                                        Slip Op. 13-118

                   UNITED STATES COURT OF INTERNATIONAL TRADE

THE STANLEY WORKS (LANGFANG)                        :
FASTENING SYSTEMS CO., LTD. and THE
STANLEY WORKS/STANLEY FASTENING                     :
SYSTEMS, LP,
                                                    :
                          Plaintiffs,
                                                    :
              v.
                                                    :
UNITED STATES,
                                                    :
                          Defendant,
                                                    :
              and
                                                    :
MID CONTINENT NAIL CORPORATION,                            Consol. Court No. 11-00102
                                                    :      PUBLIC
                          Defendant-Intervenor.
MID CONTINENT NAIL CORPORATION,                     :

                          Plaintiff,                :

              v.                                    :

UNITED STATES,                                      :

                          Defendant,                :

              and                                   :

THE STANLEY WORKS (LANGFANG)                        :
FASTENING SYSTEMS CO., LTD. and THE
STANLEY WORKS/STANLEY FASTENING                     :
SYSTEMS, LP,
                                                    :
                          Defendant-Intervenors.

[Denying Stanley’s Motion for Judgment on the Agency Record; Granting in part and denying in part
Mid Continent’s Motion for Judgment on the Agency Record; Granting Government’s Motion for
Consol. Court No. 11-00102                                                                     Page 2




Partial Voluntary Remand]

                                                                           Dated: September 3, 2013

      Lawrence J. Bogard, Neville Peterson LLP, of Washington, D.C., argued for The Stanley
Works (Langfang) Fastening Systems Co., Ltd. and The Stanley Works/Stanley Fastening Systems,
LP. With him on the brief was Meredith A. Dement.

        Carrie A. Dunsmore, Commercial Litigation Branch, Civil Division, U.S. Department of
Justice, of Washington, D.C., argued for Defendant. With her on the brief were Stuart F. Delery,
Assistant Attorney General, Civil Division, and Jeanne E. Davidson, Director, and Claudia Burke,
Assistant Director, Commercial Litigation Branch. Of counsel on the brief was Nathaniel J.
Halvorson, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce,
of Washington, D.C.

      Adam H. Gordon, Wiley Rein LLP, of Washington, D.C., argued for Mid Continent Nail
Corporation. With him on the brief were Robert E. DeFrancesco, III and Lori E. Scheetz.


                                            OPINION

RIDGWAY, Judge:

       In this consolidated action, foreign exporters of steel nails The Stanley Works (Langfang)

Fastening Systems Co., Ltd. and The Stanley Works/Stanley Fastening Systems, LP (collectively

“Stanley”) and domestic producer of steel nails Mid Continent Nail Corporation (“Mid Continent”)

contest the final results, as amended, of the U.S. Department of Commerce’s first administrative

review1 of the antidumping duty order covering steel nails from the People’s Republic of China

(“PRC”). See Certain Steel Nails from the People’s Republic of China: Final Results of the First



       1
        The period of review for this first administrative review is January 23, 2008 to July 31, 2009.
See Certain Steel Nails from the People’s Republic of China: Issues and Decision Memorandum for
the Final Results of the First Antidumping Duty Administrative Review at 2 (March 14, 2011) (Pub.
Doc. No. 381) (“Issues & Decision Memorandum”).
Consol. Court No. 11-00102                                                                    Page 3




Antidumping Duty Administrative Review, 76 Fed. Reg. 16,379 (March 23, 2011) (“Final Results”);

Certain Steel Nails from the People’s Republic of China: Amended Final Results of the First

Antidumping Duty Administrative Review, 76 Fed. Reg. 23,279 (April 26, 2011) (“Amended Final

Results”).2

       Pending before the court are three separate motions: Mid Continent’s Motion for Judgment

on the Agency Record, Stanley’s Motion for Judgment on the Agency Record, and Defendant United

States’ Motion for Partial Voluntary Remand.

       Mid Continent contests four aspects of Commerce’s Final Results specifically, Commerce’s

decision not to use the intermediate input methodology when calculating Stanley’s normal value,

Commerce’s decision not to apply adverse facts available to missing factors of production data,

Commerce’s selection of sources for surrogate financial ratios, and Commerce’s selection of data

for surrogate electricity values. See generally Amended Memorandum in Support of Mid Continent




       2
        Because business proprietary information was submitted in the course of the administrative
review, there are two versions of the administrative record a public version and a confidential
version. The public version of the record consists of copies of all documents in the record of this
action, with confidential information redacted. The confidential version consists of complete,
unredacted copies of only those documents that include confidential information.

        Documents in the public version of the administrative record are numbered sequentially, and
are cited herein as “Pub. Doc. No. ____.” Documents in the confidential version of the
administrative record are also numbered sequentially, but differently from the public version.
Documents in the confidential version of the administrative record are cited as “Conf. Doc. No.
____.”

        Mid Continent and Stanley filed both public and confidential versions of all briefs. Citations
to briefs are to the public versions whenever possible, and except as specified. Citations to the
confidential version of a brief are prefaced with “Conf.”
Consol. Court No. 11-00102                                                                   Page 4




Nail Corporation’s Rule 56.2 Amended Motion for Judgment on the Agency Record (“Mid

Continent Brief”); Reply Brief of Mid Continent Nail Corporation (“Mid Continent Reply Brief”).3

Stanley and the Government oppose Mid Continent’s motion. See generally Memorandum of

Plaintiffs The Stanley Works (Langfang) Fastening Systems Co., Ltd. and The Stanley

Works/Stanley Fastening Systems, LP in Opposition to Mid Continent’s Rule 56.2 Motion for

Judgment Upon the Administrative Record (“Stanley Response Brief”); Defendant’s Memorandum

in Opposition to Plaintiffs’ Rule 56.2 Motions for Judgment Upon the Agency Record (“Def.’s

Brief”).

       Stanley, in turn, challenges Commerce’s refusal to correct what Stanley maintains is a

“ministerial error” relating to the calculation of normal value for Stanley’s nails. See generally

Memorandum of Plaintiffs The Stanley Works (Langfang) Fastening Systems Co., Ltd. and The

Stanley Works/Stanley Fastening Systems LP in Support of Their Rule 56.2 Motion for Judgment

Upon the Agency Record (“Stanley Brief”); Plaintiffs’ Memorandum in Reply to Defendant’s and

Defendant-Intervenor’s Opposition to Plaintiffs’ Motion for Judgment on the Agency Record




       3
        Seven of the 10 counts in the Complaint that Mid Continent filed in a companion case
contesting the same final results (Court No. 11-00119) were consolidated into the instant action. See
Order (Sept. 16, 2011) (consolidating Counts II through IV and Counts VII through X of Complaint
in Court No. 11-00119 into instant action).

       Mid Continent has elected not to pursue certain counts consolidated from Court No. 11-
00119 specifically, Count IV (which challenged Commerce’s selection of surrogate values for
sodium hydroxide, labels, and shrink film), Count IX (which alleged that Commerce failed to
properly calculate Stanley’s reported U.S. indirect selling expenses), and Count X (which alleged
generally that Commerce “erred in other aspects of the Final Results”). See Mid Continent Brief at
1 n.2.
Consol. Court No. 11-00102                                                                      Page 5




(“Stanley Reply Brief”).4 Mid Continent and the Government oppose Stanley’s motion. See

generally Response Brief of Mid Continent Nail Corporation (“Mid Continent Response Brief”);

Def.’s Brief.

        The Government maintains that the Final Results should be sustained in all respects, save

one. See Def.’s Brief; Defendant’s Motion for Partial Voluntary Remand (“Def.’s Remand

Motion”). Specifically, the Government requests a partial voluntary remand to permit Commerce

to reconsider the selection of financial statements used for Stanley’s surrogate financial ratios in the

Final Results. See generally Def.’s Remand Motion. Mid Continent supports the Government’s

motion; Stanley opposes it. See generally Response of Mid Continent Nail Corporation to

Defendant United States’ Motion for Partial Voluntary Remand (“Mid Continent Response to Def.’s

Remand Motion”); Plaintiffs’ Opposition to Defendant’s Motion for Partial Voluntary Remand

(“Stanley Response to Def.’s Remand Motion”).

        Jurisdiction lies under 28 U.S.C. § 1581(c) (2006).5 For the reasons set forth below,

Stanley’s Motion for Judgment on the Agency Record must be denied, and Mid Continent’s Motion

for Judgment on the Agency Record must be granted in part and denied in part. In addition, the

Government’s Motion for Partial Voluntary Remand must be granted.



        4
         In its Complaint and briefs, Stanley also challenged Commerce’s use of “zeroing” in
calculating Stanley’s dumping margin. Stanley Complaint ¶¶ 20-21; Stanley Brief at 13-25, 31;
Stanley Reply Brief at 2-14. However, in light of the decision in Union Steel, Stanley withdrew its
zeroing claim. See Union Steel v. United States, 713 F.3d 1101 (Fed. Cir. 2013); Order (July 17,
2013) (dismissing Stanley’s zeroing claim).
        5
          All citations to federal statutes are to the 2006 edition of the United States Code. Similarly,
all citations to federal regulations are to the 2008 edition of the Code of Federal Regulations.
Consol. Court No. 11-00102                                                                      Page 6




                                           I. Background

        In September 2009, Commerce initiated its first administrative review of the antidumping

duty order on certain steel nails from the People’s Republic of China (“PRC”), covering the period

of review January 23, 2008 to July 31, 2009. See Initiation of Antidumping and Countervailing Duty

Administrative Reviews and Request for Revocation in Part, 74 Fed. Reg. 48,224 (Sept. 22, 2009).

Pursuant to its standard practice, Commerce issued questionnaires to the selected respondents,

including Stanley, requesting information from Stanley, among others, about the factors of

production consumed in the production of one kilogram of the subject merchandise i.e., finished

nails that may be collated (strung together) into strips or coils using materials such as plastic, paper,

or wire, to form strips or coils that can be loaded into a nail gun. See Response of Stanley to the

Commerce Department’s Antidumping Duty Questionnaire, Response to Section C (Pub. Doc. No.

159) (“Stanley’s Response to Section C Questionnaire”); Response of Stanley to the Commerce

Department’s Antidumping Duty Questionnaire, Response to Section D (Pub. Doc. No. 160)

(“Stanley’s Response to Section D Questionnaire”).6 Stanley reported that all of its nails were


        6
         Factors of production “include, but are not limited to . . . hours of labor required, . . .
quantities of raw materials employed, . . . amounts of energy and other utilities consumed, and . . .
representative capital cost, including depreciation.” See 19 U.S.C. § 1677b(c)(3); see also Dorbest
Ltd. v. United States, 604 F.3d 1363, 1367 (Fed. Cir. 2010) (discussing factors of production).

        In selecting surrogate values for factors of production, Commerce seeks the “best available
information” in accordance with 19 U.S.C. § 1677b(c)(1). Def.’s Brief at 23. In evaluating potential
sources, Commerce prefers “investigation or review period-wide price averages, prices specific to
the input in question, prices that are net of taxes and import duties, prices that are contemporaneous
with the period of investigation or review, and publicly available data.” Import Administration
Policy Bulletin 04.1, Non-Market Economy Surrogate Country Selection Process, at “Data
Consol. Court No. 11-00102                                                                    Page 7




collated, the style of collation used in each sale, and the collating material for each style. See

Stanley’s Response to Section C Questionnaire. Stanley then reported the quantities of each factor

of production used in producing one kilogram of nails. Id.

