Albemarle Corporation v. United States , 821 F.3d 1345 ( 2016 )

United States Court of Appeals
for the Federal Circuit
______________________
ALBEMARLE CORPORATION & SUBSIDIARIES,
NINGXIA HUAHUI ACTIVATED CARBON
COMPANY LIMITED,
Plaintiffs-Appellants
SHANXI DMD CORPORATION, BEIJING PACIFIC
ACTIVATED CARBON PRODUCTS CO., LTD.,
CHERISHMET INC., NINGXIA GUANGHUA
CHERISHMET ACTIVATED CARBON CO., LTD.,
Plaintiffs-Appellees
v.
UNITED STATES, CALGON CARBON
CORPORATION, NORIT AMERICAS, INC.,
Defendants-Cross-Appellants
CALGON CARBON (TIANJIN) CORPORATION
LIMTED,
Defendant
______________________
2015-1288, 2015-1289, 2015-1290
______________________
Appeals from the United States Court of International
Trade in No. 1:11-cv-00451-TCS, Chief Judge Timothy C.
Stanceu.
2 ALBEMARLE CORPORATION v. US
______________________
Decided: May 2, 2016
______________________
JILL A. CRAMER, Mowry & Grimson, PLLC, Washing-
ton, DC, argued for plaintiffs-appellants. Also represented
by JEFFREY S. GRIMSON, KRISTIN HEIM MOWRY, SARAH M.
WYSS.
GREGORY S. MENEGAZ, DeKieffer & Horgan, PLLC,
Washington, DC, representing plaintiff-appellee Shanxi
DMD Corporation, argued for all plaintiffs-appellees.
FRANCIS J. SAILER, Grunfeld, Desiderio, Lebowitz, Sil-
verman & Klestadt LLP, Washington, DC, for plaintiffs-
appellees Beijing Pacific Activated Carbon Products Co.,
Ltd., Cherishmet Inc., Ningxia Guanghua Cherishmet
Activated Carbon Co., Ltd. Also represented by KAVITA
MOHAN, MARK PARDO, ANDREW THOMAS SCHUTZ.
CLAUDIA BURKE, Commercial Litigation Branch, Civil
Division, United States Department of Justice, Washing-
ton, DC, argued for defendant-cross-appellant United
States. Also represented by ANTONIA RAMOS SOARES,
BENJAMIN C. MIZER, JEANNE E. DAVIDSON, PATRICIA M.
MCCARTHY; SHELBY ANDERSON, Office of the Chief Coun-
sel for Trade Enforcement and Compliance, United States
Department of Commerce, Washington, DC.
ROBERT ALAN LUBERDA, Kelley Drye & Warren, LLP,
Washington, DC, argued for defendants-cross-appellants
Calgon Carbon Corporation, Norit Americas, Inc. Also
represented by JOHN M. HERRMANN, DAVID A. HARTQUIST.
ALBEMARLE CORPORATION v. US 3
Before LOURIE, BRYSON, and DYK, Circuit Judges.
DYK, Circuit Judge.
The Department of Commerce (“Commerce”) selected
two exporters, Jacobi Carbons AB (“Jacobi”) and Calgon
Carbon (Tianjin) Co., Ltd. (“CCT”), to individually exam-
ine in the third administrative review of an antidumping
order. Commerce assigned both exporters de minimis
dumping margins. Rather than using the “expected
method” of averaging those de minimis margins to calcu-
late a separate rate for non-examined exporters Ningxia
Guanghua Cherishmet Activated Carbon Co., Ltd. (“Cher-
ishmet”), 1 Shanxi DMD Corp. (“Shanxi”), and Ningxia
Huahui Activated Carbon Company Ltd. (“Huahui”), 2
Commerce continued to apply the rates it had assigned
those exporters in the second, immediately preceding
administrative review. The Court of International Trade
(“CIT”) held that Commerce’s use of prior dumping mar-
gins was impermissible with respect to Cherishmet and
Shanxi but permissible with respect to Huahui. We
affirm with respect to Cherishmet and Shanxi and reverse
and remand with respect to Huahui. In each case, Com-
merce has failed to justify using the rate from the prior
administrative review.
1 Consistent with Commerce, we treat Cherishmet
and Beijing Pacific Activated Carbon Products as one
entity, which we refer to as “Cherishmet.”
2 We refer to appellants Albemarle Corporation &
Subsidiaries and Ningxia Huahui Activated Carbon
Company Ltd. together as “Huahui.”
4 ALBEMARLE CORPORATION v. US
BACKGROUND
I
When merchandise is sold in the United States at less
than fair value, Commerce is authorized by statute to
impose antidumping duties. See 19 U.S.C. § 1673. These
duties are equal to the dumping margin, the amount by
which the price of the merchandise in the exporting
country (“normal value”) exceeds the price of the mer-
chandise in the United States (“export price” or “U.S.
price”). See id. §§ 1673e(a)(1), 1677b(a)(1), 1677a(a); 3
Changzhou Wujin Fine Chem. Factory Co., v. United
States, 701 F.3d 1367, 1370 (Fed. Cir. 2012). Under the
statute, Commerce is generally charged with determining
individual dumping margins for each known exporter. 19
U.S.C. § 1677f–1(c)(1). When it is “not practicable” to
determine individual margins for each exporter, the
statute provides that Commerce may limit its examina-
tion to a “reasonable number of exporters” that either
constitute a statistically representative sample of all
known exporters or account for the largest volume of the
subject merchandise from the exporting country. Id.
§ 1677f–1(c)(2).
