Mid Continent Steel & Wire, Inc. v. United States

• Decision Date: 08 January 2021
• Docket Number: Consol. Court No. 15-00213,Slip Op. 21-4
• Citation: 495 F.Supp.3d 1298
• Parties: MID CONTINENT STEEL & WIRE, INC. et al., Plaintiff and Consolidated Plaintiffs, v. UNITED STATES, Defendant, and PT Enterprise Inc. et al., Defendant-Intervenors and Consolidated Defendant-Intervenors.
• Court: U.S. Court of International Trade

495 F.Supp.3d 1298

MID CONTINENT STEEL & WIRE, INC. et al., Plaintiff and Consolidated Plaintiffs,

v. UNITED STATES, Defendant,andPT Enterprise Inc. et al., Defendant-Intervenors and Consolidated Defendant-Intervenors.

Slip Op. 21-4

Consol. Court No. 15-00213

United States Court of International Trade.

January 8, 2021

Adam H. Gordon and Ping Gong, The Bristol Group PLLC of Washington, DC, for plaintiff and consolidated defendant-intervenor Mid Continent Steel & Wire, Inc.

Bruce M. Mitchell, Ned H. Marshak, Andrew T. Schutz, and Dharmendra Choudhary, Grunfeld Desiderio Lebowitz Silverman & Klestadt LLP of Washington, DC, and New York, NY, for consolidated plaintiffs and defendant-intervenors PT Enterprise Inc., Pro-Team Coil Nail Enterprise Inc., Unicatch Industrial Co., Ltd., WTA International Co., Ltd., Zon Mon Co., Ltd., Hor Liang Industrial Corp., President Industrial Inc., and Liang Chyuan Industrial Co., Ltd.

Mikki Cottet, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for defendant. Also on the brief were Jeffrey Bossert Clark, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Vania Wang, Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce of Washington, DC.

OPINION AND ORDER

Kelly, Judge:

Before the court is the U.S. Department of Commerce's ("Commerce") second remand redetermination in the antidumping duty ("ADD") investigation of certain steel nails from Taiwan, pursuant to the court's order implementing the Court of Appeals for the Federal Circuit's ("Court of Appeals") mandate in Mid Continent Steel & Wire, Inc. v. United States, 940 F.3d 662 (Fed. Cir. 2019) (" Mid Continent III") rev'g in part 41 CIT ––––, 219 F. Supp. 3d 1326 (2017) ("Mid Continent I"). See also Mid Continent Steel & Wire, Inc. v. United States, 41 CIT ––––, 273 F. Supp. 3d 1161 (2017) (" Mid Continent II"); Final Results of Redetermination Pursuant to Court Order, June 16, 2020, ECF No. 144-1 ("Second Remand Results"); Order, Dec. 3, 2019, ECF No. 132 ("Order").

The court remanded to Commerce for further proceedings in conformity with Mid Continent III, see Order, where the Court of Appeals found wanting, for several reasons, Commerce's explanation of its use of a simple average when determining the pooled standard deviation in its Cohen's d test. See Mid Continent III, 940 F.3d at 673–75. The Court of Appeals observed that: Commerce failed to address that the relevant part of the literature Commerce itself cites, calls for the use of weighted averages; Commerce's statement that simple averaging will not "skew" the outcome of its analysis, was conclusory; Commerce neither supported its dismissal of PT's charge that simple averages would distort the outcome of its Cohen's d test, nor explained why simple averaging was preferable; and, Commerce appeared to assume that weighted averaging must be done by counting the number of transactions, as opposed to quantities, sold within every transaction. See id.

On remand, Commerce reconsiders whether its "calculation of the pooled standard deviation based on a simple average of the variances determined for the test and comparison groups was appropriate," and finds that it is. Second Remand Results at 4–17. Commerce explains that a simple average of the variances for each group accurately represents pricing behaviors within each group because it is the group pricing that matters, and not the individual pricing amongst all sales, for the purposes of its analysis. See id. at 15–17, 35–36. Thus, using a simple average of the variances within each group in the pooled standard deviation, as the denominator in the Cohen's d analysis, will not mask possible targeted dumping that only exists within one group. See id. Conversely, a weighted average, based either on the number of transactions, sales volume or value, would skew the results towards the group with greater transactions or sales volume or value (and thus dilute the results from the other group). See id. at 2, 15–17. Commerce, therefore explains that a simple average is preferable because the purpose of the analysis is to identify masked dumping within the test group. See id. at 8, 14–17. For the following reasons, the court sustains Commerce's decision to use a simple average to calculate the pooled standard deviation.

