Appeals from the United States Court of International Trade
in Nos. 1:15-cv-00213-CRK, 1:15-cv-00220-CRK, Judge Claire R.
H. GORDON, The Bristol Group PLLC, Washing-ton, DC, argued
for plaintiff-appellant. Also represented by PING GONG.
COTTET, Appellate Staff, Civil Division, United States
Department of Justice, Washington, DC, argued for
defendant-appellee. Also represented by JEANNE DAVIDSON,
JOSEPH H. HUNT, PATRICIA M. MCCARTHY.
THOMAS SCHUTZ, Grunfeld, Desiderio, Le-bowitz, Silverman
& Klestadt LLP, Washington, DC, ar-gued for
defendants-cross-appellants. Also argued by NED H. MARSHAK,
New York, NY. Also represented by MAX FRED SCHUTZMAN, New
York, NY; KAVITA MOHAN, Wash-ington, DC.
Newman, O'Malley, and Taranto, Circuit Judges.
Taranto, Circuit Judge.
United States Department of Commerce found that certain
foreign producers and exporters were dumping certain products
into the United States market, and it imposed a small
antidumping duty on their imports. A domestic company argues
that Commerce should have imposed a higher duty. The foreign
producers and exporters argue that Commerce made
methodological errors, the correction of which would reduce
any dumping margin to a de minimis level, so that no duty
would be imposed. We reject the domestic firm's
challenge. We partly reject the foreign firms' challenge,
and we remand to secure further explanation from Commerce
about one issue.
on a petition from appellant Mid Continent Steel & Wire,
Inc., Commerce initiated an antidumping duty investigation
into steel nail products from Taiwan and certain other
places. Certain Steel Nails from India, the Republic of
Korea, Malaysia, the Sultanate of Oman, Taiwan, the Republic
of Turkey, and the Socialist Republic of Vietnam, 79
Fed. Reg. 36, 019 (Dep't of Commerce June 25, 2014).
Commerce separated the Taiwanese investigation into its own
proceeding and named Taiwanese exporter PT Enterprise Inc.
and its affiliated nail producer Pro-Team Coil Nail
Enterprise Inc. as mandatory respondents. See Certain
Steel Nails from Taiwan: Negative Preliminary Determination
of Sales at Less Than Fair Value and Postponement of Final
Determination, 79 Fed. Reg. 78, 053, 78, 054 (Dep't
of Commerce Dec. 29, 2014) (Preliminary Determination). Those
firms are the cross-appellants before us, along with other
Taiwanese producers of nails. We hereafter use "PT"
to refer sometimes to the cross-appellants collectively,
sometimes just to PT Enterprise and Pro-Team.
statute directs Commerce to determine whether the merchandise
at issue is being sold or is likely to be sold in the United
States "at less than its fair value," 19 U.S.C.
§ 1673, which the statute identifies as
"dumping," id., § 1677(34) (defining
"dumping" to mean "the sale or likely sale of
goods at less than fair value"). To make the required
determination, Commerce must assess the difference between
the "normal value" of the goods at issue
(reflecting the home-market value) and the "export price
or constructed export price" of those goods (reflecting
the price at which they are sold into the United States).
See id., § 1677b(a) (stating that the
determination of the existence of sales "at less than
fair value" is to be based on a comparison of "the
export price or constructed export price and normal
value"); id., § 1677a (addressing
"export price" and "constructed export
price"); id., § 1677b (addressing
"normal value"). That difference is the
"dumping margin." Id., § 1677(35)(A)
(defining "dumping margin"). If Commerce finds the
specified less-than-fair-value sales, and the International
Trade Commission makes certain findings about effects on
domestic industry, "there shall be imposed upon such
merchandise an antidumping duty, in addition to any other
duty imposed, in an amount equal to the amount by which the
normal value exceeds the export price (or the constructed
export price) for the merchandise," id., §
1673, i.e., in the amount of the dumping margin.
the fact that a foreign producer or exporter often makes many
sales, the statute provides certain rules and authorizations
that govern Commerce's required determinations.
Id., § 1677f-1. It defines "weighted
average dumping margin" to mean "the percentage
determined by dividing the aggregate dumping margins
determined for a specific exporter or producer by the
aggregate export prices and constructed export prices of such
exporter or producer." Id., § 1677(35)(B).
The statute provides, as a general rule, that Commerce must
"determine whether the subject merchandise is being sold
in the United States at less than fair value" by
"comparing the weighted average of the normal values to
the weighted average of the export prices (and constructed
export prices) for comparable merchandise" or by making
the value/price comparison for each individual transaction.
Id., § 1677f-1(d)(1)(A)(i), (ii). But the
statute also directs Commerce to disregard weighted average
dumping margins if they are de minimis, id., §
1673b(b)(3); and of relevance here, it provides authority to
Commerce to compare average values (on the foreign side) to
individual export prices or constructed export prices (on the
U.S. side) in specified circumstances involving disparities
among the U.S. side prices for the foreign exporter or
producer. Id., § 1677f-1(d)(1)(B).
aspects of the method adopted by Commerce for calculating the
dumping margin in the present matter are unchallenged. On the
U.S. side of the required comparison, Commerce used the
export price, rather than a constructed export price. On the
foreign side, Commerce determined the Taiwanese normal value
by determining a "constructed value," which
required determinations about, among other things, amounts PT
paid for various inputs. 19 U.S.C. § 1677b(a)(4), (e).
those basic choices are not in dispute, there is a dispute
about how Commerce carried out its "constructed
value" calculation. Among the inputs PT purchased were
services from many "toll" manufacturers (or
"tollers")-firms that provide limited manufacturing
services using materials or other contributions supplied or
owned by its customers. Mid Continent has contended that
certain of PT's tollers should be excluded from this
input calculation because those tollers were affiliated with
PT. The evident concern with a "transaction between
affiliated entities" is that it might not
"adequately represent the true amount," SKF USA
Inc. v. United States, 630 F.3d 1365, 1372 (Fed. Cir.
