Bonney Forge Corp. v. United States

Decision Date02 February 2022
Docket NumberSlip Op. No. 22-8,Court No. 1:20-cv-03837
Citation560 F.Supp.3d 1303
Parties BONNEY FORGE CORPORATION and United Steel, Paper and Forestry, Rubber, Manufacturing and Service Workers International Union, Plaintiffs, v. UNITED STATES, Defendant, and Shakti Forge Industries PVT. Ltd., Defendant-Intervenor.
CourtU.S. Court of International Trade

William Fennell, Schagrin Associates, of Washington, D.C., for Plaintiffs. With him on the brief was Roger B. Schagrin.

Kara M. Westercamp, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for Defendant United States. With her on the brief were Brian M. Boynton, Acting Assistant Attorney General, Jeanne E. Davidson, Director, Commercial Litigation Branch, Claudia Burke, Assistant Director, Commercial Litigation Branch, and JonZachary Forbes, Office of Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.

Matthew T. McGrath, Barnes Richardson & Colburn LLP, of Washington, D.C., for Defendant-Intervenor.

OPINION

Vaden, Judge:

This is not a case about the Government's ability to respond with agility to the unique circumstances caused by the COVID-19 pandemic. It is instead a case about the requirement that the Government respond to all arguments made in good faith by the contending parties before it and place those responses in the record to allow for meaningful judicial review. COVID did not suspend the general principles of administrative law. Cf. Roman Catholic Diocese of Brooklyn v. Cuomo , ––– U.S. ––––, 141 S. Ct. 63, 68, 208 L.Ed.2d 206 (2020) (per curiam) ("[E]ven in a pandemic, the Constitution cannot be put away and forgotten."). Plaintiffs Bonney Forge Corporation (Bonney Forge) and United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (USW) asked the Government to conduct a virtual verification of the information submitted by foreign respondent and Defendant-Intervenor Shakti Forge Industries PVT. Ltd. (Shakti). The Government candidly admits it provided no response in the record to Bonney Forge's written request. It also candidly admits that the Department of Commerce (Commerce) is currently still not conducting verification visits – virtual or otherwise – to India despite several senior political appointees’ having recently traveled to the subcontinent. Because the Government failed to provide any evidence in the record to support its decision to deny Bonney Forge's request for virtual verification, the Court GRANTS PlaintiffsMotion for Judgment on the Agency Record and REMANDS this matter to Commerce with instructions. Should the Government maintain its position that verification remains impossible, the Government can explain in the record why it is safe for senior Department of Justice and Cabinet officials to travel to India in person on discretionary trips but not safe for civil servants with statutory responsibilities to perform to do the same, even if only virtually.

BACKGROUND

The products at issue in this case are forged steel fittings produced in India for importation into the United States. A "fitting" is "a small often standardized part (as a coupling, valve, gauge) entering into the construction of a boiler, steam, water, or gas supply installation or other apparatus." Fitting , WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY (3d ed. 1986). The International Trade Administration described the types of steel fittings included in the scope of the investigation when it issued its final determination:

The merchandise covered by this investigation is carbon and alloy forged steel fittings, whether unfinished (commonly known as blanks or rough forgings) or finished. Such fittings are made in a variety of shapes including, but not limited to, elbows, tees, crosses, laterals, couplings, reducers, caps, plugs, bushings, unions (including hammer unions), and outlets. Forged steel fittings are covered regardless of end finish, whether threaded, socket-weld or other end connections. The scope includes integrally reinforced forged branch outlet fittings, regardless of whether they have one or more ends that is a socket welding, threaded, butt welding end, or other end connections.

Forged Steel Fittings from India: Final Affirmative Determination of Sales at Less Than Fair Value (Final Determination ), 85 Fed. Reg. 66,306, 66,308 (Oct. 19, 2020), Joint Appendix (J.A.) at 14,188, ECF No. 46.

