Opinion

Decca Hospitality Furnishings, LLC v. United States

391 F. Supp. 2d 1298
29 Ct. Int'l Trade 920
29 C.I.T. 920
27 I.T.R.D. (BNA) 2087
2005 Ct. Intl. Trade LEXIS 112

Court: United States Court of International Trade
Filed: Aug 23, 2005
Status: Published
Author: Pogue
On the bench: Pogue
Cited by: 12 cases
Authority: More cited than 80.6%

finding that an agency cannot impose a deadline for which it does not adequately inform parties

How later courts described this case

finding that an agency cannot impose a deadline for which it does not adequately inform parties
“While Commerce presumes that all companies [operating in a non-market economy, such as Vietnam] are under state-control, a company may rebut this presumption, and therefore qualify for an antidumping duty rate separate from the [country]-wide rate, if it demonstrates de jure and de facto independence from government control.”
"While Commerce presumes that all companies [operating in an NME] are under state-control, a company may rebut this presumption, and therefore qualify for an antidumping duty rate separate from the PRC-wide rate, if it demonstrates de jure and de facto independence from government control."
“Commerce has traded convenience for flexibility — it must take the bitter with the sweet in this trade-off.”

Written by the judges who cited it.

The opinion

Slip Op. 05-100

UNITED STATES COURT OF INTERNATIONAL TRADE

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DECCA HOSPITALITY FURNISHINGS, :

LLC, :

Plaintiff, :

MARIA YEE INC., ET AL., :

Plaintiff-Intervenors, : Before: Pogue, Judge

v. :

UNITED STATES, :

: Court No. 05-00002

Defendant, :

AMERICAN FURNITURE :

MANUFACTURERS COMMITTEE FOR :

FAIR TRADE, ET AL., :

Defendant-Intervenors. :

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OPINION

[Department of Commerce’s determination remanded.]

Dated: August 23, 2005

Dewey Ballantine LLP (Harry L. Clark, David A. Yocis, and

Mayur R. Patel) for the plaintiff;

Arent Fox PLLC (Nancy A. Noonan and Patricia P. Yeh) for

plaintiff-intervenors;

Peter D. Keisler, Assistant Attorney General; David M. Cohen,

Director, Patricia M. McCarthy, Assistant Director, Commercial

Litigation Branch, Civil Division, U.S. Department of Justice

(Michael D. Panzera); Rachel Wenthold, Attorney, Of Counsel, Office

of Chief Counsel for Import Administration, U.S. Department of

Commerce, for the defendant;

King & Spalding LLP (Joseph W. Dorn, Stephen A. Jones, and

Jeffrey M. Telep) for defendant-intervenors.

Case No. 05-00002 Page 2

Pogue, Judge: This case involves a challenge by Decca Hospitality

Furnishings, LLC (“Decca”) to the Department of Commerce’s

(“Commerce” or “Defendant” or “Department”) determination in Wooden

Bedroom Furniture from the People’s Republic of China, 69 Fed. Reg.

67,313, 67,315 (Dep’t Commerce Nov. 17, 2004) (final determination

of sales at less than fair value) (“Final Determination”). Decca

asserts that, in the Final Determination, Commerce denied Decca

separate rate status because Commerce improperly rejected its

evidence as untimely. Commerce avers that Decca failed to timely

submit a response to Commerce’s Section A Questionnaire which it

required to qualify for a separate rate. Because the court agrees

that Commerce impermissibly rejected Decca’s evidence, it remands

this case for further consideration consistent with this opinion.1

BACKGROUND

Commerce considers the PRC to have a non-market economy

(“NME”). In dumping investigations of NME economies, Commerce

presumes that all companies operating in a NME are state-

controlled. See Silicon Carbide from the People's Republic of

Decca moved for, and was granted, expedited consideration

on Counts I and II of its complaint. Order Granting Mot.

Expedited Consideration, Mar. 16, 2005. Because the court is

remanding this case for further consideration, and the results of

Commerce’s redetermination may alter the need to address the

remaining counts of Decca’s complaint, the court reserves

judgment on those counts.

Case No. 05-00002 Page 3

China, 59 Fed. Reg. 22,585, 22,586, 22,589 (Dep’t Commerce May 2,

1994) (notice of final determination of sales at less than fair

value); Sparklers from the People's Republic of China, 56 Fed. Reg.

20,588, 20,589 (Dep’t Commerce May 6, 1991) (final determination of

sales at less than fair value) (“Sparklers”). Commerce further

presumes that all state-controlled companies are part of a single

entity. Consequently, Commerce establishes a single rate for all

state-controlled companies. While Commerce presumes that all

companies are under state-control, a company may rebut this

presumption, and therefore qualify for an antidumping duty rate

separate from the PRC-wide rate, if it demonstrates de jure and de

facto independence from government control.

Despite considering the PRC to be a NME, Commerce recognizes

that companies organized outside of China are per se independent

from the control of the PRC government. Once a party demonstrates

that it is foreign owned, Commerce accords that company a rate

separate from the PRC-wide rate. Furthermore, Hong Kong is

considered to be fully autonomous from China for economic and trade

matters. 22 U.S.C. § 5713(3)(2000). Accordingly, if a company

doing business in the PRC demonstrates that it is organized under

the laws of Hong Kong, Commerce exempts that company from the PRC-

wide rate. Fresh Garlic from the People's Republic of China, 67

Fed. Reg. 51,822, 51,823 (Dep’t Commerce Aug. 9, 2002) (“Garlic”)

(preliminary results of antidumping duty administrative review,

Case No. 05-00002 Page 4

partial rescission of administrative review, and intent to rescind

administrative review in part). In large investigations, like this

one, Commerce will assign individualized separate rates to certain

participants in the investigation, i.e., the mandatory respondents,

but will assign all other qualifying companies a rate equal to the

“weighted-average margin based on the rates [Commerce] calculate[s]

for the [] mandatory respondents, excluding any rates that are

zero, de minimis, or based entirely on adverse facts available.”

Wooden Bedroom Furniture from the People's Republic of China, 69

Fed. Reg. 35,312, 32,323 (Dep’t Commerce June 24, 2004) (notice of

preliminary determination and postponement of final determination)

(“Preliminary Determination”).

The presumption of state-control has met with judicial

approval because respondents have “the best access to information

pertinent to the ‘state-control’ issue,” Sigma Corp. v. United

States, 117 F.3d 1401, 1406 (Fed. Cir. 1997), and a significant

percentage of the companies in the PRC are controlled by the PRC

government.

On December 17, 2003, Commerce began an investigation of

exporters/producers of wooden bedroom furniture from the PRC in

response to a petition filed by the domestic industry. See Wooden

Bedroom Furniture from the People’s Republic of China, 68 Fed. Reg.

70,228 (Dep’t Commerce Dec. 17, 2003) (initiation of antidumping

Case No. 05-00002 Page 5

duty investigation) (“Notice of Initiation”). In its Notice of

Initiation, Commerce specified that it would follow its statutory

and regulatory time limits. Notice of Initiation, 68 Fed. Reg. at

70,231. The Department’s regulations are stated in Antidumping

Duties; Countervailing Duties, 62 Fed. Reg. 27,296, 27,323 (Dep’t

Commerce May 19, 1997) (“Preamble”), which announced and explained

Commerce’s current rules as promulgated in the Code of Federal

Regulations. The Notice of Initiation also included contact

information for parties interested in seeking “further

information.” Id. at 70,228.

During the early stages of this investigation, Commerce asked

for information, in the form of two questionnaires,2 from

exporters/producers of furniture that were within the scope of the

investigation. On December 30, 2003, Commerce sent the first

questionnaire, a quantity and value questionnaire (“Q&V

Questionnaire”), to the Chinese Ministry of Commerce (“MOFCOM”)3

Commerce sent out more than two questionnaires during the

course of the investigation. However, as is relevant here, the

court will limit its discussion to just these two questionnaires.

