China Steel Corp. v. United States

Slip Op. 03-52

United States Court of International Trade

CHINA STEEL CORPORATION and YIEH

LOONG,

Plaintiff,

v.

UNITED STATES, Before: Pogue, Judge

Defendant, Court No. 01-01040

and

BETHLEHEM STEEL CORPORATION; NATIONAL

STEEL CORPORATION; UNITED STATES STEEL

CORPORATION; GALLATIN STEEL COMPANY;

IPSCO STEEL INC.; NUCOR CORPORATION;

STEEL DYNAMICS, INC.; and WEIRTON STEEL

CORPORATION,

Defendant-Intervenors.

[Plaintiff’s motion for judgment on the agency record is denied.

The Court sustains the Department of Commerce’s final antidumping

determination in part, and remands in part.]

Decided: May 14, 2003

Miller & Chevalier Chartered (Karl Abendschein, Peter Koenig) for

Plaintiff.

Robert D. McCallum, Jr., Assistant Attorney General, David M.

Cohen, Director, Lucius B. Lau, Assistant Director, Commercial

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

Augusto Guerra, Attorney, Office of Chief Counsel for Import

Administration, U.S. Department of Commerce, Of Counsel, for

Defendant.

Dewey Ballantine LLP (Bradford Ward, Hui Yu) for Defendant-

Intervenors Bethlehem Steel Corporation, National Steel

Corporation, and United States Steel Corporation.

Court No. 01-01040 Page 2

Schagrin Associates (Roger B. Schagrin) for Defendant-Intervenors

Gallatin Steel Company, IPSCO Steel Inc., Nucor Corporation, Steel

Dynamics, Inc., and Weirton Steel Corporation.

Opinion

Pogue, Judge: This action is before the Court on the motion of

China Steel Corporation (“China Steel”) and Yieh Loong

(collectively “Plaintiff”) for judgment upon the agency record

pursuant to USCIT R. 56.2.1 Plaintiff contests the final

affirmative determination of sales at less than fair value (“LTFV”)

rendered by the International Trade Administration of the United

States Department of Commerce (“Commerce” or “Department”) in the

investigation of certain hot-rolled carbon steel (“HRCS”) flat

products from Taiwan for the period October 1, 1999 through

September 30, 2000 (“POI”). Certain Hot-Rolled Carbon Steel Flat

Products from Taiwan, 66 Fed. Reg. 49,618, 49,618-19 (Dep’t

1

For purposes of calculating a weighted-average margin,

Commerce concluded prior to the preliminary determination that

China Steel and Yieh Loong were affiliated under 19 U.S.C. §

1677(33)(E), and collapsed the two entities into a single

producer pursuant to 19 C.F.R. § 351.401(f) (2001). Dep’t of

Commerce Mem. from Patricia Tran to Joseph A. Spetrini,

Antidumping Duty Investigation on Certain Hot-Rolled Carbon Steel

Flat Products from Taiwan: Affiliation Issue regarding China

Steel Corporation (China Steel) and Yieh Loong Enterprise Co.,

Ltd. (Yieh Loong), C.R. Doc. 51, Def.’s Conf. Ex. 5 at 2, 4 (Apr.

19, 2001); see also Certain Hot-Rolled Carbon Steel Flat Products

from Taiwan, 66 Fed. Reg. 22,204, 22,207 (Dep’t Commerce May 3,

2001) (notice of preliminary determination of sales at less than

fair value) (“Prelim. Determ.”). As those two determinations are

not challenged in the instant action, the Court will refer to the

collapsed entity as “Plaintiff” or “CSC/YL;” all other references

to the two corporations by their proper names shall refer only to

the respective individual corporation.

Court No. 01-01040 Page 3

Commerce Sept. 28, 2001) (notice of final determination of sales at

LTFV) (“Final Determ.”). Specifically, Plaintiff contests four

aspects of Commerce’s final determination: (1) Commerce’s

affiliation determination regarding the Yieh Loong affiliates; (2)

Commerce’s decision to apply facts otherwise available; (3)

Commerce’s decision to apply adverse facts available; and (4)

Commerce’s conduct in investigating the antidumping petition. The

Court exercises jurisdiction pursuant to 28 U.S.C. § 1581(c)

(2000). For the reasons set forth below, the Court sustains in

part, and remands in part, the agency’s determination.

I. Background

On November 13, 2000, Gallatin Steel Company, IPSCO Steel

Inc., Nucor Corporation, Steel Dynamics, Inc., Weirton Steel

Corporation, Bethlehem Steel Corporation, U.S. Steel Group (a unit

of USX Corporation), National Steel Corporation, United

Steelworkers of America, LTV Steel Company, Inc., and Independent

Steelworkers Union (collectively “Domestic Producers”)2 initiated

2

U.S. Steel Group (a unit of USX Corporation), United

Steelworkers of America, LTV Steel Company, Inc., and Independent

Steelworkers Union are not parties to this action.

Bethlehem Steel Corporation, National Steel Corporation, and

United States Steel Corporation collectively will be referred to

as “Defendant Intervenors I,” while Gallatin Steel Company, IPSCO

Steel Inc., Nucor Corporation, Steel Dynamics, Inc., and Weirton

Steel Corporation collectively will be referred to as “Defendant

Intervenors II.”

Plaintiff’s counsel changed affiliation from Ablondi,

Foster, Sobin & Davidow, P.C., to Miller & Chevalier Chartered

Court No. 01-01040 Page 4

an antidumping investigation with Commerce. Certain HRCS Flat

Products from Argentina, India, Indonesia, Kazakhstan, the

Netherlands, the People’s Republic of China, Romania, South Africa,

Taiwan, Thailand, and Ukraine, 65 Fed. Reg. 77,568, 77,568 (Dep’t

Commerce Dec. 12, 2000) (notice of initiation of antidumping duty

investigations) (“Initiation Notice”). The Domestic Producers

alleged that imports of HRCS flat products from Argentina, India,

Indonesia, Kazakhstan, the Netherlands, the People’s Republic of

China, Romania, South Africa, Taiwan, Thailand, and Ukraine were

being or likely to be sold at LTFV.3 Id. at 77,569. On December

4, 2000, Commerce initiated an investigation to determine whether

prior to seeking judicial review of Commerce’s affirmative LTFV

determination with the Court.

3

An antidumping duty is imposed upon imported merchandise if

that merchandise is sold or is likely to be sold in the United

States at LTFV, and an industry in the United States is

materially injured or is threatened with material injury. See 19

U.S.C. § 1673. To determine whether merchandise is sold at LTFV,

Commerce compares the price of the imported merchandise in the

United States to the normal value for the same or similar

merchandise in the home market. See 19 U.S.C. § 1677b(a).

Normal value is the comparable price for a product like the

imported merchandise when first sold (generally, to unaffiliated

parties) “for consumption in the exporting country, in the usual

commercial quantities and in the ordinary course of trade and, to

the extent practicable, at the same level of trade as the export

price or constructed export price.” 19 U.S.C. §

1677b(a)(1)(B)(i). Export price is the “price at which the

subject merchandise is first sold . . . by the producer or

exporter of the subject merchandise outside of the United States

to an unaffiliated purchaser,” 19 U.S.C. § 1677a(a); constructed

export price means the “price at which the subject merchandise is

first sold . . . in the United States . . . [by a] producer or

exporter . . . to a purchaser not affiliated with the producer or

exporter.” 19 U.S.C. § 1677a(b).

Court No. 01-01040 Page 5

certain HRCS flat products were being sold at LTFV in the United

States. Prelim. Determ., 66 Fed. Reg. at 22,204. In their

petition for unfair trade relief, the Domestic Producers identified

China Steel and Yieh Loong as principal Taiwanese producers of the

subject merchandise. Initiation Notice, 65 Fed. Reg. at 77,576.

Commerce issued an antidumping duty questionnaire to China

Steel and Yieh Loong requesting responses to sections A (General

Information), B (Sales in the Home Market or to Third Countries),

C (Sales to the United States), and D (Cost of Production) on

January 4, 2001. Final Determ., 66 Fed. Reg. at 49,619; Letter

from Robert James, Program Manager, Int’l Trade Admin., to Ablondi,

Foster, Sobin & Davidow, P.C., P.R. Doc. 28, Pl.’s Ex. 2 at 2 (Jan.

4, 2001) (“Questionnaire I”).4 Commerce explicitly informed China

Steel and Yieh Loong that “[i]f [either respondent were] unable to

respond to this questionnaire within the specified time limits,

[the respondent] must formally request an extension of time.”

Questionnaire I, P.R. Doc. 28, Pl.’s Ex. 2 at 2. Questionnaire I

directed China Steel to provide affiliated parties’ resale

information if “sales to affiliates constituted more than five

percent of total home market sales.” Final Determ., 66 Fed. Reg.

at 49,621. That questionnaire defined “affiliated persons”

according to Section 771(33) of the Tariff Act of 1930, as amended,

4

Citations to the administrative record include references

to both public documents (“P.R. Doc.”) and proprietary documents

(“C.R. Doc.”).

Court No. 01-01040 Page 6

and §§ 351.102(b) and 351.401(f) of the Department’s regulations.

Questionnaire I, P.R. Doc. 28 at app. I.

China Steel requested to be excused from reporting home market

resales by affiliates on January 19, 2001, as sales to its

affiliates, China Steel Global Trading Corporation and China Steel

Chemical Corporation, constituted less than five percent of its

total home market sales. Final Determ., 66 Fed. Reg. at 49,621.

Commerce responded on January 29, 2001, stating that the agency

could not make a determination based on the information China Steel

provided, and requested China Steel to “document the total quantity

of subject merchandise sold to all affiliated parties.” Id.

China Steel and Yieh Loong submitted responses to section A of

Questionnaire I on February 2, 2001. Id. at 49,619. The following

day, China Steel and Yieh Loong requested a three week extension of

time to complete sections B, C, and D of Questionnaire I, stating

that the information required was extensive and complex, and the

employees answering the questions had also been finalizing the

respective companies’ accounts. Letter from Peter Koenig and

Kristen Smith, Ablondi, Foster, Sobin & Davidow, P.C., to U.S.

Sec’y of Commerce, P.R. Doc. 38, Pl.’s Ex. 3 at 1 (Feb. 3, 2001).

Commerce granted that request in part, extending the deadline to

February 22, 2001, and warning the two companies that the statutory

deadlines imposed on the agency were “mandatory, not optional in

nature.” See Letter from Robert James, Program Manager, Int’l

Court No. 01-01040 Page 7

Trade Admin., to China Steel Corporation and Yieh Loong Enterprise,

Co., Ltd., c/o Peter Koenig, Ablondi, Foster, Sobin & Davidow,

P.C., P.R. Doc. 115, Pl.’s Ex. 9 at 1-2 (Apr. 25, 2001) (“Denial

Letter”). China Steel and Yieh Loong again requested an additional

week of time on February 14, 2001 for the same reasons described

above to complete sections B and D of Questionnaire I. Letter from

Peter Koenig and Kristen Smith, Ablondi, Foster, Sobin & Davidow,

P.C., to U.S. Sec’y of Commerce, P.R. Doc. 43, Pl.’s Ex. 4 (Feb.

14, 2001).

On February 26, 2001, China Steel and Yieh Loong filed their

responses to sections B, C, and D of Commerce’s Questionnaire I.

Final Determ., 66 Fed. Reg. at 49,619. The following day, Commerce

issued supplemental section A questionnaires to China Steel and

Yieh Loong seeking, among other things, clarification of each

companies’ relationship with other companies. See Letter from

Robert James, Program Manager, Int’l Trade Admin., to Yieh Loong

Enterprise, Co., Ltd., c/o Peter Koenig, Ablondi, Foster, Sobin &

Davidow, P.C., C.R. Doc. 21, Def.’s Conf. Ex. 2 at 1, supp.

questionnaire para. 5, 8, 9 (Feb. 27, 2001); Letter from Robert

James, Program Manager, Int’l Trade Admin., to China Steel

Corporation, c/o Peter Koenig, Ablondi, Foster, Sobin & Davidow,

P.C., C.R. Doc. 22, Def.’s Conf. Ex. 3 at 1, supp. questionnaire

para. 3-4 (Feb. 27, 2001).

On March 15, 2001, Commerce issued supplemental sections B and

Court No. 01-01040 Page 8

C questionnaires to China Steel and Yieh Loong (collectively

“Questionnaire II”), seeking missing product characteristics

information. Final Determ., 66 Fed. Reg. at 49,620; Letter from

Robert James, Program Manager, Int’l Trade Admin., to Yieh Loong

Enterprise, Co., Ltd., c/o Peter Koenig, Ablondi, Foster, Sobin &

Davidow, P.C., P.R. Doc. 69, Def.’s Ex. 2 (Mar. 15, 2001)

(instructing that a “complete” response be provided by March 28,

2001) (emphasis in original) (“YL’s Questionnaire II”). Commerce

again requested that China Steel provide data containing “all

affiliated parties’ resale information, [which includes sales by]

(Yieh Loong, China Steel Chemical [Corporation], China Steel Global

[Trading Corporation], Yieh Phui [Enterprise Co. Ltd.], [and] Yieh

Hsing [Enterprise Co. Ltd.]) to the first unaffiliated party.”