       The primary factor of production for nails is wire rod. See generally Surrogate Values for

the Preliminary Results (Pub. Doc. No. 287) (“Surrogate Valuation Memorandum for the Preliminary

Results”). To make nails, wire rod is drawn so that it becomes wire. Id. Nail manufacturers either

draw the wire rod into wire in their own facilities or contract with companies (“tollers”) who draw

wire rod into wire as needed. Id. In this case, Stanley explained that, as an integrated producer, it

contracts with wire drawers to draw a portion of its wire rod into wire rather than itself drawing all

of the wire rod that it requires. See Stanley’s Response to Section D Questionnaire. In addition,

Stanley stated that, although it was able to provide data for the “substantial majority” of its

subcontractors, it was unable to obtain information from certain of these wire drawers about how

much wire rod they consumed to produce the amount of wire supplied to Stanley. See Stanley’s

Response to Section D Questionnaire; Issues & Decision Memorandum at 33 n.90 (comment 17).

       Commerce also requested that Stanley report how much wire it used to produce its nails. See

Supplemental Questionnaire for Section D (Pub. Doc. No. 233). Wire, in contrast to wire rod, is not

a factor of production, but, rather, an “intermediate input.”7 See generally Surrogate Valuation


Considerations” (March 1, 2004) (“Policy Bulletin 04.1”); see also Issues & Decision Memorandum
at 13 (comment 4); Def.’s Brief at 23 (similar).
       7
         Intermediate inputs are distinct from factors of production; and Commerce’s criteria for
evaluating intermediate inputs differ from those for factors of production. See Certain Frozen Fish
Fillets From the Socialist Republic of Vietnam, 68 Fed. Reg. 4986 (Jan. 31, 2003) (preliminary
results of administrative review).
Consol. Court No. 11-00102                                                                     Page 8




Memorandum for the Preliminary Results. Stanley provided complete data for its wire consumption.

See Part 2 of Supplemental Section D Questionnaire Response of Stanley (Pub. Doc. No. 253).

       Commerce subsequently published its Preliminary Results. See generally Certain Steel Nails

From the People’s Republic of China: Notice of Preliminary Results and Preliminary Rescission,

in Part, of the Antidumping Duty Administrative Review, 75 Fed. Reg. 56,070 (Sept. 15, 2010)

(“Preliminary Results”). In the Preliminary Results, Commerce calculated a preliminary dumping

margin for Stanley at 6.48% using “facts otherwise available” (or “neutral facts”) to fill the gaps

in Stanley’s wire rod data. See Preliminary Results, 75 Fed. Reg. at 56,077.8

       In addition to wire rod, the Preliminary Results also analyzed Stanley’s other factors of

production. Electricity, for example, plays a major role in the production of nails. See Surrogate

Valuation Memorandum for the Preliminary Results at 11. As a surrogate value for electricity in

calculating the Preliminary Results, Commerce used historical data published by India’s Central

Electricity Authority in March 2008. See Surrogate Valuation Memorandum for the Preliminary



       8
         In addition to its issuance of the Preliminary Results, Commerce also provided detailed
explanations of its calculations in its September 7, 2010 Preliminary Calculation Memorandum for
Stanley. Preliminary Calculation Memorandum for Stanley (Pub. Doc. No. 290) (“Preliminary
Calculation Memorandum”). Using Stanley’s reported data to calculate normal value for Stanley,
Commerce added the costs of all the factors of production including the plastic, paper, and wire
collating material used to collate the nails and obtained a price for the normal value of collated
nails stated in terms of dollars per kilogram. See id. Commerce explained that it calculated United
States price by converting the price of a carton of subject merchandise to the price of a kilogram of
subject merchandise, using the weight of the finished nails plus the collating material, so that United
States price could be compared to normal value. Id.

       Commerce’s calculations refer to the weight of nails plus collating material as
“CONWGT3U”; the weight of nails alone is identified as “CONWGT4U.” See generally
Preliminary Calculation Memorandum at 1-8.
Consol. Court No. 11-00102                                                                    Page 9




Results at 11; Issues & Decision Memorandum at 15 (comment 5). Those data reflected “tax-

exclusive electricity rates charged to small, medium, and large industries in India.” See Surrogate

Valuation Memorandum for the Preliminary Results at 11.

       Further, because valuing product-specific factors of production does not capture certain

overall “general expenses and profits,” Commerce must separately reflect in the agency’s calculation

of normal value (1) factory overhead, (2) selling, general, and administrative expenses (“SG&A”),

and (3) profit. 19 U.S.C. § 1677b(c)(1). As with other factors of production, Commerce uses

surrogate values to determine a respondent’s financial ratios, relying on the financial statements of

one or more producers of identical or comparable merchandise, which serve as surrogates for this

purpose. See generally Ad Hoc Shrimp Trade Action Comm. v. United States, 618 F.3d 1316, 1319-

20 (Fed. Cir. 2010) (providing overview of use of financial statements to determine surrogate

financial ratios). In the Preliminary Results here, Commerce relied on the financial statement of a

large, multinational Indian producer of fasteners, Lakshmi Precision Screws Ltd. (“Lakshmi”). See

Surrogate Value Memorandum for the Preliminary Results. According to Commerce, Lakshmi

produced “comparable” merchandise, and its financial statement provided the best available

information due to the company’s use of “an integrated wire-drawing production process with steel

wire rod as the main input, which closely mirrors [the process] of the respondents.” See Surrogate

Valuation Memorandum for the Preliminary Results at 15-16.

       Between mid-November and mid-December 2010, Commerce conducted a “successful[]”

verification of Stanley’s factors of production and U.S. sales questionnaire responses, as well as the

factors of production data from one of Stanley’s unaffiliated wiredrawing subcontractors. See Final
Consol. Court No. 11-00102                                                                    Page 10




Results, 76 Fed. Reg. at 16,380; Issues & Decision Memorandum at 36 (comment 18). At

verification, Stanley provided Commerce with further information and explanation regarding

Stanley’s missing factors of production data. See generally Verification Report for Stanley (Pub.

Doc. No. 352).

       Following issuance of the Preliminary Results and completion of verification, Commerce

solicited and received administrative case briefs and rebuttal briefs from Mid Continent, Stanley, and

other interested parties. Final Results, 76 Fed. Reg. at 16,380. In its administrative case brief, Mid

Continent challenged Commerce’s determination to use “facts otherwise available” (i.e., neutral

facts) to substitute for Stanley’s missing wire rod data. Mid Continent Case Brief (Pub. Doc. No.

367) at 15. Mid Continent argued that Commerce instead should use the agency’s “intermediate

input methodology” or apply “adverse facts available.” See generally Mid Continent Case Brief.

Under Commerce’s intermediate input methodology, Commerce directly calculates the value of an

intermediate input (such as wire) rather than valuing and then adding up all the separate individual

factors of production that go into the production of that intermediate input (such as wire rod and

wiredrawing services). See, e.g., Zhengzhou Harmoni Spice Co. v. United States, 33 CIT 453, 458-

66, 617 F. Supp. 2d 1281, 1289-95 (2009). “Adverse facts available” (or “adverse inferences”) are

substitutes for missing information that are adverse to the interests of a party that has refused to

cooperate with Commerce’s information requests. See, e.g., Gallant Ocean (Thailand) Co. v. United

States, 602 F.3d 1319, 1321 (Fed. Cir. 2010).

       Also discussed in Mid Continent’s administrative case brief was electricity. Mid Continent

contended that the use of the March 2008 report by the Central Electricity Authority did not reflect
Consol. Court No. 11-00102                                                                      Page 11




the most contemporaneous information, and did not represent the best available information. See

Mid Continent Case Brief at 53-54. According to Mid Continent, Commerce should have used data

released in late March 2009 (which Mid Continent had placed on the record prior to filing its case

brief), reflecting “updated electricity pricing in effect for a significant portion of the [period of

review]” and “updated energy pricing” for certain Indian consumers. Mid Continent Case Brief at

53.

        In addition, Mid Continent’s administrative case brief challenged Commerce’s reliance on

Lakshmi’s financial statement for use in calculating the financial ratios, and submitted certain

financial data for Sundram Fasteners Ltd. (“Sundram”). See Mid Continent Case Brief at 6, 41-46;

Mid Continent Surrogate Value Submission (Pub. Doc. No. 301) (exhibit including 2009 and 2010

Limited Annual Reports for Sundram). Mid Continent urged Commerce to use Sundram’s data for

purposes of the Final Results, emphasizing that       like Lakshmi     Sundram was a multi-national

producer of fasteners, with a financial and production scale comparable to that of Stanley. See Mid

Continent Case Brief; Mid Continent Surrogate Value Submission.

        The Chinese respondents submitted other financial statements as possible sources for

surrogate financial ratios, including statements from several significantly smaller Indian companies,

including J&K Wire & Steel Industries (Pvt.) Ltd. (“J&K”), Bansidhar Granites Private Limited

(“Bansidhar”), and Nasco Steels Private Ltd. (“Nasco”). See GDLSK Section A Client’s Second

Surrogate Value Submission at Exhs. 1-3 (Pub. Doc. No. 299) (financial statements of Bansidhar,

J&K, and Lakshmi); Stanley Resubmission of Comments (Pub. Doc. No. 330) (financial statements

for Nasco). In its administrative case brief and its rebuttal brief filed with the agency, Mid Continent
Consol. Court No. 11-00102                                                                      Page 12




argued that use of the financial statements of J&K, Bansidhar, and Nasco would be inappropriate.

See generally Mid Continent Rebuttal Brief (Pub. Doc. No. 370). According to Mid Continent,

unlike the companies whose financial statements Mid Continent placed on the record, the production

and financial experience of J&K, Bansidhar, and Nasco bore no similarity to that of Stanley. See id.

at 22-37.

        In the administrative case brief that Stanley filed with Commerce, Stanley challenged a

number of issues, including Commerce’s decision to use zeroing to calculate Stanley’s dumping

margin in the administrative review (an issue that Stanley initially pursued in this litigation, but has

since dismissed). See Stanley Case Brief (Pub. Doc. No. 365) at 14-19. However, Stanley’s

administrative case brief said nothing about Commerce’s calculations regarding the weight basis for

nails used in calculating normal value. See Stanley Case Brief.

        After considering the evidence and arguments on the record, Commerce issued the Final

Results of the administrative review. See generally Final Results, 76 Fed. Reg. 16,379. In the Final

Results, Commerce declined to use the intermediate input methodology in calculating Stanley’s

normal value, and explained that it used facts otherwise available (i.e., neutral facts)    rather than

adverse facts available to fill the gaps in Stanley’s data on wiredrawing factors of production. See

Issues & Decision Memorandum at 32-36 (comments 17-18). The Final Results found that the use

of adverse facts available was not warranted, because Stanley was forthcoming about the deficiencies

in its factors of production data and because Commerce had not requested that Stanley make

additional attempts to obtain the missing data or demonstrate that it had made such attempts.

Commerce therefore did not conclude that Stanley had failed to cooperate by not acting to the best
Consol. Court No. 11-00102                                                                   Page 13




of its ability to comply with an agency request for information. See Issues & Decision Memorandum

at 34 (comment 17).

       As a surrogate value for electricity, the Final Results continued to use the data from India’s

Central Electricity Authority published in March 2008. Issues & Decision Memorandum at 15

(comment 5). Commerce explained that the rates in that publication reflected the rates in effect for

more of the period of review than the rates contained in the March 2009 data that Mid Continent had

placed on the record, and thus were more “contemporaneous.” Id.

       Commerce also reviewed all five financial statements on the record and modified its financial

ratio calculations, relying on the financial statements of Bansidhar, J&K, and Nasco. Issues &

Decision Memorandum at 11-13 (comment 3). Commerce explained that each of the three

companies is an integrated producer of nails, produces nails from steel wire rod, and has invested

in the capital equipment necessary to produce nails from steel wire rod. Id. Commerce decided not

to rely on Lakshmi’s financial statement, because the agency had discovered evidence of a

countervailable subsidy on the company’s financial statements. Id.9 Commerce also declined to use

Sundram’s financial statements, explaining that Sundram is not an integrated producer of nails and

does not consume steel wire rod in its production of nails. Issues & Decision Memorandum at 11

(comment 3).

