Jiaxing Brother Fastener Co. v. United States
2016 U.S. App. LEXIS 7196
| Fed. Cir. | 2016Background
- Jiaxing Brother Fastener Co. (manufacturer) and affiliated Chinese exporters (IFI & Morgan; RMB) were respondents in an antidumping duty administrative review for certain steel threaded rod from China (POR Apr 1, 2010–Mar 31, 2011).
- For nonmarket-economy (NME) proceedings, Commerce must construct normal value using surrogate values from a market-economy country that is economically comparable and a significant producer of comparable merchandise, using the best available information.
- Commerce initially proposed several surrogate-country candidates by per-capita GNI proximity to China (2010): Thailand, Philippines, Indonesia, Ukraine, Peru, Colombia, South Africa; India (per-capita GNI $1,340) was excluded from the candidate list.
- In the preliminary and final results of the second administrative review Commerce selected Thailand as the primary surrogate country because Thai data on key inputs (notably steel wire rod), HCl, movement, energy, and Thai financial statements (CEN) were complete and specific on the record.
- Jiaxing challenged Commerce’s exclusion of India and selection of Thailand (arguing India’s traditional role and superior data), and the Trade Court remanded for clarification comparing Thailand vs. the Philippines; Commerce reaffirmed Thailand on remand emphasizing the primacy of steel input data.
- The Federal Circuit affirmed: Commerce’s Thailand selection was supported by substantial evidence, not arbitrary or capricious, and in accordance with law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Commerce erred by excluding India as a surrogate candidate | Jiaxing: India has long served as China’s surrogate; should have been considered despite GNI gap | Govt/Commerce: statute gives Commerce discretion; India’s per-capita GNI far below China and other comparable candidates exist | Held: Commerce permissibly excluded India; no statute requires India be considered |
| Whether Commerce unlawfully departed from past practice by not using India | Jiaxing: departure from long-standing practice lacked justification and undermines predictability | Commerce: each review is fact-specific; past practice not binding; record supports new choice | Held: No procedural or legal error in departing from past practice |
| Whether Thailand was the best surrogate versus the Philippines (financial data) | Jiaxing: Thai CEN financials are inferior (investment company, translation, tax concessions) vs. better Philippine financials | Commerce: CEN had relevant subsidiaries, similar financial ratios, and usable statements on record | Held: Use of CEN financials reasonable and supported by substantial evidence |
| Whether Thailand was the best surrogate versus the Philippines (input data: steel and HCl) | Jiaxing: Thai steel/HCl data flawed or aberrant; Philippines had better data | Commerce: steel wire rod is the dominant cost driver; Thai import data identified matching low-carbon grades and provided more specific, complete input values | Held: Commerce reasonably prioritized Thai steel data; Thai HCl data also acceptable; overall selection supported by substantial evidence |
Key Cases Cited
- Nation Ford Chem. Co. v. United States, 166 F.3d 1373 (Fed. Cir. 1999) (explains construction of hypothetical normal value for NME proceedings)
- Dorbest Ltd. v. United States, 604 F.3d 1363 (Fed. Cir. 2010) (describes surrogate country selection process)
- Qingdao Sea-Line Trading Co. v. United States, 766 F.3d 1378 (Fed. Cir. 2014) (Commerce preference for public, product-specific, contemporaneous surrogate data)
- QVD Food Co. v. United States, 658 F.3d 1318 (Fed. Cir. 2011) (Commerce discretion to determine "best available information")
- Downhole Pipe & Equip., L.P. v. United States, 776 F.3d 1369 (Fed. Cir. 2015) (standard of review and acceptance of agency conclusions supported by substantial evidence)
- Zhejiang DunAn Hetian Metal Co. v. United States, 652 F.3d 1333 (Fed. Cir. 2011) (agency need not pick perfect data, only best available)
- Home Meridian Int’l, Inc. v. United States, 772 F.3d 1289 (Fed. Cir. 2014) (reiterates that surrogate data need not be perfect to be best available)
- Consol. Edison Co. of N.Y. v. NLRB, 305 U.S. 197 (U.S. 1938) (definition of substantial evidence)