Dillinger France S.A. v. United StatesPublic version: 08/15/2023.
This text of 651 F. Supp. 3d 1294 (Dillinger France S.A. v. United StatesPublic version: 08/15/2023.) is published on Counsel Stack Legal Research, covering United States Court of International Trade primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
Slip Op. 23-
UNITED STATES COURT OF INTERNATIONAL TRADE
DILLINGER FRANCE S.A., Plaintiff, v. UNITED STATES, Before: Judge Gary S. Katzmann Court No. 17-00159 Defendant, and PUBLIC VERSION
NUCOR CORPORATION and SSAB ENTERPRISES LLC, Defendant-Intervenors.
OPINION
[The court sustains Commerce’s Third Remand Results.]
Dated: August 15, 2023
Marc E. Montalbine, DeKieffer & Horgan PLCC, of Washington, D.C., argued for Plaintiff Dillinger France S.A. With him on the briefs were Gregory S. Menegaz, Alexandra H. Salzman, Merisa A. Horgan, and Alexandra H. Salzman.
Kara M. Westercamp, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for Defendant United States. With her on the brief were Brian M. Boynton, Principal Deputy Assistant Attorney General, Patricia M. McCarthy, Director, and Tara K. Hogan, Assistant Director. Of counsel on the brief was Ayat Mujais, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C.
Stephanie M. Bell, Wiley Rein, LLP, of Washington, D.C., argued for Defendant-Intervenor Nucor Corporation. With her on the brief were Alan H. Price and Christopher B. Weld.
Roger B. Schagrin, Schagrin Associates, of Washington D.C., for Defendant-Intervenor SSAB Enterprises LLC.
Katzmann, Judge: The court returns to the less-than-fair-value (“LTFV”) investigation of
certain carbon and alloy steel cut-to-length plate from France to consider the U.S. Department of Court No. 17-00159 Page 2 PUBLIC VERSION
Commerce (“Commerce”)’s latest remand results. See Certain Carbon and Alloy Steel Cut-to-
Length Plate from Austria, Belgium, France, the Federal Republic of Germany, Italy, Japan, the
Republic of Korea, and Taiwan: Amended Final Affirmative Antidumping Determinations for
France, the Federal Republic of Germany, the Republic of Korea and Taiwan, 82 Fed. Reg. 24096
(Dep’t Com. May 25, 2017), P.R. 456 (“Am. Final Determination”); see also Final Results of
Redetermination Pursuant to Court Remand (Dep’t Com. Nov. 15, 2022), Nov. 16, 2022, ECF No.
120-1 (“Third Remand Results”). The sole issue is whether -- following the Federal Circuit’s
ruling in Dillinger France S.A. v. United States, 981 F.3d 1318 (Fed. Cir. 2020) (“Dillinger III”) -
- Commerce permissibly relied on Plaintiff Dillinger France S.A. (“Dillinger”)’s normal books
and records to supply missing cost information in calculating antidumping duties.
For the reasons outlined below, the court sustains Commerce’s Third Remand Results.
BACKGROUND
While the court presumes familiarity with Dillinger France S.A. v. United States, 42 CIT
__, 350 F. Supp. 3d 1349 (2018) (“Dillinger I”), Dillinger France S.A. v. United States, 43 CIT
__, 393 F. Supp. 3d 1225 (2019) (“Dillinger II”), Dillinger III, 981 F.3d 1318, and Dillinger France
S.A. v. United States, 46 CIT __, 589 F. Supp. 3d 1252 (2022) (“Dillinger IV”), for ease of
reference, the court sets out the relevant legal, factual, and procedural background below.
I. Legal Background
A. Normal Value
When a foreign firm sells a product for less than fair value in the United States, such a
product is deemed to be “dumped.” See Saha Thai Steel Pipe (Pub.) Co. v. United States, 635
F.3d 1335, 1338 (Fed. Cir. 2011). Commerce identifies “dumping” by assessing whether an
investigated product (“subject merchandise”)’s export price -- as measured by U.S. sales price -- Court No. 17-00159 Page 3 PUBLIC VERSION
is lower than the product’s normal value, which is typically measured by the price of the product
in the home market. See Maverick Tube Corp. v. Toscelik Profil, 861 F.3d 1269, 1271 (Fed. Cir.
2017); see also 19 U.S.C. § 1677b(a)(1)(B)(i). Where Commerce identifies dumping, 1 the agency
imposes antidumping duties on the foreign merchandise proportional to the amount by which
normal value exceeds the export price. See 19 U.S.C. § 1673; id. § 1677(35)(A).
To complete these assessments and calculations, Commerce must establish the normal
value of the investigated foreign merchandise, which again, generally requires establishing the
home market sales price. In determining home market sales price, “Commerce may disregard sales
made at less than the manufacturer’s cost of production.” Saha Thai, 635 F.3d at 1338 (citing 19
U.S.C. § 1677b(b)(1)). “Cost of production” is defined as
[A]n amount equal to the sum of—
(A) the cost of materials and of fabrication or other processing of any kind employed in producing the foreign like product, during a period which would ordinarily permit the production of that foreign like product in the ordinary course of business;
(B) an amount for selling, general, and administrative expenses based on actual data pertaining to production and sales of the foreign like product by the exporter in question; and
(C) the cost of all containers and coverings of whatever nature, and all other expenses incidental to placing the foreign like product in condition packed ready for shipment.
19 U.S.C. § 1677b(b)(3).
“If no sales in the exporting country remain after disregarding sales below [cost of
production], then Commerce will alternatively base [normal value] on the constructed value . . . of
1 And where the United States International Trade Commission makes the additional requisite finding -- not at issue in the case at bar -- that the sale of such merchandise below fair value is materially injuring, threatening, or impeding the establishment of an industry in the United States. See Diamond Sawblades Mfrs. Coal. v. United States, 866 F.3d 1304, 1306 (Fed. Cir. 2017). Court No. 17-00159 Page 4 PUBLIC VERSION
the merchandise.” Saha Thai, 635 F.3d at 1338. The Federal Circuit has explained that cost of
production and constructed value “are closely related.” Id. Constructed value “includes the same
or similar elements as [cost of production]” -- namely, “(1) the cost of manufacture; (2) ‘selling,
general, and administrative expenses;’ and (3) packaging expenses” -- “but with the additional
component of profit.” Id. (quoting 19 U.S.C. § 1677b(b)(3), (e)).
“The statute further explains that such ‘[c]osts shall normally be calculated based on the
records of the exporter or producer of the merchandise, if such records are kept in accordance with
the generally accepted accounting principles [GAAP] of the exporting country . . . and reasonably
reflect the costs associated with the production and sale of the merchandise.’” Id. at 1341–42
(alterations in original) (quoting 19 U.S.C. § 1677b(f)(1)(A)). The Federal Circuit has interpreted
“the legislative history of section 1677b(f) . . . [and] its plain meaning[] [to] indicate[] Congress
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Slip Op. 23-
UNITED STATES COURT OF INTERNATIONAL TRADE
DILLINGER FRANCE S.A., Plaintiff, v. UNITED STATES, Before: Judge Gary S. Katzmann Court No. 17-00159 Defendant, and PUBLIC VERSION
NUCOR CORPORATION and SSAB ENTERPRISES LLC, Defendant-Intervenors.
OPINION
[The court sustains Commerce’s Third Remand Results.]
Dated: August 15, 2023
Marc E. Montalbine, DeKieffer & Horgan PLCC, of Washington, D.C., argued for Plaintiff Dillinger France S.A. With him on the briefs were Gregory S. Menegaz, Alexandra H. Salzman, Merisa A. Horgan, and Alexandra H. Salzman.
Kara M. Westercamp, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for Defendant United States. With her on the brief were Brian M. Boynton, Principal Deputy Assistant Attorney General, Patricia M. McCarthy, Director, and Tara K. Hogan, Assistant Director. Of counsel on the brief was Ayat Mujais, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C.
Stephanie M. Bell, Wiley Rein, LLP, of Washington, D.C., argued for Defendant-Intervenor Nucor Corporation. With her on the brief were Alan H. Price and Christopher B. Weld.
Roger B. Schagrin, Schagrin Associates, of Washington D.C., for Defendant-Intervenor SSAB Enterprises LLC.
Katzmann, Judge: The court returns to the less-than-fair-value (“LTFV”) investigation of
certain carbon and alloy steel cut-to-length plate from France to consider the U.S. Department of Court No. 17-00159 Page 2 PUBLIC VERSION
Commerce (“Commerce”)’s latest remand results. See Certain Carbon and Alloy Steel Cut-to-
Length Plate from Austria, Belgium, France, the Federal Republic of Germany, Italy, Japan, the
Republic of Korea, and Taiwan: Amended Final Affirmative Antidumping Determinations for
France, the Federal Republic of Germany, the Republic of Korea and Taiwan, 82 Fed. Reg. 24096
(Dep’t Com. May 25, 2017), P.R. 456 (“Am. Final Determination”); see also Final Results of
Redetermination Pursuant to Court Remand (Dep’t Com. Nov. 15, 2022), Nov. 16, 2022, ECF No.
120-1 (“Third Remand Results”). The sole issue is whether -- following the Federal Circuit’s
ruling in Dillinger France S.A. v. United States, 981 F.3d 1318 (Fed. Cir. 2020) (“Dillinger III”) -
- Commerce permissibly relied on Plaintiff Dillinger France S.A. (“Dillinger”)’s normal books
and records to supply missing cost information in calculating antidumping duties.
For the reasons outlined below, the court sustains Commerce’s Third Remand Results.
BACKGROUND
While the court presumes familiarity with Dillinger France S.A. v. United States, 42 CIT
__, 350 F. Supp. 3d 1349 (2018) (“Dillinger I”), Dillinger France S.A. v. United States, 43 CIT
__, 393 F. Supp. 3d 1225 (2019) (“Dillinger II”), Dillinger III, 981 F.3d 1318, and Dillinger France
S.A. v. United States, 46 CIT __, 589 F. Supp. 3d 1252 (2022) (“Dillinger IV”), for ease of
reference, the court sets out the relevant legal, factual, and procedural background below.
I. Legal Background
A. Normal Value
When a foreign firm sells a product for less than fair value in the United States, such a
product is deemed to be “dumped.” See Saha Thai Steel Pipe (Pub.) Co. v. United States, 635
F.3d 1335, 1338 (Fed. Cir. 2011). Commerce identifies “dumping” by assessing whether an
investigated product (“subject merchandise”)’s export price -- as measured by U.S. sales price -- Court No. 17-00159 Page 3 PUBLIC VERSION
is lower than the product’s normal value, which is typically measured by the price of the product
in the home market. See Maverick Tube Corp. v. Toscelik Profil, 861 F.3d 1269, 1271 (Fed. Cir.
