Jindal Poly Films Ltd. of India v. United States , 365 F. Supp. 3d 1379 ( 2019 )

Slip Op. 19-31
UNITED STATES COURT OF INTERNATIONAL TRADE
JINDAL POLY FILMS LIMITED OF INDIA
(A.K.A. JINDAL POLY FILMS, LTD.
(INDIA)),
Before: Mark A. Barnett, Judge
Plaintiff,
Court No. 18-00038
v.
UNITED STATES,
Defendant.
OPINION AND ORDER
[Remanding the U.S. Department of Commerce’s final results in the administrative
review of the antidumping duty order on polyethylene terephthalate film, sheet, and strip
from India.]
Dated: March 11, 2019
Stephen W. Brophy, Husch Blackwell, LLP, of Washington, DC, argued for Plaintiff. With
him on the brief was Nithya Nagarajan.
Sonia Orfield, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, DC, argued for Defendant. With her on the brief
were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and
Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Kristen E.
McCannon, Attorney, Office of the Chief Counsel for Trade Enforcement and
Compliance, U.S. Department of Commerce, of Washington, DC.
Barnett, Judge: Plaintiff Jindal Poly Films Limited of India (a.k.a. Jindal Poly
Films Ltd. (India)) (“Plaintiff” or “Jindal”) challenges certain aspects of the U.S.
Department of Commerce’s (“Commerce” or “the agency”) final results in the
administrative review of the antidumping duty order on polyethylene terephthalate film,
Court No. 18-00038 Page 2
sheet, and strip (“PET film”) from India. See Polyethylene Terephthalate Film, Sheet,
and Strip from India, 83 Fed. Reg. 6,162 (Dep’t Commerce Feb. 13, 2018) (final results
on antidumping duty admin. review; 2015-2016) (“Final Results”), ECF No. 18-4, and
the accompanying Issues and Decision Mem., A-533-824 (Feb. 6, 2018) (“I&D Mem.”),
ECF No. 18-5; 1 Compl., ECF No. 6. Plaintiff argues that Commerce’s decision to deny
Jindal two post-sale price adjustments to its home market sales lacks adequate
explanation and analysis, is not supported by substantial evidence, and is contrary to
law; Commerce unlawfully failed to issue a supplemental questionnaire to Jindal to seek
additional information on the two post-sale price adjustments that Commerce denied;
and Commerce violated Jindal’s due process rights by depriving it of an opportunity to
meaningfully comment on Commerce’s preliminary results. See Mot. for J. Upon the
Agency R. Pursuant to USCIT Rule 56.2 of Pl. Jindal Poly Films Ltd. of India (a.k.a.
Jindal Poly Films Ltd. (India)) and Mem. in Supp. of Pl.’s Rule 56.2 Mot. for J. on the
Agency R. (“Pl.’s Br.”), ECF No. 23; Confidential Reply of Pl. Jindal Poly Films Limited
of India (a.k.a. Jindal Poly Films Ltd. (India)) (“Pl.’s Reply”), ECF No. 27.
Defendant United States (“Defendant” or “the Government”) urges the court to
sustain the agency’s Final Results. See generally Confidential Def.’s Resp. to Pl.’s Mot.
for J. on the Agency R. (“Def.’s Br.”) at 10-14, 17-23, ECF No. 26. Defendant-
1 The administrative record for this case is divided into a Public Administrative Record
(“PR”), ECF No. 18-1, and a Confidential Administrative Record (“CR”), ECF No. 18-2.
Parties submitted joint appendices containing record documents cited in their briefs.
See Public J.A. (“PJA”), ECF No. 30; Public Suppl. J.A., ECF No. 42; Confidential J.A.
(“CJA”), ECF No. 29, Confidential Suppl. J.A., ECF No. 41. The court references the
confidential versions of the relevant record documents, unless otherwise specified.
Court No. 18-00038 Page 3
Intervenors DuPont Teijin Films, Mitsubishi Polyester Film, Inc., and SKC, Inc. did not
respond to Plaintiff’s arguments. See Letter to Court (Sep. 17, 2018), ECF No. 24. The
court heard oral argument on February 13, 2019. See Docket Entry, ECF No. 43. For
the reasons discussed below, the court remands the Final Results.
