Changzhou Trina Solar Energy Co. v. United States
2016 CIT 121
Ct. Intl. Trade2016Background
- Commerce issued a final affirmative countervailing duty (CVD) determination on certain crystalline silicon photovoltaic products from China (Solar II PRC). Trina Solar and other respondents challenged inclusion of additional subsidies and Commerce’s use of adverse facts available (AFA).
- Two categories of challenged subsidies: (1) forty programs identified in a related earlier proceeding (Solar I PRC programs); (2) twenty-eight grants and one tax deduction discovered during verification of respondents’ records (verification grants).
- Commerce relied on its authority to investigate "discovered" subsidies under 19 U.S.C. § 1677d and its regulation 19 C.F.R. § 351.311, issued supplemental questionnaires, and applied AFA where it found non-cooperation by the Government of China (GOC) and by Trina Solar.
- The agency made multiple substantive findings: specificity and countervailability of Solar I programs and verification grants (based on AFA), inclusion of Export-Import Bank Export Buyer’s Credit Program (AFA due to unverifiable GOC records), benchmark duty rates for polysilicon and solar glass, and findings on aluminum extrusions, solar glass specificity, and polysilicon.
- The court sustained Commerce’s authority to investigate discovered programs and its application of AFA in principle, but remanded because Commerce failed to identify the factual basis (or record evidence) it relied on when using AFA to conclude the Solar I programs and all verification grants/tax deduction met the legal elements of countervailability.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Authority to investigate Solar I programs and verification grants under §1677d | Trina Solar: Commerce lacked authority or improperly invoked §1677d for programs known from Solar I or found at verification | U.S.: §1677d and §351.311 permit Commerce to investigate subsidies "discovered" during a proceeding; agency discretion applies | Court: Commerce reasonably exercised §1677d authority to investigate both Solar I programs and verification grants; challenge rejected |
| Use of AFA to find programs countervailable | Trina Solar: AFA was improperly used to reach legal conclusions (specificity, financial contribution, benefit) without citing facts on record | U.S.: AFA permitted when parties fail to cooperate; adverse inferences lawful | Court: Use of AFA was warranted for non-cooperation, but Commerce failed to identify or rely on specific record facts when concluding all programs were countervailable; remand required for factual findings |
| Selection of AFA-based subsidy rates for verification grants and tax deduction | Trina Solar: Commerce’s selection of rates was unexplained and arbitrary | U.S.: Commerce followed its practice of using highest non-de minimis comparable rate or highest non-company-specific rate | Held: Remanded — agency must explain how its AFA-rate choices fit its stated methodology if it again finds these programs countervailable |
| Export Buyer’s Credit Program inclusion | Trina Solar: Company showed its U.S. customer did not use program; program benefit should not be attributed | U.S.: GOC prevented verification (denied access to Ex-Im records); verification inconclusive; AFA appropriate | Court: Sustained Commerce’s use of AFA and inclusion of the Export Buyer’s Credit Program at the selected rate (verified reasoning adequate) |
Key Cases Cited
- Torrington Co. v. United States, 68 F.3d 1347 (Fed. Cir. 1995) (agency discretion in allocation of investigative resources)
- Longkou Haimeng Mach. Co. v. United States, 581 F. Supp. 2d 1344 (Ct. Int’l Trade 2008) (deference to Commerce operational capabilities and deadlines)
- RZBC Grp. Shareholding Co. v. United States, 100 F. Supp. 3d 1288 (Ct. Int’l Trade 2015) (AFA applied where petition contained factual allegations supporting inferences)
- Universal Camera Corp. v. NLRB, 340 U.S. 474 (1951) (agency must consider evidence that fairly detracts from its conclusions)
- Archer Daniels Midland Co. v. United States, 917 F. Supp. 2d 1331 (Ct. Int’l Trade 2013) (AFA where foreign government failed to provide requested information)
- Nippon Steel Corp. v. United States, 458 F.3d 1345 (Fed. Cir. 2006) (substantial-evidence standard; reviewing reasonableness of agency findings)
- Daewoo Elecs. Co. v. Int’l Union, 6 F.3d 1511 (Fed. Cir. 1993) (courts must give reasonable inferences due weight in substantial-evidence review)