Husteel Co. v. United States, 090215 USCIT, 14-00215

Docket Nº:14-00215
Opinion Judge:Jane A. Restani Judge.
Party Name:HUSTEEL CO., LTD., Plaintiff, v. UNITED STATES, Defendant, Slip Op. 15- 100 NEXTEEL CO., LTD. and HYUNDAI HYSCO, Consolidated Plaintiffs, ILJIN STEEL CORPORATION, AJU BESTEEL CO., LTD., and SEAH STEEL CORP., Plaintiff-Intervenors, UNITED STATES STEEL CORPORATION, BOOMERANG TUBE LLC, ENERGEX TUBE (A DIVISION OF JMC STEEL GROUP), TEJAS TUBULAR PRODUC
Attorney:Donald B. Cameron, Morris, Manning & Martin, LLP, of Washington, DC, argued for plaintiff. With him on the brief were Julie C. Mendoza, R. Will Planert, Brady W. Mills, Mary S. Hodgins, and Sarah S. Sprinkle. J. David Park, Arnold & Porter, LLP, of Washington, DC, argued for consolidated plaintif...
Judge Panel:Before: Jane A. Restani, Judge Consol. Court No. 14-00215
Case Date:September 02, 2015
Court:Court of Appeals of International Trade
 
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Slip Op. 15- 100

HUSTEEL CO., LTD., Plaintiff,

NEXTEEL CO., LTD. and HYUNDAI HYSCO, Consolidated Plaintiffs,

ILJIN STEEL CORPORATION, AJU BESTEEL CO., LTD., and SEAH STEEL CORP., Plaintiff-Intervenors,

v.

UNITED STATES, Defendant,

UNITED STATES STEEL CORPORATION, BOOMERANG TUBE LLC, ENERGEX TUBE (A DIVISION OF JMC STEEL GROUP), TEJAS TUBULAR PRODUCTS, TMK IPSCO, VALLOUREC STAR, L.P., WELDED TUBE USA INC., and MAVERICK TUBE CORPORATION, Defendant-Intervenors.

No. 14-00215

Court of Appeals of International Trade

September 2, 2015

Commerce's final determination in antidumping investigation sustained in part and remanded in part to reconsider selection of mandatory respondents and constructed value profit margin.

Donald B. Cameron, Morris, Manning & Martin, LLP, of Washington, DC, argued for plaintiff. With him on the brief were Julie C. Mendoza, R. Will Planert, Brady W. Mills, Mary S. Hodgins, and Sarah S. Sprinkle.

J. David Park, Arnold & Porter, LLP, of Washington, DC, argued for consolidated plaintiffs. With him on the brief were Henry D. Almond, Yujin K. McNamara, and Yun H. Lee.

Joel D. Kaufman, Richard O. Cunningham, and Henry N. Smith, Steptoe & Johnson LLP, of Washington, DC, for plaintiff-intervenor ILJIN Steel Corporation.

Neil R. Ellis and Shawn M. Higgins, Sidley Austin, LLP, of Washington, DC, for plaintiff-intervenor AJU Besteel Co., Ltd.

Jeffrey M. Winton, Law Office of Jeffrey M. Winton PLLC, of Washington, DC, for plaintiff-intervenor SeAH Steel Corp.

Melissa M. Devine, Emma E. Bond, and Agatha Koprowski, Trial Attorneys, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington D.C., argued for defendant. With them on the brief were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, Claudia Burke, Assistant Director, and L. Misha Preheim, Senior Trial Counsel. Of counsel on the brief was Mykhaylo A. Gryzlov, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, DC.

Jeffrey D. Gerrish, Skadden Arps Slate Meagher & Flom, LLP, of Washington, DC, argued for defendant-intervenor United States Steel Corporation. With him on the brief were Robert E. Lighthizer, Luke A. Meisner, and Jamieson L. Greer.

