Ferro Union, Inc. v. United States

Slip Op. 99-27

UNITED STATES COURT OF INTERNATIONAL TRADE

___________________________________

:

FERRO UNION, INC. AND :

ASOMA CORPORATION, :

:

Plaintiffs, :

:

v. : Court No. 97-11-01973

:

UNITED STATES, : Public Version

:

Defendant, :

:

and :

:

WHEATLAND TUBE COMPANY, :

:

Defendant-Intervenor. :

___________________________________:

[Antidumping determination remanded.]

Dated: March 23, 1999

Mayer, Brown & Platt (Simeon M. Kriesberg, Carol J. Bilzi,

Peter C. Choharis, Monica B. Goldberg, Andrew A. Nicely) for

plaintiffs.

David W. Ogden, Acting Assistant Attorney General, David M.

Cohen, Director, Commercial Litigation Branch, Civil Division,

United States Department of Justice (A. David Lafer, Michele D.

Lynch), Karen Bland, International Office of Chief Counsel for

Import Administration, United States Department of Commerce, of

counsel, for defendant.

Schagrin Associates (Roger B. Schagrin, R. Alan Luberda,

John C. Steinberger) for defendant-intervenor.

OPINION

RESTANI, Judge: This matter is before the court on a motion

for judgment upon the agency record pursuant to USCIT Rule 56.2.

Ferro Union, Inc. and Asoma Corporation (collectively "Ferro

Court No. 97-11-01973 Page 2

Union" or “Plaintiffs”) challenge the determination of the United

States International Trade Administration ("Commerce" or the

"Department") in Certain Welded Carbon Steel Pipes and Tubes from

Thailand, 62 Fed. Reg. 53,808 (Dep't Commerce 1997) (final

results of antidumping admin. rev.) [hereinafter "Final

Results"].

Ferro Union raises two grounds for reversal or remand of the

Final Results. The facts relating to each count will be stated

separately.

Jurisdiction and Standard of Review

The court has jurisdiction pursuant to 28 U.S.C. §

1581(c)(1994). 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. §

1516a(b)(1)(B) (1994).

I. Termination of the Antidumping Review

Background

Commerce issued an antidumping duty order on welded carbon

steel pipes and tubes from Thailand in 1986. Circular Welded

Carbon Steel Pipes and Tubes from Thailand, 51 Fed. Reg. 8,341

(Dep't Commerce 1986). On March 4, 1996, Commerce published a

notice of opportunity to request an administrative review of the

Court No. 97-11-01973 Page 3

1986 order for the period March 1, 1995 to February 29, 1996.

Notice of Opportunity to Request Administrative Review, 61 Fed.

Reg. 8,238 (Dep't Commerce 1996). In this notice, Commerce

stated that requests for review were to be made "[n]ot later than

March 31, 1996." Id.

Saha Thai Steel Pipe Co., Ltd. (“Saha Thai”), and S.A.F.

Pipe Export Co., Ltd. (“SAF”), Saha Thai’s affiliated exporter,

along with Ferro Union and Asoma Corp., Saha Thai's U.S.

importers, filed a request for review on April 1, 1996.1 Request

for Review (Apr. 1, 1996), Pl.'s App., 15A-15B. Thai Union Steel

Co., Ltd. ("Thai Union"), another Thai producer, also timely

requested a review. Final Results, 62 Fed. Reg. at 53,809. Thai

Union is not a party to this action. Commerce announced its

initiation of the review on April 25, 1996. Initiation of

Antidumping and Countervailing Duty Administrative Reviews and

Requests for Revocation in Part, 61 Fed. Reg. 18,378, 18,378-79

(Dep't Commerce 1996). On May 9, Commerce issued the preliminary

results for a preceding administrative review of the same

merchandise, and assigned Saha Thai an antidumping margin of 1.07

percent. Certain Welded Carbon Steel Pipes and Tubes from

Thailand, 61 Fed. Reg. 21,159, 21,161 (Dep't Commerce 1996)

1

This request was timely pursuant to 19 C.F.R. §

353.31(d)(1995), which provides that when a deadline falls on a

non-business day, Commerce will accept documents filed on the

next business day.

Court No. 97-11-01973 Page 4

(prelim. results of admin. rev.).2 Plaintiffs claim that this

low margin prompted Saha Thai’s May 14, 1996 request that

Commerce terminate the review with respect to sales by Saha Thai.

Request for Termination (May 14, 1996), Pl.'s App., 16A-16B.

The domestic interested parties, Allied Tube and Conduit

Corporation, Laclede Steel Company, Sawhill Tubular Division of

Armco, Inc., and Wheatland Tube Company,3 (collectively the

“Domestic Interested Parties”), objected to a termination of the

administrative review on the basis that they had made a timely

request for review on March 29, 1996. Schagrin Associates'

Comments on Request to Terminate Review (June 21, 1996), P.R. 8,

DIP's App., p. 23. In late May, counsel for the Domestic

Interested Parties spoke with Commerce supervisor, Jean Kemp, and

learned that Commerce had no record of a request for review by

the Domestic Interested Parties in its Central Records Unit, Room

B-099.4 Id. at 2. Nevertheless, the Domestic Interested Parties

were able to produce evidence of their March 29 request.5

2

This administrative review covered the period March 1,

1994 to February 28, 1995. 61 Fed. Reg. at 21,159.

3

Wheatland Tube Company ("Wheatland") is a Defendant-

Intervenor in this action.

4

Commerce considers documents "received" when they are

"stamped by the Central Records Unit with the date and time of

receipt." 19 C.F.R. § 353.31(d)(1995). No such date-stamped

copy of the Domestic Interested Parties' request has been found.

5

The Domestic Interested Parties submitted an affidavit

(continued...)

Court No. 97-11-01973 Page 5

Commerce found that "the evidence on the record does not

provide a definitive answer" regarding whether there was any

"official record of petitioners' request." Commerce Memorandum

to Robert S. LaRussa from Stephen J. Powell (July 11, 1996), P.R.

14, DIP's App., p. 44. Commerce concluded that “because the

reason for the filing error is unclear and given the remedial

nature of the antidumping law and the fact that Saha Thai

received notice of the [Domestic Interested Parties'] request,"

it could elect to continue the ongoing administrative review.

Final Results, 62 Fed. Reg. at 53,809.

Ferro Union claims that Commerce violated its regulations by

denying Saha Thai’s request for termination and continuing the

review.

5

(...continued)

from Jeffrey Combs, a messenger from Quick Messenger Service of

Washington, D.C., stating that he remembered delivering a package

from Schagrin Associates to the Central Records Unit at the

Department of Commerce on March 29, 1996. Mr. Combs' log for the

day was also attached, showing that a package was delivered to

Room B-099 to a person named "Josey." Schagrin Associates'

Comments on Request to Terminate Review (June 21, 1996), P.R. 8,

DIP's App., 23 at ex. 2. Counsel for the Domestic Interested

Parties also submitted an affidavit stating that he had addressed

an original and seven copies of the request to the Central

Records Unit, along with a copy to Ms. Pamela Woods in Room 3065.

Id. at ex. 3. Ms. Woods indicated that she had received the

courtesy copy of the request. Id. at 4. The Domestic Interested

Parties also served their request on counsel for Ferro Union and

Saha Thai.

Court No. 97-11-01973 Page 6

Discussion

Ferro Union asserts that Commerce was obliged to terminate

the review on the grounds of Commerce's own regulations and the

agency’s established practice under those regulations. Ferro

Union also argues that the evidence of the Domestic Interested

Parties' request was not a sufficient independent ground for

Commerce to conduct the review.

Under the antidumping statute, 19 U.S.C. § 1675(a)(1)(1994),

Commerce must conduct an administrative review of an anti-dumping

duty order if a party requests such a review.6 This method of

commencing reviews replaced the former requirement that Commerce

conduct reviews on an annual basis, regardless of requests for

review by foreign producers, importers, or domestic interested

parties. See Trade Agreements Act of 1979, Pub. L. No. 96-39,

Title I, § 101, 93 Stat. 175 (1979) (amending Tariff Act of 1930)

(Sec. 751 administrative review of determinations). When

Congress eliminated the obligatory annual reviews, the conference

agreement stated that this change was “designed to limit the

6

Section 1675(a)(1) of Title 19 provides: "At least once

during each 12-month period beginning on the anniversary of the

date of publication of ... an antidumping duty order under this

subtitle ... the administering authority, if a request for such a

review has been received and after publication of notice of such

review in the Federal Register, shall -- (B) review, and

determine ... the amount of any antidumping duty ... and shall

publish in the Federal Register the results of such review,

together with notice of any duty to be assessed, estimated duty

to be deposited, or investigation to be resumed."

Court No. 97-11-01973 Page 7

number of reviews in cases in which there is little or no

interest, thus limiting the burden on petitioners and

respondents, as well as the administering authority.” H.R. Rep.

No. 98-1156, 98th Cong., 2d Sess. at 181 (1984), reprinted in

1984 U.S.C.C.A.N. 5220, 5298. The statute does not make any

provisions for the termination of administrative reviews.

Commerce did not establish a method of withdrawing a request

for review until it issued its final rules in March 1989, which

implemented the 1984 amendments.

The Secretary may permit a party that requests a review ...

to withdraw the request not later than 90 days after the

date of publication of notice of initiation of the requested

review. The Secretary may extend this time limit if the

Secretary decides that it is reasonable to do so. When a

request for review is withdrawn, the Secretary will publish

in the Federal Register notice of [the termination of the

review.]

Antidumping Duties: Final Rule, 54 Fed. Reg. 12,742, 12,778

(Dep’t Commerce 1989) [hereinafter “1989 Regulations”] (codified

at 19 C.F.R. § 353.22(a)(5)(1995)).7

The commentary to 19 C.F.R. § 353.22(a)(5) addresses

situations where one party has submitted a request for review,

but it does not indicate how Commerce would respond to situations

7

Prior to the promulgation of 19 C.F.R. § 353.22, this

court found that Commerce had "reasonably interpreted the statute

[19 U.S.C. § 1675(a)(1)] as allowing it discretion to deal with

this issue [of withdrawing requests for administrative reviews]."

Sugiyama Chain Co., Ltd. v. United States, 18 CIT 423, 430, 852

F. Supp. 1103, 1110 (1994).

Court No. 97-11-01973 Page 8

where multiple parties make a request for review and then

disagree over whether to terminate the review. See 1989

Regulations, 54 Fed. Reg. at 12,755. In its final regulations

issued to comply with the Uruguay Round Agreements Act ("URAA"),

Pub. L. No. 103-465, 108 Stat. 4809 (1994), Commerce amended 19

C.F.R. § 353.22(a)(5). The new provision provides:

Withdrawal of request for review. The Secretary will

rescind an administrative review under this section, in

whole or in part, if a party that requested a review

withdraws the request within 90 days of the date of

publication of notice of initiation of the requested review.

