
      of the original and subsequent submissions.

H.R. Rep. No. 103–316, at 865 (1994) (“SAA”) (emphasis added). Based on the record

information considered on the whole, Commerce acted within its statutory and
Consol. Court No. 21-00512                                                          Page 18

regulatory discretion in refusing to accept the March 16, 2021 submission. In arguing to

the contrary, Chandan maintains that accepting the March 16, 2021 database was

required by “[e]xtensive court precedent.” Chandan’s Mot. 14 & 14 n.30 (citing two

precedential decisions, Timken Corp. v. United States, 434 F.3d 1345, 1353 (Fed. Cir. 2006)

and NTN Bearing Corp. v. United States, 74 F.3d 1204, 1207–09 (Fed. Cir. 1995)). Neither

case is on point. Timken Corp. and NTN Bearing Corp. did not involve the use of facts

otherwise available or adverse inferences. Both involved situations in which a

respondent brought an error to the Department’s attention.

       Chandan’s argument that there was no gap in information requiring use of facts

otherwise available, Chandan’s Mot. 5–25, is also unavailing. Commerce did not

receive a complete and reliable comparison market sales database during the

questionnaire period and, for the reasons the court has pointed out, permissibly refused

to accept the fourth iteration of the comparison market database. Nor is Chandan

correct in asserting that Commerce unlawfully used adverse facts available without

notifying Chandan of deficiencies in the submissions of information to Commerce and

allowing Chandan an opportunity to address them. Id. at 25–27. Commerce accepted

Chandan’s September 11 and December 9, 2020 resubmissions of the comparison

market database, which responded to reporting errors Commerce identified.

       The court also finds unpersuasive Chandan’s arguments that Chandan acted to

the best of its ability in responding to the Department’s information requests and that
Consol. Court No. 21-00512                                                         Page 19

any errors are insufficient for adverse inferences. Id. at 27–35. The record reveals that

Commerce permissibly found repeated misreporting of the comparison market sales

database, refuting any notion that Chandan acted to the best of its ability. Chandan

highlights the circumstances that it “is a small company, with limited professional staff,

limited as to understanding all aspects of a complex and hugely demanding U.S.

antidumping duty law, and not fully proficient in English (not the native language of

the staff).” Id. at 29 (footnote omitted). It argues, moreover, that Commerce did not

allow it sufficient time to respond to requests for information, allowing only 19 total

days of extension out of a total of 31 days requested, and in doing so failed to recognize

the difficulties caused by the Covid emergency. Id. at 29–32. These arguments do not

convince the court that Commerce was statutorily barred from invoking an adverse

inference. Commerce gave Chandan two opportunities to resubmit the comparison

market database, without any adverse action, over the course of the time period from

the March 13, 2020 date of the initial questionnaire to the December 9, 2020 date of

Chandan’s second resubmission. That second resubmission still was unsatisfactory

because Chandan, for the second time, failed to include sales outside the POR as

directed by Commerce.

       Chandan argues that any errors in the comparison market database were too

minor or insufficient for adverse inferences and did not prevent Commerce from using

the database with certain allowances or adjustments, id. at 8–10, but this argument also
Consol. Court No. 21-00512                                                           Page 20

is misguided. Commerce must be able to obtain from cooperative respondents, on a

timely basis, a reliable comparison market database in order to calculate a weighted

average dumping margin. As of the time it issued the Preliminary Results, it still lacked

reporting of sales of Chandan’s smaller-sized flanges that occurred outside the POR,

which sales were unavailable for comparison with U.S. sales. The implied premise of

Chandan’s argument is that Commerce was obligated to examine, rather than reject, the

reporting of additional information that Chandan later submitted, on March 16, 2021,

and use it to calculate a dumping margin. As the court has explained, the statute and

regulations allowed the rejection of this information and its exclusion from the record.

Thus, Commerce was under no obligation to use this information or to review it to

determine the degree to which the omission of the information from the database

submitted earlier would have affected adversely the calculation of a dumping margin.

