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CIT Remands Commerce's Use of AFA in Hyundai's Antidumping Duty Case

The Court of International Trade remanded the Commerce Department's use of adverse facts available in an antidumping case, finding that the agency did not allow for proper notice and response from South Korean steel exporter Hyundai Steel Co. In an April 27 opinion made public on May 6, Judge Richard Eaton ruled that Commerce also violated its statutory authority by assigning the all-others rate to one of Hyundai's affiliated freight companies -- dubbed “Company A” in the opinion. On remand, Commerce was instructed to identify the precise data that it judged insufficient and give Hyundai an opportunity to fix the deficiency.

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The case arose from the first administrative review on an antidumping order on cold-rolled steel flat products from South Korea in which Hyundai was a mandatory respondent. During the investigation, Commerce asked for product codes and specification data -- the type or grade of steel -- despite not using either number to construct matching control numbers, which are then used to calculate the dumping margin. Finding Hyundai's submitted data insufficient, Commerce issued follow-up questionnaires, but did not specifically alert Hyundai to what information it found lacking. It was this lack of notice that prompted the April 27 remand.

“Courts have found that Commerce’s supplemental questionnaire adequately placed the respondent on notice of the nature of the deficiency in its response, where the questionnaire 'specifically point[ed] out and request[ed] clarification of [the] deficient responses,' and identified the information needed to make the required showing,” Eaton said. “This standard was not met here.” After redetermining the specific product numbers and individual U.S. sales reported in the specification data that the agency took issue with and reporting them to Hyundai, Commerce will then reconsider whether the use of AFA is warranted at all, Eaton instructed.

Defendant-intervenor U.S. Steel raised a separate issue in the case, arguing that Commerce's decision to apply the all-others rate to Company A was not in accordance with the law, as Company A is not a producer or exporter of the subject merchandise, as required by the governing statute. Initially, Commerce denied U.S. Steel's request to rescind the review of Company A because it was untimely. Eaton upheld this ruling from Commerce but was still convinced by the merits of U.S. Steel's arguments and nevertheless instructed Commerce to reverse its application of the all-others rate to Company A.

“Because Commerce was not authorized to perform the statutorily impossible act of assigning a rate to Company A, U.S. Steel’s untimely rescission is not consequential,” Eaton said. “What matters is that Commerce’s act in assigning a rate to Company A was unlawful and thus a nullity.” Commerce's remand redetermination is due 90 days following the issuance of the opinion.

(Hyundai Steel Co. v. United States, Slip Op. 21-47, CIT Consol. # 19-00099, dated 04/27/21, public 05/06/21, Judge Eaton. Attorneys: Jaehong Park of Arnold & Porter for plaintiff Hyundai Steel Co.; Kelly Krystyniak for United States; Thomas Beline of Cassidy Levy for defendant-intervenor U.S. Steel Corporation; )