2017); see also 19 U.S.C. § 1677b(a)(1)(B)(i). Where Commerce identifies dumping, 1 the agency
imposes antidumping duties on the foreign merchandise proportional to the amount by which
normal value exceeds the export price. See 19 U.S.C. § 1673; id. § 1677(35)(A).
To complete these assessments and calculations, Commerce must establish the normal
value of the investigated foreign merchandise, which again, generally requires establishing the
home market sales price. In determining home market sales price, “Commerce may disregard sales
made at less than the manufacturer’s cost of production.” Saha Thai, 635 F.3d at 1338 (citing 19
U.S.C. § 1677b(b)(1)). “Cost of production” is defined as
[A]n amount equal to the sum of—
(A) the cost of materials and of fabrication or other processing of any kind employed in producing the foreign like product, during a period which would ordinarily permit the production of that foreign like product in the ordinary course of business;
(B) an amount for selling, general, and administrative expenses based on actual data pertaining to production and sales of the foreign like product by the exporter in question; and
(C) the cost of all containers and coverings of whatever nature, and all other expenses incidental to placing the foreign like product in condition packed ready for shipment.
19 U.S.C. § 1677b(b)(3).
“If no sales in the exporting country remain after disregarding sales below [cost of
production], then Commerce will alternatively base [normal value] on the constructed value . . . of
1 And where the United States International Trade Commission makes the additional requisite finding -- not at issue in the case at bar -- that the sale of such merchandise below fair value is materially injuring, threatening, or impeding the establishment of an industry in the United States. See Diamond Sawblades Mfrs. Coal. v. United States, 866 F.3d 1304, 1306 (Fed. Cir. 2017). Court No. 17-00159 Page 4 PUBLIC VERSION
the merchandise.” Saha Thai, 635 F.3d at 1338. The Federal Circuit has explained that cost of
production and constructed value “are closely related.” Id. Constructed value “includes the same
or similar elements as [cost of production]” -- namely, “(1) the cost of manufacture; (2) ‘selling,
general, and administrative expenses;’ and (3) packaging expenses” -- “but with the additional
component of profit.” Id. (quoting 19 U.S.C. § 1677b(b)(3), (e)).
“The statute further explains that such ‘[c]osts shall normally be calculated based on the
records of the exporter or producer of the merchandise, if such records are kept in accordance with
the generally accepted accounting principles [GAAP] of the exporting country . . . and reasonably
reflect the costs associated with the production and sale of the merchandise.’” Id. at 1341–42
(alterations in original) (quoting 19 U.S.C. § 1677b(f)(1)(A)). The Federal Circuit has interpreted
“the legislative history of section 1677b(f) . . . [and] its plain meaning[] [to] indicate[] Congress
intended that Commerce rely on a producer’s or exporter’s books and records if they . . . reasonably
reflect the costs of production.” Dillinger III, 981 F.3d at 1323.
B. Facts Otherwise Available & Adverse Inferences
If an interested party “withholds information” or otherwise does not comply with
Commerce’s requests, see 19 U.S.C. § 1677e(a)(2), or if “necessary information is not available
on the record,” id. § 1677e(a)(1), Commerce “shall . . . use facts otherwise available” to fill
informational gaps and render determinations, id. § 1677e(a). The Federal Circuit has interpreted
this provision to mean that “[t]he mere failure of a respondent to furnish requested information --
for any reason -- requires Commerce to resort to other sources of information to complete the
factual record on which it makes its determination.” Nippon Steel Corp. v. United States, 337 F.3d
1373, 1381 (Fed. Cir. 2003) (“The focus of [1677e(a)(1)] is respondent’s failure to provide
information. The reason for the failure is of no moment.” (emphasis in original)). Court No. 17-00159 Page 5 PUBLIC VERSION
Moreover, where Commerce makes a “valid decision to use facts otherwise available,”
Shandong Huarong Mach. Co. v. United States, 30 CIT 1269, 1301, 435 F. Supp. 2d 1261, 1289
(2006), Commerce may then make the additional decision to “use an inference that is adverse to
the interests of [a respondent] in selecting from among the facts otherwise available” provided that
Commerce supportably finds the respondent “has failed to cooperate by not acting to the best of
its ability,” Nippon Steel, 337 F.3d at 1380–81 (alteration in original) (quoting 19 U.S.C.
§ 1677e(b)(1)).
II. Factual Background
On May 25, 2017, Commerce imposed an antidumping margin of 6.15 percent on
Dillinger’s cut-to-length plate products. See Certain Carbon and Alloy Steel Cut-to-Length Plate
from France: Final Determination of Sales at Less than Fair Value, 82 Fed. Reg. 16363 (Dep’t
Com. Apr. 4, 2017), P.R. 451; Mem. from J. Maeder to G. Taverman, re: Issues and Decision
Memorandum for the Final Affirmative Antidumping Duty Determination and Determination of
Sales at Less Than Fair Value (Dep’t Com. Mar. 29, 2017), P.R. 445 (“IDM”); see also Am. Final
Determination, 82 Fed. Reg. at 24098. Dillinger sells plate designated as prime and non-prime,
with non-prime plate comprising plates that are rejected for failing to meet the standards for prime
plate. See Dillinger III, 981 F.3d at 1321. Such non-prime products are an inevitable consequence
of the production process of prime products. Because non-prime plate are sold without
certification as to grade, type, or chemistry and cannot be used in applications that require such
certifications, non-prime plate attract a lower market value than prime plate. See IDM at 58–60.
In its normal books and records, Dillinger values non-prime products at their likely selling
price -- which comes out to [[ ]] Euros/ton. See IDM at 59; see also Mem. from R.B. Greger
to N.M. Harper, re: Cost of Production and Constructed Value Calculation Adjustments for the Court No. 17-00159 Page 6 PUBLIC VERSION
Final Determination (Dep’t Com. Mar. 29, 2017), P.R. 447, C.R. 701; Mem. from R.B. Greger to
N.M. Halper, re: Cost of Production and Constructed Value Calculation Adjustments for the
Preliminary Determination at attach. 2 (Dep’t Com. Nov. 4, 2016), P.R. 366, C.R. 405. However,
when responding to Commerce’s questionnaires in the LTFV investigation, Dillinger reported its
costs of production for non-prime plate as the average cost of production for all prime plate sold
during the period of investigation (“POI”) of [[ ]] Euros/ton -- a figure higher than the likely
selling price. See IDM at 59; see also Dillinger Second Supplemental Section D Response Part II
at app. SD-24 (Sept. 28, 2016), P.R. 289, C.R. 338 & 342.
For its part, when calculating normal value, Commerce adjusted the reported costs for non-
prime products back to the value recorded in Dillinger’s normal books and records -- i.e., the lower
estimated sales price of [[ ]] Euros/ton -- and then allocated the difference between the
reported and adjusted figure for non-prime products to the cost of production for prime products.
IDM at 59.
III. Procedural Background
A. The Federal Circuit’s Remand
Dillinger challenged several aspects of Commerce’s determination before this court in
Dillinger I, including the agency’s reliance on Dillinger’s normal books and records to reallocate
production costs between prime and non-prime plate in calculating normal value. See 350 F. Supp.
3d at 1374–77. This court sustained Commerce’s cost adjustments. See id. However, the Federal
Circuit disagreed, ruling in Dillinger III that Commerce’s determination was erroneous because
Dillinger’s normal books and records reflect the estimated selling price of non-prime plate rather
than costs of production, and thus failed to satisfy the requirement of § 1677b(f) that an exporter’s
records “reasonably reflect the costs associated with the production and sale of the merchandise.” Court No. 17-00159 Page 7 PUBLIC VERSION
See 981 F.3d at 1321–24 (discussing 19 U.S.C. § 1677b(f)(1)(A)). 2 Accordingly, the Federal
Circuit remanded to Commerce “to determine the actual costs of prime and non-prime products.”
Id. at 1324.
B. Reopening the Administrative Record
To comply with the directive of the Federal Circuit “to determine the actual costs of prime
and non-prime products,” id., on remand, Commerce reopened the administrative record and sent
Dillinger a supplemental questionnaire requesting information on the physical characteristics and
corresponding actual product-specific -- also known as CONNUM 3-specific -- production costs of
its non-prime plates. See Letter from T.A. Slaughter to Dillinger, re: Remand Redetermination at
3–5 (Dep’t Com. Mar. 17, 2021), P.R.R. 9.4 Dillinger responded to the agency that it was unable
to identify all of the physical characteristics of its non-prime products; as such, Dillinger
2 As the Federal Circuit noted in Dillinger III:
It is unclear . . . whether Commerce’s calculation of normal value involved determining constructed value (determining the sum of “the cost of materials and fabrication or other processing of any kind employed in producing the merchandise” and other factors under 19 U.S.C. § 1677b(e)), or involved determining cost of production so as to exclude home market sales made below cost of production under § 1677b(b)(3). In either event, § 1677b(f) applies . . . .
981 F.3d at 1321 n.1. Recall that § 1677b(f)(1)(A) instructs: Costs shall normally be calculated based on the records of the exporter or producer of the merchandise, if such records are kept in accordance with the generally accepted accounting principles of the exporting country (or the producing country, where appropriate) and reasonably reflect the costs associated with the production and sale of the merchandise.
19 U.S.C. § 1677b(f)(1)(A). 3 In LTFV investigations, products with identical physical characteristics are categorized by the same control number, or “CONNUM.” 4 P.R.R. refers to the public Remand Redetermination record; C.R.R. refers to the confidential Remand Redetermination record. Court No. 17-00159 Page 8 PUBLIC VERSION
resubmitted production costs for its non-prime products derived from the average cost of producing
all prime plate sold during the POI, namely the [[ ]] Euros/ton figure. See Letter from
Dillinger to G.M. Raimondo, re: Supplemental Questionnaire Response at 7–13 (June 23, 2021),
P.R.R. 16, C.R.R. 5.
Commerce determined that Dillinger’s response was insufficient to calculate actual costs
of production -- as required by the Federal Circuit in Dillinger III -- and that it was, thus, necessary
to invoke facts otherwise available under § 1677e(a)(1) 5 in rendering the remand results. See Final
Results of Redetermination Pursuant to Court Remand at 6–7 (Dep’t Com. Aug. 24, 2021), Aug.
25, 2021, ECF No. 85-1 (“Second Remand Results”). Because Commerce determined that “not
knowing the actual cost of producing the non-prime merchandise directly impacts the amount of
costs assigned to the production of the prime products,” the agency found that cost information for
both non-prime and prime products was missing. Id. at 6. Commerce utilized Dillinger’s normal
books and records -- the data source to which the Federal Circuit had previously objected -- as
facts otherwise available to fill the informational gap. Id. As a result, Commerce continued to
assess a weighted-average dumping margin of 6.15 percent on Dillinger’s subject merchandise in
the Second Remand Results. Id. at 22.