BACKGROUND
Jindal was one of two mandatory respondents in the 2015-2016 administrative
review of the antidumping duty order on PET film from India. See Selection of
Respondents for Individual Examination (Nov. 2, 2016) at 5, CR 3, P.R. 16, CJA Tab 4,
PJA Tab 4. In its response to Section B of Commerce’s initial questionnaire, Jindal
stated that it provides the following post-sale billing adjustments, discounts, and rebates
to its customers:
Short Billing Adjustment (BILLADJ1H)
Excess Billing Adjustment (BILLADJ2H)
Early Payments Discount (EARLYPYH)
Quantity Discount (REBATE1H)
Financing Charge Discount (REBATE3H)
VAT/CST Discount (REBATE4H)
Monthly Rebate & Other Credit Notes (REBATE5H)
Exclusive Dealer Discount (REBATE6H)
Initial Sec. B and C Questionnaire Resp. of Jindal (Dec. 20, 2016) (“Sec. B Resp.”) at
27-38, CR 19-21, PR 43, CJA Tab 5, Suppl. CJA Tab 1, PJA Tab 5, Suppl. PJA Tab 1.
Jindal claimed that its post-sale discounts are “within the scope of accepted price
adjustments” because they “are known to its customers at the time the sale is made”
and “these adjustments have been granted by [Commerce] in previous administrative
reviews with respect to Jindal.” Id. at 32. Jindal provided a sample copy of its sales
Court No. 18-00038 Page 4
policy that included the terms of the claimed adjustments as well as various exhibits
purporting to reflect sample calculations of the rebates and copies of credit notes. See
id., Exs. B-16—B-26.
Commerce published its preliminary results on August 7, 2017. Polyethylene
Terephthalate Film, Sheet, and Strip from India, 82 Fed. Reg. 36,735 (Dep.’t Commerce
Aug. 7, 2017) (prelim. results and partial rescission of antidumping duty admin. review;
2015–2016) (“Preliminary Results”). In the Decision Memorandum accompanying the
Preliminary Results, Commerce stated that “in accordance with 19 C.F.R. [§]
351.401(c), we made adjustments for discounts and rebates.” Decision Mem. for
Prelim. Results and Partial Rescission of Antidumping Duty Admin. Review (July 31,
2017) at 12, PR 68, CJA Tab 7, PJA Tab 7; see also id. at 7. Commerce did not identify
therein which normal value price adjustments it made or provide further discussion or
analysis regarding Plaintiff’s claimed adjustments. Commerce released the home
market Statistical Analysis Software (“SAS”) program log in conjunction with its
preliminary analysis memorandum, which provided the following information:
7809 HMGUPADJ = (BILLADJ1H + BILLADJ2H + . . .); /* Price
adjustments to be added to HMGUP */
7810 HMDISREB = EARLPYH + REBATE5H; /* Discounts, rebates &
other price */
7811 /* adjustments to be subtracted from HMGUP - Post-sale price
adjustments are not allowed */
Court No. 18-00038 Page 5
Jindal’s Prelim. Home Market SAS Program Log (Aug. 11, 2017) (“Prelim. SAS Log”) at
91, CR 126, CJA Tab 9, PJA Tab 9; see also Analysis Mem. for the Prelim. Results
(July 31, 2017) at 4, CR 63, PR 123, CJA Tab 8, PJA Tab 8.
On August 23, 2014, Plaintiff filed a letter with Commerce asking the agency to
either explain why it had denied Plaintiff’s reported price adjustments or issue a
supplemental questionnaire to Plaintiff to “clarify the record of this case” since
Commerce had granted Jindal’s reported price adjustments “in all prior reviews.” Req.
for Clarification of Prelim. Results of Review (Aug. 23, 2017) (“Pl.’s Req. for
Clarification”) at 2, PR 65, CJA Tab 10, PJA Tab 10. Commerce responded that it had
inadvertently omitted a footnote from its preliminary memoranda indicating that Jindal
“did not meet the criteria . . . for post-sale rebates and adjustments” because its
responses to the agency’s initial questionnaire “did not provide information on any of the
[] factors” set forth in Modification of Regulations Regarding Price Adjustments in
Antidumping Duty Proceedings, 81 Fed. Reg. 15,641 (Dep’t Commerce, Mar. 24, 2016)
(final rule) (“Final Modification”). Letter from Commerce to Jindal Re: 2015-2016 Admin.
