Husteel Co. v. United States, 2015 CIT 100

Background

Commerce investigated antidumping (AD) duties on certain oil country tubular goods (OCTG) from Korea after a U.S. petition; two largest Korean exporters (NEXTEEL and HYSCO) were selected as mandatory respondents.
Commerce used constructed value (CV) because mandatory respondents lacked viable home/third‑country markets; final margins rose from 0% preliminarily to 9.89% (NEXTEEL) and 15.75% (HYSCO). Non‑examined Korean firms were assigned the weighted‑average "all‑others" rate.
Petitioners submitted Tenaris S.A.'s 2012 financials late (claimed as rebuttal); Commerce used Tenaris profit for CV in the final determination, producing a large increase in margins.
Several Korean producers (Husteel, NEXTEEL, ILJIN, SeAH, AJU Besteel) and U.S. producers challenged multiple aspects: respondent selection, use of Tenaris profit and failure to apply a profit cap, affiliation findings, warranty/warehousing/cost adjustments, and use (or non‑use) of adverse facts available (AFA).
The Court sustained most Commerce determinations but remanded (1) respondent selection insofar as Commerce failed adequately to address ILJIN's representativeness (seamless vs welded OCTG), and (2) the CV‑profit choice because Tenaris data were untimely rebuttal evidence and Commerce failed adequately to apply or explain a profit cap.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Respondent selection (mandatory/representativeness)	ILJIN/Husteel: Commerce unreasonably limited mandatory respondents and ignored ILJIN’s representativeness (sole seamless OCTG producer); two respondents not a "reasonable number"	Commerce: there was a "large" number of potential respondents (CBP data), selection under §1677f‑1(c)(2)(B) was discretionary and reasonable given resources and investigation deadlines	Court: Selection as to "large number" upheld, but remanded because Commerce failed to explain why ILJIN (seamless OCTG) need not be included to preserve representativeness; must reconsider
Voluntary respondent requests (refusal to accept)	Husteel/ILJIN: Commerce improperly declined voluntary respondents; burdens cited are typical and insufficient for "unduly burdensome" under §1677m(a)	Commerce: concurrent multiple OCTG investigations and shortened investigation deadlines made accepting volunteers unduly burdensome	Court: Upheld Commerce’s refusal here — investigation context and concurrent proceedings made burdens legitimate and supported on record
Use of Tenaris profit for CV (timeliness & suitability)	Respondents: Tenaris financials were untimely rebuttal (should have been rejected); even if considered, Tenaris is unrepresentative and Commerce should have used Korean data or applied profit cap	Commerce/Petitioners: Tenaris submission rebutted NEXTEEL data and was within discretion; Tenaris best available OCTG profit source	Court: Tenaris statement was improperly received as rebuttal (should have been treated as new factual info and untimely); plaintiffs prejudiced; remand required to remove/reassess Tenaris use and to readdress CV profit and profit‑cap analysis
Profit cap under §1677b(e)(2)(B)(iii)	Respondents: Commerce must attempt to apply a profit cap (or facts‑available cap) because Tenaris margin was aberrational and record contained other profit information	Commerce: no home‑market profit data existed for same general category of products in Korea, so cap not calculable; SAA permits facts‑available use	Court: Commerce failed to attempt/apply a facts‑available profit cap or adequately explain dispensing with the cap; remand to either apply cap or justify omission
Affiliation (NEXTEEL–POSCO) & major‑input valuation	NEXTEEL: no control by POSCO; supplier relationship insufficient	Commerce: POSCO had close supplier relationship with potential to exercise control; applied major‑input rule using POSCO unaffiliated sales weighted average	Court: AFFIRMED — record supports potential for POSCO to affect NEXTEEL decisions; Commerce’s use of weighted average market price reasonable
Use of AFA for warranty/warehousing/service costs	Petitioners: apply AFA where companies withheld/failed to disclose warranty or affiliate service provider cost data	Respondents: cooperated; provided data and reasonable explanations	Court: Commerce reasonably declined AFA in disputed instances (NEXTEEL warranty, NEXTEEL warehousing, HYSCO affiliate service COP) and used verified/timely data; upheld Commerce’s line‑drawing

Key Cases Cited

Asahi Seiko Co. v. United States, 751 F. Supp. 2d 1335 (CIT 2010) (limits on Commerce relying on resource constraints when defining "large")
Carpenter Tech. Corp. v. United States, 662 F. Supp. 2d 1337 (CIT 2009) (review of Commerce's respondent‑selection reasonableness)
Zhejiang Native Produce & Animal By‑Prods. Imp. & Exp. Corp. v. United States, 637 F. Supp. 2d 1260 (CIT 2009) (Commerce cannot rewrite statute based solely on staffing issues)
Parkdale Int'l v. United States, 475 F.3d 1375 (Fed. Cir. 2007) (overriding purpose: calculate dumping margins as accurately as possible)
Grobest & I‑Mei Indus. (Vietnam) Co. v. United States, 815 F. Supp. 2d 1342 (CIT 2012) (voluntary respondent remand)
Grobest & I‑Mei Indus. (Vietnam) Co. v. United States, 853 F. Supp. 2d 1352 (CIT 2012) (remand II: Commerce must show undue burden beyond typical investigation burdens)
Geum Poong Corp. v. United States, 163 F. Supp. 2d 669 (CIT 2001) (profit cap requirement when using alternative (iii))
Geum Poong Corp. v. United States, 193 F. Supp. 2d 1363 (CIT 2002) (Commerce must attempt facts‑available profit cap if direct data lacking)
NTN Bearing Corp. v. United States, 74 F.3d 1204 (Fed. Cir. 1995) (preliminary determinations subject to change; agency reconsideration allowed)
Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (agency must cogently explain exercise of discretion)
Burlington Truck Lines, Inc. v. United States, 371 U.S. 156 (1962) (agency decisions must show rational connection between facts and choice)