Maverick Tube Corp. v. United States

• Citation: 107 F.Supp.3d 1318
• Decision Date: 24 September 2015
• Docket Number: Slip Op. 15–107.,Court No. 14–00244.
• Parties: MAVERICK TUBE CORPORATION, Plaintiffs, Tosçelik Profil ve Sac Endüstrisi A.S., and ¸Cayirova Boru Sanayi ve Ticaret A.S., Consolidated Plaintiffs, Boomerang Tube LLC, Energex Tube (A Division of JMC Steel Group), Tejas Tubular Products, TMK IPSCO, Vallourec Star, L.P., Welded Tube USA Inc., and United States Steel Corporation, Plaintiff–Intervenors, v. UNITED STATES, Defendant, Borusan Istikbal Ticaret A.S., Borusan Mannesmann Boru Sanayi ve Ticaret A.S., Tosçelik Profil ve Sac Endüstrisi A.S., and ¸Cayirova Boru Sanayi ve Ticaret A.S., Defendant–Intervenors.
• Court: U.S. Court of International Trade

107 F.Supp.3d 1318

MAVERICK TUBE CORPORATION, Plaintiffs,

Tosçelik Profil ve Sac Endüstrisi A.S., and ¸Cayirova Boru Sanayi ve Ticaret A.S., Consolidated Plaintiffs,

Boomerang Tube LLC, Energex Tube (A Division of JMC Steel Group), Tejas Tubular Products, TMK IPSCO, Vallourec Star, L.P., Welded Tube USA Inc., and United States Steel Corporation, Plaintiff–Intervenors,

v.UNITED STATES, Defendant,Borusan Istikbal Ticaret A.S., Borusan Mannesmann Boru Sanayi ve Ticaret A.S., Tosçelik Profil ve Sac Endüstrisi A.S., and ¸Cayirova Boru Sanayi ve Ticaret A.S., Defendant–Intervenors.

Slip Op. 15–107.

Court No. 14–00244.

United States Court of International Trade.

Sept. 24, 2015.

Robert E. DeFrancesco, III and Alan H. Price, Wiley Rein, LLP, of Washington, DC, for plaintiff.

David L. Simon, Law Office of David L. Simon, of Washington, DC, for consolidated plaintiffs and defendant-intervenors Tosçelik Profil ve Sac Endüstrisi A.S. and Çayirova Boru Sanayi ve Ticaret A.S. With him on the brief were Daniel R. Wilson, Jeffrey S. Grimson, Jill A. Cramer, Kristin H. Mowry, and Sarah M. Wyss, Mowry & Grimson, PLLC, of Washington, DC.

Roger B. Schagrin, John W. Bohn, and Paul W. Jameson, Schagrin Associates, of Washington, DC, for plaintiff-intervenors Boomerang Tube LLC, Energex Tube (a Division of JMC Steel Group), Tejas Tubular Products, TMK IPSCO, Vallourec Star, L.P., and Welded Tube USA Inc.

Jeffrey D. Gerrish, Jamieson L. Greer, and Robert E. Lighthizer, Skadden Arps Slate Meagher & Flom, LLP, of Washington, DC, for plaintiff-intervenor United States Steel Corporation.

Hardeep K. Josan, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of New York, NY, for defendant. With him on the brief were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, and Claudia Burke, Assistant Director. Of counsel on the brief was Jessica M. Link, Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, DC.

Donald B. Cameron, Brady W. Mills, Julie C. Mendoza, Mary S. Hodgins, R. Will Planert, and Sarah S. Sprinkle, Morris, Manning & Martin, LLP, of Washington, DC, for defendant-intervenors Borusan Istikbal Ticaret A.S. and Borusan Mannesmann Boru Sanayi ve Ticaret A.S.

