Commerce Ran 'Afoul' of Admin Law in Switching Basis for AFA on Remand, CIT Says
The Commerce Department failed to follow the "procedural prerequisites" for changing its position on remand when using adverse facts available against exporter Saha Thai Steel Pipe in an antidumping duty review, the Court of International Trade held on June 5. Remanding the review for a third time, Judge Stephen Vaden said Commerce ran "afoul of the most basic of administrative law requirements" when it "falsely claimed to keep its rationale the same" for applying AFA "while quietly changing its position."
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During the 2020-21 review of the AD order on circular welded carbon and steel pipes and tubes from Thailand, Commerce initially said respondent Saha Thai failed to respond to the best of its ability. The agency based this finding on its affiliation analysis of the respondent, since Saha Thai failed to disclose a human resources manager it shared with another company.
Commerce said Saha Thai should have disclosed this employee in response to "Question Six of the Third Supplemental Questionnaire." Vaden noted that question six, however, asks if Saha Thai and another company "share not just any employee but one that also 'has an equity or a debt position in any other company' that sells related merchandise." Question five of the questionnaire, meanwhile, only asks for "current or previous shared employees."
The court said the distinction between these two questions is important because "Commerce based its original adverse inference analysis solely on Saha Thai’s failure to disclose a shared human resources manager in response to Question Six, not Question Five." Nevertheless, the agency switched on remand to basing its AFA decision on the failure to respond to question five after Vaden previously said the agency couldn't rely on the agency's supposed failure to fully respond to question six, though Commerce insisted it didn't change its position.
Citing Commerce's explanation on remand, Vaden said the agency leaves the impression it originally used AFA due to Saha Thai's failure to disclose "only a shared employee -- i.e., that Saha Thai failed to disclose an employee in response to Question Five." The judge held that this "impression is false." Despite Commerce's attempt to "rewrite history," the judge said, the agency "originally based its adverse inference on Saha Thai’s failure to disclose a shared human resources manager as an employee likely to have a debt or equity position in the company."
Vaden said Commerce's explanation bucks standard administrative law procedures, which requires an agency on remand to take new action or more fully explain its original position without offering impermissibly post hoc new reasoning. Since the agency "chose to maintain its original position," it was "limited to its reasoning at the time of the agency action, i.e., Question Six."
Despite having the freedom to change its position on remand, Commerce "claimed to maintain its prior rationale," arguing that the court's last remand order "restricts" the agency to "analyzing affiliation as though Saha Thai had been truthful and cooperated to the best of its ability.” Vaden's reaction to this explanation was simple: "[n]onsense."
"Commerce could have reconsidered its position on remand and concluded that Question Five, instead of Question Six, was a more appropriate basis for an adverse inference," the judge said. "It could have forthrightly explained that it was changing its position because a human resources manager does not typically have a debt or equity position in a company." The agency only needed to make a "simple acknowledgment" that it had erred, but Commerce didn't do this, the judge said.
"Instead, Commerce falsely claimed that it was maintaining its original position while rewriting history sub silentio," the opinion said. "This is a procedural error that the Court cannot affirm.”
On remand, the agency can "maintain its original position that Question Six is the question on which it wishes to base its analysis," which Vaden rejected as unsupported, or "pick a different question."
(Saha Thai Steel Pipe Public Co. v. United States, Slip Op. 25-71, CIT # 21-00627, dated 06/05/25; Judge: Stephen Vaden; Attorneys: Daniel Porter of Pillsbury Winthrop for plaintiff Saha Thai Steel Pipe Public Co.; Robert Gosselink of Trade Pacific for plaintiff-intervenor Thai Premium Pipe Co.; Collin Mathias for defendant U.S. government; Christopher Cloutier of Schagrin Associates for defendant-intervenor Wheatland Tube Co.)