216 F.3d 1027 (Fed. Cir. 2000), 99-1318, Martino v United States

Docket Nº99-1318
Citation216 F.3d 1027
Party NameF.LII De CECCO DI FILIPPO FARA S. MARTINO S.p.A., Plaintiff-Appellee, v. UNITED STATES Defendant-Appellant, v. BORDEN, INC., GOOCH FOODS, INC., and HERSHEY FOODS CORP. (now New World Pasta, LLC),Defendants.
Case DateJune 16, 2000
CourtUnited States Courts of Appeals, Court of Appeals for the Federal Circuit

Page 1027

216 F.3d 1027 (Fed. Cir. 2000)



UNITED STATES Defendant-Appellant,


BORDEN, INC., GOOCH FOODS, INC., and HERSHEY FOODS CORP. (now New World Pasta, LLC),Defendants.

No. 99-1318

United States Court of Appeals, Federal Circuit

June 16, 2000

Appealed from: United States Court of International Trade Judge Jane A. Restani

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David D. Howe, Gilbert, Segall, and Young LLP, of New York, New York, argued for plaintiff-appellee. With him on the brief was Jeffrey E. Livingston. Of counsel were Anthony J. Harwood and Lawrence C. Drucker.

Erin E. Powell, Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, of Washington, DC, argued for defendant-appellant. On the brief were David W. Ogden, Acting Assistant Attorney General, and David M. Cohen, Director. Of counsel was Patrick V. Gallagher, U.S. Department of Commerce, of Washington, DC.

Paul C. Rosenthal, Collier Shannon, Rill & Scott, PLLC, of Washington, DC, for defendants. Of counsel were David C. Smith, Jr., Adam H. Gordon, and John Martin Herrmann.

Before MAYER, Chief Judge, MICHEL and SCHALL, Circuit Judges.

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Opinion for the court filed by Circuit Judge MICHEL. Opinion concurring-in-part, dissenting-in part filed by Circuit Judge SCHALL.

MICHEL, Circuit Judge.

The United States appeals from the decision of the United States Court of International Trade in this anti-dumping duty case, Borden, Inc., Gooch Foods, and Hershey Foods Corp. v. United States, No. 96-08-01970 (Ct. Int'l Trade Dec. 16, 1998) ("Borden II"), with respect to just one of the numerous respondents, F.lli De Cecco di Filippo Fara S. Martino S.p.A. ("De Cecco"). The Court of International Trade affirmed the portion of the Remand Redetermination of the Department of Commerce ("Commerce") that imposed, consistent with the Court of International Trade's March 26, 1998 remand order in Borden, Inc., Gooch Foods, and Hershey Foods Corp. v. United States, 4 F.Supp.2d 1221 (Ct. Int'l Trade 1998) ("Borden I"), a revised dumping margin of 24.31 percent on De Cecco as an adverse inferential rate against a non-cooperating party. In its Borden II decision, the Court of International Trade refused to consider Commerce's presentation of a new methodology, based on data gathered in Commerce's original investigation of cooperating companies, to corroborate the 46.67 percent rate that the court had previously rejected as discredited and uncorroborated in view of Commerce's own investigation. See Borden II, slip op. at 2. The government timely appealed to this court. The appeal was submitted for our decision following oral argument on April 4, 2000. Because we hold that the trial court did not err in (1) rejecting the 46.67 percent anti-dumping margin as discredited and uncorroborated; (2) suggesting a possible alternative rate based on the verified dumping margins of the cooperating respondents; or, (3) refusing to allow Commerce a second opportunity to attempt to corroborate the 46.67 percent rate with a new methodology, we affirm.


This case involves the determination of dumping margins for imports from Italian pasta manufacturers. Unlike the other manufacturers, De Cecco did not fully cooperate with Commerce during the inquiry period, leading Commerce to make an "adverse inference" when determining the dumping margin of the pasta products at issue.

The relevant statute provides that if Commerce

finds that an interested party has failed to cooperate by not acting to the best of its ability to comply with a request for information from [Commerce], [Commerce] in reaching the applicable determination under this subtitle, may use an inference that is adverse to the interests of that party in selecting from among the facts otherwise available. Such adverse inference may include reliance on information derived from

(1) the petition,

(2) a final determination in the investigation under this subtitle,

(3) any previous review under section 1675 of this title . . . or,

(4) any other information placed on the record.

19 U.S.C. § 1677e(b) (1994) (emphasis added). The statute further provides:

(c) Corroboration of secondary information

When [Commerce] relies on secondary information rather than on information obtained in the course of an investigation or review, [Commerce] shall, to the extent practicable, corroborate that information from independent sources that are reasonably at their disposal.