       Following issuance of the Final Results, Stanley submitted ministerial error allegations. See



       9
         Commerce generally does not rely on the financial statement of a company “where there is
evidence that the company received countervailable subsidies and there are other sufficient[ly]
reliable and representative data on the record.” Issues & Decision Memorandum at 11 (comment
3).
Consol. Court No. 11-00102                                                                  Page 14




Stanley’s Request for Correction of Significant Ministerial Errors (Pub. Doc. No. 387). Stanley

alleged that the Final Results contained two ministerial errors. Id. Stanley first alleged that

Commerce had inadvertently calculated depreciation using a “total” rather than an “annual” figure.

Id. at 2-4. Commerce corrected that error, and adjusted Stanley’s margin accordingly. In addition,

Stanley alleged a ministerial error concerning the weight basis for nails used in calculating normal

value. Id. at 5-9. Commerce disagreed with Stanley’s second point, explaining that its calculation

was intentional, and that there was no ministerial error. See Ministerial Error Memorandum (Pub.

Doc. No. 393) at 3-4. Commerce further noted that the weight basis used in the Final Results was

the same as the weight basis used in the Preliminary Calculation Memorandum for Stanley. Id.; see

also Preliminary Calculation Memorandum for Stanley (Pub. Doc. No. 290) (“Preliminary

Calculation Memorandum”). Commerce’s Amended Final Results therefore reflected an adjustment

to Stanley’s margin only for the company’s first allegation of ministerial error. See Amended Final

Results, 76 Fed. Reg. at 23,280. The Amended Final Results adjusted Stanley’s margin from 13.9%

to 10.63%. Id.

       This action ensued.

       After briefing was complete on the merits of Mid Continent’s challenge to the Final Results’

reliance on the financial statements of Bansidhar, Nasco, and J&K, Commerce           in the second

administrative review of the same antidumping duty order at issue here      refined its practice for

determining whether a company is a producer of “comparable” or “identical” merchandise for

purposes of analyzing potential surrogates for financial ratios.        See Issues and Decision

Memorandum for Certain Steel Nails from the People’s Republic of China: Final Results of the
Consol. Court No. 11-00102                                                                  Page 15




Second Antidumping Duty Administrative Review, 2012 WL 699520 at Comment 2 (Feb. 23, 2012)

(“Decision Memorandum for Second Nails Review”). Thereafter, the Government requested a

voluntary remand to allow Commerce to reevaluate its determination concerning surrogate financial

ratios in this administrative review. See Def.’s Remand Motion at 2-3.


                                     II. Standard of Review

       In an action reviewing an antidumping determination by Commerce, the agency’s

determination must be upheld except to the extent that it is found to be “unsupported by substantial

evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i);

see also NMB Singapore Ltd. v. United States, 557 F.3d 1316, 1319 (Fed. Cir. 2009). Substantial

evidence is “more than a mere scintilla”; rather, it is “such relevant evidence as a reasonable mind

might accept as adequate to support a conclusion.” Universal Camera Corp. v. Nat’l Labor Relations

Bd., 340 U.S. 474, 477 (1951) (quoting Consol. Edison Co. v. Nat’l Labor Relations Bd., 305 U.S.

197, 229 (1938)); see also Mittal Steel Point Lisas Ltd. v. United States, 548 F.3d 1375, 1380 (Fed.

Cir. 2008) (same). Moreover, any evaluation of the substantiality of evidence “must take into

account whatever in the record fairly detracts from its weight,” including “contradictory evidence

or evidence from which conflicting inferences could be drawn.” Suramerica de Aleaciones

Laminadas, C.A. v. United States, 44 F.3d 978, 985 (Fed. Cir. 1994) (quoting Universal Camera

Corp., 340 U.S. at 487-88); see also Mittal Steel, 548 F.3d at 1380-81 (same). That said, the mere

fact that it may be possible to draw two inconsistent conclusions from the record does not prevent

Commerce’s determination from being supported by substantial evidence. Am. Silicon Techs. v.
Consol. Court No. 11-00102                                                                    Page 16




United States, 261 F.3d 1371, 1376 (Fed. Cir. 2001); see also Consolo v. Federal Maritime Comm’n,

383 U.S. 607, 620 (1966).

       While Commerce must explain the bases for its decisions, “its explanations do not have

to be perfect.” NMB Singapore, 557 F.3d at 1319. Nevertheless, “the path of Commerce’s

decision must be reasonably discernable,” to support judicial review. Id. (citing Motor Vehicle

Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)); see generally 19 U.S.C.

§ 1677f(i)(3)(A) (requiring Commerce to “include in a final determination . . . an explanation of

the basis for its determination”).


                                           III. Analysis

       Dumping occurs when goods are imported into the United States and sold at a price lower

than their “normal value,” resulting in material injury (or the threat of material injury) to the U.S.

industry. See Taian Ziyang Food Co. v. United States, 35 CIT ____, ____, 783 F. Supp. 2d 1292,

1299 (2011) (citing 19 U.S.C. §§ 1673, 1677(34), 1677b(a)); see generally id., 35 CIT at ____, 783

F. Supp. 2d at 1299-1302. The difference between the normal value of the goods and the U.S. price

is the “dumping margin.” See 19 U.S.C. § 1677(35). When normal value is compared to the U.S.

price and dumping is found, antidumping duties equal to the dumping margin are imposed to offset

the dumping. See 19 U.S.C. § 1673.

       Normal value is typically calculated using either the price in the exporting market (i.e., the

price in the “home market” where the goods are produced) or the cost of production of the goods,
Consol. Court No. 11-00102                                                                   Page 17




when the exporting country is a market economy country. See generally 19 U.S.C. § 1677b.10

However, where     as here    the exporting country has a non-market economy (“NME”), there is

often concern that the factors of production used to produce the goods at issue are under state

control, and that home market sales may not be reliable indicators of normal value. See 19 U.S.C.

§ 1677(18)(A).

       In cases such as this, where Commerce concludes that concerns about the sufficiency or

reliability of the available data do not permit the normal value of the goods to be determined in the

typical manner, Commerce “determine[s] the normal value of the subject merchandise on the basis

of the value of the factors of production,” including “an amount for general expenses and profit plus

the cost of containers, coverings, and other expenses.” See 19 U.S.C. § 1677b(c)(1); see generally

Ningbo Dafa Chem. Fiber Co. v. United States, 580 F.3d 1247, 1250-51 (Fed. Cir. 2009) (briefly

summarizing “factors of production” methodology). The antidumping statute requires Commerce

to value factors of production “based on the best available information regarding the values of such

factors” in an appropriate surrogate market economy country in this case, India. See 19 U.S.C. §

1677b(c)(1) (emphasis added); see also Shakeproof Assembly Components v. United States, 268

F.3d 1376, 1382 (Fed. Cir. 2001); Ningbo, 580 F.3d at 1254 (emphasizing that statute mandates that

Commerce “shall” use “best available information” in valuing factors of production).

       In determining which data constitute the “best available information,” Commerce generally


       10
          In addition, in certain market economy cases, Commerce may calculate normal value using
the price in a third country (i.e., a country other than the exporting country or the United States).
See, e.g., RHP Bearings Ltd. v. United States, 288 F.3d 1334, 1338 (Fed. Cir. 2002) (discussing 19
U.S.C. §§ 1677b(a)(1)(B)(ii), 1677b(a)(1)(C)); see also Ningbo Dafa Chem. Fiber Co. v. United
States, 580 F.3d 1247, 1251 n.1 (Fed. Cir. 2009) (explaining exception).
Consol. Court No. 11-00102                                                                      Page 18




looks to the criteria set forth in its “Policy Bulletin 04.1,” also known as the “NME Surrogate

Country Policy Bulletin.” Policy Bulletin 04.1 explains:

        In assessing data and data sources, it is [Commerce’s] stated practice to use
        investigation or review period-wide price averages, prices specific to the input in
        question, prices that are net of taxes and import duties, prices that are
        contemporaneous with the period of investigation or review, and publicly available
        data.

See Import Administration Policy Bulletin 04.1, Non-Market Economy Surrogate Country Selection

Process, at “Data Considerations” (March 1, 2004).11

        Within this general framework, the statute “accords Commerce wide discretion in the

valuation of factors of production in the application of [the statute’s] guidelines.” See Shakeproof,

268 F.3d at 1381 (internal quotation marks and citation omitted); see also Ad Hoc Shrimp Trade

Action Committee v. United States, 618 F.3d 1316, 1320 (Fed. Cir. 2010) (same); Nation Ford

Chem. Co. v. United States, 166 F.3d 1373, 1377 (Fed. Cir. 1999) (same). Commerce is recognized

as the “master of antidumping law.” See Thai Pineapple Public Co. v. United States, 187 F.3d 1362,

1365 (Fed. Cir. 1999); see also Shakeproof, 268 F.3d at 1381 (acknowledging “Commerce’s special

expertise”). And “[t]he process of constructing foreign market value for a producer in a non-market

economy country is difficult and necessarily imprecise.” Id.



        11
          Policy Bulletin 04.1 clearly states that the five specified criteria i.e., “investigation or
review period-wide price averages, prices specific to the input in question, prices that are net of taxes
and import duties, prices that are contemporaneous with the period of investigation or review, and
publicly available data” were developed to serve as a “tie-breaker,” if necessary, in Commerce’s
identification of a surrogate country. See Taian Ziyang, 35 CIT at ____ n.8, 783 F. Supp. 2d at 1300
n.8. The criteria were not promulgated for the purpose of guiding Commerce’s selection from
among alternative data sources after a surrogate country has been identified. Id. Nevertheless,
Commerce has used the criteria for that purpose here and in many other cases. Id.
Consol. Court No. 11-00102                                                                      Page 19




        Nevertheless, Commerce’s discretion is not boundless.            In exercising its discretion,

Commerce is constrained by the purpose of the antidumping statute, which is “to determine

antidumping margins ‘as accurately as possible.’” See Shakeproof, 268 F.3d at 1382 (quoting Lasko

Metal Products, Inc. v. United States, 43 F.3d 1442, 1446 (Fed. Cir. 1994)). And, Commerce’s

discretion notwithstanding, “a surrogate value must be as representative of the situation in the [non-

market economy] country as is feasible.” See Nation Ford, 166 F.3d at 1377 (internal quotation

marks and citation omitted). Thus, “[i]n determining the valuation of . . . factors of production, the

critical question is whether the methodology used by Commerce is based on the best available

information and establishes antidumping margins as accurately as possible.” See Ningbo, 580 F.3d

at 1257 (emphases added) (quoting Shakeproof, 268 F.3d at 1382) (internal quotation marks

omitted).

        In the present case, Stanley and Mid Continent challenge multiple aspects of Commerce’s

Final Results in the first administrative review of steel nails from the PRC. As discussed in greater

detail below, Commerce’s decisions not to use intermediate input methodology, not to apply adverse

facts available, and not to “correct” an alleged ministerial error must be sustained. See sections III.A,

III.B & III.E, infra. On the other hand, Commerce’s selection of sources for Stanley’s surrogate

financial ratios and Commerce’s valuation of Stanley’s electricity must be remanded to the agency

for further consideration. See sections III.C & III.D, infra.


                                 A. Intermediate Input Methodology

        Mid Continent challenges Commerce’s normal value calculation for Stanley’s nails, arguing
Consol. Court No. 11-00102                                                                    Page 20




that   in light of Stanley’s missing factors of production data    Commerce erred by applying its

“factors of production” methodology, and instead should have used the agency’s “intermediate

input” methodology. See generally Mid Continent Brief at 7-11; Mid Continent Reply Brief at 1-4.

