China Steel Corp. v. United States

• Decision Date: 06 August 2019
• Docket Number: Slip Op. 19-106,Court No. 17-00152
• Citation: 393 F.Supp.3d 1322
• Parties: CHINA STEEL CORP., Plaintiff, v. UNITED STATES, Defendant, and ArcelorMittal USA LLC, Nucor Corp., and SSAB Enterprises LLC, Defendant-Intervenors.
• Court: U.S. Court of International Trade

393 F.Supp.3d 1322

CHINA STEEL CORP., Plaintiff,

v. UNITED STATES, Defendant,andArcelorMittal USA LLC, Nucor Corp., and SSAB Enterprises LLC, Defendant-Intervenors.

Slip Op. 19-106

Court No. 17-00152

United States Court of International Trade.

August 6, 2019

Jeffrey M. Winton, Law Office of Jeffrey M. Winton PLLC, of Washington, DC, argued for Plaintiff.

Vito S. Solitro, Trial Attorney, 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 Tara K. Hogan, Assistant Director. Of Counsel on the brief was Paul Keith, Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, DC.

Paul C. Rosenthal, Kelley Drye & Warren, LLP, of Washington, DC, argued for Defendant-Intervenor ArcelorMittal USA LLC. With him on the brief were R. Alan Luberda, David C. Smith, Jr., Melissa M. Brewer, Joshua R. Morey, and Heather N. Doherty.

Alan H. Price, Tessa V. Capeloto, Adam M. Teslik, Christopher B. Weld, Laura El-Sabaawi, Maureen E. Thorson, Stephanie M. Bell, and Timothy C. Brightbill, Wiley Rein LLP, of Washington, DC, for Defendant-Intervenor, Nucor Corporation.

Roger B. Schagrin, Christopher T. Cloutier, Elizabeth J. Drake, John W. Bohn, and Paul W. Jameson, Schagrin Associates, of Washington, DC, for Defendant-Intervenor SSAB Enterprises LLC.

OPINION and ORDER

Eaton, Judge:

Plaintiff China Steel Corporation ("Plaintiff" or "China Steel") moves for judgment on the agency record, challenging the United States Department of Commerce's ("Commerce" or the "Department") amended final determination in the antidumping investigation of certain carbon and alloy steel cut-to-length plate from Taiwan. See Certain Carbon and Alloy Steel Cut-To-Length Plate From Taiwan , 82 Fed. Reg. 16,372 (Dep't Commerce Apr. 4, 2017) ("Final Determination"), amended by Certain Carbon and Alloy Steel Cut-To-Length Plate From Austria, Belg., Fr., the Fed. Rep. of Ger., It., Japan, the Rep. of Korea, and Taiwan , 82 Fed. Reg. 24,096 (Dep't Commerce May 25, 2017) ("Amended Final Determination") and accompanying Issues and Dec. Mem. (Mar. 29, 2017), P.R. 427 ("Final IDM"). The court has jurisdiction under 19 U.S.C. § 1516a(a)(2)(B)(i) (2012) and 28 U.S.C. § 1581(c) (2012).

On April 8, 2016, domestic producers ArcelorMittal USA LLC ("ArcelorMittal" or "Petitioner"), Nucor Corporation, and SSAB Enterprises, LLC each filed an antidumping duty petition covering steel from various countries, including Taiwan. Thereafter, on May 5, 2016, Commerce published the notice of initiation of its less-than-fair-value investigation. See Certain Carbon and Alloy Steel Cut-To-Length Plate From Austria, Belg., Braz., Fr., the Fed. Rep. of Ger., It., Japan, the Rep. of Korea, the People's Rep. of China, S. Afr., Taiwan, and the Rep. of Turk. , 81 Fed. Reg. 27,089 (Dep't Commerce May 5, 2016) ("Initiation of Investigation"). The scope of the investigation covered products including "certain carbon and alloy steel hot-rolled or forged flat plate products not in coils, whether or not painted, varnished, or coated with plastics or other non-metallic substances (cut-to-length plate)." Final Determination, 82 Fed. Reg. at 16,374, App. I.

On June 7, 2016, the Department limited the respondents selected for individual investigation to two mandatory respondents: Plaintiff China Steel, and Shang Chen Steel Co., Ltd. ("Shang Chen"). See Certain Carbon and Alloy Steel Cut-to-Length Plate From Taiwan , 81 Fed. Reg. 79,420 (Dep't Commerce Nov. 14, 2016) ("Preliminary Determination"); Respondent Selection Mem. (June 7, 2016), P.R. 88 at 5.

China Steel is a Taiwanese producer and exporter of the subject steel plate, and first objects both to Commerce's application of adverse facts available ("AFA"),¹ and to Commerce's rejection of a supplemental questionnaire response containing unrequested data. Next, Plaintiff contends that Commerce erred when it applied AFA to some of the company's cost of production data and when it used that AFA-adjusted data in its difference-in-merchandise ("DIFMER") adjustment to normal value. Plaintiff also claims entitlement to a post-sale home-market price adjustment. Finally, it argues that Commerce's decision was unfairly prejudged by a conflict of interest on the part of the Secretary of the Department, Wilbur Ross, who was formerly associated with Petitioner and Defendant-Intervenor ArcelorMittal. See Pl.'s Rev. Br. Supp. Mot. J. Agency R., ECF No. 65 ("Pl.'s Br."); see also Pl.'s Reply, ECF No. 61.

