Slater Steels Corp. v. United States , 29 Ct. Int'l Trade 200 ( 2005 )


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  •                                         Slip Op. 05-23
    UNITED STATES COURT OF INTERNATIONAL TRADE
    Before: Judge Judith M. Barzilay
    ____________________________________
    Slater Steels Corporation, et al.,   :
    Plaintiffs,                :
    v.                                   :
    United States,                              :
    Defendant.            :
    ____________________________________                       Consol. Ct. No. 02-00551
    ____________________________________
    :
    Viraj Group,
    :
    Plaintiff,
    :
    v.
    :
    United States,
    :
    Defendants,
    and                                  :
    Slater Steels Corporation, et al.,         :
    Defendant-Intervenors.
    ____________________________________:
    [Case remanded to the United States Department of Commerce.]
    Decided: February 17, 2005
    Collier Shannon Scott, PLLC, (Robin H. Gilbert), for Plaintiffs and Defendant-
    Intervenors Slater Steels Corp., et al.
    John M. Gloninger and William H. Crow II, Economic Consultants for Plaintiffs and
    Defendant-Intervenors.
    Miller & Chevalier Chartered, (Peter Koenig), for Plaintiff Viraj Group.
    Peter D. Keisler, Assistant Attorney General, United States Department of Justice, David
    Consol. Ct. No. 02-00551                                                                     Page 2
    M. Cohen, Director, Commercial Litigation Branch, Civil Division, (Jeanne E. Davidson),
    Deputy Director, (Stephen C. Tosini), Attorney, Commercial Litigation Branch, Civil Division,
    Christine J. Sohar, Office of the Chief Counsel for Import Administration, United States
    Department of Commerce, of counsel, for Defendant.
    OPINION
    BARZILAY, JUDGE:
    INTRODUCTION
    The court has twice remanded this case, directing Defendant, the United States
    Department of Commerce (“The Department,” “Commerce” or “government”), to explain its
    interpretation and application of 
    19 C.F.R. § 351.401
    (f) (2000)1 in collapsing three companies of
    the Viraj Group, an Indian importer. See Slater Steels Corp. v. United States, 27 CIT __, 
    279 F. Supp. 2d 1370
     (2003) (“Slater I”); Slater Steels Corp. v. United States, Slip Op. 04-22, 28 CIT
    __, 
    316 F. Supp. 2d 1368
     (2004) (“Slater II”). Commerce timely filed its Final Results of
    Redetermination (“Remand Results II”). Following the filing of Remand Results II, Plaintiffs
    requested that the court consider and apply its recent decision in Carpenter Tech. Corp. v. United
    States, Slip Op. 04-103 (Aquilino, Judge) (Aug. 16, 2004) (“Carpenter”), a related litigation
    1
    The regulation provides:
    (f) Treatment of affiliated producers in antidumping proceedings.
    (1) In general. In an antidumping proceeding under this part, the Secretary will
    treat two or more affiliated producers as a single entity where those producers have
    production facilities for similar or identical products that would not require
    substantial retooling of either facility in order to restructure manufacturing
    priorities and the Secretary concludes that there is a significant potential for the
    manipulation of price and production.
    
    19 C.F.R. § 351.401
    (f)(1) (emphasis added).
    Consol. Ct. No. 02-00551                                                                      Page 3
    concerning the same companies of the Viraj Group, but addressing a challenge to a different
    period of review and involving different merchandise – stainless steel wire rod. Finding the
    Carpenter analysis persuasive, the court instructed Commerce to indicate what factual changes
    had occurred prior to the review at issue in this case, such that its decision to collapse the Viraj
    Group companies should not be remanded as it was in Carpenter. Defendant has submitted its
    answer to the court’s inquiry, see Mem. in Response to the Court’s Letter, Nov. 12, 2004 (“Def.’s
    Response Mem.”), and Plaintiffs and Defendant-Intervenors have submitted their response, see
    Pls.’s Reply to Def.’s Mem. in Response to the Court’s Letter, Dec. 2, 2004 (“Pls. Reply”).2
    BACKGROUND
    In this consolidated action, Plaintiffs and Defendant-Intervenors, certain domestic
    companies, challenge Commerce’s administrative decision to collapse the affiliated companies of
    the Viraj Group for the purpose of calculating a dumping margin against the imports of certain
    subject merchandise entered during the period of review (“POR”) from February 1, 2000 through
    January 31, 2001 (“the 2000-2001 review”). Commerce determined to collapse the following
    affiliated companies of the Viraj Group: Viraj Alloys, Ltd. (“VAL”), Viraj Impoexpo, Ltd.