The Secretary may extend this time limit if the Secretary

decides that it is reasonable to do so.

Antidumping and Countervailing Duties: Final Rule, 62 Fed. Reg.

27,296, 27,393 (Dep’t Commerce 1997) (codified at 19 C.F.R. §

351.213(d)(1) (1998)) (hereinafter 1998 Regulations).8

Ferro Union claims that the 1989 Regulations, 19 C.F.R. §

353.22(a)(5), mandated termination of antidumping reviews if the

termination request was made within 90 days. Ferro Union bases

this argument on that fact that the last sentence of the

8

These final regulations were issued after the

commencement of the review of Saha Thai, therefore the earlier

rule as found at 19 C.F.R. § 353.22(a)(5) (1995) is the relevant

regulation. Commerce stated, however, that the 1998 Regulations

contained in part 351 “serve as a restatement of the Department’s

interpretation of the requirements of the [Tariff] Act as amended

by the URAA” for administrative reviews “initiated on the basis

of ... requests made after January 1, 1995, but before part 351

applies.” 1998 Regulations, 62 Fed. Reg. at 27,417. The court

will therefore consider Commerce's discretion to deny a request

for termination under both 19 C.F.R. § 353.22(a)(5)(1995) and 19

C.F.R. § 351.213(d)(1)(1998).

Court No. 97-11-01973 Page 9

regulation says that the Secretary “will” publish notice of

termination if the request is “withdrawn,” and that it is the

party, and not Commerce, which withdraws the request.

The plain language of 19 C.F.R. § 353.22(a)(5) states that

the Secretary “may” permit a party who requested a review to

withdraw that review. Therefore, on its face, 19 C.F.R. §

353.22(a)(5) did not mandate that Commerce terminate these

reviews. Although the 1998 final regulations, 19 C.F.R. §

351.213(d)(1) (1998), state that the Secretary "will rescind" an

administrative review that is withdrawn, whether the withdrawal

will be recognized is discretionary. Furthermore, the

legislative history of 19 U.S.C. § 1675(a) indicates that

Congress intended to limit reviews in which no one had an

interest, and Commerce could rightly continue a review in which

there is an expressed interest.

While 19 C.F.R. § 351.213(d)(1) (1998) is written in more

mandatory language, neither 19 C.F.R. § 353.22(a)(5)(1995) nor 19

C.F.R. § 353.213(d)(1) (1998) address the question of terminating

reviews when more than one party makes an initial request for the

administrative review. When faced with such a situation,

Commerce could reasonably conclude that it has discretion as to

whether or not to terminate the review.9

9

Ferro Union cites numerous cases stating that agencies

(continued...)

Court No. 97-11-01973 Page 10

Plaintiffs also allege that Commerce has established an

unswerving practice of granting requests for termination of

administrative reviews, and that this consistent practice

required that Commerce terminate its review of Saha Thai.10

Plaintiffs have attached a list of over 180 cases where Commerce

granted termination requests.11 Plaintiffs are correct that

Commerce has granted numerous requests for termination.

Plaintiffs claim that these include instances where multiple

9

(...continued)

are required to abide by their own regulations. See Voge v.

United States, 844 F.2d 776, 779 (Fed. Cir. 1988) ("government

officials must follow their own regulations"); Reuters Ltd. v.

FCC, 781 F.2d 946, 950 (D.C. Cir. 1986) ("elementary that an

agency must adhere to its own rules and regulations.") This rule,

however, is only applicable if one assumes that Commerce's

regulations did mandate a termination of the review upon request.

As indicated, the regulations do not fully address the situation

at hand.

10

Plaintiffs rely on M.M.&P. Maritime Advancement,

Training, Education & Safety Program v. Department of Commerce,

729 F.2d 748 (Fed. Cir. 1984) for the rule that Commerce is

obliged to follow its own precedent and "if it chooses to change,

it must explain why." M.M.&P., 729 F.2d at 755. In that case,

the Federal Circuit found that Commerce had not violated this

principle of administrative law, because Commerce had not

"consistently required that [an] article must be used in formal-

science oriented education" in order to qualify for duty-free

entry under the Educational, Scientific, and Cultural Materials

Importation Act of 1996. Id. Likewise, the court does not find

that Commerce has established a consistent practice of granting a

request for termination of an administrative review when more

than one party has expressed an interest in the review, and there

is evidence of a timely request by the non-withdrawing party.

11

Attachments to Memorandum of Points and Authorities in

Support of Plaintiff's Motion for Judgment on the Agency Record

(May 1, 1998), Pl. Br., Att. 1.

Court No. 97-11-01973 Page 11

parties requested the initiation of the administrative review.

In situations involving multiple parties, however, Commerce has

only granted termination when no other party objected to the

termination.12 Indeed, one case cited by Plaintiffs shows that

Commerce does not terminate reviews when another party objects.

In Sweaters Wholly or in Chief Weight of Man-Made Fiber from Hong

Kong, 58 Fed. Reg. 63,917 (Dep't Commerce 1993) (prelim. results

of and termination in part of admin. rev.), Commerce terminated

the review of two companies, but declined to terminate the review

of a third, Everest Knitwear, because "petitioners had requested

Everest be reviewed." Id. at 63,917.

In Potassium Permanganate from the People’s Republic of

China, 59 Fed. Reg. 46,035 (Dep't Commerce 1994) (termination of

admin. rev.), Commerce granted a termination request although a

respondent objected to this termination. In this case,

12

In Antifriction Bearings (Other Than Tapered Roller

Bearings), 59 Fed. Reg. 9,463 (Dep’t Commerce 1994) (prelim.

results and partial termination of admin. rev.), the antidumping

review results involved 38 manufacturers/exporters. Commerce

terminated the reviews of nine other manufacturers/exporters

because the requests were withdrawn in a timely manner by six

companies and “there were no other requests for review of these

companies from any other interested parties.” Id. at 9,465.

Likewise, in Certain Fresh Cut Flowers from Colombia, 56 Fed.

Reg. 32,169 (Dep’t Commerce 1991) (final results of admin. rev.),

the review covered numerous producers of subject merchandise, but

reviews of 18 producers and/or exporters were terminated “because

these companies withdrew their requests for a review on a timely

basis and the petitioner did not request reviews of them.” Id.

at 32,170.

Court No. 97-11-01973 Page 12

respondent Zunyi Chemical Factory did not make its own request

for review. Commerce concluded that “Zunyi could have ...

guaranteed its right to continue this review, by making its own

request for review at the proper time.” Id. at 46,035.13 This

case reveals Commerce's preference that interested parties file

individual requests for review, rather than rely on another

party's request. The Domestic Interested Parties tried to do

just that. Commerce could reasonably distinguish the Domestic

Interested Parties from Zunyi, because they did try to “preserve

their right to compel the review” by filing their own request.

Commerce's conclusion that it was not clear who was responsible

for the filing error does not lead to a conclusion that the

Domestic Interested Parties are in the same position as Zunyi.

Unlike the Domestic Interested Parties, Zunyi never attempted to

file its own request for review.

Moreover, Commerce retains some flexibility to relax its

procedural rules. See American Farm Lines v. Black Ball Freight

Service, 397 U.S. 532, 539 (1970) (“[i]t is always within the

discretion of a court or an administrative agency to relax or

modify its procedural rules adopted for the orderly transaction

of business before it when in a given case the ends of justice

13

Commerce reached the same conclusion in Potassium

Permanganate from the People’s Republic of China, 59 Fed. Reg.

48,419 (Dep’t Commerce 1994) (termination of admin. rev.),

involving the same product and parties.

Court No. 97-11-01973 Page 13

require it.") (quoting NLRB v. Monsanto Chemical Co., 205 F.2d

763, 764 (8th Cir. 1953)).14 Plaintiffs argue that Commerce could

not have legitimately conducted the review based on the request

by the Domestic Interested Parties, on the grounds that 19 U.S.C.

§ 1675(a) is a jurisdictional provision, which only allows

Commerce to conduct administrative reviews if a request is

"received" according to the regulatory definition of

"received."15 The court disagrees. The statute does provide

that Commerce will conduct the administrative review upon receipt

14

Moreover, Plaintiffs did not sustain "substantial

prejudice." See American Farm Lines, 397 U.S. at 539 (agency's

modification of its procedural rules "not reviewable except upon

a showing of substantial prejudice to the complaining party.”)

Plaintiffs' argument that Saha Thai was substantially prejudiced

by the continuation of the administrative review necessarily

fails. A party is not prejudiced by a "technical defect simply

because that party will lose its case if the defect is

disregarded. Prejudice, as used in this setting, means injury to

an interest that the statute, regulation or rule in question was

designed to protect." Intercargo Ins. Co. v. United States, 83

F.3d 391, 396 (Fed. Cir. 1996). Neither the statute nor

Commerce's regulations gave Saha Thai a right to be free of the

administrative review. It received timely notice, which is all

it was due.

15

The regulation in force when the Domestic Interested

Parties submitted their request for review stated "For all time

limits ... the Secretary will consider documents received when

stamped by the Central Records Unit with the date and time of

receipt." 19 C.F.R. § 353.31(d) (1995). The wording changed in

the 1998 regulations to read, "no document will be considered as

having been received by the Secretary unless it is submitted to

the Central Records Unit and is stamped by the Central Records

Unit with the date and time of receipt." 19 C.F.R. § 351.103(b)

(1998). The court does not decide if the difference is

significant.

Court No. 97-11-01973 Page 14

of a request for review. See 19 U.S.C. § 1675(a). The

regulatory definition of "receipt" in effect at the time did not

prevent Commerce from exercising its discretion to conclude that

a party has made a request, even in the absence of a date-stamped

copy of the request. The regulation merely mandated that if a

valid date-stamped copy of the request is produced it will

determine the date of receipt. Here, the evidence tends to show

that in all likelihood Commerce did misfile the request. While

the Domestic Interested Parties should have retained a date-

stamped copy, such an error did not deprive Commerce of its

ability to act.

The court finds that Commerce had the right under the facts

of this case and the then applicable law to exercise discretion

in determining whether to grant Saha Thai's request for

termination, and that it did not abuse this discretion when it

denied the request for termination and continued the

administrative review of Saha Thai.

II. Calculation of the Antidumping Margin

Background

In their second count, Plaintiffs challenge the manner in

which Commerce conducted the antidumping review of Saha Thai.

Plaintiffs' arguments center around the interpretation of new

provisions of the Tariff Act, as amended by the URAA. In

Court No. 97-11-01973 Page 15

particular, Plaintiffs challenge the meaning of "affiliated

persons" under 19 U.S.C. § 1677(33) (1994) and the application of

adverse facts available pursuant to 19 U.S.C. §§ 1677e(a) and

1677e(b) (1994). The court will first review the facts of

Commerce's investigation.

In its first questionnaire to Saha Thai, Commerce requested

information to determine whether subject merchandise produced by

Saha Thai, or exported to the United States, was sold at prices

below the normal value. Questionnaire (undated), at 1, P.R. Doc.