Roger B. Schagrin and Paul W. Jameson, Schagrin Associates, of Washington, DC, for defendant-intervenors Boomerang Tube LLC, Energex Tube, Tejas Tubular Products, TMK IPSCO, Vallourec Star, L.P., and Welded Tube USA Inc.

Robert E. DeFrancesco, III., Wiley Rein, LLP, of Washington, DC, argued for defendant-intervenor Maverick Tube Corporation. With him on the brief was Alan H. Price.

Before: Jane A. Restani, Judge Consol. Court No. 14-00215

OPINION

Jane A. Restani Judge.

This action challenges the Department of Commerce's ("Commerce") final determination rendered in the antidumping ("AD") duty investigation of certain oil country tubular goods ("OCTG")1 from the Republic of Korea ("Korea"). See Certain Oil Country Tubular Goods From the Republic of Korea: Final Determination of Sales at Less Than Fair Value and Negative Final Determination of Critical Circumstances, 79 Fed. Reg. 41, 983 (Dep't Commerce July 18, 2014) ("Final Determination"). Before the court are the motions for judgment on the agency record of Korean producers Husteel Co., Ltd. ("Husteel"), NEXTEEL Co., Ltd. ("NEXTEEL"), ILJIN Steel Corporation ("ILJIN"), AJU Besteel Co., Ltd. ("AJU Besteel"), and SeAH Steel Corp. ("SeAH") (collectively, "plaintiffs"). See Br. of Pl. Husteel Co., Ltd. in Supp. of Its Mot. for J. on the Agency R., DE 95 ("Husteel Br."); Mem. in Supp. of Consol. Pl. NEXTEEL's Rule 56.2 Mot. for J. upon the Agency R., DE 106 ("NEXTEEL Br."); Mem. in Supp. of Consol. Pl. HYSCO's Rule 56.2 Mot. for J. upon the Agency R., DE 104 ("HYSCO Br."); Br. of Pl. Intvnr. ILJIN Steel Corp. in Supp. of Its Mot. for J. on the Agency R., DE 89-1 ("ILJIN Br."); Mot. of Consol. Pl. AJU Besteel Co., Ltd. for J. upon the Agency R., DE 82-1 ("AJU Besteel Br."); Br. of Pl. SeAH Steel Corp. in Supp. of Its Rule 56.2 Mot. for J. on the Agency R., DE 86 ("SeAH Br."). Also before the court are the motions for judgment on the agency record of U.S. producers United States Steel Corporation ("U.S. Steel") and Maverick Tube Corporation ("Maverick") (collectively, "petitioners"). See Mot. of Pl. United States Steel Corp. for J. on the Agency R. Under Rule 56.2, DE 97 ("U.S. Steel Br."); Pl.'s Maverick Tube Corp. Mem. in Supp. of Its Rule 56.2 Mot. for J. on the Agency R., DE 102 ("Maverick Br."). For the reasons stated below, Commerce's Final Determination is sustained in part and remanded in part.

