CIT Allows Use of AFA in Cooperative Respondent's AD Rate in Mexico Circular Welded Pipe Review
The Court of International Trade sustained the partial application of adverse facts available (AFA) to determine Mueller Comercial’s AD rate, despite Mueller’s full cooperation, in the 2008-09 antidumping administrative review of circular welded non-alloy steel pipe from Mexico (A-201-805). The International Trade Administration had used AFA on incomplete cost data needed from one of Mueller’s suppliers. CIT agreed with the ITA’s argument that the uncooperative supplier would have benefited from a lower AD rate without the partial application of AFA, and said its use was justified, despite the fact that Mueller cooperated.
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During the administrative review at issue, the ITA needed cost data from Mueller’s suppliers for use in the cost of production analysis and the calculation of constructed value for Mueller. Mueller was a reseller that did not manufacture subject merchandise. Ternium, one of Mueller’s suppliers, was a non-cooperative respondent in the investigation, and only submitted incomplete cost data. Despite Mueller’s cooperation, the ITA assigned AFA to Ternium’s cost data when calculating Mueller’s AD rate. Mueller would have received an AD rate of 4.81 percent, but instead received a 19.81 percent AD rate because of the use of AFA.
Mueller argued that, as a cooperating respondent, the ITA’s application of AFA to a cooperating respondent was unreasonable. The company pointed to the court’s decision in SKF v. U.S., a case where the ITA’s use of AFA on a cooperative respondent was remanded. The ITA argued that it has a statutory duty to ensure companies do not benefit from cooperation. Because Ternium is Mueller’s supplier, it would have benefited from a lower AD rate for Mueller, the ITA said. Further, said the ITA, not using AFA would have resulted in an inaccurate AD rate for Mueller, because the information was required to accurately calculate Mueller’s margin. “Application of an adverse inference only to the missing cost of production information that Ternium has withheld is a reasonable and limited inference based on the information on the record that ensures Ternium does not benefit from its failure to cooperate and also avoids an inaccurate dumping margin for Mueller,” the ITA said.
CIT said Mueller’s reliance on SKF was misplaced, because the facts of the case were different. While in SKF the ITA selected a rate only because it was adverse to the cooperating respondent, it did not do so in this review. The ITA also avoided drawing an adverse inference specifically against Mueller, CIT said. Because the ITA carefully considered the underlying statute, intent of Congress, the potential unfairness to Mueller, and the impact of its decision on the accuracy of Mueller’s AD rate, its decision merited Chevron deference, CIT said.
(Mueller Comercial De Mexico, S. de R.L. de C.V. v. United States, Slip Op. 12-156, dated 12/21/12, Judge Gordon)
(Attorneys: David Bond of White & Case for plaintiffs Mueller and Southland Pipe Nipples Co., Inc.; Douglas Edelschick for defendant U.S. government; Roger Schagrin of Schagrin Associates for defendant-intervenors TMK IPSCO Tubulars and Allied Tube and Coduit; Jeffrey Gerrish of Skadden Arps for defendant-intervenor U.S. Steel)