Final Determ., 66 Fed. Reg. at 49,621; see also Letter from Robert

James, Program Manager, Int’l Trade Admin., to China Steel

Corporation, c/o Peter Koenig, Ablondi, Foster, Sobin & Davidow,

P.C., C.R. Doc. 27, Def.-Int. II’s Conf. Ex. 3 at 1, supp.

questionnaire para. 3 (Mar. 15, 2001) (“CSC’s Questionnaire II”).

Commerce further directed China Steel to “[f]ully report the

[product] characteristics of ‘leeway’ and overrun merchandise

following the criteria specified in [the agency’s] [Q]uestionnaire

[I].” CSC’s Questionnaire II, C.R. Doc. 27, Def.-Int. II’s Conf.

Ex. 3 supp. questionnaire para. 5.

China Steel and Yieh Loong submitted their responses to the

Court No. 01-01040 Page 9

supplemental section A questionnaire on March 20, 2001 (“CSC’s Mar.

20 Response”). Final Determ., 66 Fed. Reg. at 49,619. On March

21, 2001 and March 26, 2001, China Steel and Yieh Loong submitted

additional responses to accompany their March 20, 2001 submission.

Id. Also on March 21, 2001, Commerce issued supplemental section

D questionnaires to China Steel and Yieh Loong. Id. at 49,620.

Both entities requested an extension of time to file their sections

B, C, and D supplemental responses on March 22, 2001, arguing that

the Department’s requests were extremely burdensome because of the

short deadlines and complex nature of the issues and transactions.

Letter from Peter Koenig and Kristen Smith, Ablondi, Foster, Sobin

& Davidow, P.C., to U.S. Sec’y of Commerce, P.R. Doc. 80, Pl.’s Ex.

6 (Mar. 22, 2001). Another extension of time was requested on

March 30, 2001 for ten days in order for China Steel to prepare

affiliate resale information pertaining to Commerce’s Questionnaire

II, because the affiliates’ records were kept in a system from

which China Steel could not easily extract the information. See

Letter from Peter Koenig and Kristen Smith, Ablondi, Foster, Sobin

& Davidow, P.C., to U.S. Sec’y of Commerce, P.R. Doc. 85, Pl.’s Ex.

7 (Mar. 30, 2001). The two companies each filed responses to

Questionnaire II on April 3, 2001. Final Determ., 66 Fed. Reg. at

49,620. China Steel and Yieh Loong then filed their responses to

the supplemental section D questionnaires on April 9, 2001. Id.

Questionnaire III was issued to China Steel and Yieh Loong on

Court No. 01-01040 Page 10

April 17, 2001 and April 18, 2001 with respect to each company’s

sections B, C, and D responses, requesting that China Steel supply

complete product characteristics and downstream sales information,

and that Yieh Loong supply downstream sales’ narratives and

supporting documentation for all expenses and adjustments. Id. On

April 23, 2001, China Steel and Yieh Loong filed a request seeking

a four day extension to file their responses to Commerce’s

Questionnaire III. Letter from Peter Koenig and Kristen Smith,

Ablondi, Foster, Sobin & Davidow, P.C., to U.S. Sec’y of Commerce,

P.R. Doc. 108, Pl.’s Ex. 8 at 2 (Apr. 23, 2001) (“Extension

Request”). That same letter also requested an extension of the

“preliminary and/or final” determinations to permit sufficient time

for the two companies to defend their cases, given that the

investigation was complex and the affiliated parties would not

cooperate with Plaintiff’s requests for resale information. Id. at

1-2. Nonetheless, the two corporations submitted their responses

to Questionnaire III on April 23, 2001. Final Determ., 66 Fed.

Reg. at 49,620. Commerce denied the four-day and preliminary

determination time extension requests on April 25, 2001. Denial

Letter, P.R. Doc. 115, Pl.’s Ex. 9 at 2.

On May 3, 2001, Commerce published its preliminary

determination of sales at LTFV. Prelim. Determ., 66 Fed. Reg. at

22,204. Among other things, Commerce concluded that China Steel

was affiliated with Yieh Loong’s affiliates, Yieh Hsing Enterprise

Court No. 01-01040 Page 11

Co. Ltd. (“YH”), and Yieh Phui Enterprise Co., Ltd (“YP”), as a

result of collapsing China Steel and Yieh Loong, and that China

Steel was required to report those two affiliates’ downstream sales

data. See id. at 22,207. Commerce also concluded that China Steel

failed to cooperate to the best of its ability “[i]n light of China

Steel’s repeated failure to provide affiliated sales information

and . . . all necessary product characteristics or to provide any

meaningful explanation of why such data could not be provided.”

Id. at 22,208. Accordingly, Commerce applied an adverse facts

available dumping margin to sales made by the collapsed entity.

Id.

A week later, on May 10, 2001, Commerce cancelled the sales

and cost verifications for the two companies. Final Determ., 66

Fed. Reg. at 49,620 (internal citation omitted). On May 30 and 31,

2001, China Steel and Yieh Loong submitted additional responses to

Commerce’s Questionnaire III. Id. Those responses subsequently

were returned to the respective companies by Commerce because the

Department found them untimely. Id. (internal citation omitted).

On July 17, 2001, Commerce published a postponement of the

final determination for this investigation. Certain HRCS Flat

Products from Taiwan, 66 Fed. Reg. 37,213, 37,214 (Dep’t Commerce

July 17, 2001) (postponement of final determination for antidumping

duty investigation) (“Postponement Notice”). The agency also

delayed its final determination by four days in light of the tragic

Court No. 01-01040 Page 12

events of September 11, 2001. Final Determ., 66 Fed. Reg. at

49,618-19. Commerce published its affirmative final determination

on September 28, 2001. Id. at 49,618.5

In rendering its affirmative LTFV determination, Commerce made

several findings. First, Commerce found that China Steel was

affiliated with Yieh Loong’s affiliates because “[c]ollapsed

companies constitute a single entity and therefore affiliates of

either company are affiliates of the collapsed entity.” Issues and

Decision Mem., P.R. Doc. 151, Def.’s Ex. 8 at 6; see also Final

Determ., 66 Fed. Reg. at 49,621. Accordingly, Commerce concluded

that China Steel’s home market sales to affiliated parties

constituted more than five percent of its total sales, thereby

requiring China Steel to report all resale information. See Final

Determ., 66 Fed. Reg. at 49,621.

Second, Commerce determined that the use of facts available

was appropriate pursuant to 19 U.S.C. § 1677e(a)(2)(A)-

1677e(a)(2)(C) because CSC/YL “withheld information requested by

the Department, failed to supply such information by the applicable

deadlines and has significantly impeded this proceeding,” and also

5

Commerce’s final determination incorporates by reference

the agency’s Issues and Decision Memorandum, which responds to

CSC/YL’s and the Domestic Producers’ comments filed during the

antidumping investigation. Dep’t of Commerce Mem. from Joseph A.

Spetrini to Faryar Shirzad, Issues and Decision Memo for the

Antidumping Investigation of Certain HRCS Flat Products from

Taiwan - October 1, 1999 through September 30, 2000, P.R. Doc.

151, Def.’s Ex. 8 (Sept. 21, 2001) (“Issues and Decision Mem.”).

Court No. 01-01040 Page 13

failed to request any modification of the reporting requirements.

See id. at 49,620. In particular, Commerce found that CSC/YL’s

affiliated party resales responses were “incomplete, deficient, and

inconsistent” because China Steel only reported downstream sales

made after February 21, 2000 by Yieh Loong, YP, and YH. See Final

Determ., 66 Fed. Reg. at 49,621. Moreover, Yieh Loong’s downstream

sales information failed to provide narratives and supporting

documentation for all expenses and adjustments. Id. Commerce

concluded that Plaintiff’s product characteristics data contained

deficiencies because the information failed to describe the

“quality, carbon, yield strength, thickness, and width

[characteristics for] a significant percentage of its home market

sales,” and that such merchandise was “prime quality,” which could

be matched to U.S. sales of prime quality merchandise. See id. at

49,621-22. Commerce stated that those deficiencies precluded the

sales data from being used for cost tests, model matching, or price

comparisons. Id. at 49,622. Without this information, the agency

stated that it was unable to accurately calculate a dumping margin.

Id. at 49,621. Finally, Commerce concluded that the sales

information provided by Plaintiff overall “was too incomplete to

form a reliable basis for making a determination and that

[Plaintiff] has not acted to the best of its ability in providing

information.” Id. at 49,620.

Third, Commerce determined that China Steel failed to

Court No. 01-01040 Page 14

cooperate to the best of its ability because it repeatedly ignored

instructions to submit complete product characteristics and

accurate downstream sales data, and “never provided alternatives or

reasonable explanations for why it could not report all downstream

sales.” Id. at 49,622. Without this information, Commerce stated

that it was unable to calculate an accurate margin, use China

Steel’s home database to match sales of identical or most similar

products, or properly perform a cost test for home market sales.

Id. Commerce also noted that Plaintiff “repeatedly told the

Department that the missing information would be forthcoming.” Id.

at 49,620. As Plaintiff’s deficient responses affected a

“significant” portion of its responses, Commerce found the

submitted data unusable for purposes of calculating a dumping

margin. Id. at 49,622. Commerce therefore determined that the

application of adverse facts available was appropriate pursuant to

19 U.S.C. § 1677e(a)(2)(B), (b). Id. at 49,620. Accordingly,

Commerce assigned Plaintiff an adverse facts available dumping

margin of 29.14 percent. Id. at 49,622.

II. Standard of Review

In reviewing final determinations in antidumping duty

investigations, the Court will hold unlawful those agency

determinations which are “unsupported by substantial evidence on

the record, or otherwise not in accordance with law.” 19 U.S.C. §

Court No. 01-01040 Page 15

1516a(b)(1)(B)(I) (2000).

III. Discussion

There are four issues presented. The Court must determine

whether: (1) Commerce’s affiliation determination is supported by

substantial evidence and in accordance with law, (2) Commerce’s

decision to apply facts available is in accordance with law, (3)

Commerce’s decision to use adverse facts available is supported by

substantial evidence and in accordance with law, and (4) Commerce’s

conduct during the investigation was arbitrary and capricious, or

an abuse of discretion.

A. Affiliation6

Commerce concluded that CSC/YL was affiliated with YH, YP, and

Persistence Hi-Tech Materials Inc. (“Persistence”) pursuant to 19

U.S.C. §§ 1677(33)(F), (G) on the basis of the following evidence:

(1) Yieh Loong, aware of the statutory definition of “affiliated

parties,” conceded affiliation with YH, YP, and Persistence in its

section A questionnaire responses; (2) Yieh Loong, YH, YP, and

Persistence shared a common chairman of the board; (3) Taiwanese

6

With the passage of Uruguay Round Agreement Act (“URAA”),

Congress modified U.S. trade law and replaced the concept of

“exporter” with the definition of “affiliated persons” as of

January 1, 1995. URAA, Pub. L. No. 103-465, 108 Stat. 4809,

4875-76 (1994); compare 19 U.S.C. § 1677(33) (2000) with 19

U.S.C. § 1677(13) (1988).

Court No. 01-01040 Page 16

law grants “extensive power” to chairmen of the board; and (4) Yieh

Loong, YH, and YP each own a minority stock interest in one

another. Issues and Decision Mem., P.R. Doc. 151, Def.’s Ex. 8 at

6-7; Dep’t of Commerce Mem. from Patricia Tran to File, Certain

HRCS Flat Products from Taiwan – China Steel Corporation (China

Steel), Yieh Loong Enterprise (Yieh Loong), and affiliated

resellers, C.R. Doc. 50, Def.’s Conf. Ex. 4 at 2 (Apr. 19, 2001)

(“Affiliated Resellers Mem.”). In reaching that conclusion,

Commerce first found that Yieh Loong is affiliated with YH, YP, and

Persistence. Issues and Decision Mem., P.R. Doc. 151, Def.’s Ex.

8 at 7. Commerce then concluded that “China Steel is affiliated

with Yieh Loong’s affiliates,” because “[c]ollapsed companies

constitute a single entity and therefore affiliates of either

company are affiliates of the collapsed entity.” See id. at 6-7.

In support of its determination, the Department cites Stainless

Steel Sheet and Strip in Coils from Germany, 64 Fed. Reg. 30,710

(Dep’t Commerce June 8, 1999) (final determination of sales at

LTFV).7 Issues and Decision Mem., P.R. Doc. 151, Def.’s Ex. 8 at

7

Commerce’s reliance on Stainless Steel and Strip in Coils

from Germany is misplaced, as the agency in that case found

affiliation based on Thyssen’s common control over its affiliates

and KTS pursuant to 19 U.S.C. § 1677(33)(E)-(F). See 64 Fed.

Reg. at 30,723-24. While Commerce relied on subsection (F) in

rendering its determination here, the Department’s decision also

was based on subsection (G). More importantly, Commerce does not

rely on “common control” pursuant to subsection (F) or equity

ownership pursuant to subsection (E) to support its affiliation

determination in this case. Thus, Commerce’s reliance on

Stainless Steel and Strip in Coils from Germany does not support

Court No. 01-01040 Page 17

7.

