Dillinger France S.A. v. United States, 2018 CIT 150

Background

Commerce investigated alleged dumping of certain carbon and alloy steel cut‑to‑length (CTL) plate from France and selected Dillinger France S.A. as a mandatory respondent; Commerce issued a final affirmative determination and assigned Dillinger a 6.15% antidumping margin.
Dillinger reported home‑market sales via three channels: factory direct, affiliated service centers (Eurodécoupe), and non‑prime merchandise; Dillinger had difficulty identifying the manufacturer for some downstream sales by Eurodécoupe and notified Commerce.
In the Preliminary and Final Determinations Commerce: (1) found one level of trade for Dillinger's home‑market sales, (2) applied the differential pricing (A‑to‑T) methodology, (3) allocated costs between prime and non‑prime plate using Dillinger’s GAAP books, and (4) applied partial adverse facts available (AFA) for Eurodécoupe transactions with unidentified manufacturers by assigning the highest non‑aberrational downstream net price instead of the recorded transaction prices.
Dillinger challenged multiple aspects of Commerce’s decision (level of trade, partial AFA, differential pricing methodology including zeroing, and cost allocation) and brought suit in the Court of International Trade; the court heard briefs and oral argument.
The court sustained Commerce on LOT, differential‑pricing (including zeroing), and cost allocation, but remanded Commerce’s application of partial AFA for reconsideration because Commerce replaced existing record prices with an adverse price without adequate explanation.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Level of trade (LOT)	Dillinger: affiliated service centers perform distributor functions and thus create a separate, more remote LOT from factory sales.	Commerce/Govt: record selling functions do not differ substantially; service‑center differences (inventory) vs. factory (rebates, training) are minor.	Court: AFFIRMED Commerce — substantial evidence supports a single LOT.
Partial AFA for Eurodécoupe sales	Dillinger: it used best efforts to collect manufacturer data and Commerce should not replace recorded sales prices where prices are present.	Commerce/Govt: Dillinger failed to act to the best of its ability regarding manufacturer IDs; AFA was warranted.	Mixed: Court agreed Dillinger failed "best of its ability" for manufacturer IDs (AFA permissible) but REMANDED because Commerce impermissibly replaced existing recorded prices with the highest non‑aberrational price without justification.
Differential pricing methodology (DPM) & pattern test	Dillinger: DPM is unlawful or unreasonable (invokes WTO Korean Washers) and fails to show a proper pattern of price differences; zeroing distorts the comparison.	Commerce/Govt: DPM is a reasonable implementation of 19 U.S.C. §1677f‑1(d)(1)(B); Korean Washers is not binding domestically; use of Cohen’s d, ratio, and meaningful‑difference tests is defensible; zeroing upheld by Fed. Cir. precedent.	Court: AFFIRMED Commerce — DPM and zeroing application are reasonable and lawful; WTO decision not controlling.
Cost allocation between prime and non‑prime plate	Dillinger: statute requires actual production costs be used; reallocating costs based on net recovery/value understates non‑prime costs and overstates prime costs.	Commerce/Govt: statute permits use of GAAP books if they reasonably reflect costs; Dillinger’s accounts value non‑prime at net recovery consistent with GAAP and differing end uses justify allocation.	Court: AFFIRMED Commerce — use of Dillinger’s GAAP books and reallocation supported by statute, precedent, and substantial evidence.

Key Cases Cited

Apex Frozen Foods Private Ltd. v. United States, 862 F.3d 1322 (Fed. Cir.) (upholding aspects of Commerce's differential pricing approach)
Nippon Steel Corp. v. United States, 337 F.3d 1373 (Fed. Cir.) (explains "best of its ability" standard for AFA)
PSC VSMPO‑Avisma Corp. v. United States, 688 F.3d 751 (Fed. Cir.) (deference to Commerce on complex cost allocation/joint‑product valuation)
IPSCO, Inc. v. United States, 965 F.2d 1056 (Fed. Cir.) (cost‑allocation principles for co‑products; distinguished here)
Thai Pineapple Pub. Co. v. United States, 187 F.3d 1362 (Fed. Cir.) (deference to Commerce's use of respondents' books and records for cost allocations)
Dongbu Steel Co. v. United States, 635 F.3d 1363 (Fed. Cir.) (addresses Commerce’s need to explain inconsistent treatment after WTO changes)
Corus Staal BV v. Dep't of Commerce, 395 F.3d 1343 (Fed. Cir.) (WTO decisions do not control domestic statutory interpretation)
The Stanley Works (Langfang) Fastening Sys. Co. v. United States, 279 F. Supp. 3d 1172 (CIT) (explains DPM mechanics and judicial review)