5 Recall that 19 U.S.C. § 1677e(a)(1) instructs in relevant part:
(a) In general
If . . . necessary information is not available on the record . . . , the administering authority and the Commission shall, subject to section [1677m](d) of this title, use the facts otherwise available in reaching the applicable determination under this [sub]title.
19 U.S.C. § 1677e(a)(1). Court No. 17-00159 Page 9 PUBLIC VERSION
C. This Court’s Further Remand
Upon review of the Second Remand Results in Dillinger IV, this court first sustained
Commerce’s general invocation of facts otherwise available to supply the costs of production for
both non-prime and prime products, but remanded for further explanation Commerce’s particular
selection of Dillinger’s normal books and records as the facts otherwise available.
1. General Reliance on Facts Otherwise Available
Concerning the former ruling, this court held that where Dillinger knows the total costs it
incurred over the POI to produce all of its plate products, but does not know the actual division of
these total costs among prime and non-prime products, substantial evidence justified Commerce’s
conclusion that it was necessary to rely on facts otherwise available to supply the costs of
production for both non-prime and prime plate. 589 F. Supp. 3d at 1260. The court noted that, as
Plaintiff itself acknowledges, Dillinger tracks only actual total costs of producing two different
types of plate -- line-pipe plate and regular plate -- which when added together equal the actual
total costs of producing all plate over the period. Id. at 1257. However, prime and non-prime
plate are produced within each of the line-pipe and regular groups, and Dillinger does not track
the costs of prime versus non-prime products within these subgroups. Id.
Dillinger, nevertheless, maintained before this court that there was no missing information
with respect to the costs of prime plate, such that any adjustments Commerce made on the basis
of facts otherwise available must be limited to non-prime plate and cannot alter the properly
reported costs of prime plate. Id. at 1256–57. But as Plaintiff itself explained, in its submissions
to Commerce, Dillinger allocated costs between prime and non-prime products based on a
“percentage yield” approach. See id. at 1258 n.6. This means that where [[ ]] percent of the
total quantity of regular plate produced during the POI was non-prime, Dillinger allocated Court No. 17-00159 Page 10 PUBLIC VERSION
[[ ]] percent of the actual total costs of producing all regular plate to non-prime plate (and
the remainder to prime); and where [[ ]] percent of the total quantity of line-pipe plate
produced during the POI was non-prime, Dillinger allocated [[ ]] percent of the actual total
costs of producing all line-pipe plate to non-prime plate (and the remainder to prime). Id. at 1257.
At oral argument on Commerce’s Second Remand Results, this court asked the parties to
consider the below Excel spreadsheet -- in which the court assumed for hypothetical purposes that
60 percent of the plate Dillinger produced during the POI was prime and 40 percent was non-prime
-- to inform the court’s understanding that costs calculated for prime and non-prime plate under
Plaintiff’s “percentage yield” approach could potentially differ from those calculated under an
“actual cost” approach:
Plate No. Prime vs. Non- Cost Prime 1 Prime $2.00 2 Prime $4.00 3 Prime $6.00 4 Prime $8.00 5 Prime $10.00 6 Prime $12.00 7 Non-Prime $2.00 8 Non-Prime $4.00 9 Non-Prime $6.00 10 Non-Prime $8.00
Total Cost $62.00
Non-Prime Prime Costs Total Cost Costs Percentage Yield Approach (Assigning 60% of total costs ($62) to prime plate and assigning 40% of $24.80 $37.20 $62.00 total costs ($62) to non-prime plate) Actual Cost Approach (Adding together actual costs of producing non-prime plate and $20.00 $42.00 $62.00 adding together actual costs of producing prime plate) Court No. 17-00159 Page 11 PUBLIC VERSION
Id. at 1258 n.6. While it is undisputed that Dillinger does not track costs on the plate-specific basis
necessary to complete the “actual cost” approach, 6 the above hypothetical illuminates that not
knowing the actual cost of producing the non-prime merchandise directly impacts the amount of
costs allocated to the production of the prime products. Relying on the Federal Circuit’s instruction
that “[t]he focus of [§ 1677e(a)(1)] is [a] respondent’s failure to provide information,” such that
“[t]he mere failure of a respondent to furnish requested information -- for any reason -- requires
Commerce to resort to other sources of information to complete the factual record on which it
makes its determination,” Nippon Steel, 337 F.3d at 1381 (emphasis in original), this court
sustained Commerce’s general invocation of facts otherwise available to supply the costs of
production for both non-prime and prime products. See 589 F. Supp. 3d at 1257. 7,8
6 Though, as this court noted, parties disagree as to whether Dillinger in fact could have supplied such plate-specific cost information. See, e.g., id. at 1260 n.10 (“[I]f Dillinger had wanted to present evidence of the specific non-prime products produced, it could have relied on production reports or finished goods inventory excerpts to show which production runs resulted in the production of non-prime plates. Dillinger chose not to do so.” (quoting Second Remand Results at 19)); see also Third Remand Results at 13–14. 7 While acknowledging “the doctrine of law of the case generally bars retrial of issues that were previously resolved,” Pl.’s Resp. to Ct.’s Apr. 11, 2023 Qs. for Oral Arg at 6, Apr. 26, 2023, ECF No. 143 (“Pl.’s Oral Arg. Subm.”) (citing Intergraph Corp. v. Intel Corp., 253 F.3d 695, 697 (Fed. Cir. 2001)), Dillinger continues to argue “[t]he informational gap to be filled in this current situation is [only] the actual costs of production of non-prime products,” id. As support, Dillinger maintains that the court’s above hypothetical does not “accurately portray how . . . actual costs were allocated,” id., and urges the court to rely on the following hypothetical (which uses generalized, non-proprietary figures from Dillinger’s questionnaire submissions):
Step 1: Actual Production Costs Product Group Total Actual COP Regular Plate (all choices) € 205,000,000 a /LQHဨSLSH3ODWH DOOFKRLFHV € 90,000,000 b Total € 295,000,000 c Court No. 17-00159 Page 12 PUBLIC VERSION
Step 2: Standard Production Costs & Variance Product Group Total Standard COP Regular Plate (all choices) € 210,000,000 d /LQHဨSLSH3ODWH (all choices) € 92,000,000 e Total € 302,000,000 f
Product Group Variance Regular Plate (all choices) 0.9762 g = a/d /LQHဨSLSH3ODWH (all choices) 0.9783 h = b/e Total 0.9768 i = c/f
Step 3: Allocate Actual Costs to prime & QRQဨSULPH plate 5HJXODU3ODWH QRQဨSULPH 2.30% j yield rate) /LQHဨSLSH3ODWH QRQဨSULPH 2.60% k yield rate)
Product Group Prime 1RQဨSULPH Regular Plate € 200,285,000 € 4,715,000 axj /LQHဨSLSH Plate € 87,660,000 € 2,340,000 bxk Total € 287,945,000 € 7,055,000 € 295,000,000
Step 4: Allocate Actual Costs to individual products (CONNUMs) Prime Plate A A x variance (i) CONNUM standard costs/ton actual costs/ton ဨဨဨဨဨဨဨဨဨဨဨ € 1,100.57 € 1,075.04 ဨဨဨဨဨဨဨဨဨဨဨ € 998.63 € 975.46 ဨဨဨဨဨဨဨဨဨဨဨ € 926.35 € 904.86 ဨဨဨဨဨဨဨဨဨဨဨ € 886.32 € 865.76 ဨဨဨဨဨဨဨဨဨဨဨ € 721.45 € 704.71 ဨဨဨဨဨဨဨဨဨဨဨ € 628.64 € 614.06 ဨဨဨဨဨဨဨဨဨဨဨ € 563.21 € 550.14 *** *** *** ဨဨဨဨဨဨဨဨဨဨဨ € 500.23 € 488.62 Total actual costs allocated to prime plate € 287,945,000
Non-Prime Plate CONNUM Standard costs/ton Actual costs/ton ဨဨဨဨဨဨဨဨဨဨဨ € 542.69 ဨဨဨဨဨဨဨဨဨဨဨ € 542.69 ဨဨဨဨဨဨဨဨဨဨဨ € 542.69 ဨဨဨဨဨဨဨဨဨဨဨ € 542.69 ဨဨဨဨဨဨဨဨဨဨဨ € 542.69 Total actual costs allocated to QRQဨSULPH plate € 7,055,000
1RQဨSULPH plate actual costs € 7,055,000 m 1RQဨSULPH plate quantity 13,000 n 1RQဨSULPH plate actual cost/ton € 542.69 m/n Court No. 17-00159 Page 13 PUBLIC VERSION
2. Particular Selection of Facts Otherwise Available
The court next considered Commerce’s use of the costs assigned in Dillinger’s normal
books and records as the agency’s particular selection of facts otherwise available to supply the
missing cost information for prime and non-prime products. As a threshold matter, this court held
that the Federal Circuit’s ruling in Dillinger III had “not strictly prohibit[ed] Commerce from
Id. at annex A. The problem for Dillinger is that Step 3 of its hypothetical still employs a ³SHUFHQWDJH\LHOG´DSSURDFKWRGHULYH³DFWXDO´WRWDOFRVWVRISULPHDQGQRQဨSULPHSODWH$QGIURP there, Step 4 allocates those “actual” total costs of prime and non-prime plate -- as derived from the “percentage yield” approach -- on a plate-specific basis. Thus, Dillinger’s alternative hypothetical does not overcome the fundamental takeaway of the court’s simplified hypothetical, which is that: (1) costs calculated for prime and non-prime plate using a “percentage yield” approach potentially differ from those calculated using an “actual cost” approach; and (2) not knowing the actual cost of producing the non-prime merchandise directly impacts the amount of costs assigned to the production of the prime products. It may be -- as Dillinger suggests -- that it is “impossible to track the actual costs of an individual plate.” Id. at 1. Nevertheless, the Federal Circuit has been clear that “[t]he focus of [19 U.S.C. § 1677e(a)(1)] is [a] respondent’s failure to provide information. The reason for the failure is of no moment.” Nippon Steel, 337 F.3d at 1381 (emphasis in original). Thus, in light of the foregoing, no “most cogent of reasons” compel this court to reconsider its prior ruling upholding Commerce’s general invocation of facts otherwise available to supply the costs of production for both non-prime and prime products. Intergraph Corp., 253 F.3d at 697 (quoting Delong Equip. Co. v. Washington Mills Electro Mins. Corp., 990 F.2d 1186, 1196 (11th Cir. 1993)). 8 Furthermore, in its briefing contesting the Third Remand Results, Dillinger argues that Commerce “arbitrar[ily] . . . treat[ed] similar situations differently” when it determined that a respondent in another LTFV investigation, NEXTEEL, “reported costs reflect[ing] the full actual costs of producing its prime and non-prime products.” Pl.’s Cmts. in Opp. to Third Remand Results at 12–14, Dec. 16, 2022, ECF No. 123 (“Pl.’s Br.”) (emphasis added) (discussing Husteel Co. v. United States, 46 CIT __, 552 F. Supp. 3d 1405 (2022)). First, such an argument seeks retrial of an issue already resolved -- namely, whether Commerce here permissibly determined that it lacked “actual costs” such that reliance on facts otherwise available was appropriate. Second, the court briefly notes that Dillinger has not even alleged that NEXTEEL derived the cost data that it submitted to Commerce -- and that Commerce deemed reflective of “actual costs” -- via a “percentage yield” approach, as Dillinger did. Where this court has already established that Dillinger’s “percentage yield” approach gave rise to a cost-related informational gap, supra, and where Dillinger has not shown that NEXTEEL likewise employed such a “percentage yield” approach, here too, the court is not persuaded to reconsider its prior ruling sustaining Commerce’s general invocation of facts otherwise available to supply the costs of production for both non- prime and prime products. Court No. 17-00159 Page 14 PUBLIC VERSION
relying on Dillinger’s normal books and records as facts otherwise available.” Id. at 1261. This
was so -- in this court’s estimation -- because at issue before the Federal Circuit in Dillinger III
was only Commerce’s reliance on Dillinger’s normal books and records in calculating normal
value under 19 U.S.C. § 1677b; accordingly, the Federal Circuit had no reason or occasion to
consider what sources Commerce could or could not rely on as facts otherwise available under 19
U.S.C. § 1677e once the agency concluded that it did not have the information it needed to
determine the actual costs of prime and non-prime products.
