471 F.Supp.3d 1349
Ct. Intl. Trade2020Background
- This consolidated action challenges Commerce’s final results in the second administrative review of the antidumping duty order on welded line pipe (WLP) from the Republic of Korea; mandatory respondents were NEXTEEL and SeAH.
- Commerce rejected SeAH’s third-country (Canada) sales as non-representative and determined normal value for SeAH and NEXTEEL using constructed value (CV).
- Commerce found a "particular market situation" (PMS) in Korea and adjusted respondents’ hot-rolled coil (HRC) input costs upward using a CVD rate derived from an earlier proceeding (based on adverse facts available in that CVD investigation).
- Commerce relied on Hyundai’s CV profit and selling-expense ratios from a prior administrative review to compute profit/selling expenses for SeAH and NEXTEEL; it also adjusted NEXTEEL’s CV for sales of "non-prime" products and reclassified certain suspended-production losses from COGS to G&A.
- Commerce allocated G&A expenses of SeAH’s U.S. affiliate (Pusan Pipe America, PPA) across SeAH’s U.S. sales when calculating constructed export price; Commerce set respondent and all-others margins and later issued amended final results.
- The Court remanded multiple Commerce determinations for further explanation or reconsideration and ordered a remand redetermination.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Commerce rejected SeAH’s third-country (Canada) sales as non-representative | SeAH: CITT dumping finding is not controlling; Canada’s methodology differs from U.S. law and Commerce ignored detracting evidence | Gov: Commerce reasonably relied on CITT finding as substantial evidence | Remanded — Commerce must address detracting evidence and explain why the CITT finding does not undermine representativeness |
| PMS finding and HRC cost adjustments | Plaintiffs: PMS not supported; Commerce failed to explain how cited factors (Chinese overcapacity, past subsidies, strategic alliances, electricity control) distorted HRC costs during POR | Gov & domestic parties: cumulative market distortions justify PMS adjustment | Remanded — Commerce must better explain/support each factor and how they prevent proper comparisons |
| Use of Hyundai’s prior-review CV profit & selling-expense ratios | Plaintiffs: Commerce should use respondents’ own data or contemporaneous financials; Hyundai’s prior-review data is non-contemporaneous and §1677b(e)(2)(B)(ii) requires data from current review | Gov: Hyundai’s data is the best available and product- and country-specific | Remanded — Commerce’s statutory basis for relying on Hyundai (and as a profit cap) is erroneous or inadequately explained; reconsideration required |
| Treatment of NEXTEEL’s non-prime products (deduction from CV) | NEXTEEL: Commerce departed from agency practice by reallocating non-prime losses to prime products without explaining criteria | Gov: Methodology accords with precedent and is reasonable | Remanded — Commerce must clarify its non-prime criteria, reconcile precedent, and justify its practice |
| Reclassification of suspended-production losses to G&A (NEXTEEL) | NEXTEEL: Costs tied to specific product lines should remain in COGS and not be reallocated to G&A | Gov: Extended shutdown losses reflect company-wide operations and are appropriately treated as G&A per agency practice | Remanded — Commerce must explain why reclassification complies with 19 U.S.C. §1677b(f)(1)(A) and agency practice |
| Use of annual weighted-average costs vs. quarterly costs (SeAH) | SeAH: Significant cost changes and partial quarter-to-quarter linkage justify quarterly-average methodology | Gov: No consistent linkage across POR; annual averages are proper | Remanded — Commerce must explain why linkage was insufficient despite apparent Q1–Q2 correlation or reconsider using quarterly averages |
| Allocation of PPA’s G&A when calculating constructed export price | SeAH: PPA’s G&A should be allocated only to further-manufactured sales; Commerce lacks statutory basis for applying G&A to all U.S. sales | Gov: Allocation to all sales is a reasonable, balanced accounting method | Remanded — Commerce must state whether it treats PPA’s G&A as deductible indirect selling expenses under statute and justify the allocation |
| Calculation of non-examined (all-others) rate | Husteel: All-others rate must be recalculated to reflect any remand adjustments and to avoid distortion from prior AFA-derived CVD rates | Gov: N/A (rate follows from respondent margins) | Remanded — Commerce must recalculate the all-others rate as appropriate after remand adjustments |
Key Cases Cited
- Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (agency action must be reasonable and explain departures from record evidence)
- CS Wind Vietnam Co. v. United States, 832 F.3d 1367 (Fed. Cir. 2016) (court must consider record evidence that detracts from agency conclusions)
- Gerald Metals, Inc. v. United States, 132 F.3d 716 (Fed. Cir. 1997) (standard for substantial evidence review)
- Consol. Edison Co. v. NLRB, 305 U.S. 197 (1938) (substantial evidence standard authority)
- Suramerica de Aleaciones Laminadas, C.A. v. United States, 44 F.3d 978 (Fed. Cir. 1994) (administrative record review principles)
- Mittal Steel Point Lisas Ltd. v. United States, 548 F.3d 1375 (Fed. Cir. 2008) (discussion of non-prime product treatment in CV)
- Albemarle Corp. v. United States, 821 F.3d 1345 (Fed. Cir. 2016) (application of §1673d methods to administrative reviews)