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Plaintiffs assert that Commerces position was not substantially justified at either the administrative level or in the litigation before this court. Plaintiffs argue that Commerce misapplied the statutory provisions regarding the application of total adverse facts available, and that the government ignored this courts reasoning in Borden, Inc. v. United States, 4 F. Supp.2d 1221 (Ct. Intl Trade 1998) in defending Commerces application of total adverse facts available. The government counters that its position was based on law and fact, and that Ferro Union involved the interpretation of new and complex terms pursuant to the 1994 Uruguay Round Agreements Act.
The government bears the burden of showing that its position was substantially justified. Inner Secrets/Secretly Yours, Inc. v. United States, 20 CIT 210, 213, 916 F. Supp. 1258, 1261-62 (1996) (quotation omitted). The Supreme Court has clarified that substantially in this context does not mean justified to a high degree, but rather justified in substance or in the main that is, justified to a degree that could satisfy a reasonable person. Pierce v. Underwood, 487 U.S. 552, 565 (1988).
The fact that the party prevailed is not sufficient to show that the governments position was not substantially justified. See Luciano Pisoni Fabbrica Accessori Instrumenti Musicali v. United States, 837 F.2d 465, 467 (Fed. Cir. 1988) (The mere fact that the United States lost the case does not show that its position in defending the case was not substantially justified.) (quotation omitted). As further stated by the Federal Circuit:
The EAJA was not intended to be an automatic fee-shifting device . . . . The decision on an award of attorney fees is a judgment independent of the result on the merits, and is reached by examination of the governments position and conduct through the EAJA prism, . . . not by redundantly applying whatever substantive rules governed the underlying case.
Id. at 467 (quotations omitted). Indeed, attorneys fees and other expenses are generally awarded only where the government offers no plausible defense, explanation, or substantiation for its action. Consolidated, 16 CIT at 696, 797 F. Supp. at 1011 (quotation omitted). Viewed in this light, Commerces position at both the administrative level and in the litigation before this court was substantially justified.
In concluding that Saha Thai was affiliated with a variety of companies through familial ties, Commerce grounded its analysis in the statute and concluded that the companies were affiliates. See Final Results, 62 Fed. Reg. at 53,809-10 (analyzing definition of affiliated persons, family and control pursuant to 19 U.S.C. § 1677(33)). Although the court found some of Commerces descriptions of the family relations vague, Commerce further described these relationships on remand and properly found that the families controlled Saha Thai. Ferro Union, 1999 WL 825584, at *6 & n.14.
Commerce was applying new statutory terms at the time of the Final Results. When the agency is dealing with a new issue, the courts have recognized that the agency may be substantially justified in its position, even if that position is erroneous. See Consolidated, 16 CIT at 697, 797 F. Supp. at 1012 (Commerce substantially justified in addressing matters pertaining to economy of Peoples Republic of China which were not settled or fixed and Commerce [made] good faith attempts to address them.); see also Luciano, 837 F.2d at 467 (underlying case revoked antidumping duty order, but Commerces position substantially justified in part because of complexity, uniqueness, and newness of issues). Here the court recognized that the full scope of the term affiliated persons pursuant to 19 U.S.C. § 1677(33) was an admittedly complex, and as yet unexplained, concept. Ferro Union, 44 F. Supp.2d at 1327. The court upheld Commerces interpretation of the term, but found that Commerce had unfairly required Saha Thai to apply this interpretation at the outset because Saha Thai did not have reason to foresee the full meaning of the term as interpreted by Commerce. Id. Nonetheless, it is not clear that Commerce should have recognized Saha Thais lack of notice. Because of the new statute, neither party was certain of its duties. The court finds Commerces proper interpretation of affiliation in this case was sufficient to render its actions substantially justified or otherwise to make the award of fees unjust.
Commerce also attempted to follow the framework of 19 U.S.C. § 1677e in applying total adverse facts available in concluding that Saha Thai had significantly impeded the review. Final Results, 62 Fed. Reg. at 53,809. This conclusion is sufficient for an application of facts otherwise available. See 19 U.S.C. § 1677e(a)(2)(C). The flaw in Commerces analysis was in failing to make the additional finding that Saha Thai had failed to cooperate by not acting to the best of its ability as required under 19 U.S.C. § 1677e(b) in order to draw an adverse inference. Ferro Union, 44 F. Supp.2d at 1329-31 & n.44.
Commerces method for selecting total adverse facts available pursuant to 19 U.S.C. § 1677e(b), however, also involved interpreting a new provision of the statute. This court clarified in Borden that the analysis under the 1994 statute differs from prior law, and that Commerce must make a series of determinations before making an adverse inference. Borden, 4 F. Supp.2d at 1246-47. Borden, however, was issued in 1998, after Commerce had issued the Final Results in its administrative review of Saha Thai. Commerce therefore did not have the benefit of the Borden analysis when it applied total adverse facts available to Saha Thai. The governments judicial defense of Commerces determination likewise should not be the basis for a fee award. An agreed remand to resolve the more procedural issue would have wasted time and likely would not have led to plaintiffs victory at that point. That is, had Commerce given adequate notice of its interpretation of the statute, it likely would have been justified in applying adverse facts after following the proper procedure. Thus, because Commerces action as to notice of its interpretation of family was substantially justified within the meaning of the EAJA, it would be unjust to award fees based on this procedural error which would not have been the cause of plaintiffs success.4
Because it is denying any fee award, the court need not decide whether Asomas request for attorneys fees and expenses was properly documented, pursuant to USCIT R. 68(b).
Although plaintiffs were prevailing parties, Commerces position was substantially justified. The court therefore denies the application for attorneys fees and expenses of the Asoma Corporation pursuant to the EAJA.
It is so ordered.
Jane A. Restani
Dated: New York, New York
This 30th day of December 1999.
4. Plaintiffs also assert that the application of the 29.89 percent margin from the Final Results was not substantially justified. Because Commerce was not required to reach the issue, the court never resolved whether this margin would have been acceptable if total adverse facts were warranted. That is, because plaintiffs were successful on their other theories the issue of corroboration of the higher margin was mooted. To resolve this issue the court would have to direct Commerce to perform an analysis merely for the purpose of resolving the attorneys fee issue. But a request for attorneys fees should not result in a second major litigation. Naekel v. Department of Transp., FAA, 884 F.2d 1378, 1379 (Fed. Cir. 1989) (quoting Hensley v. Eckerhart, 461 U.S. 424, 437 (1983)). Further, it is unlikely that plaintiffs would prevail in establishing lack of justification. The corroboration issue also stems from the new statute which had not been interpreted as to the relevant point prior to the time of the courts first decision on the merits here.