Viet I-Mei Frozen Foods Co. v. United States, 2016 U.S. App. LEXIS 18312

Background

Commerce issued an antidumping duty order on frozen warmwater shrimp from Vietnam and applied a Vietnam-wide NME rate of 25.76%; Grobest had previously received a 0% separate rate in earlier reviews and sought individual review in AR4.
Commerce initiated AR4 covering ~200 exporters; it selected two mandatory respondents and declined Grobest’s initial voluntary-request for individual examination; Grobest sued and the CIT ordered Commerce to individually examine Grobest.
After the CIT judgment, Commerce reconducted the review, but Grobest twice sought to withdraw from the now-court-ordered individual examination, citing management/accounting changes and costs; Commerce continued the review and served supplemental questionnaires.
Grobest refused to answer the supplemental questionnaires and did not cooperate; Commerce preliminarily found Grobest impeded the proceeding and applied adverse facts available (AFA), assigning the Vietnam-wide rate of 25.76%.
The CIT sustained Commerce’s reconducted final results; Grobest appealed, arguing Commerce should have allowed withdrawal and that applying the 25.76% AFA rate was unreasonable and punitive.
The Federal Circuit affirmed: Commerce reasonably refused to permit withdrawal and properly applied AFA (25.76%) where Grobest failed to cooperate and did not act to the best of its ability.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Commerce had to permit Grobest to withdraw from the court-ordered individual examination	Grobest: analogize to 19 C.F.R. § 351.213(d)(1) rescission rule; made withdrawal within 90 days of reconducted review initiation so withdrawal should be allowed	Commerce: no regulation gives voluntary respondents a 90-day right to withdraw once accepted; voluntary respondents treated like mandatory respondents and cannot unilaterally withdraw	Held: Commerce reasonably denied withdrawal; no regulatory 90-day right and treating voluntary respondents as mandatory is reasonable
Whether Commerce was required to treat the CIT judgment or objecting parties as dispositive in refusing rescission	Grobest: CIT judgment and timing meant Commerce could/should allow withdrawal	Commerce: judgment and Domestic Producers’ objection were proper factors among others; judgment supported continuing review	Held: Court finds Commerce reasonably relied on judgment and objections among other factors
Whether Commerce permissibly applied AFA for Grobest’s failure to cooperate	Grobest: inability to cooperate resulted from prior delay/litigation and thus AFA inappropriate or should be limited to 3.92%	Commerce: Grobest withheld requested information and impeded the review, so AFA authorized; may select adverse rate from prior investigations	Held: AFA application permissible; Grobest failed to act to best ability so adverse inference proper
Whether assignment of 25.76% Vietnam-wide rate as AFA was arbitrary or punitive	Grobest: 25.76% is excessive, far above commercial reality and harsher than necessary; at most assign 3.92%	Commerce: may use prior investigation or highest available margins; 25.76% derived from Vietnam-wide rate and corroborated by record; deters noncooperation	Held: 25.76% upheld as supported by record and appropriate corroboration; not arbitrary or punitive

Key Cases Cited

Albemarle Corp. & Subsidiaries v. United States, 821 F.3d 1345 (Fed. Cir. 2016) (NME countrywide rate and separate-rate framework)
Apex Exports v. United States, 777 F.3d 1373 (Fed. Cir. 2015) (standard of review for CIT decisions of Commerce)
Nippon Steel Corp. v. United States, 337 F.3d 1373 (Fed. Cir. 2003) (respondent must act to the best of its ability)
Gallant Ocean (Thailand) Co. v. United States, 602 F.3d 1319 (Fed. Cir. 2010) (Commerce discretion to select secondary sources for AFA)
F.lli De Cecco Di Filippo Fara S. Martino S.p.A. v. United States, 216 F.3d 1027 (Fed. Cir. 2000) (AFA selection from secondary sources)
Transcom, Inc. v. United States, 294 F.3d 1371 (Fed. Cir. 2002) (separate-rate entitlement in NME proceedings)
Oregon Steel Mills Inc. v. United States, 862 F.2d 1541 (Fed. Cir. 1988) (Congress intended Commerce may avoid investigative burden where domestic industry interest is lacking)
Consol. Edison Co. v. NLRB, 305 U.S. 197 (U.S. 1938) (definition of substantial evidence)
Consolo v. Fed. Mar. Comm’n, 383 U.S. 607 (U.S. 1966) (agency findings may be supported by substantial evidence even if evidence permits inconsistent conclusions)