ABB, Inc. v. United States, 101017 USCIT, 16-00054

Docket Nº:16-00054
Opinion Judge:Mark A. Barnett, Judge.
Party Name:ABB, INC., Plaintiff, v. UNITED STATES, Defendant, and HYUNDAI HEAVY INDUSTRIES CO., LTD., HYUNDAI CORPORATION USA, AND HYOSUNG CORPORATION. Defendant-Intervenors.
Attorney:R. Alan Luberda, Kelley Drye & Warren LLP, of Washington, DC, argued for plaintiff. With him on the brief were David C. Smith, Jr., and Melissa Marie Brewer. John J. Todor, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued fo...
Judge Panel:Before: Mark A. Barnett, Judge Consol.
Case Date:October 10, 2017
Court:Court of International Trade
 
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ABB, INC., Plaintiff,

v.

UNITED STATES, Defendant,

and

HYUNDAI HEAVY INDUSTRIES CO., LTD., HYUNDAI CORPORATION USA, AND HYOSUNG CORPORATION. Defendant-Intervenors.

No. 16-00054

Court of Appeals of International Trade

October 10, 2017

Defendant's request for a remand is granted with respect to Commerce's treatment of respondents' commissions and its revenue capping practice; Commerce's decision to cap Hyosung's reported freight revenue by Hyosung's reported domestic inland freight expense is sustained.

R. Alan Luberda, Kelley Drye & Warren LLP, of Washington, DC, argued for plaintiff. With him on the brief were David C. Smith, Jr., and Melissa Marie Brewer.

John J. Todor, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for defendant. With him on the brief were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, and Franklin E. White, Jr., Assistant Director. Of Counsel on the brief was James H. Ahrens, II, Attorney, U.S. Department of Commerce, Office of Chief Counsel for Trade Enforcement and Compliance, of Washington, DC.

David Edward Bond, White & Case, LLP, of Washington, DC, argued for defendant-intervenors Hyundai Heavy Industries, Co., Ltd., and Hyundai Corporation USA. With him on the brief were Walter Joseph Spak, William Joseph Moran, and Ron Kendler.

Jaehong David Park, Arnold & Porter Kaye Scholer LLP, of Washington, DC, argued for consolidated plaintiff and defendant-intervenor Hyosung Corporation. With him on the brief were Henry David Almond, Andrew Mercer Treaster, Daniel Robert Wilson and Sylvia Yun Chu Chen.

Before: Mark A. Barnett, Judge Consol.

OPINION AND ORDER

Mark A. Barnett, Judge.

ABB, Inc. ("Plaintiff" or "ABB") and Hyosung Corporation ("Hyosung") each challenge certain aspects of the final results of the U.S. Department of Commerce's ("Commerce") second administrative review of the antidumping duty order on large power transformers from the Republic of Korea for the period of review ("POR") August 1, 2013, to July 31, 2014 ("POR 2").1 Large Power Transformers from the Republic of Korea, 81 Fed. Reg. 14, 087 (Dep't Commerce March 16, 2016) (final results of antidumping duty admin. review; 2013-2014) ("Final Results"), CJA 1; PJA 1; PR 205; ECF No. 73-1; and accompanying Issues and Decision Mem., A-580-867 (Mar. 8, 2016) ("I&D Mem."), CJA 2; PJA 2; PR 198; ECF No. 73-1.

ABB argues that "Commerce failed to deduct U.S. commission expenses from constructed export price ('CEP') and instead added the U.S. commission expense to normal value, " and that it "improperly granted both respondents a commission offset to normal value" for commissions on U.S. sales incurred in the United States. Confidential Pl.'s Mem. of Law in Supp. of Mot. for J. on the Agency R. ("ABB's MJAR") at 2, ECF No. 41-2. ABB also argues that "Commerce failed to cap the revenues [Hyundai Heavy Industries Co., Ltd. and Hyundai Corporation USA (collectively, "Hyundai")] included in its gross unit prices for subject merchandise for sales-related services that were separately purchased by the customer by the amount of the related expenses incurred by Hyundai on those services" and, as a result, Hyundai's constructed export price is "overstated" and its dumping margin is "understated." Id. at 4. Defendant has requested remand on the issues raised by ABB. Def.'s Resp. to Pl.'s Rule 56.2 Mots. for J. Upon the Agency R. ("Def.'s Resp.") at 11-12, ECF No. 50; see also Def.'s Suppl. Mem. Addressing Standard for Voluntary Remand ("Def.'s Suppl. Br."), ECF No. 79.

