Borusan Mannesmann Boru Sanayi Ve Ticaret A.S. v. United States

• Citation: 426 F.Supp.3d 1395
• Decision Date: 07 January 2020
• Docket Number: Slip Op. 20-4,Consol. Court No. 19-00056
• Parties: BORUSAN MANNESMANN BORU SANAYI VE TICARET A.S., Plaintiff, American Cast Iron Pipe Company, et al., Consolidated Plaintiffs, v. UNITED STATES, Defendant, American Cast Iron Pipe Company, et al., Defendant-Intervenors, and Borusan Mannesmann Boru Sanayi ve Ticaret A.S., Consolidated Defendant-Intervenor.
• Court: U.S. Court of International Trade

426 F.Supp.3d 1395

BORUSAN MANNESMANN BORU SANAYI VE TICARET A.S., Plaintiff,

American Cast Iron Pipe Company, et al., Consolidated Plaintiffs,

v.UNITED STATES, Defendant,American Cast Iron Pipe Company, et al., Defendant-Intervenors,andBorusan Mannesmann Boru Sanayi ve Ticaret A.S., Consolidated Defendant-Intervenor.

Slip Op. 20-4

Consol. Court No. 19-00056

United States Court of International Trade.

January 07, 2020

Julie C. Mendoza, Donald B. Cameron, R. Will Planert, Brady W. Mills, Mary S. Hodgins, Eugene Degnan, Sabahat Chaudhary, and Ragan W. Updegraff, Morris, Manning & Martin L.L.P., of Washington, D.C., for Plaintiff and Consolidated Defendant-Intervenor Borusan Mannesmann Boru Sanayi ve Ticaret A.S.

Timothy C. Brightbill, Adam M. Teslik, Elizabeth S. Lee, Enbar Toledano, Maureen E. Thorzon, Laura El-Sabaawi, and Tessa V. Capeloto, Wiley Rein L.L.P., of Washington, D.C., for Consolidated Plaintiffs and Defendant-Intervenors American Cast Iron Pipe Company, Berg Steel Pipe Corporation, Berg Spiral Pipe Corporation, Dura-Bond Industries, Stupp Corporation, Greens Bayou Pipe Mill LP, JSW Steel (USA) Inc., Skyline Steel, Trinity Products LLC, and Welspun Tubular LLC.

Eric J. Singley, Trial Attorney, and L. Misha Preheim, Assistant Director, Civil Division, Commercial Litigation Branch, U.S. Department of Justice, of Washington, D.C., for Defendant United States of America. With them on the brief were Joseph H. Hunt, Assistant Attorney General, and Jeanne E. Davidson, Director, Civil Division, Commercial Litigation Branch, U.S. Department of Justice, of Washington, D.C. Of counsel on the brief was Reza Karamloo, Senior Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C.

OPINION AND ORDER

Restani, Judge:

Before the court are motions for judgment on the agency record pursuant to USCIT Rule 56.2, in a consolidated action challenging a final determination of the United States Department of Commerce ("Commerce"). The final determination at issue results from Commerce's investigation into allegations that domestic sales of certain Large Diameter Welded Pipe ("LDWP") from the Republic of Turkey were made at less-than-fair-market-value ("LTFV") between January 1, 2017 and December 31, 2017. See Large Diameter Welded Pipe from Canada, Greece, India, the People's Republic of China, the Republic of Korea, and the Republic of Turkey: Initiation of Less-Than-Fair-Value Investigations, 83 Fed. Reg. 7,154 (Feb. 20, 2018) ("Initiation of Investigation"); Large Diameter Welded Pipe from the Republic of Turkey: Final Determination of Sales at Less Than Fair Value, 84 Fed. Reg. 6,362, 6,362 (Feb. 27, 2019) (the "Final Results"); Large Diameter Welded Pipe from the Republic of Turkey: Amended Final Affirmative Antidumping Duty Determination & Antidumping Duty Order, 84 Fed. Reg. 18,799, 18,799 -800 (May 2, 2019) (the "Antidumping Order").

Plaintiff, Borusan Mannesmann Boru Sanayi ve Ticaret A.S. ("BMB"), and Consolidated Plaintiffs American Cast Iron Pipe Company ("American Cast Iron"), Berg Steel Pipe Corporation ("Berg Steel"), Berg Spiral Pipe Corporation ("Berg Spiral"), Dura-Bond Industries ("Dura-Bond"), Stupp Corporation ("Stupp"), Greens Bayou Pipe Mill LP, JSW Steel (USA) Inc. ("Greens Bayou"), Skyline Steel ("Skyline"), Trinity Products LLC ("Trinity"), and Welspun Tubular LLC ("Welspun")¹ (collectively, the "Domestic Producers"), challenge certain aspects of the Final Determination and the Antidumping Order as unsupported by substantial evidence or otherwise not in accordance with law. Defendant, the United States of America (the "government"), asks the court to sustain the Final Determination and resulting Antidumping Order.

GENERAL BACKGROUND

On January 17, 2018, the Domestic Producers filed antidumping duty ("AD") and countervailing duty ("CVD") petitions with Commerce and the International Trade Commission (the "Commission"), alleging, inter alia, that "imports of welded pipe from ... Turkey are being, or are likely to be, sold in the United States at less than fair value," and that "such imports are materially injuring or threatening material injury to, the domestic industry producing welded pipe in the United States." Initiation of Investigation, 83 Fed. Reg. at 7,155. Commerce initiated an AD investigation of welded pipe from Turkey for the period January 1, 2017 through December 31, 2017 (the "POI"). Id. After Commerce published its Final Results, the Commission informed Commerce that the LTFV imports of LDWP materially injure a United States industry resulting in an antidumping duty order. See Antidumping Order, 84 Fed. Reg. at 18,799 (setting the BMB duty deposit rate at 5.11%).

