391 F. Supp. 3d 1283
Ct. Intl. Trade2019Background
- Commerce investigated antidumping duties on certain hardwood plywood from China (POI: Apr 1–Sep 30, 2016); mandatory respondents included Shandong Dongfang Bayley Wood Co., Ltd. (Bayley) and Linyi Chengen Import & Export Co., Ltd. (Linyi Chengen).
- In the Preliminary Determination Commerce valued raw logs (factors of production) for Linyi Chengen; at final determination Commerce switched to the "intermediate input" methodology and valued veneers instead, producing a large margin (183.36%).
- Commerce applied total adverse facts available (AFA) to Bayley for alleged failure to disclose affiliations and declined to verify Bayley’s questionnaire responses; Commerce also assigned Linyi Chengen’s margin to separate-rate respondents.
- Linyi Chengen challenged Commerce’s handling of the administrative record, the intermediate-input decision, and selection of veneer surrogate values; other consolidated plaintiffs similarly sought recalculation of separate-rate margins.
- Bayley challenged Commerce’s AFA determination (affiliation with a U.S. customer Shelter/SFIA and nondisclosure of Company D) and Commerce’s refusal to verify or accept supplemental affiliation information.
- The Court sustained Commerce in part (AFA to Bayley; refusal to verify Bayley) but found Commerce’s factual treatment of Linyi Chengen’s record arbitrary and capricious, remanding the final determination for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Commerce’s handling of Linyi Chengen’s verification record | Linyi: Commerce mischaracterized verification, ignored records (conversion table, delivery docs), and unlawfully rejected corrective submissions | U.S.: Differences reflect Commerce’s weighing of evidence; verification report did not affirm the company’s methods | Court: Commerce’s Final Determination arbitrary and capricious as to record handling; remand required |
| Use of intermediate input methodology for Linyi Chengen (logs → veneers) | Linyi: No substantial evidence log reporting was unreliable; intermediate input not warranted | U.S.: Verification raised concerns about log measurement and documentation, justifying intermediate input in limited circumstances | Court: Reserved (remanded) because record-handling errors may change findings; Commerce must reconsider on remand |
| Selection/valuation of veneer surrogate values (Romanian beech) | Linyi: Chosen surrogate illogical and insufficiently specific | U.S.: Romania remains appropriate surrogate country; choice depends on intermediate methodology | Court: Reserved for remand pending potential changes to methodology and record |
| Separate-rate respondents’ margin assignment | Plaintiffs: Separate rates improperly tied to Linyi Chengen’s rate; any change to Linyi Chengen requires recalculation | U.S.: Commerce used its practice of applying an individually calculated rate to separate-rate companies | Held: Because Linyi Chengen’s margin is remanded, Commerce must reconsider separate-rate margins on remand |
| Commerce’s application of AFA to Bayley for alleged nondisclosure of affiliations | Bayley: Evidence relied on was inconclusive, stale, or misinterpreted; AFA unjustified | U.S.: Bayley failed to disclose affiliations; record evidence and public documents supported suspicion and omission | Court: Commerce’s AFA application was supported by substantial evidence and lawful |
| Decision not to verify Bayley and refusal to accept supplemental information (Company D) | Bayley: Commerce should have verified its responses and allowed supplementation to cure alleged deficiencies | U.S.: Because Commerce relied on AFA and found responses incomplete/unreliable, verification and supplementation were unnecessary and unwarranted | Court: Commerce’s refusal to verify Bayley and to accept late affiliation information was supported by law and substantial evidence |
Key Cases Cited
- Motor Vehicle Mfrs. Ass'n v. State Farm, 463 U.S. 29 (agency action arbitrary and capricious standard)
- Nippon Steel Corp. v. United States, 337 F.3d 1373 (Fed. Cir. 2003) (AFA: "best of its ability" standard)
- Zhejiang DunAn Hetian Metal Co. v. United States, 652 F.3d 1333 (Fed. Cir. 2011) (distinguishing facts-available subsections)
- Mueller Comercial de Mexico v. United States, 753 F.3d 1227 (Fed. Cir. 2014) (application of subsections 1677e(a) and (b))
- Essar Steel Ltd. v. United States, 678 F.3d 1268 (Fed. Cir. 2012) (false information/failure to produce documents supports finding respondent failed to cooperate)
- Maverick Tube Corp. v. United States, 857 F.3d 1353 (Fed. Cir. 2017) (substantial evidence supports AFA where respondent failed to provide requested information)
- Consol. Edison Co. v. NLRB, 305 U.S. 197 (1938) (definition of substantial evidence)