    (“VIL”), and Viraj Forgings, Ltd. (“VFL”). See Final Results of Antidumping Duty
    Administrative Review, 
    67 Fed. Reg. 45,956
     (July 11, 2002), amended by 
    67 Fed. Reg. 53,336
    (Aug. 15, 2002) (“Final Results”); Issues and Decision Memorandum for the Final Results of the
    Administrative Review of Stainless Steel Bar from India (July 5, 2002) (“Decision Mem.”).
    Commerce concluded that VAL, VIL, and VFL met the collapsing requirements of 
    19 C.F.R. § 2
    Viraj Group did not submit a response to the court’s letter.
    Consol. Ct. No. 02-00551                                                                    Page 4
    351.401(f), finding that “VAL and VIL can produce subject merchandise3 (i.e., similar or
    identical products) and can continue to do so, independently or under existing leasing
    agreements, without substantial retooling of their production facilities.” Decision Mem., cmt. 1.
    Commerce also found “a significant potential for the manipulation of price and production
    among VIL, VAL, and VFL.” 
    Id.
     As a collapsed entity, the Viraj Group received a de minimis
    dumping margin in the Final Results. Plaintiffs and Defendant-Intervenors, Slater Steels
    Corporation, Carpenter Technology Corporation, Electralloy Corporation, and Crucible Specialty
    Metals Division of Crucible Materials Corporation4, challenged this determination as a
    misapplication of the collapsing regulation before the court.
    In Slater I and Slater II, the court held that Commerce’s decision to collapse the Viraj
    Group was not supported by substantial evidence on the record, remanding the Department’s
    final results on both occasions.5 Following Commerce’s filing of Remand Results II, Plaintiffs
    requested that the court consider Carpenter, a related litigation concerning the same companies
    of the Viraj Group, but addressing a challenge to a different POR (from 1999 to 2000) and
    involving different merchandise – stainless steel wire rod. See Slip Op. 04-103. In Carpenter,
    the Court reviewed whether Commerce’s decision to collapse the Viraj Group was supported by
    3
    The subject merchandise in the POR at issue in this case is stainless steel bar, which
    included “articles of stainless steel in straight lengths that have been either hot-rolled, forged,
    turned, cold-drawn, cold-rolled or otherwise cold-finished, or ground, having a uniform solid
    cross section along their whole length in the shape of circles, segments of circles, ovals,
    rectangles (including squares), triangles, hexagons, octagons, or other polygons.” Final Results,
    67 Fed. Reg. at 45,957.
    4
    In this consolidated action, these companies appear as both Plaintiffs and Defendant-
    Intervenors and will be referred to in this opinion as “Plaintiffs.”
    5
    Familiarity with Slater I, Slater II and Carpenter is presumed.
    Consol. Ct. No. 02-00551                                                                         Page 5
    substantial evidence where Commerce, at a prior review (from 1997 to 1998)6 involving the same
    subject merchandise, did not collapse the same companies. See id. at 9-10. Notably, that prior
    review was affirmed on appeal in Viraj I. See Viraj I, 25 CIT at 1031-32 (holding that
    Commerce’s decision to value steel billets purchased by VIL from VAL based on the inter-
    company transfer price (paid by VIL to VAL) was supported by substantial evidence). The
    Carpenter decision relied on its finding in Viraj I that VAL and VIL had production facilities
    sufficiently different as to require substantial retooling of either facility in order to restructure
    manufacturing priorities. See Carpenter, Slip Op. 04-103, at 9. The Court found that the same
    difference between production facilities remained during the period under its review, even
    though Commerce was able to show that in the previous period of review VAL did not produce
    subject merchandise and VFL neither produced nor exported the merchandise. Id. The Court
    held that these changes were insufficient to support Commerce’s reversal of its initial decision
    not to collapse, and the Court remanded to the agency for calculation and imposition of
    individual antidumping-duty margin upon VIL and VFL. Id. at 10.
