United States Court of International Trade

Slip Op. 21-159

Before the Court in Pasta Zara S.p.A., et. al., v. United States, et. al., Consol. Court No. 20-00023, Slip Op. 21-159 (November 30, 2021) was consolidated Plaintiffs’ challenge against the final results of Commerce’s twenty-second administrative review of the antidumping duty order on certain pasta from Italy (“Order”), covering the period from July 1, 2017, through June 30, 2018. Id. at 2. Plaintiffs challenged “(1) Commerce’s use of adverse facts available and (2) its rejection of arguments, that were raised for the first time after verification, disputing Commerce’s model-match method with respect to protein content and shape.” Id. Defendant the United States and Defendant-Intervenors Riviana Foods, Inc. and Treehouse Foods, Inc. maintained that Commerce’s use of adverse facts available and its rejection of Plaintiffs’ post-verification arguments were lawful and asked the court to sustain the Final Results. Id. at 2-3. For the following reasons, the court remanded Commerce’s  adverse inferences determination. Id. at 3.

The court will sustain a determination by Commerce unless it is “unsupported by substantial evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i). Id. at 13. Where Commerce determines that a gap in the factual record exists because necessary information is missing, the statute directs the use of “facts otherwise available,” to supply the needed facts. See 19 U.S.C. § 1677e(a). Id. Under the statute, a gap may be found to exist where an interested party provides the requested information, “but the information cannot be verified” in accordance with § 1677m(i).11 See 19 U.S.C. § 1677e(a)(2)(D). Id. Where Commerce has determined that the use of facts available is warranted, it may apply an adverse inference when selecting from among the facts available if it makes the requisite additional finding that an “interested party has failed to cooperate by not acting to the best of its ability to comply with a request for information from the [Department].” See 19 U.S.C. § 1677e(b)(1). Id. In this case, the court found Commerce’s use of adverse facts available with respect to Plaintiff’s U.S. payment dates is neither supported by substantial evidence nor in accordance with law. Id. at 14. The court found that Commerce’s stated justification for its practice was sufficiently clear: its “practice is to rely on the most recently submitted databases as the basis for verification because such data is responsive to Commerce’s most recent supplemental questions.”  Id. at 15. “Based on the record, it was not unreasonable for Commerce to decline to consider the Original Database after finding the dates in the Revised Database unverifiable.” Id. Furthermore, here, “Plaintiffs did not make their arguments in favor of using the Original Database until after verification.” Id. at 16. Thus, the court found that “Commerce’s inability to verify the Revised Database created a gap in the record that justified the use of facts available, pursuant to 19 U.S.C. § 1677e(a)(2)(D).” Id. However, the court found that although the use of facts available was clearly warranted, the application of adverse inferences “in selecting from among the facts otherwise available” was not. See 19 U.S.C. § 1677e(b)(1)(A). Id. at 17. “The problem with the Final Results is that Commerce based its finding that the application of an adverse inference was warranted on the same facts that it found justified its use of facts available. Id. “As courts have explained in numerous decisions, the determination to use facts available is a separate determination from the application of adverse inferences.” Id. Commerce’s single, conclusory assertion is inadequate to satisfy the statute because it does not explain the reasons for the application of an adverse inference and indeed seems to be based on Commerce’s inability to verify the information on payment data. Id. at 18. Furthermore, the court found that Commerce properly rejected Plaintiffs’ post-verification arguments disputing the instructions for reporting protein content and pasta shape. Id. “The court finds no error in Commerce’s adherence to its long-standing model-match method with respect to protein content and pasta shape.” Id. at 25. As such, the court remanded Commerce’s Final Results. Id.