CAFC OKs Partial AFA for Respondent's Failure to Provide Manufacturer Info for Downstream Sales
The Commerce Department properly used partial adverse facts available against respondent Salzgitter Flachstahl in an antidumping duty investigation for failing to provide manufacturer information for around 28,000 of its downstream sales made in Germany by one of its affiliates, the U.S. Court of Appeals for the Federal Circuit held on June 17.
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Judges Timothy Dyk, Alan Lourie and Jimmie Reyna held that while Commerce's request for the information placed an "unreasonable burden" on the company, Salzgitter didn't provide sufficient alternatives to supplying the manufacturer information for all 28,000 sales. Dyk, writing for the court, echoed the ruling of the Court of International Trade in the matter, which said the respondent should have offered to provide the manufacturer information for a random sample of the sales.
The court also upheld Commerce's application of the "highest non-aberrational net price among the 28,000 sales to each of the 28,000 sales" as partial AFA. The result is a 22.9% AD rate for Salzgitter in the AD investigation on cut-to-length carbon and alloy steel plate from Germany.
The parties agreed that submitting the manufacturer information for all 28,000 sales would have taken the respondent nearly 5,000 hours, since the information had to be manually retrieved for each individual sale. During the investigation, Salzgitter offered three alternatives to reporting the manufacturing information. The alternatives either treated none of the sales as Salzgitter-made plate, treated all the sales as Salzgitter-made plate or treated only a portion of each sale as Salzgitter-made plate, and each alternative led to a 0% dumping margin.
The appellate court first reviewed whether Commerce's demand placed an unreasonable burden on the company, ultimately concluding that it did. The agency said its demand wasn't unreasonable, since Salzgitter was able to manually retrieve the manufacturer information for a particular sale during verification "within minutes." The court said the ability to retrieve this information for one sale "says nothing about the overall burden of the request, as Salzgitter has consistently argued," adding that Commerce hasn't disputed the respondent's "calculation of the required burden, nor does Commerce seriously contest that the burden was substantial."
Dyk said Commerce ignored the fact that the missing data "required manual assembly, and that technological enhancements in electronic records management could not be utilized to replace a manual effort." And Salzgitter shouldn't be reasonably required to keep information that's required in AD proceedings, since this was the first investigation and not a review of the AD order, the court said. Dyk added that there's no evidence to support the agency's claim that manufacturer information is the type of data a respondent "should have reasonably anticipated being required to provide to its customers for quality assurance and warranty claims.”
Despite this burden, the court said partial AFA is warranted due to the insufficient alternatives suggested by Salzgitter. The company's first two proposals "did nothing to allocate the 28,000 sales between Salzgitter and other manufacturers," and the third "simply assumed that the proportion of Salzgitter’s sales" was the same proportion that were identified as Salzgitter's in the dataset, "without any evidence that these other sales were representative of the 28,000 sales missing manufacturer data," the court said.
The respondent's proposals "failed to address Commerce’s concerns about selective reporting, which could have potentially rewarded Salzgitter by artificially distorting the margin by failing to reflect high-priced sales by Salzgitter," Dyk said. Randomized sampling would have been a reasonable alternative, the court said.
The court held that Commerce's use of partial AFA was ultimately reasonable, "if barely so, given the absence of evidence of misconduct." Dyk then addressed Salzgitter's challenge to the margin Commerce calculated, which the respondent said was "aberrational because the transaction Commerce selected concerned a product 'that was ... dissimilar in physical characteristics to the products sold in the United States.'"
The Federal Circuit said they see "no error in the Trade Court’s conclusion that, given the circumstances, Commerce’s approach was reasonable, especially because Salzgitter failed 'to suggest any alternative price from the record that Commerce could have selected as a reasonable application' of adverse facts available."
(AG der Dillinger Huttenwerke v. United States, Fed. Cir. # 24-1219, dated 06/17/25; Judges: Alan Lourie, Timothy Dyk, Jimmie Reyna; Attorneys: Ron Kendler of White & Case for plaintiffs-appellants led by Salzgitter Flachstahl; Kara Westercamp for defendant-appellee U.S. government; Jeffrey Gerrish of Schagrin Associates for defendant-appellee SSAB Enterprises)