Mid Continent contends that this case fits comfortably within both of the two exceptions to

Commerce’s standard factors of production methodology. See Mid Continent Brief at 8-11; Mid

Continent Reply Brief at 2-4. However, for the reasons described below, Mid Continent’s arguments

must be rejected.

        In NME antidumping proceedings, Commerce typically “determine[s] the normal value of

the subject merchandise on the basis of the value of the factors of production . . . based on the best

available information regarding the values of such factors in a market economy country.” 19 U.S.C.

§ 1677b(c)(1) (emphasis added). However, in some situations, Commerce resorts to an alternative

approach for determining normal value         the so-called intermediate input methodology. See

generally Zhengzhou Harmoni Spice Co. v. United States, 33 CIT 453, 458-466, 617 F. Supp. 2d

1281, 1289-95 (2009) (recognizing Commerce’s discretion to rely on intermediate input

methodology under certain circumstances).

        There are two exceptions to Commerce’s factors of production methodology that can give

rise to a need for the intermediate input methodology      the insignificant share exception and the

significant element exception. See Issues & Decision Memorandum at 35 (comment 18) (discussing

two exceptions); see also Issues and Decision Memorandum for Antidumping Duty Investigation

of Certain Frozen Fish Fillets from the Socialist Republic of Vietnam, 2003 WL 24153843 at

Comment 3 (June 23, 2003) (“Fish Fillets Decision Memorandum”) (same); Issues and Decision
Consol. Court No. 11-00102                                                                     Page 21




Memorandum for the Final Determination in the Antidumping Duty Investigation of Certain Ball

Bearings and Parts Thereof from the People’s Republic of China, 2003 WL 24153825 at Comment

6 (March 6, 2003) (“Ball Bearings Decision Memorandum”) (same); Zhengzhou Harmoni Spice Co.,

33 CIT at 461 n.14, 617 F. Supp. 2d at 1292 n.14 (same). As detailed below, neither exception

applies here.12


                                1. The Insignificant Share Exception

        Mid Continent contends that Commerce should have applied the intermediate input

methodology based on the insignificant share exception. See Mid Continent Brief at 8-9; Mid


        12
        Mid Continent’s other arguments challenging Commerce’s decision not to apply the
intermediate input methodology are also unavailing.

        Mid Continent contends that Commerce failed to articulate a satisfactory rationale for
rejecting complete data for wire that could have been used if Commerce had relied on the
intermediate input methodology. Mid Continent Brief at 11. However, as Commerce explained in
its Issues and Decision Memorandum, the amount of steel wire consumed by a company such as
Stanley, which is an integrated producer, is not necessarily reflective of its costs. Def.’s Brief at 15
(citing Issues & Decision Memorandum at 36). Based on this consideration and Commerce’s
“successful[]” verification of Stanley’s subcontractor’s wiredrawing factors of production,
Commerce found use of Stanley’s wiredrawing factors of production to be “more accurate” than Mid
Continent’s proposed intermediate input methodology. Issues & Decision Memorandum at 36
(comment 18). Mid Continent’s contention that Commerce did not satisfactorily address why factors
of production data are preferable to intermediate input data for Stanley thus has no merit.

        In addition, Mid Continent argues that using Stanley’s incomplete factors of production data
“fundamentally inhibits the accuracy of the traditional factors of production methodology, and thus
undermines the accuracy of the margin calculations.” Mid Continent Reply Brief at 2. Mid
Continent faults Commerce for not articulating its reasons for concluding that the amount of missing
wiredrawing data was small. Id. at 4. Yet the missing portion of data represented less than one-third
of the wiredrawing costs, and by Mid Continent’s own admission wiredrawing services
accounted for an insignificant percentage of the normal value of Stanley’s nails. See Mid Continent
Amended Conf. Brief at 9; Mid Continent Conf. Reply Brief at 2-3; see also Stanley Conf. Response
Brief at 22. Mid Continent’s arguments are not persuasive.
Consol. Court No. 11-00102                                                                   Page 22




Continent Reply Brief at 3. Commerce invokes the insignificant share exception as an alternative

to the agency’s standard factors of production methodology where “the factors [of production] used

to produce an intermediate input represent a small or insignificant share of total output” and where

the improvement to the overall accuracy of the normal value calculation “will be too small to justify

the burden of valuing the factors.” Issues & Decision Memorandum at 35 (comment 18).

       Mid Continent’s argument for the application of the exception is that the wiredrawing

services of Stanley’s subcontractors constituted an insignificant share of total output cost. See Mid

Continent Brief at 9 (arguing that, “based on the database that [Commerce] used for its Preliminary

Results,” wiredrawing services “by no means constitute[d] a significant share of the total output

cost”); see also Mid Continent Reply Brief at 3.13 However, in making its argument, Mid Continent

misapplies the requirements for the insignificant share exception by focusing solely on whether one

of the factors of production (wiredrawing services) was insignificant, rather than on whether the

factors of production, taken together, represented such an insignificant share of total output that

calculating values for each of them would not be worthwhile in valuing the intermediate input wire.

       The insignificant share exception does not apply merely because, as Mid Continent contends,

one of the factors of production (wiredrawing services) for the intermediate input (drawn wire)

represented an insignificant share of total output.      When considering whether to apply the

insignificant share exception, Commerce focuses on the significance of the intermediate input itself



       13
          Mid Continent explains that, based on its own calculations, the wiredrawing factors of
production (exclusive of wire rod) comprise [[ ]]% and [[ ]]% of the total cost and normal
value, respectively, of Stanley’s nails. See Mid Continent Amended Conf. Brief at 9; Mid Continent
Conf. Reply Brief at 9; see also Stanley Conf. Response Brief at 22.
Consol. Court No. 11-00102                                                                    Page 23




(or, in other words, all of the factors of production that make up the intermediate input), not on the

significance of any one particular factor of production used to produce the intermediate input. See

Stanley Response Brief at 23. As stated in Wooden Bedroom Furniture from the PRC, Commerce

“appl[ies] a surrogate value to an intermediate input”

       when the intermediate input accounts for an insignificant share of total output, and
       the potential increase in accuracy to the overall calculation that results from valuing
       each of the [factors of production] is outweighed by the resources, time, and burden
       such an analysis would place on all of the parties to the proceeding.

Issues and Decision Memorandum for the Final Results of Antidumping Duty Administrative

Review and New Shipper Review of Wooden Bedroom Furniture from the People’s Republic of

China, 2008 WL 8608280 at Comment 29 (Aug. 11, 2008) (“Wooden Bedroom Furniture Decision

Memorandum”) (emphasis added).14

       Further, Mid Continent contends that, in refusing to apply the exception here, Commerce

wrongly focused on whether wire rod represented a significant share of total output. Mid Continent

Brief at 11 (stating that Commerce conducted “the wrong analysis” by noting that “the main factor

used to value the intermediate good, drawn wire, is rod, which represents a significant share of total

output”). But Mid Continent’s argument is unavailing. By focusing on the significance of wire rod

as a factor of production in its decision that the insignificant share exception does not apply here,


       14
         In Wooden Furniture from the PRC, Commerce decided not to use the intermediate input
methodology in valuing bun feet and veneered boards, because Commerce found that “if [the
agency] did not use a [factors of production] buildup for the veneering service and for valuing bun
feet from subcontractors to whom [the producer] provided wood, it would lead to an inaccurate
result.” Wooden Bedroom Furniture Decision Memorandum at Comment 29. Similarly, here,
Commerce found that using the verified factors of production for Stanley’s drawn wire rather than
Mid Continent’s “proxy calculation” (i.e., intermediate input methodology calculation) would lead
to a “more accurate” result. Issues & Decision Memorandum at 36 (comment 18).
Consol. Court No. 11-00102                                                                   Page 24




Commerce indicated that not all of the factors used to produce wire represent insignificant shares

of total output, and that, accordingly, the insignificant share exception did not apply. Issues &

Decision Memorandum at 35 (comment 18).15

       In sum, Commerce reasonably found that, because the main factor of production (wire rod)

for the intermediate input (drawn wire) “represents a significant share of total output,” the

insignificant share exception did not apply and could not justify a departure from the agency’s

standard factors of production methodology. Issues & Decision Memorandum at 35-36 (comment

18). Mid Continent’s argument to the contrary is without merit.


                              2. The Significant Element Exception

       Mid Continent also contends that Commerce should have applied the intermediate input

methodology based on the significant element exception. See Mid Continent Brief at 8-11; Mid

Continent Reply Brief at 2-3, 4. Commerce invokes the significant element exception where a

significant portion of the costs of the factors of production for an intermediate input cannot be

accounted for by Commerce. Issues & Decision Memorandum at 35 (comment 18). Mid

Continent’s argument for the second exception is that the intermediate input methodology should



       15
          Mid Continent further argues that Commerce “overlook[ed] the fact that the outside wire
drawers did not own the wire rod Stanley did.” Mid Continent Brief at 11 (noting that “Stanley
made quite a point during the review of specifically treating drawing services as the only thing it
acquired from the [subcontractors]”). Mid Continent’s argument misses the mark because the focus
of the insignificant share exception here is not whether outside services comprised an insignificant
share of total output, but (as described above) whether the factors used to produce drawn wire, taken
together, represent an insignificant share of total output. Thus, when determining whether the
insignificant share exception applies, Commerce would not only consider the wiredrawing services
factors of production but also the wire rod factors of production.
Consol. Court No. 11-00102                                                                 Page 25




be applied because factors of production data were missing for what Mid Continent contends was

a significant portion of the wire consumed by Stanley. Mid Continent Brief at 8-11; Mid Continent

Reply Brief at 2-3, 4.16 However, Commerce’s decision to reject the significant element exception

as a basis for departing from the agency’s standard factors of production methodology was

reasonable.

       The wiredrawing factors of production of Stanley’s subcontractors account for only a small

portion of the normal value of Stanley’s nails, and the wire drawers whose factors of production

Stanley did not report accounted for less than one-third of Stanley’s drawn wire. Stanley Response

Brief at 24. In other words, Commerce had factors of production data that accounted for more than

two-thirds of Stanley’s drawn wire. Id. at 24-25. As such, Commerce did not act unreasonably by

deciding that the missing wiredrawing factors of production data were not significant enough to

merit the application of the intermediate input methodology through the significant element

exception. As the “master of antidumping law” with “special expertise,” Commerce must be

afforded some discretion under circumstances such as these. See Thai Pineapple Public Co. v.

United States, 187 F.3d 1362, 1365 (Fed. Cir. 1999); Shakeproof Assembly Components v. United

States, 268 F.3d 1376, 1381 (Fed. Cir. 2001).

       In sum, Commerce reasonably found that neither of the two exceptions was applicable here,

and that, based on agency practice, it would not be appropriate to apply the intermediate input

methodology given the circumstances of this case.        Mid Continent’s arguments for use of


       16
         Stanley did not submit data for [[ ]] of its subcontractors. As a result, Commerce was
missing factors of production data for [[ ]]% of Stanley’s total wire consumed during the period of
review. Mid Continent Amended Conf. Brief at 9.
Consol. Court No. 11-00102                                                                    Page 26




Commerce’s intermediate input methodology therefore must be rejected.


                                    B. Adverse Facts Available

       Mid Continent also contests Commerce’s decision not to apply adverse facts available to

Stanley’s missing wiredrawing factors of production. See generally Mid Continent Brief at 12-19;

Mid Continent Reply Brief at 4-7. Mid Continent argues that Stanley improperly withheld factors

of production data. See Mid Continent Brief at 12, 14-18; Mid Continent Reply Brief at 4-7. Mid

Continent further contends that Commerce’s decision not to apply adverse facts available here was

inconsistent with its decisions in other administrative proceedings. See Mid Continent Brief at 18-

19. In addition, Mid Continent asserts that Commerce’s choice of data to replace the missing

wiredrawing factors of production was not based on substantial evidence. See Mid Continent Brief

at 12-14; Mid Continent Reply Brief at 6. However, for reasons discussed below, Mid Continent’s

arguments are without merit.

