DOWNHOLE PIPE & EQUIPMENT LP and DP-Master Manufacturing Co., Ltd., Plaintiffs, v. UNITED STATES, Defendant, and VAM Drilling USA, Texas Steel Conversions, Inc., Rotary Drilling Tools, TMK IPSCO, and U.S. Steel Corp., Defendant-Intervenors.
Court No.: 11-00081
United States Court of International Trade
Nov. 20, 2012
Slip Op. 12-141
TSOUCALAS, Senior Judge
Plaintiffs do not challenge Commerce‘s established practice of applying AFA to the entire collapsed entity when one company within it has met the statutory requirements for warranting an AFA rate. Nor do they challenge Commerce‘s finding that Xinya was not responsive to Commerce‘s AD questionnaires.12 Because Xinya was properly collapsed with Guang Ya and Zhongya and failed to provide any reliable information for Commerce to use when calculating a margin, it was therefore proper for Commerce to apply AFA to the entire collapsed entity.
CONCLUSION
Because Commerce‘s decision to collapse the three affiliated exporter/producers is supported by substantial evidence, and because Commerce‘s application of AFA was also supported by a reasonable reading of the record, Commerce‘s final determination is AFFIRMED in all respects. Judgment will be entered accordingly.
Stuart F. Delery, Acting Assistant Attorney General; Jeanne E. Davidson, Director, Washington, DC, Claudia Burke, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Courtney S. McNamara); Office of Chief Counsel for Import Administration, United States Department of Commerce, Nathaniel J. Halvorson, Of Counsel, for the United States, Defendant.
Schagrin Associates, (Roger B. Schagrin, Washington, DC, John W. Bohn, and Michael J. Brown), for VAM Drilling USA, Texas Steel Conversions, Inc., Rotary Drilling Tools, TMK IPSCO; Skadden Arps Slate Meagher & Flom, LLP, (Jeffrey D. Gerrish, Luke A. Meisner, and Robert E. Lighthizer), Washington, DC, for United States Steel Corp., Defendant-Intervenors.
TSOUCALAS, Senior Judge:
Plaintiffs Downhole Pipe & Equipment, LP, and DP-Master Manufacturing Co., Ltd. (“Downhole” and “DP-Master,” respectively, and “DP,” collectively) move pursuant to
BACKGROUND
On December 30, 2009, VAM Drilling USA, Inc., TMK IPSCO, Texas Conversion Services, Inc., Rotary Drill Tools, and United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Works International Union, AFL-CIO, CLC (collectively, “petitioners” or “domestic industry“) filed petitions with Commerce seeking the imposition of antidumping and countervailing duties on drill pipe from the PRC. Letter from Roger B. Schagrin to the Secretary of Commerce, Re: Petitions for the Imposition of Antidumping and Countervailing Duties: Drill Pipe From the PRC, Public Rec. 1 at 1-4.1 The parties do not dispute that drill pipe is a specialized high-strength iron alloy tube manufactured in three phases. “First, seamless tubes--called ‘green tubes‘--are produced from raw steel.” Pls.’ Am. Mem. Supp. Mot. J. Agency R. (“Pls.’ Br.“) at 3-4. Second, a manufacturer uses complex and expensive processes to “upset” and heat treat green tube so as to thicken the ends and increase the yield strength to the desired American Petroleum Institute (“API“) grade. Id. at 3-6. Raw green tube can be processed into “oil country tubular goods” (“OCTG“)—tubular products other than drill pipe, such as casing and finished tubing—as well, but the parties dispute the interchangeability of drill pipe green tube and OCTG green tube. See Pls.’ Br. at 32-33; Def.‘s Mem. Opp‘n Pls.’ Br. (“Def.‘s Br.“) at 11-15. Lastly, a manufacturer friction-welds a specialized “tool joint” to the ends of the heat-treated and upset tube to complete the drill pipe. Id. at 3, 7-8. A manufacturer may also apply a protective coating or other post-production enhancements to the drill pipe. See Pls.’ Br. at 30-31, 35-36.
