Hyundai Heavy Indus., Co. v. United States

• Decision Date: 14 August 2018
• Docket Number: Court No. 17-00054,Slip Op. 18-101
• Citation: 332 F.Supp.3d 1331
• Parties: HYUNDAI HEAVY INDUSTRIES, CO. LTD., Plaintiff, v. UNITED STATES, Defendant, and ABB Inc., Defendant-Intervenor.
• Court: U.S. Court of International Trade

332 F.Supp.3d 1331

HYUNDAI HEAVY INDUSTRIES, CO. LTD., Plaintiff,

v. UNITED STATES, Defendant,andABB Inc., Defendant-Intervenor.

Slip Op. 18-101

Court No. 17-00054

United States Court of International Trade.

Dated: August 14, 2018

David E. Bond, White and Case LLP, of Washington, DC, argued for Plaintiff. With him on the brief were William J. Moran and Ron Kendler.

John J. Todor, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for Defendant. With him on the 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 Christopher Hyner, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.

R. Alan Luberda, Kelley Drye & Warren LLP, of Washington, DC, argued for Defendant-Intervenor. With him on the brief were David C. Smith and Melissa M. Brewer.

OPINION

Barnett, Judge:

Plaintiff, Hyundai Heavy Industries, Co., Ltd. ("Plaintiff" or "HHI") contests the final results of the U.S. Department of Commerce ("Commerce" or the "agency") in the third administrative review ("AR 3") of the antidumping duty order covering large power transformers ("LPTs") from the Republic of Korea for the period of review August 1, 2014, through July 31, 2015. Large Power Transformers from the Republic of Korea , 82 Fed. Reg. 13,432 (Mar. 13, 2017) (final results of antidumping duty administrative review; 2014-2015) (" Final Results "), ECF No. 17-2, and accompanying Issues and Decision Mem., A-580-867 (Mar. 6, 2017) ("I & D Mem."), ECF No. 17-3.¹

BACKGROUND

Commerce initiated AR 3 on October 6, 2015. Initiation of Antidumping and Countervailing Duty Admin. Reviews , 80 Fed. Reg. 60,356, 60,358 (Dep't Commerce Oct. 6, 2015), CJA Vol. I Tab 5, PJA Vol. I Tab 5, PR 10, ECF No. 40-1. Commerce selected HHI and Hyosung Corporation as mandatory respondents. I & D Mem. at 3. Commerce issued its initial questionnaire to HHI on December 3, 2015. See Req. for Information – Antidumping Admin. Review (Dec. 3, 2015) ("Initial Questionnaire"), CJA Vol. I Tab 6, PJA Vol. I Tab 6, PR 21, ECF No. 40-1.² Commerce published its preliminary results of review on September 2, 2016. Large Power Transformers from the Republic of Korea , 81 Fed. Reg. 60,672 (Dep't Commerce Sept. 2, 2016) (prelim. results of antidumping duty administrative review; 2014-2015) (" Preliminary Results "). For the Preliminary Results , Commerce relied on HHI's submitted data and calculated a weighted-average dumping margin of 3.09 percent for HHI. Id. , 81 Fed. Reg. at 60,673.

Commerce published the Final Results on March 13, 2017. Final Results , 82 Fed. Reg. 13,432. For the Final Results , Commerce assigned to HHI a final weighted-average dumping margin of 60.81 percent based on total facts available with an adverse inference (referred to as total adverse facts available). Id. , 82 Fed. Reg. at 13,432. Commerce's decision to rely on total adverse facts available was based on four findings: (1) HHI failed to report service-related revenues separately from the gross unit price despite repeated requests from Commerce, I & D Mem. at 21-22; (2) HHI failed to include the price of a subject "part" in the price for certain home-market sales despite repeated opportunities to do so, id. at 23-26; (3) HHI failed to report separately the prices and costs for accessories, id. at 26-27; and, (4) HHI was systematically selective in providing various documents to Commerce and Commerce determined there were discrepancies in HHI's reported data, id. at 27-28.

HHI now challenges Commerce's decision to rely on total adverse facts available and each of the four rationales that the agency cited as supporting that decision. The court must determine whether Commerce's individual findings are supported by substantial evidence and whether the agency's resort to total adverse facts available is otherwise in accordance with law.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction over this action pursuant to 28 U.S.C. § 1581(c) and 19 U.S.C. § 1516a(a)(2)(A)(i)(I) and (a)(2)(B)(iii).³ The court will uphold an agency determination that is supported by substantial evidence and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i).

LEGAL FRAMEWORK FOR ADVERSE FACTS AVAILABLE

When "necessary information is not available on the record," or an interested party "withholds information" requested by Commerce," "fails to provide" requested information by the submission deadlines, "significantly impedes a proceeding," or provides information that cannot be verified pursuant to 19 U.S.C. § 1677m(i), Commerce "shall ... use the facts otherwise available." 19 U.S.C. § 1677e(a). Commerce's authority to use the facts otherwise available is subject to 19 U.S.C. § 1677m(d). Id. Pursuant to § 1677m(d), if Commerce determines that a respondent has not complied with a request for information, it must promptly inform that respondent of the nature of the deficiency and, to the extent practicable in light of statutory deadlines, provide that respondent "an opportunity to remedy or explain the deficiency." Id. § 1677m(d).