Nevertheless, this court determined that it could not sustain reliance on Dillinger’s normal
books and records as facts otherwise available where the agency’s proffered explanation consisted
solely of a rejection of Dillinger’s proposed dataset for a flaw that Commerce’s selected dataset
likewise exhibited. Dillinger IV, 589 F. Supp. 3d at 1262. Specifically, Commerce concluded that
“it was not appropriate to rely on the overall average cost of producing all prime products as a
surrogate for the actual cost of producing the specific non-prime products produced,” Second
Remand Results at 3–4 -- as advocated by Dillinger -- because doing so “assigns the same cost to
products with varying physical characteristics,” id. at 7. Yet, Commerce selected as facts
otherwise available “the non-prime cost information recorded in Dillinger’s normal books and
records (i.e., the estimated sales prices),” while acknowledging that such data “does not vary by
CONNUM and does not reflect cost differences attributable to the physical characteristics,” id. at
20. Finding a foundational violation of administrative law principles -- namely, that “agency
action is arbitrary,” and thereby contrary to law, “when the agency offers insufficient reasons for
treating similar situations differently” -- this court remanded to Commerce for an affirmative
explanation of its selected facts otherwise available to supply the missing cost information.
Dillinger IV, 589 F. Supp. 3d at 1262 (cleaned up) (quoting SKF USA Inc. v. United States, 263 Court No. 17-00159 Page 15 PUBLIC VERSION
F.3d 1369, 1382 (Fed. Cir. 2001)). Accordingly, this court did not reach or resolve whether the
Federal Circuit’s ruling in Dillinger III otherwise foreclosed use by Commerce of Dillinger’s
normal books and records as facts otherwise available.
D. Commerce’s Third Remand Results
Commerce issued the Third Remand Results -- the focus of this court’s instant review --
on November 16, 2022. In said results, Commerce continues to rely on Dillinger’s normal books
and records as facts otherwise available to supply the missing cost information for prime and non-
prime plate, but now provides a two-fold justification for such reliance:
Commerce first submits that
[r]elying on Dillinger’s normal books and records, as facts available, to value both the prime and non-prime merchandise is the only reasonable approach because it recognizes that, where Dillinger cannot produce 98 perfect plates without producing two imperfect plates, the lost value of the two imperfect plates is actually a cost of producing the 98 perfect ones and should be accounted for as such.
Third Remand Results at 6. Second, Commerce explains that Dillinger’s objections to reliance on
the normal books and records as facts otherwise available hinge on unsubstantiated assumptions;
namely that “the likely selling price [of non-prime plate] must be lower than the cost of producing
the product” and that Dillinger’s “costs of producing non-prime products cannot be lower than its
cost[s] of producing its prime products.” Third Remand Results at 13. Commerce maintains that
“[a]bsent the physical characteristics and actual [cost of production] information for the non-prime
products produced, which are solely in the possession of Dillinger, none of the above assumptions
are supported by record information.” Id. In light of the foregoing, Commerce continues in the
Third Remand Results to rely on Dillinger’s normal books and records as facts otherwise available
and to assign Dillinger a weighted-average dumping margin of 6.15 percent. Id. at 2–3. Court No. 17-00159 Page 16 PUBLIC VERSION
On December 16, 2022, Dillinger filed with this court comments in opposition to
Commerce’s Third Remand Results, see Pl.’s Br., to which Defendant the United States (“the
Government”) and Defendant-Intervenor Nucor Corporation (“Nucor”) responded on January 17,
2023, see Def.’s Resp. to Cmts. in Opp. to Third Remand Results, Jan. 17, 2023, ECF No. 124
(“Def.’s Br.”); Def.-Inter.’s Resp. to Cmts. in Opp. to Third Remand Results, Jan. 17, 2023, ECF
No. 125 (“Def.-Inter.’s Br.”). The court ordered oral argument on the Third Remand Results, see
Order Scheduling Oral Arg., Apr. 25, 2023, ECF No. 139, and issued questions to the parties for
answers in writing, see Ct.’s Qs. for Oral Arg., Apr. 11, 2023, ECF No. 133; see also Pl.’s Oral
Arg. Subm.; Def.’s Resp. to Ct.’s Apr. 11, 2023 Qs., Apr. 26, 2023, ECF No. 141 (“Def.’s Oral
Arg. Subm.”); Def.-Inter.’s Resp. to Ct.’s Apr. 11, 2023 Qs., Apr. 26, 2022, ECF No. 145 (“Def.-
Inter.’s Oral Arg. Subm.”). Upon examination of the parties’ submissions, the court issued
supplemental questions for further written response. See Ct.’s Supp. Qs. for Oral Arg., May 1,
2023, ECF No. 146; see also Pl.’s Resp. to Ct.’s May 1, 2023 Suppl. Qs., May 8, 2023, ECF No.
150 (“Pl.’s Suppl. Qs. Resp.”); Def.’s Resp. to Ct.’s May 1, 2023 Suppl. Qs., May 8, 2023, ECF
No. 147 (“Def.’s Suppl. Qs. Resp.”); Def.-Inter.’s Resp. to Ct.’s May 1, 2023 Suppl. Qs., May 8,
2023, ECF No. 148 (“Def.- Inter.’s Suppl. Qs. Resp.”).
Oral argument was held on May 10, 2023. See ECF No. 151. Following oral argument,
the parties submitted post-oral argument briefing to the court. See Pl.’s Post-Arg. Subm., May 19,
2023, ECF No. 155 (“Pl.’s Suppl. Br.”); Def.’s Post-Arg. Subm., May 19, 2023, ECF No. 153;
Def.-Inter.’s Post-Arg. Subm., May 19, 2023, ECF No. 154. With these cumulative submissions
in hand, the case is now decision ready. Court No. 17-00159 Page 17 PUBLIC VERSION
JURISDICTION AND STANDARD OF REVIEW Dillinger brings this action under 19 U.S.C. § 1516a(a)(2)(A)(i)(I) and (a)(2)(B)(iii), and
the court has jurisdiction pursuant to 28 U.S.C. § 1581(c). The court “will uphold [Commerce’s]
redetermination pursuant to . . . remand unless it is ‘unsupported by substantial evidence on the
record, or otherwise not in accordance with law.’” Consolidated Bearings Co. v. United States, 28
CIT 106, 106, 346 F. Supp. 2d 1343, 1344 (2004), aff’d 412 F.3d 1266, 1267 (Fed. Cir. 2005).
A determination by Commerce is “supported by substantial evidence” if, after accounting
for detracting evidence, Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951), “more than
a mere scintilla” underpins the agency’s decision such that “a reasonable mind might accept [it] as
adequate to support [the agency’s] conclusion,” Elbit Sys. of Am., LLC v. Thales Visionix, Inc.,
881 F.3d 1354, 1355 (Fed. Cir. 2018) (quoting In re Nuvasive, Inc., 842 F.3d 1376, 1379 (Fed.
Cir. 2016)). Commerce’s determination “accords with law” if it abides by all relevant statutes,
regulations, and judicial precedent and “the agency’s decisional path is reasonably discernable.”
Wheatland Tube Co. v. United States, 161 F.3d 1365, 1369–70 (Fed. Cir. 1998) (citing Ceramica
Regiomontana, S.A. v. United States, 810 F.2d 1137, 1139 (Fed. Cir. 1987)).
DISCUSSION
The Government and Defendant-Intervenor Nucor once again ask this court to sustain
Commerce’s remand results. See Def.’s Br. at 12; Def.-Inter.’s Br. at 9. By contrast, Dillinger
argues that Commerce’s remand results contravene the Federal Circuit’s ruling in Dillinger III,
such that this court should “remand th[e] case back to Commerce with explicit directions to accept
Dillinger’s costs as reported and to stop shifting costs from nonprime to prime plate,” Pl.’s Br. at
22; in the alternative, Plaintiff argues that Commerce’s reliance on Dillinger’s normal books and
records as facts otherwise available imposes an impermissible adverse inference, id. at 14–21. Court No. 17-00159 Page 18 PUBLIC VERSION
This court will uphold Commerce’s selection of facts otherwise available so long as it is supported
by substantial evidence and otherwise in accordance with law. Ningbo Dafa Chem. Fiber Co. v.
United States, 580 F.3d 1247, 1258 n.5 (Fed. Cir. 2009); see also Pl.’s Oral Arg. Subm. at 4; Def.’s
Oral Arg. Subm. at 3; Def.-Inter.’s Oral Arg. Subm. at 2–3. Concluding that Commerce’s selection
satisfies both requirements, the court sustains Commerce’s Third Remand Results.
I. Commerce’s Selection of Facts Otherwise Available Does Not Contravene Dillinger III and Otherwise Accords with Law.
In Dillinger IV, this court held that -- strictly speaking -- the Federal Circuit’s ruling in
Dillinger III did not prohibit Commerce from relying on Dillinger’s normal books and records as
facts otherwise available to supply missing cost information for Dillinger’s prime and non-prime
plate. 9 However, since -- in accordance with this court’s most recent remand -- Commerce has
now affirmatively explained its reliance on Dillinger’s normal books and records as facts otherwise
available to supply the missing cost information, this court must proceed to consider in the first
instance whether -- practically speaking -- the Federal Circuit’s holding in Dillinger III precludes
such reliance by necessary implication. The court concludes that it does not after review of the
relevant statutory language, legislative history, and caselaw. As such, Commerce’s reliance on
Dillinger’s normal books and records as facts otherwise available accords with law.