One of MOFCOM’s self-described “main mandate[s]” is “[t]o

formulate . . . guidelines and policies of domestic and foreign

trade and international economic cooperation.” Ministry of

Commerce of the People’s Republic of China Website, MISSION

(2005), http://english.mofcom.gov.cn/mission/mission.html. As

part of its mandate, MOFCOM is responsible for guiding and

coordinating “domestic efforts in responding to foreign

antidumping, countervailing, and safeguard investigations and

other issues concerned.” Id.

Case No. 05-00002 Page 6

and 211 known producers of wooden bedroom furniture in the PRC.

Preliminary Determination, 69 Fed. Reg. at 35,313; Def.’s Mem.

Opp’n Pl.’s R. 56.2 Mot. J. Agency R. 3 (“Def’s Mem.”). In its

letter to MOFCOM, Commerce sought MOFCOM’s “support in identifying

and transmitting [its] request for information to any Chinese

producer and/or exporter of wooden bedroom furniture that exported

wooden bedroom furniture for sale to the United States during the

[period of investigation].” Letter from Edward Yang, Office

Director, AD/CVD Enforcement Group III to Liu Danyang, Director,

Bureau of Fair Trade for Imports and Exports, Re: Antidumping Duty

Investigation of Wooden Bedroom Furniture from the People’s

Republic of China, P.R. Doc. 140, Pl.’s Ex. 3 at 1 (Dec. 30, 2003).

Additionally, the letter stated in bold print:

Please be advised that receipt of the quantity and value

questionnaire by producers/exporters of the subject

merchandise does not indicate that they will be chosen as

a mandatory respondent or guaranteed separate rates

status in this antidumping duty investigation.

Id. at 2.

The letters sent to individual producers and exporters had a

virtually verbatim disclaimer noting that respondents would not be

guaranteed a separate rate status by responding to the

questionnaire. Letter from Robert A. Bolling, Program Manager

Group III, Office IX, to All Interested Parties, P.R. Doc 139,

Pl.’s Ex. 4 (Dec. 30, 2003). Commerce received 137 responses to

this initial questionnaire. Preliminary Determination, 69 Fed.

Case No. 05-00002 Page 7

Reg. at 35,313. However, Commerce “did not receive any type of

communication from the Government of the PRC in response to” its

letter to MOFCOM. Id.

Commerce sent the second questionnaire, a Section A

Questionnaire,4 on February 2, 2004. Unlike the Q&V Questionnaire,

Commerce sent the Section A Questionnaire only to (a) MOFCOM and

(b) seven companies it deemed to be mandatory respondents. The

February 2, 2004 letter to MOFCOM specified that “[a]ll parties are

requested to respond to section A (General Information) of the Non

Market Economy (“NME”) questionnaire by February 23, 2004.” Letter

from Robert Bolling, Program Manager AD/CVD Enforcement III to Liu

Danyang, Director Bureau of Fair Trade for Imports and Exports,

Pl.’s Ex. 5, P.R. Doc. 297 at 2 (emphasis in original). A generic

Section A Questionnaire was also available on Commerce’s website.

According to Commerce, “Section A of the questionnaire

requests general information concerning a company’s corporate

structure and business practices, the merchandise under

investigation that it sells, and the manner in which it sells

that merchandise in all of its markets. Section B requests a

complete listing of all home market sales, or, if the home market

is not viable, of sales in the most appropriate third-country

market (this section is not applicable to respondents in

non-market economy (NME) cases). Section C requests a complete

listing of U.S. sales. Section D requests information on the

factors of production (FOP) of the subject merchandise under

investigation. Section E requests information on further

manufacturing.” Certain Ball Bearings and Parts Thereof from the

People's Republic of China, 67 Fed. Reg. 63,609, 63,609 n.2

(Dep’t Commerce Oct. 15, 2002) (notice of preliminary

determination of sales at less than fair value and postponement

of final determination); see also Preamble, 62 Fed. Reg. at

27,334.

Case No. 05-00002 Page 8

The Section A Questionnaire itself informed parties that “[a]ll

companies requesting a separate rate must respond to the following

questions.” Section A Questionnaire, P.R. Doc. 297 at A-1.

Commerce received 126 Section A responses from parties.

Preliminary Determination, 69 Fed. Reg. at 35,313-14. The PRC did

not respond to this questionnaire either. Id. at 35,321.

In its preliminary determination issued on June 24, 2004,

Commerce assigned a separate rate to respondent companies who

timely submitted responses to the Section A Questionnaire and who

demonstrated sufficient independence, i.e., both de jure and de

facto independence from government control. Preliminary

Determination, 69 Fed. Reg. 35,312, 35,319-20. All companies

(other than the mandatory respondents), which sufficiently

demonstrated that they were organized under the laws of Hong Kong,

were granted a separate rate of 6.65%. Wooden Bedroom Furniture

from China, 70 Fed. Reg. 329, 300 (Dep’t Commerce Jan. 4, 2005)

(notice of amended final determination of sales at less than fair

market value and antidumping duty order). Commerce assigned all

other parties a rate of 198.08%. Final Determination, 69 Fed.

Reg. at 67,316.

Plaintiff, Decca, asserts that it is a Hong Kong based

Case No. 05-00002 Page 9

producer and exporter of wooden bedroom furniture.5 Although Decca

was not specifically mentioned in the Notice of Initiation Commerce

sent it a Q&V Questionnaire. Letter from Edward Yang, Office

Director, AD/CVD Enforcement Group III to Liu Danyang, Director,

Bureau of Fair Trade for Imports and Exports, Re: Antidumping Duty

Investigation of Wooden Bedroom Furniture from the People’s

Republic of China, P.R. Doc. 140, Pl.’s Ex. 3 at 1 (Dec. 30, 2003).

Although Decca claims it did not receive the Q&V Questionnaire

directly from Commerce or MOFCOM, Decca, operating pro se, timely

submitted a response to the Q&V Questionnaire on January 8, 2004.6

Decca also claims it never received the Section A Questionnaire, or

Accordingly, the court will assume that Decca can state a

case for asserting that Hong Kong is its place of incorporation,

and that therefore, Commerce must enter a finding of fact on this

question. Commerce is, of course, free on remand, after

considering Decca’s evidence, to conclude that Decca is not a

Hong Kong based corporation.

Commerce rejected Decca’s Q&V Questionnaire submission.

However, one of Commerce’s purported reasons for rejecting

Decca’s submission was that it was “submitted after the January

9, 2004 deadline.” Letter from Robert Bolling, Program Manager

Enforcement Group III, Office 9, to Spiro Kwan, Decca Furniture

Ltd., P.R. Doc. 448, Pl.’s Ex. 6 at 1 (Feb. 26, 2004); cf. Def.’s

Supp. at 3. However, Commerce also acknowledged that the

response was submitted on January 8, 2004, id., Dep’t of Commerce

Mem. from Jeffrey May, Deputy Assistant. Sec’y for Imp. Admin. to

James J. Jochum, Assistant. Sec’y for Imp. Admin., Re: Wooden

Bedroom Furniture from the People’s Republic of China: Untimely

Section A Questionnaire Submission of Decca Furniture Ltd., P.R.

Doc. 1763, Pl.’s Ex. 14 at 2 (Sept. 16, 2004) (“Decision Memo”),

which would have made Decca’s submission timely, i.e., submitted

before the January 9, 2004 deadline, Letter from Robert A.

Bolling, Program Manager, Group III, Office IX, to All Interested

Parties, P.R. Doc 139, Pl.’s Ex. 4 (Dec. 30, 2003).