 4. Chandan’s Reporting of the Costs of Production of the Foreign Like Product and
                 Other Reporting Issues Identified by Commerce

       Commerce requested data on Chandan’s U.S. sales and comparison market sales

that were organized according to “CONNUM” (or “control number”), which it defined

as “an identifier for a product, or a group of products, with a unique and

specifically-defined set of physical characteristics.” Decision Mem. for Prelim. Results of

the Antidumping Duty Admin. Review: Stainless Steel Flanges from India; 2018–2019

at 7 n.36 (Int’l Trade Admin. Feb. 17, 2021), P.R. 116 (“Prelim I&D Mem.”). Commerce

concluded that Chandan did not report correctly its production costs for the foreign like
Consol. Court No. 21-00512                                                          Page 21

product “at the CONNUM-specific level,” as Commerce had requested. Final I&D

Mem. at 14. Commerce concluded, further, that this misreporting prevented Commerce

from making correctly several determinations it is required to make, including:

(1) determining which comparison market sales may have been made at less than the

cost of production and therefore deleted from the comparison market data base

pursuant to 19 U.S.C. § 1677b(b)(1); (2) identifying sales of “similar merchandise” for

comparison to U.S. sales of subject merchandise; (3) making “difference in

merchandise” adjustments pursuant to 19 U.S.C. § 1677b(a)(6)(C); and (4) calculating

“constructed value” pursuant to 19 U.S.C. § 1677b(e). Id. Commerce concluded that

“Chandan’s cost reporting failures have key implications for our margin analysis,” id.

at 15, and “support the application of AFA,” id. at 14.

       Commerce found (and Chandan does not contest) that “Chandan does not

maintain product-specific costs in its normal books and records, and, therefore, it used

an allocation methodology to determine the per-unit costs for each reported

CONNUM” and that “[t]hese allocations are heavily reliant on weight.” Id. at 19. The

parties disagree on whether the allocation method adopted by Chandan produced

accurate and reliable cost build-ups for each CONNUM. Based on what it considered to

be discrepancies and inconsistencies in the reported information, Commerce found that

“Chandan’s reported per-unit cost data are inaccurate and unreliable,” id. at 15,

a finding Chandan contests before the court, Chandan’s Mot. 15 (“Chandan accurately
Consol. Court No. 21-00512                                                          Page 22

reported production cost.”). Chandan asserts that the Department’s claims of

misreporting “at best, are the result of Commerce’s unlawful failure to notify Chandan

of any concerns and provide an opportunity to address.” Id.

       As to the other reporting issues Commerce raised, Chandan submits that

“Commerce’s alleged deficiencies in Chandan’s reported gross unit price, quantity

discounts, other discounts, and duty refunds are minor, remediable from the record,

and do not individually warrant facts available.” Pl. Chandan Reply Br. 13 (Jan. 17,

2023), ECF No. 59 (citing Chandan’s Mot. 24–25, 40–41). According to Chandan, “[t]he

quantity discounts were reported accurately even though they were not reported in the

exact form requested by Commerce in its supplemental questionnaire” and that, in any

event, that “[t]he reported quantity discount is insignificant—i.e., 0.18% of total sales

value to the United States.” Chandan’s Mot. 24 (footnote omitted). It argues, further,

that information on gross unit prices of comparison market sales was on the record and

available to calculate normal value. Id. at 24–25.

       The court need not resolve the disagreements between the parties that arise from

Chandan’s allocation method for the reporting of the costs of production and from

reporting of gross unit price, quantity discounts, other discounts, and duty refunds.

Even if the reporting errors claimed by Commerce to have occurred in these categories

were nonexistent, minor, or inconsequential (as Chandan argues they were), the court is

not able to presume that the omission of sales of smaller-size flanges occurring in
Consol. Court No. 21-00512                                                               Page 23

window periods outside of the POR could be so described. The information necessary

to show the effect of the failure to report the sales of the smaller-size flanges that

occurred outside the POR is not on the record, Commerce permissibly having excluded

it. As the court concluded previously, that omission left Commerce without a reliable

comparison market sales database as of the time it issued the Preliminary Results.

