Ipsco, Inc. v. US, Court No. 86-06-00753.

• Decision Date: 30 October 1990
• Docket Number: Court No. 86-06-00753.
• Citation: 749 F. Supp. 1147
• Parties: IPSCO, INC. and Ipsco Steel, Inc., Plaintiffs, and The Algoma Steel Corporation, Ltd., and Sonco Steel Tube Div., Ferrum, Inc., Plaintiff-Intervenors, v. The UNITED STATES, Defendant, and Lone Star Steel Company, Defendant-Intervenor.
• Court: U.S. Court of International Trade

749 F. Supp. 1147

IPSCO, INC. and Ipsco Steel, Inc., Plaintiffs and The Algoma Steel Corporation, Ltd. and Sonco Steel Tube Div., Ferrum, Inc., Plaintiff-Intervenors, v. The UNITED STATES, Defendant and Lone Star Steel Company, Defendant-Intervenor.

Court No. 86-06-00753.

United States Court of International Trade.

October 30, 1990.

Barnes, Richardson & Colburn, Rufus E. Jarman, Jr., Josephine N. Belli, New York City, for plaintiffs.

Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civ. Div., U.S. Dept. of Justice, Jeanne E. Davidson, Craig L. Jackson, Attorney-Advisor, Office of the Chief Counsel for Import Admin., U.S. Dept. of Commerce, for defendant.

Dewey, Ballentine, Bushby, Palmer & Wood, Michael H. Stein, Washington, D.C., and Akin, Gump, Strauss, Hauer & Feld, Warren E. Connelly, Valerie A. Slater, Washington, D.C., for defendant-intervenor.

OPINION

RESTANI, Judge:

This challenge to an original antidumping determination by the Department of Commerce (Commerce or ITA) regarding Canadian oil country tubular goods (OCTG) is before the court following a third remand.

All of the issues discussed here concern proper calculation of constructed value for foreign market value purposes. See 19 U.S.C. § 1677b(e) (1988). In Ipsco, Inc. v. United States, 12 CIT ___, 687 F.Supp. 633 (1988) (Ipsco I) the court addressed several issues including a cost allocation between limited services and prime OCTG and amortization of extraordinary costs of production. Remand on the first issue was ordered. In Ipsco, Inc. v. United States, 13 CIT ___, 714 F.Supp. 1211 (1989) (Ipsco II) the court remanded the first issue once more but with more specific instructions. Following the second remand the antidumping margin was reduced by 1.15 percent, but Ipsco objected that ITA erred in its recalculation because it did not utilize a full six months of data for a particular grade of OCTG. This issue was quite distinct from the allocation methodology discussed in Ipsco I and Ipsco II. Nonetheless, in Ipsco, Inc. v. United States, Slip Op. 90-37, at 7, 1990 WL 51968 (April 16, 1990) (Ipsco III) the court once more remanded for ITA to determine:

whether it used correct tonnage data and dollar to tonnage ratios and, if not, whether the error occurred in the original determination, whether it was germaine to the original determination, and whether Ipsco could have discovered the problem after the original determination through the exercise of the amount of diligence appropriate under the facts of the case.

In the third remand determination ITA states that due to the passage of time and departure of employees it cannot determine exactly why three months of data were utilized but that it is clear that ITA did use just three months of data for the grade of OCTG at issue. ITA states that because sales did not occur in the following quarter there would have been no need to use data from that quarter and that, in any case, utilization of the second quarter data would raise the margins.

Ipsco responds as follows:

1. An error did occur because 19 U.S.C. § 1677b(e)(1)(A) requires ITA to examine costs "at a time preceding the date of exportation ..." Ipsco opines that exportation refers to shipment and shipment occurred throughout the six months period.

2. Although it does not deny that use of only one quarter of data was relevant from the outset, Ipsco alleges that it exercised due diligence in examining the record. It alleges that the error was masked by ITA's limited service, prime misallocation and Ipsco should not be found responsible for discovering this error before the allocation was corrected.

3. Use of six months of data would not result in a higher margin if ITA were directed to normalize costs for this product as it indicated, in the final determination, would be done.

4. Even without normalization margins would still be lower if ITA treated work-in-process in the same manner for both quarters.

The court turns first to the normalization issue. This is not a new issue in this case. This was a hotly contested issue at the agency level, and plaintiff had some success, that is, it turned ITA's preliminary view around to some extent, as stated in the final determination:¹

IPSCO incurred abnormally high costs for certain products which it recently started producing. However, the normalized cost data submitted by Ipsco was not sufficiently substantiated. At verification, information was gathered regarding yield rates during and after the period of investigation. Where such information was available, the low yield rates in the period of investigation were normalized, in keeping with the Department's policy of amortizing start-up costs over future production.

Antidumping; Oil Country Tubular goods From Canada; Final Determination of Sales at Less Than Fair Value, 51 Fed.Reg. 15029, 15032 (April 22, 1986), as amended 51 Fed.Reg. 29579 (Aug. 19, 1986).

The final determination stated further:

The normalized cost information submitted by IPSCO is based on standard costs contained in IPSCO's annual management budget adjusted for inflation using a broad index of price levels. The standard costs contained in the budget are not used by IPSCO in its cost accounting system. This information is not sufficient to substantiate the level of production costs under normal operating conditions. However, as stated in our response to

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