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

• Decision Date: 12 December 2000
• Docket Number: SLIP OP. 00-160.,No. 98-11-03135.,98-11-03135.
• Citation: 127 F.Supp.2d 207
• Parties: ALLIED TUBE AND CONDUIT CORP., Plaintiff, v. UNITED STATES, Defendant, and Ferro Union, Inc. and Asoma Corporation, Defendant-Intervenors.
• Court: U.S. Court of International Trade

127 F.Supp.2d 207

ALLIED TUBE AND CONDUIT CORP., Plaintiff, v. UNITED STATES, Defendant, and Ferro Union, Inc. and Asoma Corporation, Defendant-Intervenors.

SLIP OP. 00-160.

No. 98-11-03135.

United States Court of International Trade.

December 12, 2000.

Schagrin Associates (Roger B. Schagrin), Washington, D.C., for Plaintiffs.

David W. Ogden, Assistant Attorney General of the United States; David M. Cohen, Director; Katherine A. Barski, Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice; Brian Peck, Attorney Advisor, Office of the Chief Counsel, United States Department of Commerce, for Defendant, of counsel.

Mayer, Brown, & Platt (Simeon M. Kriesberg, Carol J. Bilezi, Peter C. Choharis, Andrew A. Nicely), Washington, D.C., for Defendant-Intervenors.

OPINION

CARMAN, Chief Judge.

Plaintiff moves for judgement on agency record pursuant to U.S. CIT R. 56.2., contending it is entitled to judgement as a matter of law because, in the administrative proceeding below, Commerce, rendered two decisions that were unsupported by record evidence and were otherwise not in accordance with law. Certain Welded Carbon Steel Pipes and Tubes from Thailand, 63 Fed.Reg. 55578 (October 16, 1998) (Final Results). First, Plaintiff asserts Commerce incorrectly used the invoice date rather than the contract date as the date of sale for subject merchandise exported to the United States during the period of review. In the administrative proceeding below, Plaintiff claimed this resulted in: (1) the evaluation of export sales that did not actually take place during the period of review; (2) the distortion of the true value of these exports due to the currency devaluation present in Thailand at the time the evaluated sales occurred; and (3) the distortion of the dumping margin. See Final Results, 63 Fed.Reg. at 55587. Second, Plaintiff asserts that Commerce based its decision not to collapse the Affiliated Companies on insufficient record evidence. Defendants oppose Plaintiff's motion.

BACKGROUND

On April 24, 1997, Commerce initiated an administrative review of antidumping orders covering certain welded carbon steel pipes and tubes¹ that were imported from Thailand between March 1, 1996 and February 29, 1997. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 62 Fed.Reg. 19988 (April 24, 1997). Pursuant to this review, Commerce sent Saha Thai questionnaires seeking information pertaining to, inter alia, the dates of sale for all exports of subject merchandise to the United States.² Commerce also sent each of the Affiliated Companies questionnaires relating to the interlocking nature of their business relationship. Saha Thai was the only Affiliated Company to respond to Commerce's questionnaires. Commerce verified the information provided by Saha Thai and, in doing so, generated additional evidence from both Saha Thai's corporate records and interviews with several Saha Thai managers. Based upon the totality of this evidence, Commerce made three findings relevant to this case. First, Commerce found that, because Saha Thai's export sales were frequently subjected to quantity changes greater than those permitted by contract, the material terms of sale were not actually finalized until the date of invoice. See Final Results, 63 Fed.Reg. at 55587. As such, the invoice date was the true date of sale for subject merchandise exported to the United States during the period of review. Second, Commerce found that there was sufficient record evidence upon which to base its collapsing decision, thereby negating the need to rely upon alternative facts available. See id. Third, based upon the record evidence Commerce found that the Affiliated Companies did not present a significant potential for price or production manipulation and, therefore, should not be collapsed. See id.

On December 8, 1999, Plaintiff timely filed a complaint with this Court challenging: (1) Commerce's use of invoice date as opposed to contract date as the date of sale for subject merchandise entered during the period of review; (2) Commerce's refusal to collapse the Affiliated Companies; (3) Commerce's failure to utilize alternative facts available against the Affiliated Companies; and (4) Commerce's refusal to use draw an adverse inference from these alternatively available facts. On April 27, 1999, Plaintiff filed a motion for judgement on agency record pursuant to U.S. CIT R. 56.2, to which the Defendants objected. Both the underlying litigation and this motion are properly before this Court pursuant to 28 U.S.C. § 1581(c) and sections 516(a)(2)(A) and (B)(iii) of the Tariff Act of 1930, 19 U.S.C. §§ 1301, et seq., as amended by, 19 U.S.C. §§ 1516(a)(2)(A) and (B)(iii) (Tariff Act).

