450 F.Supp.3d 1333
Ct. Intl. Trade2020Background
- Commerce conducted the second administrative review (OCTG II) of antidumping duties on oil country tubular goods (OCTG) from Korea for Sept. 1, 2015–Aug. 31, 2016. Mandatory respondents included NEXTEEL and SeAH.
- In the Final Results Commerce: (1) applied total AFA to NEXTEEL; (2) found a "particular market situation" (PMS) for Korean hot‑rolled coil (HRC) and adjusted SeAH’s costs upward using an HRC countervailing‑duty rate; (3) classified SeAH’s proprietary products as grade code 080 (N‑80 equivalent); and (4) deducted PPA’s (SeAH’s U.S. affiliate) G&A as U.S. selling expenses.
- Plaintiffs challenged those determinations; the Court in NEXTEEL II sustained in part and remanded in part, instructing Commerce to reconsider or explain several findings.
- On remand Commerce recalculated NEXTEEL’s margin using reported data (under protest), re‑explained and again found a PMS (adding a new ‘‘industry restructuring’’ factor), reaffirmed the SeAH grade classification, and again deducted PPA’s G&A.
- This opinion: sustains Commerce’s SeAH product classification and the G&A deduction; holds the PMS finding unsupported by substantial evidence, reverses it on remand, and directs Commerce to recalculate margins for mandatory and non‑examined respondents.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Particular market situation (PMS) finding | Commerce may not relitigate or rely on largely the same OCTG I record; new fifth factor (industry restructuring) was not on the record or timely noticed and lacks evidence | Record is largely identical and cumulative evidence supports a PMS; use of HRC CVD info is the most input‑specific, timeliest data for valuation | PMS finding unsupported by substantial evidence (individual and cumulative factors); remanded and Commerce ordered to reverse the PMS and recalc margins |
| Use of HRC CVD/subsidy evidence to support PMS | Reliance on an AFA‑based 2014 HRC subsidy rate is temporally misplaced and does not reflect subsidies during the POR; HR CVD evidence does not support distortion | HRC CVD data is the most input‑specific, timeliest evidence available for valuing HRC for the POR and Commerce reasonably relied on it | Court finds a temporal/evidentiary problem and that evidence does not support a subsidization‑based PMS conclusion |
| Classification of SeAH proprietary products as grade 080 (N‑80 equivalent) | SeAH: absence of heat treatment and stenciling show its products differ and should not be matched to 080; tensile strength alone insufficient | Commerce: model‑match hierarchy ranks grade higher than heat treatment; heat treatment is a separate lower‑ranked field and Commerce reasonably matched on physical characteristics | Sustained: Commerce’s model‑match methodology reasonably supports classifying SeAH’s products as grade 080 |
| Deduction of PPA’s G&A as U.S. selling expenses | SeAH: Commerce did not explain how allocating G&A converts G&A into selling expenses; improper to deduct these G&A items | Commerce: statutory discretion to allocate/deduct selling expenses for constructed export price; PPA primarily performs selling functions and further manufacturing is perfunctory (avoids double counting) | Sustained: Commerce reasonably allocated/deducted PPA’s G&A as U.S. selling expenses and avoided double counting |
Key Cases Cited
- NEXTEEL Co., Ltd. v. United States, 392 F. Supp. 3d 1276 (Ct. Int'l Trade 2019) (remanding Commerce’s OCTG determinations)
- NEXTEEL Co., Ltd. v. United States, 355 F. Supp. 3d 1336 (Ct. Int'l Trade 2019) (earlier opinion addressing PMS issues)
- Fujitsu Gen. Ltd. v. United States, 88 F.3d 1034 (Fed. Cir. 1996) (deference to Commerce on complex accounting/economic methods)
- Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (agency must provide a reasoned explanation for rulemaking/decisions)
- Aramide Maatschappij V.o.F. v. United States, 19 C.I.T. 1094 (1995) (including G&A of U.S. selling arm in indirect selling expenses)