In proceedings involving non-market economy coun-
tries, including China, Commerce presumes that export-
ers are state-controlled, and assigns them a single state-
wide dumping rate. Changzhou, 701 F.3d at 1370; 19
C.F.R. § 351.107(d). This presumption is rebuttable; an
exporter that demonstrates sufficient independence from
3 On June 29, 2015, the Trade Preferences Exten-
sion Act of 2015, Pub. L. No. 114-27, 129 Stat. 362 (2015),
went into effect. The Act makes a number of changes to
the antidumping duty laws, none of which is relevant to
this case.
ALBEMARLE CORPORATION v. US 5
state control may apply to Commerce for a different rate.
Changzhou, 701 F.3d at 1370. A separate rate, sometimes
referred to as the “all-others” rate, is assigned to all non-
individually examined exporters (“separate respondents”)
when Commerce limits its examination to fewer than all
known exporters. 19 U.S.C. § 1673d(c)(1)(B)(i)(II);
Changzhou, 701 F.3d at 1370.
Typically, as discussed below, this separate or all-
others rate is calculated by averaging the rates of the
individually examined exporters. Non-selected parties
can request individual examination pursuant to 19 U.S.C.
§ 1677m(a), but Commerce is not obligated to grant such
requests. Statement of Administrative Action accompa-
nying the Uruguay Round Agreements Act, H.R. Doc. No.
103–316 (1994) [“SAA”], reprinted in 1994 U.S.C.C.A.N.
4040, 4201 (“Commerce may decline to analyze voluntary
responses because it would be unduly burdensome.”);
Yangzhou Bestpak Gifts & Crafts Co., v. United States
(“Bestpak”), 716 F.3d 1370, 1373 (Fed. Cir. 2013). Here,
Commerce determined that all of the parties to this
appeal were entitled to separate rates. The central issue
concerns the calculation of those separate rates for Cher-
ishmet, Shanxi, and Huahui. As noted earlier, rather
than using the average of the rates calculated for the
individually examined exporters during the third admin-
istrative review, Commerce used the rates applied to
Cherishmet, Shanxi, and Huahui in the previous adminis-
trative review.
II
The underlying proceedings involve an initial investi-
gation followed by three administrative reviews of im-
ports of “certain activated carbon” from the People’s
Republic of China, which encompasses “powdered, granu-
lar, or pelletized carbon product[s] obtained by ‘activating’
with heat and steam various materials containing car-
6 ALBEMARLE CORPORATION v. US
bon.” Notice of Antidumping Order: Certain Activated
Carbon from the People’s Republic of China, 72 Fed. Reg.
20,988, 20,988 (Apr. 27, 2007). In the initial investigation
in 2007, Commerce individually investigated only the two
largest volume exporters, Jacobi and CCT. Commerce
determined that appellant Huahui and appellees Cher-
ishmet and Shanxi were entitled to separate rates.
After receiving several requests for review of the ini-
tial antidumping order, Commerce conducted a series of
three administrative reviews. In the first review in 2009,
Jacobi and CCT were selected as individual respondents,
and Commerce granted Cherishmet’s request to be indi-
vidually examined as a voluntary respondent. Certain
Activated Carbon from the People’s Republic of China:
Notice of Preliminary Results of the Antidumping Duty
Administrative Review and Extension of Time Limits for
the Final Results, 74 Fed. Reg. 21,317, 21,318 (May 7,
2009). In the second review in 2010, Jacobi and Huahui
were individually examined, while CCT, Cherishmet, and
Shanxi were given separate rates. Certain Activated
Carbon from the People’s Republic of China: Final Results
and Partial Rescission of Second Antidumping Duty
Administrative Review, 75 Fed. Reg. 70,208, 70,208,
70,209–10 (Nov. 17, 2010). Commerce assigned Jacobi a
rate of $0.11/kg and Huahui a rate of $0.44/kg. It calcu-
lated the separate rate by averaging those individual
margins, resulting in a separate rate of $0.28/kg, which
was applied to Cherishmet and Shanxi.
In the third and final review in 2011, which is the
subject of this appeal, Commerce individually examined
Jacobi and CCT. Certain Activated Carbon from the
People’s Republic of China: Final Results and Partial
Rescission of the Third Administrative Antidumping Duty
Administrative Review [“Final Results”], 76 Fed. Reg.
67,142, 67,142 (Oct. 31, 2011). Cherishmet, Shanxi, and
Huahui were held entitled to a separate rate. Huahui
ALBEMARLE CORPORATION v. US 7
submitted a request to be individually examined as a
voluntary respondent, but Commerce denied its request.
In the Final Results, Commerce determined that Jacobi
and CCT, the individually examined respondents, were
not dumping, and assigned them de minimis margins. 4
The question was whether these de minimis rates should
be averaged and applied to the separate respondents.
As discussed in detail below, 19 U.S.C. § 1673d(c)(5)
governs Commerce’s calculation of separate rates. Under
the statute, when all individually examined exporters are
assigned de minimis margins, the “expected method” is
for Commerce to calculate the separate rate by taking the
average of the de minimis margins assigned to the indi-
vidually examined respondents. See SAA, at 4201. If
Commerce determines that following the expected method
would not be feasible or would result in margins that
would “not be reasonably reflective of potential dumping
margins” for the separate respondents, Commerce may
use “other reasonable methods.” Id.
Rather than following the “expected method” of aver-
aging the de minimis margins calculated for the individu-
ally examined respondents here, Commerce calculated
separate rates for Huahui, Cherishmet, and Shanxi by
continuing to apply the margins it had assigned them
during the previous period of review—Huahui was given
$0.44/kg, the same rate it was assigned when individually
examined during the second review, and Cherishmet and
Shanxi were given $0.28/kg, the same separate rate that
was calculated during the second review by averaging the
rates for the individually examined respondents. Com-
4 In administrative reviews, Commerce considers
any margin of less than 0.5% of U.S. sales price to be de
minimis. 19 C.F.R. § 351.106(c). Here, Commerce as-
signed Jacobi and CCT margins of $0.00/kg.