A. The Plain Text of the Statute Does Not Constrain Commerce’s Selection of Facts Otherwise Available as Plaintiff Suggests.
Dillinger argues that because the “cost of production” is the “the informational gap that is
being filled,” section 1677b(b)(3) of 19 U.S.C. -- which lays out the requirements of “cost of
production” -- constrains what may be used as facts otherwise available under 19 U.S.C.
9 Supra pp. 13–14. Court No. 17-00159 Page 19 PUBLIC VERSION
§ 1677e(a)(1), see Pl.’s Oral Arg. Subm. at 8; where the Federal Circuit held that Dillinger’s
normal books and records -- which value non-prime plate at their “likely selling price” -- do not
correspond to the “costs of producing . . . the merchandise” under § 1677b, 10 Plaintiff maintains
the necessary implication is that such normal books and records cannot be used as facts otherwise
available to supply such missing cost information under § 1677e(a)(1). Pl.’s Oral Arg. Subm. at
7. By contrast, the Government and Nucor submit that 19 U.S.C. § 1677e(a) is an independent
statutory provision and that § 1677b(b)(3) does not constrain what Commerce may use as facts
otherwise available under § 1677e(a)(1). Def.’s Oral Arg. Subm. at 4; Def.-Inter.’s Oral Arg.
Subm. at 5. The court agrees with the Government and Nucor that the plain language of the statute
does not constrain Commerce’s selection as Plaintiff so suggests.
As noted, the statutory text on facts otherwise available reads in relevant part:
If — (1) necessary information is not available on the record . . .
the administering authority and the Commission shall, subject to section 1677m(d) 11 of this title, use the facts otherwise available in reaching the applicable determination under this subtitle.
19 U.S.C. § 1677e(a)(1) (footnote not in original). The statute does not define the phrase “the facts
otherwise available.” Nor does the plain language of § 1677e(a)(1) appear to prescribe or constrain
the sources that Commerce may rely upon in applying “the facts otherwise available” at all, let
alone impute the requirements of § 1677b(b)(3) as a constraint.
10 Supra note 2. 11 No party has identified as relevant to the resolution of this issue 19 U.S.C. § 1677m(d), which outlines Commerce’s obligation to afford parties an opportunity to remedy deficient submissions. Court No. 17-00159 Page 20 PUBLIC VERSION
Nor does 19 U.S.C. § 1677b(b)(3) expressly limit what Commerce may rely upon as facts
otherwise available under § 1677e(a)(1). Section 1677b(b)(3) reads:
(3) Calculation of cost of production
For purposes of this part, the cost of production shall be an amount equal to the sum of— (A) the cost of materials and of fabrication or other processing of any kind employed in producing the foreign like product, during a period which would ordinarily permit the production of that foreign like product in the ordinary course of business;
(B) an amount for selling, general, and administrative expenses based on actual data pertaining to production and sales of the foreign like product by the exporter in question; and
(C) the cost of all containers and coverings of whatever nature, and all other expenses incidental to placing the foreign like product in condition packed ready for shipment.
For purposes of subparagraph (A), if the normal value is based on the price of the foreign like product sold for consumption in a country other than the exporting country, the cost of materials shall be determined without regard to any internal tax in the exporting country imposed on such materials or their disposition which are remitted or refunded upon exportation.
19 U.S.C. § 1677b(b)(3). The court notes that § 1677b(b)(3) says “[f]or purposes of this part, the
cost of production shall be . . .,” 19 U.S.C. § 1677b(b)(3) (emphasis added), and that both § 1677b
and § 1677e fall within Part IV of Subtitle IV of Title 19 of the United States Code. Because the
“Definition; special rules” section of 19 U.S.C § 1677(1)–(36) does not otherwise define “cost of
production,” the court assesses that § 1677b(b)(3) supplies the definition of “cost of production”
for every occurrence of that term throughout Part IV. But as established above, § 1677e(a)(1) does
not contain the phrase “cost of production” or otherwise cite § 1677b.
That said, § 1677b(b)(3)’s definition is still relevant to § 1677e(a)(1), as by the statute’s
plain terms, Commerce can invoke facts otherwise available only when “necessary information is
not available on the record;” and the definitional requirements of § 1677b(b)(3) establish what is Court No. 17-00159 Page 21 PUBLIC VERSION
“necessary information” with regards to “cost of production.” Accordingly, this court discerns
that § 1677b(b)(3) supplies the criteria by which to assess if there is an informational gap with
regards to “cost of production.” However, where § 1677b(b)(3) does not mention or otherwise
cross-reference § 1677e(a), the court finds no textual support for Plaintiff’s position that
§ 1677b(b)(3) limits what sources Commerce may rely upon as facts otherwise available once the
agency determines that it does not have the information necessary to satisfy the definitional
requirements of “cost of production.”
Discerning no such limits in the statutory text, the court next considers the relevant
legislative history.
B. The Legislative History is Inconclusive.
The Statement of Administrative Action (“SAA”) is the legislative history of the Uruguay
Round Agreements Act (“URAA”), Pub.L. No. 103–465, 108 Stat. 4809 (1994), which codified
amendments to § 1677e(a). See Statement of Administrative Action, H.R.Rep. No. 103–316, at
869 (1994), reprinted in 1994 U.S.C.C.A.N. 1440, at 4198–99; see also Ningbo Dafa, 580 F.3d at
1255. 12 Regarding “determinations on the basis of the facts available,” specifically, the SAA states
in relevant part:
New section 776(a) requires Commerce and the Commission to make determinations on the basis of the facts available where requested information is missing from the record or cannot be used because, for example, it has not been provided, it was provided late, or Commerce could not verify the information. Section 776(a) makes it possible for Commerce and the Commission to make their determinations within the applicable deadlines if relevant information is missing from the record. In such cases, Commerce and the Commission must make their determinations based on all evidence of record, weighing the record evidence to determine that which is most probative of the issue under consideration.
12 By statute, the SAA is “an authoritative expression . . . concerning the interpretation and application of the Uruguay Round Agreements and this Act in any judicial proceeding in which a question arises concerning such interpretation or application.” 19 U.S.C. § 3512(d). Court No. 17-00159 Page 22 PUBLIC VERSION
...
[N]either Commerce nor the Commission must prove that the facts available are the best alternative information. Rather, the facts available are information or inferences which are reasonable to use under the circumstances. As noted above, the Commission balances all record evidence and draws reasonable inferences in reaching its determinations. It is not possible for the Commission to demonstrate that its inferences are the same as those it would have made if it had perfect information. Similarly, where Commerce uses the facts available to fill gaps in the record, proving that the facts selected are the best alternative facts would require that the facts available be compared with the missing information, which obviously cannot be done.
1994 U.S.C.C.A.N. at 4198–99.
In an exemplification of “Judge Leventhal’s memorable phrase” that “investigation of
legislative history” can become “an exercise in ‘looking over a crowd and picking out your
friends,’” Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 568 (2005) (quoting Patricia
M. Wald, Some Observations on the Use of Legislative History in the 1981 Supreme Court Term,
68 Iowa L. Rev. 195, 214 (1983)), Plaintiff and Defendants both claim the SAA as decisive support
for their respective conceptions of the interplay between § 1677e(a)(1) and § 1677b(b)(3).
For example, Dillinger latches onto the statement that “Commerce and the Commission
must make their determinations based on . . . that which is most probative of the issue under
consideration,” 1994 U.S.C.C.A.N. at 4198 (emphasis added), to suggest that, in accordance with
§ 1677b(b)(3)’s definition, “the selection of facts available for the actual costs of non-prime
products must correspond, as closely as possible, to the cost of materials and of fabrication or other
processing employed in producing the non-prime products,” Pl.’s Br. at 1–2 (emphasis added);
Pl.’s Oral Arg. Subm. at 6. By contrast, the Government and Nucor invoke the SAA’s statements
that facts otherwise available must be “reasonable to use under the circumstances” and need not
be “the best alternative information,” 1994 U.S.C.C.A.N. at 4198, as support for their position that
the relied upon dataset must only be “a reasonable approximation of Dillinger’s costs,” Def.- Court No. 17-00159 Page 23 PUBLIC VERSION
Inter.’s Oral Arg. Subm. at 8; Def.’s Oral Arg. Subm. at 3 (substantively similar), without
“correspond[ing] to the cost of materials or other processing employed in producing non-prime
products” under § 1677b(b)(3), Def.’s Br. at 9.
While parties contest whether the facts otherwise available must be the “most probative”
or “best” information, see 1994 U.S.C.C.A.N. at 4198 (requiring Commerce to rely on the “most
probative” information, while acknowledging that “[i]t is not possible” to “prov[e] that the facts
selected are the best alternative facts”), everyone agrees that there must be at least some kind of
correlation between the “issue under consideration” -- i.e., the gap to be filled -- and the selected
record evidence, see id. (directing Commerce to use that which is “probative of the issue under
consideration”). Because “[l]egislative history . . . is meant to clear up ambiguity, not create it,”
Milner v. Dep’t of Navy, 562 U.S. 562, 574 (2011), and because the plain text of § 1677e(a)(1)
contains no express indications that “the facts otherwise available” must be the “best” alternative
information to “reach[] the applicable determination,” see 19 U.S.C. § 1677e(a)(1), the court
accepts only the baseline point of agreement that the selected facts otherwise available must relate
in some way to the issue under consideration: Here, the gap to be filled is the cost of production
information for prime and non-prime plate; thus, Commerce’s selected facts otherwise available
must somehow correlate to Dillinger’s costs. 13
But what exactly is required to establish such a correlation remains “murky, ambiguous,
and contradictory.” Exxon Mobil Corp., 545 U.S. at 568. Specifically, the SAA does not address
-- let alone resolve -- whether this court should impute the requirements of the statutory provision
13 Such a conclusion aligns with the Federal Circuit’s prior treatment of the SAA. See, e.g., Ningbo Dafa, 580 F.3d at 1252 (“When § 1677e(a) applies, Commerce may use as ‘facts available’ any ‘information or inferences which are reasonable to use under the circumstances’ to make the applicable determination or substitute for the missing information.” (emphasis added) (quoting 1994 U.S.C.C.A.N. at 4198)). Court No. 17-00159 Page 24 PUBLIC VERSION
underlying the informational gap as the standard by which to assess the “reasonableness” of the
agency’s selection of facts otherwise available. See 1994 U.S.C.C.A.N. at 4198 (instructing the
selected facts otherwise available must be “reasonable to use under the circumstances”). This
court looks to related Federal Circuit caselaw to discern that it should not.