DP-Master purchases raw green tubes that it upsets and heat-treats to desired API specifications. DP-Master manufactures some, but not all, of its tool joints in-house and friction-welds them to the upset and heat-treated green tubes. DP-Master
Domestic industry proposed a broad scope for the antidumping and countervailing duty investigations: “[D]rill pipe . . . whether or not conforming to [API] or non-API specifications, whether finished (with or without tool joints attached) or unfinished (including green tubes), and without regard to the specific chemistry of the steel . . . [and excluding] tool joints not attached to drill pipe.” PR 1 at 7. In its comments from January 15, 2010 and its comments from January 19, 2010, DP-Master argued that the proposed scope overlapped with an existing investigation into OCTG from China. PR 14 at 2-5; PR 19 at 1-4. Commerce and domestic industry then agreed on revised scope language, which among other changes included a new exception: “The scope does not include . . . unfinished tubes for casing or tubing covered by any other antidumping or countervailing duty order.” PR 20 at 2. Commerce initiated the investigation based on industry support calculated using the revised scope. Drill Pipe from the PRC: Initiation of Antidumping Duty Investigation,
During the investigation, Commerce directed parties to report factor of production data using “actual quantities consumed to produce the merchandise under investigation.” PR 53 at D-2. In the event that a party could not provide such information, it was to “provide a detailed explanation of all efforts undertaken to report the actual quantity of each [factor of production] consumed to produce the merchandise.” Id. DP-Master notified Commerce that it was having difficulty obtaining the requested factor of production information from its phosphate toller. PR 107 at D-5 to D-6; PR 115 at 6. Nevertheless, once it did report what limited factor of production data it could obtain from its toller, DP-Master did not reveal that it had actually provided data based on purchased quantities instead of actual quantities consumed. Drill Pipe from the PRC: Issues and Decision Memorandum for the Final Determination (Jan. 3, 2011), PR 258 at 45 (“I & D Memorandum“).
In Drill Pipe from the PRC: Preliminary Determination of Sales at Less than Fair Value and Affirmative Determination of Critical Circumstances, and Postponement of Final Determination,
In the Preliminary Determination, Commerce also found that DP-Master was “unable to obtain” certain data from its phosphate toller. Id. at 28. To fill gaps in the data, DP-Master offered “estimated [factors of production] based on [its] knowledge of the production process,” which Commerce found to be “a reasonable proxy to account for the production costs associated with [DP-Master‘s] . . . tolled merchandise.” Id. When Commerce sought to verify the information DP-Master did obtain and report, however, it discovered “for the first time” that DP-Master did not report quantities in the manner Commerce requested, and that DP-Master could not provide records necessary for verification. I & D Memorandum at 45-47.
Following verification and the final comment period, Commerce issued the Final Determination, six aspects of which are presently on appeal. First, Commerce narrowed the scope by adding three physical criteria to the description of subject green tube. Second, in calculating DP-Master‘s surrogate financial ratio, Commerce elected to use financial information solely from the Indian company Oil Country Tubular, Ltd. Third, contrary to its finding in the Preliminary Determination, Commerce determined that the average unit value of imports under IHTS catego- ries 7304.29 and 7304.23 was the best available surrogate value for drill pipe green tube. Fourth, at DP-Master‘s urging, Commerce abandoned IHTS category 8431.43.90 and instead used the same surrogate value it chose for the tool joints DP-Master produced in-house to calculate the surrogate value for the tool joints DP-Master purchased. Without prompting from DP-Master, however, Commerce multiplied the in-house tool joint surrogate value by the applicable financial ratio to account for the selling, general and administration expenses (“SG & A“), profit, and overhead that would be reflected in prices offered on the open market. Fifth, Commerce calculated the surrogate value for labor by averaging rates in all countries that produced subject goods, regardless of how much each country actually produced. Lastly, Commerce found that DP-Master‘s failures with respect to reporting its phosphate toller‘s factor of production data warranted the application of facts otherwise available and an adverse inference therefrom. I & D Memorandum at 10-12, 14-22, 24-32, 44-47.
