Husteel Co. v. United StatesHusteel Co. v. United States
OPINION AND ORDER
[Sustaining in part and remanding in part Commerce’s remand results in the first administrative review of the antidumping duty order covering welded line pipe from the Republic of Korea.]
Dated: July 23, 2020
Donald B. Cameron, Morris, Manning & Martin LLP, of Washington, DC, for plaintiff Husteel Co., Ltd. With him on the brief were Julie C. Mendoza, R. Will Planert, Brady W. Mills, Mary S. Hodgins, and Eugene Degnan.
J. David Park, Arnold & Porter Kaye Scholer LLP, of Washington, DC, for consolidated plaintiffs Hyundai Steel Company and NEXTEEL Co., Ltd. With him on the brief were Henry D. Almond, Daniel R. Wilson, and Kang W. Lee.
Joshua E. Kurland, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendant. With him on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and L. Misha Preheim, Assistant Director. Of Counsel was Reza Karamloo, Senior Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.
Elizabeth J. Drake, Schagrin Associates, of Washington, DC, for defendant-intervenors California Steel Industries and Welspun Tubular LLC USA. With her on the brief was Roger B. Schagrin.
Gregory J. Spak, White & Case LLP, of Washington, DC, argued for defendant-intervenors Maverick Tube Corporation and IPSCO Tubulars Inc. With him on the brief were Frank J. Schweitzer, Kristina Zissis, and Luca Bertazzo.
Kelly, Judge: Before the court is the U.S. Department of Commerce’s (“Commerce”) remand redetermination filed pursuant to the court’s order in Husteel Co. v. United States, 44 CIT __, __, 426 F. Supp. 3d 1376, 1395 (2020) (“Husteel I”). See Final Results of Redetermination Pursuant to Ct. Remand [in Husteel I], Apr. 1, 2020, ECF No. 124 (“Remand Results”).
In Husteel I, the court remanded Commerce’s final determination in the first administrative review of the antidumping duty (“ADD”) order covering welded line pipe (“WLP”) from the Republic of Korea (“Korea”). See Welded Line Pipe from the Republic of Korea, 83 Fed. Reg. 33,919 (Dep’t Commerce July 18, 2018) (final results of [ADD] admin. review; 2015–2016 ) (“Final Results”) as amended by Welded Line Pipe from the Republic of Korea, 83 Fed. Reg. 39,682 (Dep’t Commerce Aug. 10, 2018) (amended final results of [ADD] admin. review; 2015–2016) (“Amended Final
On remand, Commerce reverses its determination that a particular market situation (“PMS”) exists in Korea warranting an adjustment to respondents’ reported costs of hot rolled coil (“HRC”). See Remand Results at 5, 7–8. Further, Commerce reverses its determination that SeAH Steel Corporation’s (“SeAH”) sales into the Canadian market were unrepresentative and uses those third-country sales to determine SeAH’s normal value. See Remand Results at 4, 6–7. Finally, Commerce declines to apply a constructed export price offset (“CEP offset”) to SeAH’s sales into the Canadian market. See Remand Results at 9. For the following reasons, the court sustains Commerce’s decision to reverse its PMS determination and to calculate SeAH’s normal value using third country sales. However, the court remands Commerce’s determination not to apply a CEP offset to SeAH’s Canadian sales for further explanation or reconsideration.
BACKGROUND
The court presumes familiarity with the facts of this case as set out in its previous opinion ordering remand to Commerce, and now recounts thosе facts relevant to the court’s review of the Remand Results. See Husteel I, 44 CIT at __, 426 F. Supp. 3d at 1380–82. On August 10, 2018, Commerce published its Amended Final Results. Amended Final Results, 83 Fed. Reg. at 39,682. Commerce
When determining the normal value of Hyundai’s U.S. sales of WLP, Commerce relied on home market prices, but applied the PMS adjustment to Hyundai’s reported costs for purposes of determining whether sales were made below cost. See Final Decision Memo at 4, 14–15 & nn. 67–68; Remand Results at 1–2. When determining the normal value of SeAH’s U.S. sales of WLP, Commerce did not usе home market prices because it determined that SeAH had an insufficient volume of sales into the Korean market to permit a proper comparison with U.S. sales of the subject merchandise. See Welded Line Pipe from Korea, 83 Fed. Reg. 1,023 (Dep’t Commerce Jan. 9, 2018) (prelim. results of [ADD] admin. review; 2015–2016) (“Prelim. Results”) and accompanying Decisions Memo. for the [Prelim. Results] at 15, A-580-876, PD 259, bar code 3657712-01 (Jan. 2, 2018). Further, Commerce did not use SeAH’s sales of WLP into the Canadian market because it determined that SeAH’s sales into Canada were not representative—a determination predicated on