Plaintiff challenges Commerce’s conclusion that it is

affiliated with YH, YP, and Persistence, claiming that CSC/YL does

not “control” the resellers’ pricing. See Pl.’s Br. Supp. Mot. J.

Agency R. at 15 (“Pl.’s Br.”). Plaintiff argues that control is

lacking for several reasons. First, as stated in its certified

statement to Commerce, Plaintiff claims that the common chairman

between Yieh Loong, YH, YP, and Persistence is not responsible for

pricing or daily operations, but rather meets with the board of

directors several times a year to handle macroeconomic and

investment issues. Id. at 15-16. Second, although Yieh Loong, YH,

and YP retain a minority ownership interest of less than three

percent in each other, the common chairman only has influence to

the extent of that ownership percentage. Id. at 17. Third,

Plaintiff asserts that “[a] party’s statements on affiliation,

including in financial statements” do not support Commerce’s

affiliation determination. Id. at 18. Plaintiff’s final argument

contends that it is not required, as a matter of law, to submit

pre-affiliation downstream sales data where China Steel became

affiliated with Yieh Loong, and purportedly in turn to YP, YH, and

Persistence only on February 21, 2000, a point almost five months

into the POI. Pl.’s Br. at 20.

Affiliation is defined statutorily at 19 U.S.C. § 1677(33),

the Department’s determination here.

Court No. 01-01040 Page 18

stating, in relevant part:

[t]he following persons shall be considered to be

“affiliated” or “affiliated persons:”

. . .

(F) Two or more persons directly or indirectly

controlling, controlled by, or under common control with,

any person.

(G) Any person who controls any other person and

such other person.

19 U.S.C. § 1677(33); see also 19 C.F.R. § 351.102(b) (2001)

(defining “[a]ffiliated person; affiliated parties” according to 19

U.S.C. § 1677(33)). The statute further expounds that “a person

shall be considered to control another person if the person is

legally or operationally in a position to exercise restraint or

direction over the other person.” 19 U.S.C. § 1677(33); see also

Uruguay Round Agreements Act, Statement of Administration Action,

H.R. Doc. No. 103-465 at 838 (“SAA”).8

To determine whether “control” exists, Commerce’s regulations

direct the agency to consider the following factors, “among others:

corporate or family groupings; franchise or joint venture

agreements; debt financing; and close supplier relationships.” 19

C.F.R. § 351.102(b). Commerce, however, is precluded from finding

“control” on the basis of those factors “unless the relationship

8

The SAA represents “an authoritative expression by the

Administration concerning its views regarding the interpretation

and application of the Uruguay Round agreements . . . . [T]he

Administration understands that it is the expectation of the

Congress that future Administrations will observe and apply the

interpretations and commitments set out in this statement.” SAA

at 656.

Court No. 01-01040 Page 19

has the potential to impact decisions concerning the . . . pricing,

. . . of the subject merchandise.” Id. Commerce shall also

“consider the temporal aspect of a relationship in determining

whether control exists; normally, temporary circumstances will not

suffice as evidence of control.” 19 C.F.R. § 351.102(b); see also

Hontex Enter., Inc. v. United States, slip. op. 03-17 at 39 (CIT

Feb. 13, 2003).

Neither the statute nor Commerce’s regulations, however,

prescribe how Commerce should determine when a party is affiliated

with a collapsed entity. Thus, the Court must consider whether

Commerce’s affiliation determination is based on a permissible

construction of the antidumping statute. See AK Steel Corp. v.

United States, 22 CIT 1070, 1084-85, 34 F. Supp. 2d 756, 767-68

(1998).

Plaintiff claims that the existence of a common chairman

cannot support a determination of “control” here because that

individual is not responsible for pricing or daily operations, but

rather meets with the board of directors several times a year to

discuss macroeconomic and investment issues. Pl.’s Br. at 15; see

also Letter from Peter Koenig and Kristen Smith, Ablondi, Foster,

Sobin & Davidow, P.C., to U.S. Sec’y of Commerce, C.R. Doc. 54,

Pl.’s Conf. Ex. 9 supp. questionnaire para. 1 (Apr. 23, 2001)

(“YL’s Apr. 23 Response”) (certifying that “[t]he President

[instead of the board] makes the final determinations as to the

Court No. 01-01040 Page 20

pricing and slab purchasing of Yieh Loong”). In support of that

argument, Plaintiff contends that Commerce erroneously failed to

discuss Taiwan Company Law Article 193,9 which requires listed

companies, such as China Steel and Yieh Loong, to sell to

affiliates at the same market price as non-affiliates in order to

avoid price controls and conflicts of interest. Pl.’s Br. at 15-

17.10 Taiwan Company Law Article 193 deems directors personally

liable to the company for causing loss or damage for violations of

9

Article 193 states, in relevant part:

The board of directors, in conducting business,

shall act in accordance with laws and ordinances, [and]

the articles of incorporation . . . .

Where any resolution adopted by the board of

directors contravenes the aforesaid provisions, thereby

causing loss or damage to the company, all directors

taking part in the adoption of such resolution shall be

liable to compensate the company for such loss or

damage.

YL’s Apr. 23 Response, C.R. Doc. 54 at Ex. 22 art. 193; see also

Investment Laws of the World: Taiwan art. 193 (Int’l Ctr. for

Settlement of Inv. Disputes, ed. 1982).

10

Plaintiff also claims that “Commerce unreasonably and

unlawfully, failed to investigate further, . . . if it had

concerns as to [Yieh Loong’s] certified statement.” Pl.’s Br. at

17 (citing Olympia Indus., Inc. v. United States, 22 CIT 387,

392, 7 F. Supp. 2d 997, 1002 (1998)). Plaintiff’s reliance on

Olympia Indus. is misplaced. In that case, Commerce failed to

further investigate or explain its rejection of data submitted by

a party who believed that its submission was the best information

available. 22 CIT at 390, 392, 7 F. Supp. 2d at 1001-02. Here,

Commerce explicitly rejected Plaintiff’s certified statement and

supported that rejection by discussing the extensive power

granted to chairmen under Taiwan Company Law Articles 202 and

208. Issues and Decision Mem., P.R. Doc. 151, Def.’s Ex. 8 at 6-

7.

Court No. 01-01040 Page 21

the law or the company’s articles of incorporation. Investment

Laws of the World: Taiwan, supra note 9.

Plaintiff’s claim misstates the antidumping statute. Rather

than requiring actual exercise of control, the statute only

requires that a person is “legally or operationally in a position

to exercise restraint or direction over the other person.” 19

U.S.C. § 1677(33); SAA at 838 (same); see also Ta Chen Stainless

Steel Pipe, Ltd. v. United States, 23 CIT 804, 813 (1999) (“The

statute focuses on the capacity to control, rather than on the

actual exercise of control.”) (citing Ferro Union, Inc. v. United

States, 23 CIT 178, 192, 44 F. Supp. 2d 1310, 1324 (1999)). As

stated by Commerce in its explanatory comments to its final rule,

the agency “focus[es] on relationships that have the potential to

impact decisions concerning production, pricing or cost. This does

not mean however, that proof is required that a relationship in

fact has had such an impact.” Antidumping Duties; Countervailing

Duties, 62 Fed. Reg. 27,296, 27,297-98 (Dep’t Commerce May 19,

1997) (final rule).

In this case, Commerce did not base its finding of control on

actual proof that the common chairman influences the pricing

decisions of YH, YP, and Persistence. Instead, Commerce apparently

concluded that the common chairman was operationally in a position

to affect pricing decisions, because Taiwan law grants extensive

power to the chairman of the board. See Issues and Decision Mem.,

Court No. 01-01040 Page 22

P.R. Doc. 151, Def.’s Ex. 8 at 6-7. The record reveals that

Taiwanese law generally extends chairmen of the board “‘the power

to perform every act in connection with the business operations of

the company,’” and in practice, “‘may engage in significant

transactions without seeking approval of the company’s board of

directors.’” Affiliated Resellers Mem., C.R. Doc. 50, Def.’s Conf.

Ex. 4 at 2 (quoting Paul Cassingham and Nicholas Chen, Taiwan–Joint

Ventures in an Uncommon Law Jurisdiction, Int’l Tax Rev. (1992));

see also Investment Laws of the World: Taiwan, supra note 9 at art.

202 (granting the board of directors the power to transact all of

the company’s business).11 The record also reveals that Taiwanese

11

Plaintiff asserts that the article “is not in the

[Department’s] record of this proceeding, rendering its use

impermissible.” Pl.’s Reply to Opp’n. Mot. J. Agency R. at 10

n.13 (“Pl.’s Reply”). As the article is cited in the agency’s

Affiliated Resellers Memorandum, C.R. Doc. 50, Def.’s Conf. Ex. 4

at 2, and as that memorandum was created by the agency during the

course of this proceeding, the Court concludes that the article

is part of the record. 19 U.S.C. § 1516a(b)(2)(A) (noting that

the record consists of “all governmental memoranda pertaining to

the case”); 19 C.F.R. § 351.104(a) (stating that the Department

“will include in the official record all factual information . .

. or other material developed by, presented to, or obtained by

the [agency] during the course of a proceeding”). Moreover, the

article was available in the public domain during the agency’s

investigation of this case. Cassingham and Chen, supra p. 22, at

http://www.perkinscoie.com/resource/intldocs/uncommon.htm (Apr.

16, 2001).

Plaintiff further argues that the article is inapplicable

because it was published prior to the POI. See Pl.’s Reply at 10

n.13. The Court disagrees. Because the article was obtained by

the agency during the course of this proceeding, and because the

article was expressly incorporated into the Affiliated Resellers

Memorandum, the Court can properly review the affiliation

decisions using such information. Cf. Floral Trade Council v.

United States, 13 CIT 242, 243, 709 F. Supp. 229, 230-31 (1989)

Court No. 01-01040 Page 23

law grants chairmen the power to call and direct board meetings.

See Investment Laws of the World: Taiwan, supra note 9 at art. 208,

203 (stating that “[t]he chairman of the board of directors shall

internally preside at the meetings of . . . . the board of

directors” and that “[m]eetings of the board of directors shall be

convened by the chairman of the board”). Finally, the record

indicates Yieh Loong admitted that its board of directors conform

to these responsibilities. YL’s Apr. 23 Response, C.R. Doc. 54 at

2 (“Since Yieh Loong is a company duly organized and existing under

the law of [Taiwan], it follows [Taiwan] Company Law with respect

to the responsibilities of the Board of Directors.”). Thus, the

Court finds that Commerce’s determination that the common chairman

was operationally in a position to exercise direction over pricing

decisions is supported by substantial evidence.

The Department’s final determination and supporting memoranda

fail to explicitly address Article 193. It can be presumed,

however, that the agency considered this article in light of the

fact that the Department directly discusses other articles of

Taiwan Company Law in rendering its final determination. See

Issues and Decision Mem., P.R. Doc. 151, Def.’s Ex. 8 at 6-7; China

(finding that the record contains “those documents at the agency

which become sufficiently intertwined with the relevant inquiry .

. . no matter how or when they arrived at the agency,” and that

the agency’s express reference in its determination to “the

original investigations by the ITC and the Department”

incorporated all relevant information from those prior

investigations into the record) (internal citation omitted).

Court No. 01-01040 Page 24

Nat’l Mach. Imp. & Exp. Corp. v. United States, slip. op. 03-16 at

19 (CIT Feb. 13, 2003) (“[T]he agency is presumed to have

considered all of the evidence in the record, and the burden is on

the plaintiff to prove otherwise.”) (internal citations omitted);

see also Bowman Transp., Inc. v. Ark.-Best Freight Sys., Inc., 419

U.S. 281, 286 (1974) (holding that the Court may “uphold a decision

of less than ideal clarity if the agency’s path may reasonably be

discerned”) (internal citation omitted). Even though Article 193

seems to support Plaintiff’s certified statement that the common

chairman does not “control” pricing or daily operations, Commerce

determined that the common chairman was operationally in a position

of control under Taiwanese law. As Commerce ultimately bears the

responsibility of weighing the evidence, the Court may not

substitute its judgment for that of the agency. See Corus Staal BV

v. United States, slip. op. 03-25 at 11 (CIT Mar. 7, 2003). Even

if there is some evidence which detracts from the agency’s

conclusions, the Court need only determine whether the Department’s

conclusions are substantially supported by the record. See id.;

Olympia Indus., Inc., 22 CIT at 389, 7 F. Supp. 2d at 1000 (citing

Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1563 (Fed. Cir.

1984)).

Plaintiff’s second argument contends that control is lacking

because the common chairman only has the power to influence the

board of director’s decisions to the extent of the shares his

Court No. 01-01040 Page 25

company owns, which in this case is less than 3 percent. Pl.’s Br.

at 17. Plaintiff’s argument again incorrectly states the statutory

requirements, as it focuses only on a finding of actual control,

rather than the capacity for control. As such, the Court finds

this argument lacks merit.