Review of PET Film from India (Sept. 25, 2017) (“Sept. 25, 2017 Letter”) at 1 & nn.1-2,
PR 74, CJA Tab 11, PJA Tab 11.
Two days later, Plaintiff submitted its case brief to the agency arguing that (1)
Commerce’s preliminary decision to deny Jindal’s post-sale price adjustments without
adequate explanation was arbitrary and capricious and unsupported by substantial
evidence; (2) Jindal’s Section B responses addressed the Final Modification factors;
and (3) Commerce was statutorily required to issue a supplemental questionnaire to
Court No. 18-00038 Page 6
provide Jindal an opportunity to cure any purported deficiencies in its responses.
Admin. Case Br. (Sept. 27, 2017) (“Pl.’s Admin. Case Br.”) at ECF pp. 110-11, PR 76,
CJA Tab 12, PJA Tab 12. Jindal requested that Commerce either explain the reasons
for denying its reported post-sale price adjustments and permit supplemental briefing to
address the issue or issue a supplemental questionnaire to Jindal. Id. at ECF p. 112-
13.
Commerce published its final results on February 13, 2018. See Final Results.
Commerce explained that it granted the following post-sale price adjustments in
accordance with the Preliminary Results: Payment Discount (EARLPYH), Short Billing
Adjustment (BILLADJ1H), Excess Billing Adjustment (BILLADJH2H) and Monthly/Other
Credit Notes Rebate (REBATE5H). Analysis Mem. for the Final Results (Feb. 6, 2018)
(“Final Analysis Mem.”) at 2-4, CR 144, PR 82, CJA Tab 13, PJA Tab 13. For the final
results, Commerce also granted the Quantity Discount (REBATE1H) and VAT/CST
Discount (REBATE4H) “because: 1) the terms were set prior to the sales, 2) proper
timing of the adjustment, and 3) a showing of legitimate transactions.” I&D Mem. at 3;
see also Final Analysis Mem. at 1, 5. However, Commerce denied two remaining
adjustments—Financing Charges Discount (REBATE3H) and Exclusive Dealer
Discount (REBATE6H)—stating:
We continue to determine that the information on the administrative record
does not meet the criteria spelled out in the Final Modification. The
Financing Charges Discount does not meet the criteria (1) where terms
and conditions were set prior to sale; (3) the timing of the adjustment; and
(5) any other factors tending to reflect on the legitimacy of this claimed
adjustment, specifically the business sense of this adjustment. The
Exclusive Dealer Discount also does not meet the criteria (1) where terms
Court No. 18-00038 Page 7
and conditions were set prior to sale; (3) the timing of the adjustment; and
(5) any other factors tending to reflect on the legitimacy of this claimed
adjustment, specifically the business sense of this adjustment. . . . [T]he
burden is on the respondent [to] provide information relevant to support its
questionnaire response.
Final Analysis Mem. at 6.
JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction pursuant to § 516A(a)(2)(B)(iii) of the Tariff Act of 1930,
as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2012), 2 and 28 U.S.C. § 1581(c). The
court will uphold Commerce’s determination if it is supported by substantial evidence on
the record and in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i). In reviewing
whether substantial evidence supports Commerce’s determination, the court asks
whether there was “such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion.” Huaiyin Foreign Trade Corp. (30) v. United States,
322 F.3d 1369, 1374 (Fed. Cir. 2003) (quoting Consol. Edison Co. v. NLRB, 305 U.S.
197, 229 (1938)). This standard requires that Commerce “examine the record and
articulate a satisfactory explanation for its action.” Yangzhou Bestpak Gifts & Crafts
Co., Ltd. v. United States, 716 F.3d 1370, 1378 (Fed. Cir. 2013). While the court will
uphold a determination of less than ideal clarity, “the path of Commerce’s decision must
be reasonably discernable to [the] court.” NMB Singapore Ltd. v. United States, 557
F.3d 1316, 1319 (Fed. Cir. 2009); see also CS Wind Vietnam Co., Ltd. v. United States,
2All further citations to the Tariff Act of 1930, as amended, are to Title 19 of the U.S.
Code, 2012 edition, and all references to the United States Code are to the 2012
edition, unless otherwise stated.