138, Def.'s App., Ex. 3, at 6. Commerce requested that Saha Thai

provide information on its corporate structure and affiliations.

Saha Thai was to provide a list of its ten largest shareholders,

as well as a list and description of companies affiliated with

Saha Thai "through means other than stock ownership." Id. at A-

4, P.R. Doc. 138, Def.'s App., Ex. 3, at 15. The questionnaire

included a glossary of terms, which stated that "antidumping law

subjects transactions between affiliated persons to special

scrutiny." The term was defined as it appears in Section 771(33)

of the Tariff Act (19 U.S.C. § 1677(33)). Id. at App. I, P.R.

Doc. 138, Def.'s App., Ex. 3, at 21. Commerce did not request a

complete list of Saha Thai's directors and officers.

Court No. 97-11-01973 Page 16

Saha Thai’s response to this questionnaire listed its ten

largest shareholders both before and after July 31, 1995.16

Proprietary Questionnaire Responses (July 16, 1996), at Exs. 6-7,

C.R. Doc. 2, Def.'s App., Ex. 4, at 15 and 17. Saha Thai

identified several companies that "might be considered affiliated

parties" based on common management. Id. at Exs. 6-7, C.R. Doc.

2, Def.'s App., Ex. 4, at 8-9.17 In this response, Saha Thai did

not identify these companies as members of the Siam Steel Group

International Co., Ltd., nor did it mention Saha Thai's

membership in this group. It also failed initially to identify

Company D18, a member of the Siam Steel Group and a home market

customer.

Commerce sought information on the Siam Steel Group and its

relationship to Saha Thai in its first supplemental

questionnaire. Supplemental Questionnaire (Aug. 26, 1996), at 1,

C.R. Doc. 56, Def.'s App., Ex. 5, at 3. Saha Thai responded to

this questionnaire by listing the names and addresses of the

companies in the Siam Steel Group, and by providing a list of

common shareholders. Saha Thai's Response to Supplemental

16

On July 31, 1995, during the middle of the period of

review ("POR"), Saha Thai underwent a corporate reorganization.

Proprietary Questionnaire Responses (July 16, 1996), at 6, C.R.

Doc. 2, Def.'s App., Ex. 4, at 8.

17

[ ]

18

[ ]

Court No. 97-11-01973 Page 17

Questionnaire (Sept. 23, 1996), at Ex. A, C.R. Doc. 8, Def.'s

App., Ex. 6, at 10. Saha Thai stated that these companies

represented the investments of members of the Karuchit/

Kunanuantakul family. Id. at 1, C.R. Doc. 8, Def.'s App., Ex. 6,

at 3.19 The list of Siam Steel Group companies included Company

D, but Saha Thai still did not state that it was a home market

customer.

Commerce pursued the relationship with the Siam Steel Group

in its second supplemental questionnaire. Commerce asked whether

any members of the group produced subject merchandise.

Supplemental Questionnaire (Nov. 1, 1996), at 64, P.R. Doc. 37,

Def.'s App., Ex. 7, at 2. Saha Thai responded that no members of

the group produced steel pipe and that none of the companies in

the group controlled Saha Thai, "through stock ownership or

otherwise." Saha Thai's Response to Supplemental Questionnaire

(Nov. 26, 1996), at 1-2, C.R. Doc. 14, Def.'s App., Ex. 8, at 2-

3. Company E20, a member of the Siam Steel Group, produces PVC

lined steel water-pipe. Saha Thai did not state that Company E

produced subject merchandise. In its appendix to the September

23, 1996 response to Commerce's first supplemental questionnaire,

the description of each Siam Steel Group company stated that

19

[ ]

20

[ ]

Court No. 97-11-01973 Page 18

Company E manufactured electrical construction materials "such as

conduit pipe ... including PVC lined steel water-pipe, etc."

Saha Thai's Response to Supplemental Questionnaire (Sept. 23,

1996), at Ex. A-2, C.R. Doc. 8, Def.'s App., Ex. 6, at 11.

Commerce ultimately determined that the evidence on the record

did not establish that the pipe manufactured by Company E was

within the scope of the antidumping duty order. Final Results,

62 Fed. Reg. at 53,817.

Commerce conducted a cost verification of Saha Thai’s

responses from January 27 to February 1, 1997. During

verification, Commerce became aware of ownership interests held

by Saha Thai executive officers in three home market customers.

Decision Memo -- Application of Facts Available (Mar. 31, 1997),

at 4, C.R. 33, Def.'s App., Ex. 14, at 4. At this point,

Commerce also gathered further information regarding the Siam

Steel Group. After verification, Commerce received public

information regarding a potential affiliation between Saha Thai

and another Thai pipe producer, Thai Hong Steel Pipe Co., Ltd.

("Thai Hong"), based on the management of Thai Hong by the

Lamatipanont family. Id. at 5, Def's App., Ex. 14, at 5.

Commerce sent Saha Thai two post-verification

questionnaires. In the first such questionnaire Commerce asked

for a description of all affiliations between Saha Thai, Thai

Hong, and the Lamatipanont family. Supplemental Questionnaire

Court No. 97-11-01973 Page 19

(Feb. 27, 1997), at 1, P.R. Doc. 83, Def.'s App., Ex. 9, at 1.

Saha Thai responded that Thai Hong had entered into bankruptcy in

1992, and attached a bankruptcy certificate from the Thai

Ministry of Commerce. Saha Thai's Post-Verification Response to

Questionnaire (Mar. 12 1997), at 1-2, C.R. Doc. 30, Def.'s App.,

Ex. 10, at 1-2. Saha Thai stated that Thai Hong was controlled

by Surasak Lamatipanont and Samarn Lamatipanont, the nephews21 of

Somchai Lamatipanont, a director and shareholder of Saha Thai,

and Surasak's wife, Surang Lamatipanont. Id. at 2, C.R. Doc. 30,

Def.'s App., Ex. 10, at 2. Saha Thai further stated that Thai

Hong had not resumed operations after going bankrupt. Id.

In a second post-verification questionnaire, Commerce asked

about Thai Tube Co., Ltd., ("Thai Tube") a company which seemed

to be the legal successor of Thai Hong. Commerce's Request for

Additional Information (Mar. 24, 1997), at 1, P.R. Doc. 86,

Def.'s App., Ex. 11, at 1. Saha Thai responded that it had "no

direct knowledge" of Thai Tube or its relationship to Thai Hong.

Saha Thai's Second Post-Verification Response to Questionnaire

(Mar. 27, 1997), at 1, C.R. Doc. 32, Def.'s App., Ex. 13, at 1.

Relying on public filings from the Thai Ministry of Commerce,

21

The March 12, 1997 response stated that Surasak and

Samarn Lamatipanont were the estranged brothers of Somchai

Lamatipanont, a director and shareholder of Saha Thai. Saha Thai

later clarified that Surasak and Samarn were Somchai's estranged

nephews.

Court No. 97-11-01973 Page 20

Saha Thai stated that Mr. Surasak and Mrs. Surang Lamatipanont

were the directors of Thai Tube. Id. at 3, C.R. Doc. 32, Def.'s

App., Ex. 13, at 3. Saha Thai said that Samarn was not a

director of Thai Tube. Id.22 Saha Thai listed the number of

Saha Thai shares held by Mr. Somchai Lamatipanont, his wife, and

his son, but stated that they held no shares in Thai Tube. Id.

at 4. Saha Thai also restated that Somchai Lamatipanont was

estranged from Surasak and Surang Lamatipanont, and that they had

no business dealings with each other. Id.

Commerce issued the preliminary results of its review on

April 10, 1997 and assigned Saha Thai a substitute dumping margin

of 29.89 percent, based on adverse facts available. Certain

Welded Carbon Steel Pipes and Tubes from Thailand, 62 Fed. Reg.

17,590, 17,595 (Dep't Commerce 1997) (preliminary results of

antidumping duty admin. rev.) [hereinafter "Preliminary

Results"]. Commerce resorted to adverse facts on the basis that

Saha Thai had significantly impeded the review by failing to

comply with Commerce's requests for complete information on

affiliates. Commerce found this determination appropriate under

§§ 776(a)(2)(C) and 776(b) of the Tariff Act (19 U.S.C. §§

1677e(a)(2)(C) and 1677e(b)). Preliminary Results, 62 Fed. Reg.

at 17,592.

22

[ ]

Court No. 97-11-01973 Page 21

In August 1997, Commerce requested that Saha Thai place on

the record of the 1995-96 review portions of its questionnaire

responses from a subsequent review for 1996-97. These answers

listed the percentage of shares held by various Saha Thai

directors and officers, as well as further information regarding

the Siam Steel Group. Saha Thai's Supplemental Response (Aug.

25, 1997), at Exs. 1-2, C.R. Doc. 50, Def.'s App., Ex. 19, at 3-

11. Up to this point, Commerce had not requested a list of the

officers and directors of Saha Thai. It was also at this point

that the information on the two home market customers and

resellers, Companies A23 and B24, and another home market

customer, Company C25, was placed on the record.

Commerce issued the Final Results of the Antidumping Duty

Administrative Review on October 16, 1997. In the Final Results,

Commerce confirmed its findings from the Preliminary Results and

applied total adverse facts available to Saha Thai, assigning

Saha Thai a dumping margin of 29.89 percent. Final Results, 62

Fed. Reg. at 53,821. Commerce found that Saha Thai had

"significantly impeded the review by failing to comply with

requests for complete information on affiliates." Id. at 53,809.

Specifically, Commerce concluded that Saha Thai had failed to

23

[ ]

24

[ ]

25

[ ]

Court No. 97-11-01973 Page 22

disclose affiliations with Thai Tube, and three home-market

customers (Companies A, B and C), two of which (A and B) were

resellers of subject merchandise. Id. Commerce also stated that

Saha Thai failed to provide complete information concerning

ownership and management of the Siam Steel Group. Id.

Commerce based its affiliation findings on 19 U.S.C. §

1677(33)(F) "by virtue of common control by several families

involved in the ownership and management of Saha Thai." Id. at

53,810. On these grounds, Commerce’s information revealed that

six families hold percentages of Saha Thai's shares and hold all

the seats on the Board of Directors. Id. Some of these family

members are also officers and managers of Saha Thai. Saha Thai's

affiliations were established on the basis of the common control

and financial holdings these families have in Saha Thai.

Commerce concluded that Saha Thai is affiliated with Thai

Tube and Thai Hong pursuant to 19 U.S.C. § 1677(33)(F), "by

virtue of common control by the Lamatipanont family." Id.

Somchai Lamatipanont is the Deputy Managing Director of Saha

Thai.26 Commerce was unpersuaded by Saha Thai's arguments that

Somchai Lamatipanont lacked day-to-day managerial control of Saha

26

The Preliminary Results incorrectly stated that Somchai

Lamatipanont was the Managing Director of Saha Thai. Saha Thai

submitted evidence on the record after the Preliminary Results

indicating that Somchai Lamatipanont is the Deputy Managing

Director, and Somchai Karuchit is the Managing Director. Final

Results, 62 Fed. Reg. at 53,812-813.