In Husteel I, the court held that Commerce’s upward adjustment to Hyundai’s reported costs for purchases of the HRC input—for purposes of subjecting Hyundai’s home market sales of WLP to the below-cost sales test when calculating normal value—is unlawful. See Husteel I, 44 CIT at __, __, 426 F. Supp. 3d at 1383–89, 1394. Further, thе court held that Commerce’s PMS determination was unsupported by substantial evidence because Commerce relied on the “cumulative effect” of four factors without substantiating its analysis regarding individual factors. See id., 44 CIT at __, 426 F. Supp. 3d at 1389–92. The court also held that Commerce failed to address why it was reasonable to rely solely on the CITT’s findings that SeAH’s sales were dumped to determine that SeAH’s WLP sales into Canada were unrepresentative, despite being confronted with evidence of material differences between Canadian and U.S. antidumрing laws. See id. Accordingly, the court did not reach Husteel’s challenge to Commerce’s calculation of the all-others rate, and
On remand, Commerce, under respectful protest,2 reversed its determination that a PMS exists in Korea that distorts the COP of WLP, and calculated Hyundai and SeAH’s dumping margin without upwardly adjusting the reported costs of HRC. See Remand Results at 1–2. Commerce relied on SeAH’s third country sales to determine normal value, see id., and corrеcted a ministerial error when calculating SeAH’s margin. See id. at 9–10. As a result, Commerce calculates weighted-average dumping margins of 4.70 percent for SeAH and 9.24 percent for Hyundai. See id. at 10. The all-others rate, which is no longer contested, is now 6.97 percent. Id. However, Commerce seeks a remand to address its failure to properly consider whether to apply a CEP offset to SeAH’s sales of WLP into Canada. See Def.’s Resp. to Cmts. on [Remand Results] at 7–8, May 15, 2020, ECF No. 134 (“Def.’s Br.”).
Defendant-intervenors California Steel Industries (“CSI”) and Welspun Tubular LLC USA (“Welspun”) dispute the court’s holdings in Husteel I and concur with Commerce’s decision to submit its Remand Results under protest. See Def.-Intervenors California Steel Industries & Welspun Tubular LLC USA’s Cmts. on [Remand Results] at 1–5, May 1, 2020, ECF No. 130 (“CSI & Welspun’s Br.”). Defendant-Intervenors Maverick Tube Corporation (“Maverick”) and IPSCO
SeAH requests the court remand Commerce’s determination with instructions to apply a CEP offset when calculating SeAH’s normal value. See [SeAH’s] Cmts. on [Remand Results] at 1–5, May 1, 2020, ECF No. 131 (“SeAH’s Br.”). SeAH also requests the court disregard Maverick and IPSCO Tubulars’ comments on the Remand Results as untimely motions for the court to alter or amend its original judgment. See [SeAH’s] Reply to Cmts. on [Remand Results] at 1–4, May 18, 2020, ECF No. 135 (“SeAH’s Reply Br.”). Hyundai and NEXTEEL Co., Ltd. (“NEXTEEL”) similarly contest CSI and Welspun’s failure to address Commerce’s compliance with the court’s instructions and argue that defendant-intervenors’ objections to the Remand Results, and this court’s holding, are otherwise unpersuasive. See Consol.
JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction pursuant to section 516a(a)(2)(B)(iii) of the Tariff Act of 1930, as amended,
DISCUSSION
I. Particular Market Situation
CSI and Welspun object to Commerce’s decision to reverse its PMS finding. See CSI & Welspun’s Br. at 1–5. Defendant, Hyundai, and NEXTEEL counter that Commerce’s remand redetermination complies with the court’s remand order, and that defendant-intervenors fail to produce any evidence demonstrating otherwise. See Def.’s Br. at 5–6; Consol. Pls.’ Br. at 2–7. For the reasons that follow, Commerce’s reversal of its PMS determination is sustained.