Court No. 18-00038 Page 8
832 F.3d 1367, 1377 (Fed. Cir. 2016) (the agency’s experience and expertise are not a
substitute for the required explanation).
DISCUSSION
I. Commerce’s Denial of Two Post-Sale Price Adjustments
A. Legal Framework
To determine whether subject merchandise is being sold at less than fair value,
Commerce compares the export price or constructed export price of the subject
merchandise to its normal value. See generally 19 U.S.C. § 1673 et seq. The statute
directs Commerce to calculate normal value using the “price at which the foreign like
product is first sold . . . for consumption in the exporting country.” Id.
§ 1677b(a)(1)(B)(i). Commerce’s regulations further direct the agency to use a price for
normal value that “is net of price adjustments, as defined in § 351.102(b), that are
reasonably attributable to the . . . foreign like product.” 19 C.F.R. § 351.401(c) (2016).
The regulations define a “price adjustment” as “a change in the price charged for
. . . the foreign like product, such as a discount, rebate, or other adjustment, including,
under certain circumstances, a change that is made after the time of sale (see
§ 351.401(c)), that is reflected in the purchaser’s net outlay.” Id. § 351.102(b)(38).
Commerce does “not accept a price adjustment that is made after the time of sale
unless the interested party demonstrates . . . its entitlement to such an adjustment.” Id.
Court No. 18-00038 Page 9
§ 351.401(c). 3 When it adopted this version of the regulations, Commerce also
discussed, in the preamble, a non-exhaustive list of factors that it may consider in
determining whether an interested party has demonstrated entitlement to a post-sale
price adjustment. Final Modification, 81 Fed. Reg. at 15,644-45. Those factors are:
(1) [w]hether the terms and conditions of the adjustment were established and/or
known to the customer at the time of sale, and whether this can be demonstrated
through documentation; (2) how common such post-sale price adjustments are
for the company and/or industry; (3) the timing of the adjustment; (4) the number
of such adjustments in the proceeding; and (5) any other factors tending to reflect
on the legitimacy of the claimed adjustment.
Id.
B. Parties’ Arguments
Plaintiff argues that Commerce failed to articulate its reasons for granting certain
adjustments and denying others, and this failure renders Commerce’s decision
unsupported by substantial evidence and contrary to law. 4 Pl.’s Br. at 9, 11. Plaintiff
contends that Commerce’s decision with respect to the first factor—whether the terms
of the adjustment were set or known to the customer at the time of sale—is internally
inconsistent because Plaintiff provided the same sample copy of its sales policy for all
the claimed adjustments. See id. at 10; Pl.’s Reply at 4. With respect to the third and
3 The agency modified 19 C.F.R. § 351.401(c) in 2016 to add this sentence after the
court, in Papierfabrik Aug. Koehler AG v. United States, 38 CIT ___, 971 F. Supp. 2d
1246, 1251-57 (2014), held that Commerce’s decision to reject certain post-sale price
adjustments, when the customer was not aware of the adjustment at the time of sale,
contravened the plain language of 19 C.F.R. §§ 351.401(c) and 351.102(b)(38). See
Final Modification, 81 Fed. Reg. at 15,642. Commerce also refined its definition of price
adjustment in 19 C.F.R. § 351.102(b)(38) in the Final Modification. Id.
4 Plaintiff does not challenge the regulation itself.
Court No. 18-00038 Page 10
fifth factors—the timing of the adjustment and any factor “tending to reflect on the
legitimacy of the claimed adjustment”—Plaintiff contends that Commerce’s decision fails
to explain Commerce’s path of reasoning and why Plaintiff’s questionnaire responses
were insufficient to satisfy these criteria. Pl.’s Br. at 10-11; Pl.’s Reply at 4-5.
The Government contends that Jindal, as the party claiming the adjustment,
failed to meet its burden of establishing eligibility for the adjustment. Def.’s Br. at 10.
According to the Government, Jindal failed to provide evidence regarding the first and
third factors and failed to explain whether the discounts “were legitimate adjustments.”
Id. at 11. The Government further contends that “Jindal did not offer any specific
arguments with respect to individual post-sale adjustments in its case brief.” Id. at 11
(quoting I&D Mem. at 2 n.6).
