CAFC Says Commerce Erred in Using Exporter's Likely Selling Prices as Facts Available

The court sent back the AD investigation on carbon and alloy steel cut-to-length plate from Germany due to Commerce's use of Dillinger's likely selling prices, though the judges affirmed the agency's rejection of the respondent's proposed adjustments to the model-match methodology.

During the investigation, which the Court of International Trade remanded four times, Dillinger asked Commerce to adjust its "model-match" methodology, which the agency uses to "categorize similar products based on their physical characteristics" when determining whether merchandise qualifies as a foreign like product. The respondent asked the agency to split the category covering steel used to ship petroleum products into two categories with separate quality codes, one of which would cover "sour service" petroleum transported plate, known as sour transport plate.

In issuing its final product characteristics, Commerce rejected Dillinger's request for a "separate quality code for sour transport plate," though the agency would ultimately accept this product code. In responding to additional questionnaires from the agency, the respondent, for the first time, asked that the category covering steel for pressure vessel plate be split into two categories, product codes 759 and 760, of which "759 would relate to sour pressure vessel plate."

The company said the proposed code for sour pressure vessel plate was "analogous" to its proposed code for sour transport plate. Commerce rejected the proposed code for sour pressure vessel plate as untimely despite its similarity to the product code for sour transport plate.

The agency then asked for product-specific costs of production for Dillinger's non-prime plate. After the respondent repeatedly said it wasn't able to report all the product characteristics for non-prime plate, the agency used Dillinger's likely selling prices as the company's costs for non-prime plate.

After four remands, the trade court eventually sustained the use of Dillinger's likely selling price, taken from its books, to value the costs of the company's non-prime plate (see 2306230054). CIT also upheld the agency's rejection of Dillinger's proposal to add a product code for sour vessel plate as untimely. On appeal, Dillinger argued that Commerce erred in rejecting the sour pressure vessel plate product code and in using likely selling prices for the cost of production for non-prime plate.

Reyna, writing for the court, first upheld the agency's rejection of the sour pressure vessel plate product code. While Dillinger is correct in noting that the "issues involving sour service petroleum transport plate and sour service pressure vessel plate are exactly the same," Reyna noted that Commerce didn't reject the code for sour pressure vessel plate "on the merits of the evidence presented." Rather, the agency rejected the code, since it was untimely submitted.

The court said "Commerce acted within its discretion in rejecting Dillinger’s proposed quality code 759 as untimely." The proposal was "significantly late," which only further supports the agency's rejection of the code, since "the basis supporting its proposed additions of quality codes 759 and 771 was the same," Reyna said. And while Dillinger cited a CIT decision that "proposed model-match comments are not untimely even if submitted after the comment period and after Commerce issued its final product characteristics," Reyna said that decision is clearly distinguishable from the present case given Dillinger's additional delay in presenting its proposal here.

Even assuming Commerce invited untimely proposals, as the respondent suggested, "Commerce is not required to accept all untimely proposals," the court held.

Where the agency did err, however, was in using the company's likely selling price as its cost of production, the court said. In making its case, Dillinger leaned heavily on the CAFC's decisions in Dillinger France v. U.S. and IPSCO v. U.S., which stand for the proposition that "likely selling price does not reasonably reflect the cost of production."

While the government said these cases didn't address how this notion comports with facts otherwise available under the AD statute, Reyna said "the reasoning of both cases applies here." The information Commerce uses as facts otherwise available must be "reasonable to use under the circumstances" and be based on "that which is most probative of the issue under consideration," the court held.

Here, the use of likely selling price fails to clear that standard, Reyna said. “The undisputed evidence shows that Dillinger’s cost of producing prime plate is readily available, and Commerce has not contested Dillinger’s assertion that non-prime plate undergoes the same production process as prime plate,” the opinion said.

The court clarified that Commerce isn't "strictly constrained by the standards articulated in statutes governing the necessary but missing information" when using facts otherwise available, though, the relevant statute "must inform whether Commerce’s selection of facts otherwise available is reasonable." Here, "Commerce failed to meet the reasonableness requirement in this case by using likely selling price as facts otherwise available for cost of production, which, as far as the relevant statute is concerned, are unrelated metrics," the court held.

(AG der Dillinger Huttenwerke v. United States, Fed. Cir. # 24-1498, dated 10/06/25; Judges: Alan Lourie, Timothy Dyk and Jimmie Reyna; Attorneys: Marc Montalbine of deKieffer & Horgan for plaintiff-appellant AG der Dillinger Huttenwerke; Kara Westercamp for defendant-appellee U.S. government; Stephanie Bell of Wiley Rein for defendant-appellee Nucor Corp.)