    In light of Carpenter, the court directed Commerce to indicate what, if any, factual
    changes have occurred prior to the period of review at issue in this action, such that its decision
    to collapse the Viraj Group companies should not be remanded as it was in Carpenter.
    Defendant filed its Memorandum in Response to Court’s Letter and Plaintiffs filed their Reply to
    Defendant’s Memorandum.
    6
    Stainless Steel Wire Rod from India; Final Results of Antidumping Duty Administrative
    Review, 65 Red. Reg. 31,302 (May 17, 2000).
    Consol. Ct. No. 02-00551                                                                    Page 6
    STANDARD OF REVIEW
    The court has jurisdiction over this matter pursuant to 
    28 U.S.C. § 1581
    (c) (2004). The
    court “must sustain ‘any determination, finding or conclusion found’ by Commerce unless it is
    ‘unsupported by substantial evidence on the record, or otherwise not in accordance with the
    law.’” Fujitsu General Ltd. v. United States, 
    88 F.3d 1034
    , 1038 (Fed. Cir. 1996) (quoting 19
    U.S.C. § 1516a(b)(1)(B)). “In applying this standard, the court affirms [the agency's] factual
    determinations so long as they are reasonable and supported by the record as a whole, even if
    there is some evidence that detracts from the agency’s conclusions.” Olympia Indus., Inc. v.
    United States, 
    22 CIT 387
    , 389, 
    7 F. Supp. 2d 997
    , 1000 (1998) (citing Atlantic Sugar, Ltd. v.
    United States, 
    744 F.2d 1556
    , 1563 (Fed. Cir. 1984)). The court may not re-weigh the evidence
    or substitute its own judgment for that of the agency. See Granges Metallverken AB v. United
    States, 
    13 CIT 471
    , 474, 
    716 F. Supp. 17
    , 21 (1989). Additionally, “absent a showing to the
    contrary, [the agency] is presumed to have considered all of the evidence in the record.” Nat'l
    Ass'n of Mirror Mfrs. v. United States, 
    12 CIT 771
    , 779, 
    696 F. Supp. 642
    , 648 (1988).
    DISCUSSION
    I.     History of Viraj’s Participation in the Administrative Reviews
    VIL first participated in an antidumping duty review as a new shipper of stainless steel
    bar in 1995. See, e.g., Notice of Initiation of New Shipper Antidumping Duty Administrative
    Review, 
    60 Fed. Reg. 58,598
     (Nov. 28, 1995) (concerning the POR from February 1, 1995
    through July 31, 1995) (hereinafter “the new shipper review”). The new shipper review included
    the following information about the Viraj Group: (1) VAL possessed production facilities to
    produce stainless steel billets/rounds; (2) VIL possessed production facilities to produce bright
    Consol. Ct. No. 02-00551                                                                     Page 7
    bar; and (3) VFL did not produce stainless steel bar during the period of review. See VIL’s
    Responses to the Department of Commerce’s Questionnaire for ARP 2/1/95-7/31/95 (Public
    Version) (hereinafter “New Shipper Questionnaire”). VIL specified that its own manufacturing
    facilities included “bar manufacturing unit facilities for solution annealing, pickling, drawing,
    turning, grinding, cutting, polishing and packing.” 
    Id. at 3
    . VIL’s response described VAL as “a
    steel manufacturing unit, including of stainless steel rounds and billets.” 
    Id. at 3
    . VIL stated that
    “[t]he raw material used for the manufacture of bars [was] being received from [its] affiliated
    sister company [VAL].” 