       When an interested party or any other person withholds information requested by Commerce,

fails to provide requested information by the relevant deadline or in the manner and form requested,

significantly impedes a proceeding, or provides information that cannot be verified, or when

necessary information is for some other reason not available on the record of a proceeding,

Commerce is authorized to fill in the information gaps using “facts otherwise available” (i.e., facts

that substitute for missing information). 19 U.S.C. § 1677e(a). Commerce may rely on neutral (i.e.,

non-adverse) “facts otherwise available” to fill these gaps, or, if Commerce finds that “an interested

party has failed to cooperate by not acting to the best of its ability to comply with a request for
Consol. Court No. 11-00102                                                                   Page 27




information,” Commerce may rely on “adverse facts available” (i.e., facts that are adverse to the

interests of that party). 19 U.S.C. § 1677e(b).

       In its Issues and Decision Memorandum here, Commerce explained its rationale for not

applying adverse facts available. According to Commerce, because Stanley complied with

Commerce’s requests for information to the best of its ability during the course of the review and

was able to provide factors of production data from unaffiliated wiredrawing subcontractors

accounting for a substantial majority of drawn wire consumed during the period of review,

Commerce had no reason to apply adverse facts available in this case. See Issues & Decision

Memorandum at 33 & n.90 (comment 17); see also Stanley Response Brief at 6-7.

       Mid Continent asserts that, contrary to Commerce’s finding, Stanley did not act to the best

of its ability to cooperate with Commerce, and withheld factors of production data for at least one

of its unaffiliated wiredrawing subcontractors. See Mid Continent Brief at 12, 14-18; Mid Continent

Reply Brief at 4-7.17 However, record evidence supports Commerce’s determination. From the

beginning of Commerce’s individual investigation of Stanley, Stanley was forthcoming with

Commerce about the factors of production data that it possessed for the subcontractor in question

and the reason why it was not submitting that data. For instance, in response to a questionnaire from

Commerce, Stanley reported that        despite multiple attempts     it had been unable to obtain

information that would allow it to verify the factors of production data that it possessed for the




       17
         Specifically, Mid Continent contends that Stanley “withheld requested [factors of
production] information in its possession for at least [[       ]] of its wire drawers.” Mid
Continent Amended Conf. Brief at 13.
Consol. Court No. 11-00102                                                                     Page 28




subcontractor. Supplemental Questionnaire for Section D at 12-13 (Conf. Doc. No. 109).18

Similarly, Stanley explained that it would have essentially been impossible to obtain the requested

information from another of its subcontractors. Id.19 In light of Stanley’s forthcoming response to

Commerce’s only questionnaire requesting factors of production data on Stanley’s wiredrawing

subcontractors, and in light of Stanley’s multiple attempts to obtain verifiable data, it cannot be said

that Commerce erred in concluding that Stanley cooperated with the agency and acted to the best of

its ability.20


         18
              As Stanley explained to Commerce:

         Stanley and its representatives have expended much effort and made repeated visits
         to the [[ ]] remaining sub-contractors that provided wire drawing services for which
         the Department requested [factors of production] data . . . . Despite the fact that
         wiredrawing is not [[[         ]]]’s principal business, Stanley’s representatives were
         able to obtain all of [[ ]]’s wiredrawing [factors of production] data and most of the
         necessary accounting records for [[ ]]. However, despite repeated requests from
         Stanley’s representative and three on-site meetings, company officials have
         repeatedly refused to provide the company’s financial statements or certain additional
         accounting records that are necessary to confirming their data.

Supplemental Questionnaire for Section D at 12-13.
         19
              As Stanley explained to Commerce:

         The remaining wiredrawing sub-contractor, [[         ]] first refused to provide any
         production and cost data. Following repeated inquiries and three on-site meetings,
         [[       ]] demonstrated to Stanley’s representatives that it exists as an informal
         business entity that operated under a business license borrowed from another
         company and that it did not have actual, separable accounting records.

Supplemental Questionnaire for Section D at 13.
         20
         Mid Continent suggests that, in determining whether to apply adverse facts available,
Commerce is required to evaluate “whether [the] respondent has put forth its maximum effort to
provide [Commerce] with full and complete answers to all inquiries in an investigation.” Mid
Consol. Court No. 11-00102                                                                       Page 29




       Mid Continent fares no better on its claim that Commerce should have applied adverse facts

available here based on Commerce’s determination in a previous administrative proceeding

Activated Carbon from the PRC. Mid Continent Brief at 18; see also Issues and Decision

Memorandum for the Final Determination in the Antidumping Duty Investigation of Certain

Activated Carbon from the People’s Republic of China, 2007 WL 765248 at Comment 20 (Feb. 23,

2007) (“Activated Carbon Decision Memorandum”). For the same two reasons noted by Commerce

in its Issues and Decision Memorandum in this proceeding, Activated Carbon from the PRC is

distinguishable from the instant case, and Mid Continent’s argument is unavailing. See Issues &

Decision Memorandum at 34 (comment 17).

       As Commerce explained here, “the extent by which the respondents failed to provide [factors

of production] data [in Activated Carbon from the PRC] was much more significant than Stanley’s

inability to obtain [factors of production data] from certain wiredrawing subcontractors.” Issues &

Decision Memorandum at 34 (comment 17). In Activated Carbon from the PRC, a respondent failed

to report factors of production data from two direct and three indirect suppliers, and Commerce

applied partial adverse inferences for the missing data. Activated Carbon Decision Memorandum,

2007 WL 765248 at Comment 20. The situation here involves fewer subcontractors. Id.21 In

addition, the respondent in Activated Carbon from the PRC failed to provide factors of production



Continent Brief at 15 (quoting Nippon Steel Corp. v. United States, 337 F.3d 1373, 1382 (Fed. Cir.
2003)). But, although Stanley did not submit certain unverifiable data to Commerce, nothing on the
record indicates that Stanley did not put forth its maximum effort to provide Commerce with the data
it requested.
       21
            Stanley did not provide data for [[ ]] of its subcontractors. See nn.18-19, supra.
Consol. Court No. 11-00102                                                                     Page 30




data for the producers of the subject merchandise itself, while, in this case, Stanley did not provide

factors of production data for part of its production process that is subcontracted out to unaffiliated

parties. Issues & Decision Memorandum at 34. In other words, Commerce here determined that it

is more problematic when factors of production data are missing for the entire product (as in

Activated Carbon from the PRC) than when factors of production data are missing for part of the

production process (as in the instant case). Compare Activated Carbon Decision Memorandum,

2007 WL 765248 at Comment 20 with Issues & Decision Memorandum at 34. Based on these

considerations, Commerce reasonably concluded that the result in Activated Carbon from the PRC

is not controlling here.

       Mid Continent’s reliance on two other administrative determinations is similarly misplaced.

See Mid Continent Brief at 18 (citing Issues and Decision Memorandum for the Administrative

Review of Certain Cased Pencils from the People’s Republic of China; Final Results, 2002 WL

1732817 at Comment 10 (July 25, 2002) (“Cased Pencils Decision Memorandum”); Notice of Final

Determination of Sales at Less Than Fair Value: Creatine Monohydrate From the People’s Republic

of China, 64 Fed. Reg. 71,104, 71,109 (Dec. 20, 1999) (“Creatine Monohydrate Final

Determination”)). In Cased Pencils from the PRC and Creatine Monohydrate from the PRC as in

Activated Carbon from the PRC         the non-cooperating suppliers were producers of the subject

merchandise itself, not producers of components of the subject merchandise. Further, in Creatine

Monohydrate from the PRC, there was no indication that the respondents had even tried to obtain

data from their suppliers. See Creatine Monohydrate Final Determination, 64 Fed. Reg. at 71,108-

09. In this case, the two suppliers at issue were producers of components (wiredrawing services) of
Consol. Court No. 11-00102                                                                     Page 31




the subject merchandise, and Stanley made a concerted effort to obtain verifiable factors of

production data from them. Thus, neither of the cases supports Mid Continent’s claim.

       As Commerce noted in its Issues and Decision Memorandum, the agency’s analysis here

“closely mirrors” that in its previous determination in yet another administrative review, Tapered

Roller Bearings from the PRC. See Issues & Decision Memorandum at 33-34 (comment 17); Issues

and Decision Memorandum for the Final Results of Antidumping Review on Tapered Roller

Bearings from the People’s Republic of China, 2009 WL 170611 at Comment 4 (Jan. 13, 2009)

(“Tapered Roller Bearings Decision Memorandum”). Tapered Roller Bearings from the PRC is

analogous to the instant case because the respondent in that case, as in this one, was forthcoming

about its inability to obtain factors of production data from subcontractors, and Commerce found that

the respondent did not impede the proceeding. Compare Issues & Decision Memorandum at 33-34

with Tapered Roller Bearings Decision Memorandum, 2009 WL 170611 at Comment 4. Moreover,

Tapered Roller Bearings from the PRC is also analogous to the instant case because, in both cases,

“the missing [factors of production] were not for complete production of a product, but rather for

a stage in the production process that is subcontracted out to unaffiliated parties.” Issues & Decision

Memorandum at 34; Tapered Roller Bearings Decision Memorandum, 2009 WL 170611 at

Comment 4.

       Mid Continent’s claim that Commerce’s choice of data to replace the missing wiredrawing

factors of production data was not based on substantial evidence is also unavailing. Mid Continent

Brief at 12-13. Mid Continent faults Commerce for the assumption that the subcontractors whose

data were missing from the record had production operations identical or comparable to the three
Consol. Court No. 11-00102                                                                   Page 32




subcontractors whose data were on the record. Id. at 13. According to Mid Continent, the

subcontractors whose data were on the record had “significantly different” production experiences,

resulting in “significantly different production efficiencies among them.” Id. Specifically, Mid

Continent contends that these subcontractors had meaningful differences in their drawn wire yield

rates (i.e., the quantity of wire produced from a given quantity of rod) and in their consumption of

various inputs. Id. Based on these considerations, Mid Continent concludes that Commerce

unreasonably assumed that the data on the record for Stanley’s wiredrawing subcontractors were

appropriate to replace the missing data. Id. at 14.

       However, since Commerce had already decided not to apply adverse facts available to

substitute for the missing data, Commerce was simply looking for neutral data to fill the information

gap. The weighted average of the three subcontractors’ data on the record constituted a reasonable

substitute for the missing data because they were reflective of the majority of Stanley’s wiredrawing

services data, which was already on the record.

       In short, Commerce reasonably declined to apply adverse facts available because Stanley had

cooperated with Commerce.        Mid Continent’s arguments to the contrary notwithstanding,

Commerce’s determination in this case was consistent with Commerce’s decisions in other

administrative reviews. And Commerce’s selection of neutral facts available to account for the

missing data was not unreasonable and was well within the agency’s ample discretion.


                                  C. Surrogate Financial Ratios

       In its Final Results, Commerce concluded that it could no longer use Lakshmi’s financial
Consol. Court No. 11-00102                                                                   Page 33




statement as a source for surrogate financial ratios in the underlying review, because the agency had

identified evidence of countervailable subsidies in Lakshmi’s statement. See Issues & Decision

Memorandum at 10-11 (comment 3). After reviewing the other potential sources on the record,

Commerce ultimately settled on the financial statements of three small Indian companies        J&K,

Bansidhar, and Nasco. See Issues & Decision Memorandum at 9-13.

       Mid Continent takes strong exception to Commerce’s decision to rely on the financial

statements of J&K, Bansidhar, and Nasco, and objects to the agency’s rejection of the financial

statements of Sundram and Lakshmi. See generally Mid Continent Brief at 2, 6-7, 19-27; Mid

Continent Reply Brief at 7-9. But see Def.’s Response Brief at 9, 18-23; Stanley Response Brief at

15, 30-38. In any event, the Government now has requested a voluntary remand to allow Commerce

to reconsider its position on the selection of financial statements, in light of recent intervening

developments. See generally Def.’s Remand Motion. As discussed below, that request has merit

and must be granted.