Case No. 05-00002 Page 10

information regarding the deadline for submitting responses to the

Section A Questionnaire.7 According to Decca, after submitting its

response to the Q&V Questionnaire, it did not hear from Commerce

until after March 2, 2004 when it received a letter from Commerce

rejecting its response because of filing deficiencies.8 In

Commerce’s letter to Decca explaining its rejection of Decca’s Q&V

Questionnaire response, Commerce informed Decca that “the rejection

d[id] not prevent parties from filing additional information in

this investigation.” Letter from Robert Bolling, Program Manager,

Enforcement Group III, Office 9, to Spiro Kwan, Decca Furniture

Ltd., P.R. Doc. 448, Pl.’s Ex. 6 at 3 (Feb. 26, 2004). Commerce

mailed the rejection letter after the February 24 deadline for

submitting Section A responses. Decca attempted to refile its

Q&V Questionnaire on June 8, 2004 and, in early July, attempted to

submit other information pertaining to its status as a Hong Kong

based company. Decision Memo, P.R. Doc. 1763, Pl.’s Ex. 14 at 2.

In its determination, Commerce insisted that it only needed

to take reasonable steps in providing notice, that the steps it

took were reasonable, and therefore, consideration of whether

Decca received actual and timely notice was unnecessary.

Consequently, it did not make any factual findings on this

question. Accordingly, the court will assume that MOFCOM never

sent Decca the Section A Questionnaire. Commerce is free on

remand, after considering the evidence, to conclude that Decca

received the Questionnaire, or actual and timely notice thereof

(through some means not stated in its determination or brief).

Decca avers that it did not receive this notification.

Because this fact is unnecessary in resolving this case in its

current posture, the court expresses no view on this matter.

Case No. 05-00002 Page 11

Commerce asserts that Decca missed the filing deadline for the

Section A Questionnaire. Accordingly, pursuant to its

presumptions, Commerce set Decca’s antidumping duty rate at the

PRC-wide rate. Plaintiff protests that determination, inter alia,

claiming that Commerce failed to provide it with sufficient notice

of both the requisite filing requirement for proving its

entitlement to a separate rate, and the deadline for such a filing,

and thereby improperly excluded the evidence Decca attempted to

proffer establishing that it is entitled to a separate rate.9

Decca timely protested Commerce’s determination. After

consideration, Commerce denied Decca’s request. Letter from Office

to Dewey Ballentine, P.R. Doc. No. 1802 (Sept. 30, 2004). Decca

sought timely review of Commerce’s finding and properly invoked

this court’s jurisdiction under 28 U.S.C. 1581(c).

The court must sustain Commerce’s determination unless it is

“unsupported by substantial evidence on the record, or otherwise

Decca also argues that Commerce has its mailing address in

the record and that this is substantial evidence that Decca is a

Hong Kong based company. The court agrees with Commerce that

this evidence, by itself, is insufficient to overcome Commerce’s

presumption. Companies may have multiple mailing addresses (or

keep multiple mailing addresses for the purposes of securing

separate rates). Nor does simply having a Hong Kong address

mean that a company is incorporated under the laws of Hong Kong.

So long as Commerce provides a sufficient opportunity to submit

other relevant information, Commerce may require more than a

mailing address before finding an interested party qualifies for

a separate rate. Cf. Sigma, 117 F.3d at 1406-07 (allowing

Commerce discretion to determine what evidence is sufficient to

overcome the presumption of state-control).

Case No. 05-00002 Page 12

not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B). The

court must defer to an agency’s reasonable construction of an

ambiguous statute. Chevron U.S.A. Inc. v. Natural Res. Def.

Council, Inc., 467 U.S. 837, 842-843 (1984). Likewise, the court

may defer to an agency’s interpretation of an ambiguous regulation,

so long as that interpretation is not plainly erroneous or

inconsistent with the regulation, does not fail to reflect the

“agency's fair and considered judgment on the matter in question,”

Auer v. Robbins, 519 U.S. 452, 462 (1997), Cathedral Candle Co. v.

United States ITC, 400 F.3d 1352, 1364 (Fed. Cir. 2005); but cf.

Keys v. Barnhart, 347 F.3d 990, 993 (7th Cir. 1997) (Posner, J.),

Satellite Broad. Co. v. F.C.C., 824 F.2d 1, 3-4 (D.C. Cir. 1987)

(where notice is at issue, a party cannot be faulted for relying on

an alternative reasonable construction of the regulation), John F.

Manning, Constitutional Structure and Judicial Deference to Agency

Interpretations of Agency Rules, 96 COLUM. L. REV. 612, 655-60, 678-

81 (1996), or, if adopted, does not render the regulation

unreasonable or otherwise not in accordance with law, Chevron, 467

U.S. at 842-843 (1984).

In this case, if Commerce improperly rejected Decca’s

submissions, thereby improperly presuming Decca’s place of

incorporation (not to be Hong Kong), then Commerce’s findings are

unsupported by substantial evidence and the case must be remanded

for Commerce to enter a factual finding.

Case No. 05-00002 Page 13

DISCUSSION

In Transcom, Inc. v. United States, 294 F.3d 1371, 1380 (Fed.

Cir. 2002) (“Transcom II”), the court considered whether Commerce

appropriately found that parties operating in China had failed to

rebut the presumption of state-control where the importer had not

received a questionnaire from Commerce and offered no evidence to

rebut Commerce’s presumption. The court found that, in light of

the evidentiary requirements established by Commerce’s substantive

rules, a reasonable party would have known that it had to offer

some evidence during the course of an investigation to rebut the

presumption of state-control. Id. at 1381-82. Because the parties

had failed to offer any evidence, the court concluded that it was

appropriate for Commerce to presume that the parties were state-

controlled. Id.

This case begins where Transcom II left off. Here, Decca did

attempt to submit some evidence during the course of the

investigation. Therefore, the question presented is whether

Commerce appropriately rejected Decca’s evidence. To resolve this

question, the court must turn to fundamental principles of

administrative law.

The court begins with the observation that it is axiomatic

that agencies have authority to “fashion their own rules of

procedure,” even when a statute does not specify what process to

use. Vt. Yankee Nuclear Power Corp. v. Natural Res. Def. Council,

Inc., 435 U.S. 519, 544 (1978). But this power is not unlimited.

Case No. 05-00002 Page 14

Rather, an agency’s rules of procedure must be reasonable,10 an

agency must follow its stated rules of procedure,11 and must provide

sufficient notice of its rules of procedure.12 Indeed, substantial

evidence review (on the record) would not be a meaningful exercise

if the “evidence” that comprised the record was obtained through an

arbitrary procedure.

Furthermore, because regulations define the expected course of

agency conduct, such regulations define the reasonable expectations

of interested parties and the reasonable efforts they must

undertake to vindicate their rights in an investigation. See NEC

Corp. v. United States, 151 F.3d 1361, 1371 (Fed. Cir. 1998)

(“there inheres in a statutory scheme such as this an expectation

that those charged with its administration will act fairly and

honestly.”); Shikoku Chems. Corp. v. United States, 16 CIT 382,

Chevron USA Inc. v. United States, 467 U.S. 837, 842-43

(1984); cf. Mathews v. Eldridge, 424 U.S. 319, 335 (1976).

Bennett v. Spear, 520 U.S. 154, 172 (1997); Morton v.

Ruiz, 415 U.S. 199, 235 (1974), Kemira Fibres Oy v. United

States, 61 F.3d 866, 871 (Fed. Cir. 1995); cf. Ariz. Grocery Co.

v. Atchison, Topeka & Santa Fe Ry. Co., 284 U.S. 370, 389 (1938)

(agencies cannot retroactively modify regulations through

adjudications), Breyer et al., ADMINISTRATIVE LAW AND REGULATORY POLICY

601-02 (5th ed. 2002).

City of W. Covina v. Perkins, 525 U.S. 234, 241-42 (1999);

Morton v. Ruiz, 415 U.S. at 232; Memphis Light, Gas & Water Div.

v. Craft, 436 U.S. 1, 14 (1978); New York v. New York, N. H. & H.