Subsequent to the filing of this action, the United States Court of Appeals for the Federal Circuit (“Federal Circuit“) held that the simultaneous application of non-market methodology and countervailing duty law was contrary to the Tariff Act of 1930. GPX Int‘l Tire Corp. v. United States, 666 F.3d 732 (Fed.Cir.2011), superseded by statute, Application of Countervailing Duty Provisions to Nonmarket Economy Countries, Pub.L. No. 112-99, 126 Stat. 265 (effective Mar. 13, 2012). Commerce also issued a countervailing duty order against DP-Master below. Drill Pipe from the PRC: Countervailing
JURISDICTION and STANDARD OF REVIEW
The court has jurisdiction over this matter pursuant to
DISCUSSION
DP argues that the Final Determination is contrary to law and unsupported by the record with respect to: scope; surrogate financial ratio; surrogate values for drill pipe green tube, purchased tool joints, and labor; and the partial application of adverse facts available. DP also challenges the Final Determination as contrary to law on the basis that it is being applied simultaneously with the Countervailing Duty Order. See GPX Int‘l Tire Corp., 666 F.3d at 737. For the reasons outlined below, the Final Determination is affirmed in all respects except with regard to the surrogate values for drill pipe green tube and labor.
I. Scope
DP argues that “the record lacks substantial evidence to support Commerce‘s three criteria for including green tube within the scope” of the Final Determination5 because some green tube fitting its criteria are also subject to antidumping and countervailing duty orders on OCTG. Pls.’ Br. at 32; see OCTG from the PRC,
To initiate an antidumping duty investigation, Commerce must “determine
DP‘s sole argument—that some green tube used to produce OCTG meet the technical specifications of the Final Determination and are thus subject to two antidumping orders—has little bearing on Commerce‘s decision to initiate the investigation.
Even if DP‘s challenge were procedurally appropriate, it would fail on a substantive basis. See id. at __, 825 F.Supp.2d at 1323 (prohibition against Commerce from reconsidering industry support “does not limit” the court‘s power to review it). “Commerce owes deference to the intent of the proposed scope of an antidumping investigation as expressed in an antidumping petition,” Ad Hoc Shrimp Trade Action Comm. v. United States, 33 CIT __, __, 637 F.Supp.2d 1166, 1174-75 (2009), and Commerce properly identified domestic industry‘s intent to investigate drill pipe green tube. In the Initiation, Commerce observed that it was “clear throughout Petitioners’ submissions that their use of the term ‘drill pipe’ includes ‘green tubes’ for drill pipe production only,” not green tubes for OCTG production. PR 22, Att. II at 8. In sup-
II. Surrogate Values
“Commerce ordinarily determines the normal value of subject merchandise of an exporter or producer from a nonmarket economy country ‘on the basis of the value of the factors of production utilized in producing the merchandise.‘” Shantou Red Garden Foodstuff Co. v. United States, 36 CIT __, __, 815 F.Supp.2d 1311, 1316 (2012) (quoting
In evaluating Commerce‘s selection of the best available surrogate value under the substantial evidence standard, “[t]he Court‘s role is not to make that determination anew, but rather to decide ‘whether a reasonable mind could conclude that Commerce chose the best available information.‘” China First Pencil Co. v. United States, 34 CIT __, __, 721 F.Supp.2d 1369, 1375 (2010) (quoting QVD Food Co. v. United States, 34 CIT __, __, 721 F.Supp.2d 1311, 1315 (2010), aff‘d, 658 F.3d 1318 (Fed.Cir.2011)). It is critical that Commerce‘s selection “establishes the antidumping margins as accu-
A. Surrogate Financial Ratio
Commerce selected Oil Country Tubular, Ltd. (“OCTL“) as the only financial surrogate for DP-Master in both the Preliminary Determination and Final Determination. DP argues that Commerce should have averaged financial statements from OCTL with those from Jindal Saw, another Indian producer. DP‘s challenge is twofold: first, DP questions OCTL‘s suitability as a surrogate on the basis that it has a lower drill pipe production capacity, provides more services, and produces a wider variety of expensive goods than DP-Master; second, DP disputes Commerce‘s finding that Jindal Saw was too vertically integrated to be comparable to DP-Master. In essence, DP argues that OCTL is just as poor a match for DP-Master‘s production experience as Jindal saw, meaning that Commerce‘s decision to use only OCTL as a surrogate was unsupported by substantial evidence.