C. Federal Circuit Caselaw Supports that § 1677b(b)(3) Does Not Constrain Commerce’s Selection of Facts Otherwise Available Under § 1677e(a)(1).
Although the Federal Circuit has not spoken on the precise issue of the case at bar, this
court distills and applies principles from related decisions to conclude that the requirements of
§ 1677b(b)(3) do not constrain Commerce’s selection of facts otherwise available under
§ 1677e(a)(1).
The court first considers the Federal Circuit’s opinion in Nan Ya Plastics Corp. v. United
States, 810 F.3d 1333, 1346 (Fed. Cir. 2016). There, the Federal Circuit considered whether
Commerce’s selection of certain record evidence as adverse facts available under 19 U.S.C.
§ 1677e(b) was impermissible because it, inter alia, “relie[d] upon incomplete criteria in light of
other statutory and regulatory criteria.” Nan Ya, 810 F.3d at 1346. The Federal Circuit first laid
out the statutory text at issue, 14 which read:
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,
14 The Federal Circuit noted that “[d]uring the pendency of the appeal, Congress amended . . . [the] provisions at issue.” Nan Ya, 810 F.3d at 1337 n.2. Although the Federal Circuit’s decision considered the pre-amended text of 19 U.S.C. § 1677e(b), the specific textual changes are not relevant here. Court No. 17-00159 Page 25 PUBLIC VERSION
(3) any previous review under section 1675 of this title or determination under section 1675b of this title, or
(4) any other information placed on the record.
Id. at 1347 (quoting 19 U.S.C. § 1677e(b) (2006), amended by Trade Preferences Extension Act
of 2015, Pub. L. No. 114–27, 129 Stat. 362). In light of this text, the Federal Circuit concluded
“[t]he statute simply does not require Commerce to select facts that . . . align with standards
articulated in other statutes and regulations.” Id.; see also Deacero S.A.P.I. de C.V. v. United
States, 996 F.3d 1283, 1301 (Fed. Cir. 2021) (quoting Nan Ya, 810 F.3d at 1347); Papierfabrik
August Koehler SE v. United States, 843 F.3d 1373, 1381 (Fed. Cir. 2016) (quoting Nan Ya, 810
F.3d at 1347). Thus, where § 1677e(b) did not “contain[] any of the requirements [Nan Ya]
allege[d],” the Federal Circuit declined to “impose conditions not present in or suggested by the
statute’s text.” 810 F.3d at 1347.
This court acknowledges that Nan Ya dealt with adverse facts available -- whereas the case
at bar deals only with facts otherwise available or “neutral facts available” -- and that “Commerce
has greater latitude in determining dumping margins when dealing with [adverse facts available].”
Albemarle Corp. & Subsidiaries v. United States, 821 F.3d 1345, 1357 n.12 (Fed. Cir. 2016).
However, because the Federal Circuit’s decision in Nan Ya turned on foundational tenets of
statutory interpretation -- i.e., parsing the statute’s plain text -- and not on the particular
characteristics of adverse facts available, this court deems transferrable the Federal Circuit’s core
interpretive conclusion: namely that, where -- as with 19 U.S.C. § 1677e(a)(1) -- the plain text
does not “require Commerce to select facts that . . . align with [any] standards articulated in other
statutes and regulations,” Nan Ya, 810 F.3d at 1347, the court cannot agree with Dillinger that
Commerce’s selection of replacement cost information is constrained by the definitional “cost of Court No. 17-00159 Page 26 PUBLIC VERSION
production” requirements under § 1677b(b)(3).
On first glance, such a conclusion might seem difficult to reconcile with the Federal
Circuit’s further opinion in Ningbo Dafa, 580 F.3d at 1254–58. There, the Federal Circuit
addressed whether 19 U.S.C. § 1677b(c)(1) -- which lays out procedures for calculating normal
value in non-market economy cases -- precludes Commerce from invoking facts otherwise
available under § 1677e(a) to supply information on “factors of production” missing from the
record. Id.
Section 19 U.S.C. § 1677b(c)(1) instructs:
(c) Nonmarket economy countries
(1) In general
If— (A) the subject merchandise is exported from a nonmarket economy country, and
(B) the administering authority finds that available information does not permit the normal value of the subject merchandise to be determined under subsection (a),
the administering authority shall determine the normal value of the subject merchandise on the basis of the value of the factors of production utilized in producing the merchandise and to which shall be added an amount for general expenses and profit plus the cost of containers, coverings, and other expenses. Except as provided in paragraph (2), the valuation of the factors of production shall be based on the best available information regarding the values of such factors in a market economy country or countries considered to be appropriate by the administering authority.
19 U.S.C. § 1677b(c)(1) (emphasis added). 15 Pursuant to Commerce’s “longstanding policy that
market economy prices are the ‘best available information’ [to value factors of production] under
15 Commerce in Ningbo Dafa did not purport to rely on the exception in paragraph (2). Court No. 17-00159 Page 27 PUBLIC VERSION
19 U.S.C. § 1677b(c)(1),” Commerce requested that Ningbo Dafa Chemical Fiber Company
(“Ningbo”) -- a Chinese manufacturer -- provide invoices for its market economy purchases of a
certain input used to produce the subject merchandise under investigation for dumping. Ningbo
Dafa, 580 F.3d at 1251, 1257. Where Ningbo supplied Commerce with invoices from its qualified
market economy purchases, but not in the “form and manner requested” by Commerce, the agency
invoked facts otherwise available under 19 U.S.C. § 1677e(a)(2)(B) 16 to supply the missing input
values. In litigation before this court and the Federal Circuit, Ningbo argued that § 1677b(c)(1)’s
“best available information” standard barred Commerce from invoking facts otherwise available
to value factors of production. Ningbo Dafa, 580 F.3d at 1254.
In rejecting Ningbo’s position, the Federal Circuit delineated “the proper interpretation and
interaction of 19 U.S.C. § 1677b(c)(1) and § 1677e(a).” Id. The court noted that “[b]oth § 1677b
and § 1677e are found in Subtitle IV of Title 19 of the United States Code” and that
16 19 U.S.C. § 1677e(a)(2) instructs, in relevant part:
If— ... (2) an interested party or any other person—
(B) fails to provide [information that has been requested by the administering authority] by the deadlines for submission of the information or in the form and manner requested, subject to subsections (c)(1) and (e) of section 1677m of this title, ... the administering authority and the Commission shall, subject to section 1677m(d) of this title, use the facts otherwise available in reaching the applicable determination under this subtitle.
19 U.S.C. § 1677e(a)(2) (emphasis added). Court No. 17-00159 Page 28 PUBLIC VERSION
Section 1677e(a) specifically provides: “If . . . (1) necessary information is not available on the record, or (2) an interested party or any other person . . . fails to provide such information . . . in the form and manner requested,” Commerce “shall . . . use the facts otherwise available in reaching the applicable determination under this subtitle.”
Id. (alterations and emphasis in original) (quoting 19 U.S.C. § 1677e(a)). Accordingly, where
Commerce “shall . . . use the facts otherwise available in reaching the applicable determination
under this subtitle,” and where § 1677b falls within “this subtitle,” the Federal Circuit concluded
that Commerce is not barred from relying on facts otherwise available under § 1677e(a) to value
factors of production under § 1677b(c)(1). Id. Furthermore, the court noted that § 1677b(c)(1)
“provides that in NME investigations, Commerce ‘shall’ use the ‘best available information
regarding the values of such factors [of production].” Id. (alteration in original). Thus, bringing
the pieces together, the Federal Circuit held that “under § 1677e(a), where necessary information
is unavailable on the record or a party fails to provide requested information, Commerce ‘shall’
use the ‘facts otherwise available’ to fill information gaps when determining the value of the
factors of production under § 1677b(c)(1) using the ‘best available information.’” Id. (emphasis
added).
This court notes that it might be tempting to infer from Ningbo Dafa that the standards
and/or requirements of the statutory provision underlying the informational gap to be filled govern
the selection of facts otherwise available; there the Federal Circuit imputed “the ‘best available
information’ mandate” of § 1677b(c)(1) into Commerce’s application of facts otherwise available
under § 1677e(a) to value factors of production. Id. at 1258 (quoting § 1677b(c)(1)). However,
to divine any such overarching, “per se” rule would not only overread the Federal Circuit’s holding Court No. 17-00159 Page 29 PUBLIC VERSION
in Ningbo Dafa, 17 but also would ignore unique aspects of the “interaction of 19 U.S.C.
§ 1677b(c)(1) and § 1677(e)(a).” Id. at 1254.
Specifically, recall that § 1677b(c)(1) states “[e]xcept as provided in paragraph (2), the
valuation of the factors of production shall be based on the best available information.” 19 U.S.C.
§ 1677b(c)(1) (emphasis added). This particular language -- “except as provided in paragraph (2)”
-- expressly establishes the only circumstances in which the factors of production need not be
based on the “best available information.” Because paragraph (2) does not mention or otherwise
implicate the facts otherwise available provision of § 1677(e)(a), Commerce is required -- by
§ 1677b(c)(1)’s plain terms -- to adhere to the “‘best available information’ mandate” in applying
facts otherwise available under § 1677e(a) to value factors of production. See Conn. Nat.’l Bank
v. Germain, 503 U.S. 249, 253–54 (1992) (“[C]ourts must presume that a legislature says in a
statute what it means and means in a statute what it says there.”). By contrast, 19 U.S.C.
§ 1677b(b)(3) -- the provision at issue in the case at bar -- contains no equivalent limiting language.
Supra pp. 18–21 (establishing that § 1677b(b)(3) provides the definition of “cost of production” in
the ordinary course, but does not expressly cabin Commerce’s discretion in selecting facts
otherwise available to supply missing cost of production information).
The Federal Circuit’s pronouncement in Ningbo Dafa that Commerce must adhere to the
“best available information” mandate of § 1677b(c)(1) in filling “factor of production”–related
gaps via facts otherwise available, 580 F.3d at 1254, exists comfortably alongside the appeals
court’s further pronouncement in Nan Ya that Commerce is “simply . . . not require[d] . . . to select
17 After all, the Federal Circuit in Ningbo Dafa undertook only to resolve whether § 1677b(c)(1)’s “best available information” standard barred Commerce from invoking facts otherwise available under § 1677e(a) when valuing factors of production, and not to delineate any “per se” standards or methodologies for applying facts otherwise available. Court No. 17-00159 Page 30 PUBLIC VERSION
facts . . . that align with standards articulated in other statutes and regulations,” 810 F.3d at 1347.
This is so,18 because the Federal Circuit in Nan Ya parsed only the relevant plain text of 19 U.S.C.