Court No. 97-11-01973 Page 23

Thai. Rather, as the officer second to the managing director,

Commerce stated that Somchai Lamatipanont would "normally" be in

a position of control. Id. at 53,813.

The Lamatipanont family was found to be in a position of

"legal and operational" control of Thai Tube and Thai Hong

because of its ownership and control interests in the two

companies. Surasak Lamatipanont and his wife Surang Lamatipanont

are Thai Tube's only directors, and Surasak is the nephew of

Somchai Lamatipanont. Commerce found Thai Hong was controlled by

the same Lamatipanont family, through Surasak, his wife, and his

brother, Samarn. Public information disclosed that 98.75 percent

of Thai Hong's shares were owned by individuals with the surname

Lamatipanont. Id.

Commerce also determined that Saha Thai is affiliated with

the three home market customers revealed during verification,

Companies A, B, and C. Companies A and B are also resellers of

subject merchandise. Saha Thai admitted that the families of

three Saha Thai directors exercise positions of control in these

three companies. Final Results, 62 Fed. Reg. at 53,814. Sales

to these three home market customers represented more than 5

percent of Saha Thai's total home market sales during the POR.

Id. at 53,815.27

27

[ ]

Court No. 97-11-01973 Page 24

Saha Thai conceded that the Sae Heng/Ratanasirivilai family

has an ownership interest in Company A, sufficient to establish

its control over this company. Id.28 Commerce found that this

family also has an ownership interest in Saha Thai, that it

possesses two seats on Saha Thai's board of directors, and that

Mr. Kim Hua Sae Heng is the Financial Director of Saha Thai.29

Final Results, 62 Fed. Reg. at 53,815; Saha Thai's Corrective

Supplemental Response (Sept. 8, 1997), at 2, P.R. Doc. 129,

Def.'s App., Ex. 21, at 3.

Saha Thai also conceded that the Lamatipanont family has

"substantial ownership interest" in Company B. Final Results, 62

Fed. Reg. at 53,815.30 Somchai Lamatipanont, as discussed above,

is the Deputy Managing Director of Saha Thai and a member of the

Board of Directors. The Lamatipanont family owns an equity

interest in Saha Thai. Final Results, 62 Fed. Reg. at 53,815.

Commerce thus concluded that Company B and Saha Thai are under

the common control of the Lamatipanont family.

28

[ ]

29

Saha Thai admitted that Mr. Sae Heng is "one of the

three Saha Thai officers who, together with one of the other

officials can bind Saha Thai with his signature." Final Results,

62 Fed. Reg. at 53,815; Revised Exhibit 3 to Saha Thai Submission

(Oct. 2, 1997), at Ex. 3, P.R. Doc. 133, Def.'s App., Ex. 23, at

8.

30

[ ]

Court No. 97-11-01973 Page 25

Saha Thai further conceded that the Ampapankit family

controls Company C. Id.31 This family also has an ownership

interest in Saha Thai. Limsiam Ampapankit is the Chairman of the

Board of Saha Thai, as well as a director and shareholder.32

Commerce therefore decided that Company C and Saha Thai are under

the common control of the Ampapankit family.

Commerce also found that Saha Thai is affiliated with

Company D, another home market customer, and Company E, a home

market customer and producer of steel pipe, because of their

membership in the Siam Steel Group. Final Results, 62 Fed. Reg.

at 53,816. Commerce found that the Siam Steel Group is a

"corporate or family grouping" due to the control of the member

companies by the Karuchit/Kunanuantakul family. Id. Saha Thai

had acknowledged a potential affiliation between certain Siam

Steel Group companies and Saha Thai, in response to Commerce's

initial questionnaire. See Proprietary Questionnaire Responses

(July 16, 1996), at 6-7, C.R. Doc. 2, Def.'s App., Ex. 4, at 8-

9.33 Commerce claims it did not conduct a full analysis of

31

[ ]

32

Saha Thai admitted that Mr. Ampapankit is "one of the

three Saha Thai officers who, together with one of the other

officials can bind Saha Thai with his signature." Final Results,

62 Fed. Reg. at 53,815; Revised Exhibit 3 to Saha Thai Submission

(Oct. 2, 1997), at Ex. 3, P.R. Doc. 133, Def.'s App., Ex. 23, at

8.

33

[ ]

Court No. 97-11-01973 Page 26

affiliation within the Siam Steel Group due to insufficient

information. Commerce nevertheless found it reasonable to

conclude that Companies D and E are affiliated with Saha Thai due

to their common membership in the Siam Steel Group. Final

Results, 62 Fed. Reg. at 53,816.34 The finding of affiliation

with Company E did not further effect the final results because

Commerce concluded that the products manufactured by Company E

did not fall within the scope of the review. Id. at 53,817.

Commerce stated that the existence of these affiliations was

placed on the record too late to obtain additional information

necessary to analyze whether or not Saha Thai, Thai Tube and Thai

Hong should be collapsed. Id. at 53,814. Saha Thai had argued

that there was substantial evidence on the record to show that

collapsing would not be appropriate. Commerce drew the adverse

inference that it was "appropriate to collapse Saha Thai, Thai

Tube, and Thai Hong" because Saha Thai "impeded the investigation

by failing to disclose relevant information" concerning these

affiliations. Id. Commerce also stated that the failure to

identify the resellers as affiliated prevented Commerce from

34

Mr. Karuchit, Saha Thai's Managing Director, is also

the Chairman of Siam Steel International, Saha Thai's largest

shareholder. During verification, Saha Thai "noted ... that Siam

Steel International has investments in 11 of the other members of

the Siam Steel Group." Final Results, 62 Fed. Reg. at 53,816.

Court No. 97-11-01973 Page 27

obtaining information on downstream sales prices and calculating

normal value for these sales. Id. at 53,815.

Commerce assigned Saha Thai a dumping margin of 29.89

percent, the margin applied to Thai Union in Certain Circular

Welded Carbon Steel Pipes and Tubes from Thailand, 56 Fed. Reg.

58,355 (Dep't Commerce 1991) (final results of antidumping duty

admin. rev.) (calculated margin of 38.51 percent assigned to Thai

Union); Circular Welded Carbon Steel Pipes and Tubes from

Thailand, 59 Fed. Reg. 65,753 (Dep't Commerce 1994) (amended

final results of antidumping admin. rev.) (Thai Union revised

weighted-average margin of 29.89 percent on remand from Court of

International Trade).

Ferro Union argues that Commerce's findings should be

reversed, and asserts four grounds for reversal. Ferro Union

first contends that Commerce misconstrued the new affiliation

definition in the URAA. Ferro Union states that even if the

affiliation determination was lawful, the resort to total adverse

facts was unlawful because Commerce disregarded the new statutory

requirements prior to applying adverse facts. Ferro Union next

asserts that Commerce should not have applied adverse facts

because there was sufficient record evidence to conduct a

collapsing analysis. Lastly, Plaintiffs argue that Commerce

failed to corroborate the secondary information used as adverse

facts, and applied an uncorroborated dumping margin.

Court No. 97-11-01973 Page 28

The court will address each of these arguments in turn.

Discussion

Several URAA amendments to the antidumping statute are at

issue in this case. In reviewing Commerce's construction of the

statute, the court must first look at "whether Congress has

directly spoken to the precise question at issue." Chevron,

U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S.

837, 842 (1984). "If the intent of Congress is clear, that is

the end of the matter; for the court, as well as the agency, must

give effect to the unambiguously expressed intent of Congress."

Id. at 842-43. If the statue is "silent or ambiguous with

respect to the specific issue, the question for the court is

whether the agency's answer is based on a permissible

construction of the statute." Id. at 843.

A) Affiliations

Prior to the URAA, the antidumping laws contained two

definitions for "related parties" in 19 U.S.C. § 1677(13)(1988)

and 19 U.S.C. § 1677b(e)(4)(1988). The URAA amended 19 U.S.C. §

1677b(e)(4) to create 19 U.S.C. § 1677(33) entitled "Affiliated

Persons," which added section (G) and a definition of control.

This section now provides:

The following persons shall be considered to be "affiliated"

or "affiliated persons":

Court No. 97-11-01973 Page 29

(A) Members of a family, including brothers and sisters

(whether by the whole or half blood), spouse,

ancestors, and lineal descendants.

(B) Any officer or director of an organization and such

organization.

(C) Partners.

(D) Employer and employee.

(E) Any person directly or indirectly owning, controlling,

or holding with power to vote, 5 percent or more of the

outstanding voting stock or shares of any organization

and such organization.

(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.

For purposes of this paragraph, 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)(1994). The Statement of Administrative

Action to the URAA states that these changes were made in order

to address the realities of the marketplace. Statement of

Administrative Action, accompanying H.R. 103-5110 at 838 (1994),

reprinted in 1994 U.S.C.C.A.N. 3773, 4174 ("SAA") (the

"traditional focus on control through stock ownership fails to

address adequately modern business arrangements ... [and]

including control in the definition of 'affiliated' will permit a

more sophisticated analysis which better reflects the realities

of the marketplace.").35

35

The Statement of Administrative Action represents "an

authoritative expression by the Administration concerning its

(continued...)

Court No. 97-11-01973 Page 30

Commerce's regulations adopted this same definition of

"affiliated persons". See 19 C.F.R. § 351.102(b) (1998)

("Affiliated persons" and "affiliated parties" have the same

meaning as in section 771(33) of the Act [19 U.S.C. §

1677(33)]."). In its Notice of Proposed Rulemaking, Commerce

explained that "affiliated persons" is a new term and clarified

that "affiliated person" and "affiliated parties" have the same

meaning. Antidumping Duties; Countervailing Duties, 61 Fed. Reg.

7,308, 7,310 (Dep't Commerce 1996) (notice of proposed rulemaking

and request for public comments) (proposed regulations to conform

to the URAA). Commerce declined to elaborate on the meaning of

either "control" or "affiliated persons." "'Affiliated persons'

is a new statutory term embodying new concepts, and the

complexity of the relationships potentially covered by this term

mitigates against the issuance of detailed regulations at this

time." Id. at 7,310. Commerce declined further detail on this

concept in its Final Regulations, stating that it was "more

appropriate" for Commerce to develop its practice regarding

affiliation "through the adjudication of actual cases."

35

(...continued)

views regarding the interpretation and application of the Uruguay

Round Agreements ... The 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 1 (quoted in Delverde, SrL v. United

States, 989 F. Supp. 218, 229 n.18 (Ct. Int'l Trade 1997)).

