Parties Argue Over Handling of Record From 2019 in Softwood Lumber Oral Argument

The government argued that lumber exporter Les Produits Forestiers D&G was asking Commerce to reconsider a decision without providing any citations to the original record. The judge expressed concern that the department had appeared to miss its own verification findings from the review.

“I mean, I think it’s a close call, but I think, at the end of the day, both sides were taking lazy approaches to both responding to the questions, but then dealing with the implications of all that,” he said.

Initially, Commerce treated the CVD review as an “expedited” review. CIT held that expedited reviews aren’t authorized by U.S. trade law, but the U.S. Court of Appeals for the Federal Circuit reversed that ruling in 2024 (see 2304250061). As a result, the review’s results have been repeatedly remanded.

The remaining issue in the 2019 case concerns the department’s calculation of lumber exporter D&G’s CVD rate -- more specifically, the method of calculation Commerce used to adjust for the amount of lumber D&G and its affiliate purchased from unaffiliated suppliers when determining how much of the suppliers’ subsidies were attributable to D&G (see 2501290040).

Commerce initially chose not to count those subsidies toward D&G’s CVD rate at all; the Court of International Trade remanded that choice in a 2024 decision (see 2404230031). After the remand, Commerce decided to use its trading company methodology to attribute those suppliers’ benefits to D&G in proportion to the number of purchases it made from them.

Edward Lebow, counsel for D&G, argued that this meant Commerce had wrongly attributed benefits to the importer based on “lumber purchased from other Canadian exporters, duty-paid, in the United States.”

The judge pointed out that D&G hadn’t provided Commerce data distinguishing between different types of purchases. In reviews, the exporter has the responsibility to make the record, he said.

Lebow said that D&G had fully answered all of the questions Commerce asked in both its original review questionnaire and more recent supplemental questionnaires. When responding to a 2024 questionnaire, D&G “didn’t know the department was going to come up with the trading company methodology and use it the way it did,” he said.

The exporter hadn’t known it would even have to make the argument, either, he said, because the department had “already acknowledged our purchases in the United States” when verifying its initial CVD review nearly a decade ago.

The government’s attorney, Sosun Bae, argued that D&G wasn’t citing anything specifically on the original review’s record to make its claim that Commerce’s calculation was unlawful. It would be unreasonable to say that Commerce “should have been required to comb back through the entire original record on its own,” especially considering it had more updated information from the 2024 questionnaire responses, she said.

She also claimed that D&G did have some notice that the trading company methodology would come up, as the review’s petitioner, the Committee Overseeing Action for Lumber International Trade Investigations or Negotiations, has been pushing its use for “years.”

Barnett observed to Bae that Commerce’s original verification findings from its expedited review were still on the record. Commerce never mentioned them in its remand results, he said.

“Can you give me any example of another case where Commerce made express findings, verification findings, and then chose to ignore those verified factual findings in a subsequent remand proceeding without having made an affirmative alternative finding?” he asked.

Bae argued that the department hadn’t made an alternative finding. Again, she said that Commerce wasn’t required to go digging to find “a needle in a haystack.”

Lebow argued that the exporter wasn’t asking for Commerce to find a needle in a haystack. It was asking the department to reopen the record so that it could provide the necessary information, he said.

Barnett asked Lebow how detailed D&G’s original questionnaire response had been. Lebow said he couldn’t answer. The judge asked Bae the same question, receiving the same response.

“I mean, you can see why I’m disappointed,” he said. "We're looking at transactions from 10 years ago, which is part of the problem. But you know, at the end of the day, trying to get to a result based on substantial evidence when neither side is really looking at the evidence that's on the record in a wholesome way is, I'll just repeat the word, disappointing."