ABB, Inc. v. United States

• Decision Date: 10 October 2017
• Docket Number: Slip Op. 17–137,Court No. 15–00108
• Parties: ABB, INC., Plaintiff, v. UNITED STATES, Defendant, and Hyundai Heavy Industries Co., Ltd., Hyundai Corporation USA, Hyosung Corporation, and Hico America Sales and Technology, Inc., Defendant–Intervenors.
• Court: U.S. Court of International Trade

273 F.Supp.3d 1186

ABB, INC., Plaintiff,

v.UNITED STATES, Defendant,andHyundai Heavy Industries Co., Ltd., Hyundai Corporation USA, Hyosung Corporation, and Hico America Sales and Technology, Inc., Defendant–Intervenors.

Slip Op. 17–137

Court No. 15–00108

United States Court of International Trade.

October 10, 2017

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 M. 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 Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Franklin E. White, Jr., Assistant Director. Of Counsel was James Henry 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-intervenor 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 defendant-intervenors Hyosung Corporation and HICO America Sales and Technology, Inc. With him on the brief were Daniel Robert Wilson, Henry David Almond, Andrew Mercer Treaster, and Sylvia Yun Chu Chen.

OPINION

Barnett, Judge:

This case comes before the court following the Department of Commerce's ("Commerce") redetermination on remand in the first administrative review of the antidumping duty order on large power transformers from the Republic of Korea ("Korea"), for the period of review ("POR") February 16, 2012, through July 31, 2013 ("POR 1"). Confidential Final Results of Redetermination Pursuant to Court Remand ("Remand Results"), ECF No. 104–1;¹ see also ABB Inc. v. United States (ABB I ), 40 CIT ––––, 190 F.Supp.3d 1159 (2016).²

In ABB I , the court directed Commerce to "further address the sequencing of certain of [Hyundai Heavy Industries Co., Ltd. and Hyundai Corporation USA's (collectively "Hyundai") ] documents in the record," and "defer[red] ruling on the issue of whether Commerce should have applied facts available or [adverse facts available ("AFA") ] in calculating Hyundai's dumping margin with respect to the discrepancies in the sequencing of Hyundai's documents alleged by ABB." ABB I , 190 F.Supp.3d at 1164, 1184. The court also directed Commerce to "further explain its treatment of the respondents' U.S. commissions, the record basis for such treatment, whether such U.S. commissions result in the granting of commission offsets, and the legal and factual basis for the granting or denial of the commission offsets." Id.

Upon consideration of the court's remand instructions, Commerce issued a supplemental questionnaire to Hyundai on November 1, 2016, to which Hyundai responded on November 10, 2016. See Remand Results at 6 and nn.27, 28. Commerce issued a draft redetermination on December 8, 2016, and all parties submitted comments in response. Remand Results at 6. Commerce filed its final remand redetermination with the court on February 2, 2017. See generally Remand Results. Based upon Hyundai's response to the supplemental questionnaire, Commerce found that Hyundai sufficiently explained and clarified the sequencing of certain of its sales documents. Id. at 16–22. No party challenges Commerce's redetermination on this issue.

Commerce also found that the "respondents' U.S. commissions were incurred in the United States" and declined to "grant[ ] home market commission offsets to Hyosung and Hyundai," explaining that "when [ ] commission expenses on U.S. sales are incurred in the United States and there are no commission expenses in the home market, which is the case here, such commission expenses are treated as [constructed export price or] CEP selling expenses and the commission expenses and allocated profit get deducted from the price used to establish CEP, and [ ] there are no home market commission offsets granted." Id. at 39. Both Hyosung and Hyundai (together "respondents") challenge Commerce's redetermination on this issue. See generally Hyosung's Comments on Remand Results ("Hyosung's Comments in Opp'n"), ECF No. 110; Def.–Ints.' Comments in Opp'n to the Final Results of Redetermination Pursuant to Court Remand ("Hyundai's Comments in Opp'n."), ECF. No. 111. ABB supports Commerce's redetermination. See generally Plaintiff ABB, Inc.'s Comments in Supp. of the Results of Remand Determination ("ABB's Comments in Supp."), ECF No. 115.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to § 516A(a)(2)(B)(i) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(i) (2012),³ and 28 U.S.C. § 1581(c). 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).

