Summary
The Federal Circuit held that Commerce's decision to disregard all of Bosun's country-of-origin information under 19 U.S.C. § 1677e(a) was not supported by substantial evidence where the identified errors were likely confined to sales identified via a FIFO inference (less than 2.5% of sales), and Commerce failed to explain why the reliable portions of Bosun's three-step origin-identification process (product code and unit price) were unreliable. The court affirmed that Commerce properly found § 1677e(a) applicable based on missing or unverifiable information under subsections (a)(1) and (a)(2)(D) for the FIFO-inference sales, but reversed as to subsections (a)(2)(B) and (a)(2)(C) for lack of evidence. The case addresses the scope of "facts otherwise available" and the requirement that Commerce fill informational gaps rather than impose blanket disregard of reliable data, with implications for adverse inferences under § 1677e(b) on remand.
Topics
Questions Presented
- Whether Commerce properly invoked 19 U.S.C. § 1677e(a)(2)(C) (significant impediment) and (a)(2)(B) (failure to provide in form and manner) as bases for using facts otherwise available.
- Whether Commerce properly invoked 19 U.S.C. § 1677e(a)(1) (necessary information not available) and (a)(2)(D) (information cannot be verified) as bases for using facts otherwise available.
- Whether Commerce's decision to disregard all of Bosun's country-of-origin information under § 1677e(a) and (b) was supported by substantial evidence.
- Whether the Trade Court's remand in DSMC I was an abuse of discretion.
Holdings
- Commerce's findings under § 1677e(a)(2)(C) and (a)(2)(B) are not supported by substantial evidence. Commerce did not show that Bosun significantly impeded the proceeding or failed to provide information in the requested form and manner.
- Commerce's findings under § 1677e(a)(1) and (a)(2)(D) are supported by substantial evidence. The record shows that necessary information was not available for some sales and that Bosun's information could not be verified for those sales.
- No. Commerce's decision to disregard all of Bosun's origin information is not supported by substantial evidence because the unreliability appears confined to sales identified via the FIFO methodology, and Commerce did not justify disregarding the reliable information from the first two steps.
- No, the Trade Court's remand was not an abuse of discretion.
Key quotations
“We now conclude that some of the bases on which Commerce invoked § 1677e(a) are unsupported by substantial evidence, while some—which involve only a gap in reliable information—are adequately supported. We also conclude, however, that, in light of the limited bases for applying § 1677e(a), Commerce may have applied that subsection—and hence § 1677e(b), which applies only where subsection (a) applies—too broadly by disregarding all of Bosun's country-of-origin information.” (at 3-4)
“Commerce has not satisfactorily explained why substantial evidence supports its determination of unreliability of all of Bosun's origin information.” (at 25)
“Neither Commerce nor the Trade Court misinterpreted our holdings in Nippon Steel or Peer Bearing regarding the 'best of its ability' standard of § 1677e(b).” (at 27)
Factual background
The case involves an administrative review of an antidumping duty order on diamond sawblades from China. Bosun Tools Co., Ltd., an exporter, used a three-step method to identify the country of origin of its sales to unaffiliated U.S. customers: product codes, unit prices, and a FIFO inference. Commerce verified the method and found no discrepancies in the first two steps but found errors in the FIFO step. Initially, Commerce did not use facts otherwise available, but after remand, it did, disregarding all origin information and assigning Bosun a margin of 82.05%.
Procedural history
The Diamond Sawblades Manufacturers' Coalition challenged Commerce's determination in the Court of International Trade, which remanded for further explanation. On remand, Commerce invoked facts otherwise available and adverse inferences, disregarding all of Bosun's origin information. The Trade Court affirmed. Bosun appealed.
Remand instructions
We remand for further proceedings to determine the extent to which unreliability is so confined, and the consequence for Bosun's dumping margin. We leave to the Trade Court the decision whether a further remand to Commerce is needed.