475 F.Supp.3d 1317
Ct. Int'l Trade2020Background
- Dong-A Steel Co. (DOSCO) and Kukje Steel were respondents in Commerce's 2016–2017 administrative review of antidumping duties on heavy walled rectangular welded carbon steel pipes and tubes (HWR) from Korea; Commerce assigned final AD margins of 20.79% (DOSCO) and 12.81% (Kukje).
- Petitioners alleged a particular market situation (PMS) in Korea affecting hot-rolled coil (HRC) inputs, citing four factors: Korean government subsidies for HRC, cheap Chinese HRC imports, strategic supplier–producer alliances, and distortions in the Korean electricity market.
- Commerce found a PMS for Korean HRC, quantified an upward PMS adjustment (derived from prior countervailing-duty subsidy findings) to respondents’ costs, but concluded Korea remained a viable home market (so used price-to-price comparisons rather than constructed value).
- Commerce used theoretical (nominal) weights rather than DOSCO’s preferred “theoretical actual” weights for margin calculations, denied DOSCO a CEP offset, and adjusted reported raw-material costs across certain CONNUMs to eliminate unexplained cost disparities.
- DOSCO and Kukje challenged the Final Results in the Court of International Trade via Rule 56.2: they argued the PMS finding lacked substantial evidence and that Commerce lacked statutory authority under the TPEA to apply a cost-based PMS adjustment outside a price-to-constructed-value comparison; they also challenged the weight methodology, CEP offset denial, and raw-cost adjustments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of PMS (substantial evidence) | PMS finding rests on the same insufficient record evidence relied on in earlier reviews (Nexteel/Hyundai line), so lacks substantial evidence | The four factors, read in totality, support a PMS; record here is more complete than in prior cases | PMS determination unsupported by substantial evidence; remanded to Commerce |
| Scope of TPEA §504 (may Commerce adjust costs for PMS outside price-to-CV?) | §504 authorizes PMS adjustments only in the constructed-value context (price-to-CV); Congress amended CV provisions, not cost-of-production rules | TPEA and statutory purpose (fair comparison) permit Commerce to correct distortions in any margin calculation; §1677b(e) permits "any other calculation methodology" | Commerce misapplied §504; PMS adjustments to cost of production outside price-to-CV are impermissible; remand for compliance with statutory limits |
| Use of theoretical vs. actual weights for dumping margin | Theoretical weights distort margins; DOSCO's data show significant tolerances and bias in actual weights | U.S. customers order and are invoiced using nominal/theoretical dimensions; matching CONNUMs are based on nominal dimensions; Commerce's choice reasonable | Use of theoretical weights upheld; supported by substantial evidence and reasonable exercise of discretion |
| CEP offset denial | DOSCO performed substantially more and more intensive selling activities in home market, so is entitled to CEP offset | Record does not show sufficiently substantial difference in level or stage of marketing to require CEP offset; burden rests on DOSCO | Denial of CEP offset sustained; Commerce reasonably concluded plaintiff did not meet burden |
| Raw-cost adjustments across CONNUMs | Commerce lacked quantitative support and unlawfully smoothed costs, undermining DIFMER adjustment | Cost disparities among nearly identical CONNUMs were unrelated to physical characteristics and warranted correction to avoid arbitrary differences | Commerce's adjustment of raw HRC costs across nearly identical CONNUMs sustained as supported by substantial evidence |
Key Cases Cited
- Chevron U.S.A., Inc. v. Natural Res. Def. Council, 467 U.S. 837 (1984) (framework for judicial review of agency statutory interpretation)
- Nexteel Co. v. United States, 355 F. Supp. 3d 1336 (Ct. Int’l Trade 2019) (found Commerce's PMS finding unsupported by substantial evidence)
- Nexteel Co. v. United States, 392 F. Supp. 3d 1276 (Ct. Int’l Trade 2019) (affirmed insufficiency of the PMS record in a subsequent review)
- Hyundai Steel Co. v. United States, 415 F. Supp. 3d 1293 (Ct. Int’l Trade 2019) (applied Nexteel reasoning to reject Commerce's PMS finding based on effectively the same record)
- Saha Thai Steel Pipe Public Co. v. United States, 422 F. Supp. 3d 1363 (Ct. Int’l Trade 2019) (held TPEA §504 does not authorize PMS adjustments outside a price-to-constructed-value comparison)
- Husteel Co. v. United States, 426 F. Supp. 3d 1376 (Ct. Int’l Trade 2020) (held Commerce cannot adjust below-cost test for PMS; "any other methodology" limited to constructed value context)
- Dong-A Steel Co. v. United States, 337 F. Supp. 3d 1356 (Ct. Int’l Trade 2018) (upheld Commerce's use of theoretical weights where sales/invoices used nominal dimensions)