Boomerang Tube LLC v. United States, 37 I.T.R.D. (BNA) 2494

Background

Commerce investigated antidumping (LTFV) claims for certain oil country tubular goods (OCTG) from Saudi Arabia and selected Duferco SA as the mandatory respondent; Jubail Energy Services Co. (JESCO) manufactured the exported OCTG.
Commerce treated Duferco SA and JESCO as a single entity and initially found a small affirmative preliminary dumping margin, then a final margin of 2.69%. After a ministerial-error recalculation, Commerce issued an amended final determination finding a de minimis margin and terminated the investigation.
Commerce calculated normal value using constructed value (CV) because it determined home-market sales were not in the ordinary course of trade; it therefore needed to determine a CV profit amount under 19 U.S.C. § 1677b(e)(2)(B)(iii) ("any other reasonable method").
On the record there were several candidate data sources; Commerce chose to base CV profit on certain JESCO sales to Colombia (excluding below-cost sales). Those Colombian sales were to a distributor affiliated with Duferco/JESCO.
Petitioners (U.S. OCTG producers and U.S. Steel) challenged Commerce’s CV-profit method, arguing (1) the Colombia transactions were intra-company transfers (not arm’s-length sales) because the Colombian distributor was part of the combined entity, and (2) some sales were outside the ordinary course of trade or otherwise unsuitable for use in the CV-profit calculation.
The Court of International Trade denied plaintiffs’ motions for judgment on the agency record, holding Commerce’s CV-profit choice was a reasonable method supported by substantial evidence and in accordance with law.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether plaintiffs failed to exhaust administrative remedies on intra-company-transfer/or ordinary-course arguments	Plaintiffs say exhaustion is not required because Commerce first relied on Colombia sales in its final decision, so petitioners lacked full opportunity to address that theory	Government and intervenors say petitioners should have anticipated and raised objections because JESCO proposed using Colombia sales in its case brief	Court exercised discretion not to enforce exhaustion; plaintiffs had not had a full and fair opportunity, so court reached the merits
Whether Commerce erred by treating Colombia transactions as sales rather than intra‑company transfers (i.e., should have collapsed Colombian distributor into Duferco/JESCO)	Plaintiffs argue the Colombian distributor was affiliated and essentially part of the Duferco/JESCO entity, so transactions were internal transfers and unsuitable for CV-profit	Government/intervenors defend Commerce’s collapse analysis and point to record showing lack of intertwined operations or other indicia of manipulation; also that sales passed arm’s‑length tests	Court held Commerce was not required to collapse the Colombian distributor; record did not compel a finding of significant potential for price manipulation and Commerce’s treatment was supported by substantial evidence
Whether Commerce’s use of Colombia sales violated the preference against using sales outside the ordinary course of trade when calculating CV profit	U.S. Steel argues Colombia sales were made under unusual circumstances, in unrepresentative quantities, and profits were inconsistent with other industry data, so they were outside the ordinary course and inappropriate for CV-profit	Commerce replies § 1677b(e)(2)(B)(iii) permits any reasonable method and does not restrict use to ordinary-course sales; it excluded below-cost sales and found remaining sales at arm’s length	Court held § 1677b(e)(2)(B)(iii) confers broad discretion; Commerce reasonably excluded below-cost sales, and other objections did not show usage was unreasonable
Whether Commerce’s CV-profit determination complied with the statutory "reasonable method" and profit‑cap limits	Plaintiffs contend use of affiliated Colombia sales produced an unreasonable profit basis and violated statutory preferences/limitations	Commerce contends it considered available imperfect options, verified product similarity and arm’s‑length prices, and acted within statutory discretion	Court held Commerce’s choice among imperfect alternatives was reasonable and satisfied the statute; plaintiffs failed to show the method was unlawful

Key Cases Cited

Consol. Edison Co. v. NLRB, 305 U.S. 197 (explains the substantial-evidence standard for administrative findings)
L.A. Tucker Truck Lines, Inc. v. United States, 344 U.S. 33 (1952) (courts generally require timely administrative objection before overturning agency decisions)
Corus Staal BV v. United States, 502 F.3d 1370 (Fed. Cir. 2007) (agency change in position can excuse failure to exhaust)
Mittal Steel Point Lisas Ltd. v. United States, 548 F.3d 1375 (Fed. Cir. 2008) (exhaustion principle in trade cases and requirement to raise issues at appropriate administrative stage)
Thai I-Mei Frozen Foods Co. v. United States, 616 F.3d 1300 (Fed. Cir. 2010) (discusses ordinary-course preference in context of constructed value but does not eliminate Commerce’s § 1677b(e)(2)(B)(iii) discretion)
CEMEX S.A. v. United States, 133 F.3d 897 (Fed. Cir. 1998) (ordinary-course-of-trade analysis in determining whether home‑market sales are usable for normal value)