19 U.S.C. § 1677e(c) (1994) (emphasis added).

In its initial anti-dumping determination, Commerce concluded that De Cecco had not cooperated. See Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final

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Determination: Certain Pasta From Italy, 61 Fed. Reg. 1344, 1345 (Jan. 19, 1996) ("Preliminary Determination"). Because De Cecco failed to cooperate, Commerce used an "adverse facts otherwise available" dumping margin for De Cecco. See id. Commerce chose a simple average of the range of margins stated in the notice of initiation: 46.67 percent. See id. Because the notice relied on the allegations in the petition from the domestic manufacturers, we refer to it throughout this opinion as the "petition rate." Commerce later permitted De Cecco an opportunity to answer supplemental questions to verify that information that De Cecco did report. De Cecco, however, was unable to rectify the deficiencies in its submissions to Commerce, and Commerce imposed a 46.67 percent margin in its Final Determination. See Notice of Final Determination of Sales at Less Than Fair Value: Certain Pasta From Italy, 61 Fed. Reg. 30,326, 30,329 (June 17, 1996) ("Final Determination").

De Cecco filed suit in the Court of International Trade challenging both Commerce's finding that it had not cooperated and Commerce's use of the petition rate as the adverse facts otherwise available rate. De Cecco argued that Commerce was statutorily required to corroborate the petition rate by using other information readily available. See Borden I, 4 F.Supp.2d at 1247. Following a motion for judgment on the agency record pursuant to Ct. Int'l Trade R. 56.2, the Court of International Trade held that Commerce had not sufficiently established that De Cecco was uncooperative and remanded to Commerce for reconsideration and a redetermination as to the dumping margin. In addition, the trial court held that Commerce could not rely on the petition rate for the adverse inference because Commerce's own investigation revealed that the 46.67 percent rate was "thoroughly discredited" and uncorroborated. Id. at 1247 & 1248. The court, however, suggested that Commerce might "use the highest verified margin of [24.31 percent]"1 applicable to those respondents that did cooperate with Commerce's investigation. Id. at 1247.

In its Remand Redetermination, Commerce found that De Cecco was indeed uncooperative and applied the 24.31 percent anti-dumping margin to De Cecco. See Redetermination on Remand: Final Determination of Sales at Less than Fair Value: Certain Pasta from Italy at 5-6 (Aug. 28, 1998) ("Remand Redetermination"). In addition, in an effort to corroborate the petition rate Commerce applied a new methodology to analyze the data gathered in its investigation of the cooperating respondents. The new methodology compared the petition rate to the margins calculated on specific transactions of record for the cooperating respondents. While the transactions of record were not reported as such in either the Final Determination or the Remand Redetermination, Commerce reported in the Remand Redetermination that the petition rate of 46.67 percent was within the range of the margins calculated on transactions of record for cooperative respondents. Thus Commerce argued that the Court of International Trade should have considered the petition rate corroborated. See id. at 15. When the case returned to the Court of International Trade, the government requested that the court reconsider its original order and permit Commerce to corroborate the 46.67 percent petition rate using the methodology first applied by Commerce on remand. See Borden II, slip op. at 2-3. The Court of International Trade, however, affirmed the imposition of a 24.31 percent rate on De Cecco and rejected Commerce's request for reconsideration, declaring:

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It is too late for Commerce to attempt to justify its original 46.67% margin with new support or methodology. The issue was before the court prior to remand, and all arguments relating thereto should have been made at that time. . . . Commerce's statement that, pursuant to a new methodology, it established the 46.67% margin was "within the range of margins calculated on transactions for cooperative respondents" . . . is not a sufficient reason to reopen this issue.

Id. The Court of International Trade affirmed the finding that De Cecco was not cooperative and affirmed that portion of Commerce's Remand Redetermination that applied a 24.31 percent rate to De Cecco. See id. at 4. Commerce appealed to this court, which has jurisdiction pursuant to 28 U.S.C. § 1295(a)(5) (1994).


The government argues that the Court of International Trade erred in not remanding the case to Commerce under instructions that would allow it to corroborate the petition rate with further evidence or to select any other proper rate, rather than rejecting the petition rate and suggesting a rate that Commerce might impose on De Cecco. In addition, the government argues that the trial court compounded its original mistake by refusing to reconsider the petition rate in light of the corroborating evidence cited in the Remand Redetermination. The government concedes, however, that the trial court was correct in holding that the 46.67 percent petition rate was not properly corroborated in the Final Determination.


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