Taranto, Circuit Judge.
This case arises from the U.S. Department of Commerce's antidumping-duty investigation of multilayered wood flooring imports from the People's Republic of China. The appellants here are Chinese entities that Commerce found had demonstrated their independence from the Chinese government and so deserved a "separate" antidumping-duty rate, not the so-called China-wide rate that applies to entities that had not shown their independence from the Chinese government. Commerce did not individually investigate appellants to determine firm-specific dumping margins. Instead, it assigned them a rate that, though not specified numerically, was declared to be more than de minimis, even though it found zero or de minimis dumping margins for all three of the Chinese firms that it had individually investigated. The Court of International Trade affirmed that determination.
Appellants contend that they are entitled to a de minimis rate. After the Court of International Trade rendered its decision in this case, our court made clear that the "separate rate" method used by Commerce here is a departure from the congressionally approved "expected method" applicable when all of the individually investigated firms have a zero or de minimis rate, which is the case here, and that certain findings are necessary to justify such a departure. Albemarle Corp. & Subsidiaries v. United States, 821 F.3d 1345, 1348 (Fed. Cir. 2016). Under the "expected method," appellants would be entitled to a de minimis rate. Because Commerce did not make the findings needed to justify departing from the expected method, we vacate the Court of International Trade's judgment, and we remand.
In 2010, the Department of Commerce initiated an antidumping-duty investigation
Commerce deems China to be a non-market economy, and it presumes that each Chinese exporter and producer is state-controlled, and thus covered by a single China-wide antidumping-duty rate, but a firm may rebut the presumption. See Changzhou Wujin Fine Chem. Factory Co. v. United States, 701 F.3d 1367, 1370 (Fed. Cir. 2012). Here, Commerce determined that 74 firms established their independence from the Chinese government. See Multilayered Wood Flooring from the People's Republic of China: Final Determination of Sales at Less Than Fair Value, 76 Fed. Reg. 64,318, 64,321-22 (Dep't of Commerce Oct. 18, 2011). For those 74 firms — not individually investigated, but not covered by the China-wide rate — Commerce had to calculate a "separate rate."
Commerce published its Final Determination on October 18, 2011, finding that the subject merchandise was being sold at less than fair value (dumped) in the United States. Id. at 64,318. Commerce determined that one of the three mandatory respondents had a de minimis dumping margin, but it assigned margins of 3.98% and 2.63% to the other two mandatory respondents. See id. at 64,323. After a voluntary remand from the Court of International Trade, Commerce revised the mandatory respondents' dumping margins, finding all three to be zero or de minimis. J.A. 101941. Commerce calculated the "separate rate," not by simply using the zero/de minimis rates for the three mandatory respondents, but by averaging those three zero figures with the 25.62% rate it adopted as the China-wide rate — yielding a separate rate of 6.41%. J.A. 101942.
On review, the Court of International Trade affirmed the dumping margins for the mandatory respondents but remanded for further explanation of how the separate rate related to economic reality. Baroque Timber Indus. (Zhongshan) Co. v. United States, 971 F.Supp.2d 1333, 1336 (Ct. Int'l Trade 2014). On remand, Commerce reasoned that the separate rate for the period of investigation should not be drawn entirely from the three mandatory respondents, all having a de minimis rate. Commerce gave two reasons. First, Commerce said, "if [any of] the 110 companies [that did not respond to the quantity-and-value questionnaires] had chosen to cooperate, the examined company's rate would have been above de minimis ... and would have been assigned to the separate rate plaintiffs as a separate rate in the Final
Appellants challenged that determination in the Court of International Trade. That court affirmed, concluding that "Commerce's determination regarding the group ... is based on a reasonable reading of the law and record evidence." Changzhou Hawd Flooring, 44 F.Supp.3d at 1380. The court held that Commerce's methodology was permissible because the statute allows "any reasonable method." Id. at 1384. After one further remand, which brought Changzhou Hawd Flooring within the "separate rate" applicable to government-independent but not individually investigated firms, the Court of International Trade entered a final judgment. Changzhou Hawd Flooring Co. v. United States, 77 F.Supp.3d 1351, 1359-60 (Ct. Int'l Trade 2015).
