Downhole Pipe & Equipment, LP v. United States
2013 Ct. Intl. Trade LEXIS 139
Ct. Intl. Trade2013Background
- Remand to Commerce after Downhole I regarding surrogate values for DPGT and labor wage rate.
- Commerce selected IHTS 7304.59.20 as surrogate value for DPGT on remand, based on its analysis and a CBP memo.
- Infodrive data suggested 7304.59.20 was not perfectly representative; Commerce addressed it and upheld 7304.59.20.
- Plaintiffs argued alternatives (7304.23, 7304.29, 7304.59.10, P1110, J/K 55, alloy billets) were preferable but rejected.
- Court reviews if Commerce’s choice is supported by substantial evidence and in accordance with law.
- Labor wage value sourced from ILO Yearbook Chapter 6A for India.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 7304.59.20 best represents DPGT | 7304.59.20 not representative; Infodrive shows issues; 7304.23/7304.29 broader/semi-finished | 7304.59.20 more representative as a broad basket category; corroborated by CBP memo | Yes; 7304.59.20 reasonably represents DPGT and is the best available information |
| Adequacy of Infodrive data in supporting surrogate choice | Infodrive shows 7304.59.20 misaligned with DP-Master and DPGT; data incomplete | Infodrive data acknowledged but 7304.59.20 still most representative when considering record as a whole | Yes; Commerce properly addressed Infodrive data per Downhole I and Calgon principles |
| Reasonableness of rejecting alternative surrogates (P1110, J/K 55, adjusted billets/tubes) | Alternatives are superior and require little adjustment; data contemporaneity issues ignored | Alternatives fail selection criteria (not representative, not contemporaneous, missing prices, require proprietary data) | Yes; alternatives properly rejected; 7304.59.20 favored |
| Reliability of the NIS Memo as sole justification | NIS Memo lacks explanation of CBP process and scope; unreliable | NIS Memo corroborated by CBP official; integrated into Remand Results | Yes; NIS Memo considered but not sole basis; supported by record |
Key Cases Cited
- Goldlink Indus. Co. v. United States, 431 F. Supp. 2d 1323 (2006) (agency must articulate rational connection between facts and choice)
- Universal Camera Corp. v. NLRB, 340 U.S. 474 (1951) (substantial evidence standard requires adequate record)
- Nation Ford Chem. Co. v. United States, 166 F.3d 1373 (Fed. Cir. 1999) (construction of best available information is inherently imprecise)
- Downhole Pipe & Equip. LP v. United States, 887 F.Supp.2d 1311 (2012) (remand to address record-supported surrogate data considerations)
- Gerber Food (Yunnan) Co. v. United States, 491 F. Supp. 2d 1326 (2007) (court defers to Commerce when supported by substantial evidence)
- Fuwei Films (Shandong) Co. v. United States, 837 F. Supp. 2d 1347 (2012) (selection criteria for surrogate values include contemporaneity and market average)
- Calgon Carbon Corp. v. United States, 2011 WL 637605 (2011) (addressing Infodrive data and tariff classification remand considerations)
- Motor Vehicle Mfrs. Ass’n v. State Farm, 463 U.S. 29 (1983) (A court defers to agency’s reasonable decision when supported by evidence)