    Id. at 26
    . The input materials from VAL were identified as “stainless
    steel bars” and “stainless steel wire rods.” 
    Id. at 114-115
    . VIL noted that VFL produced and
    sold stainless steel flanges and no other product. 
    Id. at 4
    . VIL explained that the cost for input
    raw materials obtained domestically was based on the “direct material cost of purchase plus
    transportation costs.” 
    Id. at 29
    . Furthermore, the petitioners in the new shipper review asked
    Commerce to consider VAL as a respondent in the review pinpointing VIL’s reported purchases
    of stainless steel bars from VAL. See Letter to the Secretary of Commerce from Viraj Impoexpo
    Ltd, Mar. 27, 1996.
    In the 1998-1999 administrative review that followed the first shipper review, VIL’s
    responses identified the same principal facts:
    1) VAL produces raw materials (i.e., stainless steel bars for stainless steel bright bars,
    VIL’s Questionnaire Responses, June 4, 1999, at 8 (“1998-1999 Questionnaire”);
    2) VIL manufactures stainless steel bright bars, 
    id. at 118
    , purchasing hot rolled bars from
    VAL, VIL’s Responses to Supplemental Questionnaire, Feb. 10, 2000, para. [15];
    3) VFL manufactures stainless steel pipe fittings, i.e. flanges, 1998-1999 Questionnaire,
    Consol. Ct. No. 02-00551                                                                       Page 8
    at 118.
    During the 1998-1999 review, VIL initially reported only its sales of bright bar to the
    United States. Stainless Steel Bar from India; Preliminary Results of Antidumping Duty
    Administrative Review and New Shipper Review and Partial Recession of Administrative Review,
    
    65 Fed. Reg. 12209
    , at 12210-11 (Mar. 8, 2000). Upon Commerce’s request to update its
    database, VIL reported that its affiliate VAL also had home market sales of stainless steel bar,
    which were sales of black bar, during the period of review. Def. Response Mem., at 7 (citing 65
    Fed. Reg. at 12210-11.) The narrative description of this information was submitted after an
    administrative deadline and was therefore rejected by Commerce. See 65 Fed. Reg. at 12210. As
    a result, Commerce found that all the information submitted by VIL was incomplete and
    preliminarily decided to apply adverse facts available assigning a margin of 21.02 to VIL. Id.
    Ultimately, however, Commerce revised its decision and applied “partial facts” submitted by VIL
    to calculate VIL’s margin. See Stainless Steel Bar from India; Final Results of Antidumping
    Duty Administrative Review and New Shipper Review and Partial Rescission of Administrative
    Review, 
    65 Fed. Reg. 48965
    , 48966-67 (Aug. 10, 2000) (calculating normal value based on the
    company’s sales to a third country market as facts available); see also Issues and Decision
    Memorandum for the Administrative Review and New Shipper Review of the Antidumping Duty
    Order on Stainless Steel Bar from India February 1, 1998 through January 31, 1999, cmt. 4
    (explaining that VIL’s “responses are sufficiently complete to serve as a reliable basis for
    reaching a determination without creating undue difficulties” and deciding to use facts otherwise
    available only “with respect to choosing the appropriate comparison market as a basis for normal
    value and when determining margins for U.S. sales that do not have identical matches.”).
    Consol. Ct. No. 02-00551                                                                      Page 9
    II.    The Current Administrative Review
    In light of the Carpenter decision, the court’s inquiry is whether Commerce’s decision to
    collapse the Viraj Group companies, VAL, VIL and VFL for the POR from February 1, 2000 to
    January 31, 2001, is consistent with its previous determinations, in which Commerce did not
    collapse the same companies involving the entry of the same subject merchandise.
    Consistency is a cornerstone of administrative action. See, e.g., Skidmore v. Swift & Co.,
    
    323 U.S. 134
    , 140, 
    65 S. Ct. 161
    , 
    89 L. Ed. 124
     (1944) (The level of deference afforded an
    agency’s action “will depend upon . . . its consistency with earlier and later pronouncements.”)
