Ellwood City Forge Co. v. United States, 2023 CIT 113

Commerce investigated antidumping of forged steel fluid end blocks from India; Bharat Forge Ltd. was a selected respondent and submitted cost and sales data used to compute constructed value.
COVID-19 travel restrictions in 2020 prevented normal on-site verification; Commerce issued a "questionnaire in lieu of verification" and Bharat responded with detailed cost breakdowns.
Ellwood City (plaintiffs) contended Bharat misallocated production and G&A costs and opposed Commerce’s reliance on the questionnaire instead of on-site verification; Commerce preliminarily found a zero dumping margin for Bharat.
In the Final Determination Commerce stated it was "unable" to conduct on-site verification and relied on selected adverse facts available for specific gaps but otherwise accepted Bharat’s data, retaining a zero margin.
Commerce sought a voluntary remand, then on remand reversed course, concluding that the original questionnaire did verify Bharat’s information and rescinding reliance on facts available — but it did not conduct on-site verification or issue a verification report.
The Court held Commerce’s remand decision unlawfully conflicted with Regents: Commerce effectively adopted a new justification on remand without complying with the procedural requirements for new agency action, and remanded for further proceedings.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Commerce complied with Regents on remand	Commerce took new action by reversing its prior position and thus had to follow procedural requirements for new agency action	Commerce only clarified its original reasoning and therefore did not take new action	Court: Commerce took new agency action in substance but failed to follow Regents; remand required
Whether Commerce lawfully relied on a "questionnaire in lieu of verification" instead of on-site verification	The questionnaire did not substitute for on-site verification; reliance on it (and acceptance of unverified data) was unlawful	The questionnaire sufficed and parties had previously praised it; on-site verification was impossible during the pandemic	Court: Commerce did not adequately justify rejecting on-site verification or consider alternatives and reliance interests; remand required for proper analysis/steps
Whether substantial evidence supports Commerce’s acceptance of Bharat’s cost allocations and zero dumping margin	Bharat underreported costs and G&A; Commerce’s acceptance lacks substantial evidence without proper verification	Commerce found Bharat generally cooperative and its submissions sufficiently detailed to support acceptance	Court: Because Commerce failed to follow Regents and provide required procedural justification, its acceptance is unsupported and must be revisited on remand

Dep’t of Homeland Sec. v. Regents of the Univ. of Cal., 140 S. Ct. 1891 (2020) (limits on post hoc rationalizations and two remand paths: fuller explanation or new agency action)
SKF USA Inc. v. United States, 254 F.3d 1022 (2001) (framework for agency remand options and review)
Timken Co. v. United States, 894 F.2d 385 (1990) (agency may not advance post hoc rationalizations)
Sec. & Exch. Comm’n v. Chenery Corp., 332 U.S. 194 (1947) (agency action must be supported by contemporaneous rationale)
Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Automobile Ins. Co., 463 U.S. 29 (1983) (requirements for reasoned agency change)
Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117 (2016) (consideration of reliance interests when changing policy)
FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009) (need for reasoned explanation when an agency departs from prior practice)
Nippon Steel Corp. v. ITC, 494 F.3d 1371 (2007) (remand review and substantial-evidence considerations)