Court No. 97-11-01973 Page 31

Antidumping Duties; Countervailing Duties, 62 Fed. Reg. 27,296,

27,297 (Dep't Commerce 1997) (final rules). The definition of

"affiliated persons" in the "Glossary of Terms" attached to the

first questionnaire Commerce sent to Saha Thai said "antidumping

law subjects transactions between affiliated persons to special

scrutiny," but then restated the elements of 19 U.S.C. § 1677(33)

without elaboration. Questionnaire (undated), at App. 1, P.R.

Doc. 138, Def.'s App., Ex. 3, at 21.

Plaintiffs allege that Commerce improperly interpreted this

new affiliation standard in several ways in its review of Saha

Thai. Ferro Union asserts that Congress spoke directly to the

meaning of affiliates in 19 U.S.C. § 1677(33), and that under

Chevron, Commerce's interpretation is not entitled to deference.

As the comments to Commerce's proposed regulations and final

regulations make clear, however, "affiliated persons" was a new

statutory term which would require further interpretation.

Commerce chose to develop this interpretation on a case-by-case

basis. One question for the court is whether Commerce's

construction of affiliates is permissible.

The court will analyze the four specific challenges

Plaintiffs raise to Commerce's interpretation of affiliated

persons under 19 U.S.C. § 1677(33).

Court No. 97-11-01973 Page 32

1) The definition of "control"

Plaintiffs contest Commerce's findings regarding "control"

in two instances. First, Plaintiffs contest Commerce's finding

that six families controlled Saha Thai. Secondly, they challenge

Commerce's determination that Somchai Lamatipanont controlled

Saha Thai in his position as Deputy Managing Director.

Plaintiffs express incomprehension over how several families

could be considered to control Saha Thai. The plain language of

the statute, along with the SAA, make it clear that "control" for

purposes of 19 U.S.C. § 1677(33) does not require a finding of

actual control; rather one controls if one is "legally or

operationally in a position to exercise restraint or direction

over the other person." See 19 U.S.C. § 1677(33). The

determination of "control" under the URAA is thus not dependent

on actually exercising control, but rather on the capacity to

exercise control.

The SAA stated that the "traditional focus of control

through stock ownership fail[ed] to address adequately modern

business arrangements." SAA at 838. The new definition of

"control" thus permits a finding that several persons or groups

are in a position to exercise restraint or direction over a

company. Furthermore, Commerce's regulations stated that in

making a determination regarding control, Commerce would consider

"corporate or family groupings" among other factors. 19 C.F.R. §

Court No. 97-11-01973 Page 33

351.102(b) (1998). There is record evidence that several

families have an ownership interest in Saha Thai, through their

stockholdings, and that all of Saha Thai's officers and directors

are members of these six families. Saha Thai's Corrective

Supplemental Response (Sept. 8, 1997), at 1-2, P.R. Doc. 129,

Def.'s App., Ex. 21, at 2-3. Assuming that the evidence is

substantial, it would not violate the statute to find that the

six families in a position to exercise "restraint or control over

Saha Thai" in fact control Saha Thai. But see discussion infra

(regarding whether Commerce properly defined these families).

Likewise, Plaintiffs contest Commerce's finding that Somchai

Lamatipanont "controlled" Saha Thai because they claim there is

no record evidence that Somchai Lamatipanont exercised day-to-day

control over the company. Commerce initially believed that

Somchai Lamatipanont was the Managing Director of Saha Thai, but

Saha Thai submitted information after the Preliminary Results

indicating that Mr. Lamatipanont was the Deputy Managing

Director. Final Results, 62 Fed. Reg. at 53,812; Saha Thai's

Corrective Supplemental Response (Sept. 8, 1997), at 2, P.R. Doc.

129, Def.'s App., Ex. 21, at 3. In its case brief, Saha Thai had

argued that Mr. Lamatipanont was only a member of the Board of

Directors, and failed to state that he was Deputy Managing

Director. Final Results, 62 Fed. Reg. at 53,813. In its

submission in August 1997, Saha Thai argued that only the

Court No. 97-11-01973 Page 34

Managing Director, Mr. Karuchit, exercises day-to-day control

over Saha Thai's operations. See id.; Saha Thai's Supplemental

Response (Aug. 25, 1997), at Ex. 2, C.R. Doc. 50, Def.'s App.,

Ex. 19, at 5. Commerce found, however, that Saha Thai had

"offered no evidence to support its assertion that all [positions

other than Managing Director] are devoid of any responsibility

over either day-to-day operating decisions or major management

decisions." Final Results, 62 Fed. Reg. at 53,813. Commerce

then concluded that a deputy managing director is "normally in a

position of control." Id.

Commerce also had evidence of Somchai Lamatipanont's

shareholdings in Saha Thai, and his directorship position. In

light of the fact that the statute only requires that a control

person be in a position to exercise restraint or direction, and

does not require evidence that such a person actually does

control a company, it was not unreasonable for Commerce to

conclude that Somchai Lamatipanont is in a position to restrain

or direct Saha Thai, and thus, is in a position of control.

2) Meaning of family

Ferro Union challenges the meaning of "family" for purposes

of 19 U.S.C. § 1677(33)(A). Plaintiffs assert that the statute

only foresees that nuclear family members and linear descendants

are "family." The sub-section provides that "members of a

family, including brothers and sisters (whether by the whole or

Court No. 97-11-01973 Page 35

half blood), spouse, ancestors, and lineal descendants" are

affiliated. 19 U.S.C. § 1677(33)(A).

Plaintiffs focus their argument on the finding that the

Lamatipanont family controls Saha Thai, Thai Tube, and Thai Hong.

Plaintiffs assert that Somchai Lamatipanont and his nephews,

Surasak and Samarn, are not covered under the definition of

"family" under 19 U.S.C. § 1677(33)(A). Plaintiffs argue that if

any relations other than those explicitly listed in (33)(A) are

to be included in the definition of family, they can only be

nuclear family or lineal relations. The Government and Wheatland

focus on the word "including" in 19 U.S.C. § 1677(33)(A), as

providing room for Commerce to conclude that family members not

listed in section (A) can still be considered "family" under the

statute.

The word "including" in section (A) of 19 U.S.C. § 1677(33)

is an indication that Congress did not intend to limit the

definition of "family" to the members listed in this section.

Had Congress intended this list to be definitive, it would have

chosen different wording. The wording it did choose evinces an

illustrative intent. Commerce's interpretation of this section is

reasonable and therefore not subject to reversal by the court.

The Plaintiffs and Wheatland debate whether uncles and

nephews can be considered "family" under an ordinary definition

of "family." The court agrees with Wheatland that the plain

Court No. 97-11-01973 Page 36

meaning of "family" includes uncles and nephews. See Black's Law

Dictionary 604 (6th ed., 1990) ("family" may mean "all

descendants of a common progenitor ... those who are of the same

lineage.").

Ferro Union also focuses on the claim that Somchai is

estranged from his nephews as a means to distinguish them from

the definition of family. Neither the statute, nor the

regulations, provide for an exception to family for members who

are estranged. If the court were to find that estranged

relatives are not members of the same family, it would invite

parties in administrative reviews to assert subjective criteria

for determining familial relationships. In the absence of

Congressional intent to make the family determination based on

such subjective criteria, the court will not inject into the

inquiry a test which is not administrable.

Although it is statutorily permissible for Commerce to

conclude that an uncle and his nephews are "family" for purposes

of the statute, Saha Thai was provided with insufficient notice

that this relationship was included in the definition of family.

Commerce bears the responsibility of asking clear questions, and

Saha Thai could not be expected to guess at the meaning and full

scope of "family." See NSK Ltd. v. United States, 19 CIT 1319,

1328, 910 F. Supp. 663, 671 (1995) ("[r]espondents should not be

required to guess the parameters of Commerce's interpretation of

Court No. 97-11-01973 Page 37

a phrase in the statute."). Accordingly, Commerce could not

legitimately expect Saha Thai to provide this information without

specific direction that uncles and nephews are considered family.

3) The Family as a "person"

Plaintiffs assert that a family cannot be considered a

"person" for purposes of 19 U.S.C. § 1677(33)(F),36 in order to

justify Commerce's findings that Saha Thai is affiliated with the

various companies by virtue of the common control of a family.

As Plaintiffs correctly note, 19 U.S.C. § 1677(33) does not

contain a definition of "person," nor does the general

definitions section of the URAA. See 19 U.S.C. § 3501 (1994).

Commerce's regulations define "person" as "any interested

party, as well as any other individual, enterprise, or entity, as

appropriate." 19 C.F.R. § 351.102(b) (1998).37 Plaintiffs

assert that none of these examples can encompass a family. On

the contrary, a family can reasonably be considered an "entity"

or an "enterprise" because family members likely share a common

interest.

36

Sub-section (F) of 19 U.S.C. § 1677(33) provides "two

or more persons directly or indirectly controlling, controlled

by, or under common control with, any person" are affiliated

persons.

37

This is the same definition as found in Commerce's

earlier regulations. See 19 C.F.R. § 353.2(p) (1995-1997).

Court No. 97-11-01973 Page 38

Plaintiffs also argue that the use of the singular "person"

at the end of 19 U.S.C. § 1677(33)(F), as contrasted to the

plural at the beginning of the sentence, evinces Congress' intent

that "person" be interpreted only as a single individual. The

court, however, finds that the singular word "person" can be

interpreted to encompass a "family" in order to carry out the

intent of the statute. See First Nat'l Bank in St. Louis v.

Missouri, 263 U.S. 640, 657 (1924) ("words importing the singular

may [not] extend and be applied to several persons or things ...

except where it is necessary to carry out the evident intent of

the statute") (emphasis added). As previously discussed, the

intent of 19 U.S.C. § 1677(33) was to identify control exercised

through "corporate or family groupings." SAA at 838. By

interpreting "family" as a control person, Commerce was giving

effect to this intent.

Once Commerce determined that the Sae Heng/Ratanasirivilai

family controlled both Saha Thai and Company A, logically 19

U.S.C. § 1677(33)(F) led Commerce to determine that these

companies were affiliated because of the family's control. The

determination that the Lamatipanont family controlled Company B,

and that the Ampapankit family controlled Company C, also

logically led to the conclusion that these companies are

affiliated with Saha Thai.

Court No. 97-11-01973 Page 39

Nevertheless, it is unclear how Commerce defined these

families. It seems that Commerce concluded that anyone with the

same surname was a member of the same family. On remand,

Commerce should inform itself of the nature of the relationships

among these people in order to assure itself that it has properly

determined that the persons involved are family members as

contemplated by the statute, and that the affected companies

should have been identified by Saha Thai.

4) "Affiliates of affiliates" as affiliates

Plaintiffs allege that Commerce went beyond the enumerated

definitions of "affiliates" and extended the definition to

"affiliates of an affiliate."38 Under this argument, Saha Thai

would not be affiliated with Companies A, B, and C, simply

because they are each affiliated with one of the family

groupings.