    The Court has recognized the “importance of consistency across [antidumping] reviews [as]
    inferred from the rationale outlined in the promulgating regulations pursuant to the Uruguay
    Round Agreements Act.” See Hynix Semiconductors, Inc. v. United States, 27 CIT __, __, 
    248 F. Supp. 2d 1297
    , 1304 (2003). Commerce may reach different determinations in separate
    administrative reviews, but it must either employ the same methodology or give reasons for
    changing its practice. Cinsa, S.A. de C.V. v. United States, 
    21 CIT 341
    , 349, 
    966 F. Supp. 1230
    ,
    1238 (1997) (involving a challenge to Commerce’s method of calculation of cost of production
    and constructed value). “It is ‘a general rule that an agency must either conform itself to its prior
    decisions or explain the reasons for its departure . . . .’” Hussey Cooper, Ltd. v. United States, 
    17 CIT 993
    , 997, 
    834 F. Supp. 413
    , 418 (1993) (citations omitted). When Commerce departs from
    its prior decision, it must provide a reasoned explanation for its departure in order for the court to
    judge the consistency of the administrative action. 
    Id. at 998
    , 834 F. Supp. at 419; see RHP
    Bearings Ltd. v. United States, 
    24 CIT 1218
    , 
    120 F. Supp. 2d 1116
    , 1124 (2000) aff’d in part and
    vacated in part, 
    288 F. 3d 1334
    , 1337 (Fed. Cir. 2002) (vacating the CIT decision sustaining
    Consol. Ct. No. 02-00551                                                                      Page 10
    Commerce’s calculation of the profit component of constructed value and remanding the case for
    further proceedings) (“Commerce is under an obligation to explain the apparent inconsistency of
    its approach in [the present] review and the two preceding reviews.”)
    The period of review at issue in this action is not the first instance where Commerce had
    the information to consider the applicability of the collapsing regulation to the Viraj Group’s
    stainless steel bar production. Commerce claims that VIL was only reviewed once before the
    review at issue in this case and that collapsing the Viraj Group companies was not an issue
    previously. Def.’s Response Mem., at 7. Notably, Commerce claims that during the 2000-2001
    review, it established for the first time that:
    (1) VAL possessed production facilities to produce stainless steel bar (black bar)
    that was sold in the home market during the period of review; (2) VIL possessed
    production facilities to produce bright bar that was sold in the United States
    market during the period of review; and (3) VFL had production facilities that
    were similar to VIL’s production facilities that could be used to produce stainless
    steel bar, but VFL itself did not produce stainless steel bar during the period of
    review.
    Id. at 8. This contention is misleading. In its Final Determination, Remand Results I, and
    Remand Results II, Commerce focused on the following facts as forming the basis of its decision
    to collapse: (1) VAL has production facilities for making steel billets and black bar7; (2) VIL has
    the capabilities to further process the black bar into bright bar (cold-finished bar), but VIL cannot
    produce black bar on its own; (3) VFL’s primary production operation relates to producing
    stainless steel flanges, and VFL’s production facilities are similar to those of VIL, but not VAL.
    7
    These bar production facilities are the production facilities that Commerce found to
    overlap with VIL and VFL’s production operations “because they are related to bar production
    and not billet making.” Remand Results II, at 18.
    Consol. Ct. No. 02-00551                                                                    Page 11
    See e.g., Remand Results II, at 12-13. The same principal facts could be gleaned from the
    information supplied by VIL in the previous two administrative reviews. See infra Part I, History
    of Viraj’s Participation in the Administrative Reviews. Thus, Commerce had the same principal
    information during the previous administrative reviews that established that the production
    facilities of each Viraj Group company possessed the capability to produce stainless steel bar.
    The additional findings identified by Commerce in the 2000-2001 review are that VAL sold
    black bar in the home market and that VFL had production facilities that were similar to VIL’s
    production facilities that could be used to produce stainless steel bar. Commerce did not explain
    how these additional findings were material or decisive in establishing a sufficient basis for
    collapsing that did not exist during the previous administrative reviews.