       When constructing normal value for a foreign producer in a NME country, Commerce bases

its determination on “the value of the factors of production utilized in producing the merchandise.”

19 U.S.C. § 1677b(c)(1). However, as discussed above, valuing the factors of production does not

capture certain items, such as manufacturing overhead, selling, general and administrative expenses

(“SG&A”), and profit. Commerce calculates those surrogate values using ratios derived from the

financial statements of one or more companies that produce identical       or at least comparable

merchandise in the surrogate market economy country. See generally 19 C.F.R. § 351.408(c)(4); 19

U.S.C. § 1677b(c)(1).
Consol. Court No. 11-00102                                                                  Page 34




       In the Final Results, Commerce explained its reasons for rejecting Sundram as a source for

surrogate financial ratios:

       [H]aving an integrated wiredrawing process with [steel wire rod, or “SWR”] is key
       to reflect the production processes of [Stanley]. However, the record does not permit
       a conclusion that Sundram’s production process mirrors Stanley Langfang’s. First,
       nowhere in its financial statement does it indicate that Sundram consumes SWR. Its
       raw material consumption report lists only “steel” as an input. Thus, even though
       Sundram produces some comparable merchandise, [Commerce] cannot be certain
       that it uses the same primary raw material as Stanley Langfang, and thus cannot
       conclude Sundram’s production process reflects that of [Stanley].

Issues & Decision Memorandum at 11 (comment 3). The Issues and Decision Memorandum further

explains that Commerce rejected Sundram not only because, according to Commerce, Sundram

“only produced comparable rather than identical merchandise,” but, in addition, because Sundram

“also produced and sold a large array of products not comparable to subject merchandise.” Id. at 12.

       The Final Results outlined as well Commerce’s reasons for selecting the financial statements

of J&K, Bansidhar, and Nasco as sources for surrogate financial ratios:

       Since the Preliminary Results, additional financial statements have been placed on
       the record, including those of Nasco, Bansidhar, and J&K. All three companies meet
       [Commerce’s] surrogate value (“SV”) selection criteria, and all three produce nails
       from SWR [steel wire rod]. In the case of Nasco, it also appears to produce nails
       either from drawn wire and/or hot-rolled sheet, but nonetheless consumed SWR
       during the fiscal year. . . . Second, of the remaining potential surrogate companies,
       only Nasco, Bansidhar, and J&K produce nails and use SWR in the production
       process.

Issues & Decision Memorandum at 11-12 (comment 3). Commerce further noted that “Nasco,

Bansidhar, and J&K have invested in equipment required to produce nails and use SWR similar to

[Stanley], whereas the other potential surrogate companies [have] not.” Id. at 12. Reasoning that

the financial ratios of companies that produce nails “are more appropriate to use than those of
Consol. Court No. 11-00102                                                                       Page 35




companies that do not produce nails” (apparently referring, perhaps mistakenly, to Sundram),

Commerce concluded that it would use the financial statements of Nasco, Bansidhar, and J&K to

calculate surrogate financial ratios for the Final Results. Id. at 12-13.

        Noting that, in selecting sources of financial ratios, Commerce’s general practice is to attempt

to match the production experience of a surrogate company to the production experience of a

respondent, Mid Continent argues that Commerce erred in using the financial statements of

Bansidhar, J&K, and Nasco, because         Mid Continent asserts      their production and operational

experiences were “fundamentally incomparable” to those of Stanley. Mid Continent Brief at 19-20;

see also id. at 21-26; Mid Continent Reply Brief at 7-9. Mid Continent characterizes Bansidhar,

J&K, and Nasco as “very small scale, private enterprises,” while Stanley is a “large, diversified

multi-national corporation.” Mid Continent Brief at 21-22; see generally id. at 2, 6-7, 19-27; Mid

Continent Reply Brief at 7-9.

        Mid Continent points to the financial statements of Bansidhar, J&K, and Nasco as proof that

“their business activities and financial performance have fundamentally little to do with the

production of steel nails or comparable [merchandise].” Mid Continent Brief at 22; see generally

id. at 22-24.22 Mid Continent also criticizes Commerce as ignoring a laundry list of concerns that,

Mid Continent contends, “undermin[e] the use of the Nasco, Bansidhar, and J&K financial


        22
           See also Mid Continent Brief at 22 (arguing that Bansidhar’s sales revenues are largely
attributable to resales of traded goods, “leaving virtually nothing to account for ‘nail’ production and
sales”); id. at 22-23 (asserting that J&K is “primarily a wire drawer,” and that J&K’s sales for all
produced goods are but a fraction of Stanley’s sales of subject goods during the period of review);
id. at 23 (arguing that Nasco “primarily produces hinges, washers, and ‘tawa,’” and that only a small
fraction of Nasco’s sales revenue was attributable to sales of nails); id. at 23-24 (contrasting the fixed
assets of the three much smaller companies with those of Stanley and Lakshmi).
Consol. Court No. 11-00102                                                                       Page 36


statements” in the Final Results. Id. at 24-26; see also Mid Continent Reply Brief at 8.23

        Moreover, just as Mid Continent contends that the profiles of Bansidhar, J&K, and Nasco

rendered them inappropriate as sources for surrogate financial ratios, Mid Continent argues that

Lakshmi and Sundram are “large, multinational fastener producers like Stanley,” with similar

production experiences. See Mid Continent Brief at 26; see also Mid Continent Reply Brief at 8-9.

Mid Continent asserts, inter alia, that the sales revenues and fixed assets of Stanley, Sundram, and

Lakshmi confirm that Sundram and Lakshmi “operate at comparable scales of production, and use

comparable processes, and thus are more representative of Stanley’s production experience” than

are Bansidhar, J&K, and Nasco, on which Commerce relied in the Final Results. See Mid Continent

Brief at 26; see also Mid Continent Reply Brief at 8-9. Mid Continent therefore requests that

Commerce be directed “to reject the use of Nasco’s, Bansidhar’s, and J&K’s financial statements



        23
           See, e.g., Mid Continent Brief at 24-25 (concluding that Nasco’s financial statements
confirm “only minimal nail production,” and suggesting that its nail production may be limited to
nails for company’s own internal consumption; asserting that Nasco is primarily a producer of
products manufactured from hot-rolled steel, and that wire rod the main input for steel nails
accounted for only a very small percentage of Nasco’s consumption of raw materials; arguing that
production process for producing goods from hot-rolled steel is “entirely different, uses wholly
different equipment, and has a significantly different cost structure” than companies such as Stanley
that use wire rod as a main input); id. at 25 (stating that Bansidhar’s financial statements indicate that
company’s financial results “are driven by significant trading, as opposed to production activity”;
arguing that Bansidhar’s manufacturing operations are operating at a loss, and that company showed
profit only due to traded goods; asserting that Bansidhar’s fiscal year production of all nails (in
general) represents but a tiny fraction of Stanley’s sales of subject nails); id. at 25-26 (highlighting
fact that less than 5% of J&K’s production was devoted to “wire nails,” and valuation of those nails
was not significant; asserting that J&K’s main focus was on drawing wire rod into steel wire, and
that most of company’s sales were related to sales of steel wire; asserting that J&K’s financial
statements reflect receipt of subsidies in amount greater than company’s “profit,” and that had J&K
been recognized as operating at a loss company would not have been considered an appropriate
source of surrogate values; emphasizing that J&K was operating at less than 30% capacity during
period of review).
Consol. Court No. 11-00102                                                                     Page 37


as surrogate financial ratios and [to] apply the more appropriate financial ratios from Lakshmi and/or

Sundram.” See Mid Continent Brief at 26-27.

       The Government and Stanley maintain that the financial statements of Bansidhar, J&K, and

Nasco constitute the best available information for surrogate financial ratios and that their use by

Commerce should be upheld as supported by substantial evidence and otherwise in accordance with

law. See generally Def.’s Brief at 9, 18-23; Stanley Response Brief at 15, 30-38.

       The Government seeks to deflect Mid Continent’s emphasis on the magnitude of the

differences in the scale of the production and operations of Stanley on the one hand and Bansidhar,

J&K, and Nasco on the other. Specifically, the Government notes that, in the Final Results,

Commerce cited several administrative decisions for the proposition that, in essence, “size doesn’t

matter” (at least not necessarily) in surrogate selection. See Def.’s Brief at 21-22 (citing Issues &

Decision Memorandum at 11-13 (comment 3), and authorities cited there).24

       In addition, the Government and Stanley particularly highlight Commerce’s focus on the

production of “identical” or “comparable” merchandise and the importance of the similarity of

processes in the use of steel wire rod in the production of nails. See generally Def.’s Brief at 9, 18,

20-22; Stanley Response Brief at 32, 34-38. Notably, however, Commerce’s conclusion that

Sundram’s production processes may not mirror those of Stanley and its determination that Sundram

does not consume steel wire rod appear to be predicated solely on Sundram’s financial statement.

See Issues & Decision Memorandum at 11 (comment 3) (concluding that “the record does not permit


       24
         But see Mid Continent Reply Brief at 8 (arguing that “[d]espite the fact that Commerce has
in the past indicated that size not render a company unfit as a surrogate, in light of the stark
differences in operations between the three surrogate [companies] selected and Stanley, the financial
statements chosen by Commerce cannot reasonably be considered the best available information”).
Consol. Court No. 11-00102                                                                   Page 38


a conclusion that Sundram’s production process mirrors [that of] Stanley,” because, inter alia,

“nowhere in its financial statement does it indicate that Sundram consumes [steel wire rod]”).

Commerce has not directly addressed Mid Continent’s specific arguments on this point; nor does it

appear that Commerce has carefully considered all relevant evidence on the record. See, e.g., Mid

Continent Case Brief at 43, 46 (explaining, inter alia, that both nails and screws/fasteners are

produced from steel wire and steel wire rod, and that “the production processes for nails and

screws/bolts is extremely similar, involving the same input material, which undergoes the same

production process”; very favorably comparing “the production process, product range, and physical

characteristics of Sundram’s screws and bolts and Stanley’s nails”).

       In any event, after briefing the issue on the merits, the Government filed a motion requesting

a voluntary remand of this matter to permit Commerce to reconsider its determination in the Final

Results. See generally Def.’s Remand Motion. In its motion, the Government explains that, since

issuing the Final Results in this first administrative review, Commerce now has issued its Final

Results in the second administrative review, where Commerce examined whether Bansidhar was a

producer of merchandise identical or comparable to that produced by Stanley. See Def.’s Remand

Motion at 2; see also Decision Memorandum for Second Nails Review, 2012 WL 699520 at

Comment 2. In the second administrative review, Commerce “refined [its] practice with regard to

how [it] determine[s] whether a company is a producer of ‘identical’ or ‘comparable’ merchandise.”

Decision Memorandum for Second Nails Review, 2012 WL 699520 at Comment 2.25 In light of this

       25
         Specifically, Commerce determined that, “where . . . detailed evidence is available in the
record of the proceeding, [Commerce] will analyze a surrogate company’s product mix to make a
determination of whether it is more reasonable to consider the company an ‘identical’ producer as
a whole or more reasonable to consider the company a producer of comparable merchandise.”
Consol. Court No. 11-00102                                                                     Page 39


policy refinement, the Government requests a remand in order to permit Commerce to reconsider

the selection of surrogate financial ratios in this first administrative review. See Def.’s Remand

Motion at 2-3.