On May 2, 2019, BMB commenced the instant action against the United States pursuant to 19 U.S.C. § 1516a(a)(2)(A)(i)(II). Summons, ECF No. 1 (May 2, 2019). In its Complaint, BMB claims that the Antidumping Order is unsupported by substantial evidence or is otherwise contrary to law because Commerce determined incorrectly: (1) the dates of BMB's U.S. sales, (2) BMB's post-sale price adjustment, (3) the applicability of and the existence of a particular market situation ("PMS") in the Republic of Turkey, and (4) that BMB purchased its freight and related services from an affiliate company in a non-arm's-length transaction. Compl. ¶¶ 42-51, ECF No. 7 (May 3, 2019).

On May 29, 2019, the Domestic Producers commenced a related action against the United States pursuant to 19 U.S.C. § 1516a(a)(2)(A)(i)(II). See Am. Cast Iron Pipe Co. v. United States, Ct. No. 19-80, Summons, ECF No. 1 (May 29, 2019). In their Complaint, the Domestic Producers allege that the Antidumping Order is unsupported by substantial evidence or is otherwise contrary to law because Commerce determined incorrectly: (1) the proper methodology to adjust BMB's reported costs due to PMS, (2) BMB's post-sale price adjustment, and (3) a reduction to BMB's freight and warehousing services upward adjustment for U.S. sales transactions. Am. Cast Iron Pipe Co. v. United States, Ct. No. 19-80, Compl. ¶¶ 21-28, ECF No. 11, (June 19, 2019). The actions were consolidated, and BMB and the Domestic Producers now move for judgment on the agency record on each of the foregoing issues. See Mot. Brief in Supp. of Pl. Borusan Mannesmann Boru Sanayi ve Ticaret A.S.'s ("BMB") in support of its Mot. for J. on the Agency R. at 2, ECF No. 38 (July 15, 2019) ("BMB Br."); Dom. Prod. Br. at 2-3. The government opposes both motions. See Def.'s Resp. to Pls.' Mots. For J. upon the Agency R., ECF No. 48 (Sept. 25, 2019) ("Gov. Br.").

For the reasons that follow, the court will sustain (1) Commerce's determinations that BMB is entitled to a post-sale price adjustment for certain of its home-market sales, but not the manner of calculation, and (2) Commerce's determination as to BMB's freight and related expenses for all of its sales. The court will remand this matter to Commerce for reconsideration (1) of the date of U.S. sales and (2) the amount of the post-sale price adjustment and to eliminate any adjustment to the calculation of sales below cost of production on account of a PMS.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) and section 516A of the Tariff Act of 1930 (the "Act"), codified as amended, 19 U.S.C. § 1516a(a)(2) (2012).² The court sustains Commerce's results in an AD investigation unless they are "unsupported by substantial evidence on the record, or otherwise not in accordance with law[.]" 19 U.S.C. § 1516a(b)(1)(B)(i). See also Fujitsu Gen. Ltd. v. United States, 88 F.3d 1034, 1038 (Fed. Cir. 1996).

STATUTORY FRAMEWORK

In an AD investigation, Commerce must determine whether the subject merchandise is being sold, or is likely to be sold, at a price that is less than its fair value in the United States. 19 U.S.C. § 1675(a)(2)(A). Where Commerce uses export price methodology for sales to the United States, as it did here, see Decision Memorandum for the Preliminary Determination in the Less-Than-Fair-Value Investigation of Large Diameter Welded Pipe from the Republic of Turkey, A-489-833, POI 1/1/2017-12/31/2017 at 5-7 (Dep't Commerce Aug. 20, 2018) ("Prelim. I & D Memo"); Issues and Decision Memorandum for the Final Affirmative Determination in the Less-Than-Fair-Value Investigation of Large Diameter Welded Pipe from the Republic of Turkey, A-489-833, POI 1/1/2017-12/31/2017 at 3 (Dep't Commerce Feb. 19, 2019) ("I & D Memo"), Commerce must make a "fair comparison" between "the export price" (i.e., the price at which the subject merchandise is first sold in the United States) and "normal value" (i.e., the price at which the subject merchandise is sold in the exporting country, or the "home market") to ascertain whether an importer is dumping its goods in the United States. 19 U.S.C. §§ 1677a and 1677b. This results in the Less Than Fair Value ("LTFV") margin used in duty assessment. Commerce may use sales to third countries or constructed value if the pool of usable home market sales is insufficient for comparison purposes. 19 U.S.C. § 1677b(a). For home-market sales, which Commerce used here to calculate normal value ("NV"), the price used is the price "for consumption in the exporting country, in the usual commercial quantities and in the ordinary course of trade and, to the extent practicable, at the same level of trade as the export price[.]" 19 U.S.C. § 1677b(a)(1)(B)(i).

The "normal value" of such merchandise equals the price "at a time reasonably corresponding to the time of the sale" that Commerce uses "to determine the export price." 19 U.S.C. § 1677b(a)(1)(A). Nevertheless, where Commerce "has reasonable grounds to believe or suspect" that the home market price used to calculate normal value "represent[s] less than the cost of production of that product," Commerce must determine whether the sales are "made at less than the cost of production" and remove such sales...