Shelter Forest International Acquisition, Inc. v. United States
1:23-cv-00144
| Ct. Intl. Trade | May 1, 2024Background
- Multiple U.S. importers and exporters of hardwood plywood (the "M&G Plaintiffs") challenged the U.S. Department of Commerce’s final scope ruling and affirmative determination of circumvention regarding antidumping and countervailing duty orders on hardwood plywood from China, including products assembled in Vietnam.
- Commerce applied adverse facts available (AFA) against several Vietnamese companies, excluding them from a certification process required to demonstrate their goods were not covered by duties.
- Plaintiffs argued Commerce’s use of AFA and exclusion from the certification regime was unlawful because Commerce did not comply with statutory prerequisites, including opportunities for the companies to remedy or explain alleged deficiencies.
- The U.S. Court of International Trade considered whether Commerce's determinations regarding AFA were supported by substantial evidence and in accordance with law, focusing on Commerce's statutory obligations under 19 U.S.C. §§ 1677e(a)-(b) and 1677m(d).
- Judge Barnett granted the plaintiffs’ motion, remanding the determination to Commerce with instructions to revise its analysis according to the opinion and statutory requirements.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was Commerce's application of AFA justified against specific Vietnamese exporters? | Commerce failed to establish necessary record gaps and did not give respondents a chance to correct deficiencies as required by law. | Commerce argues respondents failed to answer questionnaires fully and timely, justifying AFA and ineligibility for certification. | Application of AFA not supported by substantial evidence; remanded for proper analysis and compliance with statutory steps. |
| Did Commerce err in excluding companies from the certification process? | Plaintiffs assert companies should not be barred unless substantial evidence shows non-cooperation after opportunity to remedy was provided. | Commerce claims exclusion is warranted due to deficient responses or withdrawal from verification. | Court holds exclusion premature and requires reconsideration with proper notice and remedy opportunities. |
| Did Commerce adequately notify and allow companies to correct record deficiencies? | Plaintiffs argue Commerce must specifically notify respondents and allow clarification, not just issue generic follow-up requests. | Commerce maintains supplemental questionnaires sufficed as notice and opportunity. | Court finds Commerce did not provide adequate, specific notice or opportunity to cure as required by 19 U.S.C. § 1677m(d). |
| Was Commerce's underlying scope and circumvention analysis supported by substantial evidence? | Plaintiffs contend Commerce relied on flawed or insufficient data, especially regarding assembly in Vietnam. | Commerce defends its factual findings as reasonable. | Court identifies deficiencies in record support for circumvention determination; remands for revision. |
Key Cases Cited
- Changzhou Trina Solar Energy Co. v. United States, 975 F.3d 1318 (Fed. Cir. 2020) (substantial evidence review requires considering evidence that detracts from the agency's conclusion)
- Consol. Bearings Co. v. United States, 412 F.3d 1266 (Fed. Cir. 2005) (agency abuses discretion with determinations based on erroneous law or unsupported findings)
- Nippon Steel Corp. v. United States, 337 F.3d 1373 (Fed. Cir. 2003) (AFA requires proof party did not cooperate to the best of its ability, not just imperfect compliance)
- Zhejiang Dunan Hetian Metal Co. v. United States, 652 F.3d 1333 (Fed. Cir. 2011) (AFA permitted only where crucial record gap exists, and not in disregard of available record evidence)
- Huayin Foreign Trade Corp. v. United States, 322 F.3d 1369 (Fed. Cir. 2003) (substantial evidence is that which a reasonable mind might accept as adequate)