Corinth Pipeworks Pipe Indus. SA v. United States

• Docket Number: Slip Op. 23-65,Court No. 22-00063
• Decision Date: 28 April 2023
• Citation: 633 F.Supp.3d 1314
• Parties: CORINTH PIPEWORKS PIPE INDUSTRY SA and CPW America Co., Plaintiffs, v. UNITED STATES, Defendant, and The American Line Pipe Producers Association Trade Committee, Defendant-Intervenor.
• Court: U.S. Court of International Trade

633 F.Supp.3d 1314

CORINTH PIPEWORKS PIPE INDUSTRY SA and CPW America Co., Plaintiffs, v. UNITED STATES, Defendant,andThe American Line Pipe Producers Association Trade Committee, Defendant-Intervenor.

Slip Op. 23-65 Court No. 22-00063

United States Court of International Trade

April 28, 2023

Kristin H. Mowry and Bryan P. Cenko, Mowry & Grimson, PLLC of Washington, D.C., argued for Plaintiffs Corinth Pipeworks Pipe Industry S.A. and CPW America Co. With them on the briefs were Jeffrey S. Grimson and Jill A. Cramer.

Eric J. Singley, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice of Washington, D.C., argued for Defendant United States. With him on the brief were Brian M. Boynton, Principal Deputy Assistant Attorney General, Patricia M. McCarthy, Director, L. Misha Preheim, Assistant Director. Of counsel was Christopher Kimura, Attorney, U.S. Department of Commerce, Office of Chief Counsel for Trade Enforcement and Compliance of Washington, D.C.

Timothy C. Brightbill and Laura El-Sabaawi, Wiley Rein LLP of Washington, D.C., argued for Defendant-Intervenor American Line Pipe Producers Association Trade Committee.

OPINION

Gordon, Judge:

Plaintiffs Corinth Pipeworks Pipe Industry S.A. and CPW America Co. challenge the U.S. Department of Commerce's ("Commerce") final results of the first administrative review of the antidumping duty order covering large diameter welded pipe from Greece. See Large Diameter Welded Pipe from Greece, 87 Fed. Reg. 7,120 (Dep't of Commerce Feb. 8, 2022) ("Final Results"), and the accompanying Issues and Decision Memorandum (Dep't of Commerce Feb. 2, 2022), PR¹ 96 ("Decision Memorandum"); see also Large Diameter Welded Pipe from Greece, 84 Fed. Reg. 18,769 (Dep't of Commerce May 2, 2019).

Before the court is Plaintiffs' motion for judgment on the agency record under USCIT Rule 56.2. See Pls.' Am. Mot. for J. on the Agency R., ECF No. 48² ("Pls.' Br."); see also Def.'s Am. Resp. to Pls.' Mot. for J. on the Agency R., ECF No. 49; Def.-Intervenor Am. Line Pipe Producers Ass'n Trade Comm.'s Resp. Opp. Pls.' Mot. for J. on the Agency R., ECF No. 35; Pls.' Am. Reply in Supp. of Mot. for J. on the Agency R., ECF No. 50 ("Pls.' Reply"). The court has jurisdiction pursuant to Section 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2018),³ and 28 U.S.C. § 1581(c) (2018). For the reasons set forth below, the court sustains Commerce's Final Results.

I. Background

Plaintiff Corinth Pipeworks Pipe Industry S.A. ("Corinth") was the sole mandatory respondent, and indeed the sole producer and/or exporter of the subject merchandise, in the underlying administrative review.⁴ Final Results, 87 Fed. Reg. at 7,121; see also Large Diameter Welded Pipe from Greece, 86 Fed. Reg. 43,172 (Dep't of Commerce Aug. 6, 2021) ("Preliminary Results"), and the accompanying Preliminary Decision Memorandum (Dep't of Commerce July 30, 2021), PR 73 ("PDM"). The period of review was April 19, 2019 through April 30, 2020. PDM at 1.

Commerce issued its initial antidumping questionnaire to Corinth in July 2020, followed by two supplemental questionnaires in May and July 2021 respectively regarding Corinth's cost of production ("COP") and constructed value ("CV") data (Section D). Id. at 2. Corinth timely responded to both, but because its response to the second supplemental questionnaire came shortly before the issuance of the Preliminary Results, Commerce stated in the PDM that it would consider that response in the Final Results. Id. at 2.

In the initial questionnaire, Commerce directed Corinth to report per-unit COP and CV figures based on the company's "actual costs incurred . . . during the period of review ["POR"], as recorded under [its] normal accounting system." Dep't of Commerce Questionnaire (July 17, 2020) at D-2, PR 11. Commerce emphasized that "[t]he CONNUM[⁵] specific COP and CV figures [provided] . . . must reconcile to the actual costs reported in your company's normal cost accounting system and to the accounting records used by your company to prepare its financial statements." Id. at D-10. To accomplish this goal, Commerce provided a sample reconciliation for Corinth to follow, directing Corinth to take "a 'top-down' approach (e.g., financial statements to per-unit cost), starting with cost of sales from the financial statements and proceeding step-by-step down through cost of manufacturing [("COM")] for the reporting period to the summation of the reported per-unit costs." Id. at D-12.

