CIT Says Again Commerce Reasonably Emphasized R&D Country-of-Origin Factor

Solar cell exporter BYD brought its case arguing that, to rule that the exporter circumvented antidumping duty and countervailing duty orders on Chinese-origin solar cells, Commerce wrongly elevated the R&D levels factor over the other four country-of-origin factors found in 1677j(b)(2) (see 2407030064).

But BYD and plaintiff-intervenor Florida Power & Light Co. were misinterpreting the law, said CIT Judge M. Miller Baker. The department looks at all five factors, not just BYD’s preferred ones,” he said; and even if FPL would have balanced the factors differently, Commerce reasonably explained its conclusion, he said.

“Commerce must consider the five § 1677j(b)(2) factors ‘depending on the particular circumvention scenario,’” Baker said. “No single one is controlling as a matter of law, but the statute permits the Department to balance them based on the record evidence in any given case.”

Baker agreed with the exporter on one issue, although he said it amounted to harmless error. He explained BYD gives solar cell inputs to Cambodian “tollers,” unaffiliated manufacturers who construct BYD’s solar cells using their own equipment. Commerce didn’t use the tollers’ costs and production information in its determinations regarding BYD’s “level of investment” and “extent of production facilities” in Cambodia, but did regarding the “nature of production” factor.

Commerce’s refusal to use the information of the tollers employed by BYD contradicted statute, he said, but the legal error was harmless based on the determination’s emphasis on the R&D factor.

In particular, he explained, although the department may “consider any affiliation” between third-country producers and input suppliers under Section 1677j(b)(3)(B), that affiliation analysis is made at a later stage. Before then, “the statute requires the Department to undertake an ‘if/then’ analysis” whereby it first must rule on the basis of 1677j(b)(1)(A)-(E), and then, if those conditions are satisfied, it may “consider whether to expand an order to cover a third country” using the factors expressed in 1677j(b)(3).

“Commerce must evaluate the relevant aspect of ‘the process of assembly or completion’ without gerrymandering its findings -- as it did here -- based on the identity of the actor(s) undertaking it,” he said.

Baker also upheld Commerce’s decision that the value of processing in Cambodia was only a small proportion of the solar cells’ total value, even though it was “greater than one-third.” There aren’t “rigid standards” for determining what counts as “small” in this scenario, he said, and “[i]t suffices” that the department has made similar determinations in other cases.

And he dismissed BYD’s argument that Commerce should have conducted a qualitative analysis, not just a quantitative one, during its value-added determination. Even if the department had departed from its usual practice, it provided an adequate explanation for doing so, he said.

He also said that the department was allowed to use surrogate values to calculate the input costs of “source-country components” sold to a third country even when that third country is a market economy. He based the decision on the 2023 U.S. Court of Appeals for the Federal Circuit decision Al Ghurair Iron & Steel, saying that Loper Bright “did not throw out the administrative discretion baby with the Chevron deference bathwater.”

(BYD (H.K.) Co,, Ltd. v. United States, Slip Op. 25-60, CIT # 23-00221, dated 05/16/25; Judge: M. Miller Baker; Attorneys: Craig Lewis of Hogan Lovells for plaintiff BYD (H.K.) Co., Ltd.; Matthew Nicely of Akin Gump for plaintiff-intervenor Florida Power & Light Co.; Brian Boynton for defendant U.S. government)