OPINION and ORDER
This action involves an administrative review conducted by the certain circular welded non-alloy steel pipe from Mexico. See Certain Circular Welded Non-Alloy Steel Pipe From Mexico, 76 Fed. Reg. 36,086 (Dep’t of Commerce June 21, 2011) (admin, review 2008-09 final results) (Final Results); see also Issues and Decision Memorandum for Final Results of Anti-dumping Duty Administrative Review: Certain Circular Welded Non-Alloy Steel Pipe from Mexico, A-201-805 (June 13, 2011), available at http://ia.ita.doc.gov/frn/ summary/mexico/2011-15461-l.pdf (Decision Memorandum), which incorporates *1362 by reference the Use of Adverse Facts Available (AFA) for Final Results Memorandum (June 13, 2011) (AFA Memo), CD 66 1 (last visited Dec. 21, 2012.)
Before the court is the motion for judgment on the agency record of Plaintiffs Mueller Comercial de Mexico, S. de R.L. de C.Y., and Southland Pipe Nipples Company, Inc. (collectively Mueller). The court previously stayed Mueller’s challenge to Commerce’s use of zeroing pending a decision on that issue from the Federal Circuit. See Order, Nov. 21, 2011, ECF No. 35. This opinion addresses Mueller’s remaining challenge to Commerce’s use of facts available for missing production data from a non-cooperating mandatory respondent that supplied Mueller. The court has jurisdiction pursuant to Section 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2006), 2 and 28 U.S.C. § 1581(c) (2006). For the reasons set forth below, the court sustains Commerce’s use of facts available.
I. Standard of Review
For administrative reviews of antidumping duty orders, the U.S. Court of International Trade sustains Commerce’s “determinations, findings, or conclusions” unless they are “unsupported by substantial evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(l)(B)(i). More specifically, when reviewing agency determinations, findings, or conclusions for substantial evidence, the court assesses whether the agency action is reasonable given the record as a whole.
Nippon Steel Corp. v. United States,
Separately, the two-step framework provided in
Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc.,
II. Background
At the start of the administrative review, Commerce selected three mandatory
*1363
respondents, (1) Mueller, an exporter, who sourced subject merchandise from producers, (2) Tuberia Nacional, SA. de C.V. (“TUNA”), and (3) Ternium Mexico, S.A. de C.V. (“Ternium”).
Certain Circular Welded Nom-Alloy Steel Pipe from Mexico,
75 Fed. Reg. 78,216 at 78,216, (Dep’t of Commerce Dec. 15, 2010) (admin, review 2008-09 prelim, results)
(“Preliminary Results”).
Mueller fully cooperated. As a reseller, though, Mueller did not possess all of the cost information Commerce required to calculate Mueller’s margin.
Decision Memorandum
at 13. Commerce requested the cost information directly from Mueller’s two principal unaffiliated suppliers (and the two other mandatory respondents), TUNA and Ternium.
Preliminary Results
at 78,219-20;
see also SKF USA Inc. v. United States,
TUNA fully cooperated with these COP data requests, reporting cost of production on a product-specific basis. Ternium, however, did not cooperate to the same extent. Ternium failed to “ ‘provide detailed product-specific calculations that allocate costs based on product dimensions.’ ” AFA Memo at 2 (quoting Ternium’s December 21, 2010, section D questionnaire response at 3). After determining Ternium had not cooperated to the best of its ability, Commerce applied adverse facts available (AFA) for Ternium’s “cost of production for the specific products sold by Ternium to Mueller.” AFA Memo at 5. 3 More specifically, Commerce analyzed TUNA’s sales to Mueller and the corresponding costs of production, and identified as AFA the sale between TUNA and Mueller made at the greatest percentage below the cost of production. Id. at 4-5. Commerce then evaluated whether that potential AFA rate was an outlier or aberrational, and concluded it was not. Id. at 5. Commerce also compared that potential AFA rate with other TUNA-Mueller sales/cost differentials and found them to be “insufficiently adverse to compel Ternium to cooperate.” Id.
Having identified what it believed to be an appropriate AFA rate for Ternium’s CONNUM-specific production costs, Commerce returned to Mueller’s margin calculation and multiplied the AFA rate by Mueller’s acquisition costs for each of Ternium’s products. Id.; Decision Memorandum at 13-21. Throughout the process Commerce carefully, if not cleverly, avoided drawing an adverse inference directly against Mueller, a cooperating party. Id. at 12-13. Commerce repeatedly made clear that it was drawing an adverse infer *1364 ence against Ternium, not Mueller. Mueller, nevertheless, suffered adverse collateral consequences from Commerce’s use of Ternium’s AFA rate in Mueller’s margin calculation, which increased from 4.81 percent in the preliminary results to 19.81 percent in the final.