Plaintiff’s third argument that a party’s affiliation

statements, including those made in financial statements, are not

substantial evidence of affiliation is unfounded. In fact, only

one of the four agency determinations cited in Plaintiff’s Brief

lends support for CSC/YL’s claim, but even that determination only

stands for the limited proposition that admissions of affiliation

contained in an entity’s financial statements alone insufficiently

establish affiliation. Certain Hot-Rolled Flat-Rolled Carbon-

Quality Steel Products from Brazil, 64 Fed. Reg. 38,756, 38,769

(Dep’t Commerce July 19, 1999) (notice of final determination of

sales at LTFV) (“Certain Steel Products from Brazil”). Thus, the

Court finds Plaintiff’s third argument also lacks merit.

Plaintiff’s final contention is that it is not required, as a

matter of law, to submit pre-affiliation downstream sales data

where China Steel became affiliated with Yieh Loong, and

purportedly in turn to YP, YH, and Persistence, only on February

21, 2000. Pl.’s Br. at 20. Commerce’s own regulation requires

that it consider the temporal aspect of a relationship in

determining whether control exists. 19 C.F.R. § 351.102(b). In

Court No. 01-01040 Page 26

Hontex Enter., Inc., slip. op. 03-17 at 39-40, the Court refused to

sustain Commerce’s determination where the agency failed to address

the temporal aspect of the entities’ relationships, and explain why

that factor was not necessary to its determination. Here, too,

Commerce has failed to address the temporal aspect of the relevant

parties’ relationships, or to explain why that factor is not

necessary to its determination. Accordingly, the Court cannot

sustain Commerce’s determination. Torrington Co. v. United States,

82 F.3d 1039, 1049 (Fed. Cir. 1996) (“Commerce, like other

agencies, must follow its own regulations.”) (citing Fort Stewart

Sch. v. Fed. Labor Relations Auth., 495 U.S. 641, 654 (1990)

(internal citation omitted)). On remand, Commerce will have the

opportunity to reconsider the temporal aspect of the pertinent

parties’ relationships.

The Court therefore finds aspects of Commerce’s determination

that Yieh Loong is affiliated with YH, YP, and Persistence, and

that China Steel is affiliated with Yieh Loong’s affiliates,

supported by substantial evidence. The Court, however, remands the

decision because the agency failed to consider the temporal aspect

of the parties’ relationships, and as such, finds the agency’s

determination not in accordance with law.

B. Facts Otherwise Available

The second issue concerns Commerce’s decision to apply facts

Court No. 01-01040 Page 27

otherwise available. Commerce determined that the application of

facts available was appropriate in this case pursuant to 19 U.S.C.

§ 1677e(a)(2)(A)-(C), because CSC/YL “withheld information

requested by the Department, failed to supply such information by

the applicable deadlines and has significantly impeded this

proceeding,” and also failed to request any modification of the

reporting requirements with respect to the deficient downstream

sales and product characteristics information. See Final Determ.,

66 Fed. Reg. at 49,620. In particular, Commerce found deficiencies

in the downstream sales and product characteristics information

submitted by Plaintiff in response to the agency’s Questionnaires

I, II, and III. See id. Commerce concluded that CSC/YL’s

affiliated party resales responses were “incomplete, deficient, and

inconsistent” because China Steel only reported downstream sales

made after February 21, 2000 by Yieh Loong, YP, and YH. See id. at

49,621. Moreover, Yieh Loong’s downstream sales information failed

to provide narratives and supporting documentation for all expenses

and adjustments. Id. Commerce concluded that Plaintiff’s product

characteristics data contained deficiencies because the information

failed to describe the “quality, carbon, yield strength, thickness,

and width [characteristics for] a significant percentage of its

home market sales,” and that such merchandise was “prime quality,”

which should be matched to U.S. sales of prime quality merchandise.

See id. at 49,621-22.

Court No. 01-01040 Page 28

Plaintiff challenges Commerce’s facts otherwise available

determination as not in accordance with law. See Pl.’s Br. at 22.

Plaintiff raises several arguments supporting that contention.

First, Plaintiff contends that Commerce failed to provide Yieh

Loong notice and an opportunity to remedy China Steel’s deficient

information prior to applying facts available, because Commerce did

not notify Yieh Loong of China Steel’s deficient downstream sales

and missing product characteristics data until the agency decided

to collapse the two entities in its preliminary determination, and

because Commerce would not accept any additional information after

such date. Id. (citing Case Brief of Yieh Loong and China Steel

Corporation before the U.S. Dep’t of Commerce, P.R. Doc. 140, Pl.’s

Ex. 14 at 8 (“Case Br.”)).

Second, Plaintiff claims it notified Commerce in its first

response to sections B, C, and D that it was unable to report

certain home market “leeway” overrun product characteristics in

accordance with 19 U.S.C. § 1677m(c)(1), because that information

was not readily available. Pl.’s Br. at 30 (citing Letter from

Peter Koenig, Ablondi, Foster, Sobin & Davidow, P.C., to U.S. Sec’y

of Commerce, C.R. Doc. 17, Pl.’s Conf. Ex. 3 at 5-6 (Feb. 26, 2001)

(“CSC’s Feb. 26 Response”)). Plaintiff also claims that it

notified Commerce of the problems it encountered in collecting

downstream sales information. Pl.’s Br. at 30 (citing Letter from

Peter Koenig and Kristen Smith, Ablondi, Foster, Sobin & Davidow,

Court No. 01-01040 Page 29

P.C., to U.S. Sec’y of Commerce, C.R. Doc. 43, Pl.’s Conf. Ex. 8 at

2 (Apr. 10, 2001) (“CSC’s Apr. 10 Letter”)); Extension Request,

P.R. Doc. 108, Pl.’s Ex. 8 at 2. Thus, Plaintiff argues that

Commerce was required to simplify its requests for information and

offer assistance. See Pl.’s Br. at 30. Commerce responds that

Plaintiff failed to provide a full explanation of its difficulty

meeting reporting requirements and to suggest alternative forms in

which it was capable of providing the requested information.

Def.’s Mem. Opp’n to Mot. J. Agency R. at 30 (“Def.’s Mem.”).

Last, Plaintiff argues that Commerce should have considered

its deficient data because CSC/YL acted in accordance with 19

U.S.C. § 1677m(e). Pl.’s Br. at 30-31.

Title 19 U.S.C. § 1677e(a) permits Commerce to use “facts

otherwise available” in reaching determinations where “necessary

information is not available on the record,” or an interested party

withholds requested information, fails to submit the requested

information by the deadline or provide such information in the form

and manner requested, significantly impedes an investigation, or

provides the requested information in an unverifiable form. 19 U.

S.C. § 1677e(a). Before resorting to facts available, however, the

Department is required to comply with the notice and remedial

requirements of § 1677m(d).12 Id. Nonetheless, if the remedial

12

Section 1677m(d) requires the Department to “promptly

inform the person submitting the response of the nature of the

deficiency and . . . to the extent practicable, provide that

Court No. 01-01040 Page 30

response or explanation is found unsatisfactory or untimely, the

Department may, subject to § 1677m(e),13 “disregard all or part of

the original and subsequent responses” in favor of facts available.

19 U.S.C. § 1677m(d).14

person with an opportunity to remedy or explain the deficiency in

light of the time limits established for the completion of [the]

investigation[].” 19 U.S.C. § 1677m(d). See infra pp. 32-33.

13

Section 1677m(e) provides:

(e) Use of Certain Information

In reaching a determination under . . . this title the

administering authority . . . shall not decline to

consider information that is submitted by an interested

party and is necessary to the determination but does

not meet all the applicable requirements established by

the administering authority . . . if –

(1) the information is submitted by the deadline

established for its submission,

(2) the information can be verified,

(3) the information is not so incomplete that it

cannot serve as a reliable basis for reaching the

applicable determination,

(4) the interested party has demonstrated that it

acted to the best of its ability in providing the

information and meeting the requirements

established by the administering authority . . .

with respect to the information, and

(5) the information can be used without undue

difficulties.

19 U.S.C. § 1677m(e).

14

Section 1677m prevents Commerce’s unrestrained use of

facts available as to a firm that makes its best efforts to

cooperate with the Department. Borden, Inc. v. United States, 22

CIT 233, 262, 4 F. Supp. 2d 1221, 1245 (1998), aff’d sub nom.

F.LLI De Cecco Di Filippo Fara S. Martino S.p.A. v. United

States, 216 F.3d 1027 (Fed. Cir. 2000) (“Borden I”). This

section was enacted as a part of the URAA, Pub. L. 103-465, §

Court No. 01-01040 Page 31

If Commerce finds that an interested party failed to provide

requested information by the deadline or in the form and manner

requested, Commerce’s use of facts available is subject to 19

U.S.C. § 1677m(c)(1) and (e). 19 U.S.C. § 1677e(a)(2)(B).

Subsection (e) requires Commerce to consider deficient information

if the respondent satisfies five enumerated criteria. See supra

note 13. Subsection (c) requires a party to promptly notify

Commerce as to why it cannot comply with the agency’s

questionnaire. 19 U.S.C. § 1677m(c)(1).15 That subsection also

231, to implement portions of Annex II to the Antidumping

Agreement, which states, in relevant part, that information which

“may not be ideal,” should not be disregarded if the party “has

acted to the best of its ability.” Agreement on Implementation

of Article VI of the General Agreement on Tariffs and Trade,

Annex II para. 5, reprinted in U.S. Trade Representative, Final

Texts of the GATT Uruguay Round Agreements 168 (1994).

15

Title 19 U.S.C. § 1677m(c) states as follows:

(c) Difficulties in meeting requirements

(1) Notification by interested party

If an interested party, promptly . . . notifies the

administering authority . . . that such party is unable to

submit the information requested in the requested form and

manner, together with a full explanation and suggested

alternative forms in which such party is able to submit

the information, the administering authority . . . shall

consider the ability of the interested party to submit the

information . . . and may modify such requirements to the

extent necessary to avoid imposing an unreasonable burden

on that party.

(2) Assistance to interested parties

The administering authority . . . shall take into

account any difficulties experienced by interested

Court No. 01-01040 Page 32

requires parties to suggest alternative forms in which they are

able to comply with the request. Id.

In the instant case, neither China Steel nor Yieh Loong

individually contest Commerce’s efforts to comply with § 1677m(d)

prior to the preliminary determination in which the two entities

were collapsed. Put differently, Plaintiff concedes that Commerce,

in accordance with § 1677m(d), promptly informed each entity of

their respective deficiencies by issuing supplemental

questionnaires requesting the deficient information. See Pl.’s Br.

at 22; see also Letter from Robert James, Program Manager, Int’l

Trade Admin., to China Steel Corporation, c/o Peter Koenig,

Ablondi, Foster, Sobin & Davidow, P.C., C.R. Doc. 22, Def.’s Conf.

Ex. 3 (Feb. 27, 2001); YL’s Questionnaire II, P.R. Doc. 69, Def.’s

Ex. 2. At the point at which Commerce collapsed China Steel and

Yieh Loong, the two companies were no longer treated as separate

legal entities. Rather, China Steel and Yieh Loong collectively

constituted a single “producer”16 pursuant to 19 U.S.C. § 1677(28)

parties, particularly small companies, in supplying

information requested by the administering authority . . .

in connection with investigations and reviews under this

subtitle, and shall provide to such interested parties any

assistance that is practicable in supplying such

information.

19 U.S.C § 1677m(c).

16

Title 19 U.S.C. § 1677(28) defines the term “exporter” or

“producer” as the “exporter of the subject merchandise, the

producer of the subject merchandise or both where appropriate.”

Court No. 01-01040 Page 33

for purposes of conducting the antidumping investigation and

calculating a dumping margin. Final Determ., 66 Fed. Reg. at

49,620; see also Antidumping Duties; Countervailing Duties, 61 Fed.

Reg. 7,308, 7,330 (Dep’t Commerce Feb. 27, 1996) (proposed rule)

(stating that upon collapsing multiple separate legal entities,

Commerce treats the selected entities as a single entity for

calculation of a single weighted-average dumping margin). As a

result, Yieh Loong is not entitled to separately receive notice or

remedial opportunities after the two entities were collapsed, as

Yieh Loong is not an individual or separate producer in the

investigation. Thus, the Court finds Commerce’s actions consistent

with § 1677m(d).17

To support its second argument, its § 1677m(c)(1) contention,

Plaintiff points to responses indicating that it coded the

requested product characteristics data in new columns because such

information lacks “specific record.” CSC’s Feb. 26 Response, C.R.

Doc. 17, Pl.’s Conf. Ex. 3 at 5-6. With respect to the downstream

17

Plaintiff also contends that Commerce failed to again

provide it notice and an opportunity to remedy its deficiencies

prior to applying adverse facts available. See Pl.’s Br. at 22.

Plaintiff’s argument is based on a misinterpretation of the

statute. As described above, Commerce is only required to

provide notice of deficient responses and an opportunity to

remedy those deficiencies prior to applying facts available in

accordance with 19 U.S.C. §§ 1677(e)(a), 1677m(d). Commerce may

not apply adverse facts available until it has complied with the

requirements for applying facts available. Compare 19 U.S.C. §

1677e(a) with 19 U.S.C. § 1677e(b). Thus, Commerce is not again

required to extend notice and remedial opportunities after

reaching its facts available determination.