Appellants, who are separate-rate entities, have timely appealed the above-de minimis separate rate, arguing for a de minimis separate rate. They assert that, although no rate was numerically specified, the assignment of an above-de minimis rate harms them because it subjects them to the antidumping-duty order and its continuing consequences, including subsequent periodic reviews under 19 U.S.C. § 1675, whereas assigning them a de minimis rate in this investigation would remove them from the order and relieve them from its consequences. See 19 C.F.R. § 351.204(e)(1) (excluding from final determination "any exporter or producer for which the Secretary determines an individual weighted-average dumping margin ... rate of zero or de minimis"); Dupont Teijin Films USA, LP v. United States, 407 F.3d 1211,
"Commerce's determination will be sustained unless it is unsupported by substantial evidence on the record, or otherwise not in accordance with law." Yangzhou Bestpak Gifts & Crafts Co. v. United States, 716 F.3d 1370, 1377 (Fed. Cir. 2013); 19 U.S.C. § 1516a(b)(1)(B)(i). Appellants argue that Commerce erred by not relying on the three mandatory respondents' zero/de minimis rates to generate a de minimis "separate rate." We agree that Commerce has not justified its departure from that method.
In investigations involving exporters from market economies, 19 U.S.C. § 1673d(c)(5) establishes the method for determining the rate for entities that are not individually investigated, the so-called all-others rate. Commerce has relied on that statutory provision in determining the separate rate for exporters and producers from nonmarket economies that demonstrate their independence from the government but that are not individually investigated. See Albemarle, 821 F.3d at 1348.
The statute says that where the "estimated weighted average dumping margins established for all exporters and producers individually investigated are zero or de minimis margins, or are determined entirely under [19 U.S.C. § 1677e]," Commerce "may use any reasonable method to establish the estimated all-others rate for exporters and producers not individually investigated, including averaging the estimated weighted average dumping margins determined for the exporters and producers individually investigated." 19 U.S.C. § 1673d(c)(5)(B). But the Statement of Administrative Action accompanying the Uruguay Round Agreements Act — which Congress has deemed "authoritative," 19 U.S.C. § 3512(d) — states that the "expected method" is to "weight-average the zero and de minimis margins and margins determined pursuant to the facts available, provided that volume data is available." Uruguay Round Agreements Act, Statement of Administrative Action, H.R. Rep. No. 103-316, vol. 1, at 873 (1994), reprinted in 1994 U.S.C.C.A.N. 4040, 4201 (quoted in Albemarle, 821 F.3d at 1352 & n.5).
Pointing to Albemarle's observation that the mandatory respondents in that case accounted for "a majority of the market," id. at 1353, Commerce argues that Albemarle's requirement of a showing of unrepresentativeness for departing from the expected method does not apply where the mandatory respondents do not account for "a majority of the market." Appellee's Br. 22. But that argument takes too narrow a view of Albemarle. The court did not rely for its statutory analysis on the observation that the particular respondents accounted for a "majority of the market." It relied on the statutory standards for selecting mandatory respondents under § 1677f-1(c)(2), which, the court held, make the mandatory respondents representative unless evidence shows otherwise. Albemarle, 821 F.3d at 1353. The statutory standards — involving either a statistical sample, 19 U.S.C. § 1677f-1(c)(2)(A), or the largest exporters by volume, id. § 1677f-1(c)(2)(B) — are not tied to a "majority" share of a "market," of the imports at issue, or any other class or collection.
Thus, the mandatory respondents in this matter are assumed to be representative. Under Albemarle, Commerce could not deviate from the expected method unless it found, based on substantial evidence, that the separate-rate firms' dumping is different from that of the mandatory respondents. But it has not done so.
Commerce did articulate a reason addressing firms that did not respond to the quantity-and-value questionnaires: it said that those firms likely "would have cooperated with the Department's investigation if they could have obtained a low rate." J.A. 102119. But that rationale does not suggest the needed inference about the separate-rate firms, all of which did respond to the questionnaires. Indeed, under Commerce's reasoning, the separate-rate firms' decisions to respond to the questionnaires might suggest that they are more similar to other firms, like the mandatory respondents, that responded. And Commerce may have suggested the same when, in its
Because Commerce has not made the findings necessary to justify departing from the "expected method" here, we vacate the judgment of the Court of International Trade, and we remand with instructions to remand to Commerce for it to reconsider its separate-rate determination. We find it unnecessary to address appellants' other challenges to the separate-rate determination.
Costs awarded to appellants.
In this respect, the case is unlike Yangzhou Bestpak Gifts & Crafts Co. v. United States, 716 F.3d 1370 (Fed. Cir. 2013), where Commerce calculated a "separate rate" by averaging the two individually investigated firms' rates — one de minimis, the other a high § 1677e-based rate. This court held Commerce's result to be unreasonably high on the record in the particular case. Id. at 1377-81. Here, in contrast, there is no issue of an unreasonably high average of the individually investigated firms' rates; as in Albemarle, 821 F.3d at 1349, the average in this case is zero or de minimis.