Tosçelik Profil Ve Sac Endüstrisi A.S. v. United States

Decision Date06 June 2018
Docket NumberSlip Op. 18–66,Consol. Court No. 17–00018
Citation321 F.Supp.3d 1270
Parties TOSÇELIK PROFIL VE SAC ENDÜSTRISI A.S., Plaintiff, v. UNITED STATES, Defendant, and Zekelman Industries, Defendant–Intervenor.
CourtU.S. Court of International Trade

David L. Simon, Law Office of David L. Simon, of Washington, D.C., argued for Plaintiff Tosçelik Profil ve Sac Endüstrisi A.S.

Elizabeth A. Speck, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for Defendant United States. With her on brief were Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Franklin E. White, Jr., Assistant Director. Of counsel on the brief was Catherine D. Miller, Attorney, Office of Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C.

Christopher T. Cloutier, Schagrin Associates, of Washington, D.C., argued for Consolidated Plaintiff and DefendantIntervenor Zekelman Industries. With him on brief were Paul W. Jameson and Roger B. Schagrin. Of counsel were Elizabeth J. Drake and John W. Bohn.

OPINION AND ORDER

Choe–Groves, Judge:

This case involves corrosion-resistant steel products from Turkey. Plaintiff Tosçelik Profil ve Sac Endüstrisi A.S. ("Plaintiff" or "Tosçelik") and Consolidated Plaintiff and DefendantIntervenor Zekelman Industries ("Zekelman") bring this action contesting the final results of the administrative review of welded carbon steel standard pipe and tube products from Turkey, in which the U.S. Department of Commerce ("Commerce" or "Department") found that the products at issue are being, or are likely to be, sold in the United States at less-than-fair value. See Welded Carbon Steel Standard Pipe and Tube Products From Turkey, 81 Fed. Reg. 92,785 (Dep't Commerce Dec. 20, 2016) (final results of administrative review; 20142015), as amended, 82 Fed. Reg. 11,002 (Dep't Commerce Feb. 17, 2017) (amended final results of antidumping duty administrative review; 20142015) (collectively, "Final Results"); see also Issues and Decision Memorandum for the Final Results of the Antidumping Duty Administrative Review: Welded Carbon Steel Standard Pipe and Tube Products from Turkey, A–489–501, (Dec. 12, 2016), available at https://enforcement.trade.gov/frn/summary/turkey/2016-30541-1.pdf (last visited May 29, 2018) (" Final I &D Memo"). This matter is before the court on Rule 56.2 motions for judgment on the agency record filed by Tosçelik and Zekelman challenging various aspects of the Department's antidumping duty order. For the reasons discussed below, the court concludes that (1) Commerce's decision to calculate Tosçelik's duty drawback adjustment by allocating total exemptions over total cost of production is not in accordance with the law, (2) Commerce's decision to grant Tosçelik a circumstance of sale adjustment for warehousing expenses is not supported by substantial evidence, and (3) Commerce's decision to use actual weight instead of theoretical weight is supported by substantial evidence.

BACKGROUND

Commerce commenced an administrative review of the antidumping duty order on welded carbon steel standard pipe and tube products from Turkey at the request of domestic standard pipe producers, including JMC Steel Group ("JMC"), on July 1, 2015.1 See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 80 Fed. Reg. 37,588 (Dep't Commerce July 1, 2015) (notice of initiation of administrative review) ("Initiation Notice"); see also Letter from Schagrin Associates to Department of Commerce, PD 2, bar code 3280221–01 (May 29, 2015); Letter from Schagrin Associates to Department of Commerce, PD 4, bar code 3280623–01 (June 1, 2015). Commerce found that it would be impractical to examine all importers and producers, and therefore opted to examine companies accounting for the largest volume of the subject merchandise from Turkey during the investigation period. See Initiation Notice, 80 Fed. Reg. at 37,588. Tosçelik was one of the selected companies. See id. at 37,593.

Commerce published its preliminary results on June 13, 2016. See Welded Carbon Steel Standard Pipe and Tube Products From Turkey, 81 Fed. Reg. 38,131 (Dep't Commerce June 13, 2016) (preliminary results of antidumping duty administrative review, and partial rescission of review; 20142015) ("Preliminary Results"); see also Decision Memorandum for Preliminary Results of Antidumping Duty Administrative Review: Welded Carbon Steel Standard Pipe and Tube Products from Turkey; 20142015 Administrative Review, A–489–501, (June 6, 2016), available at https://enforcement.trade.gov/frn/summary/turkey/2016-13968-1.pdf (last visited May 29, 2018) (" Preliminary I &D Memo"). Pursuant to the Department's differential pricing analysis, Commerce used the average-to-average methodology to calculate dumping margins for both mandatory respondents. See Preliminary I&D Memo at 5–8. It assigned a 0.96 percent weighted-average dumping margin for Tosçelik. Preliminary Results, 81 Fed Reg. at 38,133. The Department preliminarily granted a duty drawback adjustment to Tosçelik due to the company's participation in Turkey's Inward Processing Regime. See Preliminary I&D Memo at 10. Commerce also preliminarily granted a circumstance of sale adjustment to Tosçelik. See id. at 14.

