337 F. Supp. 3d 1356
Ct. Int'l Trade2018Background
- Commerce conducted an antidumping investigation of heavy‑walled rectangular welded carbon steel pipes and tubes from South Korea, selecting Dong‑A Steel (DOSCO) and HiSteel as mandatory respondents.
- Commerce’s final determination found weighted‑average dumping margins of 2.34% for DOSCO and 3.82% for HiSteel; DOSCO, Atlas Tube, and Independence Tube challenged various aspects of the determination under Rule 56.2.
- The parties disputed six principal agency findings: date of sale, assignment of full costs to non‑prime merchandise, adjustment to DOSCO’s hot‑rolled coil costs for painted vs. unpainted products, the weight basis for price comparisons, denial of a constructed export price (CEP) offset to DOSCO, and Commerce’s use of zeroing in its differential‑pricing analysis.
- The record included company books and records (cost and sales responses), mill‑test certificates, purchase orders, invoices, and verification reports; Commerce relied on these to evaluate when material terms were fixed, how non‑prime products were used and costed, and the measurement basis for weights.
- The court reviewed Commerce’s determinations for substantial evidence and conformity with law and ultimately sustained Commerce in all contested respects.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Date of sale (use invoice/shipment vs. purchase order) | Purchase order date better reflects meeting of the minds; changes after order were immaterial | Invoice/shipment date best reflects when material terms were finalized; record shows quantities/prices changed after order | Commerce reasonably used the earlier of invoice or shipment date; substantial evidence supports that material terms were not fixed at purchase order date |
| Assignment of costs to non‑prime merchandise | Non‑prime sold at discount, without warranty; should not bear full production costs or should be treated as scrap | Companies’ GAAP records allocate full costs; non‑prime usable in same applications; prices/inventory values not materially different | Commerce reasonably assigned full costs to non‑prime for both DOSCO and HiSteel because record shows non‑prime used in same general applications and books reasonably reflect costs |
| Adjustment to DOSCO hot‑rolled coil costs (painted vs. unpainted) | DOSCO’s GAAP cost records are accurate; differences due to timing/product mix, not misallocation | Coil price timing caused differences; annual averaging required so costs reflect physical differences only | Commerce reasonably adjusted coil costs using period averages to remove timing distortions; supported by substantial evidence |
| Weight basis for comparisons (actual vs. theoretical vs. scaled) | Use actual weight (based on measured coil thickness) because it reflects negotiated/billing basis and is more accurate | Theoretical weight based on nominal dimensions/invoicing is appropriate; actual measurements are nominal and vary by tolerance | Commerce reasonably used theoretical weight (consistent with invoicing and industry tolerances); record supports that reported "actual" thicknesses are nominal |
| DOSCO CEP offset (level‑of‑trade) | Home‑market level is a more advanced stage; Commerce should grant a CEP offset | DOSCO failed to document frequency/extent of selling activities or translate key materials; no demonstrated different marketing stage | Commerce reasonably denied CEP offset; DOSCO failed to meet burden to show distinct, more advanced home‑market level and provide required evidence/translations |
| Use of zeroing in differential‑pricing analysis | Zeroing violates WTO rulings and should not be applied | Zeroing remains lawful under U.S. law; adverse WTO decisions are not binding domestically absent implementing legislation | Court sustained Commerce’s use of zeroing as a reasonable interpretation of the statute and lawful under U.S. law |
Key Cases Cited
- Smith‑Corona Grp. v. United States, 713 F.2d 1568 (Fed. Cir. 1983) (fair‑comparison timing requirement)
- Viraj Group, Ltd. v. United States, 343 F.3d 1371 (Fed. Cir. 2003) (party seeking alternate date bears burden to show it better reflects material‑term fixation)
- Thai Plastic Bags Indus. Co. v. United States, 746 F.3d 1358 (Fed. Cir. 2014) (physical characteristics central to cost comparisons; Commerce may adjust costs when non‑physical factors cause differences)
- Am. Silicon Techs. v. United States, 261 F.3d 1371 (Fed. Cir. 2001) (Commerce may reject GAAP records if they would distort true costs)
- Corus Staal BV v. Dep’t of Commerce, 395 F.3d 1343 (Fed. Cir. 2005) (WTO panel decisions are not binding on U.S. courts; statutory process governs implementation)
- Union Steel v. United States, 713 F.3d 1101 (Fed. Cir. 2013) (Commerce’s use of zeroing upheld as reasonable statutory interpretation)