R. Co., 344 U.S. 293, 296-97 (1953); Satellite Broad. Co.

v.F.C.C., 824 F.2d 1, 3-4 (D.C. Cir. 1987); Freedom of

Information Act, 5 U.S.C. § 552(a)(1); cf. 1 William Blackstone,

COMMENTARIES 46 (William S. Hein & Co., Inc. 1992).

Case No. 05-00002 Page 15

388, 795 F. Supp. 417, 421 (1992) (“Commerce is required to

administer the antidumping laws fairly.”); cf. Transcom, Inc. v.

United States, 182 F.3d 876, 879 (Fed. Cir. 1999) (“Transcom I”)

(“But the fact that a party agrees to abide by the results of an

administrative determination does not mean that the party has no

right to complain of irregularities in the proceeding leading to

that determination.”).

According to its governing statute, Commerce is required to

investigate allegations of dumping by foreign producers/exporters.

19 U.S.C. § 1671a. To this end, Commerce’s regulations state that

it “obtains most of its factual information in antidumping and

countervailing duty proceedings from submissions made by interested

parties during the course of the proceeding.” 19 C.F.R. §

351.301(a) (2004). In this case, Commerce specifically noted in

its Notice of Initiation that it would follow the rules and

procedures as specified in its regulations. Notice of Initiation,

68 Fed. Reg. at 70,231.

Commerce’s regulations, however, do not establish precise

deadlines for submitting questionnaire responses; nor do they

specify which questionnaire response is necessary to request a

separate rate. Rather, Commerce’s regulations specify two possible

deadlines: (1) a deadline in which a “submission of factual

information is due no later than . . . seven days before the date

of verification of any person is scheduled to commence,” 19 C.F.R.

§ 351.301(b)(2); and (2) a specific deadline which is established

Case No. 05-00002 Page 16

by “the Secretary's written request to [each] interested party,” 19

C.F.R. § 351.301(c)(2)(ii); Preamble, 62 Fed. Reg. at 27,333

(stating that the Secretary will provide notice to each interested

party).13 Additionally, when Commerce invokes 19 C.F.R. § 351.301

(c)(2)(ii), its regulations further provide that the Secretary must

state in such written request:

[T]he information to be provided; the form and manner in

which the interested party must submit the information;

and that failure to submit requested information in the

requested form and manner by the date specified may

result in use of the facts available under section 776 of

the Act and § 351.308.

19 C.F.R. § 351.301(c)(2)(ii). In its Federal Register notice

accompanying this rule Commerce explained: “Section 351.301(c)(2)

deals with questionnaire responses and other submissions on

request. Section 351.301(c)(2)(ii) provides that the Department

must give notice of certain requirements to each interested party

from whom the Department requests information.” Preamble, 62 Fed.

Reg. at 27,323 (emphasis added).

Annex III to the Preamble also provides “[d]eadlines for

parties in antidumping investigations.” Preamble, 62 Fed. Reg.

at 27,418. Among the deadlines stated is a deadline for Section

A responses (which is 51 days from the date of initiation.) Id.

at 27,418-419. However, the Annex also states that “[m]ost of

the deadlines shown here are approximate. The actual deadline in

any particular segment of a proceeding may depend on the date of

an earlier event or be established by the Secretary.” Id. at

27,419. Further, the Q&V Questionnaire is not mentioned in the

Annex (an event precedent to the Section A Questionnaire in this

case). In this case, the deadline for Section A responses

specified in Annex III would have been February 6, 2004 – well

before the actual deadline of February 23, 2004.

Case No. 05-00002 Page 17

In this case, Commerce relied upon Section 351.301(c)(2)(ii)

and applied a specific deadline of February 24, 2004 for its

Section A Questionnaire. As noted above, however, Section

351.301(c)(2)(ii) requires notice be given to “each interested

party.” The antidumping laws define the term “interested party” to

include “a foreign manufacturer, producer, or exporter, or the

United States importer, of subject merchandise.” 19 U.S.C. §

1677(9)(A); see also 19 C.F.R. § 353.2(k). Decca is a foreign

manufacturer and exporter of the subject merchandise. Moreover,

according to Commerce, it was mandatory that Decca respond to the

Section A Questionnaire to secure a separate rate. Therefore,

Decca is an “interested party.” However, despite the fact that

Commerce appears to be required under these circumstances to give

notice to each interested party of filing deadlines, the requested

information, and the consequences for a party’s failure to submit

the requested information, Commerce did not send Decca a written

request with such required information. Accordingly, Commerce

appears to have violated its own stated procedure. As such,

Commerce’s actions would not be in accordance with law.

Commerce challenges this assertion in four ways: (A) that

Decca was not, at the time Commerce issued the Section A

Questionnaire, an interested party and therefore Commerce was not

required to send it a questionnaire; (B) MOFCOM was a reliable

means of transmitting the questionnaire to interested parties; (C)

Commerce’s consistent practice of requiring Section A submissions

Case No. 05-00002 Page 18

provided notice to parties; and (D) Decca was required to inquire

of Commerce’s procedures. Each point will be addressed in turn.

First, Commerce argues that because it presumes that all

companies operating in the PRC are state-controlled, a party does

not become an interested party unless and until it rebuts the

presumption of state-control.14 Def.’s Supplemental Br. 1-3

(“Def.’s Supp.”). As in Transcom I, 182 F.3d at 884, Commerce’s

argument overstates the effect of its own presumption. That

Commerce creates a rebuttable presumption of state-control merely

creates a burden of proof; it does not, in and of itself, create

any actual agency relationship between MOFCOM and companies

operating in the PRC. When, as it is alleged here, there exists no

actual agency relationship between MOFCOM and the interested party,

by only sending the questionnaires to MOFCOM, Commerce does not

provide any notice to the interested party on how to rebut the

presumption. See Schwarz v. Thomas, 222 F.2d 305, 308 (D.C. Cir.

1955) (“any agent who accepts service must be shown to have been

authorized to bind his principal by the acceptance of process”),

United States v. Marple Cmty. Record, Inc., 335 F. Supp. 95, 101

(E.D. Penn. 1971) (“[f]or service of process to be valid upon an

agent, it must be shown that he was actually appointed by the

This does not appear to be the rationale adopted by

Commerce in its determination. See Decision Memo, P.R. Doc.

1763, Pl.’s Ex. 14 at 4.

Case No. 05-00002 Page 19

defendant for the specific purpose of receiving process.”).

Consequently, Commerce’s proffered construction of its regulation

is inconsistent with the stated purpose of its rule: to “give

notice of certain requirements to each interested party from whom

the Department requests information.” Preamble, 62 Fed. Reg. at

27,333 (emphasis added). Furthermore, because Commerce does not

have any other stated policies for how parties may rebut the

presumption of state-control, Commerce’s reading of its regulation

would not provide parties with a meaningful opportunity to rebut

its presumption; rather, Commerce’s interpretation would convert

what is just a rebuttable presumption into a self-fulfilling,

though baseless, “fact.” McDonald v. Mabee, 243 U.S. 90, 91 (1917)

(“great caution should be used not to let fiction deny the fair

play that can be secured only by a pretty close adhesion to

fact.”); compare Transcom I, 182 F.3d at 883 (“we recognized that

the presumption is rebuttable, and that a party that is subject to

the presumption has a right to attempt to rebut it.”) with Nelson

v. Adams USA, Inc., 529 U.S. 460, 471 (2000) (“predictions about

the outcome of hypothesized litigation cannot substitute for the

actual opportunity to defend that due process affords every party

against whom a claim is stated.”). Such a result would render the

presumption arbitrary, and accordingly, not in accordance with law.

Moreover, sending information on how to rebut the presumption

of state-control only to MOFCOM, then treating the non-

responsiveness of companies that did not receive the request for

Case No. 05-00002 Page 20

information as proof that they are state-controlled, is not a

reasonable means of obtaining the sought after information.

