36 I.T.R.D. (BNA) 1501
Ct. Intl. Trade2014Background
- Commerce concluded an antidumping investigation of drawn stainless steel sinks from the PRC, assigning weighted-average dumping margins to two individually investigated respondents (Dongyuan and Superte/Zhaoshun) and separate-rate respondents.
- Dongyuan challenged Commerce’s use of Thai GTA import data as the surrogate value for cold-rolled stainless steel coil (primary input), arguing Philippine or Indonesian data were preferable and that the Thai data were aberrational.
- Elkay (the U.S. petitioner) challenged Commerce’s treatment of SG&A labor in calculating normal value, arguing Commerce failed to capture SG&A labor costs—both by applying a surrogate labor rate only to reported production hours and by excluding SG&A labor from the SG&A surrogate ratios.
- In the Preliminary Determination Commerce used ILO Chapter 6A data for labor; in the Final Determination Commerce switched to Thai NSO data (a lower hourly rate) and adjusted surrogate SG&A/interest ratios by reclassifying certain SG&A line items as labor to avoid what Commerce deemed double-counting.
- The Department requested a voluntary remand to reconsider whether the Thai import data for stainless coil were aberrational and to allow admission of additional surrogate data; the court granted that remand.
- The court also found Commerce’s principal rationale for reducing the SG&A/interest ratios (to avoid double-counting given the NSO labor rate) unsupported by substantial evidence and ordered Commerce to reconsider its SG&A labor treatment on remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Thai GTA import data were an appropriate surrogate for cold-rolled stainless steel coil (Dongyuan) | Thai data were unsuitable/aberrational; Philippines or Indonesia data should be used | Commerce sought remand to gather/additional surrogate country GTA data and reconsider; argued agency discretion to evaluate data | Court granted voluntary remand for Commerce to reassess Thai data and allow new surrogate evidence on the record |
| Whether Commerce improperly excluded SG&A labor from SG&A/interest surrogate ratios (Elkay) | Commerce understated normal value by (1) applying a NSO surrogate rate to production hours only and (2) excluding SG&A labor from SG&A ratios, thus omitting SG&A labor costs | Commerce argued choice was reasonable given imperfect record and aimed to avoid double-counting; relied on Labor Methodologies notice | Court held Commerce’s finding that double-counting required the specific downward adjustments lacked substantial evidence; remanded for reconsideration of SG&A labor treatment |
| Whether the NSO labor rate justified reclassifying SG&A items as labor in surrogate ratios | Elkay: NSO rate application did not capture SG&A labor properly; reclassification improperly reduced SG&A ratios | Commerce: NSO data included total labor (manufacturing + SG&A); Labor Methodologies supports adjustments to avoid double-counting | Court found record insufficient to support Commerce’s conclusion that NSO rate overstated labor to the degree justifying the adjustments; rejected reliance on Labor Methodologies as a sufficient basis for that result |
| Remedy and process on remand | Parties requested appropriate remedy (Dongyuan urged prohibition on Thai data; Elkay sought recalculation) | Government sought remand to reconsider and gather data; proposed procedures for comments | Court ordered (1) voluntary remand to Commerce to reassess Thai surrogate data and reopen record for comment, and (2) remand for Commerce to reconsider SG&A labor ratio adjustments and, if needed, revise margins; set deadlines for remand redetermination and comments |
Key Cases Cited
- SKF USA Inc. v. United States, 254 F.3d 1022 (Fed. Cir. 2001) (agency remand appropriate where agency advances legitimate reason to reopen record)
- Lasko Metal Prods., Inc. v. United States, 43 F.3d 1442 (Fed. Cir. 1994) (antidumping margins must be determined as accurately as possible)
- Shakeproof Assembly Components v. United States, 268 F.3d 1376 (Fed. Cir. 2001) (Commerce must base factor valuations on best available information to achieve accurate margins)
- Consol. Edison Co. v. NLRB, 305 U.S. 197 (1938) (definition of substantial evidence)
- Dorbest Ltd. v. United States, 604 F.3d 1363 (Fed. Cir. 2010) (context for Commerce’s labor valuation methodologies in NME cases)