C. Commerce Failed to a Provide Reasoned Explanation for Denying the
Post-Sale Price Adjustments
Commerce has not provided the required explanation for its determination to
allow the court to apply the standard of review. Commerce’s entire analysis for denying
the two post-sale price adjustments is comprised of conclusory statements that the
adjustments did not satisfy the first, third, and fifth “criteria” listed in the Final
Modification. See I&D Mem. at 3; Final Analysis Mem. at 6. Commerce did not explain
why the adjustments do not meet the “criteria” or how Commerce evaluated the factors
Court No. 18-00038 Page 11
in the Final Modification. Nor did Commerce discuss the evidence which Jindal
supplied in support of its claims. 5
Regarding the first factor, the Government argues that Jindal failed to support its
claim that “the terms and conditions of the adjustment[s] were established and/or known
to the customer at the time of sale” with supporting “documentation.” Def.’s Mem. at 11
(quoting Final Modification, 81 Fed. Reg. at 15,645). In its Section B response,
however, Jindal stated that all its claimed adjustments “are known to its customers at
the time the sale is made and[,] in many situations, the customers have been availing of
the price adjustments for several years.” Sec. B Resp. at 32. Jindal also provided the
same sample copy of its sales policy for all the claimed adjustments, including the two
that Commerce denied. Id. at 31-32 & Ex. B-16. Commerce did not explain why that
documentation sufficed for some of the claimed adjustments but not others. 6
5 Defendant’s contention that Jindal failed to make any “specific arguments with respect
to individual post-sale adjustments in its case brief,” Def.’s Br. at 11 (quoting I&D Mem.
at 2 n.6), is unpersuasive because Jindal argued in its case brief that its Section B
questionnaire responses addressed the Final Modification factors, Pl.’s Admin. Case Br.
at ECF p. 111. Jindal also urged Commerce on two separate occasions to provide a
detailed explanation for denying the adjustments so that it could better tailor its
arguments to address Commerce’s concerns. See Pl.’s Req. for Clarification; Pl.’s
Admin. Case Br. at ECF p. 112. Commerce did not.
6 Furthermore, Jindal explained the circumstances in which it offers the Financing
Charge Discount and the Exclusive Dealer Discount and provided sample rebate
calculations and copies of credit notes, as supporting documentation. See Sec. B
Resp. at 34-38 & Exs. B-19, B-20, B-25, B-26. The documentation that Jindal provided
was the same as that provided to support the six other claimed adjustments that
Commerce granted. See id., Exs. B-16—B-26. Although Commerce decided to grant
some adjustments and deny others, it did not explain sufficiently its reasoning.
Court No. 18-00038 Page 12
Regarding the fifth factor, the Government contends that Jindal failed to establish
that the Exclusive Dealer Discount and Financing Charge Rebate Discount “had a
legitimate business purpose,” like the other six adjustments that Commerce granted.
Def.’s Br. at 12 (citing Final Analysis Mem. at 3-6). However, Commerce only
addressed this factor for three of the six adjustments that it granted, and even then, it
only made a specific finding regarding that factor for one of the adjustments. See Final
Analysis Mem. at 3-5. 7 Before the court, the Government claims that “Jindal explained
the business purpose” for all of the adjustments that Commerce did not address, Def.’s
Br. at 13 (citing Sec. B Resp. at 27-29); however, Commerce did not cite or rely on the
explanations provided in the brief and, more importantly, Commerce did not explain why
Jindal’s explanations for the two denied adjustments were distinct from the other
explanations. 8
The non-exhaustive list of factors in the Final Modification is not a rigid set of
criteria; Commerce “may consider any one or a combination of the[] factors in making its
determination,” and that determination “may be made on a case-by-case basis and in
light of the evidence and arguments on each record.” Final Modification, 81 Fed. Reg.
at 15,645. However, Commerce must explain that determination and the determination
7 Commerce granted the Early Payments Discount, Excess Billing Adjustment, and the
Short Billing Adjustment even though it did not make a finding concerning the “business
sense” of these adjustments. See Final Analysis Mem. at 3-4. Moreover, Commerce
granted the Short Billing Adjustment based only on a finding that it met factors (2) and
(3). Id. at 4.
8 The Government’s attempt to provide post hoc explanation for the distinction must fail.
See Def.’s Br. at 11-13.