    Furthermore, as argued by Plaintiffs, Commerce made an affirmative decision not to
    collapse VAL, VIL, and VFL during the first shipper review and the 1998-1999 review. Pls.
    Reply, at 5-6. Thus, Commerce’s acceptance of the cost of production data for the subject
    merchandise based on the price VAL charged VIL for hot-rolled stainless steel bar reveals the
    agency’s decision to treat VAL and VIL as separate entities and to accept the prices paid by VIL
    to VAL for raw materials as an accurate representation of costs incurred in producing the subject
    merchandise. See, e.g., New Shipper Questionnaire, at 29. In other words, Commerce’s
    treatment of VAL as a supplier of raw materials independent of VIL indicated that Commerce at
    that time affirmatively chose not to collapse VAL and VIL.
    Aside from a more developed record of its factual findings, Commerce did not present
    evidence of material factual changes relevant to the collapsing issue since the 1998-1999 review.
    Whereas the principal facts have remained the same since the previous two administrative
    Consol. Ct. No. 02-00551                                                                       Page 12
    reviews, Commerce’s analysis of the Viraj Group companies in the 2000-2001 review differed
    from its previous determinations. When the Department collapsed the companies in the 2000-
    2001 review, it departed from its previous application of the antidumping regulations. Although
    Commerce provided some explanation for its different determination, it is not adequate to support
    the imposition of an inconsistent result in this case. Commerce argues that the current review
    differs from the 1998-1999 review in that Commerce considered the issue of collapsing the Viraj
    Group companies from the beginning of this review since VIL reported sales information for the
    entire Viraj Group. Def. Response Mem., at 8. Commerce buttresses its argument pinpointing
    that in the 1998-1999 review Commerce applied only partial facts available to Viraj’s margin
    calculation because VIL failed to timely submit the narrative description of the home market sales
    of black bar sold by VAL during that period of review. Id. at 7. Commerce, however, failed to
    explain how VIL’s reporting of sales information for the entire Viraj Group was necessary for
    Commerce’s consideration of collapsing in the current review. Likewise, Commerce failed to
    explain how the lack of a narrative description regarding the home market sales of black bar
    precluded consideration of the collapsing issue. Without an adequate explanation, Commerce
    cannot reverse its prior practice. See, e.g., Cinsa, S.A. de C.V., 21 CIT at 349. Therefore,
    Commerce’s departure from its prior decision not to collapse VAL, VIL and VFL is not
    warranted in this case.
    It should be noted that this case is distinguishable from Carpenter because the Carpenter
    decision was informed by the Court’s previous holding affirming Commerce’s determination not
    to collapse the Viraj Group companies in an earlier period of review. This distinction, however,
    does not vitiate the essential basis for the court’s decision in this case: that Commerce may not
    Consol. Ct. No. 02-00551                                                                        Page 13
    depart from its prior practice without a change in material facts or a reasoned explanation for its
    departure. Cf. Carpenter, Slip. Op. 04-103, at 9. While there is no preceding CIT decision
    involving the collapsing issue in the 1998-1999 review, the record provides sufficient information
    to distill the principal facts that informed Commerce’s decision not to collapse the companies in
    the previous administrative reviews.
    This conclusion obviates the need to address the merits of Commerce’s Remand Results
    II, especially since they do not bring to light significant facts or findings establishing a basis for a
    change in Commerce’s approach in this case. It should be noted, however, that the government’s
    latest explanation of its methodology further supports the above conclusion. Collapsing involves
    treating a group of affiliated producers as a single entity for the calculation of dumping margins.
    See 
    19 U.S.C. § 1677
    (33) (2004). In pertinent part, the collapsing regulation requires Commerce
    to determine that the companies “have production facilities for similar or identical products that
    would not require substantial retooling of either facility in order to restructure manufacturing
    priorities,” and that “there is a significant potential for the manipulation of price or production.”