Court No. 01-01040 Page 34

sales information, Plaintiff points to responses indicating that it

“had pushed hard to get [YH] to fully report its resale data,” and

that YH was unable to submit complete data because of financial

cutbacks. CSC’s Apr. 10 Letter, C.R. Doc. 43, Pl.’s Conf. Ex. 8 at

2.

Plaintiff’s two responses do not meet the threshold

requirements of 19 U.S.C. § 1677m(c)(1), as Plaintiff neither

explains in detail the difficulties it experienced, nor suggests

alternatives for supplying the deficient information. Compare

Kawasaki Steel Corp. v. United States, 24 CIT 684, 691, 110 F.

Supp. 2d 1029, 1036 (2000) (holding that respondent failed to

provide a full explanation why requested information could not be

submitted and failed to suggest alternatives for providing such

information where the respondent simply asked to be excused from

answering a section of the questionnaire) with World Finer Foods,

Inc. v. United States, 24 CIT 541, 542-44 (2000) (holding that

respondent Arrighi provided a detailed explanation in accordance

with § 1677m(c) when the company explained to Commerce that it

ceased exportation of pasta to the United States and was unable to

submit full responses to the agency’s questionnaire because the

company was not financially in a position to spare personnel to

compose such responses, and then offered to supply limited

information the Department might find worthwhile or helpful).

In fact, the record suggests that Plaintiff was capable of

Court No. 01-01040 Page 35

complying with the Department’s requests, because Plaintiff asked

for numerous extensions of time in order to collect and submit the

requested information. E.g., Final Determ., 66 Fed. Reg. at 49,620

(stating that Plaintiff “repeatedly told the Department that the

missing information would be forthcoming”); Supplemental Section B

Response from China Steel Corporation before the Int’l Trade

Admin., P.R. Doc. 92, Def.-Int. II’s Ex. 6 para. A3,(seeking an

extension of time to file the deficient downstream sales

information with Plaintiff’s supplemental section D responses), A4

(indicating that product characteristics such as “overrun, prime,

carbon, yield strength etc. can be identified from the production

record, inventory record as well as the product code system . . .

while . . . paint, thickness, width, cut-to-length, pickled, edge

trim and patterns in relief can be identified with customers’

orders”) (Apr. 3, 2001); Letter from Peter Koenig and Kristen

Smith, Ablondi, Foster, Sobin & Davidow, P.C., to U.S. Sec’y of

Commerce, C.R. Doc. 52, Pl.’s Conf. Ex. 10 at 5-6 (Apr. 23, 2001)

(“CSC’s Apr. 23 Response”) (describing Plaintiff’s efforts to

collect the information and expressly requesting the opportunity

“to refine the data submitted before making the final

determination”). Moreover, Plaintiff also claims that it

ultimately, albeit tardily, submitted all of the deficient data.

See Pl.’s Br. at 30.

Because Plaintiff failed to provide a full, detailed

Court No. 01-01040 Page 36

explanation and suggest alternatives for providing the information,

however, the Court finds Commerce’s duty to “assist interested

parties experiencing difficulties” was not triggered. World Finer

Foods, 24 CIT at 544 (internal citation omitted).

Contrary to Plaintiff’s third argument, Commerce ultimately

rejected Plaintiff’s submitted responses because it failed to

provide complete product characteristics and accurate downstream

sales information. See Final Determ., 66 Fed. Reg. at 49,620-21.

Commerce concluded that Plaintiff’s submitted data were “too

incomplete to form a reliable basis for making a determination”

pursuant to 19 U.S.C. § 1677m(e)(3). Id. at 49,620. Without the

requested data, Commerce stated that it was unable to calculate an

accurate margin, nor could it use China Steel’s home market

database to match sales of identical or most similar products,

compare prices of the merchandise, or properly perform a cost test

for home market sales. Id. at 49,622. Because Commerce is charged

with calculating dumping margins “‘as accurately as possible,’”

Lasko Metal Prods. Inc. v. United States, 43 F.3d 1442, 1446 (Fed.

Cir. 1994) (quoting Rhone Poulenc, Inc. v. United States, 899 F.2d

1185, 1191 (Fed. Cir. 1990)), and because the agency was inhibited

from doing so without the requested information, the Court finds

Commerce’s decision to apply facts available in accordance with

Court No. 01-01040 Page 37

law.18

C. Adverse Facts Available

The third issue concerns Commerce’s application of adverse

facts available. The Department concluded that Plaintiff “has not

cooperated by acting to the best of its ability.” Final Determ.,

66 Fed. Reg. at. 49,620-21. Commerce reached this conclusion

because China Steel repeatedly ignored instructions to submit

complete product characteristics and accurate downstream sales

data, and “never provided alternatives or reasonable explanations

for why it could not report all downstream sales.” Id. at 49,622.

This information was necessary to calculate an accurate margin, to

match sales of identical or most similar products, and to perform

a cost test for home market sales. Id. Commerce also noted that

Plaintiff “repeatedly told the Department that the missing

information would be forthcoming.” Id. at 49,620. As CSC/YL’s

deficient responses affected a “significant” portion of its

responses, Commerce found the submitted data unusable for purposes

of calculating a margin. Id. at 49,622. Commerce therefore

determined that the application of adverse facts available was

18

Although Commerce also concluded that Plaintiff failed to

act to the best of its ability, Final Determ., 66 Fed. Reg. at

49,620-21, the Court will address that issue in subsection C

below, discussing adverse inferences. Regardless, as Plaintiff

has not demonstrated that all five of the elements contained in §

1677m(e) are satisfied, the Department’s decision to apply facts

available is reasonable. See 19 U.S.C. § 1677m(e).

Court No. 01-01040 Page 38

appropriate under 19 U.S.C. § 1677e(a)(2)(B), 1677e(b). Id.

Plaintiff challenges Commerce’s decision to apply adverse

facts available as unsupported by substantial evidence and not in

accordance with law, asserting that the agency merely repeated that

Plaintiff had problems in timeliness and completeness without

finding that its refusal to cooperate was willful. Pl.’s Br. at

12, 22, 29. Plaintiff further argues that the Department failed to

consider the difficulties Plaintiff experienced in tracing the

requested product characteristics data and extracting and

collecting the requested affiliate reseller information. See id.

at 13. Last, Plaintiff contends that Commerce failed to provide it

with a meaningful opportunity to respond to the Department’s

requests for product characteristics and affiliate downstream sales

data. Pl.’s Br. at 23.

Once Commerce determines that facts available is warranted, §

1677e(b) permits Commerce to apply an “adverse inference” if the

Department makes an additional finding that a party has “failed to

cooperate by not acting to the best of its ability to comply with

a request for information.” 19 U.S.C. § 1677e(b); see also Fujian

Mach. and Equip. Imp. & Exp. Corp. v. United States, 25 CIT __, __,

178 F. Supp. 2d 1305, 1332 (2001) (internal citations omitted).

This finding must be “reached by ‘reasoned decisionmaking,’

including . . . a reasoned explanation supported by a stated

connection between the facts found and the choice made.” Elec.

Court No. 01-01040 Page 39

Consumers Res. Council v. Fed. Energy Regulatory Comm’n, 747 F.2d

1511, 1513 (D.C. Cir. 1984) (citing Burlington Truck Lines, Inc. v.

United States, 371 U.S. 156, 168 (1962)). Otherwise, “the

Department’s decision-making process will be arbitrary and

capricious.” Steel Auth. of India, Ltd. v. United States, 25 CIT

__, __, 149 F. Supp. 2d 921, 929 (2001).19

In making its determination that an interested party did not

act “‘to the best of its ability,’ [Commerce] cannot merely recite

the relevant standard or repeat its facts available finding.”

Steel Auth. of India, Ltd., 25 CIT at __, 149 F. Supp. 2d at 930

(internal citation omitted); see also Kawasaki Steel Corp., 24 CIT

at 689, 110 F. Supp. 2d at 1034 (“It has been well established by

the court that a ‘mere recitation of the relevant [adverse facts

available] standard is not enough for Commerce to satisfy its

obligation under the statute.’”) (internal citation omitted).

Rather, to satisfy its statutory obligations, the Department must

be explicit in its reason for applying adverse inferences. See

Ferro Union, Inc., 23 CIT at 200, 44 F. Supp. 2d at 1331. For the

19

The Court considers not only the Department’s

interpretation of the statute, but its decision-making process as

well. See Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto.

Ins. Co., 463 U.S. 29, 42-43 (1983) (describing the role of

rationality in reviewing an agency’s decision-making process).

This review differs from Chevron review in that it focuses

on whether the Department “articulate[d] with reasonable clarity

its reasons for decision[,]” rather than on the reasonableness of

the Department’s statutory interpretation. Steel Auth. of India,

Ltd., 25 CIT at __, 149 F. Supp. 2d at 929 n.10 (internal

citation omitted) (alterations in original).

Court No. 01-01040 Page 40

Department’s decision to be supported by substantial evidence,

Commerce must clearly articulate “‘why it concluded that a party

failed to act to the best of its ability, and explain why the

absence of this information is of significance to the progress of

[the agency’s] investigation.’” Nippon Steel Corp. v. United

States, 24 CIT 1158, 1170, 118 F. Supp. 2d 1366, 1378 (2000)

(“Nippon Steel Corp. I”) (quoting Mannesmannrohren-Werke AG v.

United States, 23 CIT 826, 839, 77 F. Supp. 2d 1302, 1313-14

(1999)). Commerce’s explanation must include, “[a]t a minimum,” a

determination “that a respondent could comply, or would have had

the capability of complying if it knowingly did not place itself in

a condition where it could not comply.” Nippon Steel Corp. I, 24

CIT at 1171, 118 F. Supp. 2d at 1378-79 (internal citation

omitted). Furthermore, Commerce “must also find either a willful

decision not to comply or behavior below the standard for a

reasonable respondent.” 24 CIT at 1171, 118 F. Supp. 2d at 1379.

Here, Commerce appears to conclude that Plaintiff could comply

with the agency’s requests. Final Determ., 66 Fed. Reg. at 49,620-

21 (noting that Plaintiff “repeatedly told the Department that the

missing information would be forthcoming” and that Plaintiff failed

to provide any proof that it was unable to comply with the

requests); see also Bowman Transp., Inc., 419 U.S. at 286 (holding

that the Court may “uphold a decision of less than ideal clarity if

the agency’s path may reasonably be discerned”).

Court No. 01-01040 Page 41

Commerce’s decision, however, failed to make the required

additional finding that Plaintiff failed to act to the best of its

ability. Commerce neglected to explain or analyze whether

Plaintiff willfully decided not to comply with its requests, or

alternatively, whether Plaintiff’s behavior fell below the standard

for a reasonable respondent. See Nippon Steel Corp. I, 24 CIT at

1170-71, 118 F. Supp. 2d at 1378-79. Instead, Commerce supports

its use of adverse facts available by repeating its facts available

reasoning, although using slightly different words. Compare Final

Determ., 66 Fed. Reg. at 49,622 (finding that China Steel failed to

cooperate to the best of its ability because it repeatedly ignored

the agency’s instructions to submit downstream sales and product

characteristics data, and never provided alternatives or

explanations for why it could not report the information) with id.

at 49,620-21 (holding that use of facts available was proper

because Plaintiff withheld and failed to supply downstream sales

and product characteristic information requested by the Department

without seeking modification of the reporting requirements). In so

doing, Commerce conflates the prerequisites for use of facts

available with the additional findings required to use an adverse

inference. See Nippon Steel Corp. v. United States, 25 CIT __, __,

146 F. Supp. 2d 835, 840 (2001) (“Commerce may not in this manner

‘simply repeat[] its 19 U.S.C. § 1677e(a)(2)(B) finding, using

slightly different words,’ in lieu of making the requisite

Court No. 01-01040 Page 42

additional findings before drawing an adverse inference.”) (citing

Borden I, 4 F. Supp. 2d at 1246); see also Steel Auth. of India,

Ltd., 25 CIT at __, 149 F. Supp. 2d at 930; Kawasaki Steel Corp.,

24 CIT at 689, 110 F. Supp. 2d at 1034 (internal citations

omitted). The Court therefore finds the Department’s “best of

ability” determination not in accordance with law. See Steel Auth.

of India, Ltd., 25 CIT at __, 149 F. Supp. 2d at 930-31.

The Department’s “best of ability” determination fails for an

additional reason. In its Case Brief before Commerce, Plaintiff

described the difficulties it experienced in gathering and

submitting the requested information. Case Brief, P.R. Doc. 140,

Pl.’s Ex. 14 at 2-3 (stating that “the case is highly complex,

involving over 100,000 transactions from nine separate sales data

bases, about three million individual figures,” and multiple

tracings through up to 70 transactions for requested product

characteristics). The Department, however, fails to address this

claim in reaching its “best of ability” determination. As “the

agency must examine the relevant data and articulate a satisfactory

explanation for its action including a ‘rational connection between

the facts found and the choice made,’” Commerce failed to clearly

identify its reasons for discounting Plaintiff’s claims in making

its best of ability determination. Motor Vehicle Mfrs. Ass’n, 463

U.S. at 43 (internal citation omitted).

