Canadian Solar Int'l Ltd. v. United States

• Citation: 448 F.Supp.3d 1333
• Decision Date: 15 June 2020
• Docket Number: Consol. Court No. 17-00173,Slip Op. 20-83
• Parties: CANADIAN SOLAR INTERNATIONAL LIMITED et al., Plaintiffs and Consolidated Plaintiffs, and Shanghai BYD Co., Ltd. et al., Plaintiff-Intervenors and Consolidated Plaintiff-Intervenors, v. UNITED STATES, Defendant, and SolarWorld Americas, Inc. et al., Defendant-Intervenor and Consolidated Defendant-Intervenors.
• Court: U.S. Court of International Trade

448 F.Supp.3d 1333

CANADIAN SOLAR INTERNATIONAL LIMITED et al., Plaintiffs and Consolidated Plaintiffs,

and

Shanghai BYD Co., Ltd. et al., Plaintiff-Intervenors and Consolidated Plaintiff-Intervenors,

v.UNITED STATES, Defendant,andSolarWorld Americas, Inc. et al., Defendant-Intervenor and Consolidated Defendant-Intervenors.

Slip Op. 20-83

Consol. Court No. 17-00173

United States Court of International Trade.

June 15, 2020

Craig A. Lewis, Jonathan T. Stoel, and Michael G. Jacobson, Hogan Lovells US LLP, of Washington, DC, for Canadian Solar International Limited; Canadian Solar Manufacturing (Changshu), Inc.; Canadian Solar Manufacturing (Luoyang), Inc.; CSI Solar Power (China) Inc.; CSI-GCL Solar Manufacturing (YanCheng) Co., Ltd.; CSI Cells Co., Ltd.; Canadian Solar (USA), Inc.; and Shanghai BYD Co., Ltd.

Joseph H. Hunt, Assistant Attorney General, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for defendant. With him on the brief were Jeanne E. Davidson, Director, Reginald T. Blades, Jr., Assistant Director, and Meen Geu Oh, Trial Attorney. Of counsel on the brief was Ian McInerney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

Timothy C. Brightbill and Laura El-Sabaawi, Wiley Rein LLP, of Washington, DC, for SolarWorld Americas, Inc.

OPINION AND ORDER

Kelly, Judge:

Before the court is the U.S. Department of Commerce's ("Department" or "Commerce") second remand redetermination filed pursuant to the court's order in Canadian Solar Int'l Ltd. v. United States, 43 CIT ––––, ––––, 415 F. Supp. 3d 1326, 1335 (2019) (" Canadian Solar II"). See Redetermination Pursuant to Ct's Second Remand Order in [ Canadian Solar II ], Feb. 11, 2020, ECF No. 147 ("Second Remand Results").

In Canadian Solar II, the court sustained in part and remanded in part Commerce's first remand determination in the third administrative review of the antidumping duty ("ADD") order on crystalline silicon photovoltaic products, whether or not assembled into modules, from the People's Republic of China ("PRC"). See Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From the [PRC], 82 Fed. Reg. 29,033 (Dep't Commerce June 27, 2017) (final results of [ADD] admin. review and final determination of no shipments; 2014–2015) ("Final Results") and accompanying Issues and Decision Memo. for the [Final Results], A-570-979, (June 20, 2017), ECF No. 44-5 ("Final Decision Memo"). Specifically, the court ordered Commerce to further explain or reconsider its application of partial adverse facts available ("AFA")¹ to base the unreported consumption rates of Canadian Solar's² unaffiliated suppliers. Canadian Solar II, 43 CIT at ––––, 415 F. Supp. 3d at 1329, 1332–35. On second remand, Commerce, under respectful protest,³ reversed its decision to apply an adverse inference. Second Remand Results at 7. Defendant-Intervenor SolarWorld Americas, Inc. ("SolarWorld") argues that Commerce's determination is unreasonable and unlawful, when record evidence supports the application of an adverse inference and Commerce reasonably explained its reliance on partial AFA in the first remand redetermination. See [SolarWorld's] Cmts. Results Second Remand Redetermination at 3–4, Mar. 19, 2020, ECF No. 151 ("Def.-Intervenor's Br."); see also Remand Redetermination Pursuant to Ct. Remand Order in Canadian Solar Int'l Ltd. v. United States Consol. Ct. No. 17-00173, July 15, 2019, ECF No. 110 ("First Remand Results"). Defendant as well as Canadian Solar and Shanghai BYD Co., Ltd. ("Shanghai BYD") (collectively, "Plaintiffs") request the court to sustain the Second Remand Results. See Def.’s Request Sustain Results Commerce's Second Remand Redetermination at 1, Mar. 31, 2020, ECF No. 152 ("Def.’s Br."); [Canadian Solar's] Reply Cmts. Second Remand Redetermination at 1–2, Apr. 3, 2020, ECF No. 153 ("Pls.’ Br."); [Shanghai BYD's] Reply Cmts. Remand Results, Apr. 3, 2020, ECF No. 154 ("Shanghai BYD's Br.").⁴ For the reasons that follow, the court sustains Commerce's Second Remand Results.

