D & L Supply Co. v. U.S.

• Citation: 113 F.3d 1220
• Decision Date: 08 May 1997
• Docket Number: Nos. 95-1437,95-1450,s. 95-1437
• Parties: D & L SUPPLY CO., Plaintiff-Appellant, and Guandong Metals & Minerals Import & Export Corporation, and Overseas Trade Corporation, Plaintiffs, and U.V. International, Sigma Corporation, Southern Star, Inc., City Pipe & Foundry, Inc., Long Beach Iron Works, Inc., Plaintiffs-Appellants, v. The UNITED STATES, Defendant-Appellee, and Alhambra Foundry Inc., Allegheny Foundry Co., Bingham & Taylor Division, Virginia Industries, Inc., Charlotte Pipe & Foundry Co., East Jordan Iron Works, Inc., Lebaron Foundry Co., Municipal Castings, Inc., Neenah Foundry Co., Opelika Foundry Co., Inc., Tyler Pipe Industries, Inc., U.S. Foundry & Manufacturing Co. And Vulcan Foundry, Inc., Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Page 1220

113 F.3d 1220

19 ITRD 1138

D & L SUPPLY CO., Plaintiff-Appellant and Guandong Metals & Minerals Import & Export Corporation, and Overseas Trade Corporation, Plaintiffs and U.V. International, Sigma Corporation, Southern Star, Inc. City Pipe & Foundry, Inc., Long Beach Iron Works Inc., Plaintiffs-Appellants, v. The UNITED STATES, Defendant-Appellee, and Alhambra Foundry Inc., Allegheny Foundry Co., Bingham & Taylor Division, Virginia Industries, Inc., Charlotte Pipe & Foundry Co., East Jordan Iron Works, Inc., Lebaron Foundry Co., Municipal Castings, Inc., Neenah Foundry Co., Opelika Foundry Co., Inc., Tyler Pipe Industries, Inc., U.S. Foundry & Manufacturing Co. And Vulcan Foundry, Inc., Defendants-Appellees.

Nos. 95-1437, 95-1450.

United States Court of Appeals, Federal Circuit.

May 8, 1997.

Dennis James, Jr., Cameron & Hornbostel, Washington, D.C., argued, for plaintiff-appellant D & L Supply Co. Of counsel was Michele C. Sherman.

Christopher M. Curran, White & Case, Washington, D.C., argued, for plaintiffs-appellants U.V. International, et al. With him on the brief were Walter J. Spak, Vincent Bowen, and of counsel, Stephen N. Schaefer.

Henry R. Felix, Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, Washington, D.C., argued, for defendant-appellee United States. With him on the brief were Frank W. Hunger, Assistant Attorney General, David M. Cohen, Director, and Jeanne E. Davidson, Assistant Director. Of counsel on the brief was Jeffrey C. Lowe, Attorney-Advisor, Department of Commerce. Of counsel were Berniece A. Brown, Chief Counsel of Import Administration and Stephen J. Powell, Department of Commerce.

Mary T. Staley, Collier, Shannon, Rill & Scott, Washington, D.C., argued, for defendants-appellees Alhambra Foundry Inc., et al. With her on the brief were Paul C. Rosenthal, and Robin H. Gilbert.

Before NEWMAN, LOURIE, and BRYSON, Circuit Judges.

BRYSON, Circuit Judge.

Before its amendment in 1994, the antidumping statute directed that when a party to an antidumping proceeding failed to provide properly requested information, the Commerce Department was required to "use the best information otherwise available" in determining the appropriate antidumping duty rate. 19 U.S.C. § 1677e(c) (1988). Pursuant to that provision, the Commerce Department developed a protocol that allowed it to use the highest dumping margin established in any prior administrative review or in the less-than-fair-value proceeding as the "best information available" (or "BIA") rate for an administrative review in which the foreign exporter did not comply with Commerce's inquiry. The question presented in this case is whether, when the prior antidumping duty rate that Commerce relied upon to establish the BIA rate has been invalidated in the course of judicial review, Commerce may nonetheless continue to rely on that antidumping duty rate as the BIA rate in any pending administrative review proceeding. We hold that it is improper for Commerce to continue to use, as the BIA rate, an antidumping duty rate that has been vacated as erroneous.

I

Appellant D & L Supply Company, an American company, imported iron castings from the People's Republic of China during the period relevant to this case. Plaintiff Guangdong Metals & Minerals Import & Export Corporation, a Chinese exporter, supplied iron castings to D & L during that period.

