Commerce Didn't Have Requisite Industry Support Before AD/CVD Cases, Importer Tells CAFC

The Commerce Department violated the law when it initiated an antidumping and countervailing duty investigation into quartz surface products from India since it didn't have the requisite industry support, importer M S International told the U.S. Court of Appeals for the Federal Circuit in its Dec. 20 opening brief. Urging the appellate court to overturn a Court of International Trade decision that found that Commerce legally interpreted what constitutes a "producer" of QSPs, MSI argued that Commerce erred by excluding fabricators from the industry support calculation (Pokarna Engineered Stone Limited v. U.S., Fed. Cir. #22-1077).

Commerce requires that producers representing over 25% of domestic production back petitions for AD/CVD cases prior to initiation, but the statute is silent on the definition of "producers." MSI claimed, in its original complaint, that Commerce abused its discretion by excluding fabricators from its definition of "producers," for the sake of determining proper industry support to initiate the AD/CVD investigations.

The trade court had said that the Federal Circuit and CIT have previously ruled that Commerce is afforded Chevron deference in regard to how it determines which companies are "producers" of the merchandise in question. Commerce decided to use the "sufficient production-related activities" test, which employs a six-factor test to find if a company has enough production-related activities to quality as a domestic producer (see 2110080035). The court said that MSI failed to point to any basis on which the court could find that Commerce's interpretation of who is a producer is unreasonable.

At the Federal Circuit, MSI argued that Commerce was wrong to drop fabricators from the industry support determination since "fabricated QSP is part of both the domestic like product and the scope of the Investigations." MSI said that the statute lays out two clear exceptions as to when domestic like product producers should be barred from the standing calculation. "Here, Commerce did not invoke either exception but still proceeded to disregard the views of fabricators," the brief said. "Moreover, Commerce’s legal error is not excused by the absence of a statutory definition for the term 'producer,' given that Commerce acknowledges that fabricators are “producers,” a term with an unambiguous natural meaning. Given their production operations, fabricators have a clear 'stake' in the domestic industry consistent [with] this Court’s holding in Eurodif S.A. v. United States."

MSI also argued that even if the statute allows Commerce to apply the "sufficient production-related activities" test as the trade court spelled out, there isn't enough evidence to back excluding fabricators from the domestic industry. The views of 10,000 fabricators were ignored due to the "production-related activities" test. In the test, Commerce said that information given by the petitioner shows that the fabrication process requires limited equipment that isn't dedicated solely to QSPs, along with less capital investment and employees, among other things.

"This finding is unsupported by substantial evidence," MSI responded. "In particular, this finding fails to account for evidence detracting from the substantiality of the Petitioner’s claims, including the declarations of hundreds of fabricators -- producers of the domestic like product. Commerce accepted [the petitioner's] unsupported assertions without meaningfully engaging with evidence disproving the Petitions’ standing claims."