Court No. 18-00038 Page 13
must be supported by substantial evidence on the record. Based on Commerce’s
conclusory statements, the court cannot discern the path of Commerce’s decision-
making nor determine that it is supported by substantial evidence. See NMB Singapore
Ltd., 557 F.3d at 1319 (“[W]hile its explanations do not have to be perfect, the path of
Commerce’s decision must be reasonably discernable to a reviewing court.”); see also
CS Wind, 832 F.3d at 1377. Therefore, this matter must be remanded for Commerce to
reconsider Jindal’s claims for post-sale price adjustments for Exclusive Dealer
Discounts and Financing Charge Rebate Discounts, taking account of the evidence and
arguments on record, and to provide the reasons supporting its redetermination.
II. Commerce’s Decision Not to Issue to Jindal a Supplemental Questionnaire
A. Legal Framework
Pursuant to 19 U.S.C. § 1677m(d), if Commerce:
determines that a response to a request for information . . . does not
comply with the request, [Commerce] shall promptly inform the person
submitting the response of the nature of the deficiency and shall, to the
extent practicable, provide that person with an opportunity to remedy or
explain the deficiency in light of the time limits established for the
completion of investigations or reviews.
If the respondent’s subsequent submission is also deficient or untimely, Commerce may
“disregard all or part of the original and subsequent responses,” subject to section
1677m(e). Id. § 1677m(d)(1)-(2). Section 1677m(e) provides that Commerce may not
“decline to consider information that is . . . necessary to the determination but does not
meet all the applicable requirements” when the information is timely submitted; “the
information can be verified”; “the information is not so incomplete that it cannot serve as
Court No. 18-00038 Page 14
a reliable basis for reaching the applicable determination”; the proponent of the
information “has demonstrated that it acted to the best of its ability in providing the
information and meeting the requirements established by [Commerce]”; and “the
information can be used without undue difficulties.” Id. § 1677m(e).
As noted above, in addition to these statutory obligations placed on the agency,
Commerce has regulated that it “will not accept a price adjustment that is made after the
time of sale unless the interested party demonstrates, to the satisfaction of [the agency],
its entitlement to such an adjustment.” 19 CFR § 351.401(c).
B. Parties’ Arguments
Plaintiff asserts that Commerce was required to issue a supplemental
questionnaire if it found Jindal’s questionnaire response regarding the two price
adjustments to be inadequate. Pl.’s Br. at 15. Plaintiff also complains that Commerce
did not provide adequate notice of the specific information required to receive a post-
sale price adjustment pursuant to the methodology announced in the Final Modification.
Id. at 15-16. The Government argues that Commerce did not request that Jindal claim
eligibility for a post-sale price adjustment and, therefore, Jindal did not submit a
deficient response within the meaning of 19 U.S.C. § 1677m(d). Def.’s Br. at 18. The
Government also argues that Commerce was not obligated to issue a supplemental
questionnaire and did not rely on facts otherwise available to calculate a price
adjustment; instead, Commerce merely refused to grant the adjustment. Id.
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C. Commerce Must Provide Jindal an Opportunity to Clarify or
Supplement its Questionnaire Responses
Commerce’s failure to articulate its reasoning for denying two of Jindal’s post-
sale price adjustments limits the court’s ability to review whether an alleged deficiency
in Jindal’s questionnaire response was a factor in Commerce’s decision making.
Nevertheless, for the reasons discussed below, if Commerce determined that Plaintiff’s
questionnaire response was deficient in some regard, or that Commerce needed
clarification of the response regarding the adjustments, the agency should have issued
a supplemental questionnaire to Plaintiff.
Commerce stated that it was denying certain post-sale price adjustments in the
Preliminary Results because Jindal’s questionnaire responses “did not provide
information on any of the [] factors” laid out in the Final Modification. Sept. 25 Letter at
1. This statement is inaccurate 9 and Plaintiff subsequently made two efforts to obtain
clarification as to how Commerce interpreted the Final Modification factors and what
additional information was necessary to satisfy those factors. See Pl.’s Req. for
Clarification; Pl.’s Admin. Case Br. at ECF p. 112.
