Coal. of Am. Flange Producers v. United States

Citation517 F.Supp.3d 1378
Decision Date13 May 2021
Docket NumberSlip Op. 21-59,Court No. 18-00225
CourtU.S. Court of International Trade
Parties COALITION OF AMERICAN FLANGE PRODUCERS, Plaintiff, v. UNITED STATES, Defendant.

Daniel B. Pickard, Stephanie M. Bell, and Cynthia C. Galvez, Wiley Rein LLP, of Washington, DC, for plaintiff.

Geoffrey M. Long, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for defendant. With him on the brief were Jeffrey Bossert Clark, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Tara K. Hogan, Assistant Director. Of counsel was Kirrin Ashley Hough, Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, DC.

OPINION

Katzmann, Judge:

The court returns to a challenge to the U.S. Department of Commerce's ("Commerce") classification of a challenged sale as an export sale in an antidumping ("AD") investigation and to its associated 19 U.S.C. § 1677b(a)(1)(C) finding of home market non-viability. Before the court is Commerce's Final Results of Redetermination Pursuant to Court Remand, Oct. 6, 2020, ECF No. 56 ("Remand Results"), which the court ordered in Coalition of American Flange Producers v. United States, 44 CIT ––––, 448 F. Supp. 3d 1340 (2020) (" Coalition I"). In Coalition I, the court remanded so that Commerce could further explain certain aspects of its calculation of normal value in determining an AD duty margin for a foreign producer and exporter, Chandan Steel Limited ("Chandan"), in the importation of stainless steel flanges from India into the United States. Id. at 1345. On remand, with explanation, Commerce continued to conclude that the challenged sale should be excluded from Chandan's home market sales database and that Chandan did not have a viable home market for normal value purposes. Remand Results at 1. Plaintiff Coalition of American Flange Producers ("Coalition"), an ad hoc association whose members manufacture stainless steel flanges in the United States, again challenges this determination. Compl. at 2, Dec. 6, 2018, ECF No. 9; Pl.’s Comments on the Results of Remand Redetermination, Nov. 6, 2020, ECF No. 60 ("Pl.’s Br."). Defendant the United States ("the Government") requests that the court affirm Commerce's Remand Results. Def.’s Reply in Supp. of the Dep't of Commerce's Remand Redetermination, Feb. 2, 2021, ECF No. 67 ("Def.’s Br."). The court affirms.

BACKGROUND

The court set out the relevant legal and factual background of the proceedings in further detail in its previous opinion, Coalition I, 448 F. Supp. 3d at 1345–50. Information relevant to the instant opinion is set forth below.

On August 16, 2018, Commerce issued Stainless Steel Flanges from India: Final Affirmative Determination of Sales at Less Than Fair Value and Final Affirmative Critical Circumstances Determination, 83 Fed. Reg. 40,745 (Dep't Commerce Aug. 16 2018), P.R. 411 ("Final Determination") and accompanying issues and decision memorandum (Dep't Commerce Aug. 10, 2018), P.R. 406 ("IDM"). As explained in the court's previous opinion, " [t]o determine whether a sale is a home market sale, Commerce objectively assesses whether, given the particular facts and circumstances, a producer would have known that the merchandise will be sold domestically or for export.’ If Commerce concludes that a producer knew or had reason to know, at the time of the sale, that the merchandise was destined for export, Commerce may exclude the sale from the home market database." Coalition I, 448 F. Supp. 3d at 1346 (first quoting Stupp Corp. v. United States, 43 CIT ––––, ––––, 359 F. Supp. 3d 1293, 1310 (2019) ; and then citing INA Walzlager Schaeffler KG v. United States, 21 C.I.T. 110, 123–25, 957 F. Supp. 251, 264–65 (1997) ). Based on its application of this knowledge test, Commerce determined that certain reported sales should not be included in Chandan's home market sales database and, therefore, Chandan's home market of India was not viable as a basis for determining normal value. IDM at 37. Commerce accordingly used Chandan's reported third-country market sales to determine its AD duty margin. Id. During the investigation, Coalition challenged Commerce's determination to exclude one sale from Chandan's home market database -- the "challenged sale."1 Letter from Wiley Rein LLP to Sec'y Commerce, re: Stainless Steel Flanges from India: Case Brief Regarding Chandan Steel at 4 (June 19, 2018), P.R. 401, C.R. 443. In its Final Determination, Commerce relied on two provisions in the contract for the challenged sale to determine that it was not a home market sale: (1) a provision requiring packaging of export quality and (2) a provision requiring the merchandise to be stamped with a [[ ]] logo. IDM at 37. As a result of using third-country market sales rather than Chandan's home market, Commerce calculated an AD margin of 19.16 percent for Chandan. Final Determination at 40,476.