8 ALBEMARLE CORPORATION v. US
merce does not contend that employing the expected
method would be unfeasible. Instead, Commerce deter-
mined that the expected method would result in margins
that would not be reasonably reflective of the separate
respondents’ actual dumping, explaining primarily that
its policy was to exclude de minimis margins from all
separate rate calculations: “We agree with Petitioners
that [Commerce] should not diverge from the practice of
excluding zero and de minimis margins when calculating
the separate rate margin.” Memorandum to the File,
through Ronald K. Lorentzen from Christian Marsh re:
Issues and Dec. Mem. for the Final Results of the Third
Antidumping Duty Administrative Review, dated Oct. 24,
2011, at 5 [“Memorandum”], available at J.A. 100992.
III
Huahui, Cherishmet, and Shanxi challenged Com-
merce’s separate rate calculations in the CIT. Albemarle
Corp. v. United States (“Albemarle I”), 931 F. Supp. 2d
1280 (Ct. Int’l Trade 2013). The exporters argued that
Commerce’s calculations were unreasonable because they
were based exclusively on non-contemporaneous data, and
asserted that Commerce failed to adequately explain its
departure from the “well-established premise that the
Final Results of a proceeding should be based solely on
the facts on the record in that proceeding.” Id. at 1290.
The CIT remanded and ordered Commerce to reconsider
the margin it assigned to Cherishmet and Shanxi, ex-
plaining that the
$0.28/kg margin was not based on data pertaining
to any pricing behavior that occurred in the third
[period of review]. Nor was it based on any data
pertaining to these respondents; instead, Com-
merce reverted to a margin it determined in an-
other review for other respondents. This margin
does not reflect commercial reality with respect to
ALBEMARLE CORPORATION v. US 9
[Shanxi or Cherishmet], and is, in that sense, ar-
bitrary.
Id. at 1291. With respect to Huahui, the CIT “reserve[d]
any decision on whether the margin assigned [] was
permissible. Commerce may or may not decide to assign
Huahui a different margin based on other decisions it
makes upon remand.” Id. at 1293.
On remand, cross-appellant Calgon Carbon Corpora-
tion (“CCC”), the parent company of CCT and a United
States competitor of Cherishmet, Shanxi, and Huahui,
petitioned Commerce to reopen the administrative record
and collect additional data from the separate respondents
to support its position that those companies should be
assessed dumping duties. Final Results of Redetermina-
tion Pursuant to Court Remand, Albemarle Corp. v. U.S.,
Consol. Ct. No. 11-00451 at 21 (Jan. 9, 2014) [“Final
Remand Redetermination”], available at J.A. 101177.
Commerce declined, stating, “we do not have the re-
sources to individually review more than two respond-
ents.” Id. Commerce recalculated the separate rates for
Cherishmet and Shanxi, “follow[ing] the [CIT’s] logic,
under protest, to its natural conclusion,” and averaging
the de minimis margins assigned to the individually
examined respondents in the third review. Id. at 13. This
resulted in de minimis margins for Cherishmet and
Shanxi. With respect to Huahui, Commerce “decline[d] to
reconsider Huahui’s dumping margin” and continued to
assign the previous rate of $0.44/kg. Id. at 22.
Following the Final Remand Redetermination, the
CIT, having retained jurisdiction, affirmed Commerce’s
redeterminations and the dumping margins assigned to
all exporters. Albemarle Corp, Ningxia Huahui Activated
Carbon Co. v. United States (“Albemarle II”), 27 F. Supp.
3d 1336, 1352 (Ct. Int’l Trade 2014). While following the
CIT’s instructions on remand, Commerce continued to
10 ALBEMARLE CORPORATION v. US
view its original determinations as being correct. With
respect to Cherishmet and Shanxi, the CIT reiterated
that Commerce’s initial decision to carry forward the prior
dumping margins was impermissible. It explained that
Commerce’s assertion that the previous margins were
contemporaneous and reasonably reflective of actual
margins was “factually incorrect when viewed in the
context of the record evidence of the third review.” Id. at
1344. The CIT explained that “no data on the record
demonstrated that the pricing behavior of [Cherishmet
and Shanxi] matched the pricing behaviors of the manda-
tory respondents in the previous review.” Id. Instead,
using contemporaneous data from the third review for the
individually examined respondents resulted in a “reason-
able reflection of the potential dumping margin” that
Cherishmet and Shanxi “would have been assigned in the
third review, had they been examined.” Id. at 1344–45
(internal quotation marks, citations, and alterations
omitted).
With respect to Huahui, the CIT affirmed Commerce’s
decision to not recalculate the $0.44/kg margin previously
assigned, holding that Commerce’s method was reasona-
ble because it “relie[d] on data that were specific to
Huahui’s sales and factors of production,” unlike the rate
that had been carried over for Cherishmet and Shanxi.
Id. at 1348. The CIT recognized that the data were
derived from the previous period of review but concluded
that Commerce’s decision to choose “specificity to Huahui
over contemporaneity” was reasonable. Id.
Huahui appeals. The government and CCC cross-
appeal. We have jurisdiction pursuant to 28 U.S.C.
§ 1295(a)(5).
ALBEMARLE CORPORATION v. US 11
DISCUSSION
I
We review decisions of the CIT concerning Com-
merce’s antidumping determinations by applying the
same standard of review used by the CIT. Bestpak, 716
F.3d at 1377; Changzhou, 701 F.3d at 1374. Commerce’s
determination will be set aside if it is arbitrary and
capricious or not supported by substantial evidence.