To establish the existence of a PMS, Commerce must demonstrate both that there are distortions present in the market and that those distortions prevent a proper comparison of normal value with export price or constructed export price. See
On remand, Commerce reverses its determination that a PMS exists in Korea that distorts the COP of WLP. See Remand Results at 5, 7–8. Commerce does so under respectful protest. Id. at 7–8. Although Commerce and the domestic parties disagree with the court’s holding in Husteel I,5 they do not provide any additional
II. SeAH’s Third Country Sales
Maverick and IPSCO Tubulars challenge Commerce’s determination to calculate normal value for SeAH’s sales of WLP based on its sales into the Canadian market. See Maverick & IPSCO Tubulars’ Br. at 3–12.6 Defendant counters that
Where Commerce finds that home market sales are an inappropriate basis for determining normal value, it may resort to third country sales. See
Commerce now finds, under protest, that SeAH’s sales into Canada are representative. See Remand Results at 4, 7. Apart from the CITT’s findings that SeAH’s sales into Canada are dumped, neither Commerce, nor the interested parties, point to any record evidence or explanation as to why Commerce’s previous determination that SeAH’s third country sales are not representative was reasonable in light of inconsistencies between U.S. and Canadian antidumping law. See id. Commerce complains that it lacks sufficient evidence to “perform the compulsory analysis” necessary to determine “whether SeAH’s comparison market sаles to Canada would be found to have been dumped under U.S. law.” Remand Results at 4. Commerce does not explain why it would not suffice for the agency to explain why the inconsistencies between U.S. and Canadian antidumping law should not disturb its
III. CEP Offset
SeAH argues that Commerce contravenes agency regulation by declining to apply a CEP offset when calculating its normal value because the level of SeAH’s U.S. sales is less advanced than the аctual level of SeAH’s third country sales into Canada. See SeAH’s Br. at 1–5; see also
On remand, Commerce declines to grant a CEP offset to SeAH after finding that SeAH’s sales into Canada were made at the same level of trade as its sales into the United States, see Remand Results at 9, but SeAH submits that Commerce fails to properly consider the selling activities of SeAH’s U.S. affiliate Pusan Pipe Americas, Inc. (“PPA”). See SeAH’s Br. at 1–5. Defendant states that “Commerce agrees with SeAH that the agency should have considered PPA’s selling functions in determining the third country level of trade.” Def.’s Br. at 7–9.
The court has discretion to grant a request from Commerce for remand where the agency expresses doubts about the correctness of its decision. See SKF USA, Inc. v. United States, 254 F.3d 1022, 1029 (Fed. Cir. 2001) (citations omitted). The court will usually grant such requests where Commerce’s concern is substantial and legitimate, see id., but may refuse remand where the request appears to be frivolous or in bad faith. See, e,g., Corus Staal BV v. United States, 29 CIT 777, 781–83, 387 F.Supp.2d 1291, 1296–97 (2005) (“The Government must give due regard to finality
Commerce’s request for a remand to consider whether to apply a CEP offset to SeAH’s Canadian sales raises substantial and legitimate concerns, and remand on this issue is appropriate, because the agency acknowledges it failed to revisit its preliminary determination that SeAH’s sales into Canada were made at the same level as its U.S. sales. Def.’s Br. at 7–8 (citations omitted). Commerce makes a specific request to address a clearly identified lapse in its analysis on remand, and does not appear to do so frivolously or in bad faith. See id. Accordingly, Commerce’s request for remand to address the question of whether to apply the CEP offset to SeAH’s Canadian sales is granted, and SeAH’s request for the court to instruct Commerce to grant the CEP offset is denied.11
CONCLUSION
For the forgoing reasons, it is
ORDERED that Commerce’s determination to calculate SeAH’s normal value using third country sales into Canada is sustained; and it is further
ORDERED that Commerce’s determination not to apply a CEP offset to SeAH’s Canadian sales is remanded for further consideration and/or explanation consistent with this opinion; and it is further
ORDERED that Commerce shall file its remand redetermination with the court within 60 days of this date; and it is further
ORDERED that the parties shall have 30 days thereafter to file comments on the remand redetermination; and it is further
ORDERED that the parties shall have 15 days to file their replies to comments on the remand redetermination; and it is further
ORDERED that the parties shall have 14 days thereafter to file the Joint Appendix; and it is further
ORDERED that Commerce shall file the administrative record within 14 days of the date of filing of its remand redetermination.
/s/ Claire R. Kelly
Claire R. Kelly, Judge
Dated: July 23, 2020
New York, New York
Notes
Id. at 4 (quoting Husteel I, 44 CIT at __, 426 F. Supp. 3d at 1391–92). CSI and Welspun argue that the statute is “only concerned with whether normal values are in the ordinary course of trade” and that “the concept of ordinary course of trade and PMS do not apply to the calculation of export price.” Id. 4 (citingChinese overcapacity may affeсt the COP by lowering the price of HRC, however, it is unclear how that finding alone would support the determination that the home market price and export price (or constructed export price) cannot be compared because Commerce does not address whether costs would be lowered on both sides of the less than fair value equation
Antidumping Duties; Countervailing Duties, 62 Fed. Reg. at 27,357; see also Statement of Administrative Action, H.R. DOC. NO. 103-826, vol. 1, at 821 (1994), reprinted in 1994 U.S.C.C.A.N. 4040, 4162 (“SAA”).In the Department‘s view, the criteria of a “particular market situation” and the “representativeness” of prices fall into the category of issues that the Department need not, and should not, routinely consider . . . the [Statement of Administrative Action] at 821 recognizes that the Department must inform exporters at an early stage of a proceeding as to which sales they must report. This objective would be frustrated if the Department routinely analyzed thе existence of a “particular market situation” or the “representativeness” of third country sales . . . the party alleging . . . that sales are not “representative” has the burden of demonstrating that there is a reasonable basis for believing that a “particular market situation” exists or that sales are not “representative.”