A reliable comparison market sales database for matching with a U.S. sales database is

fundamental and essential for the Department’s ability to calculate a weighted average

dumping margin. Therefore, this omission justified the use of facts otherwise available

as a total substitute for that database and, accordingly, for the assignment of a dumping

margin. Because Commerce lacked a complete database even after allowing Chandan

opportunities to correct its reporting errors, Commerce also acted within its discretion

in using an adverse inference when selecting from among those facts otherwise

available.

                        5. Selection of an Adverse Inference Rate

       Chandan argues that the 145.25% rate Commerce chose as an adverse inference

was unlawfully “punitive.” Chandan’s Mot. 35–40. The court disagrees.

       The immediate source of the 145.25% rate was the antidumping duty

investigation, in which Commerce assigned this rate as an adverse inference “to an
Consol. Court No. 21-00512                                                           Page 24

uncooperative respondent, the Bebitz/Viraj single entity.”9 Final I&D Mem. at 32. The

rate assigned to that entity was derived from the antidumping duty petition: Commerce

explained that “in the Preliminary Results, Commerce selected the highest rate alleged in

the petition, because it is higher than the only rate calculated in the investigation.” Id.

at 33. Commerce did not depart from this reasoning for the Final Results. Id.

       The Tariff Act provides that an adverse inference “may include reliance on

information derived from . . . the petition,” 19 U.S.C. § 1677e(b)(2), as Commerce has

done here. It further provides that Commerce, in selecting among the facts otherwise

available, may . . . use any dumping margin from any segment of the proceeding under

the applicable antidumping order.” Id. § 1677e(d)(1)(B). In choosing one of those

dumping margins, Commerce “may apply any of the . . . dumping margins specified

under that paragraph [i.e., paragraph (1) of § 1677e(d)], including the highest such rate or

margin, based on the evaluation by the administering authority of the situation that

resulted in the administering authority using an adverse inference in selecting among

the facts otherwise available.” Id. § 1677e(d)(2) (emphasis added).

       9Commerce assigned this rate as the dumping margin to the Bebitz/Virage entity
and also to the “Echjay single entity.” Stainless Steel Flanges From India: Final Affirmative
Determination of Sales at Less Than Fair Value and Final Affirmative Critical Circumstance
Determination, 83 Fed. Reg. 40,745, 40746 (Int’l Trade Admin. Aug. 16, 2018). The only
other dumping margin Commerce calculated in the investigation was a 19.16% margin
assigned to Chandan Steel Limited. Id.
Consol. Court No. 21-00512                                                            Page 25

       As outlined above, Commerce found itself in a “situation” in which a mandatory

respondent twice (on September 11 and December 9, 2020) resubmitted its comparison

market database in response to errors identified by Commerce without doing so in a

way that would have allowed Commerce to use that database to calculate a correct

dumping margin. Chandan failed to provide Commerce a database that complied fully

with reporting instructions even though Commerce allowed resubmissions to correct

the failure to report window period sales outside of the POR and the failure to report

sales of small-size flanges after bringing those errors to Chandan’s attention. In such a

situation, Commerce must have discretion to choose a rate sufficiently adverse to create

the incentive for the careful and timely responses to requests for information that are

needed for the calculation of a weighted average dumping margin.

  6. Deduction of Antidumping and Countervailing Duty Cash Deposits from U.S.
                                    Price

       Chandan claims that it “inadvertently included AD/CVD [antidumping duty and

countervailing duty] cash deposits” when reporting customs duties in a questionnaire

field and, therefore, that “Commerce should remove those cash deposits” to ensure that

these cash deposits are not deducted from U.S. price in the calculation of a dumping

margin. Chandan’s Mot. 40. The court interprets this claim as pertinent to the

calculation of U.S. price, and therefore pertinent to the calculation of a weighted

average dumping margin based on Chandan’s sales pertaining to the POR, should the

court direct Commerce to do so in its remand order.
Consol. Court No. 21-00512                                                         Page 26

       As discussed above, Chandan has not demonstrated its right to a remand order

that would set aside the Department’s decision to assign it the 145.25% rate, which is

based on an adverse inference rather than an examination of Chandan’s sales.