In support of its position, Plaintiffs rely on a public

briefing by Commerce regarding the new affiliation standard, held

on June 18, 1997. See Pl. Br., Att. 2. In this overview,

Commerce presented three scenarios for affiliation. In scenario

2, A holds a 50 percent interest in B, and a 10 percent interest

38

This court will not uphold an extra-statutory

definition of "affiliate." See Delverde, 989 F. Supp. at 224

(court will not "read into the substantive law [a] definitional

provision when there is neither implicit or explicit reference to

it and no other support for such a reading.")

Court No. 97-11-01973 Page 40

in C. Commerce stated that under this scenario "A is affiliated

with B and A is affiliated with C, this does not mean that B and

C are affiliated." Id. at 3. Scenario 3 provided an example

where A has a controlling equity interest in both B and C,

"therefore, B and C are affiliated." Id. at 4. Plaintiffs try

to equate Commerce's affiliation findings in this case with

scenario 2. Commerce, however, found that each family controls

both Saha Thai and the affiliated company. Therefore, Commerce's

findings are akin to scenario 3 and no new affiliation standard

has been created.

Plaintiffs also cite Queen's Flowers de Colombia v. United

States, 981 F. Supp. 617 (Ct. Int'l Trade 1997), where the court

found that companies which were not directly related under the

terms of 19 U.S.C. § 1677(13)(1988) could not be related by means

of a string of related parties.39 Queen's Flowers dealt with the

affiliation standard under the pre-URAA statute, and even under

that standard, the court found several companies affiliated by

39

In Queen's Flowers, Mr. X owned 25 percent of MG. MG

owned a 20 percent share of six subsidiary companies. X owned 33

percent of Company Z, so Company Z and MG were related under 19

U.S.C. § 1677(13)(D)(1988). Mr. X also owned 10 percent of

Company Y, so X and Y were related under 19 U.S.C. §

1677(13)(B)(1988). Neither Z nor Y, however, were related to

MG's subsidiary companies in which MG owned a 20 percent share,

because Mr. X's "indirect ownership interests" in these companies

were less than 20 percent. Therefore, there was no "person or

persons who own[ed] directly or indirectly at least 20 percent"

of Z or Y and the MG subsidiaries. Queen's Flowers, 981 F. Supp.

at 625.

Court No. 97-11-01973 Page 41

aggregating the ownership interests of two brothers. Queen's

Flowers, 981 F. Supp. at 626.

In this case, Commerce did not create a new category of

affiliated persons under 19 U.S.C. § 1677(33)(1994). Commerce

found that Saha Thai and the three home market customers are

directly controlled by three families. Likewise, Commerce found

that Saha Thai and the Siam Steel Group are controlled by the

Karuchit/Kunanuantakul family. These companies, thus, would be

affiliated under 19 U.S.C. § 1677(33)(F) ("two or more persons

directly or indirectly ... controlled by, or under common control

with, any person" are affiliated parties).

Therefore, the court concludes that all of Commerce's

interpretations regarding "affiliated persons" were permissible.

Even though the court's analysis leads it to conclude that

Commerce's interpretation of this new statutory term was

reasonable, it was not proper for Commerce to expect Saha Thai to

foresee the full interpretation of a term which was undergoing

development. Saha Thai cannot be faulted for failing to comply

with Commerce's interpretation of an admittedly complex, and as

yet unexplained, concept. The court finds this to be

particularly true with regards to the affiliation of Thai Tube

and Thai Hong. Without more detailed questions from Commerce,

Saha Thai had no reason to reveal a company owned by the nephews

of one of its directors as an affiliate. Therefore, on remand,

Court No. 97-11-01973 Page 42

even if Commerce concludes that it has properly understood the

familial relationships, Commerce must exclude any affiliation

finding between Saha Thai and Thai Tube/Thai Hong from its

analysis of whether it should resort to total adverse facts

available.

(B) Total Adverse Facts Procedure

Ferro Union argues that Commerce's resort to total adverse

facts available was unlawful because Commerce disregarded the new

statutory standard for applying adverse facts, pursuant to 19

U.S.C. § 1677e(b)(1994). Section 1677e provides in relevant

part:

Determinations on basis of facts available

(a) In General

If -

(1) necessary information is not available on the

record, or

(2) an interested party or any other person -

(A) withholds information that has been requested

by the administering authority or the Commission

under this subtitle,

(B) fails to provide such information by the

deadlines for submission of the information or in

the form and manner requested, subject to

subsections(c)(1) and (e) of section 1677m of this

title,

(C) significantly impedes a proceeding under this

subtitle, or

(D) provides such information but the information

cannot be verified as provided in section 1677m(i)

of this title,

the administering authority and the Commission shall, subject to

section 1677m(d) of this title, use the facts otherwise available

in reaching the applicable determination under this subtitle.

Court No. 97-11-01973 Page 43

(b) Adverse inferences

If the administering authority or the Commission (as the

case may be) finds that an interested party has failed to

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

a request for information from the administering authority or the

Commission, the administering authority or the Commission (as the

case may be), in reaching the applicable determination under this

subtitle, may use an inference that is adverse to the interests

of that party in selecting from among the facts otherwise

available. Such adverse inference may include reliance on

information derived from –

(1) the petition,

(2) a final determination of the investigation under

this subtitle,

(3) any previous review under section 1675 of this

title or determination under section 1675b of this

title, or

(4) any other information placed on the record.

19 U.S.C. § 1677e (1994). As this court clarified in Borden,

Inc. v. United States, 4 F. Supp. 2d 1221 (Ct. Int'l Trade 1998),

Commerce may not automatically resort to adverse inferences once

it decides that a party has failed to comply with its requests.

Borden, 4 F. Supp. 2d at 1246.

The URAA amended 19 U.S.C. § 1677e(a)(1988) to conform to

the requirements of Article 6.8 and Annex II of the Agreement on

Implementation of Article VI of the GATT 1994. See Borden, 4 F.

Supp. 2d at 1244. Under 19 U.S.C. § 1677e(a) (1994), Commerce

will apply facts available when necessary information is not

available on the record or when a party (A) withholds information

that Commerce has requested, (B) fails to provide information in

a timely fashion or in the form requested, (C) significantly

Court No. 97-11-01973 Page 44

impedes the proceeding, or (D) provides information which cannot

be verified in accordance with 19 U.S.C. § 1677m(i). 19 U.S.C. §

1677e(a). The use of facts available is subject to the

requirements of 19 U.S.C. § 1677m(d), that a party have a chance

to remedy deficient submissions.40

Sub-parts (a) and (b) of 19 U.S.C. § 1677e make a

distinction between resort to "facts available" (sub-part (a))

and resort to an adverse inference (sub-part (b)). Once Commerce

has determined under 19 U.S.C. § 1677e(a) that it may resort to

facts available, it must make additional findings prior to

applying 19 U.S.C. § 1677e(b) and drawing an adverse inference.

40

Section 1677m(d) provides:

(d) Deficient submissions

If the administering authority or the Commission determines

that a response to a request for information under this subtitle

does not comply with the request, the administering authority or

the Commission (as the case may be) shall promptly inform the

person submitting the response of the nature of the deficiency

and shall, to the extent practicable, provide that person with an

opportunity to remedy or explain the deficiency in light of the

time limits established for the completion of investigations or

reviews under this subtitle. If that person submits further

information in response to such deficiency and either -

(1) the administering authority or the Commission (as

the case may be) finds that such response is not

satisfactory, or

(2) such response is not submitted within the

applicable time limits,

then the administering authority or the Commission (as the case

may be) may, subject to subsection (e) of this section, disregard

all or part of the original and subsequent responses.

Court No. 97-11-01973 Page 45

Commerce must find that a party "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 Borden, 4 F. Supp.

2d at 1246.41 Under the URAA, Commerce is now required to make

more subtle judgments than under the previous best information

available ("BIA") standard. The antidumping statute may now be

less administratively convenient, but Commerce must conform its

administrative reviews to the new provisions. In this case,

Commerce did not comply with the required steps of 19 U.S.C. §

1677e prior to applying adverse facts available.

In the Preliminary and the Final Results, Commerce stated it

was applying total adverse facts available pursuant to both 19

U.S.C. § 1677e(a)(2)(C) and § 1677e(b), because Saha Thai had

significantly impeded the review by "failing to comply with

[Commerce's] requests for complete information on affiliates."

Preliminary Results, 62 Fed. Reg. at 17,592; Final Results, 62

Fed. Reg. at 53,809. "Significantly impeding the review" is only

sufficient grounds to warrant an application of facts available

41

The SAA states that although the URAA changed the

terminology of the former best information available ("BIA")

rule, resort to facts available remains "an essential

investigative tool in antidumping and countervailing duty

proceedings." SAA at 868. The use of adverse inferences

conforms to the Antidumping Agreement and current practice. SAA

at 870. When a party is uncooperative, Commerce "may employ

adverse inferences about the missing information to ensure that

the party does not obtain a more favorable result by failing to

cooperate than if it had cooperated fully." Id.

Court No. 97-11-01973 Page 46

pursuant to 19 U.S.C. § 1677e(a)(2)(C).42 The additional finding

that a party failed to comply "to the best of its ability" must

be made to warrant an application of adverse facts under 19

U.S.C. § 1677e(b). See Borden, 4 F. Supp. 2d at 1246. In

Borden, Commerce "simply repeated its 19 U.S.C. § 1677e(a)(2)(B)

finding, using slightly different words." Id. The court

concluded this was an insufficient basis for drawing an adverse

inference.

In this case, Commerce also repeated its 19 U.S.C. §

1677e(a)(2)(C) finding to determine that Saha Thai's responses

evinced an inability to comply to the best of its ability,

pursuant to 19 U.S.C. § 1677e(b). In the Preliminary Results,

Commerce said that Saha Thai failed to act to the best of its

ability, on the basis that Saha Thai had "demonstrated an

understanding of the affiliated party definition." Preliminary

Results, 62 Fed. Reg. at 17,593. In determining whether to rely

42

Under the post-URAA standard, this is not a sufficient

finding for applying adverse facts available, although it was

sufficient under the former BIA rule. See Olympic Adhesives,

Inc. v. United States, 899 F.2d 1565, 1572 (Fed. Cir. 1990)

(partial completeness in responding to Commerce request "may

justify resort to the best information rule."); Mitsubishi Heavy

Indus., Ltd. v. United States, 17 CIT 1024, 1031, 833 F. Supp.

919, 926 (1993) ("Commerce may resort to BIA 'whenever a party

... refuses or is unable to produce information requested ... or

otherwise significantly impedes an investigation'."); Ansaldo

Componenti, S.p.A. v. United States, 10 CIT 28, 36, 628 F. Supp.

198, 205 (1986) (failure to furnish information requested

justified Commerce's use of best information available.).

Court No. 97-11-01973 Page 47

on information provided by Saha Thai, Commerce allegedly analyzed

Saha Thai's information in conformity with 19 U.S.C. § 1677m(e).