Changzhou, 701 F.3d at 1374; see also SKF U.S.A., Inc. v.
United States, 254 F.3d 1022, 1028 (Fed. Cir. 2001) (“We
review [Commerce’s] decision under the Administrative
Procedure Act and any other applicable law.”). The
question of whether Commerce’s statutory interpretation
accords with law is guided by the two-part test articulated
in Chevron, U.S.A., Inc. v. Natural Resources Defense
Council, Inc., 467 U.S. 837, 842–43 (1984). See Bestpak,
716 F.3d at 1377; Nan Ya Plastics Corp., v. United States,
810 F.3d 1333, 1341 (Fed. Cir. 2016). We have acknowl-
edged “Commerce’s special expertise” in antidumping
cases and have “accorded substantial deference to its
construction of pertinent statutes.” SKF, 254 F.3d at
1028 (internal quotation marks, citations, and alterations
omitted).
II
Under the statute, Commerce normally calculates the
separate rate by averaging the “dumping margins estab-
lished for exporters and producers individually investi-
gated, excluding any zero and de minimis margins.” 19
U.S.C. § 1673d(c)(5)(A); Changzhou, 701 F.3d at 1372.
The statute provides an exception, however, for situations
like the present one where all individually examined
respondents receive de minimis margins. In that case,
Commerce “may use any reasonable method to establish
the estimated all-others rate for exporters and producers
not individually investigated, including averaging the
12 ALBEMARLE CORPORATION v. US
estimated weighted average dumping margins deter-
mined for the exporters and producers individually inves-
tigated.” 19 U.S.C. § 1673d(c)(5)(B). The Statement of
Administrative Action, legislative history that is “recog-
nized by Congress as an authoritative expression concern-
ing the interpretation and application of the Tariff Act
under 19 U.S.C. § 3512(d),” Bestpak, 716 F.3d at 1373,
explains that when all individually examined respondents
are assigned de minimis margins,
The expected method in such cases will be to
weight-average the zero and de minimis mar-
gins . . . provided that volume data is available.
However, if this method is not feasible, or if it re-
sults in an average that would not be reasonably
reflective of potential dumping margins for non-
investigated exporters or producers, Commerce
may use other reasonable methods.
SAA, at 4201 (underscoring added). 5 The SAA thus
makes clear that under the statute, when all individually
5 The full text of the relevant SAA section reads as
follows:
(2) All Others Rate
Recognizing the impracticality of examining
all producers and exporters in all cases, Article 9.4
of the Antidumping Agreement permits the use of
an all others rate to be applied to non-investigated
firms. To implement the Agreement, section
219(b) of the bill adds section 735(c)(5)(A) to the
Act which provides that the all others rate will be
equal to the weighted-average of the individual
dumping margins calculated for those exporters
and producers that are individually investigated,
exclusive of any zero and de minimis margins, and
any margins determined entirely on the basis of
ALBEMARLE CORPORATION v. US 13
examined respondents are assigned de minimis margins,
Commerce is expected to calculate the separate rate by
taking the average of those margins. Commerce may use
“other reasonable methods,” but only if Commerce rea-
sonably concludes that the expected method is “not feasi-
ble” or “would not be reasonably reflective of potential
dumping margins.” Id.
It is true, as the government points out, that 19
U.S.C. § 1673d applies on its face only to investigations,
not periodic administrative reviews. 6 See Amanda Foods
the facts available. Currently, in determining the
all others rate, Commerce includes margins de-
termined on the basis of the facts available.
Section 219(b) of the bill adds new section
735(c)(5)(B) which provides an exception to the
general rule if the dumping margins for all of the
exporters and producers that are individually in-
vestigated are determined entirely on the basis of
the facts available or are zero or de minimis. In
such situations, Commerce may use any reasona-
ble method to calculate the all others rate. The
expected method in such cases will be to weight-
average the zero and de minimis margins and
margins determined pursuant to the facts availa-
ble, provided that volume data is available. How-
ever, if this method is not feasible, or if it results
in an average that would not be reasonably reflec-
tive of potential dumping margins for non-
investigated exporters or producers, Commerce
may use other reasonable methods.
SAA, at 4201 (underscoring added).
6 The statute also explicitly applies only to market
economy proceedings, but Commerce has adopted it in
non-market economy proceedings as well, see Bestpak, 716
14 ALBEMARLE CORPORATION v. US
(Vietnam) Ltd. v. United States, 714 F. Supp. 2d 1282,
1290 (Ct. Int’l Trade 2010). But the statutory framework
contemplates that Commerce will employ the same meth-
ods for calculating a separate rate in periodic administra-
tive reviews as it does in initial investigations. See 19
U.S.C. § 1675(a) (amended 2016) (In conducting periodic
administrative reviews, Commerce is required to “deter-
mine the dumping margin” to calculate “the amount of
any antidumping duty,” just as it must do in initial inves-
tigations). 7 Indeed, for this reason Commerce itself has
found the statute’s methodology applicable in periodic
F.3d at 1374, and the government does not contend that
the calculation of the separate rate should be any differ-
ent in light of the non-market economy here.
7 Although the government contends that the SAA
applies only to investigations and not administrative
reviews, the text of the SAA is to the contrary. The
section of the SAA from which the quoted excerpt above
was taken refers to the calculation of dumping margins
“for all producers and exporters of merchandise who are
subject to an antidumping investigation or for whom an
administrative review is requested.” SAA, at 4200 (em-
phasis added). And the treaty that gave rise to the statu-
tory provisions addressed in the SAA states that the
provisions governing the determination of individual
dumping margins when there are large numbers of ex-
porters and producers apply to reviews as well as investi-
gations. Agreement on Implementation of Article VI of
the General Agreement on Tariffs and Trade 1994, art.