CONTENTIONS OF THE PARTIES

A. Plaintiff's Contentions

Plaintiff contends that Commerce's decisions are unsupported by substantial evidence and are otherwise not in accordance with law. The following sections detail each of the Plaintiff's contentions individually.

1. Date of Sale:

Plaintiff makes two arguments with respect to the appropriate date of sale: (1) because the material terms of sale were established by contract, the use of invoice date rather than contract date as the date of sale is contrary to law and to Commerce's regulations; (2) the record lacks substantial evidence to support Commerce's finding that changes frequently were made beyond the contractually agreed quantity tolerance levels. Plaintiff argues the record clearly demonstrates that the contract date better reflects the date on which the material terms of sale were established and, thus, Commerce should have found that the contract date is the appropriate date of sale.

(a) The Date of Sale is the Date on Which the Material Terms of Sale are Established:

At the time of the administrative review, Commerce's date of sale determination was guided by its then current practice and a proposed regulation that was designed to codify this practice. See 19 C.F.R. § 351.401(i).³ Both Commerce's practice and its proposed regulation established invoice date as the presumptive date of sale. Relying on its finding that Saha Thai's export sales frequently were subject to quantity changes greater than that permitted by contract, Commerce determined that there was no reason to deviate from its presumptive use of invoice date as the date of sale. Accordingly, Commerce determined that the invoice date was the appropriate date on which to base its comparison of Saha Thai's home market and export sales.

Plaintiff argues that this determination was improper. Although acknowledging that Commerce's practice during the period of review was to presumptively use the invoice date as the date of sale, Plaintiff argues that this presumption should be disregarded if a different date "better reflect [ed] the date on which the exporter or producer establishes the material terms of sale." 19 C.F.R. § 351.401(i) (emphasis added). Plaintiff notes that although Commerce "prefers to use invoice date as the date of sale," it is "mindful that this preference does not require the use of invoice date if the facts of the case indicate a different date better reflects the time at which the material terms of sale were established." Circular Welded Non-Alloy Steel Pipe from the Republic of Korea, 63 Fed.Reg. 32833, 32835 (June 16, 1998). Rather, "both the Proposed and Final Regulations speak to giving the Department flexibility to abandon the use of invoice date." Id. Thus, instead of simply adhering to the invoice date as the presumptive date of sale, Plaintiff argues that Commerce should have established the date of sale as the date on which the essential terms of the sale, specifically quantity and price, were actually finalized. Al Tech Specialty Steel Corp. v. United States Consol. Court No. 97-08-01328, 1998 WL 661461 (CIT Sept. 24, 1998).

In support of its argument, Plaintiff notes that Commerce has frequently deviated from the presumptive use of invoice date as the date of sale where the facts required. Specifically, where the facts demonstrated that "[first] price and quantity are established, then the factory produces the subject merchandise, and finally, after a significant period of time, the product is shipped and an invoice is issued," Commerce has regularly held the contract date to be the actual date of sale. Circular Welded Non-Alloy Steel Pipe from the Republic of Korea, 62 Fed.Reg. 64559, 64560 (Dec. 8, 1997). In such cases, Plaintiff argues Commerce has consistently instructed respondents to "report as the date of sale the date that will reasonably approximate the time at which the material terms of sale are set." Id.

In sum, Plaintiff argues that neither Commerce's prior practice nor its proposed regulation requires the invoice date be used as the date of sale. Rather, Commerce is free to disregard the invoice date where it can be demonstrated that the essential terms of sale were established on a different date. Plaintiff argues, in the present case, the essential terms of sale were established on the contract date.

(b) The Record Evidence is Insufficient to Support a Finding that Date of Invoice is the Proper Date of Sale:

As stated, Plaintiff argues Commerce is not required to use the invoice date as the date of sale if "satisfactory evidence" demonstrates that the material terms of sale are established on a different date. Plaintiff contends the record provides more than satisfactory evidence that the material terms of sale were established on the contract date.

Plaintiff's argument centers on the information and documents submitted to Commerce by Saha Thai. In addition to providing questionnaire responses, Saha Thai provided Commerce with a sample contract and related sales documents. Plaintiff challenges Commerce's analysis of these documents and questions the factual findings and legal conclusions drawn therefrom. Specifically, Plaintiff challenges...