Therefore, the court concludes that no relief can be granted on Chandan’s claim relating

to deposits of antidumping and countervailing duties.

 C. Assignment of the 145.25% Rate to the “Companies Not Individually Examined”

       For the reasons stated below, the court sets aside as unlawful the Department’s

assigning the 145.25% rate to respondents not individually examined in the first

administrative review.

  1. Assignment of the 145.25% Rate to the Companies Not Individually Examined
                          Violated the Rule of YC Rubber

       The Court of Appeals for the Federal Circuit (“Court of Appeals”) issued

YC Rubber Co. (North America) LLC v. United States, No. 21-1489, 2022 WL 3711377 (Fed.

Cir. Aug. 29, 2022) (“YC Rubber”) one year after the publication of the Final Results. The

precedent established by YC Rubber requires the court to invalidate the Department’s

assignment of the 145.25% rate to the respondents Commerce did not examine

individually in the first administrative review.

       Like this case, YC Rubber arose from a challenge to the results of an

administrative review of an antidumping duty order and, like this case, involved the

selection of an “all others” rate based on the individual examination of one respondent.

Specifically, after examining individually “only a single mandatory respondent” in the
Consol. Court No. 21-00512                                                           Page 27

review at issue in YC Rubber, Commerce assigned the weighted average dumping

margin it determined for this respondent, which was 64.57%, to “all participants in the

review.” Id. at *2.

       In YC Rubber, the Court of Appeals interpreted section 777A(c)(2) of the Tariff

Act, 19 U.S.C. § 1677f-1(c)(2), which provides that “[i]f it is not practicable to make

individual weighed average dumping margin determinations . . . because of the large

number of exporters or producers involved in the investigation or review, the

administering authority may determine the weighted average dumping margins for a

reasonable number of exporters or producers.” The Court of Appeals held that

Commerce fails to comply with this provision when it bases its rate for unexamined

respondents on the individual examination of only one exporter or producer: “We

conclude that a ‘reasonable number’ is generally more than one.” Id. at *4. The

appellate court declined to accord the Department’s interpretation of § 1677f-1(c)(2)

deference under Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984),

noting that the provision at issue is an exception to a general rule: “The statute calls for

all respondents to be individually investigated, unless the large number makes separate

review impracticable.” Id. at *3. Addressing the government’s argument that

“Commerce’s position that it suffices to review only one respondent warrants Chevron

deference,” the Court of Appeals concluded “that Commerce’s interpretation is contrary

to the statute’s unambiguous language.” Id.
Consol. Court No. 21-00512                                                         Page 28

       YC Rubber is directly on point. In the review at issue here, Commerce decided to

examine individually only Chandan, finding that “an individual examination of the

largest exporter and producer will account for a significant volume of subject

merchandise during the POR.” Respondent Selection Mem. at 4. Commerce further

decided, over the objections of some respondents, see Final I&D Mem. at 33–36, that it

permissibly could use the margin it determined for Chandan as the rate to be applied to

the reviewed but unexamined respondents. Under the binding precedent of YC Rubber,

both decisions were unlawful, and, therefore, the resulting assignment of the 145.25%

rate to the unexamined respondents must be invalidated.

       Defendant argues that the holding in YC Rubber does not apply in this litigation

because “neither Kisaan nor the Other Plaintiffs requested to be voluntary respondents,

and so they did not exhaust their administrative remedies.” Def.’s Resp. to Pls.’ Mots.

for J. on the Admin. R. 42 n.1 (Oct. 14, 2022), ECF No. 52. Defendant submits that:

              Although the Federal Circuit in YC Rubber noted that no exporter
       had requested to be a voluntary respondent, . . . the court did not address
       administrative exhaustion or otherwise suggest that the court was altering
       the established requirement that only non-examined producers that have
       sought to be voluntary respondents may challenge the respondent
       selection process.”