Id. at 17,593.43

In the Final Results, Commerce said it was applying total

adverse facts available because Saha Thai "significantly impeded

the review," and cited 19 U.S.C. § 1677e(a)(2)(C) and 19 U.S.C. §

1677e(b). Final Results, 62 Fed. Reg. at 53,809. Commerce did

not state that it was applying sub-section (b) on the ground that

Saha Thai failed to act to the best of its ability. Commerce can

not cite to 1677e(b) for the application of total adverse facts

when it has only concluded that a party has significantly impeded

43

Section 1677m(e) provides:

(e) Use of certain information

In reaching a determination under section 1671b, 1671d,

1673b, 1673d, 1675, or 1675b of this title the administering

authority and the Commission shall not decline to consider

information that it 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 or the Commission, 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 or the Commission with respect to the information,

and

(5) the information can be used without undue

difficulties.

Court No. 97-11-01973 Page 48

the review.44 The only mention of the 1677e(b) standard came

after the Department stated its position on Saha Thai's various

affiliates. The Department stated, "[g]iven Saha Thai's failure

to identify Company A, Company B, and Company C as affiliates, we

continued to find that Saha Thai failed to act to the best of its

ability to comply with our requests for information on

affiliates." Final Results, 62 Fed. Reg. at 53,815. Commerce

did not reference 19 U.S.C. § 1677e(b) at this point. Rather, it

cited a Memorandum to the File, dated October 7, 1997. This

memorandum neither states the requirements of 19 U.S.C. §

1677e(b) nor states that Saha Thai failed to act to the best of

its ability. See Memorandum to File: Analysis for Final Results

(Oct. 7, 1997), C.R. Doc. 55, Def.'s App., Ex. 24. This

memorandum only reiterates Commerce's conclusion that Saha Thai

significantly impeded the review by failing to provide full

information on affiliates. Moreover, mere recitation of the

relevant standard is not enough for Commerce to satisfy its

obligation under the statute. Borden, 4 F. Supp. 2d at 1246.

44

Although these two standards, "significantly impeding"

and "failing to cooperate to the best of its ability", appear

quite similar, there is a statutory distinction, and only the

latter leads to the application of adverse facts. Impeding the

review does not have to be read negatively. A respondent could

impede a review without intending to do so, for example, because

it did not understand the questions asked. The statute requires

an additional finding under Section 1677e(b) that a respondent

could have complied, and failed to do so.

Court No. 97-11-01973 Page 49

Although in the Preliminary Results, Commerce used the

language of 19 U.S.C. 1677e(b) to justify its application of

total adverse facts available, and applied some rudimentary

reasoning, the court is reluctant to incorporate the statement of

the Preliminary Results into the Final Results where, as here,

Commerce placed additional information on the record after the

Preliminary Results.45 The Preliminary Results, by their nature,

and given Commerce's additional inquires, were subject to change.

NTN Bearing Corp. v. United States, 74 F.3d 1204, 1208 (Fed. Cir.

1995) ("preliminary determinations are preliminary precisely

because they are subject to change."); Peer Bearing Co. v. United

States, 12 F. Supp. 2d 445, 456 (Ct. Int'l Trade 1998) (Commerce

has flexibility to change position from preliminary determination

to final results ... "preliminary results, by their very nature,

are preliminary and subject to change.") (citing

Tehnoimportexport v. United States, 15 CIT 250, 254-55, 766 F.

Supp. 1169, 1174-75 (1991)). The Preliminary Results, assuming

arguendo that they were sufficient at the time, cannot be relied

upon to fill the gaps in reasoning of the Final Results.

45

As discussed above, Commerce requested that Saha Thai

place information on the record of the 1995-96 review which Saha

Thai had already submitted in a subsequent review for 1996-97.

Commerce made this request in August 1997, four months after

issuing the Preliminary Results. Commerce Letter to Saha Thai

(Aug. 21, 1997), P.R. Doc. 121, Def.'s App., Ex. 18.

Court No. 97-11-01973 Page 50

Commerce is obliged to explain why it concluded that a party

failed to comply to the best of its ability prior to applying

adverse facts, and it did not do so here. The Government and

Wheatland cite record evidence to support the conclusion that

Saha Thai expressed an unwillingness to comply with Commerce's

requests. They also argue that if Saha Thai was truly confused

regarding the meaning of "affiliated parties," it had the

responsibility to seek clarification from Commerce. See Yamaha

Motor Co., Ltd. v. United States, 19 CIT 1349, 1358, 910 F. Supp.

679, 686 (1995) (“if the instructions were confusing,

[respondent] should have sought clarification from Commerce.”)46

Plaintiffs counter that Commerce’s initial questionnaire gave

Saha Thai no notice as to the importance of the new definition of

affiliates. By contrast, the initial questionnaire did signal an

amendment in the Department’s practice regarding the

determination of the date of sale. Questionnaire (undated), at

2, P.R. Doc. 138, Def.'s App., Ex. 3, at 2. The court finds that

Commerce has not pointed to substantial evidence which shows that

the failure to identify Companies A, B, C, D, and E was a failure

by Saha Thai to comply to the best of its ability.

46

In Yamaha, the court expressly found that Commerce’s

instructions were clear. Yamaha, 19 CIT at 1358, 910 F. Supp. at

686.

Court No. 97-11-01973 Page 51

As discussed supra, the court finds that Commerce's

interpretation of "affiliated persons" was permissible, but this

does not mean Saha Thai could be expected to understand the full

implications of this new statutory provision. Commerce itself

recognized the complexity of this provision in its Proposed

Regulations. Saha Thai, as one of the first respondents in a

case applying the new standard, should not be faulted for failing

to understand the full ramifications of "affiliated persons."

Commerce should avoid asking questions which require a respondent

to guess at its implications. See Queens Flowers, 981 F. Supp.

at 628 (an "alleged response deficiency cannot support [the]

application of BIA where the information sought was apparently

never requested.") (citing Olympic Adhesives, Inc. v. United

States, 899 F.2d 1565, 1572-75 (Fed. Cir. 1990)).

As indicated, Commerce could not legitimately expect Saha

Thai to provide information about Thai Tube or Thai Hong. On

remand, Commerce must focus on whether the failure to disclose

potential affiliations with Companies A, B, C, and D, as well as

the failure to state that Company E produced PVC lined steel

water-pipe, warrants a conclusion that Saha Thai failed to comply

to the best of its ability. In order to apply adverse facts

available, Commerce must be explicit in its reasoning, and

conclude that Saha Thai knew that Companies A, B, C, D, and E

Court No. 97-11-01973 Page 52

could be considered affiliates and deliberately chose not to

disclose them as such.

Commerce must also explain why the absence of this

information is of significance to the progress of the

investigation. Commerce stated in the Final Results that the

lack of information regarding Companies A and B hindered Commerce

from requesting downstream sales data for the sales to A and B,

which prevented the Department from calculating normal value

pursuant to 19 U.S.C. § 1677b(a)(5). Final Results, 62 Fed. Reg.

at 53,815. Commerce also stated that it was unable to examine

the common management and ownership of Saha Thai with the Siam

Steel Group. Id. at 53,816-17. Nonetheless, the court cannot

conclude that this alone was a significant impediment, given

Commerce's misunderstanding of what it could properly expect of

Saha Thai. Further, Commerce did not elaborate on the

ramifications of the failure to identify Companies C and D, and

ultimately determined that Company E did not produce subject

merchandise. If overall the failure to identify these companies

was of no significance to the progress of the investigation, then

Commerce cannot apply total adverse facts on the basis of the

non-identification of these companies.

On remand Commerce will not regard the failure to identify

Thai Hong and Thai Tube as a deliberate effort to impede the

investigation, or as grounds to conclude that Saha Thai failed to

Court No. 97-11-01973 Page 53

act to the best of its ability. It will decide whether it

adequately defined affiliates for the purposes of identification

of Companies A, B, C, D, and E, whether lack of identification of

these companies impeded the investigation, and whether adverse

facts are warranted based on failure to act to the best of

ability, given the development of the law and the facts of this

case.

(C) Calculation of the Dumping Margin

Plaintiffs next argue that there was sufficient evidence on

the record to calculate a dumping margin. Ferro Union states

that Commerce should have done a collapsing analysis, rather than

collapse Saha Thai with Thai Tube and Thai Hong without analysis.

Commerce justified collapsing Saha Thai with Thai Tube and Thai

Hong on the basis that the record was "incomplete" rendering the

Department unable to perform the collapsing inquiry. Final

Results, 62 Fed. Reg. at 53,814.47 Commerce, "therefore [made]

the adverse inference" that it was "appropriate to collapse Saha

Thai, Thai Tube, and Thai Hong." Id.

Plaintiffs also argue that there was sufficient evidence on

the record for Commerce to calculate a dumping margin without

including reference to the resale prices of Companies A and B.

47

If the record is "incomplete" only because Commerce did

not specifically ask questions related to Thai Tube/Thai Hong, as

indicated above, this conclusion would be inadequate and Commerce

must request the data.

Court No. 97-11-01973 Page 54

Commerce claims these sales failed its standard arms-length

pricing test – a test which Saha Thai challenged. Id. at 53,817.

Commerce says that because sales to these companies exceeded 5

percent of total home market sales, under its standard practice,

Commerce would have requested downstream sales data in order to

calculate normal value for these sales. Id. at 53,815.

These issues may be mooted by or subsumed into Commerce's

remand determinations and will not be decided at this stage.

(D) Corroboration of secondary information for calculating the

antidumping margin

Ferro Union's final argument is that Commerce unlawfully

disregarded the statutory requirement that secondary information

be corroborated, when it applied the 29.89 percent dumping margin

to Saha Thai.48 Pursuant to 19 U.S.C. § 1677e(c)(1994), Commerce

must corroborate secondary information "to the extent

48

The Government argues that Ferro Union is precluded

from raising this argument, because Saha Thai did not raise this

issue during the administrative review. Ferro Union counters

that Saha Thai contested the margin itself and Commerce's

methodology in arriving at the 29.89 percent margin.

Commerce did consider the question of which adverse margin

it should apply, and discussed corroboration in the Preliminary

Results. Preliminary Results, 62 Fed. Reg. at 17,593. Given

that the agency actually considered this issue and had a chance

to review it, the administrative exhaustion requirement has been

satisfied. See Natural Resources Defense Council, Inc. v. EPA,

824 F.2d 1146, 1151 (D.C. Cir. 1987) (court "excuse[s] exhaustion

requirements for a particular issue when the agency has in fact

considered the issue").

Court No. 97-11-01973 Page 55

practicable" from independent sources reasonably at its

disposal.49

The Antidumping Agreement of GATT 1994 and the URAA evince a

preference that secondary information be corroborated. While the

Antidumping Agreement permits the use of "facts available," the

Contracting Parties are required to check secondary information

from other "independent sources." Annex II of the Agreement on

Implementation of Article VI of GATT 1994 at ¶ 7, reprinted in

U.S. Trade Representative, Uruguay Round of Multilateral Trade

Negotiations 168-169 (1994). The SAA of the URAA further

clarifies that "secondary information may not be entirely

reliable" and that "corroborate means that the agencies will

satisfy themselves that the secondary information to be used has

probative value." SAA at 870. Commerce has said it determines

the probative nature of a margin based on whether it is reliable

and relevant. Preliminary Results, 62 Fed. Reg. at 17,593.

