986 F.3d 1351
Fed. Cir.2021Background
- Commerce reviewed antidumping duties for diamond sawblades (PRC) for the period Nov 1, 2014–Oct 31, 2015; Bosun Tools was an individually examined exporter.
- Bosun’s two U.S. importer‑affiliates imported PRC and Thailand sawblades and intermixed inventory; the affiliates did not record country of origin at the point of sale to unaffiliated U.S. purchasers.
- Bosun disclosed a three‑step origin‑identification method: (1) affiliate‑specific product codes, (2) unit‑price comparisons, and (3) a FIFO inference for remaining sales.
- Verification found no problems with the first two steps but discovered errors linked to the FIFO inference for some sales (a small subset). Commerce initially accepted Bosun’s data, but Diamond Sawblades challenged and secured a remand.
- On remand Commerce invoked 19 U.S.C. § 1677e(a) and (b), disregarded all of Bosun’s origin information, applied an adverse inference (AFA), and assigned Bosun an 82.05% dumping margin; the Trade Court affirmed. The Federal Circuit affirmed in part, reversed in part, vacated in part, and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §1677e(a) preconditions to use "facts otherwise available" were met | DSMC: Bosun failed to maintain point‑of‑sale origin records and verification showed errors, so §1677e(a) applies | Bosun: it supplied requested information in the form Commerce required and verification issues were limited | Court: §1677e(a)(1) and (a)(2)(D) (missing/unverifiable info) supported; (a)(2)(B) (form/manner) and (a)(2)(C) (significant impediment) not supported by substantial evidence |
| Whether Commerce permissibly discarded all Bosun origin information | DSMC: All origin info unreliable; Commerce may disregard all and use AFA | Bosun: Reliability problems were confined to FIFO subset (<2.5%); Commerce lacked basis to disregard verified data | Court: Commerce failed to show substantial evidence that all origin info was unreliable; remand required to determine scope of unreliability |
| Whether §1677e(b) adverse inference ("best of its ability") properly applied | DSMC: Bosun did not act to best ability (failed to keep point‑of‑sale records), so AFA justified | Bosun: Did act to best ability; AFA not warranted given limited errors and verified data | Court: §1677e(b) can apply only after properly defining "facts otherwise available" under §1677e(a); because scope of §1677e(a) application is unresolved, §1677e(b) application must be reconsidered on remand |
| Whether the Trade Court properly remanded for more explanation (DSMCI) | DSMC: Commerce’s explanation was adequate initially | Bosun: remand unnecessary and undue | Court: Remand was not an abuse of discretion—the Trade Court reasonably sought fuller explanation about verification errors and "best of its ability" implications |
Key Cases Cited
- Peer Bearing Co.-Changshan v. United States, 766 F.3d 1396 (Fed. Cir. 2014) (pre‑questionnaire recordkeeping can inform the "best of its ability" standard)
- Nippon Steel Corp. v. United States, 337 F.3d 1373 (Fed. Cir. 2003) (§1677e(b) "best of its ability" standard and recordkeeping relevance)
- F.lli de Cecco di Filippo Fara S. Martino S.p.A. v. United States, 216 F.3d 1027 (Fed. Cir. 2000) (adverse inferences must be reasonably accurate estimates, not punitive)
- Essar Steel Ltd. v. United States, 678 F.3d 1268 (Fed. Cir. 2012) (limits on use of adverse inferences)
- Gallant Ocean (Thailand) Co. v. United States, 602 F.3d 1319 (Fed. Cir. 2010) (adverse inference principles)
- Zhejiang DunAn Hetian Metal Co. v. United States, 652 F.3d 1333 (Fed. Cir. 2011) (§1677e(a) fills gaps when information is missing or unverifiable)
- Yangzhou Bestpak Gifts & Crafts Co. v. United States, 716 F.3d 1370 (Fed. Cir. 2013) (Commerce’s aim is accurate dumping margins)
- US Magnesium LLC v. United States, 839 F.3d 1023 (Fed. Cir. 2016) (standard of review for Trade Court remands)
- CP Kelco US, Inc. v. United States, 949 F.3d 1348 (Fed. Cir. 2020) (agency explanation/remand practice)
- Mid Continent Steel & Wire, Inc. v. United States, 941 F.3d 530 (Fed. Cir. 2019) (remand and agency explanation precedents)
- Universal Camera Corp. v. NLRB, 340 U.S. 474 (U.S. 1951) (substantial‑evidence review standard)
- SEC v. Chenery Corp., 332 U.S. 194 (U.S. 1947) (courts review agency decisions on the grounds the agency relied upon)