To account for factory overhead, SG & A, and profit in a nonmarket economy context, Commerce uses financial statements from “one or more surrogate companies.” Fujian Lianfu Forestry Co. v. United States, 33 CIT __, __, 638 F.Supp.2d 1325, 1353 (2009). “To serve as an adequate proxy for the respondent companies being reviewed, the surrogate companies selected ideally should produce comparable merchandise” in the surrogate country. Id. (citing
The first prong of DP‘s argument focuses on differences between OCTL and DP-Master. DP argues that “OCTL‘s [oil tubular goods] production capacity vastly overshadows its drill pipe production capacity, which itself is only 1/10 of DP-Master‘s.” Pls.’ Br. at 30-31. Commerce found that DP-Master and OCTL were at an “identical level of integration” because both “purchas[e] green tube that is then processed into drill pipe.” I & D Memorandum at 22. As DP argues elsewhere, oil tubular goods are comparable to drill pipe because the production of both re-
The second prong of DP‘s argument is that Commerce improperly rejected Jindal Saw as a surrogate because it “does not appear to be as fully-integrated as Commerce believed.” Pls.’ Br. at 32. DP supports its argument with a quote from a Jindal Saw 2009-2010 annual report: “Jindal ‘focused on value added production’ and reduced production of pig iron by 81.7% ‘to [a] negligible level.‘” Pls.’ Br. at 31 (quoting PR 218 at 29, 71) (alteration in Pls.’ Br.). This quotation is irrelevant for two reasons. First, although pig iron is an input for some steel products, there is no indication that Jindal Saw used its pig iron to make pipes.8 See PR 218 at 26-29. Second, contrary to DP‘s assertion, the annual report shows that Jindal Saw‘s con- sumption of raw iron ore and iron fines increased by 20% along with its production of pipes. PR 218 at 71. In other words, DP‘s selective quotation does not undermine Commerce‘s finding that Jindal Saw is more vertically integrated than DP-Master because it “begin[s] its production at the iron ore stage.” I & D Memorandum at 22.
Furthermore, the same annual report demonstrates that Jindal Saw produces “certain out of scope merchandise that [DP-Master] does not,” just like OCTL. See I & D Memorandum at 22. In addition to non-drill pipe metal tube products, Jindal Saw “provides various value added products like pipe coatings, bends and connector castings,” PR 218 at 19, which DP does not claim to provide. Jindal Saw also produces and sells steel plates, steel coils, and pig iron, id. at 29, products DP does not claim to produce. Finally, Jindal Saw‘s wholly-owned subsidiary “owns and operates businesses in three core sectors of the Indian economy,” none of which bear any relation to producing drill pipe or other oil extraction products: “Water, Waste Water and Solid Waste Management[;] Domestic Transportation & Logistics[; and] Transportation Equipment Fabrication.” Id. at 8, 63-64, 89-90. Jindal Saw reaches as wide across as it does far down the stream of production, and as such it is equally subject to the criticism DP applies to OCTL.
Commerce‘s decision to use only OCTL as a financial surrogate is supported by substantial evidence in the record. OCTL and Jindal Saw both produce nonsubject goods, but Jindal Saw has a high level of vertical integration that neither DP-Mas-
B. Surrogate Value for Drill Pipe Green Tube
In the Preliminary Determination, Commerce calculated a $1262.50 surrogate value for green tube by averaging prices and offers for J/K-55 grade tube listed in the January and March 2009 issues of MBR. As Commerce stated, “[MBR] is a widely respected steel industry journal produced outside the context of this case . . . [and] J/K55 is the most similar in yield strength to drill pipe green tubes, a key characteristic in green tubes.” PR 186 at 7. In the Final Determination, however, Commerce opted instead to use average unit values of goods imported under IHTS categories 7304.29 and 7304.23 to calculate a $2,511.67 surrogate value. I & D Memorandum at 31-32. One of the reasons Commerce changed its mind was that, in its opinion, the IHTS categories actually “capture” green tube, whereas the MBR issues described J/K-55 grade tube, a product “that is only comparable to” green tube.9 Id. DP contends that Infodrive India listings for IHTS categories 7304.29 and 7304.23 show that imports under both categories were actually devoid of green tube and dominated by high-priced fin- ished products, meaning that Commerce did not base its determination on substantial evidence.10 Pls.’ Br. at 15-17.