    
    19 C.F.R. § 351.401
    (f)(1). Essentially, Commerce interprets the substantial retooling prong of
    this regulation as merely requiring a unilateral analysis of a potential shift in manufacturing
    priorities8 as long as there is a certain overlap in the production of similar or identical
    8
    In other words, Commerce explains that it is sufficient to determine whether VAL can
    produce bright bar without substantial retooling, but not necessary to also determine that VIL can
    produce stainless steel black bars. Remand Results II. In Slater II, the court instructed
    Commerce to explain why it need not examine the production facilities of each company
    involved in collapsing and why it need not address the possibility of shifting production among
    companies in either direction. Slip Op. 04-22, at 11.
    Consol. Ct. No. 02-00551                                                                      Page 14
    merchandise by the companies.9 Remand Results II, at 10-13. Thus, Commerce argues that the
    Viraj Group companies have production facilities for production of stainless steel bar, and that
    there is an overlap in their production of stainless steel bar as their production facilities “converge
    with respect to the [stainless steel bar].” See Remand Results II, at 10-11. Commerce, however,
    does not provide an explanation regarding its method of determining the sufficiency of such an
    overlap in the production of similar or identical merchandise, and it does not appear from the
    record that a greater overlap sprang into existence in the 2000-2001 review since the first shipper
    review and the 1998-1999 review. The court notes that the government had an opportunity to
    demonstrate any factual changes in the production overlap from the prior administrative review,
    and that the government instead insisted that the 2000-2001 review was the first instance where
    Commerce had enough information to make its decision to collapse the companies.
    9
    The court also notes inconsistency in Commerce’s interpretation and application of 
    19 C.F.R. § 351.401
    (f)(1). While Commerce contends that the unilateral analysis of the substantial
    retooling prong is a reasonable interpretation of its regulation, in another stainless steel bar case,
    for example, involving the German companies EWK and KEP, Commerce noted the companies
    had production facilities that could produce similar and identical merchandise in a certain limited
    range of sizes without requiring substantial retooling. Final Determination of Sales at Less Than
    Fair Value: Stainless Steel Bar from Germany, 
    67 Fed. Reg. 3159
     (Jan. 23, 2002). In addition,
    Commerce took into account that either of the two companies could outsource a portion of the
    production process to the other company for some sizes outside that limited range. 
    Id.
    Nonetheless, Commerce concluded that the limited overlap of the companies’ production
    capabilities for identical products and “the significant impediments to expanding this overlap, in
    concert with . . . the lack of any significant intertwining of the operations of the two firms,” were
    insufficient reasons to collapse the companies. 
    Id.
     This reasoning deviates from the
    Department’s interpretation that “its regulation does not require that each affiliated company
    produce the products that the other company produces before finding the potential for
    manipulation of shifting production priorities.” Remand Results II, at 15.
    Consol. Ct. No. 02-00551                                                                    Page 15
    CONCLUSION
    Commerce cannot, without an adequate explanation or a material change in facts, impose
    an inconsistent result. Commerce has neither demonstrated how certain additional findings
    during the 2000-2001 review were material or decisive to its determination to collapse nor
    furnished adequate explanation for departing from its previous decision not to collapse VAL, VIL
    and VFL to warrant its decision to collapse the Viraj Group companies in the 2000-2001 review.
    In this case, Commerce’s reversal of its prior practice is inconsistent with core administrative law
    principles. Consequently, Plaintiffs’ motion for judgment must be granted, and this matter is
    remanded to Commerce for calculation and imposition of individual antidumping margins upon
    VAL, VIL and VFL. However, the court notes that Plaintiffs in this case have not objected to the
    potential collapse of VIL and VFL, “as these companies have similar functions for finishing VAL
    inputs.” Pls. Reply, at 9 n.4. Therefore, on remand, Commerce may consider collapsing VIL and
    VFL in accordance with the court’s opinions in Slater I and Slater II.
    February 17, 2005                                      /s/ Judith M. Barzilay
    Dated : _______________________                              _________________________
    New York, New York                                       Judith M. Barzilay