OPINION

RESTANI, Judge:

This matter is before the court on plaintiff Maverick Tube Corporation's ("Maverick"), consolidated plaintiffs Çayirova Boru Sanayi ve Ticaret A.S., and Tosçelik Profil ve Sac Endüstrisi A.S.'s (collectively "Çayirova"), and plaintiff-intervenor United States Steel Corporation's ("U.S. Steel") motions for judgment on the agency record pursuant to USCIT Rule 56.2. These parties contest the U.S. Department of Commerce's ("Commerce") final determination in the antidumping ("AD") investigation of oil country tubular goods ("OCTG")¹ from the Republic of Turkey ("Turkey"). Certain Oil Country Tubular Goods from the Republic of Turkey: Final Determination of Sales at Less Than Fair Value and Affirmative Final Determination of Critical Circumstances, in Part, 79 Fed.Reg. 41,971 (Dep't Commerce July 18, 2014) (" Final Determination "). The court denies Maverick's and U.S. Steel's motions and grants Çayirova's motion in part and remands the Final Determination to Commerce for reconsideration of the calculation of constructed value profit ("CV profit"). The court also grants, in part, Commerce's request for a remand to reconsider duty drawback.

BACKGROUND

Following a petition by Maverick, U.S. Steel, and others, Commerce initiated an AD investigation into OCTG from Turkey. Certain Oil Country Tubular Goods from India, the Republic of Korea, the Republic of the Philippines, Saudi Arabia, Taiwan, Thailand, the Republic of Turkey, Ukraine, and the Socialist Republic of Vietnam: Initiation of Antidumping Duty Investigations, 78 Fed.Reg. 45,505 (Dep't Commerce July 29, 2013) ("Initiation Notice "). The period of investigation ("POI") for the Turkish investigation was July 1, 2012, through June 30, 2013. Id. at 45,506. After selecting Borusan Mannesmann Boru Sanayi ve Ticaret A.S. and Borusan Istikbal Ticaret A.S. (collectively, "Borusan"),² and Çayirova Boru Sanayi ve Ticaret A.S. and its affiliated exporter Yücel Boru Ithalat–Pazarlama A.S. (collectively, "Yücel"), as mandatory respondents, Commerce calculated preliminary margins of 0% and 4.87% for Borusan and Yücel, respectively, and 4.87% for all others. Certain Oil Country Tubular Goods From the Republic of Turkey: Preliminary Affirmative Determination of Sales at Less Than Fair Value, Negative Preliminary Determination of Critical Circumstances, and Postponement of Final Determination, 79 Fed.Reg. 10,484, 10,486 (Dep't Commerce Feb. 25, 2014) (" Preliminary Determination ").

In calculating dumping margins, Commerce compares the export price³ and normal value.⁴ See19 U.S.C. § 1677b(a) (2012). Borusan reported home market sales in excess of 5% of its U.S. sales and accordingly, in calculating normal value, Commerce used Borusan's home market sales. See 19 U.S.C. § 1677b(a)(B)(ii)(II). Yücel, however, did not have any home market or third country sales and thus Commerce calculated normal value using constructed value. See 19 U.S.C. § 1677b(a)(4) ; 19 C.F.R. § 351.405(a) (2014). Constructed value is established by applying a statutory formula, and it includes the sum of the costs of production plus an amount for profit. See 19 U.S.C. § 1677b(e) ; 19 C.F.R. § 351.405(b). In the Preliminary Determination, Commerce also granted a duty drawback adjustment to both Borusan and Yücel by increasing the export price by "the amount of any import duties imposed by the country of exportation which have been rebated, or which have not been collected, by reason of the exportation of the subject merchandise to the United States." 19 U.S.C. § 1677a(c)(1)(B) ; Decision Memorandum for the Preliminary Affirmative Determination in the Antidumping Duty Investigation of Certain Oil Country Tubular Good from the Republic of Turkey 20, A–489–816, (Feb. 14, 2014), available at http://enforcement.trade.gov/frn/summary/turkey/2014–04108–1.pdf (last visited Sept. 15, 2015) ("Preliminary I & D Memo ").