Hyosung argues that "Commerce's decision to use Hyosung's reported Korean domestic inland freight expenses as the [] cap for [its] reported inland freight revenue, when that revenue was made up primarily of U.S. inland freight revenue" is unsupported by substantial evidence and not in accordance with law. Confidential Mem. in Supp. of Consol. Pl. Hyosung's Rule 56.2 Mot. for J. Upon the Agency R. ("Hyosung's MJAR") at 10, ECF No. 40-2. Defendant argues that Commerce's decision to cap Hyosung's inland freight revenue by its domestic inland freight expenses is supported by substantial evidence and otherwise in accordance with law. Def.'s Resp. at 12-16.

The motions are fully briefed and the court heard oral argument on August 1, 2017. See Docket Entry, ECF No. 83. For the reasons discussed below, the court grants Defendant's request to remand the issues raised by ABB, and sustains Commerce's determination with respect to Hyosung's inland freight revenue cap.

Jurisdiction and Standard of Review

The court has jurisdiction pursuant to § 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2012), 2 and 28 U.S.C. § 1581(c) (2012).

The court will uphold an agency determination that is supported by substantial evidence and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i). "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. v. NLRB, 305 U.S. 197, 229 (1938)). It "requires more than a mere scintilla, " but "less than the weight of the evidence." Nucor Corp. v. United States, 34 CIT 70, 72, 675 F.Supp.2d 1340, 1345 (2010) (quoting Altx, Inc. v. United States, 370 F.3d 1108, 1116 (Fed. Cir. 2004)). In determining whether substantial evidence supports Commerce's determination, the 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.'" Nippon Steel Corp. v. United States, 337 F.3d 1373, 1379 (Fed. Cir. 2003) (quoting Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1562 (Fed. Cir. 1984)). However, that a plaintiff can point to evidence that detracts from the agency's conclusion or that there is a possibility of drawing two inconsistent conclusions from the evidence does not preclude the agency's finding from being supported by substantial evidence. Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927, 933 (Fed. Cir. 1984) (citing Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 619-20 (1966)). The court may not "reweigh the evidence or . . . reconsider questions of fact anew." Downhole Pipe & Equip., L.P. v. United States, 776 F.3d 1369, 1377 (Fed. Cir. 2015) (quoting Trent Tube Div., Crucible Materials Corp. v. Avesta Sandvik Tube AB, 975 F.2d 807, 815 (Fed. Cir. 1992)); see also Usinor v. United States, 28 CIT 1107, 1111, 342 F.Supp.2d 1267, 1272 (2004) (citation omitted) (the court "may not reweigh the evidence or substitute its own judgment for that of the agency.").

Separately, the two-step framework provided in Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842-45 (1984), guides judicial review of Commerce's interpretation of the antidumping and countervailing duty statutes. See Nucor Corp. v. United States, 414 F.3d 1331, 1336 (Fed. Cir. 2005).

Discussion

I. Defendant's Remand Request

Defendant requests that the court remand Commerce's determination with respect to two issues: (1) Commerce's treatment of Hyundai's and Hyosung's (collectively "respondents") U.S. commissions, and (2) Commerce's treatment of Hyundai's sales related revenue. Def.'s Resp. at 11-12; Def.'s Suppl. Br. at 2-3. ABB supports Defendant's request, see generally Confidential Pl.'s Reply Br. ("ABB's Reply"), ECF No. 71, but both respondents oppose the remand request.[3]

When an agency determination is challenged in the courts, the agency may "request a remand (without confessing error) in order to reconsider its previous position" and "the reviewing court has discretion over whether to remand." SKF USA Inc. v. United States, 254 F.3d 1022, 1029 (Fed. Cir. 2001) (citations omitted). Remand is appropriate "if the agency's concern is substantial and legitimate, " but "may be refused if the agency's request is frivolous or in bad faith." Id.

Commerce's concerns are substantial and legitimate. In its motion for judgment on the agency record, ABB argues that Commerce improperly added U.S. commission expenses to normal value when it should have deducted them from the CEP, and improperly granted to both respondents commission offsets to normal value for commissions on U.S. sales incurred in the United States. ABB's MJAR at 2. Referencing Commerce's remand redetermination in the first administrative review of the antidumping duty order on LPT's from Korea, 4 Defendant acknowledges that Commerce recently has reconsidered its practice on U.S. commissions and explains that it seeks remand to "reconsider whether it is...

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