This Court has recognized Infodrive‘s utility in specifying descriptions of products at the moment of import as a supplement to aggregated IHTS data. See Dorbest Ltd., 30 CIT at 1695-98, 462 F.Supp.2d at 1284-86; Zhejiang, 652 F.3d at 1342. Infodrive is not a perfect tool, Zhejiang, 652 F.3d at 1342, and so Commerce need not rely on Infodrive data that is incomplete or demonstrably inaccurate. Globe Metallurgical, Inc. v. United States, 33 CIT __, __, Slip Op. 09-37 at 7-8, 2009 WL 1272102 (May 5, 2009), appeal dismissed per stipulation, 449 Fed.Appx. 9 (Fed.Cir.2010); Calgon Carbon Corp. v. United States, 35 CIT __, __, Slip Op. 11-21 at 17, 2011 WL 637605 (Feb. 17, 2011). Nevertheless, this Court has consistently found that Commerce is obliged to address Infodrive data offered in rebuttal if it specifies a “definite and substantial percentage” of imports under a particular IHTS category. Calgon Carbon, 35 CIT at __, Slip Op. 11-21 at 17; see Zhengzhou Harmoni Spice Co. v. United States, 33 CIT __, __, 617 F.Supp.2d 1281, 1325 (2009); Longkou Haimeng Mach. Co. v. United States, 32 CIT 1142, 1162-65, 581 F.Supp.2d 1344, 1361-64 (2008).
Commerce‘s description of the Infodrive data in the Final Determination is misleading to the point where it is impossible to determine whether its reliance on the IHTS data was reasonable. See Calgon Carbon, 33 CIT at __, Slip Op. 11-21 at 17-19. Commerce determined that
Defendant-intervenors argue that the IHTS data is accurate because the finished casing and tubes actually imported under those categories are comparable to drill
Commerce‘s rebuttal of each of DP‘s four alternative surrogates12 in response to the instant motion does not cure its inadequate explanation of its reliance upon the IHTS data. See Longkou Haimeng, 32 CIT at __, 581 F.Supp.2d at 1363-64. Although Commerce is not required to address every counterargument or piece of evidence before it, see Taian Ziyang Food Co. v. United States, 33 CIT __, 637 F.Supp.2d 1093, 1141 (2009), its failure here to explain evidence apparently contrary to a finding central to its determination leaves the court without the means necessary to affirm it as supported by the record. See Taian Ziyang Food Co. v. United States, 35 CIT __, 783 F.Supp.2d 1292, 1331-32 (2011) (remand appropriate where there remained “serious unanswered questions” as to Commerce‘s justification for selecting apparently distorted import statistics as the best available surrogate). On remand, Commerce is not barred from selecting the IHTS data—it need only explain why such data is more representative of the price for drill pipe green tube than other potential surrogate values in light of Infodrive data that appears to demonstrate that categories 7309.23 and 7309.29 do not actually “capture” green tube and are highly distorted by expensive, finished tubular goods.
C. Surrogate Value for Purchased Tool Joints
Commerce used average unit values of imports under IHTS 8431.43.90 to calculate the tool joint surrogate value in the Preliminary Determination. DP-
Commerce acted reasonably when it declined to use petitioners’ data as the best available information on the record. See QVD Food Co., 34 CIT at __, 721 F.Supp.2d at 1315 (citing Goldlink, 30 CIT at 619, 431 F.Supp.2d at 1327). DP admits that petitioners’ prices are derived from U.S. market prices and that the U.S. market is not economically comparable to the PRC, Pls.’ Br. at 25-26, and it does not dispute that the chosen surrogate value is derived entirely from the primary surrogate country, India. I & D Memorandum at 28. DP also admits that petitioners’ data is proprietary, whereas the chosen surrogate is based on public information. Pls.’ Br. at 25-26. DP argues at great length that petitioners’ prices are a “precise product match” for the tool joints DP-Master purchased, e.g., Pls.’ Br. at 25, but it does not contest that the chosen surrogate value is also product specific.13 See id. at 24-29; I & D Memorandum at 27-28. Faced with a choice between two product-specific surrogate valuation methods spanning the period of investigation, this court cannot say that Commerce erred when it selected the method that was based on public data from the primary surrogate country over proprietary data from a country not economically comparable to the U.S. See Goldlink, 30 CIT at 619, 431 F.Supp.2d at 1327 (“[T]he Court must defer to Commerce” if its determination below is reasonable.).