11.4, Apr. 15, 1994, H.R. Doc. No. 103-316, vol. 1, at 1455,
1868 U.N.T.S. 201 (“The provisions of Article 6 regarding
evidence and procedure shall apply to any review carried
out under this Article”), referring to Article 6.10; see also
id. at art. 9.4.
ALBEMARLE CORPORATION v. US 15
administrative reviews as well as initial investigations, as
it did in this case. See Memorandum, at 4.
The “expected method” under the statute makes sense
in light of the general assumption underlying the statuto-
ry framework. Here, the individually examined respond-
ents account for a majority of the market during the
relevant period, and are representative at the very least
in terms of aggregate volume. The government argues
that “the possibility exists that the pricing behavior of the
largest exporters [selected for individual examination]
may not reflect the pricing behavior of smaller exporters,”
Br. of United States at 23–24, but there is no evidence
here that the largest exporters are not representative.
The very fact that the statute contemplates using data
from the largest volume exporters suggests an assump-
tion that those data can be viewed as representative of all
exporters. The statute assumes that, absent such evi-
dence, reviewing only a limited number of exporters will
enable Commerce to reasonably approximate the margins
of all known exporters. As the CIT has explained, “[t]he
representativeness of the investigated exporters is the
essential characteristic that justifies an ‘all others’ rate
based on a weighted average for such respondents.” Nat’l
Knitwear & Sportswear Ass’n v. United States, 15 C.I.T.
548, 559 (1991). Thus the government’s repeated argu-
ment that “no record evidence demonstrated that the
separate rate respondents engaged in pricing behavior
similar to Jacobi or CCT,” Br. of United States at 24, is
backwards. The burden is not on the separate respond-
ents to show that their dumping is the same as that of the
individually examined respondents. Rather, Commerce
must find based on substantial evidence that there is a
reasonable basis for concluding that the separate re-
spondents’ dumping is different.
There is no contention here that the expected method
is not feasible. The questions therefore are (1) whether
16 ALBEMARLE CORPORATION v. US
Commerce properly determined that the expected method
(utilizing the average of the margins calculated for the
examined respondents) “would not be reasonably reflec-
tive of potential dumping margins” for Cherishmet, Shan-
xi, and Huahui; and (2) if so, whether Commerce’s chosen
method of carrying forward their margins from the previ-
ous review was “reasonable.”
III
Commerce primarily seeks to justify its approach on
the ground that there is a policy against using de minimis
margins to calculate separate rates. See Memorandum, at
4 (“We agree with Petitioners that [Commerce] should not
diverge from the practice of excluding zero and de mini-
mis margins when calculating the separate rate margin.”)
(emphasis in original). The government contends that
this is reasonable because the statute disfavors using zero
or de minimis rates as a general matter. We disagree.
It is true that when there are non-de minimis margins
assigned to individually examined respondents, the
statute instructs Commerce to calculate the separate rate
by averaging the margins assigned to the individually
examined respondents, “excluding any zero and de mini-
mis margins.” 19 U.S.C. § 1673d(c)(5)(A). But it is equal-
ly clear that when all individually examined respondents
are assigned de minimis margins, Commerce has no
similar mandate to routinely exclude zero or de minimis
margins. Congress has spoken directly to this precise
situation in § 1673d(c)(5)(B), and the SAA unambiguously
provides that the expected method to calculate the sepa-
rate rate in such circumstances is to average the individ-
ually examined respondents’ de minimis margins. See
SAA, at 4201.
The government cannot contend that methodology
employing de minimis margins is disfavored when Con-
gress has unmistakably explained that it is, in fact,
ALBEMARLE CORPORATION v. US 17
preferred. 8 The government’s policy simply cannot be
distilled from the statute in this context, and Commerce’s
insistence on using its hostility to de minimis rates as the
driving force behind its methodology is on its face arbi-
trary and capricious. Indeed, counsel for the government
admitted at oral argument that Commerce would have
used $0.05/kg, which CCT was assigned in the prelimi-
nary results of the third review, as the separate rate if
one of the two individually examined respondents had
been assigned that rate in the final review. See Oral Arg.
at 44:30–40. This demonstrates the arbitrariness of
Commerce’s approach.
Commerce also seeks to justify its approach on the
ground that Commerce has a legitimate interest in allo-
cating its own limited resources. 9 While this interest is
8 “Simply put, when a statutory provision specifical-
ly lists ‘averaging the [zero and de minimis] estimated
weighted average dumping margins determined for the
exporters and producers individually investigated’ as the
sole provided example of a ‘reasonable method to estab-
lish the estimated all-others rate’ when all mandatory
respondents’ margins are zero or de minimis, 19 U.S.C.
§ 1673d(c)(5)(B), it is impermissible to interpret this
provision as expressing a preference against the use of
such methodology in such situations. This must particu-
larly be the case when the [SAA] expressly states that the
allegedly disfavored methodology is in fact ‘[t]he expected
method in such cases.’” Amanda Foods, 714 F. Supp. 2d
at 1291 (citations omitted).
9 See, e.g., Torrington v. United States, 68 F.3d
1347, 1351 (Fed. Cir. 1995) (“[A]gencies with statutory
enforcement responsibilities enjoy broad discretion in
allocating investigative and enforcement resources.”).
18 ALBEMARLE CORPORATION v. US
certainly relevant, it alone is not sufficient to render an
otherwise unreasonable methodology reasonable.