       Stanley opposes the Government’s motion for a voluntary remand, dismissing the issue of

whether a company is a producer of “identical” or “comparable” merchandise as a “minor element”

of Commerce’s antidumping analysis, and asserting that the motion does not establish a “substantial

and legitimate” concern within the meaning of SKF. See Stanley Response to Def.’s Remand

Motion at 1-3 (citing SKF USA Inc. v. United States, 254 F.3d 1022, 1029 (Fed. Cir. 2001) (citation

omitted)).26 Stanley argues that the Government’s request is not made “for any purpose except a

vague and open-ended ‘evaluation of this issue,’” and observes that the Government’s motion “does

not state that such a determination would be of any substantive consequence.” Stanley Response to

Def.’s Remand Motion at 3. Ultimately, Stanley maintains that there is no basis to believe that, even

if Bansidhar were to be reclassified as a producer of “comparable” rather than “identical”

merchandise, that determination would have any impact on Stanley’s dumping margin. See id.



Decision Memorandum for Second Nails Review, 2012 WL 699520 at Comment 2 (emphasis
added); see also Def.’s Remand Motion at 2.
       26
         Initially Stanley also opposed the Government’s remand motion on the grounds that it
would waste the resources of the court. In particular, Stanley argued that, if the Government’s
remand were granted and the Court of Appeals rendered a decision on zeroing favoring Stanley’s
zeroing claim in this action, the issue of surrogate financial ratios would be moot because the zeroing
ruling would reduce Stanley’s dumping margin to zero without regard to Commerce’s calculation
of financial ratios. Stanley Response to Def.’s Remand Motion at 3-4. However, Stanley’s argument
has been overtaken by events. As a result of the Court of Appeals’ recent decision in Union Steel,
Stanley has voluntarily dismissed its zeroing claim in this action. See [Stanley Plaintiffs] Motion
for Voluntary Dismissal of Their First Cause of Action; Union Steel v. United States, 713 F.3d 1101
(Fed. Cir. 2013).
Consol. Court No. 11-00102                                                                   Page 40


       Mid Continent, on the other hand, supports the Government’s motion and argues that the

Government’s concerns are both substantial and legitimate. See Mid Continent Response to Def.’s

Remand Motion at 3-4. According to Mid Continent, “Commerce’s recent refinement to its practice

potentially will result in a change to the financial statements selected and the financial ratios

calculated, thereby altering . . . [the] final [dumping] margin.” See id. at 3. Mid Continent further

notes that there is no “evidence that [the Government’s] request for partial remand is motivated by

bad faith or is frivolous in nature.” Id. at 3-4 (citing Clemmons v. West, 206 F.3d 1401, 1403-04

(Fed. Cir. 2000) (citation omitted)).

       As Stanley suggests, it may be that Commerce’s policy refinement will have no impact on

the ultimate dumping margin in this case. But, at this point, no one can be certain. In this review,

Commerce has considered the issue of whether a company produced “identical” or “comparable”

merchandise to be a relevant factor in its selection of surrogate companies for financial ratios. For

instance, Commerce rejected Sundram in part because it was a producer of “comparable,” not

“identical,” merchandise. Issues & Decision Memorandum at 12 (comment 3) (explaining that

Commerce found Sundram to “only produce[] comparable rather than identical merchandise”).

Similarly, in the Preliminary Results, Commerce noted that it had selected Lakshmi, even though

the company “produce[d] comparable rather than identical merchandise.” Surrogate Valuation

Memorandum for the Preliminary Results at 15-16.

       Thus, a change in the way the agency determines whether merchandise is “identical” or

“comparable” conceivably could have implications for Commerce’s ultimate determination in the

underlying administrative review here. The Government’s concern is clearly “substantial and
Consol. Court No. 11-00102                                                                       Page 41


legitimate.” See SKF, 254 F.3d at 1028 (explaining that a “remand is generally required if the

intervening event may affect the validity of the agency action” (emphasis added)). A remand is

therefore appropriate, to permit Commerce to reevaluate its determination in the Final Results

concerning the selection of financial statements as sources for surrogate financial ratios, in light of

the agency’s recent policy refinement. On remand, Commerce shall consider anew all record

evidence in light of, inter alia, the agency’s updated policy and shall fully articulate the rationale for

its determination on remand, and identify all relevant evidentiary support, whatever that

determination may be.


                                 D. Surrogate Values for Electricity

        Mid Continent challenges Commerce’s determination in the Final Results to value the

electricity consumed in producing nails based on data published by India’s Central Electricity

Authority (“CEA”) in March 2008, rather than on data that the CEA published in March 2009 (which

Mid Continent placed on the record here). See generally Mid Continent Brief at 2, 7, 27-28; Mid

Continent Reply Brief at 9-11. But see Def.’s Brief at 9-10, 23-25; Stanley Response Brief at 16,

38-39. Mid Continent emphasizes that Commerce’s decision not to use the 2009 data was based on

the agency’s conclusion that the 2008 data are “more contemporaneous” than the data published in

2009. See Issues & Decision Memorandum at 15 (comment 5).

        Mid Continent contends that Commerce’s determination concerning the relative

contemporaneity of the two data sets is demonstrably “factually incorrect,” and that the Final Results

on this point therefore are not supported by substantial evidence. See Mid Continent Brief at 27-28;

Mid Continent Reply Brief at 9-11. Remand is necessary to allow Commerce to reconsider this issue
Consol. Court No. 11-00102                                                                   Page 42


and to clarify both its determination and the underlying rationale.

       In selecting surrogate values, Commerce seeks the “best available information” in accordance

with 19 U.S.C. § 1677b(c)(1). Def.’s Brief at 23. In evaluating potential sources, Commerce prefers

“investigation or review period-wide price averages, prices specific to the input in question, prices

that are net of taxes and import duties, prices that are contemporaneous with the period of

investigation or review, and publicly available data.” Policy Bulletin 04.1; see also Issues &

Decision Memorandum at 13 (comment 4); Def.’s Brief at 23 (similar). Here, Commerce found that

the two potential data sources for surrogate values for electricity i.e., the 2008 data and 2009 data

 both satisfied the relevant criteria, but that the 2008 data were “more contemporaneous” with the

period of review. See Issues & Decision Memorandum at 15 (comment 5). In its entirety,

Commerce’s analysis of the matter in the Issues and Decision Memorandum constitutes but a few

brief sentences, with no elaboration:

       We have followed the [surrogate value] selection [criteria] . . . [i.e., public
       availability, contemporaneity, representativeness, and specificity, as well as whether
       the data are from an approved surrogate country and are exclusive of taxes and
       duties]. In the case of electricity, after reviewing both the 2008 and 2009 CEA data,
       we have determined that both values are publicly available, from an approved
       surrogate country, specific to the input in question, and . . . broad-market averages.
       With respect to contemporaneity, . . . the rates contained in the 2008 CEA data cover
       more of the [period of review] than do those of the 2009 data, and are thus more
       contemporaneous. Therefore, for the final results of this review, we have continued
       to value electricity using CEA data from 2008 because they best satisfy
       [Commerce’s] [surrogate value] selection criteria.

Issues & Decision Memorandum at 15 (comment 5) (emphasis added).

       The bases for Commerce’s conclusion that the 2008 data are “more contemporaneous” than

the 2009 data quoted above are entirely unclear. The 2008 data reflect effective tariff rates only
Consol. Court No. 11-00102                                                                    Page 43


through March 31, 2008, and the most recent data point for electricity pricing in the 2008 data is

from May 2007. See Mid Continent Brief at 27; Mid Continent Reply Brief at 10; see also Mid

Continent Case Brief at 53-54 (citing Surrogate Valuation Memorandum for the Preliminary Results

at Exh. 46 (data table showing May 2007 as most recent effective date for tariff rates in 2008 data)).

In contrast, the 2009 data reflect effective tariff rates through March 31, 2009, and the most recent

data point for electricity pricing in the 2009 data is from August 2008. See Mid Continent Brief at

28-29; Mid Continent Reply Brief at 10; see also Mid Continent Case Brief at Att. 3 (data table

showing August 2008 as most recent effective date for tariff rates in 2009 data). Although the 2009

data include many of the same data points as the 2008 data for pre-2008 tariff rates, the 2009 data

also include updated energy pricing from 2008 for Madhya Pradesh, Maharashtra, Mumbai

(B.E.S.T.), Mumbai (Reliance Energy), and Mumbai (TATA). Compare Surrogate Valuation

Memorandum for the Preliminary Results at Exh. 46 (2008 data) with Mid Continent Case Brief at

Att. 3 (2009 data). Thus, on the whole, the 2009 data appear to be more contemporaneous.

       The Government attempts to defend Commerce’s action in the Final Results by underscoring

that the 2008 data “comprise over thirty pages of detailed ‘price data for small, medium, and large

industries’ across an extensive range of geographical locations, whereas the 2009 data appear in

summary form on a single page containing only a handful of data points.” See Def.’s Brief at 24

(citing Surrogate Valuation Memorandum for the Preliminary Results at 11). The Government’s

observation may well have some bearing on the relative merits of the two data sets. However, it says

nothing at all about the relative “contemporaneity” of the data, which was the basis for Commerce’s

selection of the 2008 data over the 2009 data in the Final Results. An agency determination cannot
Consol. Court No. 11-00102                                                                     Page 44


be sustained on the strength of a post hoc rationale supplied by litigation counsel. See Burlington

Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962). As the Supreme Court has explained,

“an agency’s action must be upheld, if at all, on the basis articulated by the agency itself.” Motor

Vehicle Mfg. Ass’n of the United States v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 50 (1983).

       The 2008 data may be superior in other respects yet to be detailed by Commerce. But the

2009 data appear to be more contemporaneous with the period of review at issue (January 23, 2008

to July 31, 2009). The plain meaning of “prices that are contemporaneous with the . . . period of

review” in this context is prices that are reflective of those actually in effect during the review

period. Thus, a data set reflecting prices that were in effect for more months of the review period

is more contemporaneous with the period of review than a data set reflecting prices that were in

effect for fewer months of the review period. Based on this understanding, the 2009 data reflect

tariff rates in effect for 13 of the 18 months of the period of review (i.e., late January 2008 through

late March 2009), while the 2008 data cover less than two months of the period of review (i.e., late

January 2008 through late March 2008). See Mid Continent Brief at 27.27

       The Government argues that “issuing a subsequent edition [of data on electricity rates] does


       27
          There is much confusion as to the exact nature, meaning, and significance of the
information in the two sets of data. For example, the Government asserts that “the 2008 data show
the date of implementation for each rate not the specific dates on which the rate was in effect.”
See Def.’s Brief at 25. But other parties differ. Similarly, Stanley insists that the 2008 data reflect
electricity rates that were “in effect for thirteen months of the [period of review],” and that the 2009
data reflect rates that were “only in effect for four months” of that period. See Stanley Response
Brief at 38-39. And, as discussed above, Mid Continent’s figures are quite different. Compare Mid
Continent Brief at 27-28 (arguing that 2009 data reflect rates in effect for 13 of the 18 months of the
period of review, while 2008 data cover less than two months of the period). It appears that there
is even disagreement and confusion as to the definition of “contemporaneous.” See generally
Transcript of Oral Argument at 24-27, 35-47, 59-63 (oral argument on surrogate value for
electricity). Commerce must clarify and then explain all such matters on remand.
Consol. Court No. 11-00102                                                                      Page 45


not affect the individual rates [in the prior publication] nor does it mean the rates in the prior

publication are no longer effective.” Def.’s Brief at 25. However, the Government’s next statement

  that the subsequent edition “simply reports any new rates that came into effect after the earlier

publication”      does not support the Government’s assertions that the 2008 data are more

contemporaneous than the 2009 data. See id. Instead, that statement suggests that the 2009 data are

more contemporaneous, because the “new rates that came into effect after the earlier publication”

should make the 2009 data more aligned with the period of review.