49

Section 1677e(c) provides:

(c) Corroboration of secondary information

When the administering authority or the Commission

relies on secondary information rather than on information

obtained in the course of an investigation or review, the

administering authority or the Commission, as the case may

be, shall, to the extent practicable, corroborate that

information from independent sources that are reasonably at

their disposal.

Court No. 97-11-01973 Page 56

Commerce applied a dumping margin of 29.89 percent to Saha

Thai. Commerce determined that this was the highest calculated

margin from any prior administrative review. Id. This was the

rate applied to Thai Union Steel Co., Ltd. in Circular Welded

Carbon Steel Pipes and Tubes from Thailand, 59 Fed. Reg. 65,753

(Dep’t Commerce 1994) (amended final results) for a 1987-88

period. Commerce found that corroborating this secondary

information required "simply that [Commerce] satisfy itself that

the secondary information to be used has probative value."

Preliminary Results, 62 Fed. Reg. at 17,593 (citing SAA at 870).

Commerce stated in the Preliminary Results that it would, "to the

extent practicable, examine the reliability and relevance of the

information used." Id. Because the only source for calculating

dumping margins are administrative determinations, Commerce

concluded that if it "chooses as total adverse facts available a

calculated dumping margin from a prior segment of the proceeding,

it is not necessary to question the reliability of the margin for

that time period." Id. Commerce stated that the 29.89 percent

rate was the highest rate for any prior segment of the

proceedings, and that the court had affirmed this rate as applied

to Thai Union in a recalculation pursuant to a remand order. See

Primary Steel, Inc. v. United States, 18 CIT 20, 814 F. Supp.

1317 (1994); Circular Welded Carbon Steel Pipes and Tubes from

Thailand, 59 Fed. Reg. 65,753 (amended final results of

Court No. 97-11-01973 Page 57

antidumping duty admin. rev.). Commerce concluded that this rate

was thus neither irrelevant nor inappropriate as "total facts

available rate for Saha Thai." Preliminary Results, 62 Fed. Reg.

at 17,594. Commerce did not revisit the relevance or

appropriateness of this rate in the Final Results.

Plaintiffs challenge the application of this margin on the

basis that it is neither reliable nor relevant, given that the

29.89 percent rate was applied to a different respondent at a

different time period.50 Moreover, the SAA recognizes that

secondary information must be corroborated because it "may not be

entirely reliable because ... it concerns a different time frame

than the one at issue." SAA at 870. Previously, the highest

50

Plaintiffs note that Saha Thai was reviewed during this

same 1987-88 administrative review and received a rate of 0.49

percent. Much of the information used to calculate Thai Union's

rate was based on best information available. In that review,

Commerce found that Thai Union's cost of production understated

the quantity of zinc actually on the pipes and did not include

the cost of couplings. Commerce used the petitioner's

calculation to determine Thai Union's cost of production, which

was based on information submitted by Thai Union at various

times. Commerce also used an IMF country-wide lending rate as

best information available, in order to calculate Thai Union's

credit costs on its US sales. See Certain Circular Welded Carbon

Steel Pipes and Tubes from Thailand, 56 Fed. Reg. 58,355, 58,357-

358. The court found Commerce's calculation of Thai Union's cost

of production "rationally related to Thai's Union's zinc usage

and coupling cost." Primary Steel, Inc. v. United States, 17 CIT

1080, 1087-88, 834 F. Supp. 1374, 1381 (1993). Likewise, the

court approved Commerce's use of the IMF rate as best information

available. Id., 17 CIT at 1088-89, 834 F. Supp. at 1382.

By contrast, the rate calculated for Saha Thai during the

same review was not based on best information available, but on

Saha Thai's responses to Commerce's questionnaires.

Court No. 97-11-01973 Page 58

rate calculated for Saha Thai in a less than fair value

investigation was 17.28 percent. Certain Circular Welded Carbon

Steel Pipes and Tubes from Thailand, 61 Fed. Reg. 1,328 (Dep't

Commerce 1996) (final results of antidumping duty admin. rev.),

amended by Certain Circular Welded Carbon Steel Pipes and Tubes

from Thailand, 61 Fed. Reg. 18,375, 18,376 (Dep't Commerce 1996)

(1992-93 review period).

Wheatland asserts that Commerce's only choices for the facts

available information was the petition data or the margin

information from a previous review, and that the calculated

margin was the only margin information available.51 Wheatland

also minimizes the fact that Saha Thai's margin in the 1987-88

review was substantially lower than Thai Union's on the grounds

that the question before Commerce in this review was whether the

margin was appropriate for a collapsed Saha Thai/ Thai Hong/Thai

Tube, and not simply Saha Thai.52

Since the passage of the URAA, Commerce is proceeding on the

basis that prior calculated margins are ipso facto reliable. See

Extruded Rubber Thread from Malaysia, 63 Fed. Reg. 12,752, 12,763

51

In Borden, this court found petition margins were not

corroborated, and in fact were discredited. Commerce was not

permitted to resort to the petition information under a "claim of

necessity" where there were other suitable margins available.

Borden, 4 F. Supp. 2d at 1247-48.

52

If collapsing is not appropriate, this reasoning would

not be useful on remand.

Court No. 97-11-01973 Page 59

(Dep't Commerce 1998) (final results of antidumping duty admin.

rev.) ("absent evidence to the contrary, [prior calculated rate]

is reliable and has probative value"); Canned Pineapple Fruit

from Thailand, 63 Fed. Reg. 43,661, 43,665, (Dep't Commerce 1998)

(notice of final results and partial rescission of antidumping

duty admin. rev.) ("margins from other segments of the proceeding

are by definition reliable sources"). Commerce says "relevancy"

means that the prior margin should reflect the sales practices of

the industry under examination. Commerce has rejected prior

margins which are not reflective of an industry's sales

practices, even prior to the URAA. See Fresh Cut Flowers from

Mexico, 61 Fed. Reg. 6,812, 6,814 (Dep't Commerce 1996) (final

results of antidumping duty admin. rev.) (Pre-URAA, applying BIA,

rejection of a rate because it was "unrepresentative of the other

companies in that review, and by extension, of the entire flower

industry"); cf. Extruded Rubber Thread from Malaysia, 63 Fed.

Reg. at 12,763 (post-URAA, applying same rationale, but

concluding that a calculated rate did reflect business practices

of rubber thread industry). Commerce is essentially assuming

that the margins are relevant unless there are extraordinary

conditions demonstrating that the margins are irrelevant. The

exception is too restrictive.

Commerce must do more than assume any prior calculated

margin for the industry is reliable and relevant. Even under the

Court No. 97-11-01973 Page 60

BIA standard, the court instructed Commerce that it cannot select

margins which are out of context. See Manifattura Emmepi S.p.A.

v. United States, 16 CIT 619, 624, 799 F. Supp. 110, 115 (1992)

("[Commerce's] authority to select best information otherwise

available is subject to a rational relationship between data

chosen and the matter to which they are to apply."). Nor can

Commerce apply a margin which has been discredited. See D&L

Supply Co. v. United States, 113 F.3d 1220, 1221 (Fed. Cir. 1997)

(it is "improper for Commerce to continue to use, as the BIA

rate, an antidumping duty rate that has been vacated as

erroneous"). In D&L Supply Co., the court clarified that the

purposes for applying the highest prior margin under the BIA

scheme was to prevent the exporter from benefitting from refusing

to provide information, and to select a margin which "bears some

relationship to past practices in the industry in question." D&L

Supply Co., 113 F.3d at 1223. Commerce can not select a rate

which focuses only on inducing the exporter to cooperate, and

ignores the interest in selecting a margin which relates to the

past practices of the industry. Id. at 1224.

In the case of Saha Thai, Commerce selected a margin that

was calculated eight years prior to the relevant POR, and which

was calculated for another producer of subject merchandise.

Moreover, much of the information on which Thai Union's margin

was calculated was based on BIA. See Certain Circular Welded

Court No. 97-11-01973 Page 61

Carbon Steel Pipes and Tubes from Thailand, 56 Fed. Reg. 58,355,

58,357-58; see also supra fn. 50. Commerce had available several

other margins previously calculated for Saha Thai, all of which

were sources "reasonably at its disposal."53 See 19 U.S.C. §

1677e(c). In its Final Results, Commerce did not elaborate on

why the 1987-88 Thai Union margin was more probative than other

Saha Thai margins, other than the fact that the Thai Union margin

was higher. Commerce also has not shown why, under its own

definition of relevancy, the Thai Union rate reflects the sales

practices of the pipe and tube industry. Even when it is

applying total adverse facts, under the URAA Commerce cannot

assume the highest previous margin applies simply because it is

the one most prejudicial to the respondent.

In order to comply with the statute and the SAA's statement

that corroborated information is probative information, Commerce

must assure itself that the margin it applies is relevant, and

not outdated, or lacking a rational relationship to Saha Thai.

The court accordingly remands this issue. If Commerce applies

total adverse facts to Saha Thai, Commerce must then corroborate

the dumping margin it applies to Saha Thai as secondary

information, assuring itself of its reliability and relevancy.

53

Prior margins assessed against Saha Thai in other

administrative reviews range from 0.49 percent to 17.28 percent.

Court No. 97-11-01973 Page 62

CONCLUSION

The court finds that Commerce reasonably continued the

administrative review of Saha Thai, because Commerce had the

discretion to deny Saha Thai’s request for termination. The

court also affirms Commerce's interpretation of "affiliated

parties" under 19 U.S.C. § 1677(33). Commerce's interpretation

of the new affiliation statute was permissible, in accordance

with the law, and is entitled to deference, although

Commerce must revisit its factual determinations as to who

comprised the families at issue. Further, Commerce did not

provide Saha Thai with sufficient guidance for Saha Thai to know

it had to provide information on companies owned by the nephews

of one of its directors. Therefore, on remand, Commerce must

exclude the non-identification of Thai Tube and Thai Hong from

its facts available analysis.

The court also remands the Final Results on the ground that

Commerce did not properly apply 19 U.S.C. § 1677e in deciding

whether it could apply total adverse facts. Commerce must follow

the requirements of § 1677e and conduct a separate analysis under

sub-sections (a) and (b). If it chooses to apply adverse facts

available, Commerce will also have to corroborate the dumping

margin by showing the relevance of a particular margin and why it

may be reliably applied to Saha Thai.

Court No. 97-11-01973 Page 63

Remand results are due within 60 days. Objections are due

20 days thereafter, responses 11 days thereafter.

__________________________

Jane A. Restani

Judge

Dated: New York, New York

This day of March, 1999.