Hyundai Steel Co. v. United States
2018 CIT 2
| Ct. Intl. Trade | 2018Background
- Commerce investigated antidumping (AD) duties on corrosion‑resistant steel (CORE) from Korea; Hyundai Steel was a mandatory respondent for the period 4/1/2014–3/31/2015.
- Hyundai sold imported CORE to its U.S. affiliate (HSA), which resold it unaltered, as slightly further manufactured products (skelp/sheets/blanks — SSBs), or as tailor‑welded blanks (TWBs) and aftermarket auto parts consumed by Hyundai affiliates.
- Hyundai requested Commerce apply the §1677a(e) “special rule” (value added after importation) for TWBs and auto parts; Commerce declined and instead required detailed Section E cost/sales data.
- Commerce found Hyundai’s Section E submissions deficient, cancelled verification of U.S. affiliate further‑manufacturing data, and applied adverse facts available (AFA), producing a 47.8% dumping margin for Hyundai.
- Hyundai challenged Commerce’s refusal to apply the special rule and the use of AFA; the Court reviewed whether Commerce properly requested deficiencies, timely notified Hyundai, and whether Hyundai acted to the “best of its ability.”
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Commerce unreasonably declined to apply the §1677a(e) “special rule” to TWBs and auto parts | Hyundai: complexity of further manufacturing and its submissions warranted the special rule; Commerce failed to describe its preferred valuation method per the SAA | Commerce: Hyundai failed to meet the 65% value‑added threshold; Hyundai’s calculation double‑counted subject inputs and was unreasonable | Court: Commerce reasonably declined to apply the special rule; Hyundai’s method was unreasonable and, after correction, the 65% threshold was not met |
| Whether Commerce properly resorted to “facts otherwise available” (AFA predicate: missing or deficient information) for TWBs, auto parts, and SSBs | Hyundai: Commerce did not fairly request the specific data and shifted requirements; supplemental questionnaires sought new info rather than cure opportunities | Commerce: it issued Section E and multiple supplemental questionnaires identifying deficiencies; Hyundai omitted non‑subject inputs and submitted untimely/non‑responsive databases | Court: Commerce made adequate requests and established missing/deficient info for TWBs and auto parts and for SSBs generally, but Commerce failed to timely notify/permit cure with respect to SSB cost data |
| Whether Hyundai’s submissions met §1677m(e) (timely, verifiable, complete, usable; and acted to best ability) such that Commerce had to accept them despite form deficiencies | Hyundai: its December submissions and explanations satisfied the §1677m(e) criteria and were verifiable; it cooperated and sought guidance | Commerce: Hyundai’s submissions contained inconsistencies, unexplained downward cost revisions, and untimely unsolicited databases that were not verifiable | Court: TWB and auto part data were untimely/unverifiable and Hyundai did not act to the best of its ability — Commerce permissibly excluded them; but SSB cost deficiencies were not timely flagged and Hyundai must be given an opportunity to remedy |
| Whether application of an adverse inference in selecting among facts otherwise available was lawful and supported | Hyundai: it made many responses, verifications showed only minor issues, and it tried to comply with complex reporting; AFA was excessive | Commerce: Hyundai repeatedly submitted unusable data, retracted prior statements, underestimated affected sales, and impeded accurate calculation | Court: Applying an adverse inference for TWBs and auto parts was reasonable (Hyundai failed best‑effort standard); AFA as to SSBs was improper given Commerce’s failure to timely notify — remand ordered for SSBs |
Key Cases Cited
- RHP Bearings Ltd. v. United States, 288 F.3d 1334 (Fed. Cir. 2002) (Commerce has discretionary role in applying special rule §1677a(e))
- Nippon Steel Corp. v. United States, 337 F.3d 1373 (Fed. Cir. 2003) (respondent must provide requested information; failure requires use of other facts available)
- Micron Tech., Inc. v. United States, 117 F.3d 1386 (Fed. Cir. 1997) (verification is a spot‑check; Commerce verifies information it uses)
- JTEKT Corp. v. United States, 675 F. Supp. 2d 1206 (CIT 2009) (verifiability requirement for Commerce use of submitted data)
- Koyo Seiko Co. v. United States, 92 F.3d 1162 (Fed. Cir. 1996) (Commerce must fairly request information before resorting to facts available)
- Essar Steel Ltd. v. United States, 678 F.3d 1268 (Fed. Cir. 2012) (purpose of adverse facts is to encourage cooperation, not to punish)
- Papierfabrik Aug. Koehler SE v. United States, 843 F.3d 1373 (Fed. Cir. 2016) (statutory limits on Commerce’s ability to disregard information; §1677m(e) standards)
- Tung Mung Dev. Co. v. United States, 25 C.I.T. 752 (CIT 2001) (respondents must prepare accurate and complete records to Commerce inquiries)