Companies that are not state-controlled are the least likely to

have any relationship with MOFCOM. Therefore, equating non-

responsiveness with being under the authority of MOFCOM makes

little sense.

Furthermore, judicial acceptance of Commerce’s presumption

rests, in part, on the notion that the parties themselves will have

the best information to disprove state-control. See Sigma Corp. v.

United States, 117 F.3d 1401, 1406 (Fed. Cir. 1997). Therefore,

the companies, not MOFCOM, would be in the best position to proffer

this evidence. However, Commerce’s method does not seek this

information from the parties by directly notifying them of this

information request. Consequently, Commerce’s proposed method of

notifying parties would be contrary to a key justification for the

presumption.

Nor is Commerce’s interpretation consistent with its past

practice. Cf. Marseilles Land & Water Co. v. FERC, 345 F.3d 916,

920 (D.C. Cir. 2003). In only three determinations cited by

Commerce and Defendant-Intervenor has Commerce exclusively relied

upon MOFCOM to inform parties of the Section A Questionnaire; in

all other instances, Commerce has explicitly noted that it sent the

questionnaires to all parties for whom it had information.15 In at

Compare Polyethylene Retail Carrier Bags from the People’s

(footnote omitted)

Case No. 05-00002 Page 21

Republic of China, 69 Fed. Reg. 3,544, 3,545 (Dep’t Commerce Jan.

26, 2004) (notice of preliminary determination of sales at less

than fair value) (“Retail Carrier Bags”)(noting that Section A

Questionnaires were sent “to all of the producers/exporters named

in the petition and to the exporters who comprise the top 80

percent of exporters in terms of quantity imported” and resending

letters to parties that did not respond); Certain Color

Television Receivers from the People's Republic of China, 68 Fed.

Reg. 66,800, 66,801 (Dep’t Commerce Nov. 28 2003) (notice of

preliminary determination of sales at less than fair value,

postponement of final determination, and affirmative preliminary

determination of critical circumstances) (noting that Commerce

sent questionnaires to MOFCOM requesting it forward the

questionnaires on, and courtesy copies to the Chinese Chamber of

Commerce, “to all companies identified in U.S. customs data as

exporters of the subject merchandise during the POI with

shipments in commercial quantities,” and companies identified by

domestic industry in the petition); Garlic, 67 Fed. Reg. at

51,823 (noting that Commerce would deem non-Hong Kong companies

non-responsive because they had failed to reply to the

questionnaire even though they had received questionnaires);

Certain Automatize Replacement Glass Windshields from the

People’s Republic of China, 66 Fed. Reg. 48,233, 48,233 (Dep’t

Commerce Sept. 19, 2001) (notice of preliminary determination of

sales at less than fair value) (“Windshields”) (“the Department

issued a questionnaire requesting volume and value of U.S. sales

information to the Embassy of the PRC and to the Ministry of

Foreign Trade and Economic Development, and sent courtesy copies

to the following known producers/exporters of subject merchandise

identified in the petition . . . and notified the PRC Government

that it was responsible” for other companies for whom Commerce

did not have information); Certain Folding Gift Boxes from the

People’s Republic of China, 66 Fed. Reg. 40,973, 40,975 (Dep’t

Commerce Aug. 6, 2001) (notice of preliminary determination of

sales at less than fair value) (noting questionnaires had been

sent to all producers/exporters listed in the petition and the

Chinese Government and further requested assistance in delivering

the questionnaires); Certain Preserved Mushrooms from the

People’s Republic of China, 63 Fed. Reg. 41,794, 41,794 (Dep’t

Commerce Aug. 5, 1998) (notice of preliminary determination of

sales at less than fair value and postponement of final

determination) (sending questionnaires to the Chinese Chamber of

Commerce, the Ministry of Foreign Trade and Economic Cooperation

(“MOFTEC”) (MOFCOM’s predecessor), and a courtesy copies to

producers/exporters); Freshwater Crawfish Tail Meat from the

People’s Republic of China, 62 Fed. Reg. 14,392, 14,392 (Dep’t

(footnote continued)

Case No. 05-00002 Page 22

least one case, Commerce specifically cited the fact that the

interested party had received the questionnaire before faulting the

party for failing to timely respond. See Garlic, 67 Fed. Reg. at

51,823.

Commerce’s position is further undermined by its own practice

in this case. Commerce sent the initial Q&V Questionnaires, and

the Section A Questionnaires intended for the mandatory

respondents, directly to the parties notwithstanding Commerce’s

Commerce March 26, 1997) (notice of preliminary determination of

sales at less than fair value) (noting a) the non-responsiveness

of MOFTEC; b) that questionnaires were sent to MOFTEC and all

parties for which it had addresses; and c) that Commerce included

instructions to MOFCOM to forward the questionnaire); with

Certain Ball Bearings and Parts Thereof from the People’s

Republic of China, 67 Fed. Reg. 63,609, 63,609 (Dep’t Commerce

Oct. 15, 2002) (notice of preliminary determination of sales at

less than fair value and postponement of final determination)

(which may have relied upon MOFTEC to send questionnaires);

Certain Non-Frozen Apple Juice Concentrate from the People’s

Republic of China, 64 Fed. Reg. 65,675, 65,676 (Dep’t Commerce

Nov. 23, 1999) (notice of preliminary determination of sales at

less than fair value) (“Apple Juice”) (sending questionnaires to

“identified producers/exporters through their counsel or through

the China Chamber (with copies to MOFTEC and the Embassy of the

PRC), and requested that they assist in distributing it to all

exporters who might request separate rates.”); Bicycles from the

People’s Republic of China, 60 Fed. Reg. 56,567, 56,567 (Dep’t

Commerce Nov. 9, 1995) (notice of preliminary determination of

sales at less than fair value) (“Bicycles”) (sending original

questionnaires to MOFTEC, and two Chambers of Commerce). The

court should note that Bicycles pre-dated Commerce’s current

rules. The court further notes that foreign governments are

separately stated as being interested parties to antidumping duty

investigations. 19 U.S.C. § 1677(9)(B). Additionally, the court

notes that the myriad difficult approaches demonstrate that

Commerce has not deemed its determinations to have precedential

effect as to whom questionnaires should be sent. Last the court

notes that these are just the determination cited by Commerce and

Defendant-Intervenor.

Case No. 05-00002 Page 23

presumption. Significantly, Commerce addressed the letter

accompanying the Q&V Questionnaire “to all interested parties.”

Letter from Robert A. Bolling, Program Manager, Group III, Office

IX, to All Interested Parties, P.R. Doc 139, Pl.’s Ex. 4 (Dec. 30,

2003); see also Letter from Robert Bolling, Program Manager

Enforcement Group III, Office 9, to Spiro Kwan, Decca Furniture

Ltd., P.R. Doc. 448, Pl.’s Ex. 6 at 1 (Feb. 26, 2004) (“It is the

Department’s goal to make every effort to ensure that all

interested parties have an opportunity to respond . . . .”)

(emphasis added). Such practices are inconsistent with viewing

MOFCOM as the spokesperson or agent of all companies operating in

China. Rather, these practices evidence the fact that Commerce

has recognized that parties qualify as interested parties, and act

outside of the control of the Chinese government, before these

parties have submitted information to rebut the presumption of

state-control.16

Accordingly, the court that finds that Decca is an “interested

To the extent Commerce’s reading of Decca’s status is

correct, Commerce’s position would be even more problematic.

Given that Decca would not have been an “interested party,” 19

C.F.R. § 351.301(c)(2)(ii) would not apply. Therefore, only 19

C.F.R. § 351.301(b) would be the appropriate method of submitting

this information. Any procedural rule requiring parties to

request a Section A Questionnaire from Commerce, or MOFCOM, is

not a possible reading of the 19 C.F.R. § 351.301(c)(2)(ii)

requirement that the Secretary provide a written request for said

information. Therefore, any such required procedure would have

to be separately stated in the Federal Register to have any force

or effect (even if it is a consistent policy of Commerce).

