Ta Chen Stainless Steel Pipe, Inc. v. U.S.

• Decision Date: 01 August 2002
• Docket Number: No. 01-1048.,01-1048.
• Citation: 298 F.3d 1330
• Parties: TA CHEN STAINLESS STEEL PIPE, INC., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1330

298 F.3d 1330

TA CHEN STAINLESS STEEL PIPE, INC., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.

No. 01-1048.

United States Court of Appeals, Federal Circuit.

August 1, 2002.

COPYRIGHT MATERIAL OMITTED

Peter J. Koenig, Miller & Chevalier, of Washington, D.C., argued for plaintiff-appellant. With him on the brief were Joel Davidow, and Kristen S. Smith.

Mark L. Josephs, Trial Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, Washington, D.C., argued for defendant-appellee. With him on the brief were Stuart E. Schiffer, Acting Assistant Attorney General, David M. Cohen, Director, and Velta A. Melnbrencis, Assistant Director.

Before MAYER, Chief Judge, GAJARSA and LINN, Circuit Judges.

LINN, Circuit Judge.

Ta Chen Stainless Steel Pipe, Ltd. ("Ta Chen") appeals a judgment of the United States Court of International Trade affirming a United States Department of Commerce ("Commerce") remand determination applying partial adverse facts available to certain Ta Chen sales of welded stainless steel pipe ("steel pipe") and setting the import duty at the highest available dumping margin. Ta Chen Stainless Steel Pipe, Inc. v. United States, No. 97-08-01344, 2000 WL 1225799 (CIT Aug. 25, 2000) ("Ta Chen II"). Because Commerce's decision is supported by substantial evidence and is otherwise in accordance with the law, we affirm.

BACKGROUND

Ta Chen is a Taiwanese producer and exporter of steel pipe. Through August 1994, Ta Chen sold steel pipe through a U.S. distributor, Sun Stainless, Inc. ("Sun"). From September 1993 to July 1995, Sun was owned by Frank McClane, a former minority shareholder of Ta Chen, and managed by Ken Mayes, a former consultant to Ta Chen. Ta Chen had custody of Sun's signature stamp as well as unlimited access to Sun's accounts receivable, accounts payable, and inventory and pricing information. Ta Chen also participated in negotiations of Sun's sales of steel pipe. Ta Chen, however, had no equity ownership in Sun. On July 3, 1995, McClane sold 80% of Sun's stock to Picol International ("Picol"), a foreign corporation, and the remaining 20% to Mr. Masaru Kimura, thereby fully divesting himself of ownership.

In 1992, certain U.S. producers of steel pipe ("petitioners") filed an antidumping petition with Commerce alleging that steel pipe imported from Taiwan was being sold domestically at a lower price than it was being sold under similar conditions in Taiwan. On January 18, 1994, Commerce initiated an administrative review of certain steel pipe imported from Taiwan covering a period from 1992 to 1993. Initiation of Antidumping and Countervailing Duty Administrative Reviews, 59 Fed. Reg. 2593 (Dep't Commerce Jan. 18, 1994). On January 13, 1995, Commerce initiated a second review covering a period from 1993 to 1994. Initiation of Antidumping and Countervailing Duty Administrative Reviews, 60 Fed.Reg. 3192 (Dep't Commerce Jan. 13, 1995). On February 1, 1996, Commerce initiated a third review covering a period from December 1, 1994, through November 30, 1995. Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 61 Fed.Reg. 3670 (Dep't Commerce Feb. 1, 1996). The three reviews were conducted concurrently, and preliminary determinations for all three were published during the first half of 1997. See Certain Welded Stainless Steel Pipe from Taiwan; Preliminary Results of Antidumping Duty Administrative Reviews, 62 Fed.Reg. 26,776 (Dep't Commerce May 15, 1997) ("Combined First and Second Review Preliminary Results"); Certain Welded Stainless Steel Pipe from Taiwan; Preliminary Results of Administrative Review, 62 Fed.Reg. 1435 (Dep't Commerce Jan. 10, 1997) ("Third Review Preliminary Results"). The third review is the subject of this appeal.

During the first review, petitioners called Commerce's attention to Ta Chen's potential affiliation with Sun and certain other parties under the then existing Tariff Act. See Certain Welded Stainless Steel Pipe from Taiwan; Final Results of Administrative Review, 64 Fed.Reg. 33,243, 33,244 (Dep't Commerce June 22, 1999) ("First and Second Review Final Results"); 19 U.S.C. § 1677(13) (1988). At that time, Ta Chen denied the allegations of affiliation and provided no information concerning its relationship with Sun. Ta Chen later argued before Commerce that it was not affiliated with Sun during the period of review because under the law at the time, foreign exporters were "affiliated" with their U.S. customers only if the exporter owned at least 5% of the customer. First and Second Review Final Results, 64 Fed.Reg. at 33244-45; see also 19 U.S.C. § 1677(13) (1988) (repealed by Pub.L. No. 103-465, Title II § 222(i)(2), Dec. 8, 1994, 108 Stat. 4876). Petitioners renewed their allegations in a submission filed with Commerce on July 12, 1995, and presented additional information regarding Ta Chen's potential affiliation with Sun. First and Second Review Final Results, 64 Fed.Reg. at 33,244-45. Ta Chen again denied the allegations. Id.

