CIT Upholds Use of Exporter's Records as Facts Otherwise Available Despite CAFC Opinion

Judge Gary Katzmann upheld the use of this information despite a U.S. Court of Appeals for the Federal Circuit ruling in the case, which said that these books and records failed to satisfy Section 1677b(f)'s requirement that an exporter's records reasonably reflect the costs linked with the production of the merchandise. Dillinger's records reflect the estimated selling price of non-prime plate instead of their costs of production.

On remand, the agency said it was still allowed to use the respondent's likely selling prices as facts otherwise available, forcing the court to rule on whether this data could be used in light of the informational gap on the record (see 2211160073). Katzmann said that Commerce could use this data despite the Federal Circuit's ruling. The judge said that after reviewing the statute, legislative history and appellate court case law, he "declines to impute the definitional requirements of" Section 1677b(b)(3) -- the provision laying out the requirements of "cost of production" -- as the standard by which it assesses the reasonableness of the agency's reliance on Dillinger's normal books and records as facts otherwise available.

Katmann said Commerce doesn't need actual COP data when filling a gap on the record, but there still must be "at least some kind of connection between the gap to be filled and the selected facts otherwise available." In this case, the gap to be filled is the cost of making the prime and non-prime plate. As a result, the judge said he had to assess whether the Federal Circuit's holding is so broad as to bar a finding of any such link between Dillinger's books and records and the missing cost information.

Katzmann said the decision wasn't so broad and a link exists. "More than a mere scintilla" of the evidence shows that Dillinger's likely selling price of its non-prime plate is "probative of the issue under consideration," the court said. In its remand results, Commerce said the production of non-prime products is an "inevitable consequence of the production process of prime products" because it can't make the non-prime goods without the process of making the prime ones.

The court ruled that Dillinger's counterarguments are "unavailing." The judge said the only one of the respondent's claims that "requires further discussion" argues that Commerce's rationale concedes that the non-prime sales price doesn't cover the costs of making those products so that the likely selling price has no relationship with the actual costs of production. Katzmann said this claim has some "initial appeal," but it rests on "unsubstantiated assumptions" because the actual costs of making the non-prime products are dependent on their physical characteristics, which Dillinger hasn't provided. As a result, the agency is faced with a situation in which the exporter didn't submit information that would have let it set the actual costs of making the non-prime products.

Given the informational gap, Katzmann ruled that "ties goes to the agency." A court can't step between an agency's choice between two fairly conflicting views, the opinion said. The judge concluded the use of facts otherwise available here doesn't impose "an adverse inference" since Dillinger has provided no basis for finding that relying on its normal books and records sets an adverse inference other than to "assert that it is so."

(Dillinger France v. U.S., Slip Op. 23-114, CIT # 17-00159, dated 08/15/23; Judge: Gary Katzmann; Attorneys: Marc Montalbine of DeKieffer & Horgan for plaintiff Dillinger France; Kara Westercamp for defendant U.S. government; Stephanie Bell of Wiley for defendant-intervenor Nucor Corporation; Roger Schagrin of Schagrin Associates for defendant-intervenor SSAB Enterprises)