CIT Says Commerce Gave No Clear Reason for Refusing Alternate Legal Grounds for PMS Argument
The Court of International Trade in a July 24 opinion granted the Commerce Department's voluntary remand request to address alleged errors in calculating the antidumping margin as part of the investigation on forged steel fluid end blocks from Germany. Judge Stephen Vaden also sent the case back after finding that Commerce did not express a clear rationale for its refusal to address petitioner Ellwood City Forge Co.'s claims on alternate legal grounds Commerce could have used to make a particular market situation adjustment.
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In the case, Ellwood City alleged that Commerce erred in calculating the variable cost difference. When the agency previously dropped its PMS adjustment in the case, Ellwood City said that the agency failed to remove the adjustment from the denominator of the variable cost difference equation. Respondent BGH Edelstahl Siegen claimed that "administrative exhaustion" prohibits the voluntary remand request.
Vaden dispatched with the objection, ruling that the claim "turns the purpose of the exhaustion doctrine on its head." In the case, Commerce is asking for a remand to address the alleged errors, "obviating any concern that failure to exhaust has 'deprived the agency of the opportunity to consider these arguments in the first instance.'" Since Commerce requested a voluntary remand to address a "substantial and legitmate concern, administrative exhaustion does not apply," the opinion said.
In the suit, Commerce dropped its PMS adjustment to the sales-below-cost test following the U.S. Court of Appeals for the Federal Circuit's ruling in Hyundai Steel v. U.S., in which the appellate court ruled the adjustment illegal. Ellwood City claimed that the agency refused to address its proposed alternatives, which would allow the imposition of the adjustment. Vaden said the government's response could be interpreted in three ways: (1) the remand order barred the consideration of alternatives, (2) administrative exhaustion prohibits their consideration or (3) it would be improper to consider the alternatives since it would require the agency to reopen the record.
Vaden said the first interpretation does not stand as a valid excuse since the remand order was silent on alternatives. However, the judge said the second interpretation may very well be a valid reason to not consider the alternatives, but it is not adequately expressed by the agency. The U.S. and BGH said that Ellwood City never raised the alternative statutory pathways to make the adjustment before the agency in the original investigation. While Ellwood City does not fight this, it says that it could not have known to do so since the Hyundai Steel decision had not come out.
The judge found this to be a "creative argument" since the petitioner "was on notice that its litigation position before the agency had been rejected by this Court" and had been rejected at least seven times. "Ellwood City nonetheless proceeded before Commerce without making any alternative arguments," the opinion said. Vaden added that Commerce is also silent on "whether it believes it has sufficient information on the record before it to make an alternative calculation."
(Ellwood City Forge Co., et al. v. United States, Slip Op. 23-110, CIT Consol. # 21-00077, dated 07/24/23; Judge: Stephen Vaden; Attorneys: Myles Getlan of Cassidy Levy for plaintiffs led by Ellwood City Forge; Sarah Kramer for defendant U.S. government; Marc Montalbine of deKieffer & Horgan for defendant-intervenor BGH Edelstahl Siegen)