Maverick Tube Corp. v. United States, 051016 USCIT, 14-00244

Docket Nº:14-00244
Opinion Judge:JANE A. RESTANI JUDGE.
Party Name:MAVERICK TUBE CORPORATION, Plaintiff, v. UNITED STATES, Defendant, TOSCELIK PROFIL VE SAC ENDÜSTRISI A.§., and CAYIROVA BORU SANAYI VE TICARET A.§., Consolidated Plaintiffs, 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 UNITED STATES STEEL COR...
Attorney:Robert E. DeFrancesco, III, Alan H. Price, Adam M. Teslik, and Laura El-Sabaawi, Wiley Rein, LLP, of Washington, DC, for plaintiff. David L. Simon, Law Office of David L. Simon, of Washington, DC, for consolidated plaintiffs and defendant-intervenors Tosgelik Profil ve Sac Endüstrisi A.§. and Cay...
Judge Panel:Before: Jane A. Restani, Judge.
Case Date:May 10, 2016
Court:Court of International Trade
 
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MAVERICK TUBE CORPORATION, Plaintiff,

TOSCELIK PROFIL VE SAC ENDÜSTRISI A.§., and CAYIROVA BORU SANAYI VE TICARET A.§., Consolidated Plaintiffs,

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 UNITED STATES STEEL CORPORATION, Plaintiff-Intervenors,

v.

UNITED STATES, Defendant,

BORUSAN ISTIKBAL TICARET A.§., BORUSAN MANNESMANN BORU SANAYI VE TICARET A.§., TOSCELIK PROFIL VE SAC ENDÜSTRISI A.§., and CAYIROVA BORU SANAYI VE TICARET A.§., Defendant-Intervenors.

No. 14-00244

Slip Op. 16-46

Court of Appeals of International Trade

May 10, 2016

Commerce's Final Results of Redetermination in antidumping duty investigation sustained.

Robert E. DeFrancesco, III, Alan H. Price, Adam M. Teslik, and Laura El-Sabaawi, Wiley Rein, LLP, of Washington, DC, for plaintiff.

David L. Simon, Law Office of David L. Simon, of Washington, DC, for consolidated plaintiffs and defendant-intervenors Tosgelik Profil ve Sac Endüstrisi A.§. and Cayirova Boru Sanayi Ve Ticaret A.§.

Roger B. Schagrin, John W. Bohn, and Paul W. Jameson, Schagrin Associates, of Washington, DC, for plaintiff-intervenors Boomerang Tube LLC, Energex Tube (a Division of JMC Steel Group), Tejas Tubular Products, TMK IPSCO, Vallourec Star, L.P., and Welded Tube USA Inc.

Jon D. Corey, Jonathan G. Cooper, and Susan R. Estrich, Quinn Emanuel Urquhart & Sullivan, LLP, of Washington, DC, for plaintiff-intervenor United States Steel Corporation.

Hardeep K. Josan, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of New York, NY, for defendant. With her on the brief were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, and Claudia Burke, Assistant Director. Of counsel on the brief was Jessica M. Link, Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, DC.

Donald B. Cameron, Brady W. Mills, Julie C. Mendoza, Mary S. Hodgins, R. Will Planert, and Sarah S. Sprinkle, Morris, Manning & Martin, LLP, of Washington, DC, for defendant-intervenors Borusan Istikbal Ticaret A.§. and Borusan Mannesmann Boru Sanayi ve Ticaret A. §.

Before: Jane A. Restani, Judge.

OPINION

JANE A. RESTANI JUDGE.

Currently before the court are the U.S. Department of Commerce's ("Commerce") Final Results of Redetermination Pursuant to Ct. Remand, ECF No. 111-1 ("Remand Results"). The Remand Results concern the final determination in the antidumping ("AD") investigation of oil country tubular goods ("OCTG") from the Republic of Turkey ("Turkey"), covering the period of investigation between July 1, 2012, and June 30, 2013. Certain Oil Country Tubular Goods from the Republic of Turkey: Final Determination of Sales at Less Than Fair Value and Affirmative Final Determination of Critical Circumstances, in Part, 79 Fed. Reg. 41, 971, 41, 971 (Dep't Commerce July 18, 2014) ("Final Determination"). The court remanded Commerce's calculation of the constructed value ("CV") profit margin ("CV Profit") and duty drawback adjustment used in determining the A.D. duty margin for mandatory respondent and consolidated plaintiff Cayirova Boru Sanayi ve Ticaret A.§. ("Cayirova") and its affiliated exporter Yücel Bora Ithalat-Pazarlama A.§. (collectively, "Yücel"). Maverick Tube Corp. v. United States, 107 F.Supp. 3d 1318, 1323, 1335, 1338-42 (CIT 2015) ("Maverick"). Commerce's revised calculations are supported by substantial evidence and accordingly the Remand Results are sustained.

BACKGROUND

The court presumes familiarity with the facts of the case as discussed in Maverick, 107 F.Supp. 3d at 1323-26, but the facts relevant to the Remand Results are summarized briefly for convenience.

