CIT Upholds Commerce's Surrogate Values, Use of Partial Neutral Facts Available in Solar Cell AD Review

The Court of International Trade in a Dec. 20 opinion made public Jan. 4 upheld the Commerce Department's remand results in a case involving the 2017-18 administrative review of the antidumping duty order on solar cells from China. In its remand results, Commerce changed how it determined surrogate values for silver paste, a solar cell input, while revising its use of adverse facts available, choosing to use partial neutral facts available. The agency stuck by its positions, however, on which surrogate values to use for backsheet and ethyl vinyl acetate (EVA). Judge Claire Kelly found these positions to be reasonable.

The case was brought by 21 plaintiffs, consolidated plaintiffs and plaintiff-intervenors, led by Risen Energy, one of the review's mandatory respondents, along with Trina Solar. In the court's first opinion on the matter, issued in April, Kelly remanded the surrogate values for silver paste, backsheet and EVA (see 2204120050).

Where the silver paste -- a solar cell input -- is concerned, the judge agreed with the plaintiffs' argument that the surrogate data for this input is aberrant and doesn't reflect the commercial reality of solar cell and module production in China, and that its Malaysian Harmonized Tariff Schedule classification is not specific to silver paste. On remand, Commerce added data to the record over the plaintiffs' preferred HTS subheading, then chose to value the silver paste using the subheading, 7106.92.00, which is more specific to the paste used by the respondents. No parties contested the switch, prompting Kelly to uphold the decision.

On the backsheet and EVA, Kelly initially ruled Commerce's decision to use the Malaysian data for these two inputs is arbitrary and departs from past agency practice without explanation. In the review, Commerce used Malaysian HTS subheading 3920.62.1000, which covers plates and sheets of polyethylene terephthalate, to value the backsheet, while it has historically used subheading 3920.62.9000, which covers PET not in the form of plates and sheets.

On remand, Commerce continued to defend its use of subheading 3920.62.1000, telling the court that the "central issue" is whether to value backsheets using the Malaysian HTS category for PET plates and sheets or the one covering non-plates and sheets. The agency put ASTM abstracts on the record to define the terms "plate," "sheet" and "film," showing that Risen's backsheets fit under sheet rather than film. Risen argued that the ATSM abstracts are not meant for this purpose but are guidelines for finding the thickness of plastic film. Commerce disagreed, saying the ASTM abstracts are the only definition of film on the record and must be used. Kelly sided with the government.

The "ASTM abstracts support Commerce’s analysis based on thickness, not flexibility," the judge said. "Although Risen provided marketing materials demonstrating that some companies in the solar power industry describe thicker backsheet as 'film,' these materials provide a competing definition at best; they do not rebut Commerce’s definition of sheet as plastic products 0.25 mm thick and greater, nor do they demonstrate that Commerce’s determination is unreasonable."

In the court's discussion of the valuation of EVA, Kelly added that the marketing materials the plaintiffs discuss at most give a competing definition of the terms "film" and "sheet," but ultimately fail to rebut Commerce's definition of sheet "as a plastic product 0.25 mm or greater in thickness or Commerce's finding that EVA meets the definition of sheet."

"The product my client purchased was 'film' yet based on a completely different standard in a different country, Commerce classified it as 'sheet,'" said Greg Menegaz, counsel for Risen. "So we are disappointed and considering our options."

Elsewhere in its remand results, Commerce revised its use of AFA to partial neutral facts available given that Risen and Trina put forth the maximum effort in the review. The agency concluded the companies did not have the leverage to get their unaffiliated suppliers to cooperate. "Specifically, Commerce uses Risen and Trina’s average reported consumption rates for each input as a substitute for the missing factor of production consumption rates to calculate their dumping margins," the opinion said. "Thus, Commerce’s determination on remand is consistent with the remand order, is supported by substantial evidence, and is in accordance with law."

(Risen Energy v. U.S., Slip Op. 22-148, CIT Consol. #20-03743, dated 12/20/22, Judge Claire Kelly. Attorneys: Gregory Menegaz of deKieffer & Horgan for plaintiff Risen; Jonathan Freed of Trade Pacific for consolidated plaintiffs led by Trina; Jeffrey Grimson of Mowry & Grimson for consolidated plaintiffs JA Solar Technology Yangzhou, Shanghai JA Solar Technology and JingAo Solar; Jonathan Stoel of Hogan Lovells for plaintiff-intervenors led by Shanghai BYD and Canadian Solar; Joshua Kurland for defendant U.S. government)