DP employs a false comparison of the $10,529.40 surrogate value with the $5571.40 constructed value for the tool joints it produces to raise doubts about Commerce‘s choice. The $5571.40 tool joint value lacks the profit, SG & A, and overhead considerations that would be reflected in the price of tool joints offered for sale in a surrogate market, and so $5571.40 is not an accurate representation of purchased tool joint value. See I & D Memorandum at 28. Furthermore, given the nature of the tool joint market, the record shows that the chosen surrogate value is not aberrational when compared to the proprietary average value of tool joints purchased in the U.S. The parties agree
“[T]he process of constructing foreign market value for a producer in a nonmarket economy country is difficult and necessarily imprecise.” Nation Ford Chem., 166 F.3d at 1377 (quoting Sigma, 117 F.3d at 1407). That DP also presents a well-reasoned case for why Commerce could have chosen petitioners’ data as the best available does not change the fact that this court cannot usurp Commerce‘s sound judgment in selecting a different viable surrogate. See Peer Bearing Co. v. United States, 25 CIT 1199, 1201-02, 182 F.Supp.2d 1285, 1292 (2001). Because Commerce‘s choice here was reasonable, DP‘s challenge must fail. See Goldlink, 30 CIT at 619, 431 F.Supp.2d at 1327.
D. Surrogate Value for Labor
DP argues that, when calculating the labor wage rate surrogate value, Commerce averaged the wage rate of thirty-one countries that produced comparable merchandise without distinguishing between producers and “significant producers” as required under
III. Partial Application of Adverse Facts Available
DP argues that “Commerce‘s application of adverse facts available . . . because of an independent toller‘s failure to report certain information regarding consumption of material inputs is unsupported by substantial evidence and is contrary to law.” Pls.’ Br. at 35. Under
Commerce relied on DP-Master‘s failures in deciding to apply an adverse inference, not its toller‘s poor recordkeeping.14 I & D Memorandum at 47. On April 7, 2010, Commerce instructed DP-Master to provide “a detailed explanation
DP-Master‘s actions—lulling Commerce into believing it had provided information in the manner requested when it in fact had not, and then suddenly admitting that it had not provided reliable information at verification—are closer to the kind of “deliberate concealment or inaccurate reporting” that “surely evince[] a failure to cooperate” than to the mere “inadequate inquiries” sufficient for application of an adverse inference. See Nippon, 337 F.3d at 1383 (emphasis added). Although DP does not contest this aspect of Commerce‘s determination. See Pls.’ Br. at 35-36; Pls.’ Reply at 11-13; Nippon, 337 F.3d at 1381 (“The mere failure of a respondent to furnish requested information—for any reason—requires Commerce to resort to other sources of information to complete the factual record upon which it makes its determination.” (emphasis added)).
DP-Master notified Commerce that it was having difficulty securing information from its toller, DP does not and cannot dispute that Commerce provided “extensive instructions . . . numerous times over the course of the investigation” to the effect that DP-Master should notify Commerce if it was unable to provide information in the manner requested. I & D Memorandum at 47; Wuhan Bee Healthy Co. v. United States, 31 CIT 1182, 1191, 2007 WL 2071537 (2007) (not published in the Federal Supplement) (objective prong satisfied where “a reasonable and responsible respondent would have brought any problems surrounding its supporting documentation to Commerce‘s attention before the verification“). DP also does not and cannot dispute that DP-Master failed to provide a detailed explanation of its efforts to get actual-consumption data before verification as requested. See Sidenor Indus. SL v. United States, 33 CIT __, __, 664 F.Supp.2d 1349, 1358 (2009) (subjective prong satisfied where respondent failed to act as requested even though it was able to do so).