BACKGROUND

The court presumes familiarity with the facts of this case as set out in its previous two opinions ordering remand to Commerce, and now recounts those facts relevant to the court's review of the Second Remand Results. See Canadian Solar Int'l Ltd. v. United States, 43 CIT ––––, ––––, 378 F. Supp. 3d 1292, 1298–1300 (2019) (" Canadian Solar I"); Canadian Solar II, 43 CIT at ––––, 415 F. Supp. 3d at 1329–31. Relevant here, in the Final Results of the third administrative review, Commerce determined that a number of Canadian Solar's unaffiliated suppliers of solar cells and solar modules were interested parties that failed to provide sufficient information regarding their factors of production ("FOPs").⁵ See Final Decision Memo. at 15–18. Commerce found that the suppliers did not comply with Commerce's request for information and that Canadian Solar had the ability to induce cooperation from its suppliers.⁶ Id. at 15–16. As a result, Commerce selected among facts otherwise available with an adverse inference and valued the unreported solar cell and solar cell module FOPs by using Canadian Solar's highest reported consumption rates for those solar cells and modules sold in the United States. Id. at 18. Canadian Solar commenced an action 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) (2012), challenging this determination, among other aspects of the Final Results.⁷ Summons, July 7, 2017, ECF No. 1; Compl., July 7, 2017, ECF No. 8.⁸

In Canadian Solar I, the court held that Commerce's decision to apply partial AFA against Canadian Solar was contrary to law. 43 CIT at ––––, 378 F. Supp. 3d at 1318–20. The court explained that where information is necessary to calculate a respondent's dumping margin is not available on the record, see id., Commerce applies "facts otherwise available" in place of the missing information. See id., 43 CIT at ––––, 378 F. Supp. 3d at 1316 ; see also 19 U.S.C. § 1677e(a). 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," Commerce may apply "an inference that is adverse to the interests of that party in selecting among the facts otherwise available." 19 U.S.C. § 1677e(b) ; see also Canadian Solar I, 43 CIT at ––––, 378 F. Supp. 3d at 1316. However, under certain circumstances, Commerce may incorporate an adverse inference under 19 U.S.C. § 1677e(a) in calculating a cooperative respondent's margin, if doing so will yield an accurate rate, promote cooperation, and thwart duty evasion. Mueller Comercial de Mexico S. de R.L. de C.V. v. United States, 753 F.3d 1227, 1232–36 (Fed. Cir. 2014) ; see also Canadian Solar I, 43 CIT at ––––, 378 F. Supp. 3d at 1316–18 (summarizing Mueller ). Given that Commerce relied upon 19 U.S.C. § 1677e(b) to impose an adverse inference, the court held Commerce's determination to be contrary to law. Canadian Solar I, 43 CIT at ––––, 378 F. Supp. 3d at 1318–20. The court also held that, to the extent Commerce purported to rely on 19 U.S.C. § 1677e(a) to apply partial AFA, Commerce's finding that Canadian Solar could potentially have induced its suppliers to cooperate was unsupported by substantial evidence. Id., 43 CIT at ––––, 378 F. Supp. 3d at 1320–22. As a result, the court ordered Commerce to further explain or reconsider its determination. Id., 43 CIT at ––––, 378 F. Supp. 3d at 1322.

Commerce, on remand,⁹ offered further explanation to justify its continued imposition of partial AFA. See First Remand Results at 15–29. Specifically, Commerce elaborated that it may consider an adverse inference against a non-cooperative party when choosing facts otherwise available for a cooperative respondent under 19 U.S.C. § 1677e(a) and that its use of an adverse inference against Canadian Solar fulfills policy objectives of deterring non-cooperation and duty evasion. Id. at 16–23. Commerce also explained that if Commerce did not apply partial AFA, Canadian Solar would be incentivized to conduct business with parties that did not cooperate with Commerce's investigation. Id. at 20–21. The court, however, held that Commerce failed to demonstrate, as required by Mueller, that applying an adverse inference would lead to the calculation of an accurate dumping margin and, further, that the record did not support Commerce's view that applying an adverse inference would promote the policy considerations of avoiding non-cooperation¹⁰ and duty evasion.¹¹ See Canadian Solar II, 43 CIT at ––––, 415 F. Supp. 3d at 1332–35. The court noted that Commerce did not address the accuracy concerns identified by Mueller. Id., 43 CIT at ––––, 415 F. Supp. 3d at 1334 (citing Mueller, 753 F.3d at 1232–34 ). In addition, the court noted that Commerce's cited policy objectives were unsupported by substantial evidence. See id., 43 CIT at ––––, 415 F. Supp. 3d at 1334–35. The court again remanded Commerce's determination. Id., 43 CIT at ––––, 415 F. Supp. 3d at 1335.

Commerce filed its Second Remand Results under respectful protest as it disagrees with the court's holding in Canadian Solar I that Commerce failed to comply with Mueller and that record evidence did not support Commerce's interpretation of facts concerning duty evasion and deterrence of non-cooperation. See Second Remand Results at 8. Commerce, on second remand, did not apply an adverse inference in selecting among facts otherwise available. Id. Instead, Commerce used the average consumption rates reported by Canadian Solar in employing partial facts available. Id. Commerce revised Canadian Solar's dumping margin to 3.19 percent. Id. at 10.¹²

JURISDICTION AND STANDARD OF REVIEW

This court has jurisdiction pursuant to 19 U.S.C. § 1516a(a)(2)(B)(iii) and 28 U.S.C. § 1581(c), which grant the court authority to...