15 F.4th 1078
Fed. Cir.2021Background:
- Commerce opened the fifth administrative review of the antidumping order on large power transformers from Korea for Aug 1, 2016–July 31, 2017; Hyundai (successor to Hyundai Heavy) was a mandatory respondent.
- Commerce requested product-specific cost data and cost-reconciliation worksheets after Hyundai disclosed that it had shifted costs among LPT projects in its accounting (SAP) to show individual-project profitability.
- Hyundai submitted largely aggregate, sample, or single-line reconciling data (e.g., one month or one sample project for silicon steel; a single "Non-MUC from Transformer" line) and said some inputs (silicon steel) could not be traced to specific projects.
- Commerce concluded Hyundai’s submissions were incomplete/unverifiable, canceled verification, relied on facts otherwise available, and applied an adverse inference—assigning a 60.81% dumping margin (same as prior review).
- The Court of International Trade sustained Commerce; the Federal Circuit affirmed, holding Commerce’s reliance on facts available, cancellation of verification, and use of an adverse inference were supported by substantial evidence and lawful.
Issues:
| Issue | Hyundai's Argument | Commerce's Argument | Held |
|---|---|---|---|
| Reliance on "facts otherwise available" (19 U.S.C. §1677e) | Hyundai: it provided sufficient cost and reconciliation data; Commerce’s finding of missing "necessary" information was incorrect | Commerce: Hyundai provided only aggregate/sample data and failed to produce requested itemized, project-level cost details necessary for dumping calculations | Affirmed — substantial evidence that necessary information was missing; facts available appropriate |
| Cancellation of verification | Hyundai: Commerce should have conducted verification and could accept/clarify information there | Commerce: verification is pointless when submitted information is unverifiable/incomplete and parties had multiple opportunities to comply | Affirmed — Commerce permissibly cancelled verification where record lacked verifiable, necessary data |
| Use of adverse inference in selecting from facts available (§1677e(b)) | Hyundai: an adverse inference was unwarranted because limits of its accounting system and good-faith efforts prevented fuller reporting | Commerce: Hyundai did not act to the best of its ability after clear requests and deficiency notices; adverse inference deters noncooperation | Affirmed — substantial evidence supports finding Hyundai failed to act to best ability; adverse inference lawful |
| "Best of its ability" standard and record-keeping defense | Hyundai: it made comprehensive efforts and accounting system limited traceability | Commerce: repeated deficient responses, sample/aggregate disclosures, and post-hoc explanations show more could have been produced | Affirmed — shortcomings attributable to record-keeping do not preclude adverse inference; Hyundai did not meet standard |
Key Cases Cited
- Dupont Teijin Films USA, LP v. United States, 407 F.3d 1211 (Fed. Cir. 2005) (standard of review for Commerce determinations)
- SNR Roulements v. United States, 402 F.3d 1358 (Fed. Cir. 2005) (same)
- Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927 (Fed. Cir. 1984) (definition of substantial evidence)
- Nippon Steel Corp. v. United States, 337 F.3d 1373 (Fed. Cir. 2003) ("best of its ability" standard explanation)
- Mukand, Ltd. v. United States, 767 F.3d 1300 (Fed. Cir. 2014) (product-specific information necessity and adverse inference purpose)
- AMS Assocs., Inc. v. United States, 719 F.3d 1376 (Fed. Cir. 2013) (verification not required when information cannot be verified)
- Qingdao Sea-Line Trading Co. v. United States, 766 F.3d 1378 (Fed. Cir. 2014) (Commerce may decline verification where correct sources not provided)
- Maverick Tube Corp. v. United States, 857 F.3d 1353 (Fed. Cir. 2017) (adverse inference where supplemental questionnaire identified defects)
- Jiaxing Bro. Fastener Co. v. United States, 822 F.3d 1289 (Fed. Cir. 2016) (Commerce not bound by prior practices)
- Universal Camera Corp. v. NLRB, 340 U.S. 474 (U.S. 1951) (definition of substantial evidence)