§ 1677e, and not that of the “other statutory and regulatory criteria” that Nan Ya claimed
Commerce’s selection of adverse facts available failed to meet. 810 F.3d at 1346. Thus, it is
entirely consistent to hold that the plain language of § 1677e(a)–(b) -- without more -- “does not
require Commerce to select facts that . . . align with standards articulated in other statutes and
regulations,” id. at 1347, while holding open the possibility that -- where explicit -- the standards
and requirements articulated in other statutes and regulations can override or cabin Commerce’s
discretion under § 1677e(a)–(b). 19
Thus, applying the principles distilled from the Federal Circuit’s decisions in Nan Ya and
Ningbo Dafa, where the plain text of § 1677e(a) does not prescribe the sources that Commerce
may use when applying facts otherwise available, and where the plain text of § 1677b(b)(3) on
cost of production does not expressly override or cabin Commerce’s discretion under § 1677e(a),
this court concludes that § 1677b(b)(3)’s definitional requirements do not constrain Commerce’s
selection of facts otherwise available to fill in the missing cost information.
18 Not merely because the Federal Circuit’s opinion in Nan Ya addressed the application of adverse facts available, as opposed to facts otherwise available; as this court explained above, supra p. 25, the Federal Circuit’s conclusion in Nan Ya turned on a plain text rationale that applies with equal force to the language of 19 U.S.C. § 1677e(a) on facts otherwise available. 19 The court notes that such an interpretation accords with the “whole act” canon of statutory construction. See Richards v. United States, 369 U.S. 1, 11 (1962) (“We believe it fundamental that a section of a statute should not be read in isolation from the context of the whole Act . . . .”); see also Norman Singer & Shambie Singer, 2 Sutherland Statutes and Statutory Construction § 46:5 (7th ed. 2022) (“[E]ach part or section of a statute should be construed in connection with every other part or section to produce a harmonious whole.”). Indeed, a contrary conclusion could give rise to tension between 19 U.S.C. § 1677e(a) -- which by its plain text does not constrain what sources Commerce may use when applying facts otherwise available -- and § 1677b(c)(1) -- which the Federal Circuit interprets as requiring adherence to that provision’s “best available information” standard even in a facts otherwise available scenario. Court No. 17-00159 Page 31 PUBLIC VERSION
D. Summation: Commerce’s Reliance on Dillinger’s Normal Books and Records as Facts Otherwise Available Does Not Contravene Dillinger III and Otherwise Accords with Law.
In sum, because the Federal Circuit in Dillinger III held that Plaintiff’s normal “books and
records did not reasonably reflect the costs associated with the production and sale of the
merchandise as required by 19 U.S.C. § 1677b(f),” 981 F.3d at 1321, this court had to confront --
in the first instance -- whether the Federal Circuit’s holding precludes by necessary implication
Commerce’s reliance on said normal books and records as facts otherwise available under
§ 1677e(a)(1) to supply the missing cost information. Plaintiff has argued fervently that it does,
submitting that where “cost of production” is “the informational gap that is being filled,” Pl.’s Oral
Arg. Subm. at 8, section 1677b(b)(3) requires that “the selection of facts available . . . must
correspond, as closely as possible, to the cost of materials and of fabrication or other processing
employed in produc[tion],” Pl.’s Br. at 1–2.
This court disagrees. After review of the plain language of the relevant statutory provisions
and related Federal Circuit caselaw, the court declines to impute the definitional requirements of
§ 1677b(b)(3) as the standard by which it assesses the “reasonableness” of Commerce’s reliance
on Dillinger’s normal books and records as facts otherwise available under § 1677e(a)(1) to supply
the missing cost information. See 1994 U.S.C.C.A.N. at 4198 (instructing that the selected facts
otherwise available must be “reasonable to use under the circumstances”).
Nevertheless, after review of the relevant legislative history, this court concludes that there
must be at least some kind of connection between the gap to be filled and the selected facts
otherwise available, even if the selected facts otherwise available need not be the “best alternative
information.” See 1994 U.S.C.C.A.N. at 4198 (directing Commerce to use that which is “probative
of the issue under consideration” (emphasis added)). Here, the gap to be filled is the costs of Court No. 17-00159 Page 32 PUBLIC VERSION
producing the prime and non-prime plate. This leads the court -- in closing -- to resolve a further
question posed by the parties: whether the Federal Circuit’s holding in Dillinger III is sufficiently
broad so as to preclude a finding of any such connection -- even without imputing the underlying
requirements of § 1677b(b)(3) as the guiding standard -- between Dillinger’s normal books and
records and the missing cost information. This court concludes that it is not. 20
As the Federal Circuit explained in Dillinger III:
It is unclear . . . whether Commerce’s calculation of normal value involved determining constructed value (determining the sum of “the cost of materials and fabrication or other processing of any kind employed in producing the merchandise” and other factors under 19 U.S.C. § 1677b(e)), or involved determining cost of production so as to exclude home market sales made below cost of production under § 1677b(b)(3). In either event, § 1677b(f) applies. 21
981 F.3d at 1321 n.1 (emphasis added). The Federal Circuit further interpreted “the legislative
history of section 1677b(f) . . . [and] its plain meaning[] [to] indicate[] Congress intended that
Commerce rely on a producer’s or exporter’s books and records if they . . . reasonably reflect the
costs of production.” Dillinger III, 981 F.3d at 1323 (emphasis added). Where “costs of
production” is a defined term, see 19 U.S.C. § 1677b(b)(3), this court concludes that the Federal
Circuit’s ruling in Dillinger III -- that “Dillinger’s books and records did not reasonably reflect the
costs associated with the production and sale of the merchandise as required by 19 U.S.C.
20 This conclusion likewise applies to the Federal Circuit’s decision in IPSCO, Inc. v. United States, 965 F.2d 1056 (Fed. Cir. 1992). 21 Again, § 1677b(f)(1)(A) instructs:
Costs shall normally be calculated based on the records of the exporter or producer of the merchandise, if such records are kept in accordance with the generally accepted accounting principles of the exporting country (or the producing country, where appropriate) and reasonably reflect the costs associated with the production and sale of the merchandise.
19 U.S.C. § 1677b(f)(1)(A) (emphasis added). Court No. 17-00159 Page 33 PUBLIC VERSION
§ 1677b(f)” -- turned on a determination that Dillinger’s books and records did not satisfy the
definitional requirements of § 1677b(b)(3). 981 F.3d at 1321.
Because this court has already resolved not to impute § 1677b(b)(3)’s definitional
requirements as the standard for assessing the “reasonableness” of Commerce’s selection of facts
otherwise available, it -- correspondingly -- does not consider itself precluded from finding that
Dillinger’s normal books and records bear some kind of connection to “the issue under
consideration,” i.e., costs, for purposes of § 1677e(a). See 1994 U.S.C.C.A.N. at 4198. Thus, this
court concludes that Commerce’s reliance on Dillinger’s normal books and records as facts
otherwise available does not contravene Dillinger III and otherwise accords with law.
II. Commerce’s Selection of Facts Otherwise Available is Supported by Substantial Evidence.
The court notes, however, that it is not enough to hold that Commerce’s selection of facts
otherwise available accords with law; Commerce’s reliance on Dillinger’s normal books and
records under § 1677e(a) to supply the missing cost information must also be supported by
substantial evidence. See Ningbo Dafa, 580 F.3d at 1256 (“[I]t is not enough that the law permits
Commerce to apply ‘facts available’ in valuing factors of production. . . . In addition, substantial
evidence must support Commerce’s” specific selection of facts otherwise available.).
Before delving into the substantial evidence review, the court pauses briefly to demarcate
the scope of its inquiry. In light of the preceding discussion, Commerce need only show that
substantial evidence supports that its selected facts otherwise available are “probative of the issue
under consideration” such that they relate in some way to Dillinger’s costs. Making such a
showing does not require Commerce to show that substantial evidence supports that its selected
facts otherwise available are the “best alternative information” or that they meet the standards
articulated in other statutes, such as 19 U.S.C. § 1677b(b)(3) on costs of production. Accordingly, Court No. 17-00159 Page 34 PUBLIC VERSION
this court’s substantial evidence inquiry here is a narrow one: Accounting for detracting evidence,
does “more than a mere scintilla” support that Commerce’s selected facts available -- i.e.,
Dillinger’s normal books and records -- are probative of the missing cost information such that “a
reasonable mind might accept” their use under the circumstances? Elbit, 881 F.3d at 1356. The
court concludes that Commerce has met this reasonableness standard and, thus, sustains the Third
Remand Results.
A. Dillinger’s Normal Books and Records Are “Probative of the Issue under Consideration.” Commerce asserts “there is record evidence to demonstrate that the use of the likely selling
price of non-prime products” -- as recorded in Dillinger’s normal books and records -- “results in
a reasonable allocation of total costs,” Third Remand Results at 15, and this court agrees.
Commerce first notes the undisputed fact that “the production of non-prime products is an
inevitable consequence of its production of prime products.” Id. at 5. Commerce next cites to
Note II.4.1 of Dillinger’s audited 2015 financial statement, which states:
II.4. Stocks and work-in-progress
II.4.1. Modes and Methods of Evaluation
... x Work-in-progress, 1st choice intermediate and finished products: These stocks are valued at their weighted-average production cost, this cost including direct and indirect costs that can be reasonably related with their production.
x The stock of 2nd choice sheet metal is valued at its likely selling prices.
Id. at 15 (citing Dillinger France S.A. Section A Resp. app. 18, at 600, June 29, 2016, ECF No.
158). Commerce interprets this note to constitute an “acknowledg[ment]” by Dillinger’s auditor
that any “lost value attributable to the production of non-prime products is an indirect cost of
producing prime products,” such that the figures in Dillinger’s normal books and records Court No. 17-00159 Page 35 PUBLIC VERSION
“recognize[] the total direct costs (i.e., direct materials and conversion costs) and indirect costs
(i.e., the lost value of the non-prime plates) attributable to the production of prime plates.” Id. at
15–16. Accordingly, Commerce concludes that where “Dillinger failed to provide the [actual cost]
information requested by Commerce, which is solely in its control,”
[r]elying on Dillinger’s normal books and records, as facts available, to value both the prime and non-prime merchandise is the only reasonable approach . . . . [I]t recognizes that, where Dillinger cannot produce 98 perfect plates without producing two imperfect plates, the lost value of the two imperfect plates is actually a cost of producing the 98 perfect ones and should be accounted for as such.
Id. at 6, 14. This court assesses that in light of the above identified record evidence and the
agency’s explanation, “more than a mere scintilla” supports that Dillinger’s normal books and
records are “probative” of the missing cost information, such that they are “reasonable to use under
the circumstances.” Elbit Sys., 881 F.3d at 1355; 1994 U.S.C.C.A.N. at 4198.