On July 18, 2014, Commerce issued an affirmative final determination, calculating margins of 0% for Borusan, 35.86% for Yücel, and 35.86% for all others. Final Determination, 79 Fed.Reg. at 41,973. The dramatic increase in Yücel's margin from the Preliminary Determination to the Final Determination was due to Commerce's decision to calculate CV profit using the financial statement of Tenaris S.A., a multinational OCTG company whose financial statements Commerce sua sponte placed on the record on May 12, 2014. See Issues and Decision Memorandum for the Final Affirmative Determination in the Less than Fair Value Investigation of Certain Oil Country Tubular Goods from the Republic of Turkey at 2, 20–27, A–489–816, (July 10, 2014), available at http://enforcement.trade.gov/summary/turkey/2014–16873–1.pdf (last visited Sept. 15, 2015) ("I & D Memo "). Yücel's margin was also impacted by Commerce's reduction of its duty drawback adjustment. Id. at 16–17.

Maverick and U.S. Steel (collectively "petitioners") challenge Commerce's Final Determination on five grounds. First, they argue that Borusan's home market sales were part of an effort to create a "fictitious market" and thus Commerce's reliance on those sales in calculating Borusan's normal value was not supported by substantial evidence. Pl. Maverick Tube Corp.'s Mem. in Supp. of Its Rule 56.2 Mot. for J. on the Agency R. at 10–22, DE 49 ("Maverick Br."); Mot. of Pl. United States Steel Corp. for J. on the Agency R. Under Rule 56.2, DE 46.⁵ Second, they argue that Commerce improperly granted Borusan and Yücel (collectively, "respondents") duty drawback adjustments. Maverick Br. at 22–33. Third, they contest Commerce's decision not to treat standard J55 OCTG separately from upgradeable J55 OCTG. Id. at 33–36. Fourth, they challenge Commerce's decision to reject factual information showing that Borusan failed to report a potential affiliation. Id. at 36–41. Finally, they argue the inclusion of certain Borusan export price sales in its U.S. sales database was improper because Borusan knew those sales would be re-exported to a third country.Id. at 41–46.

The government and Borusan respond that Commerce properly used Borusan's home market and export price sales, properly analyzed standard and upgradeable J55 together, and properly rejected undisclosed affiliation allegations as untimely. See Def.'s Resp. in Opp'n to Mots. for J. upon the Administrative R. at 8–35, DE 60 ("Gov. Br."); Resp. Br. of Def.-Intvnrs. Borusan Mannesmann Boru Sanayi ve Ticaret A.S. and Borusan Istikbal Ticaret in Resp. to Pls.' Rule 56.2 Brs. at 12–25, 30–44, DE 63 ("Borusan Resp."). Borusan argues that Commerce properly granted it a duty drawback adjustment. Borusan Resp. at 25–29. The government requests a remand to review the adjustment. Gov. Br. at 52–54.

Çayirova challenges Commerce's Final Determination on two grounds. First, Çayirova argues that Commerce improperly denied two-thirds of Yücel's duty drawback adjustment. Br. of Pls. Çayirova Boru Sanayi ve Ticaret A.S. and Tosçelik Profil ve Sac Endüstrisi A.S. in Supp. of Their Mot. for J. on the Agency R. at 9–18, DE 45 ("Çayirova Br."). Second, Çayirova argues Commerce's calculation of its CV profit based on Tenaris's financial statements was not supported by substantial evidence. Id. at 18–40. The government also requests a remand to review Yücel's duty drawback adjustments. Gov. Br. at 52–54. The government and U.S. Steel argue that Commerce properly relied on Tenaris's financial statements in calculating CV profit margin because Yücel's non-OCTG sales in Turkey were not of the same general category of merchandise as OCTG and using Tenaris's financial statements was a reasonable method of calculating CV profit. See Gov. Br. at 35–52; U.S. Steel...