Golden Dragon Precise Copper Tube Grp., Inc. v. United States
| Decision Date | 19 August 2015 |
| Docket Number | Slip Op. 15 - 89,Consol. Court No. 14-00116 |
| Parties | GOLDEN DRAGON PRECISE COPPER TUBE GROUP, INC., HONG KONG GD TRADING CO., LTD., GOLDEN DRAGON HOLDING (HONG KONG) INTERNATIONAL, LTD., and GD COPPER (U.S.A.) INC., Plaintiffs, v. UNITED STATES, Defendant, and CERRO FLOW PRODS., LLC, WIELAND COPPER PRODUCTS, LLC, MUELLER COPPER TUBE PRODUCTS, INC, and MUELLER COPPER TUBE CO., INC., Intervenor-Defendants. |
| Court | U.S. Court of International Trade |
Before: R. Kenton Musgrave, Senior Judge
OPINION AND ORDER[ second (2011-2012) administrative review of antidumping duty order on seamless copper pipe and tube from the People's Republic of China for further proceedings.]
Kevin M. O'Brien and Yi Fang, Baker & McKenzie, LLP, of Washington DC, for the plaintiffs.
Jennifer E. LaGrange, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for defendant. With her on the brief were Stuart F. Delery, Assistant Attorney General, Jeanne E. Davidson, Director, and Claudia Burke, Assistant Director. Of Counsel on the brief was Daniel J. Calhoun, Senior Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C.
Thomas M. Beline, Jack A. Levy, and Jonathan M. Zielinski, Cassidy Levy Kent (USA) LLP, of Washington DC, for the defendant-intervenors.
Musgrave, Senior Judge: This consolidated case represents separate actions filed by nominal plaintiffs ("Golden Dragon" or "GD") and nominal intervenor-defendants ("Mueller") challenging aspects of the second (2011-2012) administrative review compiled by the defendant United States Department of Commerce, International Trade Administration ("Commerce" or "the Department") sub nom. Seamless Refined Copper Pipe and Tube From the People's Republic of China ("PRC"), 79 Fed. Reg. 23324 (Apr. 28, 2014), subsequently amended, 79 Fed. Reg. 47091 (Aug. 12, 2014). In addressing Golden Dragon and Mueller's separate motions for judgment, the court concludes that remand is necessary in accordance with the following.
Jurisdiction is here pursuant to 28 U.S.C. §1581(c) and 19 U.S.C. §1516a(a)(2)(B)(iii), as previously alluded.1 The court will uphold an administrative determination unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. §1516a(b)(1)(B)(i). This standard requires that Commerce thoroughly examine the record and "articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made." Motor Vehicle Manufacturers Association of the United States, Inc. v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29, 43 (1983) (internal quotation omitted).
Further to Seamless Refined Copper Pipe and Tube From Mexico and the PRC, 75 Fed. Reg. 71070 (Nov. 22, 2010) (antidumping duty order), Commerce initiated the second administrative review of the antidumping duty order. Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requestfor Revocation in Part, 77 Fed. Reg. 77017, 77025 (Dec. 31, 2012). Commerce selected Golden Dragon as a mandatory respondent. PDoc 13 at 5.
Via Seamless Refined Copper Pipe and Tube from the PRC, 78 Fed. Reg. 69820 (Nov. 21, 2013) () and an accompanying preliminary decision memorandum ("PDM"), PDoc 126, (together, "Preliminary Results"), for its primary surrogate country, Commerce preliminarily selected Thailand because: (1) it met both criteria set forth in section 1677b(c)(4) above; (2) it provided the most specific, contemporaneous, and high-quality data of all potential surrogate countries; and (3) it offered financial statements that conformed to criteria that Commerce uses when choosing the best information available -- i.e., "financial statements that are complete, publicly available, and contemporaneous with the [period of review ("POR")]." Id.; see also Prelim. Surrogate Country Memo at 6-10, PDoc 134. Commerce did not opt for the Ukraine because Golden Dragon did "not provide[ ] sufficient information to demonstrate that Ukraine [was] a reliable source of publicly available surrogate data," and the record "contain[ed] no Ukrainian data to value copper slag and ash." PDoc 134 at 9.
Commerce calculated a preliminary weighted-average dumping margin of 3.55 percent for Golden Dragon using the average-to-average (A-A) comparison methodology for Golden Dragon's U.S. sales. See Preliminary Results, 78 Fed. Reg. at 69821; PDM at 12-14. In deciding whether to use the default A-A methodology or an alternative methodology, e.g., average-to-transaction (A-T), to calculate Golden Dragon's dumping margin, Commerce conducted its differential pricing analysis across quarterly periods of the POR. Id.
