Allied Tube and Conduit Corp. v. U.S.

• Decision Date: 18 January 2001
• Docket Number: Slip Op. 01-03.,Court No. 99-11-00715.
• Citation: 132 F.Supp.2d 1087
• Parties: ALLIED TUBE AND CONDUIT CORP., Plaintiff, v. The UNITED STATES, Defendant, and Saha Thai Steel Pipe Co., Ltd., et al., Defendant-Intervenors.
• Court: U.S. Court of International Trade

132 F.Supp.2d 1087

ALLIED TUBE AND CONDUIT CORP., Plaintiff, v. The UNITED STATES, Defendant and Saha Thai Steel Pipe Co., Ltd., et al., Defendant-Intervenors.

Slip Op. 01-03.

Court No. 99-11-00715.

United States Court of International Trade.

January 18, 2001.

Schagrin Associates, Washington, DC, (Roger B. Schagrin), for plaintiff.

David W. Ogden, Assistant Attorney General, Washington, DC, David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC (Michele D. Lynch), Brian K. Peck, Office of Chief Counsel for Import Administration, United States Department of Commerce, for defendant, of counsel.

O'Melveny & Myers LLP, Washington, DC (Peggy A. Clarke and Greyson Bryan), for defendant-intervenors Saha Thai Steel Pipe Co., Ltd., Ferro Union, Inc., and Asoma Corporation.

OPINION

RESTANI, Judge.

This matter is before the court on a motion for judgment on the agency record pursuant to USCIT Rule 56.2, brought by Allied Tube and Conduit Corp. ("Allied Tube" or "plaintiff"), the petitioner in the underlying antidumping administrative review. Defendant-intervenors Saha Thai Steel Pipe Co., Ltd. ("Saha Thai" or "respondent"), Ferro Union, Inc., and Asoma Corporation (collectively "defendant-intervenors") appear in order to support the determination of the United States Department of Commerce ("Commerce" or the "Department") in the underlying administrative proceeding. At issue is Certain Welded Carbon Steel Pipes and Tubes from Thailand, 64 Fed.Reg. 56,759 (Dep't Comm.1999) (final determ.) [hereinafter "Final Results"].

Allied Tube challenges two of the Department's conclusions from the Final Results: (1) that the date of sale on which normal value is to be determined for Saha Thai's sales is the invoice date, and (2) that Saha Thai is entitled to a duty drawback adjustment to its export price, at an amount quantified based on the Department's selection of facts available. Commerce and defendant-intervenors urge this court to deny plaintiff's motion based on the following: (1) plaintiff's challenge to the identification of invoice date as the date of sale cannot overcome the agency's regulatory presumption in favor of invoice date, and (2) Saha Thai satisfied the Department's two-prong test for entitlement to duty drawback, notwithstanding certain of Saha Thai's inaccuracies, which were addressed in any event by Commerce's use of facts otherwise available.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (1994). In reviewing final determinations in antidumping duty investigations, this court will hold unlawful those determinations of Commerce found to be "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i) (1994).

DISCUSSION

I. Date of Sale

A. Facts

In response to the Department's initial questionnaire regarding the date of sale for Saha Thai's U.S. sales, respondent submitted to Commerce a representative group of sales documents. See Supplement to Section A Questionnaire Response (July 1, 1998), at Exh. 12, C.R. Doc. 3, Saha Thai App., Tab A. Saha Thai reported invoice date as the date of sale. See Section C Questionnaire Response (Aug. 3, 1998), at C-16 to 17, C.R. Doc. 7, Saha Thai App., Tab B, at C-16 to 17. Responding to an additional request for information regarding date of sale, Saha Thai reported that for sales to the company's principal U.S. customer, which accounted for two-thirds of U.S. sales,

the contract notes only the total quantity to be ordered. The specific quantity for each product is set subsequently. The exact quantity for each sale is not determined until the merchandise is shipped.

Supplemental Questionnaire Response (Sept. 23, 1998), at 13, C.R. Doc. 14, Def.'s App., Exh. 2, at 2.

The Department conducted a verification of Saha Thai's questionnaire responses during the week of January 25, 1999. See Verification Report (Feb. 25, 1999), at 1, C.R. Doc. 22, Saha Thai App., Tab E, at 1. Commerce confirmed during verification that Saha Thai's business records identified invoice date as the date of sale. See id. at 13, Saha Thai App., Tab E, at 13. Respondent also produced exhibits, reviewed by the Department, that included contracts, invoices and purchase orders for certain U.S. sales. See Verification Exhs. 21, 22, 23, in Pl.'s App., at 74-108, 109-123, 124-135, respectively. In response to Department questions about the export sales process, Saha Thai's export manager noted that the sales contracts establish quantities, but that customers submit purchase orders that indicate specific quantities to be supplied for each product and shipment. See Verification Report, at 20, Saha Thai App., Tab E, at 20. The sales contracts allow for deviations from the specified quantity of up to X %,¹ measured against the total quantity of goods in a purchase order (covering subject and non-subject merchandise), not against the quantity for individual products or shipments. See id. at 20, Saha Thai App., Tab E, at 20.