Finally, as our cases have explained, accuracy and
fairness must be Commerce’s primary objectives in calcu-
lating a separate rate for cooperating exporters. See
Bestpak, 716 F.3d at 1379 (“An overriding purpose of
Commerce’s administration of antidumping laws is to
calculate dumping margins as accurately as possible.”);
Gallant Ocean (Thailand) Co., v. United States, 602 F.3d
1319, 1323 (Fed. Cir. 2010) (a rate must be a “reasonably
accurate estimate of the respondent’s actual rate”) (inter-
nal quotation marks and citations omitted); SNR Rou-
lements v. United States, 402 F.3d 1358, 1363 (Fed. Cir.
2005) (“Antidumping laws intend to calculate antidump-
ing duties on a fair and equitable basis.”); Rhone Poulenc,
Inc. v. United States, 899 F.2d 1185, 1191 (Fed. Cir. 1990)
(the “basic purpose of the statute” is to “determin[e]
current margins as accurately as possible”); see also Nan
Ya, 810 F.3d at 1344–45 (accuracy represents a “reliable
guidepost[] for Commerce’s determinations,” and a deter-
mination is “accurate” if it is “supported by substantial
evidence”).
IV
We therefore turn to Commerce’s other justifications
for its approach. We first address Commerce’s methodol-
ogy with respect to Cherishmet and Shanxi. Cherishmet
and Shanxi were not individually examined in either the
second or third reviews. In the second review, they were
assigned a separate rate based on the simple average of
the dumping margins calculated for the individually
examined respondents, Jacobi and Huahui, which result-
ed in a dumping margin of $0.28/kg. In the third review,
Commerce individually examined Jacobi and CCT, ulti-
mately assigning them both de minimis margins. But
Commerce continued to apply the $0.28/kg margin to
ALBEMARLE CORPORATION v. US 19
Cherishmet and Shanxi as their separate rate in the third
review.
There is no evidence that supports Commerce’s de-
termination that averaging the de minimis margins
assigned to the individually examined respondents in the
third review would have resulted in margins for Cherish-
met and Shanxi that would not have been reflective of
their actual dumping margins. Commerce had no data
specific to Cherishmet or Shanxi from either the second or
third review. And Commerce in fact assumed that the
examined respondents were reasonably representative of
Cherishmet and Shanxi during the second review, as
Commerce calculated the separate rate by averaging the
margins of the individually examined respondents from
that review.
Having assumed that the individually examined re-
spondents were reasonably representative of Cherishmet
and Shanxi in the second review, Commerce lacked any
basis to reverse course and conclude that Cherishmet and
Shanxi were somehow different in the third review.
Commerce did not collect any additional information
regarding Cherishmet or Shanxi, nor was there any
evidence that would indicate different exporting behavior.
In fact, one of the two individually examined exporters,
Jacobi, was examined in both the second and third re-
views. And in both reviews Commerce selected the indi-
vidually examined respondents pursuant to the same
method of examining the largest volume exporters. In the
second review, Jacobi’s rate was used to calculate the
rates for Cherishmet and Shanxi, but was found non-
representative in the third review. The government offers
no explanation as to why Cherishmet and Shanxi were no
longer reasonably represented by the individually exam-
ined respondents in the third review, while they had been
in both reviews prior. Commerce’s conclusion was arbi-
trary and unsupported by substantial evidence. Accord-
20 ALBEMARLE CORPORATION v. US
ingly, we affirm the CIT with respect to Cherishmet and
Shanxi.
V
We next consider Huahui. Unlike Cherishmet and
Shanxi, Commerce did have information specific to
Huahui because Huahui was one of the individually
examined respondents in the second review. Huahui was
assigned an individual dumping margin of $0.44/kg in the
second review, significantly higher than the $0.11/kg
margin assigned to Jacobi, the other individually exam-
ined respondent during that review, and the $0.00/kg
rates assigned to the individually examined respondents
in the third review. For this reason, Commerce did have
substantial evidence to support its conclusion that simply
averaging the de minimis rates assigned to Jacobi and
CCT in the third review might not reasonably reflect
Huahui’s potential dumping margin during the third
period. Commerce was therefore entitled to use “other
reasonable methods” under the statute. SAA, at 4201; 19
U.S.C. § 1673d(c)(5)(B). The question here is whether
Commerce’s chosen method of carrying forward Huahui’s
data from the second period of review to the third was
reasonable. We conclude that it was not.
In assessing the reasonableness of Commerce’s meth-
odology, our analysis is guided by the statute’s manifest
preference for contemporaneity in periodic administrative
reviews. Under the statute, Commerce is obligated to
review an antidumping duty order if requested “[a]t least
once during each 12-month period beginning on the
anniversary of the date of publication” of the order. 19
U.S.C. § 1675(a)(1) (1999) (amended 2016). Commerce
must commence a review within six months of any re-
quest. 19 U.S.C. § 1675(a)(2)(B)(ii) (1999) (amended
2016). The purpose of periodic administrative reviews is
to reassess dumping margins previously calculated in
ALBEMARLE CORPORATION v. US 21
light of data made available during the intervening period
since the antidumping order was issued. See Union Steel
v. United States, 713 F.3d 1101, 1103, 1108 (Fed. Cir.
2013); Allegheny Ludlum Corp. v. United States, 346 F.3d
1368, 1373 (Fed. Cir. 2003).
Unlike investigations, which consider “overall pricing
behavior” to “determine the appropriateness of imposing
an antidumping duty order” in the first place, administra-
tive reviews begin with “an antidumping duty order
already in place,” and typically employ methodology that
“permits greater specificity” to “further[] the transactional
accuracy interests” at the core of the review process.