Commerce may not disregard information that is "necessary to the determination but does not meet all the applicable requirements," when:

(1) the information is submitted by the deadline established for its submission,

(2) the information can be verified,

(3) the information is not so incomplete that it cannot serve as a reliable basis for reaching the applicable determination,

(4) the interested party has demonstrated that it acted to the best of its ability in providing the information ..., and

(5) the information can be used without undue difficulties.

Id. § 1677m(e).

If, however, Commerce determines that the party "has failed to cooperate by not acting to the best of its ability to comply with a request for information," it "may use an inference that is adverse to the interests of that party in selecting from among the facts otherwise available."Id. § 1677e(b). "Compliance with the ‘best of its ability’ standard is determined by assessing whether a respondent has put forth its maximum effort to provide Commerce with full and complete answers to all inquiries in an investigation." Nippon Steel Corp. v. United States , 337 F.3d 1373, 1382 (Fed. Cir. 2003).⁴

Commerce uses total adverse facts available when "none of the reported data is reliable or usable," such as when all of the "submitted data exhibit[s] pervasive and persistent deficiencies that cut across all aspects of the data." Zhejiang DunAn Hetian Metal Co. v. United States , 652 F.3d 1333, 1348 (Fed. Cir. 2011) (citing Steel Authority of India, Ltd. v. United States , 25 CIT 482, 487, 149 F.Supp.2d 921, 928-29 (2001) ).

DISCUSSION

I. Service-related revenue

a. Relevant Facts

In Sections B and C of the initial questionnaire, Commerce instructed HHI to "report revenue in separate fields (e.g., ocean freight revenue, inland freight revenue, oil revenue, installation, etc.) and identify the related expense(s) for each revenue." Initial Questionnaire at JA100059. In response, HHI stated:

[HHI] has reported, since the first administrative review, separate revenue and expenses whe[n] the customer issues a separate purchase order for services that are not part of the original term of sale ... [HHI] has reported the sales amount from additional purchase orders in the ADDPOPRU field and the associated additional expenses under the separate purchase order in the ADDPOEXPU field. [HHI] did not receive additional purchase orders for home-market sales during the POR ...."

Resp. of Hyundai Heavy Industries Co., Ltd. to Section B of the Questionnaire (Jan. 27, 2016) ("HHI's Sec. B Resp.") at B-4, CJA Vol. I Tab 8, CR 152-156, PJA Vol. I Tab 8, PR 91-94, ECF No. 40-1; see also Resp. of Hyundai Heavy Industries Co., Ltd. to Section C of the Questionnaire (Jan. 27, 2016) ("HHI's Sec. C Resp.") at C-3, CJA Vol. I Tab 9, CR 152-156, PJA Vol. I Tab 9, PR 91-94, ECF No. 40-1 (cross-referencing its response to Section B of the questionnaire). HHI explained that its reporting methodology was based on Commerce's "conclusion" in the original investigation:

[Commerce] found that [HHI] correctly had reported its gross unit price and properly did not separate, for example, freight where there were no ‘separate arrangements on behalf of the customer’ and where [HHI] had not ‘sought reimbursement for that cost.’ ... [Commerce] recognized that its practice is to separate revenue and expenses ‘that are not included in the term of sale.’

HHI's Sec. B Resp. at B-3 (citing Issues and Decision Mem., A-580-867 (Jul. 11, 2012) ("Initial Investigation I & D Mem.") at Comment 4, accompanying Large Power Transformers from the Republic of Korea , 77 Fed. Reg. 40,857 (Dep't Commerce July 11, 2012) (final determination of sales at less than fair value). HHI reasoned that the prices of its services are not separable from the price of the subject merchandise. See id. at B-4 ("[W]he[n] it is required, installation and supervision are not separable from the LPT itself."). HHI's response asserted that Commerce has distinguished "separately provided and charged services from those within the terms of sale" in prior proceedings. Id. at B-3 (citing Issues and Decision Mem., A-100-001 (Aug. 31, 2009) at Comment 12, accompanying Ball Bearings and Parts Thereof From France, Germany, Italy, Japan, and the United Kingdom , 74 Fed. Reg. 44,819 (Dep't Commerce Aug. 31, 2009) (final results of antidumping duty admin. reviews and revocation of an order in part).

Following this initial response, Commerce asked HHI to "clarify whether HHI or Hyundai USA received revenue related to international freight, inland freight, oil, installation, or any other expenses on U.S. sales. If so, please report this revenue in a field separate from the related expense." Suppl. Questionnaire for Hyundai...