A dumping margin is "the amount by which the normal value1 exceeds the export price.2" 19 U.S.C. § 1677(35)(A) (2012). Relevant to the calculation on remand, when a respondent, such as Yücel, does not have any home market or third country sales, Commerce calculates normal value using CV. 19 U.S.C. § 1677b(a)(4); see Maverick, 107 F.Supp. 3d at 1336. CV is calculated by applying a statutory formula, which includes the sum of the costs of production ("Selling Expenses") plus an amount for profit (CV Profit), and other incidental expenses. See 19 U.S.C. § 1677b(e); 19 C.F.R. § 351.405(b) (2013). In calculating normal value using CV, Commerce's preferred method is to include "the actual amounts incurred and realized by the specific exporter or producer being examined . . . for selling, general, and administrative expenses, and for profits, in connection with the production and sale of a foreign like product, in the ordinary course of trade, for consumption in the foreign country." 19 U.S.C. § 1677b(e)(2)(A). If such data are unavailable, Commerce resorts to one of three statutory alternatives for calculating Selling Expenses and CV Profit.3 19 U.S.C. § 1677b(e)(2)(B). The court will refer to these alternatives as "alternative (i), " "alternative (ii), " and "alternative (iii), " respectively. Also relevant to the calculation on remand, in calculating export price, Commerce increases export price by "the amount of any import duties imposed by the country of exportation which have been rebated, or which have not been collected, by reason of the exportation of the subject merchandise to the United States[;]" this is commonly referred to as the duty drawback adjustment. 19 U.S.C. § 1677a(c)(1)(B).

On February 25, 2014, Commerce assigned Yücel a preliminary dumping margin of 4.87 percent.4 Certain Oil Country Tubular Goods From the Republic of Turkey: Preliminary Affirmative Determination of Sales at Less Than Fair Value, Negative Preliminary Determination of Critical Circumstances, and Postponement of Final Determination, 79 Fed. Reg. 10, 484, 10, 486 (Dep't Commerce Feb. 25, 2014) ("Preliminary Determination"). In the Preliminary Determination, Commerce determined, with respect to Yücel, the data to calculate CV Profit under § 1677b(e)(2)(A) were unavailable, and therefore, that it was necessary to rely on one of the alternatives listed in § 1677b(e)(2)(B). Decision Memorandum for the Preliminary Affirmative Determination in the Antidumping Duty Investigation of Certain Oil Country Tubular Good from the Republic of the Turkey at 25, A-489-816, (Feb. 14, 2014), available at http://enforcement.trade.gov/frn/summary/turkey/2014-04108-1.pdf (last visited Apr. 27, 2016) ("Preliminary I&D Memo"). Commerce preliminarily calculated Yücel's CV Profit based on its home market sales of non-OCTG pipe products pursuant to alternative (i). See id.; see also 19 U.S.C. § 1677b(e)(2)(B)(i). Commerce also preliminarily granted Yücel a duty drawback adjustment, but stated it would further consider the adjustment. Preliminary I&D Memo at 20.

In Commerce's Final Determination, issued on July 18, 2014, Yücel's margin increased dramatically to 35.86 percent. 79 Fed. Reg. at 41, 973. Yücel's margin increased for two reasons. First, Commerce calculated CV Profit using alternative (iii) based on data from the 2012 financial statements of Tenaris S.A. ("Tenaris"), a multinational OCTG company whose data Commerce sua sponte placed on the record on May 12, 2014.5 See Issues 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 Turkey at 2, 20-27, A-489-816, (July 10, 2014), available at http://enforcement.trade.gov/frn/summary/turkey/2014-16873-1.pdf (last visited Apr. 27, 2016) ("I&D Memo"). Commerce also did not apply a profit cap as required by alternative (iii) because it did not have "home market data for other exporters and producers in Turkey of the same general category of products." Id at 26. Second, Commerce denied approximately two-thirds of Yücel's duty drawback adjustment because the Harmonized Tariff Schedule ("HTS") headings under which the subject merchandise were reported to Turkish customs appeared to be non-OCTG headings in the United States. Id at 15-16.

Cayirova challenged the Final Determination, arguing that Commerce improperly calculated CV Profit using the Tenaris data and should have awarded the full amount of the requested duty drawback adjustment.6 See Maverick, 107 F.Supp. 3d at 1325. The government defended Commerce's CV Profit calculation, but requested a remand to allow it an opportunity to "'reconsider its [duty drawback] determination' because it 'changed certain aspects of its duty drawback decision between the preliminary and final determinations and did not have the opportunity to consider the impact of those changes or certain arguments [that were] raised before the Court.'" Id. at 1333 (quoting Def.'s Resp. in Opp'n to Mots. for J. upon the Administrative R. 54, ECF No. 60).

In Maverick, the court remanded two issues to Commerce: (1) the calculation of CV Profit used in Yücel's dumping margin analysis; and (2) Yücel's duty drawback adjustment.7See id. at 1342. The court held that Commerce's use of Tenaris's financial statements for the calculation of Yücel's CV Profit was unsupported by substantial evidence because it did not accurately reflect the home market experience. Id. at 1338–39. The court further held that Commerce did not adequately explain why it dispensed with alternative (iii)'s profit cap requirement. Id. at 1339. For these reasons, the court directed Commerce to explain why a CV Profit based on a range derived from the confidential profit margin of the other mandatory respondent, Borusan Istikbal Ticaret A.§. and Borusan Mannesmann Boru Sanayi ve Ticaret A.§. (collectively "Borusan"), could not be used in accordance with alternative (ii), beyond...

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