Union Steel, 713 F.3d at 1108. Thus, when it comes to
administrative reviews, “it is reasonable for the agency to
look for more accuracy [than in the initial investigation],
which it achieves in some measure through monthly
averaging.” Id.
There is no basis to simply assume that the underly-
ing facts or calculated dumping margins remain the same
from period to period. “[I]f the facts remained the same
from period to period, there would be no need for adminis-
trative reviews.” Shandong Huarong Mach. Co. v. United
States, 29 C.I.T. 484, 490–91 (2005). Thus Commerce
itself has explained that “it is well established and upheld
practice that the Department must base its decisions on
the record of the administrative proceeding before it in
each review.” Issues and Decision Memorandum for the
Final Results in the Second Antidumping Duty Order
Administrative Review of Diamond Sawblades and Parts
Thereof from the Republic of Korea, 78 Fed. Reg. 36,524,
cmt. 4 (June 18, 2013). 10 In short, as we have previously
10 See also, e.g., Qingdao Sea-Line Trading Co., v.
United States, 766 F.3d 1378, 1386 (Fed. Cir. 2014) (In
22 ALBEMARLE CORPORATION v. US
recognized, “there is a clear congressional intent” that
administrative reviews “be as accurate and current as
possible.” Allegheny, 346 F.3d at 1373 (emphasis added).
The legislative history “emphasized the importance of
using current information with respect to making deter-
minations. ‘The Committee intends that the Authority
and the ITC should always use the most up-to-date infor-
mation available.’” Freeport Minerals Co. (Freeport
McMoran, Inc.) v. United States, 776 F.2d 1029, 1032
(Fed. Cir. 1985) (quoting H.R. Rep. No. 96-317, at 77
(1979)). 11
determining what constitutes the “best available infor-
mation” for calculating normal values in administrative
reviews of non-market economies, “Commerce generally
selects, to the extent practicable, surrogate values that
are publicly available, are product-specific, reflect a broad
market average, and are contemporaneous with the
period of review.”) (emphasis added); Home Meridian Int’l,
Inc. v. United States, 772 F.3d 1289, 1296 (Fed. Cir. 2014)
(“Commerce gave considerable weight to contemporaneity,
as the Court of International Trade recognized Commerce
often does when comparing contemporaneous surrogate
values with non-contemporaneous market economy pur-
chases.”); Ad Hoc Shrimp Trade Action Comm. v. United
States, 618 F.3d 1316, 1322 (Fed. Cir. 2010) (Commerce
argued that certain survey data was the best available
because it presented “a broad market average, specific to
the input in question, exactly contemporaneous with the
period of review.”) (emphasis added) (alterations omitted).
11 Commerce appears to suggest that it is somehow
less important to use contemporaneous data in adminis-
trative reviews than in investigations because in adminis-
trative reviews, unlike investigations, prior period data is
ALBEMARLE CORPORATION v. US 23
In light of this established doctrine, it is not open to
Commerce to argue that prior review data is reliable
simply because it is “temporally proximate.” Br. of United
States at 13, 25. The government’s rationale contravenes
this fundamental premise of periodic administrative
reviews that each “administrative review is a separate
exercise of Commerce’s authority that allows for different
conclusions based on different facts in the record.” Qing-
dao, 766 F.3d at 1387. That the prior rates were near in
time cannot in and of itself justify their use in a subse-
quent review.
To be sure, there are at least two circumstances
where use of data from a prior period may be reasonable.
But neither prevails here. First, there are situations
where there is evidence that the overall market and the
dumping margins have not changed from period to period.
Thus in Atar S.R.L. v. United States, we upheld Com-
merce’s use of surrogate data from a prior review period
in calculating an exporter’s constructed value profit cap
because the record demonstrated that the market had not
meaningfully changed between periods. 730 F.3d 1320,
1327 (Fed. Cir. 2013). But that is not the case here. This
is not a situation in which there was any consistency with
respect to the dumping margins of the individually exam-
ined respondents throughout the reviews. For both
parties that were individually examined in more than one
review here, the numbers demonstrate a significant
decline in dumping margins. For example, Jacobi’s mar-
gin decreased from 61.95% in the initial investigation to
18.19% in the first review, and then again from $0.11/kg
in the second review to $0.00/kg in the third. CCT’s
available. See Memorandum, at 5. But the availability of
prior information provides no basis for using non-
contemporaneous data in each administrative review.
24 ALBEMARLE CORPORATION v. US
margin also significantly decreased from 69.54% in the
initial investigation to 14.51% in the first review, and
then again to a de minimis margin in the third review.
There was also a significant decrease in the financial
ratios used in calculating the normal values between the
second and third reviews, which, all other things being
equal, suggests a decline in overall dumping. Thus if
anything, the history here is one of generally declining
dumping margins, and Commerce had no reason to be-
lieve that Huahui’s margin would not have similarly
declined.
Second, as the government points out, in the Adverse
Facts Available (“AFA”) context, where Commerce is
allowed to consider deterrence as a factor, 12 we have
upheld Commerce’s use of data from a previous adminis-
trative review. We have explained that when an exporter
is not cooperating, “Commerce is permitted to use a
‘common sense inference that the highest prior [dumping]
margin is the most probative evidence of current mar-
gins.’” KYD, Inc. v. United States, 607 F.3d 760, 766 (Fed.
Cir. 2010) (quoting Rhone Poulenc, 899 F.2d at 1190). In
other words, Commerce may presume that “a prior dump-
ing margin imposed against an exporter in an earlier
administrative review continues to be valid if the exporter
fails to cooperate in a subsequent administrative review.”
Id. at 767; see also Ta Chen Stainless Steel Pipe, Inc. v.
