2015 CIT 131
Ct. Intl. Trade2015Background
- This case concerns Commerce’s third remand redetermination (RR3) in the antidumping investigation of certain coated paper from the PRC, addressing: (1) whether to disregard market-economy purchase (MEP) prices for inputs APP-China purchased from Thailand due to suspected subsidy distortion; and (2) whether Commerce should use its Nails targeted-dumping test or its newer differential-pricing (Cohen’s d) methodology to assess pervasiveness of targeted dumping.
- On remand Commerce disregarded the Thai MEPs, reasoning the Thai Tax Certificates for Export program had been previously countervailed as a broadly available export subsidy and APP-China provided no evidence the program was terminated or that benefits ceased.
- Commerce retained the Nails test (rather than Cohen’s d) to measure whether targeted dumping was "pervasive" under the (withdrawn-but-still-applicable) regulation, applying A‑T only to targeted sales and A‑A to the remainder; APP‑China’s final margin was 3.64%.
- APP‑China challenged Commerce’s reversal (or changed application) regarding Thai MEPs and argued Commerce failed to meet higher evidentiary standards (relying on AK Steel and Fuyao II); Appleton (domestic interests) urged use of Cohen’s d for pervasiveness.
- The Court sustained RR3, holding Commerce’s presumption (that a previously countervailed broadly-available export subsidy may continue absent evidence of termination) satisfied the lower “reason to believe or suspect” standard and that Commerce reasonably retained the Nails test for pervasiveness.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Disregard of Thai MEP prices | APP‑China: Commerce unlawfully reversed course and failed to articulate basis; AK Steel requires evidence subsidy continued into POI | Commerce: prior countervailing findings support a presumption of continuing subsidy absent affirmative evidence of termination; lower "reason to believe or suspect" standard applies | Sustained — Commerce reasonably disregarded Thai prices given prior countervailing findings and lack of rebuttal evidence |
| Standard for inferring subsidy/distortion | APP‑China: Commerce must meet the test in AK Steel / Fuyao II to infer continuing subsidy | Commerce: AK Steel governs countervailing orders (higher standard); Fuyao II is one method but not exclusive; "reason to believe or suspect" is lower threshold | Sustained — Commerce’s approach satisfies the lower threshold and Gold East III clarification |
| Whether petitioners’ record evidence was sufficient/pertinent | APP‑China: Petitioners’ materials remote or about different/modified programs; time lapse undermines inference | Commerce: prior countervailing determinations plus absence of affirmative rebuttal by APP‑China justify inference; revocation of orders does not prove program termination | Sustained — agency not arbitrary; APP‑China failed to rebut presumption |
| Methodology for measuring pervasiveness (Nails vs Cohen’s d) | Appleton: Cohen’s d (differential pricing) is superior statistical measure and should be used to assess pervasiveness | Commerce: Cohen’s d was developed after withdrawal of the regulation and targets a different statutory inquiry; Nails better aligns with the withdrawn regulation’s pervasiveness criterion; agency discretion to choose reasonable method | Sustained — Commerce reasonably used Nails; court will not substitute its judgment absent unreasonableness |
Key Cases Cited
- AK Steel Corp. v. United States, 192 F.3d 1367 (Fed. Cir.) (standard for proving subsidy existence in countervailing duty context requires showing subsidy during the relevant period)
- Nippon Steel Corp. v. United States, 458 F.3d 1345 (Fed. Cir.) (review standard: agency action sustained if reasonable and supported by record)
- Mitsubishi Heavy Indus., Ltd. v. United States, 275 F.3d 1056 (Fed. Cir.) (same principle on scope of judicial review)
- Gold East Paper (Jiangsu) Co. v. United States, 61 F. Supp. 3d 1289 (CIT) (prior remand clarifying Commerce may apply its normal practice re: subsidies and MEPs)
- Zhejiang Mach. Imp. & Exp. Corp. v. United States, 473 F. Supp. 2d 1365 (CIT) (describing the "reason to believe or suspect" standard as relatively low)
- CS Wind Vietnam Co. v. United States, 971 F. Supp. 2d 1271 (CIT) (recognizing multiple reasonable methods to assess subsidy distortion)
- China Nat'l Mach. Imp. & Exp. Corp. v. United States, 293 F. Supp. 2d 1334 (CIT) (Commerce may infer suppliers benefited from broadly available subsidies)