I. The Antidumping Investigation

The investigation sub judice began on October 23, 2019, when Bonney Forge, a U.S. producer of forged steel fittings, and USW, a union whose members include workers at facilities where domestic steel fittings are produced, filed a petition alleging that steel fittings from India were being sold at less than fair market value in the United States. See Decision Memorandum for the Final Determination in the Less-Than-Fair-Value Investigation of Forged Steel Fittings from India (Final IDM) at 1, J.A. at 14,126, ECF No. 46. Commerce initiated an investigation on November 12, 2019, and published its Respondent Selection Memorandum identifying mandatory respondents on January 2, 2020. Forged Steel Fittings from India and the Republic of Korea: Initiation of Less-Than-Fair-Value Investigations , 84 Fed. Reg. 64,265 (Nov. 21, 2019) ; Decision Memorandum for the Preliminary Determination in the Less-Than-Fair-Value Investigation of Forged Steel Fittings from India (PDM) at 2–3, J.A. at 11,666–67 ECF No. 46. Shakti was the only mandatory respondent selected by Commerce that did not withdraw from the investigation. See Antidumping Duty Investigation of Forged Steel Fittings from India: Selection of Respondents for Individual Examination, J.A. at 2,900–05, ECF No. 45. Commerce sent Shakti a standard initial questionnaire on January 2, 2020, requesting information about Shakti's sales in the United States, sales in its home market, and its costs of production. Request for Information, J.A. at 2,909, ECF No. 45. Shakti cooperated fully with Commerce throughout the proceeding, submitting responses to the initial questionnaire on February 5, February 24, and March 2, 2020. J.A. at 3,411–5,748, ECF No. 45.

Just over a week after Commerce received Shakti's final response to the initial questionnaire, the World Health Organization officially classified COVID-19 as a pandemic. WHO Director-General's opening remarks at the media briefing on COVID-19 - 11 March 2020 , WORLD HEALTH ORGANIZATION (Mar. 11, 2020) https://www.who.int/director-general/speeches/detail/who-director-general-s-opening-remarks-at-the-media-briefing-on-covid-19---11-march-2020. On March 15, 2020, the Department of Commerce issued an agency-wide memo prohibiting all travel not "mission-critical and pre-approved by senior bureau leadership." DEP'T OF COMMERCE , All Hands: Coronavirus Update (3-16-2020) https://www.commerce.gov/sites/default/files/2020-03/AllHandsCoronavirusUpdate3-16-20.pdf. The CDC issued a Level 4 travel advisory, urging all U.S. citizens to avoid international travel on March 31, 2020. CENTER FOR DISEASE CONTROL , Global Level 4 Health Advisory: Do Not Travel (Mar. 31, 2020); J.A. at 13,909, ECF No. 46.

Amidst the unfolding pandemic and the resulting transition to "teleworking," Commerce continued its investigation of steel fittings from India, sending Shakti four additional supplemental questionnaires on March 20, March 27, April 10, and April 16, 2020. J.A. at 6,022, 6,051, 8,108, 8,183, ECF No. 46. Shakti timely responded to those questionnaires on April 27 and May 4, 2020. J.A. at 8,817, 9,548, 9,557, ECF No. 46. Based on the initial information it had gathered from Shakti, Commerce issued a Preliminary Affirmative Determination of Sales at Less Than Fair Value (SLTFV) and Postponement of Final Determination, with those preliminary results indicating that Shakti was not selling its steel fittings in the United States at below fair market value.1 J.A. at 11,746, ECF No. 46. Thereafter, Commerce sent Shakti two additional supplemental questionnaires on June 15 and July 2, 2020, to which Shakti fully replied on July 6 and July 23, 2020. J.A. at 11,761, 11,816, 11,871, 12,146, ECF No. 46.

Though Commerce "normally conducts verification" after having gathered relevant information from respondents, in light of the uncertain risks of and continuing restrictions on travel during the summer of 2020, Commerce instead issued a memo cancelling verification and setting forth the briefing schedule for the parties.2 Def.’s Resp. to Pls.’ Mot. for J. on the Agency R. (Def.’s Resp.) at 12–13, ECF No. 35; J.A. at 13,906 (memo cancelling verification), ECF No. 46. Plaintiffs Bonney Forge and USW timely submitted an administrative brief opposing Commerce's decision not to verify on the basis that there were discrepancies in Shakti's reported data that made the data unreliable absent verification. J.A. at 91,588, ECF No. 45. Plaintiffs "urge[d] Commerce to engage in virtual verification" or else rely on other facts available with adverse inferences rather than accept Shakti's data without substantiation. J.A. at 91,588–89, ECF No. 45. Shakti submitted a rebuttal case brief, affirming the accuracy of the data it had provided and asserting that Commerce had all the information it needed to rely on Shakti's reporting. J.A. at 91,766, ECF No. 45.

Commerce concluded that the information it had collected from Shakti was reliable without any verification, categorized the information it had collected as "facts available," and issued its final determination in the investigation on October 13, 2020. Final IDM, J.A. at 14,126, 14,127, ECF No. 46. Commerce published its Final Affirmative Determination on October 19, 2020. Id. ; Final Determination , J.A. at 14,186–89, ECF No. 46. Commerce failed to consider or even acknowledge Plaintiffs’ request for a virtual verification, providing no explanation for choosing to rely solely on post-preliminary...

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