CIT Says AD Cases Not Customs Cases for Purposes of Picking SV Information

Judge M. Miller Baker sustained the surrogate values used for two of Dingli's inputs, dubbed "Drive Motor 1" and "Drive Motor 2." Commerce used two different Harmonized Tariff Schedule subheadings to value the two different motors -- a move contested by AD petitioner Coalition of American Manufacturers of Mobile Access Equipment on the grounds that the agency overlooked the fact that the first motor's primary function is as a motor.

The judge said the coalition, and also the government, overlooked the "essential point" that the present suit is an "antidumping case" and not a customs classification case. As a result, Commerce was only responsible for finding the subheading that had the "best available information for valuing" the input, as opposed to the purpose of classification cases, which is to "determine how to classify merchandise for tariff purposes." While the coalition says the main function of Dingli's input was an important consideration regarding the SV selection, Baker disagreed due to the U.S. Court of Appeals for the Federal Circuit's "clear holding that the Department need not follow classification principles."

Since "a reasonable mind could so conclude that the Department chose the best available information," Baker sustained Commerce's subheading picks for the motor inputs.

Baker sent back the SV picks for Dingli's ocean-shipping costs, which Commerce based on data from Descartes, Freightos and Drewry. Regarding the ocean-freight data, Dingli submitted its routes as business proprietary information, which the judge remanded "for the agency to explain why such characterization was permissible" under Commerce's regulations. The coalition said Dingli's designation forced it to submit data from Maersk as BPI "to avoid breaching the agency's protective order."

If the agency finds that Dingli erred in submitting the routes as BPI, it must let Dingli withdraw the designation or let the company proffer "other material." If the designation was proper, Commerce must tell the coalition that its designation of "ocean freight rates" was improper and ask for an explanation.

What Commerce can't do "is what it did here," the judge said, which is to accept a party's BPI designation, "only later characterize that denomination as erroneous, and then cite that error as a reason not to use the information because of the agency’s preference for using publicly available data." In addition, the court rejected Commerce's claim that the Maersk data wasn't public. Baker sent the decision back in light of the agency's past decisions "bearing directly on the question."

The coalition also argued that the Maersk data was more reflective of Dingli's ocean freight costs than the Descartes, Freightos and Drewry data, since the Maersk data was limited to the sea route to the West Coast Dingli used for the vast majority of its exports. Baker found that Commerce's failure to recognize that the Descartes, Freightos and Drewry data was less specific than the Maersk data is "unreasonable." However, the judge found that Commerce's treatment of the types of cargo carried in the Descartes, Freightos and Drewry data was permissible.

The court addressed the coalition's claim that Commerce must adjust the Descartes data, if selected again, to account for certain fees to more closely match the company's experience. The court said it was impossible for it to decide the question since it's "impossible to tell what the 'brokerage and handling' fees included or excluded."

Baker also sent back Commerce's surrogate values for Dingli's fabricated steel components, finding the agency's finding to be "internally inconsistent." While Commerce said the coalition failed to substantiate its claim that Dingli's suppliers provided fabricated components instead of plate steel, it acknowledged Dingli's evidence that some suppliers "do more in-depth fabrication or processing," the court said. These "contradictions" mean the SV picks weren't appropriately supported.

The coalition lastly challenged Commerce's acceptance of Dingli's mill test certificates as submitted in violation of the agency's regulations. Baker said the agency "plainly" violated the regulation by accepting the company's "non-public surrogate value rebuttal information," though Commerce gave a "reasonable explanation" for doing so: it was the only way Dingli could "rebut, clarify, or correct the" SV information on the record and the purpose of the submission was to support information already on the record.

The coalition also challenged submissions from Dingli regarding its drive motor and cast-iron billet inputs as untimely since they were sent in response to Commerce's questionnaire. Baker said the coalition "can't have it both ways," in that the regulation regarding response to questionnaires applies or it doesn't. If it does, then it "doesn’t matter whether the company’s timely submission was also responsive to Commerce’s questionnaire."

Timothy Brightbill, counsel for the coalition, said in an email that the group is "pleased with the Court's decision." He added that when "these issues and other are corrected, we think the antidumping margins will more accurately reflect the full amount of unfair trade from Dingli.”

(Coalition of American Manufacturers of Mobile Access Equipment v. United States, Slip Op. 24-66, CIT # 22-00152, dated 05/31/24; Judge: M. Miller Baker; Attorneys: Timothy Brightbill of Wiley Rein for plaintiff coalition; Brian Boynton for defendant U.S. government; Ned Marshak of Grunfeld Desiderio for defendant-intervenor Dingli)