390 F. Supp. 3d 1356
Ct. Intl. Trade2019Background
- This case challenges Commerce’s final results in the sixth administrative review of the antidumping order on certain steel nails from China (POR: Aug. 1, 2013–July 31, 2014). Commerce initially applied “total adverse facts available” (AFA) and assigned Shandong the China-wide rate (118.04%).
- The court previously remanded for Commerce to reassess Shandong’s separate-rate eligibility; on remand Commerce (under protest) found Shandong eligible for a separate rate but again assigned AFA-based rate using the 118.04% margin.
- Commerce treated Shandong’s factors-of-production (FOP) data and U.S. sales reconciliation as unusable, asserting missing or single-average reporting and unexplained revisions; it also found Shandong’s affiliate Jining Dragon failed to substantiate that its “shooting nails” were outside the order scope.
- National Nail (U.S. importer) and Shandong contend the requested FOP and sales information was provided in the form Commerce permitted (CONNUM-specific or production-group reporting) and that missing items were placed on the record via timely supplemental responses.
- The court reviewed statutory standards for facts available and adverse inferences (19 U.S.C. § 1677e(a),(b)) and the Federal Circuit’s two-part Nippon Steel framework (objective and subjective showing for adverse inference).
- Holding: the court rejected Commerce’s use of total AFA for Shandong’s FOP and U.S. sales (insufficient record support and failure to apply Nippon Steel steps), sustained AFA only for Jining Dragon’s shooting-nails information, and remanded for Commerce to use the submitted FOP and sales data (and solicit explanation for two small unexplained sales revisions).
Issues
| Issue | National Nail (Plaintiff) Argument | United States (Commerce) Argument | Held |
|---|---|---|---|
| Whether Commerce permissibly applied total AFA to Shandong’s factors of production | Shandong provided FOP in the form Commerce allowed (CONNUM-specific or production-group); reported identical consumption where production-group treatment made identical figures appropriate | Shandong reported some inputs on a single-average basis contrary to instructions; failed to explain or convert to CONNUM-specific amounts | Court: Commerce lacked substantial evidence; Shandong’s FOP were submitted in permitted form; remand—use submitted FOP (no total AFA) |
| Whether Commerce permissibly applied total AFA to Shandong’s U.S. sales reconciliation | Sales data (incl. Nov–Dec 2014) and narrative tying reconciliation to financials were timely provided; unexplained quantity revisions were de minimis (~1%) and did not justify AFA | Sales reconciliation omitted months initially and included unexplained revisions shortly before prelims; overall reliability in question | Court: Nov–Dec 2014 data and narrative were on the record; Commerce may not apply adverse inference to all sales; remand—use sales data and solicit explanation for Aug/Dec 2013 revisions |
| Whether Commerce permissibly applied AFA to Jining Dragon’s shooting-nails (scope exclusion) | Shandong contends shooting-nails were excluded and Commerce gave conditional excusal; complains Commerce moved to AFA without opportunity to produce full C&D databases | Shandong failed to provide required supporting documentation re: the powder-actuated tool (hand tool and propellant); Commerce conditioned excusal and requested further detail but record responses lacked the supporting evidence | Court: sustained Commerce’s use of facts available and adverse inference for shooting-nails information—Shandong failed to substantiate exclusion and did not request/produce documentation; AFA for this discrete item upheld but cannot drive total AFA |
| Whether Commerce satisfied the "best of its ability" requirement to draw adverse inference under Nippon Steel | Shandong did cooperate to the extent possible and acted to best of its ability; Commerce did not perform the required objective/subjective analysis before AFA | Commerce asserted pervasive deficiencies and lack of cooperation but relied largely on the same factual findings used for facts-available determination without the Nippon Steel two-step analysis | Court: Commerce failed to make the required Nippon Steel-specific findings (objective + subjective) as to FOP and sales; adverse inference improper for those areas |
Key Cases Cited
- Nippon Steel Corp. v. United States, 337 F.3d 1373 (Fed. Cir.) (two-part test for adverse inferences; distinction between facts available and adverse facts available)
- F.lli De Cecco Di Filippo Fara S. Martino S.p.A. v. United States, 216 F.3d 1027 (Fed. Cir.) (adverse facts available as deterrent; adverse inference standards)
- Ta Chen Stainless Steel Pipe, Inc. v. United States, 298 F.3d 1330 (Fed. Cir.) (adverse AFA should be reasonably accurate estimate with deterrence component)
- NSK Ltd. v. United States, 481 F.3d 1355 (Fed. Cir.) (best-of-ability standard requires prompt, careful, comprehensive investigation of records)
- QVD Food Co. v. United States, 658 F.3d 1318 (Fed. Cir.) (burden on parties to create adequate administrative record)
- Essar Steel Ltd. v. United States, 678 F.3d 1268 (Fed. Cir.) (false information and failure to produce key documents show lack of cooperation)
- Mukand, Ltd. v. United States, 767 F.3d 1300 (Fed. Cir.) (upholding total AFA where record contained no usable core information and failures were egregious)