DISCUSSION

I. The Sequencing of Certain of Hyundai's Documents

In briefing its original motion to the court, ABB had argued that a number of Hyundai's sales documents for specific sales contained discrepancies in their dates. Conf. Pl.'s Mem. of Law in Supp. of Mot. for J. on the Agency R. ("Pl.'s Mem.") at 46, ECF No. 45–1. ABB had raised this issue during the administrative proceeding and Commerce "acknowledged that Hyundai did not address the sequencing of documents, but concluded that this was an issue that normally would have been resolved through supplemental questionnaires." ABB I , 190 F.Supp.3d at 1181. Given that Commerce recognized that questions existed as to Hyundai's reported data, the court remanded the sequencing issue so that Commerce could further address the sequencing of certain of Hyundai's sales documents. Id. at 1182, 1184. Familiarity with the more detailed discussion of this issue in ABB I is assumed.

In light of the court's remand instructions, Commerce requested, and Hyundai provided, explanations for the sequencing of the documents. Hyundai explained that it had a "back-to-back" sales process whereby Hyundai Heavy Industries Co., Ltd. ("HHI") concluded initial contracts with an affiliated middleman "well before the shipment of the transformers to the United States" and then "HHI issued invoices directly to Hyundai USA and later formalized the agreement in pro forma contracts." Remand Results at 17. At the time of shipment, Hyundai "prepare[d] a commercial invoice, which reflected the agreement in principle ... regarding the transfer price for the transformer," but "the contracts [were] not finalized until the division of the scope of work between the entities ha[d] been agreed upon." Id. Hyundai noted that there were "instances [in which] the preparation of the contract ... was delayed," but that this was not "problematic given [the companies'] close corporate relationship, their agreement in principle, and the confirmation of the transfer price in the commercial invoices." Id. Further, Hyundai acknowledged that there were instances in which contracts were "revised ... to reflect change orders from the ultimate U.S. customers." Id. Hyundai supported its assertions with "copies of the initial contracts, contracts between HHI and Hyundai USA (including revised contracts), commercial invoices, and customs entry documents, along with [a] worksheet [ ] show[ing] the initial contract dates ... for the U.S. sales identified/requested by [Commerce]." Id. at 18.

Commerce found that "Hyundai sufficiently addressed the discrepancies in sequencing of certain of its documents for certain U.S. sales," and that it has "no remaining questions as to the reliability of Hyundai's reporting of U.S. sales." Id. at 18–19. No party challenges these findings before the court, and Hyundai requests that these findings be affirmed. See generally Def.–Ints.' Comments in Supp. of the Final Results of Redetermination Pursuant to Court Remand, ECF No. 117. On remand, Commerce addressed the sequencing issues it was required to address and, in the absence of any further challenge to the agency's determination in that regard, the court will sustain Commerce's redetermination findings on the issue of Hyundai's document sequencing, including its decision not to apply facts available or AFA.⁴

II. Hyundai and Hyosung's U.S. Commission Expenses

In briefing its original motion to the court, ABB had argued that Commerce erred in granting Hyundai and Hyosung a home market commission offset related to commissions on sales made in the United States. Pl.'s Mem. at 47–52; see also ABB I , 190 F.Supp.3d at 1182. In ABB I , the court ruled that Commerce had not adequately explained its treatment of respondents' commissions and remanded the issue for further clarification. 190 F.Supp.3d at 1182–84.

In its redetermination, Commerce concluded that Hyosung and Hyundai's U.S. commissions were incurred in the United States and that there were no commission expenses in the home market. Remand Results at 39. Commerce determined that these U.S. commission expenses should be treated as CEP selling expenses and deducted from the U.S. sales price along with the allocated profit. Id. Additionally, Commerce did not grant a commission offset to normal value (or "NV"). See id. at 32. Hyosung challenges Commerce's redetermination, arguing that the agency went beyond the court's remand instructions when it revised its factual findings on where Hyosung's commissions were incurred and that its new, three-step methodology for determining where commissions are incurred is "results-oriented" and contradicts its previous position. Hyosung's Comments in Opp'n at 1–3. Hyundai also challenges Commerce's redetermination, arguing that "den[ying the] commission offset based on where the commission was ‘incurred’ " is contrary to the governing statute and regulations. See Hyundai's Comments in Opp'n. at 3–6.

Defendant responds that...