On March 19, 1986, the Department of Commerce found that iron castings from China were being sold in the United States at less than fair value. After the International Trade Commission determined that those imports were causing injury to U.S. producers of similar castings, Commerce issued an antidumping order and set an antidumping duty rate of 11.66 percent for the Chinese exporters.

In the course of its annual administrative reviews of the antidumping order, Commerce adjusted the antidumping rates for iron castings several times. For 1987-88 Commerce calculated the rate to be 24.21 percent, and for 1988-89 Commerce calculated the rate to be 45.92 percent. In connection with the administrative review for 1989-90, Guangdong was the only Chinese manufacturer or exporter that responded to Commerce's antidumping questionnaire. Commerce initially established a preliminary rate of 63.28 percent for Guangdong, but when it issued its final results for the 1989-90 administrative review, Commerce raised that rate to 92.74 percent. At the same time, Commerce declared that the 92.74 percent rate for Guangdong would also apply to all other Chinese manufacturers and exporters of iron castings.

While Commerce was still conducting the administrative review for 1989-90, it initiated the administrative review for 1990-91. In connection with the 1990-91 review, however, no Chinese exporter, including Guangdong, responded to Commerce's questionnaire. Commerce therefore resorted to its BIA procedures to determine the antidumping duty rates for that period. Basing the BIA rate on the highest antidumping duty rate from any prior administrative review, Commerce looked to what was then the rate for 1989-90--92.74 percent--and it set the 1990-91 BIA rate for all Chinese manufacturers and exporters at that level.

Commerce's various decisions provoked litigation. First, D & L, Guangdong, and a group of other importers (U.V. International et al.) brought suit in the Court of International Trade contesting the final rate of 92.74 percent for 1989-90. Then, when Commerce selected the contested 92.74 percent rate as the BIA rate for 1990-91, D & L, Guangdong, and U.V. International et al. appealed that determination as well.

The Court of International Trade subsequently vacated the 92.74 percent rate for 1989-90 with instructions that Commerce recalculate the antidumping duty rate for that period. At the same time, the court remanded the 1990-91 BIA determination, directing Commerce to "reevaluate the situation [for 1990-91] and deem whether the rate from [the 1989-90 review] is still appropriate for use as BIA." D & L Supply Co. v. United States, 841 F.Supp. 1312, 1314-15 (CIT 1993).

On remand, Commerce determined that it had overstated the antidumping duty rate for 1989-90, and it reduced the rate for that period from 92.74 percent to 31.05 percent (later revised to 31.51 percent). Commerce refused, however, to adjust the BIA rate for 1990-91, which had been based on the now-discredited 92.74 percent rate for 1989-90. D & L and the other plaintiffs again sought review of the 1990-91 BIA rate in the Court of International Trade, but the court upheld the 92.74 percent rate for that period. D & L and the other U.S. importers have appealed from that ruling.

II

On appeal, D & L and U.V. International et al. argue that Commerce acted unreasonably by refusing to revise the 1990-91 BIA rate notwithstanding Commerce's recognition on remand that the 1989-90 rate on which the BIA rate was based was erroneous. Commerce and a group of domestic producers, Alhambra Foundry, Inc., et al., disagree. They argue that it was proper for Commerce to use 92.74 percent as the BIA rate, because that was the applicable antidumping duty rate for 1989-90 at the time Commerce calculated the 1990-91 BIA rate, and they contend that no rule of law requires Commerce to recalculate the BIA rate when the prior rate on which it was based is later held to be erroneous.

The BIA provision in effect at the time Commerce made its margin determinations in this case provided:

In making their determinations under this subtitle, the [Commerce Department] ... shall, whenever a party or any other person refuses or is unable to produce information requested in a timely manner and in the form requested, or otherwise significantly impedes an investigation, use the best information otherwise available.

19 U.S.C. § 1677e(c) (1988). The statute was amended in 1994 and now provides that under such circumstances Commerce shall "use the facts otherwise available in reaching the applicable determination under this subtitle." 19 U.S.C. § 1677e(a) (1994). Pursuant to section 1677e, Commerce has adopted a two-tiered method for calculating antidumping rates based on BIA. Commerce uses the first tier for respondents who fail to cooperate. To calculate the appropriate dumping rate for first-tier firms, Commerce selects the highest margin calculated for any party in the less-than-fair-value investigation or in any administrative review. Commerce uses the second tier for respondents who substantially cooperate but fail to provide the requested...