Deacero S.A.P.I. de C.V. v. United States, Slip Op. 18-155

• Decision Date: 08 November 2018
• Docket Number: Slip Op. 18-155,Court No. 17-00183
• Citation: 353 F.Supp.3d 1303
• Parties: DEACERO S.A.P.I. DE C.V. and Deacero USA, Inc., Plaintiffs, v. UNITED STATES, Defendant, and Nucor Corporation, Defendant-Intervenor.
• Court: U.S. Court of International Trade

353 F.Supp.3d 1303

DEACERO S.A.P.I. DE C.V. and Deacero USA, Inc., Plaintiffs,

v. UNITED STATES, Defendant,andNucor Corporation, Defendant-Intervenor.

Slip Op. 18-155

Court No. 17-00183

United States Court of International Trade.

November 8, 2018

Rosa S. Jeong and Irwin P. Altschuler, Greenberg Traurig, LLP, of Washington, DC, argued for plaintiffs, Deacero S.A.P.I. de C.V. and Deacero USA, Inc.

Elizabeth Anne Speck, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for defendant. With her on the brief were Tara K. Hogan, Assistant Director, Jeanne E. Davidson, Director, and Chad A. Readler, Acting Assistant Attorney General. Of Counsel on the brief was Emma Thomson Hunter, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

Derick G. Holt and Daniel Brian Pickard, Wiley Rein, LLP, of Washington, DC, argued for defendant intervenor, Nucor Corporation. With them on the brief was Alan Hayden Price.

OPINION AND ORDER

Kelly, Judge:

This action is before the court on a motion for judgment on the agency record challenging various aspects of the U.S. Department of Commerce's ("Department" or "Commerce") final determination in the administrative review of the antidumping duty ("ADD") order covering carbon and certain alloy steel wire rod from Mexico. See Pls.' Mot. J. Agency R., Dec. 15, 2017, ECF No. 24; see also Carbon and Certain Alloy Steel Wire Rod From Mexico, 82 Fed. Reg. 23,190 (Dep't Commerce May 22, 2017) (final results of [ADD] administrative review and final determination of no shipments; 2014–2015) ("Final Results") and accompanying Decision Mem. for [the] Final Results of 2014/15 [ADD] Administrative Review: Carbon and Certain Alloy Steel Wire Rod from Mexico, A-201-830, (May 15, 2017), ECF No. 21-5 ("Final Decision Memo"); Carbon and Certain Alloy Steel Wire Rod From Brazil, Indonesia, Mexico, Moldova, Trinidad and Tobago, and Ukraine, 67 Fed. Reg. 65,945 (Dep't Commerce Oct. 29, 2002) (notice of [ADD] orders). Deacero S.A.P.I. de C.V., a Mexican producer and exporter of the subject merchandise and Deacero USA, Inc., an importer of the subject merchandise, commenced this action pursuant to section 516A(a)(2)(A)(i)(I) and 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(A)(i)(I) and 1516a(a)(2)(B)(iii) (2012).¹ See Summons, July 17, 2017, ECF No. 1; Compl., July 17, 2017, ECF No. 2.

Deacero S.A.P.I. de C.V. and Deacero USA, Inc., (collectively "Plaintiffs") challenge six aspects of Commerce's final determination. See Br. Supp. Pls.' Mot. J. Agency R., Dec. 18, 2017, ECF No. 26 ("Pls.' Br."). Plaintiffs challenge as not in accordance with law and unsupported by substantial evidence Commerce's decision (i) to use total facts available, and (ii) to apply an adverse inference to those facts to calculate Deacero's final dumping margin, see id. at 16–30,² and related decision to disregard Deacero's revised cost dataset, see id. at 35; (iii) to select the highest rate alleged in the 2001 petition, 40.52%, as Deacero's AFA rate and final dumping margin, see id. at 30–35; (iv) not to recalculate the general and administrative expense ratio of Deacero's U.S. affiliate, see id. at 36–37; (v) not to correct certain clerical errors made in calculating Deacero's preliminary dumping margin, see id. at 37–39; and (vi) to use zeroing, instead of the average-to-average method, to calculate Deacero's dumping margin. See id. at 39–41.³

For the reasons that follow, the court sustains the agency's determination to apply total facts available with an adverse inference ("AFA"). However, the court remands Commerce's selection of 40.52% as the AFA rate for further explanation or reconsideration consistent with this opinion.

BACKGROUND

Commerce initiated this administrative review covering the subject merchandise entered during the period of review ("POR"), October 1, 2014 through September 30, 2015. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 80 Fed. Reg. 75,657, 75,658 (Dep't Commerce Dec. 3, 2015) ("Initiation of Reviews"). Commerce's review covered respondent Deacero S.A.P.I de C.V. ("Deacero").⁴ Id.