Coalition filed this action to challenge Commerce's Final Determination related to the challenged sale. Summons, Nov. 6, 2018, ECF No. 1; Compl. Specifically, Coalition argued that "(1) Commerce's determination that the challenged sale was for export is unsupported by substantial evidence because Commerce failed to provide an adequate explanation for its findings and failed to demonstrate a rational connection between the facts found and the determination made; and (2) Commerce did not act in accordance with law because it failed to undertake a diligent inquiry in response to Coalition's comments." Coalition I, 448 F. Supp. 3d at 1351. On June 17, 2020, the court remanded Commerce's determination that the challenged sale was for export because that determination was not adequately explained and thus not supported by substantial evidence, but (2) concluded that Commerce did meet its obligation to conduct a diligent inquiry. Id. The court also noted that it took no position "on the correctness of Commerce's determination" on remand. Id. Commerce filed its Remand Results with the court on October 6, 2020. Remand Results.2 Coalition filed its comments on the Remand Results on November 6, 2020. Pl.’s Br. The Government replied on February 2, 2021. Def.’s Br.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction over this action pursuant to 28 U.S.C. § 1581(c) and 19 U.S.C. § 1516a(a)(2)(B)(i). The standard of review in this action is set forth in 19 U.S.C. § 1516a(b)(1)(B)(i) : "[t]he court shall hold unlawful any determination, finding or conclusion found ... to be unsupported by substantial evidence on the record, or otherwise not in accordance with law." A conclusion based on substantial evidence and in accordance with law requires Commerce to examine the record and provide an adequate explanation for its findings such that the record demonstrates a rational connection between the facts accepted and the determination made. See Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983) ; Jindal Poly Films, Ltd. of India v. United States, 43 CIT ––––, ––––, 365 F. Supp. 3d 1379, 1383 (2019). Commerce's findings may be supported by substantial evidence despite the existence of "contradictory evidence or evidence from which conflicting inferences could be drawn," Suramerica de Aleaciones Laminadas, C.A. v. United States, 44 F.3d 978, 985 (Fed. Cir. 1994) (quoting Universal Camera Corp. v. NLRB, 340 U.S. 474, 487, 71 S.Ct. 456, 95 L.Ed. 456 (1951) ), so long as that evidence is addressed and explained, CS Wind Vietnam Co. v. United States, 832 F.3d 1367, 1373–74 (Fed. Cir. 2016). The court also reviews the Remand Results "for compliance with the court's remand order." See Beijing Tianhai Indus. Co. v. United States, 39 CIT ––––, ––––, 106 F. Supp. 3d 1342, 1346 (2015) (citations omitted).

DISCUSSION

The court remanded to Commerce for explanation of material record evidence related to the challenged sale that was unaddressed and may have undermined its decision to exclude the challenged sale from the home market database. Specifically, the court determined that "Commerce was obligated to discuss on the record ... (1) the export quality packaging provision in Chandan's [[ ]], (2) Chandan's treatment of the agreement's logo provision, and (3) the final payment and delivery terms of the sale." Coalition I, 448 F. Supp. 3d at 1352–53. The court concluded that "the record in this case contained both evidence from which conflicting inferences concerning Chandan's knowledge may have been drawn and arguments from Coalition raising these issues. In light of such evidence and arguments, Commerce was obligated to provide a reasoned analysis of the choices made in support of its determination." Id. at 1356 (citations omitted).

On remand, Commerce further explained its decision to exclude the challenged sale from Chandan's home market database and addressed each piece of evidence as directed by the court. Commerce noted that it "evaluated the totality of the evidence on the record, with particular attention to the evidence highlighted by the CIT." Remand Results at 6. In addition to the evidence highlighted in its Final Determination and discussed in the court's previous opinion, Commerce explained that other considerations regarding the challenged sale supported its decision to exclude that sale from Chandan's home market database. Commerce further analyzed the initial negotiation terms, circumstances surrounding the negotiations, and the buyer's main business of "sales of traded merchandise ... focused on exports." Id. at 6–7. Commerce noted that "[w]hile no one single factor may be considered dispositive," it found that, "when considered in its totality, the record supports [its] conclusion regarding Chandan's knowledge of the ultimate destination for the merchandise" from the challenged sale. Id. at 8.

Coalition again challenges Commerce's determination by claiming that its decision...

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