CIT Rules Against Commerce 'Bookend Methodology' in AD Case in Line With Federal Circuit
The Commerce Department's use of Thai surrogate data in two antidumping administrative reviews of crystalline silicon photovoltaic cells from China was not properly supported, the Court of International Trade said in two nearly identical July 28 decisions. Judge Claire Kelly, penning the opinions, sought to bring Commerce's practice in line with a U.S. Court of Appeals for the Federal Circuit decision that called unreasonable the agency's “bookend methodology” in selecting the surrogate data. Stopping short of instructing Commerce to cease its use of the Thai data, Kelly found that the agency's rationale was unsupported and remanded the surrogate value selection for further consideration or explanation.
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The two decisions come from the second and third administrative reviews of the AD duty orders on the solar cells from China in which Trina Solar Energy and Canadian Solar International served as the respondents, respectively. Following two initial CIT decisions in the cases in which the trade court sustained Commerce's findings, the Federal Circuit eventually remanded the lower court's rulings. Declaring that Commerce's bookend methodology for picking the Thai surrogate data for the respondents' nitrogen inputs was not backed by proper evidence, the appellate court sent the case back to Commerce to either change the surrogate nation or further explain.
Commerce elected to do the latter. In its bookend methodology, the agency accepted the Thai data as not “aberrational” since it “accepted data as reliable and not aberrational because it fell within the range of average import prices of the potential surrogate countries.” Commerce said the Thai data fell within the range of prices for nitrogen imports in Bulgaria and Romania. The Federal Circuit spurned this practice in this case because the Thai import data represented only 1% of the imports considered. “The Court of Appeals rejected Commerce’s bookend methodology in those cases where specific evidence detracts from its use,” Kelly said. “Specifically, the Court of Appeals noted that over 99% of the imports into potential surrogate countries were for $0.13 or less/kg, while Thailand’s imports, which made up less than 1% of the imports reviewed, averaged over $11.00/kg.”
In essence, Commerce failed to account for the volume of the imports at each end of the spectrum of prices to be considered. This led to the unreasonable selection of the Thai surrogate data, the CIT said. “The Court of Appeals expressly found Commerce’s failure to address this discrepancy to be unreasonable, yet on remand Commerce uses the same bookend methodology to justify its determination.”
Commerce also used a string of defenses of the Thai data for which it admitted there was no evidence. For instance, Commerce argued that the nitrogen import data from Bulgaria and Romania was artificially low because the imports came from neighboring countries, leading to “special conditions” in which the goods were shipped. “Commerce does not cite any record evidence that would permit it to make an inference that importers in Bulgaria and Romania receive special deals from suppliers in neighboring countries that are somehow unrepresentative of the nitrogen import market as a whole,” Kelly said.
The judge also ruled against Commerce's attempt to explain a discrepancy between the Thai data and International Trade Commission export data, calling it “speculative.” The Federal Circuit initially found Commerce's reliance on the Thai data over the ITC data to be unsupported since both data sets couldn't be correct. Ruling out a host of suggested minor differences in the data from Commerce, Kelly said that “none of Commerce’s explanations is supported by record evidence, and Commerce does not cite to the record in support of its explanations.” The agency has 60 days to submit its fourth remand results in the case.
(Solarworld Americas, Inc. et al. v. United States, Slip Op. 21-91, CIT Consol. #16-00134, dated 07/28/21, Judge Kelly. Attorneys: Robert G. Gosselink of Trade Pacific PLLC for consolidated plaintiffs; Tara Hogan for defendant U.S. government)
(Canadian Solar International Limited et al. v. United States, Slip Op. 21-92, CIT Consol. #17-00173, dated 07/28/21, Judge Kelly. Attorneys: Craig Lewis of Hogan Lovells US for plaintiff Canadian Solar; Tara Hogan for defendant U.S. government)