CSC/YL’s last argument contends that Commerce failed to afford

Court No. 01-01040 Page 43

Plaintiff a meaningful opportunity to respond to the agency’s

requests to submit the data in question. Generally, Commerce

affords interested parties at least 30 days to respond to the full

initial questionnaire from the date of receipt. 19 C.F.R. §

351.301(c)(2)(iii). Notwithstanding that regulation, our case law

has established that “parties must be given a reasonable and

meaningful opportunity to participate in the review and provide

complete responses.” Mitsui & Co. v. United States, 18 CIT 185,

202 (1994) (internal citation omitted).

In Am. Silicon Tech. v. United States, 24 CIT 612, 624-25, 110

F. Supp. 2d 992, 1003 (2000), the Court found that Commerce’s use

of adverse facts was inappropriate because it was “not clear” that

the “numerous opportunities” afforded to respondent Eletrosilex

were meaningful opportunities to respond. The Department in that

case issued an initial questionnaire and a supplemental

questionnaire, to which Eletrosilex responded promptly. 24 CIT at

620, 110 F. Supp. 2d at 998-99. Thereafter, Commerce sought

additional information on “certain topics” by issuing a second and

third questionnaire that required responses within one week of

issuance, because of the statutory deadline for filing the

preliminary decision. 24 CIT at 620, 110 F. Supp. 2d at 999.

Eletrosilex failed to respond to either supplemental questionnaire.

Id. Instead, the respondent informed the Department that it was

being acquired, and that it was unable to file timely responses to

Court No. 01-01040 Page 44

the supplemental questionnaires because of management reviews and

changes in staffing. Id. The Court found that it was unclear

whether Plaintiff was afforded a meaningful opportunity to respond,

because the questionnaires required responses within one week of

issuance in light of the approaching preliminary determination

deadline, and Eletrosilex notified the agency upon receipt of the

questionnaires that it was being acquired and that it was unable to

submit timely responses because of management reviews and staffing

changes. 24 CIT at 624-25, 110 F. Supp. 2d at 1002-03.

Similarly, in Mitsui & Co., 18 CIT at 202, the Court held that

Commerce failed to afford respondent a meaningful opportunity to

respond to the Department’s requests because the agency requested

5 years of information to be submitted in 83 days, and the

Department failed to provide the respondent notice of the alleged

deficiencies in its submission. The Court in Melex USA, Inc. v.

United States further held that Commerce’s resort to “best

information available”20 was not in accordance with law because the

respondents were expected to submit data covering several years of

sales which occurred over ten years before the initiation of the

investigation, and the Department failed to give some indication

20

The “best information available” (“BIA”) standard preceded

the current “facts available” standard. See Ferro Union, Inc.,

23 CIT at 198 n.41, 44 F. Supp. 2d at 1329 n.41. Pursuant to the

URAA, Pub. L. No. 103-465, 108 Stat. 4809 (1994), the terminology

was changed, and the Department was instructed to make more

discriminating judgments then previously mandated under the BIA

standard. Id.

Court No. 01-01040 Page 45

whether the information submitted satisfied the agency’s requests.

See 19 CIT 1130, 1142, 899 F. Supp. 632, 642 (1995) (indicating the

investigation was initiated in April 1991 for the period of July 1,

1976 through June 10, 1980).

The instant case, however, is factually dissimilar from our

“meaningful opportunity” jurisprudence. Here, it is undisputed

that Commerce notified Plaintiff of its deficient Questionnaire I

responses. Thereafter, Commerce continued to seek the same product

characteristics and downstream sales data, providing Plaintiff with

notice of deficiencies and issuing repeated supplemental

questionnaires. Even though Plaintiff was only given several days

to complete Commerce’s Questionnaires II and III, Plaintiff, in

fact, received a total of more than four months to respond to

Commerce’s request for data describing sales which occurred within

the same year of the Department’s initiation of the antidumping

investigation. The Court therefore finds that Commerce afforded

Plaintiff a meaningful opportunity to respond to the Department’s

requests.

Accordingly, the Court remands Commerce’s adverse facts

available decision so that the Department may make specific

findings as to whether CSC/YL willfully decided not to cooperate or

behaved below the standard of a reasonable respondent, or otherwise

reconsider its decision to apply an adverse inference in choosing

Court No. 01-01040 Page 46

the available data to calculate the dumping margin.21

D. Additional Arguments Contesting Commerce’s Application of

Adverse Facts Available

1. “Overrun” Product Characteristics

Plaintiff also argues that Commerce may not resort to adverse

facts available because the missing product characteristics data

are “insignificant or irrelevant.” Pl.’s Br. at 6. Plaintiff

asserts three arguments in support of its contention. First,

Plaintiff challenges Commerce’s conclusion that the “leeway

overrun” merchandise in question is “prime quality merchandise,”

which should be matched to U.S. sales, as unsupported by

substantial evidence. Id. at 9. Plaintiff’s second argument is

that its “leeway overrun” merchandise is sold outside the ordinary

course of trade.22 Id. at 8. Third, Plaintiff argues that the

“leeway overrun” merchandise in question is sold only in the home

market, and as such, the Department should have excluded that

21

Plaintiff also claims that Commerce failed to corroborate

the selected adverse facts available margin. Pl.’s Br. at 31.

Because the Court remands this matter for reconsideration of the

inferences drawn adversely against Plaintiff, any ruling on the

corroboration of the adverse facts available dumping margin would

be premature.

22

“Ordinary course of trade,” a variable considered in

calculating normal value, is defined by 19 U.S.C. § 1677(15) as

“the conditions and practices which, for a reasonable time prior

to the exportation of the subject merchandise, have been normal

in the trade under consideration with respect to merchandise of

the same class or kind.”

Court No. 01-01040 Page 47

merchandise from use in calculating the dumping margin in

accordance with agency practice. Id. at 6-7.

The Department’s questionnaires do not request product

characteristics data for “leeway overrun” products. Instead, the

agency sought product characteristic data for all products

Plaintiff classifies as “leeway” merchandise and specifically for

Plaintiff’s “overrun” merchandise. See, e.g., CSC’s Questionnaire

II, C.R. Doc. 27, Def.-Int. II’s Conf. Ex. 3 supp. questionnaire

para. 5; YL’s Questionnaire II, P.R. Doc. 69, Def.’s Ex. 2 supp.

questionnaire para. 2. Commerce defines “overrun” merchandise as

“excess production from [a] particular purchase order, regardless

of the manner in which [the product] is ultimately sold.” Id.

In the normal course of business, Plaintiff, however, does not

appear to individually catalogue data for overrun merchandise.

Rather, Plaintiff classifies overrun as a possible source of

“leeway” merchandise, because that product lacks a purchase order.

CSC’s Feb. 26 Response, C.R. Doc. 17, Pl.’s Conf. Ex. 3 at 3.

“Leeway” merchandise derives from four possible sources, according

to Plaintiff, including: (1) overrun, (2) prime products that do

not meet customers’ original specifications, (3) prime products

produced after cancelled orders, and (4) newly developed products.

CSC’S Apr. 3 Response, C.R. Doc. 39, Pl.’s Conf. Ex. 6 para. 5. In

one questionnaire response, Plaintiff describes “leeway”

merchandise as both prime and non-prime quality merchandise, id.

Court No. 01-01040 Page 48

para. 6, while at various other places in the record, Plaintiff

insists that “leeway” products are prime quality. CSC’s Mar. 20

Response, C.R. Doc. 31, Pl.’s Conf. Ex. 4 at 24 (indicating that

“[i]rregular miscellaneous leeway” product is “prime finished

goods” and that such product “would be reported as overrun prime in

the sales listings”); CSC’s Apr. 3 Response, C.R. Doc. 39, Pl.’s

Conf. Ex. 6 para. 5; CSC’s Apr. 23 Response, C.R. Doc. 52, Pl.’s

Conf. Ex. 10 at 5. With regards to overrun merchandise, CSC/YL

defines overrun as excess production that is either non-prime or

prime quality merchandise. See Pl.’s Br. at 5; Letter from

Ablondi, Foster, Sobin & Davidow, P.C., to U.S. Sec’y of Commerce,

C.R. Doc. 39, Pl.’s Conf. Ex. 6 para. 5-6 (Apr. 3, 2001) (“CSC’s

Apr. 3 Response”). Plaintiff also stated in CSC’s Apr. 3 Response

that a substantial percentage of the overrun merchandise in

question is prime quality. CSC’s Apr. 3 Response, C.R. Doc. 39

para. 7.

Here, Commerce concluded that contrary to Plaintiff’s

characterization of the subject merchandise as “leeway” sales, “the

merchandise in question is not ‘secondary’ quality merchandise

which should not be matched to prime quality merchandise. The

merchandise in question is prime quality; it has simply not been

purchased by the customer to whose specifications it was originally

produced.” Final Determ., 66 Fed. Reg. at 49,621. In other words,

as a result of excess production, the merchandise is sold to other

Court No. 01-01040 Page 49

customers from Plaintiff’s inventory. Id.

Commerce’s determination that the merchandise in question is

prime quality is supported by substantial evidence. While the

record indicates that overrun merchandise may be either prime or

non-prime quality merchandise, it clearly indicates that a

substantial percentage of the overrun merchandise in question is

prime quality. Moreover, the record reveals Plaintiff only once

stated that “leeway” merchandise, a category which contains the

overrun merchandise in question, is either prime or non-prime

quality merchandise; in all other instances, the record indicates

that “leeway” merchandise is prime quality. For these reasons, the

Court finds Commerce’s determination is supported by substantial

evidence.

With regards to Plaintiff’s second argument contending that

leeway overrun merchandise is outside the ordinary course of trade,

Commerce responds that the Court should decline to review this

argument because Plaintiff failed to exhaust its administrative

remedies. Def.’s Mem. at 29. The Court will address the agency’s

argument first.

“The exhaustion doctrine requires a party to present its

claims to the relevant administrative agency for the agency’s

consideration before raising these claims to the Court.” Timken

Co. v. United States, 26 CIT __, __, 201 F. Supp. 2d 1316, 1340

(2002) (internal citation omitted). There is, however, “no

Court No. 01-01040 Page 50

absolute requirement of exhaustion in the Court of International

Trade in non-classification cases.” Consol. Bearings Co. v. United

States, 25 CIT __, __, 166 F. Supp. 2d 580, 586 (2001) (internal

citation omitted). Rather, Congress vested the Court with

discretion to determine the circumstances under which it is

appropriate to require the exhaustion of administrative remedies

pursuant to 28 U.S.C. § 2637(d).

While a plaintiff cannot circumvent the require-

ments of the doctrine . . . by merely mentioning a broad

issue without raising a particular argument, plaintiff’s

brief statement of the argument is sufficient if it

alerts the agency to the argument with reasonable clarity

and avails the agency with an opportunity to address it.

Luoyang Bearing Factory v. United States, 25 CIT __, __, 240 F.

Supp. 2d 1268, 1297 (2002) (internal citations omitted). The sole

fact that the agency failed to address a plaintiff’s argument does

not invoke the exhaustion doctrine and shall not preclude a

plaintiff from seeking judicial relief. Id. at 1298. “An

administrative decision not to address the issue cannot be

dispositive of the question whether or not the issue was properly

brought to the agency’s attention.” Id.

Here, Plaintiff properly exhausted its administrative

remedies. In its Case Brief before the Department, Plaintiff

raised its challenge contending that the “leeway overrun”

merchandise was sold outside the ordinary course of trade.

Specifically, Plaintiff argued that Commerce discards “similar

overruns sold at a discount in the dumping margin calculation, as

Court No. 01-01040 Page 51

. . . not in the ordinary course of trade” and cited three agency

determinations to support its position. Case Brief, P.R. Doc. 140,

Pl.’s Ex. 14 at 7. Even though Plaintiff’s statement of its

position was brief, Plaintiff articulated its “ordinary course of

trade” challenge with reasonable clarity, and provided the

Department with an opportunity to address that argument in the

final determination. Thus, the Court finds that Plaintiff has

properly presented its claim here. Cf. NSK Ltd. v. United States,

25 CIT __, __, 170 F. Supp. 2d 1280, 1291 (2001) (finding that

respondent NSK sufficiently exhausted its administrative remedies

by bringing forth the issue in its case brief before Commerce).

The Court now turns to the merits of Plaintiff’s second contention.