Following the preliminary determination, JMC filed an administrative case brief on July 27, 2016. See Administrative Case Brief of JMC Steel Group, PD 172, bar code 3491484–01 (July 27, 2016). JMC contested the Department's grant of a circumstance of sale adjustment to Tosçelik for warehousing expenses, as well as the Department's decision to use actual weight as opposed to theoretical weight for calculating the dumping margin. See id. at vi. Tosçelik submitted a rebuttal brief on August 9, 2016, which contested, in part, Commerce's methodology in calculating the duty drawback adjustment. See Tosçelik Rebuttal Brief at 6–28, PD 174, bar code 3495971–01 (Aug. 6, 2016).

Commerce issued its final determination on December 20, 2016. See Welded Carbon Steel Standard Pipe and Tube Products From Turkey, 81 Fed. Reg. 92,785 (Dep't Commerce Dec. 20, 2016) (final results of administrative review; 20142015). The Department assigned a weighted-average dumping margin of 1.91 percent to Tosçelik for the period of May 1, 2014 through April 30, 2015. Id. at 92,786. JMC subsequently submitted a ministerial error allegation. See Letter from Schagrin Associates to Department of Commerce, PD 188, bar code 3532690–01 (Dec. 27, 2016). Tosçelik filed comments in rebuttal to JMC's submission. See Letter from Law Offices of David L. Simon to Department of Commerce, PD 189, bar code 3533504–01 (Jan. 3, 2017). Commerce issued amended final results on February 17, 2017, in which it calculated a final weighted-average dumping margin of 3.40 percent for Tosçelik. See Welded Carbon Steel Standard Pipe and Tube Products From Turkey, 82 Fed. Reg. 11,002, 11,003 (Dep't Commerce Feb. 17, 2017) (amended final results of antidumping duty administrative review; 20142015).

Tosçelik commenced this action contesting Commerce's Final Determination on January 18, 2017, ECF No. 1, and filed its complaint on February 16, 2017, ECF No. 7. The court consolidated this action with Zekelman Industries v. United States on May 3, 2017. See Order, May 3, 2017, ECF No. 21.

Zekelman submitted a Rule 56.2 motion for judgment on the agency record, challenging Commerce's use of actual weight in calculating the weighted-average dumping margin and Commerce's grant of a circumstance of sale adjustment to Tosçelik for warehousing expenses. See Mot. Zekelman Industries J. Agency R. USCIT Rule 56.2, July 10, 2017, ECF No. 24 ("Zekelman's Mot."). Tosçelik filed a timely response. See Resp. Br. Pl. Tosçelik Profil ve Sac Endüstrisi A.S., Oct. 30, 2017, ECF No. 36. Zekelman filed a reply. See Consolidated Pl. Zekelman Industries' Reply Br. Supp. Mot. J. Agency R. Pursuant Rule 56.2, Nov. 29, 2017, ECF No. 43 ("Zekelman's Reply").

Tosçelik also filed a Rule 56.2 motion for judgment on the agency record, contesting the methodology Commerce utilized to calculate the amount of the duty drawback adjustment. See Mot. Pl. Tosçelik Profil ve Sac Endüstrisi A.S. J. Agency R. Pursuant Rule 56.2, July 10, 2017, ECF No. 25; see also Mem. Supp. Mot. Pl. Tosçelik Profil ve Sac Endüstrisi A.S. J. Agency R. Pursuant Rule 56.2, July 10, 2017, ECF No. 27 ("Pl.'s Mot."). Zekelman filed a response. See Def.–Intervenor Zekelman Industries' Resp. Pl.'s Mot. J Agency R., Oct. 30, 2017, ECF No. 38. Tosçelik filed a timely reply. See Reply Br. Pl. Tosçelik Profil ve Sac Endüstrisi A.S., Nov. 29, 2017, ECF No. 40.

Defendant submitted a consolidated response to both motions. See Def.'s Consolidated Resp. Opp'n Pl.'s & Consolidated Pl.'s Mots. J. Agency R., Oct. 30, 2017, ECF No. 39 ("Def.'s Br."). Pursuant to the two motions for judgment on the agency record, this court held oral argument on March 20, 2018. See Oral Argument, Mar. 20, 2018, ECF No. 55.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction over this matter pursuant to 19 U.S.C. § 1516a(a)(2)(B)(i) and 28 U.S.C. § 1581(c), which grant the court authority to review actions contesting the final determination in an antidumping duty investigation.2 The court "shall hold unlawful any determination, finding or conclusion found ... to be unsupported by substantial evidence on the record, or otherwise not in accordance with law ...." 19 U.S.C. § 1516a(b)(1)(B)(i).

DISCUSSION
I. Tosçelik's Rule 56.2 Motion for Judgment on the Agency Record
A. Legal Standard for Duty Drawback Adjustment

The Tariff Act of 1930, as amended, directs Commerce to conduct antidumping duty investigations and determine whether goods are being sold at less-than-fair value.

See 19 U.S.C. § 1673. If the Department finds that subject merchandise is being sold at less-than-fair value, and the U.S. International Trade...

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