Canadian Solar, Inc. v. United States

23 F.4th 1372

CANADIAN SOLAR, INC., Canadian Solar International Limited, Canadian Solar Manufacturing (Luoyang), Inc., Canadian Solar Manufacturing (Changshu), Inc., CSI Cells Co., Ltd., CSI Solar Power (China) Inc., CSI Solartronics (Changshu) Co., Ltd., CSI Solar Technologies Inc., CSI Solar Manufacture Inc., CSI New Energy Holding Co., Ltd., CSI-GCL Solar Manufacturing (Yancheng) Co., Ltd., Changshu Tegu New Materials Technology Co., Ltd., Changshu Tlian Co., Ltd., Suzhou Sanysolar Materials Technology Co., Ltd., Canadian Solar (USA), Inc., Plaintiffs-Appellants

Sumec Hardware & Tools Co., Ltd., Changzhou Trina Solar Energy Co., Ltd., Trina Solar (Changzhou) Science & Technology Co., Ltd., Yancheng Trina Solar Energy Technology Co., Ltd., Changzhou Trina Solar Yabang Energy Co., Ltd., Turpan Trina Solar Energy Co., Ltd., Hubei Trina Solar Energy Co., Ltd., Changzhou Trina PV Ribbon Materials Co., Ltd., Plaintiffs

v.UNITED STATES, Defendant-Appellee

SolarWorld Americas, Inc., Defendant

2021-1434

United States Court of Appeals, Federal Circuit.

Decided: January 28, 2022

Sarah Wyss, Mowry & Grimson, PLLC, Washington, DC, argued for plaintiffs-appellants. Also represented by Bryan Cenko, Jill Cramer, Jeffrey S. Grimson, Wenhui Ji, Kristin Heim Mowry.

Justin Reinhart Miller, International Trade Field Office, Civil Division, United States Department of Justice, New York, NY, argued for defendant-appellee. Also represented by Brian M. Boynton, Jeanne Davidson, Tara K. Hogan; Paul Keith, Office of the Chief Counsel for Trade Enforcement & Compliance, United States Department of Commerce, Washington, DC.

Before Moore, Chief Judge, Clevenger and Chen, Circuit Judges.

Chen, Circuit Judge.

Appellants Canadian Solar, Inc. et al.¹ (collectively, Canadian Solar) are producers and exporters of certain crystalline silicon photovoltaic cells. These photovoltaic cells were imported into the United States from the People's Republic of China, and the United States Department of Commerce (Commerce), after an investigation, issued an order imposing a duty to counteract subsidies Canadian Solar received from the government of China.

During its fourth administrative review of that countervailing duty order, Commerce determined on remand that Canadian Solar received regionally specific electricity subsidies subject to countervailing duties under 19 U.S.C. § 1677(5A)(D)(iv). Final Results of Redetermination Pursuant to Court Remand at 14–19, Canadian Solar Inc. v. United States , No. 18-00184 (Ct. Int'l Trade June 26, 2020), ECF No. 95-1 (Remand Redetermination ). To reach this conclusion, Commerce identified electricity price variation across the different provinces and applied adverse facts available—due to the central government of China's failure to cooperate in Commerce's investigation—to conclude that the central government sets variable electricity pricing that is region-specific for development purposes. See id. at 19. The Court of International Trade (CIT) sustained Commerce's Remand Redetermination. Canadian Solar Inc. v. United States , No. 18-00184, slip op. 20-149, 2020 WL 6129754 (Ct. Int'l Trade Oct. 19, 2020) ( Canadian Solar II ). For the reasons stated herein, we affirm.

BACKGROUND

A

Commerce is required to impose a countervailing duty on imported merchandise when it "determines that the government of a country or any public entity within the territory of a country is providing, directly or indirectly, a countervailable subsidy." 19 U.S.C. § 1671(a)(1). A subsidy is countervailable when it is "specific." Id. § 1677(5)(A). One type of specific subsidy is a subsidy "limited to an enterprise or industry located within a designated geographical region within the jurisdiction of the authority providing the subsidy." Id. § 1677(5A)(D)(iv). Such a subsidy is referred to as a regionally specific subsidy.