BACKGROUND

On June 25, 2014, in response to a petition filed by Mid Continent, Commerce initiated an ADD investigation of certain steel nails from six countries, including Taiwan. See Certain Steel Nails from India, the Republic of Korea, Malaysia, the Sultanate of Oman, Taiwan, the Republic of Turkey, and the Socialist Republic of Vietnam, 79 Fed. Reg. 36,019 (Dep't Commerce June 25, 2014) (initiation of less-than-fair-value investigations). Commerce selected Taiwanese exporters PT Enterprise Inc. et al.’s ("PT")¹ and its affiliated producer, Pro-Team, and Quick Advance, Inc. and its affiliated producer, Ko's Nails Inc., as mandatory respondents for the investigation. See Certain Steel Nails from Taiwan, 79 Fed. Reg. 78,053, 78,054 (Dep't Commerce Dec. 29, 2014) (preliminary determination of sales at less than fair value, postponement of final determination) ("Prelim. Results"); Decision Memorandum for the Preliminary Determination in the Antidumping Duty Investigation of Certain Steel Nails from Taiwan at 2, PD 225, bar code 3247845-01 (Dec. 17, 2014) ("Prelim. Decision Memo");² see also Section 777A of the of the Tariff Act of 1930, as amended 19 U.S.C. § 1677f-1(c)(2)(B) (2012).³

On December 29, 2014, Commerce issued its negative preliminary determination. See Prelim. Results, 79 Fed. Reg. at 78,053 ; see also Prelim. Decision Memo at 1. Commerce applied its differential pricing analysis and determined that, although 41.73 percent of PT's U.S. sales passed the Cohen's d test, a meaningful difference did not exist in the dumping margins that would result from using the standard average-to-average ("A-to-A") methodology and the alternate mixed methodology. See Prelim. Decision Memo at 12. Commerce accordingly applied the standard A-to-A methodology to all of PT's sales, and preliminarily determined that respondents’ steel nails from Taiwan "are not being, or are not likely to be, sold in the United States at less than fair value." Id. at 1.⁴ Commerce preliminarily assigned PT a weighted-average dumping margin of 0.00 percent. See Prelim. Results, 79 Fed. Reg. at 78,054.

On May 20, 2015, Commerce issued its final determination. See Certain Steel Nails from Taiwan, 80 Fed. Reg. 28,959 (Dep't Commerce May 20, 2015) (final determination of sales at less than fair value) ("Final Results") and accompanying Issues and Decision Memorandum for the Affirmative Final Determination in the Less than Fair Value Investigation of Certain Steel Nails from Taiwan, May 13, 2015, ECF No. 17 ("Final Decision Memo"). As an initial matter, Commerce determined that it made ministerial errors which impacted the dumping margins it calculated in the Prelim. Results. See Final Results, 80 Fed. Reg. at 28,960. Additionally, Commerce made other adjustments, including changes to the margin calculation. See Final Decision Memo at 1; Final Results, 80 Fed. Reg. at 28,960 ; Mid Continent I, 41 CIT at ––––, 219 F. Supp. 3d at 1331. Commerce determined that 42.27 percent of PT's U.S. sales had passed the Cohen's d test, and accordingly applied the mixed methodology, by which Commerce applies the average-to-transaction ("A-to-T") method to PT's sales that passed the Cohen's d test and the A-to-A method to PT's sales that did not pass the Cohen's d test, to calculate a respondent's weighted-average dumping margin. See Final Decision Memo at 19. Commerce determined that a meaningful difference existed between the resultant A-to-A margin and mixed methodology margin, so it applied the mixed methodology (A-to-T) to calculate PT's weighted-average dumping margin. See Final Decision Memo at 15–17. Commerce subsequently assigned PT a weighted-average dumping margin of 2.24 percent. See Final Results, 80 Fed. Reg. at 28,961. The final determination resulted in an ADD order on subject nails from Taiwan. See Certain Steel Nails from the Republic of Korea, Malaysia, the Sultanate of Oman, Taiwan, and the Socialist Republic of Vietnam, 80 Fed. Reg. 39,994, 39,994 –97 (Dep't Commerce July 13, 2015) ([ADD] orders).⁵

On March 23, 2017, the U.S. Court of International Trade ("CIT") sustained Commerce's determination including its decision to use a simple average to calculate the pooled standard deviation. See Mid Continent I, 41 CIT at ––––, 219 F. Supp. 3d at 1340–43. On October 3, 2019, the Court of Appeals vacated and remanded in part the CIT's judgment sustaining Commerce's decision. See Mid Continent III, 940 F.3d at 675. The Court of Appeals disagreed with PT's challenge to Commerce's use of zeroing and Commerce's requirement to have a Cohen's d coefficient of at least 0.8, and thus sustained this court's ruling upholding Commerce on those issues. See Mid Continent III, 940 F.3d at 672. However, the Court of Appeals instructed the CIT to remand to Commerce to provide additional reasoning in support of its decision to use a simple average to calculate the pooled standard deviation. See id. at 673–75. On December 3, 2019, the CIT remanded to Commerce to provide further explanation in accordance with the Court of Appeals’ directive. See Order, Dec. 3, 2019, ECF No. 132.

On March 3, 2020, Commerce released its draft remand redetermination and invited the parties to comment. See Draft Results of Redetermination Pursuant to Court Order [ Mid Continent III ], PRRs 3–5, bar codes 3949998-01–03 (Mar. 3, 2020).⁶

On March 19, 2020, PT and Mid Continent submitted comments to Commerce. See Second Remand Results at 3. On April 9, 2020, Commerce gave the parties an opportunity to...