Shandong Rongxin Import & Export Co. v. United States, 2019 CIT 3

Background

Rongxin, a Chinese exporter of cased pencils, sought a company-specific (separate) antidumping rate for the review period Dec. 1, 2014–Nov. 30, 2015; Commerce denied a separate rate and applied the China-wide rate.
Commerce concluded Rongxin was majority-owned (for 11 of 12 months) by Shandong International Trade Group (SITG), which is owned by a provincial Commerce Department, and found de facto government control over management selection.
Rongxin submitted new Articles of Association that became effective two months into the POR; Commerce found those did not resolve an alleged evidentiary gap and relied on the prior (Old) Articles as facts available for the early POR months and extended that reasoning into most of the POR.
Rongxin challenged Commerce’s decision in this Court, arguing (inter alia) that: as a mandatory respondent it was entitled to a separate rate; Commerce failed to issue supplemental questionnaires under 19 U.S.C. § 1677m(d); Commerce improperly relied on facts available/AFA; and Commerce considered only one de facto factor.
The Court upheld Commerce on several points (mandatory-respondent and § 1677m(d) issues; use of facts available for the first two months), but remanded because Commerce failed to adequately justify displacing the New Articles for the remainder of the POR.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a mandatory respondent is automatically entitled to a separate rate	Rongxin: 19 U.S.C. § 1677f-1(c) entitles mandatory respondents to individual rates regardless of state-control analysis	U.S.: Commerce's rebuttable government-control presumption is consistent with statute and precedents; mandatory respondent status does not bypass separate-rate analysis	Held for U.S.: mandatory respondent status does not automatically entitle Rongxin to a separate rate; Commerce's presumption is lawful
Whether Commerce was required to issue supplemental questionnaires under 19 U.S.C. § 1677m(d) before using facts available	Rongxin: Commerce created the deficient record and thus had to issue deficiency notices/supplemental questionnaires	U.S.: The respondent bears primary responsibility for the record; Commerce requested Articles of Association and Rongxin failed to provide Articles covering entire POR	Held for U.S.: Commerce was not required to issue § 1677m(d) supplemental questionnaires here
Whether Commerce permissibly used facts available for the first two months of the POR	Rongxin: Use of Old Articles was effectively AFA and improperly manufactured a gap	U.S.: Neutral facts available were appropriate because New Articles were not yet effective for those months	Held for U.S.: Use of neutral facts available (Old Articles) for the first two months is supported by substantial evidence
Whether Commerce permissibly relied on Old Articles for the period after the New Articles became effective	Rongxin: New Articles on their face rebut state control; Commerce ignored them and unjustifiably filled a non-existent gap	U.S.: Commerce claims record lacked evidence showing how New Articles operated in practice	Held for Rongxin (remand): Commerce failed to explain why it disregarded the New Articles once effective; remand required to reconsider de facto independence during that period

Key Cases Cited

Diamond Sawblades Mfrs. Coal. v. United States, 866 F.3d 1304 (Fed. Cir. 2017) (upholding Commerce's government-control presumption and separate-rate framework in NME cases)
Dongtai Peak Honey Indus. Co. v. United States, 777 F.3d 1343 (Fed. Cir. 2015) (discussing rebuttable presumption of state control in non-market-economy proceedings)
AMS Assocs., Inc. v. United States, 719 F.3d 1376 (Fed. Cir. 2013) (de jure and de facto factors for separate-rate determinations)
Nippon Steel Corp. v. United States, 337 F.3d 1373 (Fed. Cir. 2003) (standard for applying adverse inferences and facts available)
Nan Ya Plastics Corp. v. United States, 810 F.3d 1333 (Fed. Cir. 2016) (respondent bears responsibility for creating an adequate administrative record)
Universal Camera Corp. v. NLRB, 340 U.S. 474 (1951) (substantial evidence includes consideration of contradictory evidence)