308 F. Supp. 3d 1297
Ct. Int'l Trade2018Background
- Commerce investigated antidumping on hot-rolled steel from Turkey (POI July 1, 2014–June 30, 2015), selected Erdemir and Çolakoglu as mandatory respondents, and issued a Final Determination assigning weighted-average dumping margins to Erdemir and Çolakoglu.
- Erdemir sells in Turkey via an online pro forma/invoice system ("ErdemirOnline") where customers "click" to accept pro formas; payment method (cash vs. credit) is selectable at shipment-ready time and quantity tolerances apply.
- For U.S. sales Erdemir used signed pro forma invoices, letters of credit, and quantity tolerances; Commerce relied on invoice dates for certain sales citing quantity variances, multiple signature dates, and untimely letters of credit.
- Çolakoglu sought (1) a duty-drawback adjustment based on Turkey’s inward-processing regime (IPR) documents, (2) quarterly cost-averaging, (3) by-product treatment (excess heat) vs. co-product treatment, (4) indirect selling-expense allocation, and (5) corrections to international ocean freight reported at verification.
- Commerce denied Çolakoglu’s duty-drawback adjustment (citing illegible/insufficient translations and lack of a demonstrated link), declined quarterly cost-averaging (no >25% quarter-to-quarter cost change in TRY), treated excess heat as a co-product, accepted its indirect selling-expense methodology, and refused certain freight corrections at verification.
- The Court consolidated the cases and reviewed Commerce’s determinations under the substantial-evidence/reasonable-explanation standard, remanding some determinations for further explanation or reconsideration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Erdemir’s home-market "click" acceptance (pro forma acceptance) is the date of sale instead of invoice date | Erdemir: the click finalizes material terms (price, quantity tolerance, payment options embedded in terms); payment option is pre‑established and economically equivalent, so invoice date presumption is rebutted | Gov/Def‑Ints: payment terms are a material term that may be finalized at invoice/ready‑to‑ship date; record shows selection at invoicing so invoice date is appropriate | Court: Remanded — Commerce’s conclusory reliance on invoice date lacked reasoned explanation; payment option appears embedded and agency must explain why selection at ready date alters material terms |
| Whether Erdemir’s U.S. pro forma signature date is the date of sale | Erdemir: signed pro formas (final signature) fix material terms; quantity variances are immaterial; letters of credit untimeliness is within seller’s discretion | Gov/Def‑Ints: records show quantity deviations, multiple signature dates, and untimely letters of credit that indicate terms were not final until invoice | Court: Sustained Commerce — substantial evidence supports reliance on invoice due to quantity nonconformity in some sales, untimely L/C openings and ambiguous/multiple signature dates |
| Whether Çolakoglu is entitled to a duty‑drawback adjustment based on IPR documentation | Çolakoglu: provided IPRs, government approval evidence, and calculations showing slab imports linked to U.S. exports; offered to cure legibility/translation issues at verification | Gov/Def‑Ints: documents were partially illegible/insufficiently translated and did not establish that imported slabs were the types used to make hot‑rolled steel or directly linked to specific exports; Commerce gave adequate opportunities | Court: Remanded — Commerce failed to articulate a clear, consistent standard for the required ‘‘link’’ and did not comply with §1677m(d) obligations to identify deficiencies and allow remedy; denial unsupported by substantial evidence |
| Whether Commerce properly refused corrections to Çolakoglu’s international ocean freight at verification | Çolakoglu: corrections were minor discounts and should have been accepted at verification under the minor‑correction policy | Gov: corrections affected most U.S. sales and could not be accepted at verification as minor; Commerce verifiers declined the documents | Court: Remanded — Commerce’s conclusory statement that corrections were not minor lacks record support or explanation; agency must reconsider and explain |
Key Cases Cited
- Huaiyin Foreign Trade Corp. v. United States, 322 F.3d 1369 (Fed. Cir.) (substantial‑evidence standard explained)
- Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927 (Fed. Cir.) (possibility of inconsistent inferences does not defeat substantial evidence)
- Saha Thai Steel Pipe (Public) Co. Ltd. v. United States, 635 F.3d 1335 (Fed. Cir.) (upholding Commerce’s two‑prong duty‑drawback framework)
- Nippon Steel Corp. v. United States, 337 F.3d 1373 (Fed. Cir.) (consider record as whole; substantial evidence review)
- Burlington Truck Lines, Inc. v. United States, 371 U.S. 156 (Supreme Court) (agency cannot be sustained on post hoc rationalizations)
- Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (Supreme Court) (agency must provide a discernable path of reasoning)