Freedom of Information Act, 5 U.S.C. § 552(a)(1).

Case No. 05-00002 Page 24

party” within meaning of Section 351.301(c)(2)(ii).

Alternatively, Commerce alleges that its reliance on MOFCOM to

redirect the Section A Questionnaires to interested parties was

reasonable. More specifically, Commerce alleges that MOFCOM has

been reliable in the past, and that some parties in this case

responded to the questionnaire even though they did not receive it

directly from Commerce,17 and therefore relying on MOFCOM to deliver

the questionnaires was reasonable. Decision Memo, P.R. Doc. 1763,

Pl.’s Ex. 14 at 4; but see, e.g., Preliminary Determination, 69

Fed. Reg. at 35,313, 35,321 (noting that the government of China

was non-responsive); Saccharin From the People's Republic of China,

67 Fed. Reg. 79,049, 79,050 (Dep’t Commerce Dec. 27, 2002) (notice

of preliminary determination of sales at less than fair value)

Neither Commerce nor Defendant-Intervenor offer a single

citation indicating that this is a relevant factor; indeed, this

argument has been implicitly rejected in all the cases cited by

the court. To the extent that such a factor could be relevant,

probabilities, rather than raw numbers, would be the relevant

figures. Cf. Dusenbery v. United States, 534 U.S. 161, 179

(2002) (Ginsberg J. dissenting); United States v. Carroll Towing

Co., 159 F.2d 169, 173 (2d Cir. 1947) (Hand, J.). Commerce has

failed to substantiate why it deems MOFCOM to be reliable.

Courts do "not defer to the agency's conclusory or unsupported

suppositions." McDonnell Douglas Corp. v. United States Dep't of

the Air Force, 375 F.3d 1182, 1187 (D.C. Cir. 2004) (citing Motor

Vehicle Mfrs. Ass'n of United States, Inc. v. State Farm Mut.

Auto. Ins. Co., 463 U.S. 29, 43 (1983)), especially where the

Supreme Court has found that such means of providing notice,

where other means are available, is facially unreasonable.

Case No. 05-00002 Page 25

(same); Certain Cased Pencils from the People’s Republic of China,

67 Fed. Reg. 2402, 2403 n.1 (Dep’t Commerce Jan, 17, 2002)

(preliminary results and recision in part of antidumping duty

administrative review) (noting frustration with the Chinese

government’s lack of cooperation).

Commerce’s regulations, however, require it to send written

requests to interested parties. Although this language may not

require Commerce to provide actual notice of a request for

information, Dusenbery v. United States, 534 U.S. 161, 166, 170

(2002) (interpreting a similarly worded statutory provision

coextensive with the Due Process Clause), but cf. Freedom of

Information Act, 5 U.S.C. 552(a)(1), Static Random Access Memory

Semiconductors from Taiwan, 63 Fed. Reg. 8909, 8919 (Dep’t Commerce

Feb. 23, 1998) (notice of final determination of sales at less than

fair value) (“Taiwan Semiconductors”), the means Commerce employs

must nonetheless be reasonably calculated under the circumstances

to provide actual notice, New York v. New York, N. H. & H. R. Co.,

344 U.S. 293, 296-97 (1953); cf. Memphis Light, Gas & Water Div. v.

Craft, 436 U.S. 1, 13 (1978) (citing Mullane v. Central Hanover

Bank, 339 U.S. 306, 314 (1952)).

In this case, Commerce’s method of notice was not reasonably

calculated to provide parties with actual notice of the filing

requirements. Commerce relied on an organ of the Chinese

government to notify parties, i.e., MOFCOM. The Supreme Court has

held that reliance on government instrumentalities to provide

Case No. 05-00002 Page 26

notice to interested parties, where the government instrumentality

is not required to retransmit notice onto the interested parties,

does not create a reasonable probability of providing actual

notice. Wuchter v. Pizzutti, 276 U.S. 13, 24-25 (1928), Koster v.

Automark Indus., Inc., 640 F.2d 77, 81 n.3 (7th Cir. 1981) (“a

statutory provision is not reasonably calculated to provide notice

unless its terms relating to the sending of notice are mandatory”);

cf. Howard v. Jenny’s Country Kitchen, Inc., 223 F.R.D. 559, 565-66

(D. Kan. 2004) (canvassing extensive authority on this question).

This rule has been consistently applied even where the service

occurs in a foreign country. See Koster, 640 F.2d at 81 n.3, De la

Mata v. Am. Life Ins. Co., 771 F. Supp. 1375, 1386-87 (D. Del.

1991), aff’d 961 F.2d 208 (3rd Cir. 1992) (unpublished table

decision), Boivin v. Talcott, 102 F. Supp. 979, 80-81 (N.D. Ohio

1951); cf. Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S.

694, 709-10 (1989) (Brennan, J. concurring), Ma v. Continental Bank

N.A., 905 F.2d 1073, 1076 (7th Cir. 1990). As the court in Koster

v. Automark explained, “[t]hat the [foreign government] as a matter

of practice may exercise its discretion to serve process in some

reasonable manner is not dispositive, since ‘[t]he right of a

citizen to due process of law must rest upon a basis more

substantial than favor or discretion.’” Koster v. Automark

Industries, Inc., 640 F.2d at 81 n.3 (quoting Roller v. Holly, 176

U.S. 398, 409 (1900)); cf. Pencils, 67 Fed. Reg. at 2402 n.1.

Accordingly, Commerce’s reliance on MOFCOM as its method of

Case No. 05-00002 Page 27

providing notice is not supported by established jurisprudence.

In addition, it is axiomatic that Commerce may not exercise

its authority in an arbitrary or capricious manner. See, e.g.,

Tung Mung Dev. Co. v. United States, 354 F.3d 1371, 1378 (Fed. Cir.

2004). This is especially true where Commerce itself has stated

that it must do something. Preamble, 62 Fed. Reg. at 27,333,

Taiwan Semiconductors, 63 Fed Reg. at 8,919 (explaining Commerce’s

questionnaire policy). This principle is clearly broad enough to

apply when Commerce requests other parties to act on its behalf.

Consequently, if Commerce’s method of notice relied on no more than

MOFCOM’s “favor or discretion,” Commerce’s actions here cannot be

in accordance with law. Just as “[i]t is rudimentary

administrative law that [agency] discretion as to substance of the

ultimate decision does not confer discretion to ignore the required

procedures of decisionmaking,” Bennett v. Spear, 520 U.S. 154, 174

(1997), it is also rudimentary that discretion as to substance does

not license an agency to adopt an arbitrary or capricious

procedure.

In this case, MOFCOM does not appear to have acceded to any

responsibilities in retransmitting the information onto Hong Kong

corporations. Nor did Commerce even request MOFCOM to forward the

Section A Questionnaire on to third parties. Cf. supra at note 15.

Consequently, Commerce’s method of providing notice in this case

was not more than a “mere gesture . . . [not] one desirous of

actually informing the” party of its procedural rules. Mullane v.

Case No. 05-00002 Page 28

Central Bank of Hanover, 339 U.S. 306, 315 (1950); cf. Pencils, 67

Fed. Reg. at 2403 n.1.

Consequently, the court finds that Commerce’s reliance on

MOFCOM as a means of getting questionnaires to interested parties

was not reasonable. Accordingly, Commerce’s actions did not comply

with its own regulations.

Commerce argues, as a fallback position, that even if Decca

was not provided notice by MOFCOM, it still should have known of

the Section A Questionnaire because previous determinations have

made reference to Section A Questionnaires. Cf. City of West

Covina v. Perkins, 525 U.S. 234, 237 (1999). Commerce’s argument

is not that the Section A requirement is stated or implied by its

regulations, but rather, that Decca was required to deduce the

Section A requirement through recourse to Commerce’s prior

determinations. This argument is unpersuasive.

