Commerce Unreasonably Used AFA Rate to Set Separate Respondents' Margin, Importers Tell CAFC
The Commerce Department erred in using a country-wide adverse facts available rate in calculating the antidumping duty rate for the separate rate respondents, importers led by Galleher Corp. argued in an opening brief at the U.S. Court of Appeals for the Federal Circuit. Galleher argued the use of the AFA rate "punishes" the separate rate firms for respondent Sino-Maple's "lack of cooperation" and leads to an "aberrational margin that does not bear any relationship to the actual dumping margins of the separate rate companies" (Fuson Jinlong Wooden Group Co. v. United States, Fed. Cir. # 25-1196).
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In the 2016-17 AD administrative review on multilayered wood flooring from China, Commerce used a weighted average of the zero percent and the 85.13% China-wide rate assigned to the two respondents to set the mark for the separate rate companies at 31.63%. The Court of International Trade sustained the move after rejecting the agency's original decision to use a simple average of the zero and AFA margins. The trade court said the weighted average represented an appropriate use of the agency's "expected method" for calculating separate rates (see 2409180044).
On appeal, Galleher argued that the use of the AFA rate was "unreasonable" and unsupported when considered in the context of the historic margins imposed in all preceding reviews of the AD order.
The importer cited the Federal Circuit's holding in Yangzhou Bestpak Gifts & Crafts Co. v. U.S., which rejected the inclusion of the AFA rate in the separate company rate, since it was "far in excess of the de minimis rate assigned to the only cooperating non-government controlled" mandatory respondent. Galleher argued that Commerce's actions in the present review "employ the same flawed methodology that this Court addressed in Bestpak."
The agency "tainted its separate rate calculation by including the AFA rate of a non-cooperative mandatory respondent," despite the separate rate firms' full cooperation, the brief said. The "application of such an inference to fully cooperative separate rate respondents" led to a rate that "does not reasonably reflect their potential dumping margins." Galleher said "Congress simply could not have" meant for Commerce's discretion to include the ability to pick "unreasonably high rates with no relationship to the respondent's actual dumping margin."
Galleher also claimed that the historic AD rates, and the trends in those rates, don't support the 31.63% mark. The importer sought to distinguish its case from the facts present in Bosun Tools v. U.S. -- a case in which the Federal Circuit upheld the use of the AFA mark in the separate rate respondent calculation, since the respondents in that case were historically assigned higher than de minimis rates and were following an "upward trend."
The brief said the present review is the "opposite" of Bosun Tools, noting that in almost all reviews preceding the 2016-17 review, the mandatory and separate rate respondents "received margins of zero percent." The 2016-17 review was the "first in which the separate rate companies received a margin over 4%," clearly showing that the 31.63% mark is "highly aberrational margin for this proceeding," Galleher argued.
There was "no upward trend or larger than de minimis rates as there was in Bosun Tools," the brief said.