CAFC Sharply Questions US, Exporter on Missed Deadlines in CVD Case
The U.S. Court of Appeals for the Federal Circuit last week heard oral argument on whether the Commerce Department erred in using adverse facts available against exporter Tau-Ken Temir in a countervailing duty review due to the company's failure to meet filing deadlines. Judges Todd Hughes, Sharon Prost and Timothy Dyk sharply questioned counsel for both Tau-Ken Temir and the government regarding whether the exporter took best efforts to meet filing deadlines and whether the government acted reasonably in rejecting the submission that was filed two hours late (Tau-Ken Temir v. United States, Fed. Cir. # 22-2204).
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Tau-Ken Temir missed its filing deadline in the countervailing duty investigation on silicon metal from Kazakhstan after being granted two previous filing deadline extensions. As instructed by Commerce, the exporter filed an emergency extension the day the submissions were due, which automatically pushed the deadline to 8:30 a.m. the next business day given that Commerce didn't respond to the extension request. Despite the extensions, parts of Tau-Ken Temir's submission were late, leading the agency to use total adverse facts available and impose a 160% CVD rate.
At oral argument, counsel for Tau-Ken Temir, Peter Koenig, said the documents were late, since he received them from the company at 11 a.m. on the day they were due and then encountered filing difficulties after beginning to attempt submission at 4 p.m. Hughes asked why Koenig thought "it was appropriate to wait until 11 the day it was due to receive the documents," noting that his approach didn't seem to be a "very wise practice, especially after you'd already been given two extensions."
Hughes and Prost also pressed Koenig on what they can instruct Commerce to do if they found that AFA was warranted due to the missing information, but took issue with the size of the resulting CVD mark. After Koenig continued to claim that the company's submissions had to be accepted, Hughes asked what the consequence of non-compliance would be if the agency can't use adverse inferences.
Dyk added to this point, suggesting that the court could direct Commerce to use partial AFA after finding that the 160% rate is "draconian" and goes beyond the intended purpose of inducing cooperation. "Here, this draconian, large AFA rate for a minor failure to comply seems inappropriate," the judge said.
Dyk brought this same line of inquiry to his questioning of DOJ attorney Brendan Jordan, first invoking CAFC's recent decision in Oman Fasteners v. U.S., in which the court rejected the use of total AFA for a respondent's 16-minute late submission (see 2501070084). The judge asked how Oman Fasteners isn't applicable in this case and, in fact, isn't more favorable to Tau-Ken Temir given that the Kazakh exporter filed an emergency extension request, whereas the respondent in Oman Fasteners didn't take this step.
Both Hughes and Dyk asked if Commerce is "worse off" if the respondent fails to file the emergency extension request, to which Jordan emphasized the fact that Tau-Ken Temir still missed the deadline even after getting the extension until 8:30 a.m. the next business day. Jordan also urged the court to consider as a factor that the exporter's submissions were filed 17 hours after the original deadline, notwithstanding the emergency extension.
In addition, Dyk asked Jordan if Commerce could use partial AFA to deter a late finding, assuming that it's "arbitrary and capricious to refuse to accept the filing." Jordan responded that this is potentially possible on remand, to which Prost asked "how on earth can they apply an AFA if we find they needed to have granted an extension?" The DOJ attorney said the AFA finding wouldn't be strong if those were the circumstances.
Dyk then asked how a one-day delay can "prevent Commerce" from meeting its statutory deadlines. Jordan said that the agency would still need more information and, at the point of the missed deadline, would have incomplete information. Dyk pointed out that the agency explicitly said in its issues and decision memorandum that it was not relying on the incompleteness of the information in using AFA, but instead resting the decision solely on Tau-Ken Temir's failure to cooperate.
The judges also sharply questioned intervenor Mississippi Silicon, which argued that the factors weigh in favor of finding a "particularly serious failure to cooperate here." Dyk expressed incredulity at this claim, asking if Tau-Ken Temir's intent was to go past the deadline. Jennifer Smith-Veluz, counsel for the intervenor, replied that, even assuming the original error there was inadvertent, the exporter's "failure to be forthcoming was intentional." The respondent knows they are missing information, the attorney said.
In response, Dyk again noted that Commerce didn't rely on the incompleteness of the information in using AFA. Smith-Veluz conceded that this finding by the agency is "a little frustrating," going on to suggest that a remand may be needed for Commerce to explicitly make the finding on incompleteness.