Effective January 1, 1995, Congress modified U.S. trade law and broadened the definition of "affiliated persons." See Uruguay Round Agreements Act ("URAA"), Pub.L. No. 103-465, 108 Stat. 4809 (1994); compare 19 U.S.C. § 1677(33) (2000), with 19 U.S.C. § 1677(13) (1988). Under the new definition, if an exporter has operational control over its U.S. customer, the exporter is affiliated regardless of ownership. See 19 U.S.C. § 1677(33). The third antidumping review of Ta Chen was initiated under this broadened standard. As part of the third review, Commerce issued a general questionnaire to Ta Chen concerning affiliated importers, giving Ta Chen notice of the broader definition of affiliated parties. Ta Chen's response to the questionnaire, however, did not include information about Sun. First and Second Review Final Results, 64 Fed.Reg. at 33,244. Commerce then issued a supplemental questionnaire to Ta Chen specifically requesting information regarding its affiliation with Sun. In response, Ta Chen provided some of the requested information Sun's 1995 financial statement, for example but did not provide any information regarding sales data. Id.; Third Review Preliminary Results, 62 Fed.Reg. at 1436.

In reviewing the information provided, Commerce determined that Ta Chen was affiliated with Sun during the third review period. Certain Welded Stainless Steel Pipe from Taiwan; Final Results of Administrative Review, 62 Fed.Reg. 37,543, 37,544 (Dep't Commerce July 14, 1997) ("Third Review Final Results"); see also First and Second Review Final Results, 64 Fed.Reg. at 33,244. Commerce further determined that Ta Chen had failed to act to the best of its ability to provide information on Sun's U.S. sales and consequently would be subject to the highest dumping margin from the facts otherwise available. Third Review Final Results, 62 Fed.Reg. at 37,544. Ta Chen appealed to the Court of International Trade. Ta Chen Stainless Steel Pipe, Ltd. v. United States, 23 C.I.T. 804 (Ct. Int'l Trade 1999) ("Ta Chen I"). The court affirmed the determination that Ta Chen and Sun were affiliated but reversed and remanded the determination to apply adverse facts available. Id. at 818, 821. The court found that Commerce violated 19 U.S.C. § 1677m(d) by not providing adequate notice to Ta Chen that it was required to furnish Sun's U.S. sales data. Id. at 821. The court remanded for further review by Commerce after Ta Chen had been given an adequate opportunity to provide Sun's sales data. Id.

During the remand review, Commerce issued another questionnaire seeking Sun's sales data. Ta Chen forwarded the questionnaire to Sun, asked Sun to complete it, and offered "any and all assistance" in answering it. On November 25, 1999, Sun's counsel notified Ta Chen that Sun would not cooperate with the Commerce inquiry because it had been closed since 1996 and had no operations in the United States, making a response too burdensome and costly. Sun's counsel stated, however, that he would urge Sun to reconsider. After Ta Chen successfully sought two extensions of time to submit the requested information to Commerce, Sun's counsel notified Ta Chen that Sun still would not cooperate with the request. The following day Ta Chen informed Commerce that further attempts to retrieve the Sun data would be "futile."

Upon remand, Commerce found that "Ta Chen has withheld or failed to provide the information requested regarding Sun's U.S. sales despite repeated notification of the deficiency...." Certain Welded Stainless Steel Pipe from Taiwan, Final Results of Redetermination Pursuant to Court Remand, No. 97-08-01344, slip op. 99-117 at 3 (Dep't Commerce Feb. 25, 2000) ("Remand Results"). Commerce further found that Ta Chen "failed to act to the best of its ability in responding to the Department's request for information regarding Sun's U.S. sales." Id., slip op. at 3-4. Without the requested sales data and pursuant to 19 U.S.C. § 1677e(b), Commerce applied facts otherwise available and used an adverse inference to apply the highest available dumping margin. Id., slip op. at 4. Commerce calculated that margin at 30.95%. Id., slip op. at 13.

On appeal, the Court of International Trade affirmed the Commerce remand determination. The court found substantial evidence that Ta Chen had not complied to the best of its ability with Commerce's request for information on Sun's sales. Ta Chen II, slip op. at 13. The court noted that while Ta Chen may have had reason to argue it was not affiliated with Sun under the changing definitions of "affiliated party," it was nevertheless on notice as early as July 1994 that its relationship with Sun was at issue and that Sun's sales might be later construed as constructed export price sales. Id., slip op. at 9-10. The court, therefore, found that Ta Chen "could have, and should have, preserved its information on Sun's sales in order to...