Based on its evaluation of Saha Thai's sales documentation, viewed in the context of the specific terms of respondent's sales contracts, the Department concluded that changes in material terms of sale, particularly quantity, occurred between purchase order date and invoice date. See Final Results, 64 Fed.Reg. at 56,768.

B. Analysis

The Department's date of sale determination is governed by 19 C.F.R. § 351.401(i) (2000).² Section 351.401(i) provides that Commerce will "normally" use the invoice date as the date of sale. A party seeking to have the invoice date deemed the date of sale is entitled to this regulatory presumption only if that party records the invoice date as the date of sale in the company's "records kept in the ordinary course of business." Id. Once a party's records reveal that it identifies the invoice date as the date of sale, the party seeking to establish a date of sale other than invoice date bears the burden of producing sufficient evidence to "satisf[y]" the Department that "a different date better reflects the date on which the exporter or producer establishes the material terms of sale." Id.

As elaborated by Department practice, a date other than invoice date "better reflects" the date when "material terms of sale" are established if the party shows that the "material terms of sale" undergo no meaningful change (and are not subject to meaningful change) between the proposed date and the invoice date. See, e.g., Issues & Decision Mem. to Certain Large Diameter Carbon and Alloy Seamless Standard, Line and Pressure Pipe from Mexico, 65 Fed.Reg. 39,358 (Dep't Comm. June 2000) (final determ.), at cmt. 2 [hereinafter "Issues Mem. to Pipe from Mexico"]; Issues & Decision Mem. to Circular Welded Non-Alloy Steel Pipe from Mexico, 65 Fed.Reg. 37,518 (Dep't Comm. June 2000) (final determ.), at Hylsa cmt. 1. Whatever else may constitute "material terms of sale," agency practice makes clear that price and quantity, at least, are such "material terms." See, e.g., Stainless Steel Sheet and Strip in Coils from the Republic of Korea, 64 Fed.Reg. 30,664, 30,679 (Dep't Comm.1999) (final determ.); Stainless Steel Sheet and Strip in Coils from Taiwan, 64 Fed.Reg. 30,592, 30,609 (Dep't Comm.1999) (final determ.). Therefore, if there is a change in price and/or quantity after the proposed date, and the Department fails to provide a rational explanation as to why such a change is not meaningful for date of sale analysis, then Commerce is bound under the regulation to employ invoice date as the date of sale. See Thai Pineapple Canning Indus. Corp., Ltd. v. United States, No. 98-03-00487, 2000 WL 174986, at *2 (CIT 2000).

Plaintiff in this case failed to cite sufficient evidence to compel a rejection of the regulatory presumption in favor of invoice date as the date of sale. Respondent Saha Thai's internal business records, as verified by the Department, identified the date of sale to be the invoice date. See Verification Report, at 13, Saha Thai App. Tab E, at 13. The presumption in favor of the invoice date was further strengthened by the changes in quantity observed by the Department between the purchase order date and the invoice or shipment date.³ See Date of Sale Memo (Aug. 11, 1999), at 3-4, C.R. Doc. 34, Pl.'s App., at 54-55.

Plaintiff emphasizes previous agency determinations suggesting that the date of sale may be other than the invoice date, notwithstanding changes in quantity, based on the fact that such quantity changes fell within tolerance limits specified in the relevant sales contracts. See Issues Mem. to Pipe from Mexico, at cmt. 2; Certain Welded Carbon Steel Pipes and Tubes from Thailand, 63 Fed.Reg. 55,578, 55,588 (Dep't Comm.1998) (final determ.). These findings do not dictate a similar result here, however, because plaintiff has not cited evidence establishing that the quantity changes between the purchase order date and the invoice date in this case were within the sales contracts' tolerance limits. Calculating Saha Thai's shipments of individual products (i.e., subject merchandise) to be within X % of the amount specified in the sales contracts and purchase orders,⁴ plaintiff argues that the changes in quantity relied upon by the Department are within the tolerance limits permitted by the contracts and therefore should not be considered meaningful changes for purposes of the agency's date of sale determination. The sales contracts, however, permitted shipments within X % of the contractually-specified quantity, measured in terms of all products in a purchase order (including subject and non-subject merchandise), not in terms of quantity per shipment of individual products.⁵ See Verification Report, at 20, Saha Thai App., Tab E, at 20. Because plaintiff failed to establish that the quantities shipped by respondent were within the tolerance limits, when viewed against the ...