The record belies DP‘s contention that it is “not the party who failed to cooperate,” Pls.’ Br. at 35 (emphasis omitted), and so this court cannot say that the application of an adverse inference to DP-Master‘s unverifiable submissions was unreasonable or contrary to law.15 Wuhan Bee, 31 CIT
IV. Simultaneous Application of Non-market Economy Methodology and Countervailing Duty Law
DP‘s motion—dated February 8, 2012—argues for remand on the basis of the Federal Circuit‘s decision in GPX International Tire Corp., 666 F.3d at 734. That decision invalidated Commerce‘s simultaneous application of countervailing duty law and nonmarket economy methodologies below, which was its usual approach under then-existing law. The Federal Circuit decided GPX on December 19, 2011, almost a year after DP appealed the Final Determination to this court. Id. Just over a month after DP filed the instant motion, Congress passed Public Law 112-99, amending the Tariff Act of 1930. 126 Stat. 265. Public Law 112-99 clarifies that “merchandise on which countervailing duties shall be imposed . . . includes a class or kind of merchandise imported, or sold (or likely to be sold) for importation, into the [U.S.] from a nonmarket economy.”
Recognizing that Public Law 112-99 “permits Commerce to apply [countervailing duties] concurrently with the [nonmarket economy] methodology,” DP argues for the first time in its reply that Public Law 112-99 is unconstitutional because it violates DP‘s equal protection, due process, and ex post facto rights and that “the law may have other constitutional infirmities.” Pls.’ Reply at 14-15. “Arguments raised for the first time in a reply brief are not properly before this court,” United States v. Ford Motor Co., 463 F.3d 1267, 1276-77 (Fed.Cir.2006), and such arguments are usually deemed to be waived. Novosteel SA v. United States, 284 F.3d 1261, 1273-74 (Fed.Cir.2002); see Ford Motor Co., 463 F.3d at 1276-77. Here, however, DP did not have an opportunity to present its constitutional objections before it filed its reply because Public Law 112-99 did not become effective until March 13, 2012—well after it filed the instant motion. DP‘s good faith effort to preserve its objections is dissimilar from other parties’ failure in previous cases to present arguments available to them at the time of filing the main brief, and therefore, waiver is inappropriate. See Novosteel SA, 284 F.3d at 1273-74; Ford Motor Co., 463 F.3d at 1276-77.
A more fundamental concern is that Commerce and domestic industry have not yet been afforded a full opportunity to be
CONCLUSION
For the foregoing reasons, the court concludes that the Final Determination is in accord with the law and is supported by substantial evidence, except with respect to Commerce‘s explanation of its findings regarding the surrogate value for drill pipe green tube and to its findings regarding the surrogate labor wage rate as applied to DP-Master. On remand, Commerce must either select a new surrogate value or explain why IHTS categories 7309.23 and 7309.29 are more representative of the price for drill pipe green tube than other potential surrogate values in light of Infodrive data that appears to demonstrate that the categories do not actually “capture” green tube imports, and are highly distorted by expensive, finished tubular goods. This court also reserves judgment on any constitutional issues until after Commerce returns with its remand results.
ORDER
In accordance with the above, it is hereby
ORDERED that this case is remanded to the United States Department of Commerce, International Trade Administration, to reconsider its findings regarding drill pipe green tube and labor wage rate surrogate values; and it is further
ORDERED that the Final Determination is affirmed in all other respects; and it is further
ORDERED that the remand results are due within ninety (90) days of the date this opinion is entered. Any responses or comments are due within thirty (30) days thereafter. Any rebuttal comments are due within fifteen (15) days after the date responses or comments are due.
Court No. 10-00015
United States Court of International Trade
Nov. 21, 2012
Slip Op. 12-144
Notes
Final Determination,unfinished drill collars (including all drill collar green tubes) and unfinished drill pipe (including drill pipe green tubes, which are tubes meeting the following description: seamless tubes with an outer diameter of less than or equal to 6 5/8 inches[,] . . . containing between 0.16 and 0.75 percent molybdenum, and containing between 0.75 and 1.45 percent chromium). The scope does not include tool joints not attached to the drill pipe, nor does it include unfinished tubes for casing or tubing covered by any other antidumping or countervailing duty order.