Inmax Sdn. Bhd. v. United States
2017 CIT 158
| Ct. Intl. Trade | 2017Background
- Inmax Sdn. Bhd. (Inmax) and affiliated Inmax Industries were separate respondents in an antidumping investigation of certain steel nails from Malaysia; Commerce assigned Inmax a total AFA rate (~39.35%) and Inmax Industries the all-others rate (~2.66%).
- After the final determination, Inmax Holding publicly stated Inmax would sell to the U.S. through Inmax Industries’ new production line, and U.S. import data showed Inmax exports declined while Inmax Industries’ exports rose.
- Petitioner requested a changed circumstances review (CCR) alleging potential evasion; Commerce initiated a CCR within 24 months, citing changed trading patterns and possible evasion, and later collapsed the two companies.
- During the CCR, Commerce found no evidence that Inmax exported merchandise through Inmax Industries; instead Inmax ceased production and Inmax Industries produced and exported its own merchandise under its assigned rate.
- Plaintiffs challenged Commerce’s initiation of the CCR (arguing lack of good cause to initiate within 24 months); the court reviewed Commerce’s findings for substantial evidence and reasonableness and remanded for further explanation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Commerce had "good cause" to initiate a CCR within 24 months | Inmax: Commerce lacked the heightened "good cause" needed to start a CCR so soon | U.S./Commerce: Changed trading patterns plus evidence suggesting possible evasion constituted good cause | Court: Initiation was reasonable given record; preventing evasion can constitute good cause |
| Whether Commerce reasonably treated Inmax’s production shift as evasion or manipulation | Inmax: The shift was a lawful corporate response to differing rates, not evasion | Commerce: Avoiding application of the investigation AFA rate via affiliate undermines the order’s integrity | Court: Commerce initially had basis to investigate, but its characterization that the activity undermined the order lacks adequate explanation given finding of no evasion; remand required |
| Whether Commerce should have terminated the CCR upon finding no actual evasion | Inmax: CCR should have been terminated once evidence showed no illegal shipments through affiliate | Commerce: Continued review and collapsing was appropriate to address potential manipulation and ensure proper rates | Court: Question left open; remand directs Commerce to explain why it completed CCR and collapsed companies despite lack of evasion evidence |
| Whether Commerce’s rationale about ‘‘statutory remedy’’ and integrity of the order was adequate | Inmax: Commerce’s references were vague and unexplained | Commerce: Invoked protecting efficacy of remedies and integrity of trade laws | Court: Commerce must clarify what statutory remedy it meant and how the order’s integrity was undermined when no evasion occurred; remand required |
Key Cases Cited
- Nippon Steel Corp. v. United States, 458 F.3d 1345 (Fed. Cir.) (describing substantial-evidence review scope)
- DuPont Teijin Films USA v. United States, 407 F.3d 1211 (Fed. Cir.) (defining substantial evidence)
- Consol. Edison Co. v. NLRB, 305 U.S. 197 (U.S.) (description of substantial evidence standard)
- Consolo v. Fed. Mar. Comm’n, 383 U.S. 607 (U.S.) (possibility of inconsistent inferences does not defeat substantial evidence)
- Eurodif S.A. v. United States, 555 U.S. 305 (U.S.) (Commerce interpretation of antidumping statute reviewed under Chevron framework)
- Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (U.S.) (two-step framework for reviewing agency statutory interpretation)
- Gonzales v. Oregon, 546 U.S. 243 (U.S.) (parroting regulation doctrine)