279 F.Supp.3d 1349
Ct. Intl. Trade2017Background
- Commerce investigated antidumping for certain hot-rolled steel from Korea (POI: July 1, 2014–June 30, 2015) and selected Hyundai Steel as a mandatory respondent.
- Commerce issued questionnaires and supplemental questionnaires; Commerce conducted multiple verifications (sales, cost, further manufacturing) in Jan–June 2016.
- At verification, Commerce requested documentation of contracts/transactions between Hyundai's affiliated freight and insurance providers and their unaffiliated customers; Hyundai did not produce the full documentation, providing instead representative samples and other substitute materials.
- Commerce found Hyundai and those affiliates were commonly controlled (family cross-ownership) and concluded the record lacked necessary information to determine whether affiliate transactions were arm’s-length.
- Commerce applied facts available and adverse facts available (AFA) adjustments to certain freight, warehousing, and insurance expenses, and denied Hyundai a constructed export price (CEP) offset for level-of-trade differences; Hyundai challenged the Final Results in Court of International Trade.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Commerce permissibly applied AFA for Hyundai's affiliate transactions | Hyundai: Commerce requested affiliates' transaction data only at verification; Hyundai cooperated to the best of its ability and substitutes provided were sufficient | Commerce: Hyundai failed to provide requested documentation despite common control making data accessible; substitutes were insufficient and Commerce may request information at verification | Court: Commerce's use of facts available and AFA was supported by substantial evidence and lawful; Hyundai failed to demonstrate best-efforts to obtain requested records |
| Whether record supports an arm's-length finding for affiliate services | Hyundai: submitted materials (representative contracts, price comparisons) show affiliate charges were arm's-length and supported preliminary finding | Commerce: submissions did not satisfy the scope of requested documentation needed to complete arm's-length analysis | Court: Even if alternate inferences possible, agency reasonably concluded submitted materials were insufficient; substantial evidence supports Commerce's determination |
| Lawfulness and reasonableness of the specific AFA adjustments applied (highest/lowest values) | Hyundai: Commerce applied high/low values too broadly (including some unaffiliated-provider transactions) and used absolute lowest values without destination-specific logic | Commerce: Has discretion to select adverse facts to deter noncooperation; chosen AFA methodology was reasonable given missing record evidence | Court: Commerce's selection and application of AFA values were within its statutory discretion and not unlawful |
| Whether Hyundai was entitled to a CEP offset for level-of-trade differences | Hyundai: Home-market selling functions were more advanced/intense (freight, warehousing, warranty, sales/marketing), and Commerce previously granted CEP offsets in other Hyundai proceedings | Commerce: Selling functions are substantially similar across markets; minor differences do not meet statutory substantiality standard; prior grants in other proceedings do not bind current determination | Court: Denial of CEP offset supported by substantial evidence and not arbitrary or capricious; Commerce reasonably applied facts on the record |
Key Cases Cited
- Apex Frozen Foods Private Ltd. v. United States, 862 F.3d 1322 (Fed. Cir. 2017) (defines normal value/export price context)
- Nippon Steel Corp. v. United States, 337 F.3d 1373 (Fed. Cir. 2003) (explains "best of its ability" standard for AFA)
- Micron Tech., Inc. v. United States, 243 F.3d 1301 (Fed. Cir. 2001) (level-of-trade/CEP offset principles)
- Maverick Tube Corp. v. United States, 857 F.3d 1353 (Fed. Cir. 2017) (Commerce's AFA authority and burden of production)
- Papierfabrik Aug. Koehler SE v. United States, 843 F.3d 1373 (Fed. Cir. 2016) (AFA selection discretion)
- F.lli De Cecco Di Filippo Fara S. Martino S.p.A. v. United States, 216 F.3d 1027 (Fed. Cir. 2000) (purpose of adverse facts statute: induce cooperation)
- Ta Chen Stainless Steel Pipe, Inc. v. United States, 298 F.3d 1330 (Fed. Cir. 2002) (treatment of affiliated-party relationships)
- Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927 (Fed. Cir. 1984) (standard that conflicting inferences do not preclude substantial-evidence support)