BACKGROUND

Following the filing of a petition by U.S. Steel, Maverick, and other domestic producers of OCTG, Commerce initiated an AD investigation of OCTG from Korea on July 22, 2013. See Certain Oil Country Tubular Goods from India, the Republic of Korea, the Republic of the Philippines, Saudi Arabia, Taiwan, Thailand, the Republic of Turkey, Ukraine, and the Socialist Republic of Vietnam: Initiation of Antidumping Duty Investigations, 78 Fed. Reg. 45, 505, 45, 506, 45, 512 (Dep't Commerce July 29, 2013) ("Initiation Notice"). On August 26, 2013, Commerce limited the number of respondents for individual examination, selecting the two exporters or producers of OCTG that accounted for the largest volume of imports from Korea to the United States: NEXTEEL and HYSCO. Respondent Selection Memorandum at 6–8, PD 80 (Aug. 27, 2013) ("Respondent Selection Memo"). Because the two mandatory respondents did not have viable home or third-country markets for OCTG, pursuant to 19 U.S.C. § 1677b(a)(4) (2012), Commerce used a constructed value ("CV") to determine the appropriate normal value.2Issues and Decision Memorandum for the Final Affirmative Determination in the Less than Fair Value Investigation of Certain Oil Country Tubular Goods from the Republic of Korea at 3, A-580-870, (July 10, 2014), available at http://enforcement.trade.gov/frn/summary/korea-south/2014-16874-1.pdf (last visited Aug. 27, 2015) ("I&D Memo"). In order to determine whether OCTG from Korea were sold in the United States at less than fair value, Commerce compared HYSCO's constructed normal value to a constructed export price ("CEP"), 3 because HYSCO reported that it sold the subject merchandise to a wholly-owned subsidiary in the United States that then sold the merchandise to an unaffiliated customer. Decision Memorandum for the Preliminary Determination in the Less-Than Fair Value Investigation of Certain Oil Country Tubular Goods from the Republic of Korea at 15, 19, PD 276 (Feb. 14, 2014) ("Preliminary I&D Memo"). NEXTEEL's constructed normal value was compared to NEXTEEL's export price4for certain sales that it made directly to unaffiliated customers, and CEP for sales made through an affiliated customer. See I&D Memo at 90.

In February 2014, Commerce issued a negative preliminary determination. Certain Oil Country Tubular Goods From the Republic of Korea: Negative Preliminary Determination of Sales at Less Than Fair Value, Negative Preliminary Determination of Critical Circumstances and Postponement of Final Determination, 79 Fed. Reg. 10, 480 (Dep't Commerce Feb. 25, 2014) ("Preliminary Determination"). Commerce calculated weighted-average dumping margins of zero for both mandatory respondents. Id. at 10, 481.

In July 2014, Commerce issued an affirmative final determination. Final Determination, 79 Fed. Reg. at 41, 983. Commerce calculated a dumping margin of 9.89% for NEXTEEL and 15.75% for HYSCO. Id. at 41, 984. Korean producers and exporters not individually examined, including Husteel, ILJIN, SeAH, and AJU Besteel, were assigned a margin of 12.82%, which was the weighted average of the mandatory respondents' dumping margins. See id. The largest factor in the significant change in the dumping margin between the Preliminary Determination and the Final Determination was the profit figure used in the CV calculation. For NEXTEEL, Commerce preliminarily relied on the profit recorded in certain Korean OCTG producers' financial statements, and for HYSCO, Commerce preliminarily used the profit HYSCO earned on its home market sales of non-OCTG pipe products. I&D Memo at 14. For the Final Determination, Commerce used the profit reflected in the financial statement of Tenaris S.A., a multinational corporation, to calculate CV profit for both mandatory respondents. Id. at 14, 16, The Tenaris financial statement was placed on the record after the Preliminary Determination. See id. at 28–29.

The International Trade Commission reached an affirmative injury determination in September 2014. See Certain Oil Country Tubular Goods from India, Korea, the Philippines, Taiwan, Thailand, Turkey, Ukraine, and Vietnam, 79 Fed. Reg. 53, 080 (ITC Sept. 5, 2014). Commerce issued the AD order effective September 10, 2014. See Certain Oil Country Tubular Goods From India, the Republic of Korea, Taiwan, the Republic of Turkey, and the Socialist Republic of Vietnam: Antidumping Duty Orders; and Certain Oil Country Tubular Goods From the Socialist Republic of Vietnam: Amended Final Determination of Sales at Less Than Fair Value, 79 Fed. Reg. 53, 691 (Dep't Commerce Sept. 10, 2014).

Korean producers NEXTEEL, HYSCO, Husteel, SeAH, AJU Besteel, and ILJIN, and domestic producers U.S. Steel and Maverick, challenge numerous aspects of Commerce's Final Determination. Each issue will be discussed in turn.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to 28 U.S.C. § 1581(c). The court will uphold Commerce's final determination in an AD investigation, unless it is "unsupported by substantial evidence on the record...

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