Id. (citing YC Rubber, 2022 WL 3711377, at *2). Defendant’s argument misconstrues the

claims the plaintiffs other than Chandan are raising. They are challenging the

Department’s assigning them the 145.25% rate as a rate for respondents not individually

examined (i.e., an “all-others” rate). They are not challenging their non-selection as
Consol. Court No. 21-00512                                                            Page 29

respondents for which Commerce would conduct an individual examination of their

respective sales.

       This Court rejected a similar “failure to exhaust” argument in Siemens Gamesa

Renewable Energy v. United States, 47 CIT __, __, 621 F. Supp. 3d 1337, 1348 (2023)

(“Siemens Gamesa”). The plaintiff in that case, Siemens Gamesa, had been assigned a

73.00% rate as an all-others rate based on an investigation of a single respondent; in its

opinion, the Court concluded that:

              Siemens Gamesa was under no obligation to request to be a
       voluntary respondent (or, for that matter, to be a substitute mandatory
       respondent) in order to exhaust administrative remedies and thereby
       preserve its right to contest the Department’s assigning it the 73.00% rate
       as an all-others rate, as any respondent adversely affected by that rate
       potentially could have done.

Id. Here, as in Siemens Gamesa, the all-others rate was a consequence of the

Department’s conducting the proceeding in violation of 19 U.S.C. § 1677f-1(c)(2). It also

is pertinent to the issue of exhaustion of administrative remedies that YC Rubber was

decided after the issuance of the Final Results. As Siemens Gamesa stated, “[c]ourts have

long recognized ‘intervening legal authority’ as an exception to the exhaustion

requirement.” 47 CIT at __, 621 F. Supp. 3d at 1348 (citation omitted).
Consol. Court No. 21-00512                                                          Page 30

   2. Assigning the 145.25% Rate to the “Companies Not Individually Examined”
                  Violated the “Reasonable Method” Requirement

       In addition to violating the rule of YC Rubber, the Department’s decision to

assign the 145.25% rate to the unexamined respondents was unlawful because it did not

comport with the “reasonable method” requirement imposed by the Tariff Act.

       Congress addressed the method of determining an “all-others” rate in an

antidumping duty investigation in section 735(c)(5) of the Tariff Act, 19 U.S.C.

§ 1673d(c)(5). Although this provision “applies on its face only to investigations, not

periodic administrative reviews, . . . the statutory framework contemplates that

Commerce will employ the same methods for calculating a separate rate in periodic

administrative reviews as it does in initial investigations.” Albemarle Corp. v. United

States, 821 F.3d 1345, 1352 (Fed. Cir. 2016) (“Albemarle”) (footnote and internal citations

omitted).

       The Tariff Act applies a “general rule” under which “the estimated all-others rate

shall be an amount equal to the weighted average of the estimated weighted average

dumping margins established for exporters and producers individually investigated,

excluding any zero and de minimis margins, and any margins determined entirely

under section 1677e of this title.” 19 U.S.C. § 1673d(c)(5)(A). Because Commerce

determined only one margin in the review, and because that margin was “determined

entirely under section 1677e,” Commerce was not in a position to apply the “weighted
Consol. Court No. 21-00512                                                            Page 31

average” method of the “general rule.” In § 1673d(c)(5)(B), Congress provided an

“exception” to the “general rule,” as follows:

                If the estimated weighted average dumping margins established for
       all exporters and producers individually investigated are zero or de
       minimis margins, or are determined entirely under section 1677e of this
       title, the administering authority may use any reasonable method to
       establish the estimated all-others rate for exporters and producers not
       individually investigated, including averaging the estimated weighted
       average dumping margins determined for the exporters and producers
       individually investigated.

Id. § 1673d(c)(5)(B). In Yangzhou Bestpak Gifts & Crafts Co., Ltd. v. United States, 716 F.3d

1370 (Fed. Cir. 2013) (“Bestpak”), the Court of Appeals resolved an interpretive question

raised by § 1673d(c)(5)(B). Under the holding in Bestpak, the specific mention of the

“averaging” method in the provision does not signify congressional intent that resort to

this method is per se reasonable. Instead, any rate Commerce would apply to

respondents that it does not investigate or review individually must satisfy the

“reasonable method” test.