It is undisputed that a respondent seeking a post-sale price adjustment to normal
value bears the burden of establishing its entitlement to such adjustment. See Fujitsu
Gen. Ltd. v. United States, 88 F.3d 1034, 1040 (Fed. Cir. 1996). This burden properly
rests with the respondent because it is the party in possession of “the necessary
9Indeed, Plaintiff attempted to address the Final Modification factors through both
narrative responses and documentary evidence. See Sec. B Resp. at 27-38 & Exs.
Exs. B-16—B-26.
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information.” Id. at 1040. However, this placement of the burden comes with an
understanding that a respondent has sufficient notice of what information is considered
necessary to allow it to meet its burden. Although the preamble to the Final
Modification contained a list of factors Commerce may consider to determine whether to
grant a post-sale price adjustment, Commerce indicated that it would apply these
factors on a case-by-case basis in light of the evidence and arguments on the record.
See Final Modification, 81 Fed. Reg. at 15,644-45. While Commerce may conduct such
a case-by-case analysis, it may not fail to engage with a respondent attempting to
address the factors in good faith. Under these circumstances, in which Jindal
responded to Commerce’s questions regarding price adjustments and attempted to
address the Final Modification factors, Commerce was obligated to inform Jindal of the
nature of any deficiency and, to the extent practicable, provide Jindal with an
opportunity to remedy or explain the deficiency. See 19 U.S.C. § 1677m(d).
The court is unpersuaded by the Government’s argument that section 1677m(d)
is inapplicable because Commerce did not specifically request Plaintiff to establish
entitlement to these post-sale price adjustments and, thus, Plaintiff’s response did not
fail to comply with a request for information. Def.’s Br. at 18. In Section B of the initial
questionnaire, Commerce requested that Jindal “report the unit value of each rebate
given,” “explain [its] policy and practice for granting rebates,” and “describe the terms
and conditions of each rebate program and when the terms and conditions are
established in the sales process.” See Sec. B Resp. at 31. Jindal reported the post-
sale price adjustments in response to this request.
Court No. 18-00038 Page 17
The Government’s reliance on ABB, Inc. v. United States, 41 CIT __, 273 F.
Supp. 3d 1200 (2017) for its claim that Commerce is not required to issue a
supplemental questionnaire to a respondent seeking a favorable adjustment that fully
complied with an information request, see Def.’s Br. at 19; Oral Arg. at 26:48-27:16, is
unavailing. 10 In ABB, the respondent mislabeled its data, did not attempt to fix the
alleged labeling error prior to Commerce issuing its final determination, and did not
identify its own error until it filed ministerial error allegations. 273 F. Supp. 3d at 1211-
12. The issue in ABB was whether Commerce was required to correct the alleged error,
not whether it was obligated to issue a supplemental questionnaire. ABB, therefore, is
readily distinguished.
The Government might have considered ABB, Inc. v. United States, Slip Op. 18-
156, 2018 WL 6131880 (CIT Nov. 13, 2018) to be slightly more relevant. See Oral Arg.
at 35:40-36:00 (quoting language from ABB, 2018 WL 6131880, at *11). There, the
court agreed with the Government that Commerce was not obligated to issue a
supplemental questionnaire pursuant to 19 U.S.C. § 1677m(d). That case, however, is
also distinguishable because the court found that “[i]nherent in the requirement of
§ 1677m(d) is a finding that Commerce was or should have been aware of the
deficiency in the questionnaire response” and the respondent was the only party with
the ability to determine that its questionnaire response was deficient. Id. at *11. Here,
the situation is just the opposite—Commerce was the only party that could have been
10 Citations to the oral argument reflect time stamps from the recording.
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aware of the deficiency in the questionnaire response because it was the only
participant in the review that knew what would satisfy its unarticulated criteria.
Even if Commerce determined that Jindal fully complied with a request for
information, but Commerce did not understand the information, Commerce had the
opportunity to issue a supplemental questionnaire seeking clarification of any
ambiguities in the information. The Government’s brief and statements at oral argument
indicate that Commerce might have benefitted from a request for clarification of certain
information in Jindal’s responses and documentation Jindal submitted. See Def.’s Br. at
11-12 (selecting several quotes from Jindal’s Section B responses and arguing that
Jindal “did not explain” what it meant by them); Oral Arg. at 40:15-40:38, 40:50-41:16
(making similar arguments and stating that Jindal’s responses were unclear and “not
intelligible” to Commerce); id. at 23:06-23:14 (arguing that it was not clear whether
Jindal had shared its sales policy with anyone).
