2020 CIT 174
Ct. Intl. Trade2020Background
- This case arises from the 14th administrative review (Aug. 1, 2016–July 31, 2017) of the 2003 antidumping order on certain frozen fish fillets from Vietnam (pangasius). Hung Vuong Group was a mandatory respondent.
- Commerce preliminarily assigned Hung Vuong a zero dumping margin, then conducted verification and found missing/ discarded source documents (feed records, production orders, sales emails), control-number reporting irregularities (averaging instead of per-run control numbers), and unexplained factors-of-production discrepancies (byproduct output exceeding input).
- Commerce concluded the record was incomplete and that Hung Vuong failed to cooperate to the "best of its ability," applied adverse inferences and "total AFA," and assigned the highest prior rate of $3.87/kg.
- Hung Vuong sued in the Court of International Trade, challenging Commerce's use of facts available with an adverse inference, the total-AFA decision, and the selected rate; the company also raised an appearance-of-bad-faith claim based on undisclosed congressional communications to Commerce.
- The Court sustained some of Commerce's AFA findings (retained-documents and control-number issues), remanded others (customer questionnaires and the byproduct/factors-of-production issue), rejected the bad-faith claim, and vacated the total-AFA outcome and the assigned rate for reconsideration on remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether congressional communications required voiding Commerce's decision (bad-faith claim) | Hung Vuong: Commerce reversed preliminary zero margin after congressional pressure; failure to record communications shows bad faith and prejudice. | U.S.: Ex parte contacts do not prove taint; no evidence contacts affected decision; presumption of good faith applies. | Court: Rejected bad-faith claim — Commerce failed to timely memorialize contacts (statutory lapse) but plaintiff did not show prejudice or that decision was tainted; presumption of good faith stands. |
| AFA/adverse inference for failure to retain source documents (feed records, production orders, sales emails) | Hung Vuong: Discarding such records is ordinary business practice in Vietnam; Commerce should not impose AFA. | U.S.: Verification showed documents missing and unverifiable; respondent had notice from verification outline and prior reviews; AFA and adverse inference permissible. | Court: Sustained — substantial evidence supports applying facts available and an adverse inference for discarded source documents given verification outline and Hung Vuong's prior experience. |
| AFA/adverse inference for customer-relationship evidence (customers' nonresponse to questionnaires; deleted emails) | Hung Vuong: Commerce improperly relied on customers' nonresponses without notifying Hung Vuong of the deficiency; Commerce must provide §1677m(d) cure or notice. | U.S.: Customers' nonresponse made verification impossible; AFA justified; §1677m(d) inapplicable at verification stage or impracticable because documents no longer existed. | Court: Remand — Commerce permissibly relied on missing sales emails/production orders for facts-available but could not base AFA on customers' nonresponse without prior notice; must reconsider partial vs. total AFA and explain. |
| AFA/adverse inference for control-number reporting (averaging NETWGTU vs per-run control numbers) | Hung Vuong: Its averaging methodology reflected accurate data; compliance was "difficult" and alternative method reasonable. | U.S.: Commerce repeatedly required control-number reporting; Hung Vuong admitted averaging; An Giang and prior notice made requirement reasonable; AFA/adverse inference justified. | Court: Sustained — substantial evidence supports facts-available and adverse inference because Hung Vuong failed to report in the form/manner requested and had opportunity to comply. |
| AFA/adverse inference for factors of production (labor hours; byproduct weight discrepancy) | Hung Vuong: Explained by industry practice (byproducts collect water), and labor can be converted based on Commerce's presumptions; Commerce failed to consider explanations. | U.S.: Verification showed unverifiable or impossible figures (output > input); factors unreliable; AFA appropriate. | Court: Partial remand — Commerce permissibly applied facts available for labor (unverifiable hours), but Commerce's rejection of all FOPs based on the byproduct discrepancy was unsupported because Commerce failed to address Hung Vuong's prior explanation; must reconsider and explain. |
| Whether "total AFA" and the selected rate ($3.87/kg) were appropriate | Hung Vuong: Total-AFA and the top prior rate are punitive and unsupported. | U.S.: Defends total-AFA given pervasive, core record deficiencies; statute permits use of highest prior margin when adverse inference applied. | Court: Remand — cannot sustain total-AFA or the chosen rate because two issues (customer-notice and byproduct explanation) require further consideration; Commerce must reconsider partial vs. total AFA and the rate on remand. |
Key Cases Cited
- Nippon Steel Corp. v. United States, 337 F.3d 1373 (Fed. Cir. 2003) (defines "best of its ability" standard and two-step AFA analysis)
- Ta Chen Stainless Steel Pipe, Inc. v. United States, 298 F.3d 1330 (Fed. Cir. 2002) (respondent bears burden to create adequate administrative record)
- QVD Food Co. v. United States, 658 F.3d 1318 (Fed. Cir. 2011) (burden of creating adequate record lies with interested parties)
- Mukand, Ltd. v. United States, 767 F.3d 1300 (Fed. Cir. 2014) (partial vs. total AFA analysis and when partial AFA may be appropriate)
- Zhejiang Dunan Hetian Metal Co. v. United States, 652 F.3d 1333 (Fed. Cir. 2011) (total AFA use where respondent's data are wholly unreliable)
- SeAH Steel VINA Corp. v. United States, 950 F.3d 833 (Fed. Cir. 2020) (agency must address respondent's counterarguments and explain conclusions)
- Taian Ziyang Food Co. v. United States, 637 F. Supp. 2d 1093 (CIT 2009) (non-market-economy FOP valuation context)
- PATCO v. Federal Labor Relations Auth., 685 F.2d 547 (D.C. Cir. 1982) (ex parte communications require a showing of prejudice to void agency action)
- Fresh Garlic Producers Ass'n v. United States, 121 F. Supp. 3d 1313 (CIT 2015) (discusses considerations for partial vs. total AFA)