       In the antidumping duty investigation culminating in Bestpak, Commerce

calculated an all-others rate by taking a simple average of a 247.65% “AFA China-wide

rate,” which Commerce assigned to one of the two mandatory respondents based

entirely on 19 U.S.C. § 1677e for failure to cooperate in the investigation, with a

de minimis margin assigned to the other, cooperating mandatory respondent, resulting

in a 123.83% “all-others” rate that Commerce applied to respondents that were not

individually investigated. Id., 716 F.3d at 1375. The Court of Appeals explained that
Consol. Court No. 21-00512                                                           Page 32

“[a]lthough Commerce may be permitted to use a simple average methodology to

calculate the separate rate [which Commerce applied to respondents that demonstrated

independence from the Chinese government but were not individually investigated],

the circumstances of this case renders a simple average of a de minimis and AFA

China-wide rate unreasonable as applied.” Id., 716 F. 3d at 1378. The Court concluded

that “a review of the administrative record reveals a lack of substantial evidence

showing that such a determination reflects economic reality.” Id. The Court further

observed that “[t]his case is peculiar in that Commerce identified only two significant

exporters/producers, yet one was assigned a de minimis dumping margin while the

other was assigned the highest possible AFA China-wide margin.” Id., 716 F.3d at 1380.

“The result is not only limited and frustrating, as the Court of International Trade

described it, but is also unreasonable.” Id.

       In the administrative review at issue in this case, Commerce cited what it termed

the “expected method” of § 1673d(c)(5)(B) as identified in Albemarle in applying the

145.25% rate to the unexamined respondents. Commerce recounted that “[i]n the

Preliminary Results, we applied Chandan’s dumping margin to the companies subject to

this review that were not individually examined, consistent with the expected method

under section 735(c)(5)(B) of the Act,” Final I&D Mem. at 33, and then concluded that

“application of the expected method is reasonable here because the record evidence

does not rebut the presumption that margin [sic] for the mandatory respondent is
Consol. Court No. 21-00512                                                          Page 33

representative,” id. at 38. Commerce referred to the averaging method of

§ 1673d(c)(5)(B) as the “expected method” based on language in Albemarle, 821 F.3d

at 1352 & 1352 n.5 (quoting SAA at 873).

       Nothing in the SAA supports the Department’s imposing a rebuttable

“presumption” that the 145.25% rate, which was based entirely on AFA, was

representative of a margin that would be reasonable if applied to every unexamined

respondent in the review, i.e., every respondent other than Chandan. The relevant text

of the SAA (quoted in Albemarle, 821 F.3d at 1352 n.5), is as follows:

              Section 219(b) of the bill adds new section 735(c)(5)(B) which
       provides an exception to the general rule if the dumping margins for all of
       the exporters and producers that are individually investigated are
       determined entirely on the basis of the facts available or are zero or de
       minimis. In such situations, Commerce may use any reasonable method to
       calculate the all others rate. The expected method in such cases will be to
       weight-average the zero and de minimis margins and margins determined
       pursuant to the facts available, provided that volume data is available.
       However, if this method is not feasible, or if it results in an average that
       would not be reasonably reflective of potential dumping margins for non-
       investigated exporters or producers, Commerce may use other reasonable
       methods.

SAA at 873. An obvious flaw in the Department’s analysis is that Commerce did not

actually apply the “expected method” described in the SAA. Commerce did not

“weight average,” let alone average, anything in determining its all-others rate.

“Averaging” necessarily involves the situations of different exporters and thus rests on

a wider data base than does use of only one margin. But the Department’s selection of

only one respondent for individual examination (which itself was unlawful, as
Consol. Court No. 21-00512                                                          Page 34

discussed above) left it with only one margin, and thus no averaging of any kind was

possible. That deficiency aside, the application of the 145.25% rate to the unexamined

respondents, in additional respects, was unreasonable and unsupported by substantial

record evidence.