The differential pricing analysis involved two stages. Id. at 13. In the first stage, Commerce determined whether there was a pattern of prices that differed significantly by purchaser, region, or time period by: (1) applying the "Cohen's d" test to compare the mean of a test group of net prices (e.g., Golden Dragon's net prices in one quarter) and the mean of a comparison group of net prices (e.g., the export prices or constructed export prices of comparable merchandise in the other quarters) and (2) applying the ratio test to assess the extent of the significant price differences for all sales as measured by the Cohen's d test. Id. Because both tests together demonstrated the existence of a pattern of prices that differed significantly by time period, Commerce proceeded to the second stage. Id. at 14.
In the second stage, Commerce determined whether the A-A methodology could account for such price differences by testing whether application of the alternative A-T methodology, as opposed to the A-A methodology, yielded a meaningful difference in the weighted-average dumping margin. Id. Commerce concluded that: (1) "38.9 percent of Golden Dragon's export sales pass the Cohen's d test"; and (2) this value of total sales supported consideration of applying the alternative average-to-transaction (A-T) method to those sales identified as passing the Cohen's d test; but (3) after comparing the weighted-average dumping margins calculated using the A-A and alternative methods, "there was not a meaningful difference." Id. Thus, for its preliminary determination, Commerce used the default A-A methodology. Id.
Because the PRC is a non-market economy country, Commerce was required to base normal value on the value of factors of production used in producing the merchandise, referencing the best information available in surrogate market economy countries that were: (1) at a level of economic development comparable to that of the PRC and (2) significant producers of comparable merchandise. See PDM at 11, discussing 19 U.S.C. § 1677b(c)(1) & (4). For this matter, Commerce selected Thailand as the primary surrogate country to value the factors of production. Id., citing 19 C.F.R. §351.408(c)(2).
Both Golden Dragon and Mueller submitted case and rebuttal briefs addressing the preliminary results. PDocs 148-50, 151. Relevant here, Golden Dragon argued that: (1) Commerce should have selected Ukraine, rather than Thailand, and the surrogate value country; (2) Commerce's differential pricing analysis was flawed because the primary elements of Golden Dragon's U.S. prices (the fabrication charge and metal pricing formula) were fixed by contract, Golden Dragon did not intend to engage in targeted dumping, and Commerce should have inquired into the "underlying reasons" or "causes" for price fluctuations rather than simply apply the differential pricing analysis; and (3) Commerce should have used monthly prices, rather than quarterly prices, in its differential pricing analysis because Golden Dragon priced its products based on monthly London Metal Exchange prices. PDocs 148-50 at 4-19. For its part, Mueller challenged the ocean freight surrogate values selected by Commerce. PDoc 151 at 8-10.
Commerce published the final results in April 2014. 79 Fed. Reg. at 23324-26; PDoc 176. Commerce continued to find that Thailand was the appropriate surrogate value country. Issues and Decision Memorandum for the Final Results ("IDM") at 14-16, PDoc 162. Commerce observed that Golden Dragon had corrected the deficiencies with the Ukrainian data that had been identified in the preliminary decision, but then Commerce noted several other defects with the Ukrainian financial statements, concluding that Thailand is a more appropriate selection. Id. at 15.
Concerning the issue of targeted dumping, Commerce agreed with Golden Dragon that the "contractually-determined monthly fluctuation in copper prices" created "a logical basis for grouping sales by month when examining whether there are prices that differ significantly by time periods." Id at 13-14. Commerce did not, however, agree that it was required to consider the reasons for price fluctuations. Commerce thus again applied its differential pricing analysis, this time on a monthly basis, and concluded that: (1) "51.2 percent of Golden Dragon's export sales pass the Cohen's d test"; (2) this value of total sales supported consideration of applying the A-T method to those sales identified as passing the Cohen's d test; and (3) after comparing the weighted-average dumping margins calculated using both the A-A and this alternative method, "the change in the two results exceed[ed] the 25 percent threshold which the Department considers meaningful." Id. at 3. Commerce then used the mixed alternative method, in which it applied the A-T method for U.S. sales that passed the Cohen's d test and the A-A method for U.S. sales that did not pass the Cohen's d test. Final Results Analysis Memo, PDoc 161 at 2-3. Using this alternative method, Commerce calculated a dumping margin of 4.50...
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