CIT Remands Vietnamese Catfish Exporter's Separate Rate Status in Suit on AD Review

In the review, the agency said that mandatory respondents NTSF and East Sea established independence from the Vietnamese government and qualified for separate AD rates. NTSF got a zero percent dumping margin, while East Sea got the $3.87 per kilogram adverse facts available rate for its failure to respond to Commerce's requests.

Exporter and plaintiff Green Farms Seafood Joint Stock Co. also demonstrated its independence from the Vietnamese state, though it received a simple average of the zero percent and $3.87 per kilogram rates for its own AD margin.

Green Farms challenged Commerce's conclusion that East Sea qualified for a separate AD rate on numerous grounds, including that the company failed to submit all the requested questionnaire responses. As a result, Commerce said its regulations are clear: the company isn't eligible for the separate rate. The agency justified its departure from its standard procedure on the basis that the Vietnam-wide rate is lower than the AFA rate and that the Statement of Administrative Action accompanying the Uruguay Round Agreements Act allows the use of AFA to ensure a party doesn't get a more favorable rate by not cooperating.

Baker found this to be a valid justification. "Complying with the SAA and preventing respondents from benefiting from a lack of cooperation are valid reasons for a change in practice, if that’s what happened here," he said.

Green Farms additionally claimed that East Sea's separate-rate certification was "deficient" and didn't include enough information to establish eligibility for a separate rate and that the agency disregarded comments from the petitioners on the deficiencies in the certification. Baker disagreed, saying "Commerce did not rely on the certification," given that it used Section A of the mandatory-respondent questionnaire with the material submitted in the certification to establish eligibility. In addition, Green Farms failed to include the petitioners' comments in its case brief, meaning the court had no need to address them.

Where Baker took issue with Commerce's finding that East Sea was eligible for a separate AD rate was in the agency's analysis, or lack thereof, regarding the factors relevant to the absence of de jure and de facto control. In its preliminary decision, Commerce made "conclusory" remarks regarding these factors, then did the same in its final results.

Baker said Commerce offered "no analysis of its own -- rather, it said that the Department 'continue[d] to find' that East Sea had established a right to a separate rate. But Commerce’s preliminary discussion was conclusory." The agency didn't show its work, which is an "indispensable" principle in administrative law, the opinion said.

Green Farms also challenged the methodology used to calculate its own AD rate, which amounted to a simple average of the zero percent and AFA rates assigned to NTSF and East Sea, respectively. While Baker acknowledged that the statute may allow such a methodology, it's still possible for it to be "unreasonable."

Commerce justified the ultimate rate for Green Farms, $1.94 per kilogram, due to its similarity to the exporter's cash deposit rate. The judge echoed Green Farms in noting that the cash deposit rate is "irrelevant," saying the point of the review process is to give the company a chance to update this rate with "newer and updated data," lest there be "no point in participating in" the review.

Baker said he "agrees that Commerce’s use of the cash deposit rate to justify Green Farms’s margin is “wholly circular and arbitrary.”

The court also sent back the use of India as the primary surrogate nation in calculating the rate for NTSF, saying the case is virtually identical to a separate CIT case on the previous review of the same AD order (see 2402270033). In that case, the court took umbrage that Commerce invited parties to submit information on countries at a "comparable" level of economic development to Vietnam but rejected data from Indonesia because that country wasn't at the "same level of economic development as Vietnam."

The agency "never considered whether Indonesia is at a comparable level," as claimed by the petitioners. "That omission invalidates the analysis because, as the court has explained, Commerce may not ignore Catfish Farmers’ evidence and argument," Baker held.

Robert LaFrankie, counsel for Green Farms, said that he was "glad to see that Judge Baker agreed that Commerce’s actions in using a harsh and punitive 'adverse' rate to calculate my client’s separate rate were unreasonable. My client cooperated fully in the proceeding, and yet Commerce used an adverse punitive AD rate to calculate my client’s AD rate. The Judge agreed this was unreasonable and he correctly instructed Commerce that the final AD rate assigned to my client must reflect 'economic reality.' We hope Commerce will adhere to this instruction in the remand."

(Green Farms Seafood Joint Stock Company v. U.S., Slip Op. 24-46, CIT # 22-00092, dated 04/17/24; Judge: M. Miller Baker; Attorneys: Robert LaFrankie of Crowell & Moring for plaintiff Green Farms Seafood Joint Stock Company; Brian Boynton for defendant U.S. government; Nazak Nikakhtar of Wiley for defendant-intervenor Catfish Farmers of America)

(Catfish Farmers of America v. U.S., Slip Op. 24-46, CIT # 22-00125, dated 04/17/24; Judge: M. Miller Baker; Attorneys: Nazak Nikakhtar of Wiley for plaintiff Catfish Farmers of America; Brian Boynton for defendant U.S. government; Robert Gosselink of Trade Pacific for defendant-intervenor NTSF Seafoods Joint Stock Company; Matthew McConkey of Mayer Brown for defendant-intervenor Nam Viet Corp.)