       Commerce offered, in essence, only one evidence-based rationale for its

conclusion that assigning the 145.25% rate to the unexamined respondents was

“reasonable”: that this was the rate assigned to the exporter, Chandan, that “accounted

for a substantial portion of the subject merchandise exports of all exporters and

producers for which Commerce had remaining requests for review.” Final I&D Mem.

at 41 (quoting Qingdao Qihang Tyre Co. v. United States, 42 CIT __, __, 308 F. Supp. 3d

1329, 1363 (2018)). This rationale is specious. Chandan’s failure to act to the best of its

ability in responding to information requests in the review, which was the sole basis

upon which Commerce applied “total adverse facts available” to Chandan, had no

factual relationship to the unexamined respondents’ sales of subject merchandise that

pertained to the first administrative review. These were sales that Commerce, of its

own volition, refused to examine. The rate from which the 145.25% rate was taken,

which was assigned to an uncooperative respondent in the investigation and also was

based on total AFA, similarly lacked a relationship to those sales. In that respect, the

Department’s use of the 145.25% rate as an “all-others” rate was even less
Consol. Court No. 21-00512                                                          Page 35

representative of respondents not individually examined than was the rate held

unlawful in Bestpak.

      Nor can support for the Department’s assigning the 145.25% rate to the

unexamined respondents be found in the decision of the Court of Appeals in Albemarle,

which involved facts and circumstances highly dissimilar to those of the review at issue

in this case. Albemarle arose from the third periodic administrative review of an

antidumping duty order on activated carbon from China, following which Commerce

published final results assigning zero margins to the two mandatory respondents.

Albemarle, 821 F.3d at 1349. But rather than follow the “expected method” of 19 U.S.C.

§ 1673d(c)(5)(B) by averaging these two calculated margins to yield zero margins for the

three separate rate respondents in the review that were not examined individually,

Commerce assigned each of these three respondents the specific-tariff antidumping

duty margins it had determined for them in the previous, second review of the

antidumping duty order. Id. For one of those three, a mandatory respondent in the

second review, Commerce carried over the individually-calculated $0.44/kg. margin

from that review; the other two separate rate respondents received in the third review

the $0.28/kg. margin they were assigned in the second review, which Commerce had

obtained by averaging the individually-determined margins of two mandatory

respondents in that review. Id. The Court of Appeals disallowed the Department’s

decision to carry over the margins from the previous review, holding that Commerce
Consol. Court No. 21-00512                                                         Page 36

instead should have followed the “expected method,” under which Commerce would

have averaged the two zero margins to obtain zero margins for the three respondents

that Commerce did not examine individually in the third review. The Court reasoned

that Commerce has no “mandate to routinely exclude zero or de minimis margins” and

that “Commerce’s insistence on using its hostility to de minimis rates as the driving

force behind its methodology is on its face arbitrary and capricious.”10 Id., 821 F.3d

at 1354.

                                III. CONCLUSION AND ORDER

       For the reasons set forth in the foregoing, the court sustains the Department’s

assigning the rate of 145.25% to Chandan and sets aside as unlawful the assignment of

that rate to the other plaintiffs in this case.

       Therefore, upon consideration of plaintiffs’ Rule 56.2 motions and all papers and

proceedings had herein, and upon due diligence, it is hereby

      ORDERED that Chandan’s motion for judgment on the agency record be, and
hereby is, denied; it is further

       ORDERED that the motions for judgment on the agency record of the other
plaintiffs in this case be, and hereby are, granted; it is further

       ORDERED that defendant shall consult with counsel for plaintiffs other than
Chandan and submit to the court, by January 22, 2024, an agreed-upon proposed
schedule for the conducting of proceedings that will conclude the litigation before the
court; and it is further

       10
         A zero or “de minimis” rate, unlike a rate based entirely on facts otherwise
available with an adverse inference, is a margin calculated from the individual
examination of a respondent’s sales.
Consol. Court No. 21-00512                                                    Page 37

       ORDERED that if defendant and the plaintiffs other than Chandan are unable to
reach agreement on the above-referenced proposed schedule, these parties shall submit,
by January 22, 2024, a joint status report on their negotiations.

                                              /s/ Timothy C. Stanceu
                                              Timothy C. Stanceu
                                              Judge

Dated: December 8, 2023
       New York, New York