On July 21, 2016, in response to Commerce's first supplemental questionnaire response, Deacero submitted a revised section D cost dataset. See Deacero's Resp. Suppl. Sections A–E at Exs. Supp. D-6–7, PD 50–52, bar codes 3490088-02–04 (July 21, 2016) ("Deacero's First Suppl. Resp."). On November 7, 2016, Commerce preliminarily calculated a 17.02% dumping margin for Deacero, relying on the revised cost dataset. Carbon and Certain Alloy Steel Wire Rod From Mexico, 81 Fed. Reg. 80,638, 89,639 (Dep't Commerce Nov. 16, 2016) (preliminary results of [ADD] administrative review; 2014–2015) and accompanying Decision Mem. for [the] Prelim. Results of 2014/15 [ADD] Administrative Review: Carbon and Certain Alloy Steel Wire Rod from Mexico at 12, A-201-830, PD 66, bar code 3519579-01 (Nov. 3, 2016) ("Prelim. Decision Memo"); Final Decision Memo at 22.

In the final determination, Commerce used total AFA to calculate Deacero's final dumping margin. See Final Decision Memo at 4–8, 12. Pursuant to 19 U.S.C. § 1677e(b), Commerce chose the highest margin alleged in the 2001 petition—40.52%, as Deacero's final average-dumping margin. See id. at 8–9; Final Results, 82 Fed. Reg. at 23,190. The court heard oral argument on September 28, 2018. See Oral Arg., Sept. 28, 2018, ECF No. 45.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to 19 U.S.C. § 1516a(a)(2)(B)(iii) and 28 U.S.C. § 1581(c) (2012), which grant the court authority to review actions contesting the final determination in an administrative review of an antidumping duty order. The court will uphold Commerce's determination unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance with law[.]" 19 U.S.C. § 1516a(b)(1)(B)(i).

DISCUSSION

I. Commerce's Decision to Apply Total Facts Otherwise Available

Plaintiffs challenge Commerce's decision to apply total facts otherwise available to calculate Deacero's final dumping margin. See Pls.' Br. at 16–25. Defendant argues that Commerce's determination is in accordance with law and supported by substantial evidence because Deacero withheld information, submitted untimely responses to Commerce and, as a result, significantly impeded Commerce's review. See Def.'s Resp. to Pls.' Mot. J. Agency R. at 13–26, Apr. 13, 2018, ECF No. 32 ("Def.'s Resp. Br."). For the following reasons, Commerce's decision is in accordance with law and is supported by substantial evidence.

Under certain circumstances, Commerce may use facts otherwise available. See 19 U.S.C. § 1677e(a). Commerce shall use facts otherwise available to reach its final determination when "necessary information is not available on the record," a party "withholds information that has been requested by [Commerce]," fails to provide the information timely or in the manner requested, "significantly impedes a proceeding," or provides information Commerce is unable to verify. 19 U.S.C. § 1677e(a)(1)–(2). However, prior to resorting to facts otherwise available, Commerce must explain why the information it has is insufficient and provide, where practicable, the non-complying party with an opportunity to comply. See 19 U.S.C. § 1677m(d). If a party is provided with an opportunity to comply and does so, Commerce may nevertheless "disregard all or part of the original and subsequent responses" if it determines that the information provided is not satisfactory or untimely, subject to 19 U.S.C. § 1677m(e). Id.

Pursuant to 19 U.S.C. § 1677m(e), Commerce "shall not decline to consider" information that is "necessary to the determination but does not meet all the applicable requirements," if

(1) the information is submitted by the deadline established for its submission,

(2) the information can be verified,

(3) the information is not so incomplete that it cannot serve as a reliable basis for reaching the applicable determination,

(4) the interested party has demonstrated that it acted to the best of its ability in providing the information and meeting the requirements established by [Commerce] with respect to the information, and

(5) the information can be used without undue difficulties.

19 U.S.C. § 1677m(e). Commerce's regulations do not specifically address whether an original submitter of information can correct its own mistakes and do not provide a time frame within which such corrections should be submitted. The regulations do address submissions of untimely or unsolicited questionnaire responses, stating that Commerce will "provide, to the extent practicable, written notice stating the reasons for rejection [of untimely or unsolicited material]." 19 C.F.R. § 351.302(d)(1) (2015).⁵ Commerce has the discretion to decide whether to accept corrective information on a case-by-case basis. See Timken U.S. Corp. v. United States, 434 F.3d 1345, 1353 (Fed. Cir. 2006). In reaching its decision Commerce should balance "the desire for accuracy ... with the need for finality at the final results stage." Id. The corrections submitted may address errors of a clerical, substantive, or methodological nature. See id.

In the final determination, Commerce applied total facts otherwise available, explaining that Deacero impeded Commerce's review when it made changes to its cost dataset, misrepresented the effects of those changes, and did not provide supporting record evidence to explain the changes. See Final Decision Memo at 4–8 (relying on 19 U.S.C. § 1677e(a)(2)(B) and (C) as the basis for its determination). Commerce contends that as a result of Deacero's revisions, the costs associated with production of a billet control-number ("CONNUM") that accounts for a large portion of Deacero's sales to the United States decreased and, for the first time, revealed that...