324 F. Supp. 3d 1344
Ct. Intl. Trade2018Background
- Commerce investigated antidumping duties on certain cut-to-length (CTL) steel plate from Austria and used a model-match CONNUM methodology to identify "foreign like products."
- Commerce's CONNUM hierarchy (as adopted) prioritized QUALITY and other fields but did not include a GRADE field to sort by alloy content; Plaintiffs proposed adding GRADE (and later PROCESS) to better distinguish high-alloy specialty steels.
- Plaintiffs argued that Commerce’s CONNUMs grouped products with materially different alloy content, causing large cost and price disparities within CONNUMs and producing distorted dumping margins without DIFMER adjustments.
- Commerce rejected Plaintiffs’ proposed GRADE and PROCESS fields as untimely and unnecessary; it also refused to apply DIFMERs where it treated matched sales as "identical."
- The Court found Plaintiffs consistently raised the alloy-content concern in the record, concluded Commerce’s methodology failed to account for commercially significant differences driven by alloy content, and remanded for the Department to revise the model-match methodology (sustaining Commerce only as to rejection of PROCESS).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Commerce’s CONNUM methodology improperly groups products with materially different alloy content as "identical" foreign like products | CONNUMs grouped high-alloy and low-alloy products, producing large cost/price variance and distorted dumping margins; Commerce should add a GRADE field | Commerce argued Plaintiffs’ proposals were untimely and that cost differences alone are not dispositive of material physical differences | Court: Commerce's methodology did not reasonably account for commercially significant alloy-content differences; remand to revise model-match to account for grade |
| Whether Commerce could treat such grouped products as "identical" and therefore avoid DIFMER adjustments | Treating materially different products as identical denies required adjustments and yields unfair comparisons | Commerce maintained that when physical characteristics are reported identical under CONNUM, DIFMER is not applied; prior precedent supports consideration of costs not dispositive | Court: It is unreasonable to treat products as identical when record shows large variable-cost differences tied to alloy content; DIFMER application concerns require Commerce to prevent mismatching |
| Timeliness of Plaintiffs’ GRADE proposal | Plaintiffs submitted GRADE soon after the revised methodology and responded to follow-ups; not untimely | Commerce contended the model-match methodology was closed and Plaintiffs’ alternatives came too late | Court: Plaintiffs raised concerns repeatedly and timely enough; Commerce erred to deem them untimely given fairness/accuracy interests |
| Whether PROCESS (manufacturing method) is a commercially significant characteristic requiring a separate CONNUM field | PROCESS reflects higher production costs for some items and should be added | Commerce argued PROCESS is not a product characteristic but a cost-driver related to grade; would be redundant if GRADE applied | Court: Sustained Commerce — PROCESS is not itself a physical characteristic and need not be added; properly left to be addressed through GRADE adjustments if necessary |
Key Cases Cited
- SKF USA, Inc. v. United States, 537 F.3d 1373 (Fed. Cir.) (Commerce has discretion to design model-match methodology)
- Pesquera Mares Australes Ltda. v. United States, 266 F.3d 1372 (Fed. Cir.) (minor differences may be allowed but commercially significant differences must be recognized)
- Grobest & I-Mei Indus. (Vietnam) Co. v. United States, 815 F. Supp. 2d 1342 (Ct. Int'l Trade) (fairness and accuracy can outweigh procedural burdens on Commerce)
- Pastificio Lucio Garofalo, S.p.A. v. United States, 783 F. Supp. 2d 1230 (Ct. Int'l Trade) (company-specific CONNUMs may be justified by substantial evidence of physical differences)
- Thai Plastic Bags Indus. Co. v. United States, 752 F. Supp. 2d 1316 (Ct. Int'l Trade) (Commerce must consider DIFMER and differences in variable costs when comparing non-identical merchandise)
- Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (U.S.) (deference to agency statutory interpretation principles discussed by government)