2011)-here, that PT's payments for tolling to an
affiliate might be artificially low, with the consequence
that the constructed value might be too low, thus shrinking
the gap between the constructed value and the U.S. price and,
in turn, reducing the dumping margin and antidumping duty.
Preliminary Determination, Commerce rejected Mid
Continent's affiliation claim as to a number of PT's
tollers and found no dumping. Preliminary Determination, 79
Fed. Reg. at 78, 054-78, 055; Decision Memorandum for the
Preliminary Determination in the Antidumping Duty
Investigation of Certain Steel Nails from Taiwan, 79
ITADOC 78053 (issued Dec. 17, 2014) (Preliminary Decision
Mem.). Commerce then conducted its full investigation and
analysis, including verification of key factual submissions.
Final Determination, Commerce continued to find
non-affiliation of certain PT tollers, contrary to Mid
Continent's contentions. See Certain Steel Nails from
Taiwan: Final Determination of Sales at Less Than Fair
Value, 80 Fed. Reg. 28, 959, 28, 960-62 (Dep't of
Commerce May 20, 2015) (Final Determination); Issues and
Decision Memorandum for the Affirmative Final Determination
in the Less than Fair Value Investigation of Certain Nails
from Taiwan, 80 ITADOC 28959, at 47-53 (issued May 13,
2015) (Issues and Decision Mem.). But, based on some
adjustments of earlier information, Commerce now found a
positive dumping margin above (though not far above) the
level that Commerce deems de minimis, and it imposed a duty
in that amount. See Final Determination, 80 Fed.
Reg. at 28, 961. In reaching that result, Commerce found
so-called "differential pricing" by PT among its
export prices, and it rejected certain of PT's challenges
to the method for analyzing differential pricing that
Commerce had set out in its preliminary decision memorandum.
Issues and Decision Mem. at 15-31.
Continent filed an action in the Court of International Trade
(Trade Court), seeking a higher duty by challenging
Commerce's finding of no affiliation between PT and
certain of its tollers. PT also sued in the Trade Court,
seeking a lower or zero duty by challenging certain aspects
of Commerce's calculation methodology. The Trade Court
sustained the relevant Commerce conclusions and remanded on
an unrelated issue. Mid Continent Steel & Wire, Inc.
v. United States, 219 F.Supp.3d 1326 (Ct. Int'l
Trade 2017). The Trade Court subsequently entered judgment
sustaining Commerce's Final Determination after the
remand was complete. J.A. 72-73.
Mid Continent and PT have timely appealed to this court, and
we have jurisdiction pursuant to 28 U.S.C. §§
1295(a)(5) and 2645(c). Mid Continent appeals Commerce's
determination of non-affiliation between PT and certain of
its tollers. PT cross-appeals three aspects of Commerce's
method of calculating the dumping margin.
review Commerce's decision using the same standard of
review applied by the Trade Court, while carefully
considering that court's analysis. Diamond Sawblades
Mfrs. Coal. v. United States, 866 F.3d 1304, 1310 (Fed.
Cir. 2017). We decide legal issues de novo and uphold factual
determinations if they are supported by substantial evidence.
19 U.S.C. § 1516a(b)(1)(B)(i); see Diamond
Saw-blades, 866 F.3d at 1310; Dupont Teijin Films
USA, LP v. United States, 407 F.3d 1211, 1215 (Fed. Cir.
2005). "A finding is supported by substantial evidence
if a reasonable mind might accept the evidence to support the
finding." Nobel Biocare Services AG v. Instradent
USA, Inc., 903 F.3d 1365, 1374 (Fed. Cir. 2018); see
Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938). In
carrying out its statu-torily assigned tasks, Commerce has
discretion to make reasonable choices within statutory
constraints. See, e.g., Nucor Corp. v.
United States, 927 F.3d 1243, 1248-49 (Fed. Cir. 2019);
Apex Frozen Foods Private Ltd. v. United States, 862
F.3d 1322, 1329 (Fed. Cir. 2017); see also Utility Air
Regulatory Group v. EPA, 573 U.S. 302, 321 (2014);
City of Arlington v. FCC, 569 U.S. 290, 297 (2013).
But Commerce must provide an explanation that is adequate to
enable the court to determine whether the choices are in fact
reasonable, including as to calculation methodologies.
See CS Wind Vietnam Co., Ltd. v. United States, 832
F.3d 1367, 1376-77 (Fed. Cir. 2016).
address Mid-Continent's challenge and PT's challenges
in turn. We reject Mid Continent's challenge. We reject
two of PT's challenges, but we vacate the decision of the
Trade Court on the third challenge and remand for that court
to remand to Commerce for further explanation.
statute directs Commerce, when determining a constructed
value of the merchandise at issue, to examine certain
transactions to gauge the costs of various inputs. 19 U.S.C.
§ 1677b(e). The statute provides, however, that
"[a] transaction directly or indirectly between
affiliated persons may be disregarded" in certain
circumstances- specifically, "if, in the case of any
element of value required to be considered, the amount
representing that element does not fairly reflect the amount
usually reflected in sales of merchandise under consideration
in the market under consideration." Id., §
1677b(f)(2). Mid Continent's challenge focuses on the
threshold question of what it means for a transaction to be
between "affiliated persons."
has provided a definition:
following persons shall be considered to be
"affiliated" or ...