         In light of the discussion above, remand is warranted to permit Commerce to reconsider this

issue, and to clarify its determination that the 2008 data are more contemporaneous than the 2009

data and to detail the bases therefor. If, upon review, Commerce concludes that the 2008 data are

not more contemporaneous, Commerce shall determine which data constitute the “best available

information”     based on all relevant factors   and shall explain why.


                                    E. Ministerial Error Allegation

         Stanley’s sole remaining issue in this consolidated action is its “ministerial error” claim. The

gravamen of this claim is that Commerce declined to correct “an error in [the agency’s] computer

program,” which according to Stanley therefore did not, as a general matter, properly calculate

U.S. prices and normal value on the same weight basis. See generally Stanley Brief at 2, 3, 4-5, 10,

25-30, 31; Stanley Reply Brief at 14-15. But see Def.’s Brief at 10, 31-37; Mid Continent Response

Brief at 3-4, 20-24. According to Stanley, the effect of the error was to “overstate[] Stanley’s normal

values and increase[] the resulting dumping margin by about one percent ad valorem.” Stanley Brief

at 26.
Consol. Court No. 11-00102                                                                     Page 46


        Specifically, Stanley contends that, due to a “missing instruction,” Commerce’s computer

program did not “adjust normal values to account for the fact that Stanley’s per-kilogram normal

values were computed using the weight of nails alone while its U.S. selling prices were converted

from per-carton prices to per-kilogram prices using the combined weights of nails plus collating

materials.” Stanley Brief at 2; see also id. at 3, 4-5, 25-26; Stanley Reply Brief at 14.28 Commerce’s

failure to correct this “error” in “computer programming” was, Stanley asserts, “a ministerial error.”



       28
          The alleged ministerial error was the product of a process which began when in response
to Commerce’s questionnaire regarding the company’s factors of production Stanley reported the
amounts of each factor used to produce one kilogram of nails. See Stanley’s Response to Section
C Questionnaire at 14 (Pub. Doc. No. 159). Using this data, Commerce “added the costs of all the
factors, including the plastic, paper or wire collating material used to connect the nails, and obtained
a price for the normal value of collated nails stated in terms of dollars per kilogram.” Def.’s Brief
at 32-33.

         Thereafter, Commerce calculated the United States price using the gross unit price charged
to the first unaffiliated customer in the United States as reported by Stanley. Def.’s Brief at 33. The
gross unit price charged was for a carton of collated nails. Id. During further calculations, “[t]o
restate the United States price of a carton of collated nails in terms of weight so that it could be
compared to normal value (which was calculated in terms of weight), Commerce divided the price
of each carton by the weight of its contents (thus restating the price in dollars per kilogram of
collated nails).” Id.

        Commerce then had to select a conversion factor. Def.’s Brief at 33. In its questionnaire
response, Stanley provided four different options for conversion factors, including CONGWGT3U
(or “C3,” the weight of collated nails) and CONGWGT4U (or “C4,” the weight of collated nails
minus the weight of collating materials). Id. & n.5. According to Commerce, the agency decided
to divide the price of each carton by the weight of collated nails, or C3, because “collating materials
are part of the finished product.” Id. at 34. Finally, Stanley’s dumping margin was calculated by
subtracting the United States price from the normal value.

        In Stanley’s view, the alleged ministerial error was thus “an error in [Commerce’s] computer
program” because it did not account for the fact that Commerce “converted Stanley’s . . . U.S.
selling prices to prices per kilogram using the combined weight of nails and collating materials
contained in the carton,” while, in the meantime, Commerce “calculated per-kilogram normal values
based on the weight of nails alone.” Stanley Brief at 25-26 (emphasis added).
Consol. Court No. 11-00102                                                                  Page 47


Stanley Brief at 26, 30; see also id. at 2, 3, 5, 10, 25, 28, 29.

        Stanley further argues that Commerce did not even address the ministerial error that Stanley

actually alleged. Stanley Brief at 29-30; Stanley Reply Brief at 14; see generally Stanley’s Request

for Correction of Significant Ministerial Errors (Pub. Doc. No. 387). In other words, Stanley

maintains, Commerce ended up “focus[ing] . . . on an issue that Stanley did not raise” which was,

Stanley contends, “the selection of the cartons-to-kilograms conversion denominator itself.” Stanley

Brief at 29-30 (citing Amended Final Results, 76 Fed. Reg. at 23,280). But it was not Commerce’s

selection of the cartons-to-kilograms denominator that was the ministerial error, Stanley urges;

rather, it was the “computer programming step that occurred after” Commerce selected the

denominator. Stanley Brief at 30; Stanley Reply Brief at 14. Stanley concludes that, because

Commerce focused on the wrong ministerial error allegation, Commerce’s “denial of Stanley’s

correction request [was] therefore unreasonable.” Stanley Brief at 29.

        Whether Commerce focused on the incorrect ministerial error allegation, or whether

Commerce’s alleged error was in fact a ministerial error at all (a point that the Government and Mid

Continent dispute) is of no moment here, because Stanley failed to exhaust its administrative

remedies. See Def.’s Brief at 10 (arguing that Stanley is “characterizing,” post hoc, a substantive

issue “as a ministerial error”), 36, 37 (same); Mid Continent Brief at 3-4, 22, 24 (same). For the

reasons discussed below, Stanley’s claim must fail.

        To promote “transparency,” Commerce has a long-standing practice of disclosing to parties

to an administrative review the details of the agency’s antidumping calculations and affording them

an opportunity to point out and request correction of any “ministerial errors” identified in the
Consol. Court No. 11-00102                                                                      Page 48


calculations. See generally 19 C.F.R. § 351.224 (“Disclosure of calculations and procedures for the

correction of ministerial errors.”).29

        Pursuant to the regulations, when Commerce discloses its antidumping calculations to a

party, the party has five days thereafter to file comments concerning any ministerial errors. 19

C.F.R. § 351.224(c)(2). The party’s comments are to “explain the alleged ministerial error” by

pointing to evidence in the record, “and must present what, in the party’s view, is the appropriate

correction.” 19 C.F.R. § 351.224(d). These comments help Commerce correct              “if appropriate”

 any ministerial errors and amend (if necessary) preliminary and/or final results, as well as publish

any necessary corrections to the public. 19 C.F.R. § 351.224(e).

        To similar ends, the Court of Appeals has instructed that interested parties “must point out

any ministerial errors [concerning the preliminary results of a review] in their case briefs” filed with

Commerce following the issuance of preliminary results. QVD Food Co. v. United States, 658 F.3d

1318, 1328 (Fed. Cir. 2011) (quoting 19 C.F.R. § 351.224(c)(1); 19 C.F.R. § 351.309(c)(2) (“The

case brief must present all arguments that continue in the submitter’s view to be relevant to

[Commerce’s] final determination or final results . . . .”)) (emphasis added). In other words, a party

must exhaust its administrative remedies before pressing a ministerial error allegation in this forum.

        Here, Stanley failed to exhaust its administrative remedies by not timely and properly

objecting to Commerce’s choice of conversion factors in the Preliminary Results. See Def.’s Brief

at 31-32, 35, 36-37. Although Stanley was put on notice of Commerce’s choice of conversion


        29
          A ministerial error is defined by the regulations as “an error in addition, subtraction, or
other arithmetic function, clerical error resulting from inaccurate copying, duplication, or the like,
and any other similar type of unintentional error which [Commerce] considers ministerial.” 19
C.F.R. § 351.224(f); see also 19 U.S.C. § 1675(h) (similar).
Consol. Court No. 11-00102                                                                       Page 49


factors and programming code in the Preliminary Calculation Memorandum (referenced in the

Preliminary Results), Stanley raised no objection within the five-day period for doing so. See Def.’s

Brief at 32, 34-35; Preliminary Results, 75 Fed. Reg. at 56,075-76; 19 C.F.R. § 351.224(c)(2)(i)-(ii)

(providing that party must file comments within “five days” of Commerce disclosing details of its

antidumping duty calculations). Nor did Stanley include any comments concerning ministerial errors

in its administrative case brief, as the regulations specifically required it to do. See 19 C.F.R. §

351.224(c)(1) (requiring party to include “comments concerning ministerial errors made in the

preliminary results of a review” in the party’s administrative case brief).

        Stanley’s failure to raise any ministerial allegations at the time Commerce’s calculations were

disclosed, or even in its administrative case brief, is fatal to the claim that it seeks to press here. As

the Court of Appeals has squarely held, “a ministerial error made by Commerce that was reflected

in its preliminary antidumping duty determination need not be corrected [by Commerce] when no

interested party pointed out the error in a timely manner.” QVD Food, 658 F.3d at 1328 (citing

Dorbest Ltd. v. United States, 604 F.3d 1363, 1376-77 (Fed. Cir. 2010)). In Dorbest, the court

explained that parties are “procedurally required to raise the[ir] issue before Commerce at the time

Commerce [is] addressing the issue.” Dorbest, 604 F.3d at 1375 (quoting Mittal Steel Point Lisas

Ltd. v. United States, 548 F.3d 1375, 1383 (Fed. Cir. 2008)) (internal quotation marks omitted). The

Dorbest court instructed that “[t]his is because ‘[s]imple fairness to those who are engaged in the

tasks of administration, and to litigants, requires as a general rule that courts should not topple over

administrative decisions unless the administrative body not only has erred but has erred against

objection made at the time appropriate under its practice.’” Dorbest, 604 F.3d at 1375 (quoting
Consol. Court No. 11-00102                                                                     Page 50


United States v. L.A. Tucker Truck Lines, 344 U.S. 33, 37 (1952)).

        In the case at bar, Stanley failed to assert its ministerial error allegation “at the time

Commerce was addressing the issue” both within the specified five-day period following disclosure,

and in its administrative case brief. Dorbest, 604 F.3d at 1375; Def.’s Brief at 32, 35, 36-37. Stanley

could    and should     have mounted its challenge within five days of Commerce disclosing its

antidumping margin calculations at the time of the Preliminary Results, and pursued the matter in

its administrative case brief as well. See QVD Food, 658 F.3d at 1328; 19 C.F.R. § 351.224(c)(1)-

(2). Yet it was not until after publication of the Final Results that Stanley requested that Commerce

correct the alleged ministerial error. See Def.’s Brief at 36; see generally Stanley’s Request for

Correction of Ministerial Errors at 5-9 (Pub. Doc. No. 387) (dated March 23, 2011). Thus, Stanley

did not raise the challenge “until after the proceeding had essentially concluded.” Def.’s Brief at 36.

        In the Preliminary Calculation Memorandum, Commerce specifically identified its selection

of CONWGT3U (the conversion factor) as “the most appropriate conversion weight to use,” stating

that it “represents the weight of the finished nail plus any collating materials, reflecting the scope

of the order and also the fact that collating materials are part of the finished product.” Preliminary

Calculation Memorandum at 1-2. In addition, Commerce provided “over two hundred pages of

detailed calculations” supporting its decision to use what the agency believed to be the most

appropriate conversion factor. See Def.’s Brief at 35. As such, “Commerce clearly gave Stanley

ample opportunity to raise the issue after the Preliminary Results.” Def.’s Brief at 36. Because it

did not do so, Stanley failed to exhaust its administrative remedies and is thus barred from pursuing

its claim of ministerial error in this forum.
Consol. Court No. 11-00102                                                                Page 51




                                        IV. Conclusion

       Stanley’s Motion for Judgment on the Agency Record is denied, and Mid Continent’s Motion

for Judgment on the Agency Record is denied in part and granted in part. Further, the Government’s

Motion for Partial Voluntary Remand is granted. This matter is remanded to the Department of

Commerce for further proceedings not inconsistent with this opinion. A separate order will enter

accordingly.

                                                              /s/ Delissa A. Ridgway
                                                                Delissa A. Ridgway
                                                                      Judge

Dated: September 3, 2013
       New York, New York