B. Dillinger’s Counterarguments Are Unavailing.
Plaintiff submits several counterarguments as to why it is “unreasonable” to rely on
Dillinger’s normal and books records as facts otherwise available, including that: (1) “the use of
the likely selling price in place of the cost of production was specifically prohibited by the” Federal
Circuit, Pl.’s Br. at 7; (2) “Commerce fails to explain how this ‘likely selling price’ in any way
corresponds to the cost of materials and of fabrication or other processing employed in producing
the non-prime products,” id. at 2; and that (3) “[t]here is no provision in the statute to reduce the
costs of materials, fabrication and processing employed in producing the merchandise by the ‘lost
value’ resulting from the sale of the merchandise,” id. at 8. Court No. 17-00159 Page 36 PUBLIC VERSION
While Commerce responds to Dillinger’s counterarguments on the merits in the Third
Remand Results, 22 as a threshold matter, each of these arguments presupposes that this court will
impute the underlying requirements of 19 U.S.C. § 1677b(b)(3) as the standard for assessing
reliance on Dillinger’s normal books and records as facts otherwise available to supply the missing
cost information. Because this court has already held that the underlying requirements of
§ 1677b(b)(3) do not here govern, such that the Federal Circuit’s Dillinger III decision is not here
decisive, supra, the court rejects the above counterarguments outright.
Dillinger’s only counterargument that requires further discussion is that Commerce’s
proffered rationale -- i.e., that any “lost value attributable to the production of non-prime products
is an indirect cost of producing prime products,” Third Remand Results at 15 -- concedes “that the
sales price of non-prime products does not cover the costs of production of those products,” such
that the “likely selling price” in Dillinger’s normal books and records “bears no relationship with
the actual costs of production,” Pl.’s Br. at 8, 21. While this argument has some initial appeal,
Commerce explains that it rests on unsubstantiated assumptions. This is so, because “the ‘actual’
costs of nonprime products are dependent on the physical characteristics of the non-prime products
(e.g., products which undergo more processing have higher processing costs),” and Dillinger has
not provided any information on those physical characteristics necessary to establish their actual
22 For example, Dillinger argues that where the production of non-prime products is an inevitable consequence of the production of prime products, a simple comparison of the [[ ]] Euros/ton likely selling price for non-prime plate to the lowest total cost of manufacture reported for prime plate of [[ ]] Euros/ton establishes that the likely selling price recorded in Dillinger’s normal books and records is not “probative” of the cost of producing the non-prime products. Pl.’s Br. at 2–3. Commerce responds on the merits that Dillinger’s argument rests on several unsubstantiated assumptions, including that: (1) Plaintiff has in fact reported the actual costs of producing the prime products; and that (2) the prime and non-prime products incurred the same processing costs (which is unknown because Dillinger did not submit the physical characteristics of the non-prime plate necessary to derive said processing costs). See Second Remand Results at 6; Third Remand Results at 12. Court No. 17-00159 Page 37 PUBLIC VERSION
costs. See Def.’s Suppl. Qs. Resp. at 2. Commerce is, therefore, faced with a situation where
Dillinger did not submit “information which would have permitted Commerce to determine the
actual costs of producing non-prime products.” Third Remand Results at 16. To the extent that
the selling price is lower than the cost of producing the non-prime products -- again, a fact that
Commerce does not know on the current record -- “Commerce’s selected approach recognizes that
. . . the difference between the unknowable ‘actual’ costs of producing the non-prime products and
their selling price is the lost value of production to be borne as an indirect cost of producing the
prime products.” Def.’s Oral Arg. Subm. at 9; see also Third Remand Results at 16 (substantively
similar).
Because this explanation establishes that Dillinger’s normal books and records are
“probative of the issue under consideration,” i.e., costs, and because Dillinger’s counterarguments
rest either on imputing the definitional requirements of 19 U.S.C. § 1677b(b)(3) as the governing
standard or on unsubstantiated assumptions, Commerce’s selection of facts otherwise available is
supported by substantial evidence.
C. Summation: Under the Substantial Evidence Standard, Ties Go to the Agency.
Dillinger insists that “[t]he most accurate information on the administrative record” -- and
thereby, “[t]he most reasonable calculation of actual production costs of non-prime plate” -- are
the figures that Dillinger derived via its percentage yield approach. Pl.’s Br. at 6; see also id. at
11(“[T]he guiding principle for choosing what facts to apply is accuracy in the given case.”
(quoting Shandong Rongxin Imp. & Exp. Co. v. United States, 43 CIT __, __, 355 F. Supp. 3d
1365, 1370 (2019))). But the Federal Circuit has established that a determination by Commerce
is “‘accurate’ if it is correct as a mathematical and factual matter, [and] thus supported by
substantial evidence.” Nan Ya, 810 F.3d at 1344. Given the broad discretion that Commerce has Court No. 17-00159 Page 38 PUBLIC VERSION
in selecting facts otherwise available, supra pp. 18–33 (establishing that the plain language of 19
U.S.C. § 1677e(a) imposes no constraints, such that Commerce’s selection of facts otherwise
available need only be “reasonable under the circumstances” and not necessarily the “best
alternative information”), substantial evidence supports that Dillinger’s normal books and records
are “probative” of costs and, therefore, “reasonable” to supply the missing cost information.
It may well be that Dillinger’s proposed dataset also represents a “reasonable” cost
allocation method. 23 But where, as here, substantial evidence supports Commerce’s selection of
facts otherwise available, a court “may [not] displace the [agency’s] choice between two fairly
conflicting views, even [if] the court [might] justifiably have made a different choice had the matter
been before it de novo.” Universal Camera, 340 U.S. at 477; see also In re Cree, Inc., 818 F.3d
694, 701 (Fed. Cir. 2016) (“[W]here two different, inconsistent conclusions may reasonably be
drawn from the evidence in record, an agency’s decision to favor one conclusion over the other is
the epitome of a decision that must be sustained upon review for substantial evidence.” (alteration
in original) (quoting In re Jolley, 308 F.3d 1317, 1329 (Fed. Cir. 2002))). In short, “[u]nder the
substantial evidence standard, ties go to the agency.” MTD Prods. Inc. v. United States, 47 CIT
__, __, Slip Op. 23-34, at 21 (Mar. 16, 2023).
III. Commerce’s Selection of Facts Otherwise Available Does Not Impose an Impermissible Adverse Inference.
Having held that Commerce’s selection of facts otherwise available is supported by
substantial evidence and in accordance with law, the court proceeds to consider Plaintiff’s
alternative argument: that reliance on Dillinger’s normal books and records as facts otherwise
available imposes an impermissible adverse inference. Pl.’s Br. at 14–21; see Oral Arg. at 24:18–
23 A point this court need take no view on. Court No. 17-00159 Page 39 PUBLIC VERSION
32 (assertion by Plaintiff’s counsel that “the adverse inference is a supplemental argument . . . the
real main argument is that it’s not the most probative”).
As discussed extensively above, if “necessary information is not available on the record,”
19 U.S.C. § 1677e(a)(1), Commerce “shall . . . use facts otherwise available” to fill informational
gaps and render determinations, id. § 1677e(a). Additionally, where Commerce makes a “valid
decision to use facts otherwise available,” Shandong Huarong, 30 CIT at 1301, 435 F. Supp. 2d at
1289, Commerce may then make the additional decision to “use an inference that is adverse to the
interests of [a respondent] in selecting from among the facts otherwise available” provided that
Commerce supportably finds the respondent “has failed to cooperate by not acting to the best of
its ability,” Nippon Steel, 337 F.3d at 1380–81 (quoting 19 U.S.C. § 1677e(b)(1)).
Commerce does not here purport to have imposed an adverse inference by relying on
Dillinger’s normal books and records to fill the cost-related informational gap. See Third Remand
Results at 17. Nevertheless, Dillinger maintains that “[b]y rejecting all of the cost of production
figures . . . and applying an unreasonably low cost of production to non-prime plate based upon
resale value, Commerce is applying an adverse inference that . . . increases the dumping margin.”
Pl.’s Br. at 21.
The problem for Dillinger is that it “provides no basis for concluding that relying on [its
normal books and records] imposed an ‘adverse inference’ other than to assert that it is so.” Def.-
Inter.’s Oral Arg. Subm. at 13. Dillinger has provided no authority in which a court has imputed
an adverse inference into Commerce’s selection of facts otherwise available. See Huvis Corp v.
United States, 31 CIT 1803, 1808, 525 F. Supp. 2d 1370, 1376 (2007) (rejecting an argument that
Commerce’s selected facts otherwise available were “so high that they must be characterized as
‘adverse’” where respondent “cite[d] no statute, regulation, or case law for its claim”), aff’d, 570 Court No. 17-00159 Page 40 PUBLIC VERSION
F.3d 1347 (Fed. Cir. 2009). 24 Instead, Dillinger merely notes that reliance on its own preferred
facts otherwise available would reduce its dumping margin from 6.15 percent to 5.91 percent. Pl.’s
Oral Arg. Subm. at 13. This is insufficient.
As Defendant-Intervenor persuasively argues:
If Commerce were deemed to have imposed an adverse inference simply because a party can propose “facts available” that would result in a lower margin[,] [that] would effectively create a “favorable inference” standard in the statute. Such a standard, however, is not required by the statute or implicated by the SAA.
Def.-Inter.’s Oral Arg. Subm. at 12. In concluding that Commerce did not here impose an
impermissible adverse inference, the court does not foreclose the possibility that Commerce may
in the future select as facts otherwise available information that “must be characterized as ‘adverse’
under the antidumping law.” Huvis, 31 CIT at 1808, 525 F. Supp. 2d at 1376 (citation omitted).
The court merely holds that Dillinger has not made such a showing in the case at bar.
CONCLUSION
For the foregoing reasons, the court concludes that Commerce’s selection of facts
otherwise available to supply the missing cost of production information for Dillinger’s prime and
non-prime plate was supported by substantial evidence and otherwise in accordance with law.
Accordingly, the court sustains Commerce’s Third Remand Results.
SO ORDERED. /s/ Gary S. Katzmann Gary S. Katzmann, Judge Dated: August 15, 2023 New York, New York
24 Dillinger’s citations to National Steel Corp. v. United States, 18 CIT 1126, 870 F. Supp. 1130 (1994), Garg Tube Export LLP v. United States, 45 CIT __, 527 F. Supp. 3d 1362 (2021), and Hyundai Electric & Energy Systems v. United States, 2022 WL 3273811 (Fed. Cir. Aug. 11, 2022) are inapposite. None of these cases involved a court imputing an adverse inference into Commerce’s selection of facts otherwise available. Contra Huvis, 570 F.3d at 1353–54 (disagreeing “that the constructed market price . . . constitute[s] an adverse inference against [respondent]”).
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651 F. Supp. 3d 1294, 2023 CIT 114, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dillinger-france-sa-v-united-statespublic-version-08152023-cit-2023.