Commerce is obligated “to carry out its statutory duty of ‘determining dumping
margins as accurately as possible.’” Huzhou Muyun Wood Co., Ltd. v. United States,
41 CIT __, __, 279 F. Supp. 3d 1215, 1224 (2017) (quoting NTN Bearing Corp. v.
United States, 74 F.3d 1204, 1208 (Fed. Cir. 1995)). As stated above, Commerce must
calculate normal value using the “price at which the foreign like product is first sold . . .
for consumption in the exporting country,” 19 U.S.C. § 1677b(a)(1)(B)(i), and which is
net of price adjustments, 19 C.F.R. §§ 351.401(c), 351.102(b)(38). By declining to
issue a supplemental questionnaire seeking clarification of the information Jindal
provided to support its claims for the post-sale price adjustments, Commerce
Court No. 18-00038 Page 19
unreasonably declined a downward adjustment to normal value when a simple
clarification may have cured Commerce’s lack of understanding.
Accordingly, on remand, Commerce must provide Jindal an opportunity to clarify
or supplement its responses to address Commerce’s application of the Final
Modification in this case with respect to the Exclusive Dealer Discount and Financing
Charges Discount.
III. Jindal’s Procedural Due Process Claim
A. Legal Framework
When Commerce makes a preliminary determination in an administrative review,
it must “publish the facts and conclusions supporting that determination” and “publish
notice of that determination in the Federal Register.” 19 U.S.C. § 1677f(i)(1). The
notice or determination must include, “to the extent applicable . . . a full explanation of
the methodology used in establishing [the weighted average dumping] margins” and
“the primary reasons for the determination.” 19 U.S.C. § 1677f(i)(2)(A)(iii)(II), (iv).
Thereafter, interested parties may submit case briefs setting forth arguments relevant to
the agency’s final results. See 19 C.F.R. § 351.309(c)(1)(ii), (2). The U.S. Court of
Appeals for the Federal Circuit has stated that an importer participating in an
administrative review has a due process right to “notice and a meaningful opportunity to
be heard.” PSC VSMPO-Avisma Corp. v. United States, 688 F.3d 751, 761–62 (Fed.
Cir. 2012) (quoting LaChance v. Erickson, 522 U.S. 262, 266 (1998)).
Court No. 18-00038 Page 20
B. Parties’ Arguments
Plaintiff contends that Commerce’s failure to provide an adequate explanation for
its decision in the Preliminary Results deprived Jindal of its due process rights and an
opportunity to comment meaningfully on the preliminary decision. Pl.’s Br. at 13. The
Government responds that Commerce identified the adjustments that it granted in the
preliminary SAS Log and explained the legal basis for its decision in the September 25,
2017 letter in response to Jindal’s request. Def.’s Br. at 15 (citing Prelim. SAS Log. At
91; Sept. 25, 2017 Letter). It further argues that Jindal received and used its
opportunity to file a brief pursuant to 19 C.F.R. § 351.309(c)(1)(i). Id. At oral argument,
Plaintiff conceded that if the court remands the determination for Commerce to
reconsider the two price adjustments, Plaintiff’s due process claim is moot. Oral Arg. at
17:17-17:37.
C. Jindal’s Procedural Due Process Claim is Moot
Jindal’s claim that it was deprived of notice and meaningful opportunity to be
heard is moot as a result of the court’s remand order. Jindal has made its objections to
Commerce’s determination and Commerce must now reconsider its determination in
light of those objections. No further remedy would be available to Jindal if the court
were to agree with its due process claim.
CONCLUSION
In accordance with the foregoing, it is hereby
ORDERED that Commerce’s Final Results are remanded so that Commerce
may reconsider or further explain its denial of the Financing Charge Discount and the
Court No. 18-00038 Page 21
Exclusive Dealer Discount price adjustments in accordance with Discussion sections I
and II above;
ORDERED that Commerce shall file its remand results on or before June 10,
2019; and it is further
ORDERED that subsequent proceedings shall be governed by USCIT Rule
56.2(h); and it is further
ORDERED that any comments or responsive comments must not exceed 5,000
words.
/s/ Mark A. Barnett
Mark A. Barnett, Judge
Dated: March 11, 2019
New York, New York