Because Commerce erred when it based part of its DIFMER analysis, and thus its subsequent adjustment, on AFA-adjusted data, the Amended Final Determination is remanded. Since Plaintiff's other arguments lack merit, Commerce's determination, as to the remaining issues, is sustained.

BACKGROUND

Where goods are being sold at less than fair value, Commerce imposes an antidumping duty "equal to the amount by which the normal value exceeds the export price (or the constructed export price) for the merchandise."² 19 U.S.C. § 1673.

During this investigation, the Department compared

all products produced and sold by China Steel in Taiwan during the [period of investigation] that fit the description in the "Scope of Investigation" section of the accompanying Federal Register notice to be foreign like products for purposes of determining appropriate product comparisons to U.S. sales. We compared U.S. sales to sales made in the home market, where appropriate. Where there were no sales of identical merchandise in the home market made in the ordinary course of trade to compare to U.S. sales, we compared U.S. sales to sales of the most similar foreign like product made in the ordinary course of trade.

Final IDM at 19. When appropriate, Commerce makes various adjustments to normal value, including the difference-in-merchandise ("DIFMER") adjustment for physical variations between products. See 19 U.S.C. § 1677b(a)(6)(C)(ii) ; 19 C.F.R. § 351.411 (2017).

Normal value, in the context of a market economy country³ such as Taiwan, is generally based on the prices of sales in the home market. See 19 U.S.C. § 1677b(a)(1)(B)(i). Commerce disregards home-market sales that were made at less than the cost of production, and bases normal value on the remaining sales, or, if none remain, the merchandise's constructed value. Id. § 1677b(b)(1).

In this investigation, after reviewing the company's cost of production information, Commerce eventually concluded that China Steel's home-market sales were a suitable basis for normal value. See Final IDM at 20 ("[W]e used home market sales as the basis for [normal value] for China Steel."). Commerce, however, calculated normal value employing AFA for some of China Steel's cost of production data. Further, Commerce rejected China Steel's preferred version of its cost of production database. Thereafter, Commerce determined that it had made a ministerial error by not using AFA-adjusted data as the basis of its DIFMER adjustment to normal value. Its correction of that claimed error resulted in an increased weighted-average dumping margin for China Steel.

I. Commerce's Preliminary Determination

Commerce issued its initial questionnaire on June 9, 2016. See China Steel Quest. (June 9, 2016), P.R. 96. In its Section D (cost of production) questionnaire response, Plaintiff provided its cost reporting method and cost data file, denominated as COP1. See China Steel Sec. D Narrative Resp. (July 28, 2016), P.R. 195 at 19-21; China Steel Sec. D Exs. (July 28, 2016), P.R. 198, Apps. D-19, D-20.

The Department identified several errors in China Steel's COP1 database. See Prelim. Dec. Mem. (Nov. 4, 2016), P.R. 358 at 16 ("Prelim. Dec. Mem."). Accordingly, on September 16, 2016, it issued a supplemental questionnaire to Plaintiff asking for additional information concerning Plaintiff's Section D response.⁴ Sec. D Suppl. Quest. (Sept. 16, 2016), P.R. 298 ("Suppl. Quest. I").

China Steel filed its Section D supplemental response on October 11, 2016. See China Steel Suppl. Quest. Sec. D Resp. (Oct. 11, 2016), P.R. 324 ("First COP2 Resp."). In addition to providing the information specifically requested by the Department, however, it made additional, unrequested, revisions to its cost data file (denominated as COP2).⁵ Prelim. Dec. Mem. at 16 (noting that Plaintiff's additional revisions "were not made in response to a supplemental questionnaire or otherwise solicited by the Department").

In its Preliminary Determination, Commerce found all of China Steel's reported cost data, "unreliable for use." Prelim. Dec. Mem. at 16. The statute provides that Commerce shall use facts available "[i]f ... necessary information is not available on the record, or ... an interested party or any other person ... withholds information that has been requested by [Commerce]" or "significantly impedes a proceeding ...." 19 U.S.C. § 1677e(a)(1)-(2)(A), (C). Here, Commerce found that China Steel's changes, between COP1 and COP2, to certain product-matching control numbers ("CONNUMs") affected the calculation of the cost of production and rendered all of China Steel's reported cost information unusable. See Prelim. Dec. Mem. at 16 (emphasis added) ("[T]he Department preliminarily finds that China Steel failed to provide requested information in the form and manner requested and by the deadlines established by the Department. By revising its costs so extensively and significantly, and by doing so in such close proximity to the statutory date^{[6 ]} for the [P]reliminary [D]etermination, China Steel has also significantly impeded the proceeding.").

Where Commerce determines that the use of facts available is warranted, it must make the requisite additional finding that a party has "failed to cooperate by not acting to the best of its ability to comply with a request for information"...