704 F.Supp.2d 1353 (CIT 2010), 09-00248, SeAH Steel Corp. v. United States

Docket Nº:Court 09-00248.
Citation:704 F.Supp.2d 1353
Opinion Judge:CARMAN, Judge.
Party Name:SEAH STEEL CORPORATION, Plaintiff, v. UNITED STATES, Defendant, and Bristol Metals, Defendant-Intervenor. Slip Op. 10-60.
Attorney:Troutman Sanders LLP (Donald B. Cameron; Julie C. Mendoza; Jeffrey S. Grimson; R. Will Planert; Brady W. Mills; Mary S. Hodgins) for Plaintiff. Tony West, Assistant Attorney General; Jeanne E. Davidson, Director; Patricia M. McCarthy; Assistant Director, Commercial Litigation Branch, Civil Divisi...
Case Date:May 19, 2010
Court:Court of International Trade
 
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Page 1353

704 F.Supp.2d 1353 (CIT 2010)

SEAH STEEL CORPORATION, Plaintiff,

v.

UNITED STATES, Defendant,

and

Bristol Metals, Defendant-Intervenor.

Slip Op. 10-60.

Court No. 09-00248.

United States Court of International Trade.

May 19, 2010

Page 1354

Troutman Sanders LLP (Donald B. Cameron; Julie C. Mendoza; Jeffrey S. Grimson; R. Will Planert; Brady W. Mills; Mary S. Hodgins) for Plaintiff.

Tony West, Assistant Attorney General; Jeanne E. Davidson, Director; Patricia M. McCarthy; Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Claudia Burke); Scott D. McBride, Office of the Chief Counsel for Import Administration, United States Department of Commerce; for Defendant.

Schagrin Associates (Roger B. Schagrin; Michael J. Brown) for Defendant-Intervenor.

OPINION

CARMAN, Judge.

This matter comes before the Court, on a motion for judgment on the agency record brought by Plaintiff, SeAH Steel Corporation (" SeAH" ), pursuant to Rule 56.2 of the Rules of the United States Court of International Trade (" USCIT" ).

Plaintiff, challenges numerous aspects of the United States Department of Commerce's (" Commerce" or " Department" ) administrative determination with respect to Certain Welded Stainless Steel Pipes From the Republic of Korea: Final Results of Antidumping Duty Administrative Review, 74 Fed.Reg. 31,242 (June 30, 2009), Public Record Doc. No. 77 (" Final Results " ).1 SeAH contends that certain findings made by Commerce are unsupported by substantial evidence or otherwise not in accordance with the law. ( See Pl.'s R. 56.2 Mot. for J. Upon Agency Rec. (" Pl.'s Brief." ).) SeAH's motion is opposed by Commerce, as well as Defendant-Intervenor, Bristol Metals. Whereas Defendant-Intervenor urges the Court to affirm, in their entirety, Commerce's Final Results ( see generally Resp. Brief of Def.-Int. in Opp'n to Pl.'s Mot. for J. On the Agency R. (" Def.-Int.'s Brief" )), Defendant requests that the Court sustain its findings with regard to its calculation of normal value and costs of production, but requests voluntary remand of its major input and transactions disregarded findings, ( see Def.'s Mem. in Opp'n to Pl.'s Mot. for J. Upon the Agency R. at 39 (" Def.'s Brief" )).

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For the reasons set forth below, the Court sustains Commerce's Final Results in part, and remands them in part.

JURISDICTION

The Court has jurisdiction over this matter pursuant to 19 U.S.C. § 1516a(a)(2) and 28 U.S.C. § 1581(c).2

STANDARD OF REVIEW

When reviewing the final results of antidumping administrative reviews, " [t]he 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). " Substantial evidence is more than a mere scintilla." Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938). " Substantial evidence is ‘ such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.’ " Huaiyin Foreign Trade Corp. (30) v. United States, 322 F.3d 1369, 1374 (Fed.Cir.2003) ( quoting Consol. Edison Co., 305 U.S. at 229, 59 S.Ct. 206). In determining the existence of substantial evidence, a reviewing Court must consider " the record as a whole, including evidence that supports as well as evidence that ‘ fairly detracts from the substantiality of the evidence.’ " Huaiyin, 322 F.3d at 1374 ( quoting Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1562 (Fed.Cir.1984)). The possibility of drawing two inconsistent conclusions from the evidence " does not prevent an administrative agency's finding from being supported by substantial evidence." Consolo v. Federal Maritime Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966) (citations omitted). There must be a " rational connection between the facts found and the choice made" in an agency determination if it is to be characterized as supported by substantial evidence and otherwise in accordance with law. Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168, 83 S.Ct. 239, 9 L.Ed.2d 207 (1962).