First, in light of Commerce’s unambiguously declared policy to

provide direct notice, it is at best unclear why a party should

have felt any need to canvass through Commerce’s prior

determinations. Cf. Parsons v. United States, 670 F.2d 164, 166

(Ct. Cl. 1982) (“It is well established that there is a presumption

that public officers perform their duties correctly, fairly, in

good faith, and in accordance with law and governing regulations.

. . .”) (emphasis added); Marseilles Land & Water Co. v. FERC, 345

Case No. 05-00002 Page 29

F.3d 916, 920 (D.C. Cir. 2003).18 Nor did Commerce’s letter

accompanying the Q&V Questionnaire provide notice that something

more than a Q&V Questionnaire response was required. The letter

stated that submitting a Q&V Questionnaire did not “guarantee[]

[Decca] a separate rate status.” Letter from Edward Yang, Office

Director, AD/CVD Enforcement Group III to Liu Danyang, Director,

Bureau of Fair Trade for Imports and Exports, Re: Antidumping Duty

Furthermore, the Freedom of Information Act, 5 U.S.C. §

552(a)(1)(C) requires agencies to either separately state their

rules of procedure in the Federal Register or provide parties

with actual and timely notice of such rules. United States v.

Aarons, 310 F.2d 341, 348 (2d Cir. 1965); Hoenig Plywood Corp. v.

United States, 51 Cust. Ct. 336, 347 (1963) Neighborhood Legal

Servs, Inc. v. Legal Servs., Corp., 466 F. Supp. 1148, 1153-54

(D. Conn. 1979) (discussing the Freedom of Information Act’s

amendments to 5 U.S.C. § 552(a)(1)). According to the

legislative history:

Since the [APA] leaves wide latitude for each agency to

frame its own procedures, this subsection requiring agencies

to state their organization and procedures in the form of

rules is essential for the information of the public. The

publication must be kept up to date. The enumerated classes

of informational rules must also be separately stated so

that, for example, rules of procedure will be separate from

rules of substance, interpretation or policy . . . . The

requirement that no one shall ‘in any manner’ be required to

resort to unpublished organization or procedure protects the

public from being required to pursue remedies that are not

generally known.

S. Rep. No. 752 at 198 (Nov. 19, 1945); see also id. (“The

section has been drawn [based] upon the theory that

administrative operations and procedures are public property

which the general public, rather than a few specialists or

lobbyists, is entitled to know or to have the ready means of

knowing with definiteness and assurance.”) (emphasis added);

see also U.S. Dep’t of Labor, Office of Administrative Law

Judges, ATTORNEY GENERAL'S MANUAL ON THE ADMINISTRATIVE PROCEDURE ACT

(1947) (2005), http://www.oalj.dol.gov/public/apa/refrnc/ag02.htm

(Section 3(a)).

Case No. 05-00002 Page 30

Investigation of Wooden Bedroom Furniture from the People’s

Republic of China, P.R. Doc. 140, Pl.’s Ex. 3 at 1 (Dec. 30, 2003).

Commerce reads this language as placing parties on notice that they

had to fill out different forms to qualify for a separate rate.

This is, perhaps, a reading of this language. However, a better

reading is that Commerce was reserving the right to request

additional information. After all, the disclaimer also noted that

parties would not necessarily be chosen as mandatory respondents –

that language did not suggest, however, that parties could not be

so chosen, and, in fact, some parties were chosen; likewise, the

disclaimer did not state that the Q&V Questionnaire submission

could not be sufficient for an interested party to qualify for a

separate rate. Especially where Commerce requested Q&V

Questionnaire responses directly from the parties, there is no

apparent reason why a party should have felt that it must undertake

the responsibility for determining what additional information was

required without receiving direction from Commerce. New York v.

New York, N. H. & H. R. Co., 344 U.S. 293, 296-97 (1953).

Second, the cited determinations do not undermine Decca’s

reasonable expectation that Commerce would follow its declared

policies. In all but three determinations cited by Commerce and

Defendant-Intervenor, Commerce took efforts to send questionnaires

directly to the parties. See supra at note 15.

Third, although Commerce claims that the Section A

Questionnaire is required to qualify for a separate rate, Commerce

Case No. 05-00002 Page 31

concedes that its “determinations do not specifically state that

Section As are required in all future cases, but reflect the

standard presumption that the PRC rate will apply unless a party

presents sufficient evidence to rebut that presumption.” Def.’s

Supp. at 10. In fact, the determinations cited by Commerce have

little information on how foreign owned companies qualify for

separate rates. This is problematic for Commerce’s argument,

especially because “no separate rate analysis is required for these

exporters.” Bicycles, 61 Fed. Reg. at 19,027. Furthermore,

Commerce has relied upon information other than Section A

Questionnaires to determine which parties qualify for separate

rates. See, e.g., Garlic, 67 Fed. Reg. at 51,823 (Dep’t Commerce

Aug. 9, 2002) (“Garlic”)(relying, in large measure, on a Q&V

questionnaire to determine separate rate status); Saccharin From

the People's Republic of China, 67 Fed. Reg. 79,049, 79,050 (Dep’t

Commerce Dec. 27, 2002) (referring to a company’s, Kaifeng’s,

response to its Section A Questionnaire as “unsolicited”); Apple

Juice, 64 Fed. Reg. at 65,676 (relying on a “questionnaire

concerning quantity and value of sales of [apple juice], and

company structure, ownership, and affiliations (‘separate rates

questionnaire[.]’)”); cf. Petroleum Wax Candles From the People's

Republic of China, 68 Fed. Reg. 53,109, 53,109 (Sept. 9, 2003)

(notice of preliminary partial rescission of antidumping

administrative review) (“Wax Candles”) (requiring both Section A

Case No. 05-00002 Page 32

and Q&V questionnaire responses to be eligible for a separate

rate); Windshields, 66 Fed. Reg. at 48,235 (faulting parties for

failing to respond to Commerce’s quantity and volume questionnaire

in deeming them nonresponsive and granting a Canadian company a

separate rate because “it has provided information indicating that

its PRC supplier does not have knowledge that its sales to TCGI are

destined for the United States.”).19

In fact, in Garlic, it appears that Commerce found that a

Hong Kong company qualified for a separate rate on the sole basis

of its mailing address even though the party had failed to respond

to Commerce’s questionnaire. Garlic, 67 Fed. Reg. at 51,823;

Decision Memo, P.R. Doc. 1763, Pl.’s Ex. 14 at 2.20 Indeed,

In Wax Candles, it is unclear what method of notice

Commerce used to inform interested parties of the Section A

Questionnaire. The determination makes explicit that it provided

individual notice of its Q&V Questionnaire to parties listed in

the notice of initiation. Wax Candles, 68 Fed. Reg. at 53,109.

Commerce and Defendant-Intervenor attempt to distinguish

Garlic. They argue that Commerce in Garlic applied the PRC-wide

rate to Hong Kong companies who failed to respond to Commerce’s

questionnaire.

Commerce appears to employ a two-prong test in assigning a

separate rate. First, Commerce determines whether an interested

party is state-controlled. If Commerce finds that an interested

party is not state-controlled, Commerce then must decide what its

rate should be. See Transcom II, 294 F.3d at 1382.

Applying this approach in Garlic, Commerce first found that

non-responsive companies with Hong Kong mailing addresses

qualified for a separate rate. Garlic, 67 Fed. Reg. at 51,823

(“Wo Hing (H.K.) Trading Co. (Wo Hing) has an address in Hong

Kong and did not respond to our January 8, 2002, request for

information. Without any information concerning its corporate

ownership, we presume that it is a Hong Kong entity. Thus, we

determine that it qualifies for a company-specific rate.”); see

(footnote continued)

Case No. 05-00002 Page 33

Commerce has maintained throughout these proceedings that its

practice is “discretionary.” Def.’s Supp. at 6. Accordingly,

there is no reason to conclude that Decca should have known of the

Section A requirement during the stage of the investigation at

issue here.