Corinth responded timely to the initial questionnaire, but Commerce found that the company's response regarding Section D contained deficiencies. See Corinth's Initial Sec. D Questionnaire Resp. (Sept. 21, 2020), PR 34-35; Decision Memorandum at 12 (noting that Corinth's reconciliation was not submitted as "one complete reconciliation" as requested, but rather, "two separate reconciliations for different parts of the POR," and determining that the reconciliation provided "did not reconcile the expenses per the audited income statement to its extended cost database," "relied on amounts that included the counting of product costs at both the semifinished stage and the finished product stage, resulting in 'double counted' costs from intermediate stages," and "did not show the total extended POR COM from the COP database").

Accordingly, Commerce issued its first supplemental questionnaire, directing Corinth, "[a]s requested, [to] provide worksheets in the format shown below, reconciling the total POR COM to the total of the per-unit manufacturing costs submitted to Commerce" and to "[i]dentify and quantify" various reconciling items. Dep't of Commerce Suppl. Sec. D Questionnaire (May 27, 2021) at 5, PR 55 (emphasis added); see also Decision Memorandum at 12-13. Corinth's first supplemental response again included two partial reconciliations instead of a single complete reconciliation, which still "failed to exclude the first quarter 2019 costs" and was also missing other reconciling items. See Corinth's First Suppl. Sec. D Questionnaire Resp. (June 22 & 25, 2021), PR 62-63; Decision Memorandum at 13.

Commerce then issued a second supplemental Section D questionnaire, warning Corinth that its "section D and the supplemental D responses lacked adequate descriptions of [its] response methodology." Dep't of Commerce Second Suppl. Sec. D Questionnaire ("Second Suppl. Quest.") (July 15, 2021) at 4, PR 65. Commerce further explained that "[the company's] extensive calculation worksheets and reconciliation are difficult to interpret because of the lack of adequate descriptions as to the methodology used in the normal records or in [its] reporting to Commerce." Id. Commerce asked Corinth to explain, inter alia, why Corinth found it necessary to include reported costs for months outside the POR and why the company was "unable to generate a single COM report from its system." Id. at 3-4. Commerce also requested explanations for certain steps, lines of data, and definitions contained in Corinth's submitted worksheets. Id. at 4.

In its second supplemental response, Corinth again insisted that it could not combine multiple years in its SAP (cost accounting system) reporting, and thus needed to submit separate reconciliations. Corinth's Second Suppl. Sec. D Questionnaire Resp. ("Corinth's Second Suppl. Quest. Resp.") (July 22, 2021) at 13, PR 69; see also Decision Memorandum at 13. Further, Corinth confirmed that it could not "generate a single COM report from its system because doing so would double or triple count costs when the product passed through multiple phases." Corinth's Second Suppl. Quest. Resp. at 2; Decision Memorandum at 14. Corinth stated, however, that "[t]o demonstrate that Commerce has complete cost data for this review which reconciles to [Corinth's] audited financial statements, [Corinth] prepared and submitted an annotated version of its cost reconciliation exhibit for 2019," ostensibly showing "a 'road map' for the worksheets and source data contained in the exhibit." Corinth's Second Suppl. Quest. Resp. at 14 ("On each sheet of the annotated version of [the exhibit, Corinth] inserted a brief explanation of what information the sheet presents, the source of the data, and how the sheet relates to the overall reconciliation.").

In the Preliminary Results, Commerce conducted the less than fair value ("LTFV") analysis by comparing the constructed export price of Corinth's U.S. sales to normal value based on CV. PDM at 7, 14 ("[19 U.S.C. § 1677b(e)] provides that CV shall be based [in part] on the sum of the cost of materials and fabrication for the imported merchandise . . . ."). Based on that analysis, Commerce "preliminarily determine[d] that sales of the subject merchandise [had] not been made at prices less than normal value," and that Corinth's estimated weighted-average dumping margin was 0.00 percent. Id. at 1; Preliminary Results, 86 Fed. Reg. at 43,172.

After issuing the Preliminary Results and reviewing Corinth's questionnaire responses in their entirety, Commerce attempted "to piece together a meaningful reconciliation" itself "[u]sing the voluminous worksheets, datafiles, and report downloads submitted by Corinth." Decision Memorandum at 14; see Cost of Production and Constructed Value Calculation Adjustments for Final Results (Feb. 2, 2022), PR 97 ("Final Results Calculation Memorandum"). From its analysis, Commerce identified four flaws in Corinth's cost responses: (1) that Corinth "failed to provide a proper cutoff of accounting periods and one complete POR cost reconciliation worksheet"; (2) that, even after the removal of amounts designated for exclusion, the total TOTCOM (total cost of manufacturing) costs "still include[d] 'double counted' costs in the COP/CV file reported by [Corinth] per their SAP [cost accounting] system"; (3) that, once the double counted costs were removed, "the amounts contained in the COP/CV file include...