United States, 298 F.3d 1330, 1339–40 (Fed. Cir. 2002).
We have upheld this presumption because “if it were not
so, the [exporter], knowing of the rule, would have pro-
12 As Nan Ya makes clear, Commerce has greater
latitude in determining dumping margins when dealing
with AFA determinations, because other considerations
such as deterrence appropriately play a role. See 810 F.3d
at 1348.
ALBEMARLE CORPORATION v. US 25
duced current information showing the margins to be
less.” KYD, 607 F.3d at 766 (emphasis in original).
Commerce is thus permitted to infer from the exporter’s
lack of cooperation that its dumping has not decreased
since the previous review. But the current situation is
quite different.
Huahui is not a non-cooperating party. To the contra-
ry, Huahui specifically requested leave to be individually
examined as a voluntary respondent under 19 U.S.C.
§ 1677m(a), or alternatively to submit additional supple-
mentary data, but Commerce denied both requests. “A
presumption used to encourage some companies to submit
more accurate information may not reasonably be trans-
posed onto companies which are expressly prevented from
submitting more accurate information.” Amanda Foods,
714 F. Supp. 2d at 1294.
VI
Nonetheless, the government argues that Commerce’s
reliance on data from the previous period was reasonable
as to Huahui for two additional reasons.
First, the government argues that Commerce’s meth-
od was reasonable in light of Huahui’s “history of dump-
ing” over the course of the administrative proceedings
here. Br. of United States at 24. While evidence of dump-
ing from previous administrative reviews is relevant and
may inform Commerce’s methodology, in itself it is not
sufficient to demonstrate that Huahui’s dumping contin-
ued, let alone that it continued at the same rate.
Second, the government argues that it was reasonable
to carry over Huahui’s old rate because there were no
data on record specific to Huahui in the third review. As
we described earlier, Commerce has significant authority
to make administrative decisions regarding the allocation
of its own limited resources. See, e.g., Torrington Co. v.
26 ALBEMARLE CORPORATION v. US
United States, 68 F.3d 1347, 1351 (Fed. Cir. 1995). But as
we have explained, Commerce may not justify “the ab-
sence of evidence by invoking procedural difficulties that
were at least in part a creature of its own making.”
Bestpak, 716 F.3d at 1378. It was unreasonable in this
case for Commerce to choose to limit its review to the two
largest volume exporters, refuse to collect additional data
from Huahui, and then draw inferences adverse to
Huahui based on the lack of data available in the record.
See Albemarle I, 931 F. Supp. 2d at 1293 (“The available
data pertaining to the [period of review] for the third
review were limited by [Commerce’s] decision to individu-
ally examine only two mandatory respondents. . . . Com-
merce made this determination despite its general
statutory obligation to examine all respondents for which
a review was requested.”).
While it is clear that 19 U.S.C. § 1677f-1 does not re-
quire Commerce to calculate individual margins for every
known exporter in all instances, it is equally clear that
Commerce has at its disposal broad authority to gather
information, see 19 U.S.C. §§ 1677f-1(a), (b); 1675(a),
including from separate respondents. On at least one
prior occasion, Commerce has reopened the administra-
tive record and collected additional information from
separate respondents when all individually examined
respondents were assigned de minimis margins. See
Amanda Foods (Vietnam) Ltd. v. United States, 774 F.
Supp. 2d 1286, 1289–90 (Ct. Int’l Trade 2011). When it
did, it found that the separate respondents, like the
individually examined respondents, were not dumping.
See id.
The availability of updated information from Huahui
and its request to submit such information here suggest
that simply applying the old rate in the third period of
review was not reasonable. Commerce had available
additional quantity and value data, which would not have
ALBEMARLE CORPORATION v. US 27
required elaborate antidumping calculations, but rather
could have served as a basis for Commerce to make ap-
proximate comparisons of Huahui’s export price. See, e.g.,
Amanda Foods, 774 F. Supp. 2d at 1289–90, n.8. What is
more, as Commerce acknowledged at argument, Com-
merce already had at least partial data specific to
Huahui’s factors of production on record because Huahui
was a supplier to Jacobi, and Huahui’s information had
already been collected as part of Jacobi’s individual exam-
inations. See Oral Arg. at 12:24–12:52. Commerce had at
least partial information regarding Huahui’s contempora-
neous normal value, and the ability to gather information
as to U.S. sales price.
To be clear, we are not suggesting that Commerce was
required to either individually examine Huahui or assign
it a de minimis margin. Rather, what was necessary was
some evidence, for example, by a sampling process, that
Huahui’s earlier data continued to be reasonably reflec-
tive of its current practice. Far from suggesting that
Huahui’s old data would continue to be reasonably reflec-
tive here, the current record suggests that normal values
decreased and dumping margins declined between the
second and third reviews generally. It was unreasonable
under these circumstances for Commerce to reassign
Huahui in the third review its rate calculated during the
second review rather than take the average of the de
minimis margins assigned to Jacobi and CCT.
VII
Accordingly, we affirm the decision of the CIT with
respect to Cherishmet and Shanxi, and reverse with
respect to Huahui. We hold that Commerce could not on
this record utilize data from the previous review. Rather,
Commerce, having declined to collect additional infor-
mation, was required to follow the “expected method” of
utilizing the de minimis margins of the individually
28 ALBEMARLE CORPORATION v. US
examined respondents from the contemporaneous period.
The case is remanded to the CIT so that it may issue
appropriate instructions to Commerce.
AFFIRMED-IN-PART, REVERSED-IN-PART, AND
REMANDED-IN-PART
COSTS
Costs to Cherishmet, Beijing Pacific Activated Carbon
Products, Shanxi, Albemarle, and Huahui.