Mueller challenges Commerce’s selection of facts available for Mueller’s production costs that include an AFA rate for Ternium’s production costs. See Mem. in Supp. of Pis.’ R. 56.2 Mot. for J. on Agency R. (“Pis.’ Br.”), ECF No. 38-2. Mueller argues that Commerce unreasonably applied the antidumping statute, violating the court’s decision in
SKF USA Inc. v. United States,
33 CIT -, -,
III. Discussion
A. Commerce’s Application of 19 U.S.C. § 1677e is Reasonable
This case involves 19 U.S.C. § 1677e, which governs Commerce’s use of “facts available.” Section 1677e directs Commerce to use the facts otherwise available if necessary information is not available on the administrative record. 19 U.S.C. § 1677e(a). Necessary information may not be available if, among other things, an interested party withholds information that has been requested, or fails to provide information in the form and manner requested. 19 U.S.C. § 1677e(a)(2). For Mueller’s margin calculation TUNA’s production costs were available in the form and manner requested, but Ternium’s were not. Ternium’s missing data implicated 1677e(a) because Ternium, an interested party and mandatory respondent, failed to provide requested information in the form and manner requested. Ternium’s lack of cooperation also implicated section 1677e(b), which permits Commerce to draw adverse inferences when selecting from among the facts available to fill an information gap. The question here is whether section 1677e also allows Commerce to factor in AFA against a non-cooperative supplier when selecting from among the facts otherwise available to calculate a cooperating exporter’s production costs. Or stated another way, does the antidumping statute require Commerce to ignore the adverse inference against Ternium when filling the information gap for Mueller’s costs of production?
Mueller and Defendant agree that the statute “is silent” for purposes of the Chevron two-step framework. Pis.’ Br. at 4. Defendant-Intervenor United States Steel Corporation argues that Commerce’s action is, in fact, mandated under the first prong of Chevron. United States Steel Corp.’s Mem. in Opp’n to Pis.’ Mot. for J. on the Agency R. at 3-5, ECF No. 50. The court, however, agrees with Mueller and Defendant that Congress did not specifically provide the manner in which Commerce should evaluate the costs of a cooperating exporter sourcing product from a non-cooperating producer.
Under the second prong of
Chevron,
Commerce’s “interpretation governs” as long as it is reasonable.
United States v. Eurodif S.A,
Commerce interpreted Section 1677e as “manifesting an intent by Congress to provide the agency with authority to seek such information” and “a mechanism to induce compliance if the interested party’s failure to cooperate might affect the dumping margin of another party.”
Decision Memorandum
at 18;
see also Essar Steel Ltd. v. United States,
Commerce also considered the potential effect that its statutory interpretation would have upon cooperative respondents such as Mueller. Cf.
SKF,
*1366 Commerce farther considered its duty to determine Mueller’s margin accurately and concluded that its decision advances this interest. From a practical standpoint, without the required Ternium COP data, there is no way to know whether Mueller’s home market sales of Ternium products are above or below cost, and whether they may properly be used as a basis for normal value. It is therefore difficult for Commerce, the parties, or the court to know with certainty what a truly “accurate” margin for Mueller is. Commerce explained: “Although premised on the adverse inference that Ternium’s actual cost information would not be favorable — otherwise Ternium may not have elected to withhold it from the Department — -the selected facts available are intended to produce an accurate, non-punitive, dumping margin for Mueller.” Id. Commerce reasoned that if it “ignores the fact that Ternium chose to withhold necessary information and fails to apply an adverse inference in the selection of facts available, the resulting dumping margin would not reflect accurately the rate at which Mueller’s sales of merchandise produced by Ternium was sold at less than normal value.” Id. Commerce concluded that the “[application of an adverse inference only to the missing cost of production information that Ternium has withheld is a reasonable and limited inference based on the information on the record that ensures Ternium does not benefit from its failure to cooperate and also avoids an inaccurate dumping margin for Mueller.” Id.