In calculating the antidumping margin, Commerce generally

excludes home market sales of overrun merchandise from U.S. sales

comparisons where the agency determines that the overrun

merchandise is sold outside the ordinary course of trade. E.g.,

Certain Cut-to-Length Carbon-Quality Steel Plate Products from

Italy, 64 Fed. Reg. 73,234, 73,236-37 (Dep’t Commerce Dec. 29,

1999) (notice of final determination of sales at LTFV); Certain

Steel Products from Brazil, 64 Fed. Reg. at 38,771. In evaluating

whether sales of overrun merchandise are outside the ordinary

course of trade, the agency typically examines all of the

circumstances particular to the sales in question. See, e.g.,

Certain Steel Products from Brazil, 64 Fed. Reg. at 38,770. For

Court No. 01-01040 Page 52

example, the agency has considered several factors, no one of which

is dispositive, including: (1) an average price comparison between

an overrun sale and a commercial sale; (2) a comparison between the

ratio of overrun sales to total home market sales; (3) the volume

of sales and number of buyers in the home market; (4) whether the

merchandise is “off-quality” or produced according to unusual

specifications; (5) whether the merchandise is sold at unusually

high profits or according to unusual terms of sale; or (6) whether

the merchandise is sold to affiliated parties at non-arm’s length

prices. Id.; Mantex, Inc. v. United States, 17 CIT 1385, 1403, 841

F. Supp. 1290, 1305-06 (1993); Circular Welded Non-Alloy Steel Pipe

from the Republic of Korea, 65 Fed. Reg. 76,218, 76,221 (Dep’t

Commerce Dec. 6, 2000) (preliminary results and rescission in part

of antidumping administrative review). It follows that Commerce

would be unable to determine whether a producer’s overrun sales

were sold outside the ordinary course of trade until the agency has

actually evaluated the producer’s complete overrun sales data. See

id.

The Department here could not conduct such an examination of

Plaintiff’s overrun merchandise. Because Plaintiff failed to

submit complete product characteristics data, Commerce concluded

that it was unable to use Plaintiff’s submissions to conduct price

comparisons and accurately compute a dumping margin. Final

Determ., 66 Fed. Reg. at 49,621. In other words, without the

Court No. 01-01040 Page 53

products characteristics data, the agency was unable to consider

all of the circumstances particular to Plaintiff’s overrun sales to

determine whether those sales were sold outside the ordinary course

of trade. Moreover, the agency’s inaction is consistent with its

obligation to calculate accurate dumping margins. Lasko Metal

Prods. Inc., 43 F.3d at 1446 (quoting Rhone Poulenc, Inc., 899 F.2d

at 1191). The Court therefore finds that Commerce’s failure to

make an ordinary course of trade determination was reasonable.

The Court finds Plaintiff’s third argument unpersuasive. As

evidence of the Department’s practice to exclude home market

overrun sales from the dumping margin where a producer has no U.S.

overrun sales, CSC/YL incorrectly cites to Certain Steel Products

from Brazil, 64 Fed. Reg. at 38,770-71.23 Pl.’s Br. at 7. In that

determination, Commerce concluded that, although producer CSN’s

home market overruns were sold only in the home market, and

represented “such an insignificant portion” of CSN’s total home

23

Plaintiff also cites to Hot-Rolled Flat-Rolled Carbon-

Quality Steel Products from Japan, 64 Fed. Reg. 24,329, 24,341

(Dep’t Commerce May 6, 1999) (notice of final determination of

sales at LTFV) for support of its contention. Pl’s Br. at 7.

The Department in that determination found that the producer’s

home market overrun merchandise was outside the ordinary course

of trade and should be excluded from the dumping margin for three

reasons. Id. One of those reasons included the fact that the

Department found sufficient matches of U.S. and home market non-

overrun prime merchandise sold in the ordinary course of trade.

Id. The agency, however, did not find, nor does the

determination suggest, that the overrun sales were excluded from

the margin because the producer had not sold any overrun

merchandise in the U.S. See id. Therefore, the Court finds this

determination unsupportive of Plaintiff’s contention.

Court No. 01-01040 Page 54

market sales during the period of investigation that the data’s

effect on the margin was negligible, the merchandise did not

warrant exclusion from the home market database. 64 Fed. Reg. at

38,771. Because none of the factors the Department considers in

determining whether overrun sales are outside the ordinary course

of trade were germane to the producer’s overrun sales, Commerce

decided to include the overrun sales data. Id.

It can reasonably be inferred, however, that the agency’s

decision in Certain Steel Products from Brazil was based on its

evaluation and verification of complete overrun sales information.

See id. Accordingly, the instant case is factually

distinguishable. The agency here neither found that the missing

overrun sales were only sold in the home market, nor that those

sales constituted “such an insignificant portion” of CSC/YL’s home

market sales that the merchandise’s effect would be “negligible.”

Certain Steel Products from Brazil, 64 Fed. Reg. at 38,771; Final

Determ., 66 Fed. Reg. at 49,621 (indicating that the missing

product characteristics data affected a “significant” portion of

China Steel’s home market sales and that such merchandise could be

matched to U.S. sales). More importantly, unlike Certain Steel

Products from Brazil, CSC/YL failed to provide complete overrun

sales information during the investigation, which resulted in

Commerce’s inability to consider whether those sales were made only

in the home market, and consequently, outside the ordinary course

Court No. 01-01040 Page 55

of trade. See supra pp. 51-53. For these reasons, the Court finds

that Commerce’s decision to include the overrun sales in the

dumping margin was in accordance with law.

2. Downstream Sales Data

Plaintiff raises two additional arguments supporting its

contention that Commerce erroneously used adverse facts available

with respect to the downstream sales data. Plaintiff first argues

that Commerce erred because its total home market sales to

affiliates do not meet the five percent threshold required in 19

C.F.R. § 351.403(d), and thus, the missing affiliate reseller data

would not be used in calculating the dumping margin. See Pl.’s Br.

at 19. Plaintiff’s second argument contends that the agency failed

to consider whether the sales to the affiliates were arm’s length

transactions pursuant to 19 C.F.R. § 351.403(c),(d) and agency

practice. See Pl.’s Br. at 18-19. Plaintiff argues that Commerce

should have made this decision prior to requesting the affiliate

downstream sales information. Id. at 19.

With regards to CSC/YL’s first argument, Commerce “normally

will not calculate normal value based on the sale by an affiliated

party if sales of the foreign like product by an exporter or

producer to affiliated parties account for less than five percent

of the total value (or quantity) of the exporter’s or producer’s

sales.” 19 C.F.R. § 351.403(d). Here, the agency concluded that

Court No. 01-01040 Page 56

“China Steel’s sales to affiliates constituted approximately one-

fifth of its total home market sales;” particularly, Commerce

determined that sales to Yieh Loong, YH, and YP constituted more

than five percent of China Steel’s home market sales, or a

“significant percentage.” Final Determ., 66 Fed. Reg. at 49,621-

22; see also Dep’t of Commerce Mem. from Patricia Tran, Dep’t

Commerce to File, The Use of Adverse Facts Available for China

Steel Corporation (China Steel) and Yieh Loong Enterprise Co., Ltd.

(Yieh Loong), C.R. Doc. 55, Def.’s Conf. Ex. 7 at 5-6 (Apr. 23,

2001). Commerce, however, included Yieh Loong in its affiliate

reseller calculation, even though that entity was collapsed with

China Steel. As discussed above in subsection B, once the two

entities are collapsed, Commerce must treat them as a single

producer for purposes of calculating the dumping margin. See supra

pp. 32-33. Because Yieh Loong’s sales were included in the

calculation, Commerce’s determination may have been erroneous, and

the Court is unable to review that determination. Accordingly, the

Court remands this issue to Commerce for reconsideration.

The Court finds Plaintiff’s second argument lacks merit. The

plain language of the regulation indicates that Commerce may

calculate normal value based on affiliate reseller data, although

the Department normally will not do so if the exporter’s or

producer’s sales to affiliates constitute less than 5 percent of

its home market sales or were arm’s length transactions. 19 C.F.R.

Court No. 01-01040 Page 57

§ 351.403(d) (emphasis supplied). Further, the Department may

calculate normal value based on sales to affiliates if the agency

is satisfied that the transactions were made at arm’s length. See

19 C.F.R. § 351.403(c) (emphasis supplied).24 Thus, Commerce has

discretion to calculate normal value pursuant to subsections (c)

and (d). Neither the regulations nor the Department’s practice,

however, support Plaintiff’s contention that Commerce is required

to conduct an arm’s length test prior to requesting affiliate

reseller data. Rather, it seems that the agency could not conduct

an arm’s length test without first receiving the requisite

affiliate reseller data. Thus, Commerce’s failure to conduct an

arm’s length test prior to requesting affiliate reseller data in

the instant case was permissible.

3. World Trade Organization Obligations

a. 19 U.S.C. § 3512

As a preliminary matter, Commerce argues that 19 U.S.C. §

3512(c) prohibits Plaintiff, as a private party, from challenging

any government action brought under any provision of law as

inconsistent with any of the World Trade Organization (“WTO”)

24

19 C.F.R. § 351.403(c) states that the “[i]f an exporter

or producer sold the foreign like product to an affiliated party,

the [Department] may calculate normal value based on that sale

only if satisfied that the price is comparable to the price at

which the exporter or producer sold the foreign like product to a

person who is not affiliated with the seller.” 19 C.F.R. §

351.403(c).

Court No. 01-01040 Page 58

Agreements. See Def’s Mem. at 31-32. As the Court determined in

Timken Co. v. United States, 26 CIT __, __, 240 F. Supp. 2d 1228,

1238 (2002) (“Timken I”), Plaintiff is not bringing this action

under any WTO agreement; instead, Plaintiff argues that Commerce’s

application and interpretation of U.S. law violates its

international obligations pursuant to a WTO agreement.

CSC/YL is certainly “‘free to argue that Congress would never

have intended to violate an agreement it generally intended to

implement, without expressly saying so.’” Timken I, 26 CIT at __,

240 F. Supp. 2d at 1238 (quoting Gov’t of Uzbekistan v. United

States, slip. op. 01-114 at 11 (CIT Aug. 30, 2001)). As in those

two cases, Commerce’s reliance here on § 3512(c) is an “‘erroneous

technical bar.’” Id. Therefore, Plaintiff’s arguments are

properly before the Court.

b. WTO Panel Reports

Plaintiff argues that Commerce’s application of adverse facts

available violates U.S. obligations to the WTO, rendering its

decision not in accordance with law. Pl.’s Br. at 14, 23. With

respect to the product characteristics data, Plaintiff argues that

for Commerce to “demand all this [data], and to require that it all

be perfect under penalty of hair-trigger application of ‘[facts

available]’ within significantly accelerated deadlines, is the

epitome of unreasonable government action.” Id. at 14 (citing WTO

Court No. 01-01040 Page 59

Dispute Settlement Report on United States – Anti-Dumping Measures

on Certain Hot-Rolled Steel Products from Japan, 29 Bernan’s Annot.

Rep. 163 (Feb. 28, 2001) (“Certain HR Products from Japan”)).25

Plaintiff’s reliance on Certain HR Products from Japan,

however, is misplaced, as the Panel in that case did not find that

the Department “unduly accelerated the proceeding” in violation of

U.S. international obligations. 29 Bernan’s Annot. Rep. at 85-86.

Rather, the Panel held that it “simply [could] not see any basis on

which to find that [Commerce] failed to administer the anti-dumping

law in a uniform, impartial, and reasonable manner simply because

[the agency] chose to act faster than it normally did in issuing

the questionnaires in this investigation.” Id. at 86. Put

differently, the Panel held the Department’s 25-day acceleration of

the investigation in accordance with law. Id.

Similarly, the Court does not find Commerce’s requests for

product characteristics data in the time frame at issue here to be

“unreasonable government action.” Unlike Certain HR Products from

Japan, here, Commerce did not significantly accelerate the

deadlines for initiating the investigation, issuing its initial

questionnaire, and rendering a preliminary and final determination.

25

Plaintiff further argues that a respondent cooperates to

the best of its ability when the respondent asks a third-party to

cooperate and that party fails to do so, even if the respondent

could have done more to induce the third-party’s cooperation.

Pl.’s Br. at 23. Because the Court found Commerce’s “best of

ability” determination not in accordance with law in subsection C

above, the Court declines to reach this argument.

Court No. 01-01040 Page 60

In particular, the Department initiated the investigation here 21

days after receiving the petition, see Prelim. Determ., 66 Fed.

Reg. at 22,204; Initiation Notice, 65 Fed. Reg. at 77,568, whereas

in Certain HR Products from Japan, the agency initiated the

investigation the day after the petition was filed, or five days

earlier than normal. 29 Bernan’s Annot. Rep. at 85. Although the

Department sent questionnaires to the respondents in Certain HR

Products from Japan only four days after initiating the

investigation, 29 Bernan’s Annot. Rep. at 85, the agency here

waited the normal thirty days. See Prelim. Determ., 66 Fed. Reg.

at 22,205. As discussed in more detail below in subsection E,

Commerce’s preliminary determination was made within the

statutorily mandated time frame of 140 days, infra pp. 67-68,

unlike the Department’s actions in Certain HR Products from Japan,

in which a preliminary decision was rendered 120 days after the

initiation of the investigation. 29 Bernan’s Annot. Rep. at 85.

Rather than accelerating the deadline for the final determination,

the Department here postponed its final determination an additional

60 days beyond the statute’s prescribed 75 days. Postponement

Notice, 66 Fed. Reg. at 37,213-14. Accordingly, the Court does not

find that Commerce “unduly accelerated the proceeding” in violation

of U.S. international obligations, but rather acted in conformity

with the statutorily mandated norms for instituting, investigating,

and rendering a LTFV determination. 19 U.S.C. §§ 1673b(b)(1)(A),

Court No. 01-01040 Page 61

1673b(c), 1673d(a)(2).