If, during investigation or review of a countervailing duty order, Commerce determines that (a) "necessary information is not available on the record" or (b) "an interested party or any other person ... withholds information that has been requested by [Commerce]," "fails to provide such information by the deadlines ... or in the form and manner requested," "significantly impedes a proceeding," or "provides such information but the information cannot be verified," Commerce must use "facts otherwise available." 19 U.S.C. § 1677e(a) ; see also Changzhou Trina Solar Energy Co. v. United States , 975 F.3d 1318, 1327 (Fed. Cir. 2020). If Commerce further "finds that an interested party has failed to cooperate by not acting to the best of its ability to comply with a request for information," then Commerce "may use an inference that is adverse to the interests of that party in selecting from among the facts otherwise available." 19 U.S.C. § 1677e(b). To reach an adverse inference, Commerce can rely on information from the petition, a final determination in the investigation, prior administrative reviews, or "any other information placed on the record." 19 U.S.C. § 1677e(b)(2) ; see also 19 C.F.R. § 351.308(c) ; Gallant Ocean (Thai.) Co. v. United States , 602 F.3d 1319, 1321 (Fed. Cir. 2010).

B

On February 13, 2017, Commerce initiated the fourth administrative review of the countervailing duty order at issue. See Initiation of Antidumping and Countervailing Duty Admin. Revs., 82 Fed. Reg. 10,457, 10,457, 10,462 (Dep't Commerce Feb. 13, 2017). The order imposed duties on crystalline silicon photovoltaic cells manufactured in China and imported into the United States. As part of its review, Commerce initiated an investigation and selected Canadian Solar as one of the mandatory respondents. Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From China: Preliminary Results of Countervailing Duty Admin. Rev., and Rescission of Rev., in Part; 2015, 83 Fed. Reg. 1235, 1236 (Dep't Commerce Jan. 10, 2018), and accompanying Decision Memorandum for Preliminary Results at 2–3 (Dep't Commerce Jan. 2, 2018) (Preliminary Memo ). Of relevance to this case, Commerce sought to determine whether Canadian Solar benefitted from receiving electricity for less than adequate remuneration (LTAR). Preliminary Memo , at 25–26.

To understand whether Canadian Solar received electricity subsidies, Commerce sent questionnaires to the government of China. Among other things, Commerce requested provincial price proposals, descriptions of how the National Development and Reform Commission (NDRC) is involved in electricity price-setting, and an explanation of how electricity pricing is responsive to market variables. J.A. 157–65. The parties do not dispute that the government of China declined to provide complete responses to Commerce's inquiries. Because, in Commerce's view, the government of China "failed to cooperate by not acting to the best of its ability to comply" with Commerce's request and because the requested information was "key to [Commerce's] understanding of the [government of China's] role in establishing electricity prices at the local provincial level," Commerce applied adverse facts available to conclude that Canadian Solar received a countervailable subsidy through below-market electricity prices. Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From China: Final Results of Countervailing Duty Admin. Rev.; 2015, 83 Fed. Reg. 34,828, 34,829 (Dep't Commerce July 23, 2018) ( Final Results ), and accompanying Decision Memorandum for the Final Results at 14–15 (Dep't Commerce July 12, 2018) (Final Memo ).² Commerce also applied adverse facts available to calculate the countervailing duty rate.³ Final Memo , at 33–34.

Canadian Solar subsequently filed suit in the CIT challenging various components of the Final Results, including Commerce's finding that Canadian Solar received a countervailable electricity subsidy. Canadian Solar Inc. v. United States , No. 18-00184, slip op. 20-23, 2020 WL 898557, at *4 (Ct. Int'l Trade Feb. 25, 2020). Commerce requested a voluntary remand and the CIT granted the request. Id.

On remand, Commerce provided a revised determination that Canadian Solar received a regionally specific subsidy under 19 U.S.C. § 1677(5A)(D)(iv). Remand Redetermination , at 14. As support for this finding, Commerce noted that the parties did not dispute "that electricity prices vary from province to province in China." Id. Because the government of China declined to provide certain "key information" as to the electricity price variation across the provinces, Commerce was unable to "confirm that market and commercial principles explain the variation in electricity prices on the record." Id. at 15–16.

First, the government of China refused to provide "provincial price proposals for each of the relevant provinces," which would have helped Commerce determine why the electricity prices varied by province, including by identifying "marketor cost-based reasons underlying the variation." Id. at 15. Second, the government of China's response lacked "a detailed description of the cost elements and price adjustments that were discussed between the provinces and the NDRC," which would have helped Commerce ascertain whether the NDRC was involved in price setting as well as why prices varied by province. Id. at 15– 16. Finally, the government of China's response was devoid of any "province-specific explanations" for price variation, such as how costs inform provincial electricity prices. Id. at 16. This would have also helped Commerce determine "whether there is a market-or cost-based explanation for variation among provinces." Id.

After finding that the government of China failed to cooperate to the best of its ability, Commerce applied adverse facts available to conclude that "the provision of electricity is a countervailable subsidy program whereby the central Chinese government, through the NDRC in Beijing, sets different prices in different regions under its authority (i.e., the provinces) without any...