Mueller, for its part, argues that it fully cooperated during the review and that Commerce should therefore ignore Ternium’s non-cooperation to be fair when calculating Mueller’s dumping margin. Pis.’ Br. at 5 (quoting
SKF USA,
33 CIT at -,
Mueller relies heavily upon the decision in
SKF USA,
arguing that Commerce’s decision violates that precedent. Pis.’ Br. at 1-10. In
SKF USA,
Commerce interpreted Section 1677e as authorizing Commerce to draw an adverse inference against a cooperative exporter, SKF, based solely upon non-cooperation by SKF’s unaffiliated supplier.
SKF USA,
33 CIT at -,
Allowing an interested party’s failure to cooperate to affect adversely the dumping margin of another interested party who is a party to the proceeding, about whom Commerce did not make a finding of noncooperation, violates the Department’s obligation to treat fairly every participant in an administrative proceeding. As is any government agency, Commerce is under a duty to accord fairness to the parties that appear before it. Although 19 U.S.C. § 1677e(b) does not expressly state that Commerce may not adversely affect a party to a *1367 proceeding based upon another interested party’s failure to cooperate, a construction permitting such an absurd result makes a mockery of any notion of fairness. In the specific context of the antidumping laws, a party that did not fail to meet its obligation to cooperate, as imposed by § 1677e(b), is entitled by § 1675(a) and related provisions of the antidumping law to have its margin determined accurately and according to the relevant information on the record of the administrative review. See 19 U.S.C. § 1675(a)(1)—(2) (requiring generally that Commerce determine the amount of antidumping duty according to normal value and export price or constructed export price of each entry of subject merchandise); Rhone Poulenc, Inc. v. United States,899 F.2d 1185 , 1191 (Fed.Cir.1990) (stating that “the basic purpose of the [antidumping] statute [is] determining current margins as accurately as possible”).
Id. at 1276.
In this case Commerce took a decidedly different approach. Commerce did not draw an adverse inference against Mueller, did not rely upon a dumping rate previously calculated for Mueller, or select a rate because it was adverse to Mueller. Rather, Commerce selected a ratio based on some of TUNA’s cost data as the best available information in place of Ternium’s missing cost data. Id. When Commerce made the judgment as to what information available on the record was best to evaluate Mueller’s cost of production for Ternium products, Commerce considered the adverse inference that it had drawn against Ternium—a mandatory respondent to whom Commerce had assigned a margin reflecting an adverse inference. Id. Unlike SKF USA, this case involves a different interpretation of Section 1677e by Commerce, a different methodology for selecting from the facts available, and a different record. Therefore, Mueller’s argument that the facts in SKF USA are “virtually identical to the facts in this case” is not correct. As opposed to Commerce’s “unreasonable” decision-making in SKF USA, Commerce’s decision-making here appears thorough, thoughtful, logical, and complete.
Commerce carefully considered the remedial statutory scheme, the intent of Congress, the potential unfairness to Mueller, and the impact of its decision on the accuracy of Mueller’s dumping margin.
Decision Memorandum
at 16-20. Using its administrative expertise, Commerce reasonably concluded that all of these factors support the agency’s interpretation of the antidumping statute that Congress has charged it to administer.
Id.
Commerce determined, consistent with the remedial purposes of the antidumping law, the statutory policy of encouraging interested parties to cooperate with information requests, and the obligation to calculate dumping margins as accurately as possible, that Section 1677e authorizes Commerce, in place of missing cost data needed to determine a cooperating exporter’s dumping margin, to consider an adverse inference against a non-cooperative supplier when selecting from facts otherwise available on the record. In the court’s view, that determination is reasonable and entitled to
Chevron
deference. It therefore “governs.”
See Eurodif,
B. Commerce Selection from Among Facts Available is Reasonable
Mueller also argues in the alternative that the facts available applied by Commerce are unreasonable on this administrative record (unsupported by substantial evidence). Pls.’s Br. at 13-17. This argument though is largely predicated on Mueller’s argument that Commerce may not consider the adverse inferences *1368 drawn against Ternium when choosing from among the facts available to use for Mueller’s production costs. As explained above, the facts available on the administrative record for Ternium’s production costs for sales made to Mueller included the AFA rate that Commerce determined for Ternium’s costs of production, which Commerce derived from TUNA’s production cost data and Mueller’s acquisition cost data. AFA Memo at 4.