E. Commerce’s Conduct during the Investigation

The final issue concerns Commerce’s actions in conducting the

investigation. Plaintiff raises three arguments. First, Plaintiff

contends that Commerce abused its discretion in rejecting its May

30-31, 2001 submission, which allegedly provided all deficient

affiliate downstream sales and product characteristics information,

in addition to its response to the agency’s verbal, post-

preliminary determination request for warranty costs on a

transaction-specific basis for over 100,000 sales. See Pl.’s Br.

at 24-25. This new information in particular, Plaintiff contends,

should not have been rejected, as the agency never provided a

deadline for its submission. Id. at 25. Thus, Plaintiff contends

that Commerce’s actions were not in accordance with law. Id.

Next, Plaintiff argues that Commerce’s conclusion that the

agency had insufficient time to use CSC/YL’s May 30-31, 2001

submission in calculating the dumping margin within the postponed

time frame for rendering the final determination is inconsistent

with its prior statement that the agency would analyze Plaintiff’s

April 23 Responses and make its final decision within 75 days of

the publication of the preliminary decision. Therefore, Plaintiff

argues that Commerce’s claim is unsupported by substantial evidence

and not in accordance with law. See Pl.’s Br. at 25-26. Plaintiff

Court No. 01-01040 Page 62

relies on ALTX, Inc. v. United States, 25 CIT __, __, 167 F. Supp.

2d 1353, 1363 (2001) for the proposition that Commerce “may not

reach inconsistent conclusions as to different points in the

investigation.” Pl.’s Br. at 26.

Third, Plaintiff claims that Commerce unnecessarily limited

the investigation time frame in this case. According to CSC/YL,

Commerce should have postponed the preliminary determination an

additional 50 days to allow sufficient time for the questionnaire

process to lead to an accurate dumping margin in this

“extraordinarily complicated” case. Pl.’s Br. at 26-27.

With respect to Plaintiff’s first contention, the regulations

clearly state that a submission of factual information is due no

later than 7 days before verification is scheduled in final

antidumping determinations. 19 C.F.R. § 351.301(b)(1). “[A]t any

time prior to [that] deadline,” however, any interested party “may

submit factual information to rebut, clarify, or correct factual

information submitted by any other interested party.” 19 C.F.R. §

351.301(c)(1). The Department, moreover, may request any party to

submit factual information at any time during the proceeding. 19

C.F.R. § 351.301(c)(2)(I). The regulations do not govern

Commerce’s issuance of verbal requests, but the case law

establishes that “the administrative record is limited to the

information that was presented to or obtained by the agency making

the determination during the particular review proceeding for which

Court No. 01-01040 Page 63

section 1516 authorizes judicial review.” Neuweg Fertigung GmbH v.

United States, 16 CIT 724, 726, 797 F. Supp. 1020, 1022 (1992)

(internal citations omitted).

Plaintiff’s May 30-31, 2001 submission purportedly contains

two sets of information: the deficient downstream sales and product

characteristics data and warranty costs on a transaction-specific

basis for over 100,000 sales. Commerce denied the entire response

as untimely, because this submission constituted a new response and

would require additional analysis and investigation to properly

administer the case. Final Determ., 66 Fed. Reg. at 49,618; Letter

from Robert James, Program Manager, Int’l Trade Admin., to China

Steel Corporation and Yieh Loong Enterprise Co. Ltd., c/o Peter

Koenig, Ablondi, Foster, Sobin & Davidow, P.C., P.R. Doc. 131,

Def.-Int. I’s Ex. 15; Issues and Decision Mem., P.R. Doc. 151,

Def.’s Ex. 8 at 13.

With regards to the product characteristics and downstream

sales information, the record reveals that Commerce scheduled

verification for Yieh Loong and China Steel to commence on April

30, 2001 and May 7, 2001 respectively. Letter from Neal Halper,

Director, Office of Accounting, Int’l Trade Admin., to Peter

Koenig, Ablondi, Foster, Sobin & Davidow, P.C., C.R. Doc. 49 at 1

(Apr. 19, 2001); Letter from Neal M. Halper, Director, Office of

Accounting, Int’l Trade Admin., to Peter Koenig, Ablondi, Foster,

Sobin & Davidow, P.C., C.R. Doc. 56 at 1 (Apr. 26, 2001). For

Court No. 01-01040 Page 64

Plaintiff’s submission to be timely, Plaintiff should have filed

its responses seven days before the commencement of each companies’

respective verification. 19 C.F.R. § 351.301(b)(1). As the

submission was filed on May 30-31, 2001, approximately one month

after the regulatory deadline for timely submissions, Plaintiff’s

submission of this factual information was properly rendered

untimely and rejected by the agency.

With regards to the warranty costs information, as Commerce

may request factual information from any interested party at any

time during the proceeding, Commerce properly issued this request.

The agency, however, requested the information orally on May 3,

2001 without setting a deadline for its submission. See Letter

from Peter Koenig and Kristen Smith, Ablondi, Foster, Sobin &

Davidow, P.C., to U.S. Sec’y of Commerce, P.R. Doc. 138, Pl.’s Ex.

13 at 1-2 (June 21, 2001); Dep’t of Commerce Mem. from Patricia

Tran to File, Telephone Conversation with Counsel for Yieh Loong

Enterprise Co., Ltd. (Yieh Loong) and China Steel Corporation

(China Steel), P.R. Doc. 122, Def.-Int. I’s Ex. 13 (May 9, 2000).

Consequently, Plaintiff could not have made a timely submission of

the warranty costs information, as the Department requested that

information after the regulatory deadline for filing factual

information. Moreover, Commerce rejected that data as untimely,

even though the agency failed to provide a deadline for its

submission, and Plaintiff submitted the request within a month of

Court No. 01-01040 Page 65

its verbal issuance. Accordingly, on these facts, the Court finds

that Commerce abused its discretion in rejecting Plaintiff’s

warranty costs data. Therefore, the Court instructs the agency to

reopen the record for further consideration of the warranty costs

data.26

Plaintiff’s reliance on ALTX, Inc. in support of its second

argument is misplaced. In that case, the International Trade

Commission (“ITC”) supported its determination that subject import

volumes were not significant with a finding that “nonsubject

imports were so significant as to have displaced subject imports

and the domestic like product,” focusing specifically on the latter

half of the period of investigation. 25 CIT at __, 167 F. Supp. 2d

26

Plaintiff further contends that Commerce’s rejection of

the May 30-31, 2001 submission violates Article 6.8 of the WTO

Antidumping Code, and is therefore, not in accordance with law,

because Plaintiff made that submission in time to allow for its

verification and use in the final determination. Pl.’s Br. at

28-29 (citing Certain HR Products from Japan, 29 Bernan’s Annot.

Rep. at 28, 33-34). The instant case, however, is factually

dissimilar from Certain HR Products from Japan. There, because

the respondents submitted their questionnaire responses almost

two weeks before verification, and because those responses did

not present new information, the Panel found that the

submissions, although untimely, were made within a reasonable

time as required by Article 6.8. Certain HR Products from Japan,

29 Bernan’s Annot. Rep. at 28 (indicating that respondent NSC

submitted the information 14 days before verification, while

respondent NKK submitted the information 9 days beforehand), 33

(citing Article 6.8) (stating that determinations may be made on

the basis of facts available if parties do not supply requested

information within a reasonable time). Here, however, Plaintiff

filed its submission approximately one month after the scheduled

verification. Accordingly, the Court finds Plaintiff’s reliance

on that panel decision misguided.

Court No. 01-01040 Page 66

at 1363. The Court found that the ITC failed to rationally support

its conclusion, because the application of the agency’s rationale

to the first half of the period of investigation produced a

contrary conclusion. Id. at 1362-63. In particular, the Court

stated:

Having employed a rationale to interpret data from the

later part of the [period of investigation] in such a

manner as to support its conclusion, the Commission may

not ignore the fact that the same rationale applied to

data from the earlier part of the [period of

investigation] weakens its conclusion with regard to

nonsubject imports. Further explanation is required on

remand for the agency to support its reasoning that

nonsubject imports were so significant as to have

displaced subject imports and the domestic like product.

25 CIT at __, 167 F. Supp. 2d at 1363. Put differently, the Court

held that the agency must provide further explanation to

substantially support its rationale when that rationale would

produce two inconsistent conclusions from the evidence. See id.

The instant case, however, is distinguishable from ALTX, Inc.

Commerce’s conclusion that it lacked sufficient time to use the

data in calculating the dumping margin within the postponed time

frame for rendering the final determination is inconsistent with

its prior statement that the agency would analyze Plaintiff’s

responses to Questionnaire III and make its final decision within

75 days of the publication of the preliminary decision. The

Department’s conclusion, nevertheless, is reasonable. Unlike the

agency in ALTX, Inc., Commerce sufficiently supported its

conclusion by providing a detailed explanation of its rationale.

Court No. 01-01040 Page 67

The record reveals that reasoning.

The May 30 and 31, 2001 submissions . . . would

constitute such a major revision of China Steel/Yieh

Loong’s questionnaire as to qualify as a completely new

response. It would involve significant new subsets of

home market sales, and accompanying narrative, submitted

for the first time. The same holds true for the missing

model match data. Even with the extended final

determination, the Department would not be able to

properly administer the investigation of this case. To

[do so], the Department must: analyze the new

submissions; allow an opportunity for comments from

interested parties; issue additional supplemental

questionnaires; conduct cost and sales verification of

China Steel/Yieh Loong; issue verification reports; and

allow interested parties to comment and request a

hearing.

Issues and Decision Mem., P.R. Doc. 151, Def.’s Ex. 8 at 13. The

Court therefore finds that Commerce’s conclusion that it lacked

sufficient time to use CSC/YL’s May 30-31, 2001 submission is in

accordance with law.

The Court finds that Plaintiff’s third argument lacks merit.

Commerce is not required to extend the preliminary determination’s

deadline beyond the normal 140 day limitation. See 19 U.S.C. §

1673b(b)(1)(A). Commerce may, however, extend that deadline “if”

the agency determines that the parties are cooperating, additional

time is needed to make the preliminary decision, and the case is

“extraordinarily complicated.” 19 U.S.C. § 1673b(c)(1)(B).27 The

27

The statute also permits the agency to extend the deadline

for making the preliminary determination in “extraordinarily

complicated cases” if the petitioner files a timely request for

an extension. 19 U.S.C. § 1673b(c)(1)(A). As the Domestic

Producers did not file such a request in the instant case, that

subsection is irrelevant here.

Court No. 01-01040 Page 68

agency determines that a case is “extraordinarily complicated” by

considering “(I) the number and complexity of the transactions to

be investigated or adjustments to be considered, (II) the novelty

of the issues presented, or (III) the number of firms whose

activities must be investigated.” Id. Thus, Commerce has

discretion to extend the deadline where it finds that a case is

extraordinarily complicated. See id.

Here, Commerce did not find this case extraordinarily

complicated, even though Plaintiff repeatedly asserted that

Commerce’s data requests required review and submission of

thousands of transactions. See Denial Letter, P.R. Doc. 115, Pl.’s

Ex. 9 at 2; Pl.’s Br. at 26-27. Instead, the record reveals that

Commerce determined that the instant matter was controlled by the

statutorily defined time limitations. Denial Letter, P.R. Doc.

115, Pl.’s Ex. 9 at 1-2. As the statute clearly grants the agency

discretion to determine whether the instant matter was

extraordinarily complicated and there is no indication that

Commerce’s determination was unreasonable, the Court defers to the

Department’s decision not to postpone the preliminary determination

deadline. Accordingly, the Court finds Plaintiff’s argument

unpersuasive.

IV. Conclusion

For the foregoing reasons, the court sustains the agency’s

Court No. 01-01040 Page 69

determination in part and remands in part for reconsideration in

accordance with this opinion. Specifically, on remand, Commerce

shall reconsider their affiliation determination in light of the

fact that China Steel only became affiliated with Yieh Loong and in

turn with the Yieh Loong affiliates, on February 21, 2000.

Commerce’s affiliation determination must consider this temporal

aspect of Plaintiff’s relationship with the Yieh Loong affiliates

or explain why that factor is not necessary to its determination in

accordance with the agency’s regulations. The agency shall also

make specific findings as to whether CSC/YL willfully decided not

to cooperate or behaved below the standard of a reasonable

respondent, or otherwise reconsider its decision to apply an

adverse inference in choosing the available data to calculate the

dumping margin. Commerce shall also reconsider whether the missing

affiliate reseller data should be used in calculating the dumping

margin. In particular, the agency must reconsider whether

Plaintiff’s home market sales to affiliates satisfy the five

percent threshold required in the agency’s regulations. The agency

may not, however, include home market sales from China Steel to

Yieh Loong in that calculation. Finally, Commerce must reopen the

record for further consideration of the warranty costs data

requested orally by the agency on May 3, 2001.

Commerce shall have 60 days to submit its remand

determination. The parties shall have 15 days to submit comments

Court No. 01-01040 Page 70

on the remand determination. Rebuttal comments shall be submitted

within 7 days thereafter.

Donald C. Pogue

Judge

Dated: May 14, 2003,

New York, New York