BACKGROUND

Dumping takes place when goods are imported into the United States and sold at a price lower than their normal value. 19 U.S.C. § 1677(34). Under the statute, Commerce is required to impose duties on dumped merchandise to offset the effects of dumping. § 1673. The antidumping statutes provide for periodic administrative reviews of antidumping duty orders-at the request of an interested party-to update the applicable antidumping duty rate.3 § 1675. The case at bar challenges the results of such an administrative review.

In January 2008, at the request of Bristol Metals, Commerce initiated a periodic administrative review of the antidumping duty order currently in place for welded stainless steel pipes (" WSSP" ) 4 from Korea for the period December 1, 2006 through November 30, 2007. Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part, 73 Fed.Reg. 4,829 (Jan. 28, 2008); see also

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Antidumping Duty Order and Clarification of Final Determination: Certain Welded Stainless Steel Pipes From Korea, 57 Fed.Reg. 62,301 (December 30, 1992). In the Preliminary Results, Commerce followed its conventional methodology of using SeAH's period of review annual weighted-average costs of production to determine the appropriate dumping margin, and preliminarily calculated a rate of 4.10%. Preliminary Results, 73 Fed.Reg. at 79,052, 79,054. Shortly thereafter, the Department requested that SeAH provide quarterly cost information " in order to analyze the magnitude of cost changes throughout the POR" to determine whether it was appropriate to use shorter cost averaging periods for the Final Results.

On April 29, 2009, Commerce issued its post-preliminary calculations of SeAH's cost of production and constructed value information, which was based on an analysis of SeAH's quarterly cost information. (Memorandum from Gina Lee, to Neal M. Halper, Proposed Adjustments to the Cost of Production and Constructed Value Information, PR 63, CR 31 (" Proposed Cost Adjustments Memo" ).) The decision to proceed with a quarterly cost analysis had implications beyond Commerce's normal value calculations, and affected how the Department conducted its price-to-price comparisons between home market and U.S. sales, as well as its statutorily mandated cost recovery methodology. Based on its evaluation of the quarterly cost information, Commerce made an upward adjustment of SeAH's dumping margin prior to completion of the Final Results. 5 ( Id. )

Following publication of the post-preliminary calculations, SeAH's advocacy before Commerce focused principally on the issues in dispute in this action: (1) whether Commerce erred in using quarterly cost information rather than annual period of review average costs in the agency's normal value calculations; (2) whether Commerce erred in its decision not to apply its normal " 90/60" day window period for comparing U.S. and home market sales, and instead to make comparisons within a given quarter; (3) whether Commerce's adjusted cost-recovery methodology was consistent with its statutory mandate; and (4) whether Commerce erred in its application of the " transactions disregarded" and " major input" rules.6 ( See generally Brief from Law Firm of Troutman Sanders (" Case Brief" ), PR 68, CR 34.) In the Final Results, Commerce rejected SeAH's arguments on all the issues, and further adjusted its dumping margin to 9.05%. Final Results, 74 Fed.Reg. at 31,243. This action followed, contesting the Department's determination in the Final Results.

Plaintiff asserts that calculating its production costs on a quarterly basis results in an improper inflation of its dumping margin. ( See Pl.'s Brief at 12.) SeAH further contends that the Department's application of the major input and transactions disregarded provisions of the statute had a similar effect. ( Id. at 10.) As a result, Plaintiff requests that this matter be remanded to Commerce with instructions to recalculate SeAH's dumping margin using annual weighted average costs, and to conduct its major input analysis on a grade and specification basis. (Pl.'s Brief at 50.)

DISCUSSION

I. Commerce's Use of Quarterly Costs Versus Period of Review Average Costs for the Cost of Production Analysis

A. Statutory Scheme

In an administrative review, Commerce determines the antidumping duties to be imposed by first calculating the dumping

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margin for each of a foreign producer or exporter's individual U.S. transactions, which is the amount by which the normal value of the imported subject merchandise in the exporter's home market exceeds the export price or the constructed export price of that merchandise. See 19 U.S.C. § 1677(35)(A). Normal value is the basic conceptual focus in deriving the foreign benchmark value for the subject merchandise. The relevant portions of the statute require normal value to be calculated as follows:

In determining under this subtitle whether subject merchandise is being, or is likely to be, sold at less than fair value, a fair comparison shall be made between the export price or constructed export price and normal value. In order to achieve a fair comparison with the export price or constructed export price, normal value shall be determined as follows:

(1) Determination of normal value

(A) In general

The normal value of the subject merchandise shall be the price described in subparagraph (B), at a time reasonably corresponding to the time of the sale used to determine the export price or constructed...

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