Ellwood City Forge Co. v. United States
| Decision Date | 08 November 2022 |
| Docket Number | Slip Op. No. 22-122,Consol. Court No. 1:21-00077 |
| Citation | 600 F.Supp.3d 1281 |
| Parties | ELLWOOD CITY FORGE CO., Ellwood National Steel Co., Ellwood Quality Steels Co., and A. Finkl & Sons, Plaintiffs/Defendant-Intervenors, v. UNITED STATES, Defendant, and BGH Edelstahl Siegen GmbH, Defendant-Intervenor/Plaintiff. |
| Court | U.S. Court of International Trade |
Myles S. Getlan, Cassidy Levy Kent LLP, of Washington, DC, for Plaintiffs. With him on the brief were Jack A. Levy, Thomas M. Beline, James E. Ransdell, IV, and Nicole Brunda.
Sarah E. Kramer, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendant United States. With her on the brief were Brian M. Boynton, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, Commercial Litigation Branch, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, and Hendricks Valenzuela, Office of Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.
James Kevin Horgan, deKieffer & Horgan, PLLC, of Washington, DC, for Defendant-Intervenor. With him on the brief were Alexandra H. Salzman, Gregory Stephen Menegaz, and Marc Edward Montalbine.
Ellwood City Forge Company, Ellwood National Steel Company, Ellwood Quality Steels Company, and A. Finkl & Sons (collectively "Ellwood City" and "Plaintiffs") filed this case on February 26, 2021, under Section 516A of the Tariff Act of 1930, as amended. Plaintiffs challenge certain aspects of the final determination in the less-than-fair-value investigation of forged steel fluid end blocks (FEBs) from Germany issued by the U.S. Department of Commerce (Commerce). Specifically, Plaintiffs challenge Commerce's decision to issue verification questionnaires in lieu of conducting on-site verification, the results obtained from that procedure, the cost data on which Commerce relied, and Commerce's subsequent determination of a 3.82% dumping margin for BGH Edelstahl Siegen GmbH (BGH), a German producer of FEBs and mandatory respondent in this investigation. See Compl., ECF No. 6. In the companion consolidated case, No. 21-00079, BGH challenges Commerce's use of a particular market situation adjustment to the sales-below-cost test and what it refers to as the "inter-product zeroing" Commerce used in its differential pricing analysis. BGH Mot. for J. on the Agency R. at 3, ECF No. 23. Before the Court are both Motions for Judgment on the Agency Record. For the reasons set forth below, Ellwood City's Motion is DENIED , BGH's Motion is GRANTED in part, and the case is REMANDED to Commerce for further consideration consistent with this opinion.
The products at issue in this case are fluid end blocks produced in Germany for import into the United States. The International Trade Administration described the types of FEBs included in the scope:
Forged Steel Fluid End Blocks from The Federal Republic of Germany, India, and Italy: Initiation of Less-Than-Fair-Value Investigations , 85 Fed. Reg. 2,394, 2,399 Appendix I (Jan. 15, 2020) (describing the particular characteristics of FEBs included in this investigation), J.A. at 80,005, ECF No. 42.
The investigation at issue began on December 18, 2019, when Plaintiffs filed a petition with the Department of Commerce alleging that German producers were selling FEBs at less than fair market value in the United States. Forged Steel Fluid End Blocks from the Federal Republic of Germany, India, and Italy: Initiation of Less-than-Fair-Value Investigations , 85 Fed. Reg. 2,394 (Jan. 15, 2020). Commerce initiated an investigation on January 15, 2020, and published its Respondent Selection Memorandum identifying BGH Edelstahl Siegen GmbH as a mandatory respondent on February 4, 2020. Preliminary Decision Memorandum (PDM) at 3, J.A. at 82,877. Commerce sent BGH a standard initial questionnaire on February 10, 2020, requesting information about the German producer's sales in the United States and costs of production. Id. Between March 10, 2020, and April 28, 2020, BGH submitted responses to each section of the initial questionnaire. Id. at 4.
During the period that BGH was submitting its questionnaire responses, the World Health Organization officially classified COVID-19 as a pandemic. WHO Director-General's opening remarks at the media briefing on COVID-19 - 11 March 2020 , WORLD HEALTH ORGANIZATION (Mar. 11, 2020) https://bit.ly/WHORemarks. On March 15, 2020, the Department of Commerce issued an agency-wide memorandum prohibiting all travel not "mission-critical and pre-approved by senior bureau leadership." DEP'T OF COMMERCE , All Hands: Coronavirus Update (3-16-20) https://bit.ly/commercecoronavirus. The CDC issued a Level 4 travel advisory, urging all U.S. citizens to avoid international travel on March 31, 2020. CENTERS FOR DISEASE CONTROL AND PREVENTION , Global Level 4 Health Advisory: Do Not Travel (Mar. 31, 2020).
Given those pandemic-related disruptions, Commerce postponed the preliminary determination in the investigation by fifty days from March 26, 2020, to July 16, 2020. Forged Steel Fluid End Blocks from the Federal Republic of Germany, India and Italy: Postponement of Preliminary Determinations in the Less-Than-Fair-Value Investigations , 85 Fed. Reg. 17,042 (March 26, 2020). Meanwhile, Commerce continued to issue supplemental questionnaires to BGH between April and June of 2020. PDM at 4, J.A. at 82,879. With some extensions, BGH timely responded to those questionnaires. Id. Based on the initial information it had gathered from BGH, Commerce issued a Preliminary Affirmative Determination of Sales at Less Than Fair Value (SLTFV), assessing a preliminary zero percent dumping margin for BGH. Forged Steel Fluid End Blocks from Germany: Preliminary Affirmative Determination of Sales at Less Than Fair Value, Postponement of Final Determination, and Extension of Provisional Measures (Prelim. Determination), 85 Fed. Reg. 44,513, 44,514 (July 23, 2020).
On October 20, 2020, Ellwood City filed comments on Commerce's planned verification method. There, Ellwood City stated that it "appreciate[d] that Commerce [ ] indicated its intention to issue a questionnaire to BGH in lieu of performing an on-site verification." Pet'rs’ Req. That Commerce Include Specific Instructions in BGH Suppl. Questionnaire (Oct. 20, 2020), bar code 4042079-01, PR 310. Ellwood City then made a number of specific recommendations, including that "consistent with on-site verifications, Commerce should instruct BGH to support its responses with source documentation" and that Commerce should impose a one-week deadline for the verification questionnaire response because "BGH has been aware for nearly three months that Commerce would verify BGH's submitted information." Id.
Later that same day, Commerce issued a questionnaire "in lieu of performing an on-site verification." Letter to BGH, J.A. at 83,328, ECF No. 42. Commerce explained that the purpose of the questionnaire was "to probe information ... already submitted – not to obtain new information." Id. Thus, "the questions are similar to those that the Department of Commerce (Commerce) would normally ask during an on-site verification." Id. BGH requested an extension of time to complete the verification response, and Commerce ultimately granted a one-day extension while explaining that it could not grant a longer extension because it would frustrate the purposes of its chosen verification methodology. Letter Granting Extension, J.A. at 83,334, ECF No. 42. BGH submitted its response on October 28, 2020. J.A. at 83,336, ECF No. 42.
BGH and Ellwood City submitted administrative case briefs on November 9, 2020. IDM at 2, J.A. at 83,988, ECF No. 42. Ellwood City's submission repeatedly refers to the questionnaires as verification, calling the procedure "verification" and a "verification questionnaire." Administrative Case Br. at 3, ECF No. 48 (...
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