Finally, Defendant-Intervenor and Commerce, to a lesser

extent, argue that Decca was required to make inquiries of

Commerce’s procedures if it did not know what was required of it.

Specifically, Defendant-Intervenor cites to the Notice of

Initiation which provides contact information for inquires relating

to the investigation. Therefore, the Defendant-Intervenor asserts

also id. at 51,825. Next, Commerce had to choose a rate.

Because “[t]he only rate that has ever been assigned in this

proceeding is 376.67 percent . . . we preliminarily determine

that the rate of 376.67 percent should be used as the adverse

facts available for the preliminary results of review for Golden

Light, Phil-Sino, and Wo Hing.” Id. According to the approach in

Garlic, Commerce should have found that Decca qualified for a

separate rate and then decided what the rate should have been.

In this case, Commerce did not do this. Of, and to the extent,

Commerce attempts to equate its presumption of state-control with

an adverse facts determination, the court must note that this

Court has repeatedly held “that a party must be given a

reasonable opportunity to respond to Commerce’s requests.”

Shandong Huarong Mach. Co. v. United States, 29 CIT ___, Slip Op

05-54, at 8 (May 2, 2005).

That this was a preliminary determination is irrelevant as

the final determination incorporated by reference this finding.

Fresh Garlic from the People's Republic of China, 68 Fed. Reg.

4,758, 4,758-59 (Dep’t Commerce Jan. 30, 2003) (final results of

antidumping duty administrative review and rescission of

administrative review in part) (“We have not received any

information since the issuance of the Preliminary Results that

provides a basis for reconsideration of these determinations.”).

Case No. 05-00002 Page 34

that Decca was required to inquire of Commerce’s procedures in

order to later complain of a procedural irregularity. This

argument is problematic.

First, this analysis implies that Commerce may ignore its own

procedural rules, and, so as long as a party does not make an

inquiry, that party cannot later complain of procedural defects.

This result would only create perverse incentives for Commerce and

run counter to basic notions of due process, i.e., that agencies

must follow their rules. Moreover, such an approach would also

require parties to persistently inquire of Commerce regarding its

procedures lest Commerce change its procedures mid-investigation or

depart from its regulations, and the party be without recourse

because it failed to inquire. Commerce could not possibly want

this result. Cf. Az. Grocery v. Atchison, Topeka & Santa Fe Ry.

Co., 284 U.S. 370, 389-90 (1931); John F. Manning, Constitutional

Structure and Judicial Deference to Agency Interpretations of

Agency Rules, 96 COLUM. L. REV. 612, 665-68, 678-80 (1996).

Second, this requirement is counter to federal policy. The

Freedom of Information Act (“FOIA”) requires the publication of

agency rules of procedure in the Federal Register. 5 U.S.C. §

552(a)(1).21 Those rules must be separately stated, i.e., not part

Although Commerce may claim exemption from certain

generally applicable administrative laws, 19 U.S.C. § 1677c

(exempting “hearings” from the requirements of the Administrative

Procedure Act), there is no indication that Commerce has an

exemption from the FOIA requirements that Commerce promulgate or

(footnote continued)

Case No. 05-00002 Page 35

of determinations. Id. Under the FOIA, “[e]xcept to the extent

that a person has actual and timely notice of the terms thereof, a

person may not in any manner be required to resort to, or be

adversely affected by, a matter required to be published in the

Federal Register and not so published.” Id. (emphasis added).

Requiring parties to resort (unless explicitly directed) to

contacting Commerce would violate the express terms of the Act.

Although Decca may not have been as diligent as Defendant-

Intervenor claims it should have been, Commerce has failed to

comply with (or publish) notice of its rules in the Federal

agency or an interested party in such a situation, Congress has

determined that the agency must bear liability. Cf. Morton v.

Ruiz, 415 U.S. 199, 232 (1974) (“The Administrative Procedure Act

was adopted to provide, inter alia, that administrative policies

affecting individual rights and obligations be promulgated pursuant

publish it rules and procedures. See Hoenig Plywood Corp. v.

United States, 51 Cust. Ct. 336, 347 (1963). This is especially

true when Commerce expects parties to come forward to challenge a

presumption on their own initiative in a specific manner and at a

specific time. Even if the FOIA is not directly binding upon

Commerce, is does evidence the reasonably feasible and customary

alternatives. Goldhofer Fahrzeugrwerk GmbH & Co. v. United

States, 885 F.2d 858, 860 (Fed. Cir. 1989). Contrary to Decca’s

claim, however, any effort Commerce has made to rectify its

failure to publish such a rule, since its determination in this

case, by itself, is not relevant. See Dusenbery, 534 U.S. at

172. However, the court does note for the sake of posterity that

Commerce has now published a protocol: Separate Rates and

Combination Rates in Antidumping Investigations Involving Non-

Market Economy Countries, 70 Fed. Reg. 17,233 (Dep’t Commerce

Apr. 5, 2005).

Case No. 05-00002 Page 36

to certain stated procedures so as to avoid the inherently

arbitrary nature of unpublished ad hoc determinations.”).

Accordingly, Defendant-Intervenor’s argument must fail.

Third, requiring Decca to inquire would also be counter to the

Supreme Court’s holding in New York v. New York, N. H. & H. R. Co.,

344 U.S. 293, 296 (1953). In that case, New York City complained

that its liens on certain properties were improperly destroyed in

a Federal bankruptcy proceeding. The governing statute required

the bankruptcy judge to provide “reasonable notice” of any filing

deadlines. Although the bankruptcy court alerted some parties by

direct mail of the deadline, it informed other known parties,

including New York City, through publication in newspapers. New

York, unaware of the filing deadlines, missed its opportunity to

protect its liens. Although New York City had actual knowledge of

the bankruptcy proceedings, the Court held:

Nor can the bar order against New York be sustained

because of the city's knowledge that reorganization of

the railroad was taking place in the court. The

argument is that such knowledge puts a duty on creditors

to inquire for themselves about possible court orders

limiting the time for filing claims. But even creditors

who have knowledge of a reorganization have a right to

assume that the statutory "reasonable notice" will be

given them before their claims are forever barred. When

the judge ordered notice by mail to be given the

appearing creditors, New York City acted reasonably in

waiting to receive the same treatment.

Id. at 297. In this case, not only did Commerce mail the Q&V

Questionnaires directly to the parties, Commerce was required to do

more than provide “reasonable notice” – it was required to send

Case No. 05-00002 Page 37

written requests to the parties. Accordingly, it was certainly not

inappropriate for Decca to rely on Commerce to follow its published

rules of procedure. Cf. Transcom, Inc. v. United States, 24 CIT

1333, 1343, 123 F. Supp. 2d 1372, 1381 (2000) (“Indeed, it would be

anomalous to expect a member of the industry to inquire whether the

agency is aware of the applicable statutes, regulations and

pertinent case law, or whether the agency actually meant to make

the unambiguous statement it made.”). That the statute in New

York, N. H. & H. R. R. R. Co. required “reasonable notice,” as

opposed to Commerce’s regulation in this case, is of no

consequence. As courts have long held, “[i]t is well established

that there is a presumption that public officers perform their

duties correctly, fairly, in good faith, and in accordance with law

and governing regulations[.]” Parsons v. United States, 670 F.2d

164, 166 (Cl. Ct. 1982) (emphasis added), Transcom I, 182 F.3d at

882; Satellite Broad. Co. v. FCC, 824 F.2d 1, 3-4 (D.C. Cir. 1987);