941 F.3d 530
Fed. Cir.2019Background
- Commerce investigated Oman Fasteners (OF) for alleged dumping of steel nails; OF had home- and third-country sales each below 5% of its U.S. sales, so Commerce had to compute a "constructed value" under 19 U.S.C. § 1677b(e).
- The statute gives a preferred method (use the respondent’s actual home‑market profit and SG&A) and three alternatives if "actual data are not available." Commerce concluded OF’s home‑market data were not "available" for reliable use and declined the preferred method.
- OF submitted partially translated financials for L.S. Industry (LSI, a Thai nail producer) and later a fully translated LSI statement after the deadline; Commerce rejected the partial translation per 19 C.F.R. § 351.303(e) and declined to accept the late full translation.
- With LSI and Omani financials excluded, Commerce used the third alternative and selected Hitech (a Thai screw producer) as the surrogate source for profits and SG&A to compute constructed value.
- Commerce refused to consider whether Hitech received government subsidies that might distort its reported profits and also concluded no viable record data existed to calculate a statutory "profit cap." The Trade Court mostly sustained Commerce but remanded some issues; the Federal Circuit affirms in part, vacates on the subsidy refusal, and remands for further explanation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Commerce erred by not using OF’s home‑market data (preferred method) | OF: home‑market data are "available" and must be used regardless of volume | Commerce: "available" includes functional sufficiency; tiny volumes can be unusable for accurate constructed‑value profit calculations | Held: Affirmed Commerce — statute permits considering volume/utility when assessing "available" data for preferred method |
| Whether Commerce improperly rejected LSI partial translation and late full translation | OF: Commerce had accepted the partial LSI translation in another proceeding and should have used it or accepted the late full translation | Commerce: regulation requires full English translations or prior approval for partial translations; deadlines and enforcement were reasonable | Held: Affirmed Commerce — enforcement of translation rule and deadlines reasonable |
| Whether selecting Hitech (Thai screw maker) as surrogate for profits was unreasonable | OF: Hitech is an imperfect surrogate (different product); LSI or Omani firms were better proxies | Commerce: no suitable Omani or nail‑producer financials on record; Hitech comparable (fasteners family, similar production) and only reliable fully translated statement | Held: Affirmed Commerce — choice reasonable and supported by record (subject to subsidy issue) |
| Whether Commerce unreasonably refused to consider subsidies affecting Hitech’s profits | OF: Commerce should have investigated/subtracted subsidies or rejected Hitech if subsidies distorted profits | Commerce: treatment of subsidies applies in non‑market‑economy provisions; Commerce ‘‘normally’’ treats subsidy issues there and declined to apply here | Held: Vacated and remanded — Commerce must reconsider and explain whether and how subsidies to Hitech affect its suitability or require adjustment |
| Whether Commerce could calculate a statutory "profit cap" to limit Hitech’s profit used in constructed value | OF: a profit cap should be calculable using available alternatives (e.g., LSI or other data) | Commerce: no viable home‑market data in same general product category and other submissions were flawed; no facts available to set a cap | Held: Affirmed Commerce — profit cap not computable from record; Commerce reasonably declined to impose one |
Key Cases Cited
- SKF USA Inc. v. United States, 263 F.3d 1369 (Fed. Cir. 2001) (explains constructed‑value methods and alternatives)
- Albemarle Corp. & Subsidiaries v. United States, 821 F.3d 1345 (Fed. Cir. 2016) (accuracy and fairness are Commerce’s primary objectives)
- CS Wind Vietnam Co., Ltd. v. United States, 832 F.3d 1367 (Fed. Cir. 2016) (agency must tie methodology to statute and record)
- Yangzhou Bestpak Gifts & Crafts Co., Ltd. v. United States, 716 F.3d 1370 (Fed. Cir. 2013) (Commerce must articulate satisfactory explanation for methodology)
- Diamond Sawblades Mfrs. Coal. v. United States, 866 F.3d 1304 (Fed. Cir. 2017) (standard of review for Commerce decisions)
- Universal Camera Corp. v. NLRB, 340 U.S. 474 (U.S. 1951) (substantial‑evidence standard explained)
- Bowman Transp., Inc. v. Ark.-Best Freight Sys., Inc., 419 U.S. 281 (U.S. 1974) (agency decisions may be upheld if their path can reasonably be discerned)
- FCC v. Fox Television Stations, Inc., 556 U.S. 502 (U.S. 2009) (requirements when an agency changes position)
- Ross v. Blake, 136 S. Ct. 1850 (U.S. 2016) (‘‘availability’’ may be defined functionally where procedures operate as dead ends)