Commerce compared “TUNA’s sales to Mueller and TUNA’s cost of production information for specific products.” Commerce was “able to perform a cost test on TUNA’s sales to Mueller,” and Commerce selected “the sales transaction between TUNA and Mueller made ... at the greatest percentage below the cost of production.” AFA Memo at 4. This “was the same as the next two transactions with a differential between the sale price and the cost of production.” Id. at 5. Commerce determined that a ratio based on TUNA’s production costs for these transactions was most probative of Ternium’s withheld cost data. Decision Memorandum at 16, 20 (Commerce “has selected from the facts otherwise available, the best information to use in place of Ternium’s withheld cost data”); AFA Memo at 5 (Commerce selected the “most probative evidence” available). There is no dispute that, like Ternium, TUNA produced the same types of products in the same country and then sold them to the same exporter (Mueller) during the same period of review.
Mueller, nevertheless, argues that production costs for the TUNA transactions that Commerce selected are not probative of all TUNA transactions, Pis.’ Br. at 11-12, 14-16, but Defendant correctly explains that this misses the point. Commerce selected a ratio based on some of the TUNA transactions because the production costs associated with them (and the accompanying [ ] percent differential with Mueller’s acquisition price) were, according to Commerce, the best information to use in place of Ternium’s missing cost data. Decision Memorandum at 16, 20; AFA Memo at 5. Commerce reasonably declined to rely upon TUNA’s cost data for the balance of TUNA’s products, which had a differential of less than [ ] percent, because Commerce determined that they were “insufficiently adverse” to induce Ternium’s cooperation. AFA Memo at 5. Commerce explained that it had assigned Ternium a total AFA rate (48.33%) during the prior review, and this had not induced Ternium to cooperate during the current review, leading Commerce to draw an adverse inference that Ternium refused to cooperate because its data would have been less favorable. AFA Memo at 5 (citing Certain Circular Welded Nortr-Alloy Steel Pipe From Mexico, 75 Fed. Reg. 20342, 20343 (Dep’t of Commerce Apr. 19, 2010) (admin, review 2007-OS final results)); Decision Memorandum at 15-16, 18, 20 (discussing inference against Ternium).
Mueller also argues that its acquisition costs are “certainly more probative of the issue,” Pis.’ Br. at 11-12, but Commerce reasonably concluded otherwise using its administrative expertise.
Preliminary Results
at 78,219-20. Congress requires that Commerce determine the costs associated with Mueller’s sales of Ternium products by calculating “an amount equal to the cost of materials and fabrication or other processing of any kind employed in producing the merchandise,” plus profit and selling, general, and administrative expenses.
See
19 U.S.C. § 1677b(e). There is no dispute that Mueller does not possess all of this information because it resells rather than produces the merchandise at issue.
Decision Memorandum
at 13. Commerce also determined that Mueller’s acquisition costs for products from its supplier, TUNA, did not equate to the costs of production reported by TUNA for those
*1369
products. AFA Memo at 4-6. Commerce reasonably concluded that supplier production costs are more probative than exporter acquisition costs.
Decision Memorandum
at 13;
see also SKF,
Finally, Mueller suggests that Commerce could have relied upon Ternium’s data. Pis.’ Br. at 13-14. Ternium supplied average cost of production data relative to four of its “product families” during the administrative review, but Ternium failed to provide data as Commerce requested on a specific, product-by-product basis. AFA Memo at 3. Commerce did not use average cost data for Ternium’s “product families” due to accuracy concerns. Decision Memorandum at 16-17. Commerce explained that Ternium’s average cost data limited to four product categories did not “reflect cost differences attributable to the different physical characteristics” of the several dozen products reviewed. Id. at 17. Therefore, Commerce reasonably concluded that Ternium’s overall cost data was not the most probative facts available in place of Ternium’s missing product-specific cost data.
IV. Conclusion
For the foregoing reasons, Commerce’s application of facts available to calculate Mueller’s costs of production is sustained. Accordingly, it is hereby
ORDERED that the Final Results are sustained with respect to Commerce’s application of facts available to calculate Mueller’s costs of production; and it is further
ORDERED that Mueller’s challenge to Commerce’s practice of zeroing remains stayed pending a decision on the issue from the U.S. Court of Appeal for the Federal Circuit.
Notes
. “CD-” refers to Confidential Document.
. Further citations to the Tariff Act of 1930, as amended, are to the relevant provisions of Title 19 of the U.S.Code, 2006 edition.
. Commerce also assigned Ternium a total adverse facts available (AFA) rate of 48.33% ior Ternium’s overall failure to participate in the review. AFA Memo at 1.