Morex Ribbon Corp. v. United States
2017 CIT 95
| Ct. Intl. Trade | 2017Background
- Commerce conducted the third administrative review of the antidumping duty order on narrow woven ribbons with woven selvedge (NWR) from Taiwan covering the POR; Hen Hao was a producer/exporter that withdrew from the review without providing requested information.
- Hen Hao’s U.S. importers (Morex Ribbon Corp., Papillon Ribbon and Bow Inc., and Ad‑Teck Ribbon, LLC) challenge Commerce’s assignment of total adverse facts available (AFA) to Hen Hao.
- King Young, the sole cooperating mandatory respondent, participated and received a calculated weighted‑average margin of 30.64% for the POR; Hen Hao withdrew and provided no data.
- Commerce applied AFA and selected the highest rate alleged in the petition (the Petition Rate, 137.20%) as Hen Hao’s AFA rate, finding other candidate rates (4.37% and 30.64%) insufficient to deter non‑cooperation.
- Commerce corroborated the Petition Rate using transaction‑specific margins from King Young, finding many of King Young’s sales dumped at rates equal to or exceeding the Petition Rate and noting prior proceedings where the Petition Rate had been used.
- The Court sustained Commerce’s assignment of the 137.20% AFA rate, concluding the selection and corroboration were supported by substantial evidence and consistent with law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Commerce lawfully assigned the Petition Rate as total AFA to Hen Hao | Morex: Petition Rate is unreasonably punitive and not tied to Hen Hao’s commercial reality; importers unfairly bear increased duties | U.S./Commerce: AFA appropriate to deter non‑cooperation; petition rate permissible where corroborated and not aberrational | Court: Sustained Commerce — Petition Rate reasonable deterrent and lawful AFA selection |
| Whether importers may be saddled with AFA liability for an uncooperative foreign exporter | Morex: Independent importers should not pay punitive AFA for exporter’s withdrawal | U.S./Commerce: Allowing relief would enable evasion; importers’ exposure is consistent with statutory purpose | Court: Rejected Morex; followed KYD — importers may bear enhanced duties to induce cooperation |
| Whether Commerce properly considered Hen Hao’s stated reasons for non‑cooperation (burden/capability) | Morex: Hen Hao’s withdrawal was due to inability, not willful evasion; should mitigate AFA | U.S./Commerce: Statute requires no mens rea; inability is not a statutory bar to AFA | Court: Rejected Morex — no requirement to find willfulness or motive under 19 U.S.C. § 1677e(b) |
| Whether Commerce adequately corroborated the Petition Rate as required for secondary information | Morex: Corroboration was insufficient—Petition Rate is extreme relative to calculated rates; a lower, contemporaneous cooperative respondent rate should be used | U.S./Commerce: King Young’s transaction‑specific margins showed many sales at or above Petition Rate; prior proceedings support relevance and reliability | Court: Sustained Commerce — record evidence corroborates relevance and reliability of Petition Rate |
Key Cases Cited
- de Cecco di Filippo Fara S. Martino S.p.A. v. United States, 216 F.3d 1027 (Fed. Cir.) (AFA proxy must be a reasonably accurate estimate of respondent’s actual rate, with deterrent effect)
- Gallant Ocean (Thailand) Co. v. United States, 602 F.3d 1319 (Fed. Cir.) (Commerce may not select unreasonably high, uncorroborated AFA rates)
- KYD, Inc. v. United States, 607 F.3d 760 (Fed. Cir.) (Importers may bear AFA margins assigned to uncooperative exporters; prevents evasion)
- Nippon Steel Corp. v. United States, 458 F.3d 1345 (Fed. Cir.) (substantial‑evidence review standard for Commerce determinations)
- Nan Ya Plastics Corp. v. United States, 810 F.3d 1333 (Fed. Cir.) (AFA proxy should have some grounding in commercial reality)
- Timken Co. v. United States, 354 F.3d 1334 (Fed. Cir.) (Commerce must balance accuracy and inducement when selecting margins)
- DuPont Teijin Films USA v. United States, 407 F.3d 1211 (Fed. Cir.) (definition and scope of substantial evidence)
- Consolidated Edison Co. v. NLRB, 305 U.S. 197 (U.S.) (classic formulation of substantial evidence standard)