Husteel Co. v. United States

• Decision Date: 07 June 2021
• Docket Number: Consol. Court No. 19-00112,Slip Op. 21-70
• Citation: 520 F.Supp.3d 1296
• Court: U.S. Court of International Trade
• Parties: HUSTEEL CO., LTD., Plaintiff, and Nexteel Co., Ltd. et al., Consolidated Plaintiffs, v. UNITED STATES, Defendant, and Maverick Tube Corporation et al., Defendant-Intervenors and Consolidated Defendant-Intervenors.

520 F.Supp.3d 1296

HUSTEEL CO., LTD., Plaintiff,andNexteel Co., Ltd. et al., Consolidated Plaintiffs,

v. UNITED STATES, Defendant,andMaverick Tube Corporation et al., Defendant-Intervenors and Consolidated Defendant-Intervenors.

Slip Op. 21-70

Consol. Court No. 19-00112

United States Court of International Trade.

June 07, 2021

Donald B. Cameron, Morris, Manning & Martin LLP, of Washington, DC, for plaintiff Husteel Co., Ltd. Also on the brief were Brady W. Mills, Julie C. Mendoza, R. Will Planert, Mary S. Hodgins, and Eugene Degnan.

J. David Park, Arnold & Porter Kaye Scholer LLP, of Washington, DC, for consolidated plaintiffs Hyundai Steel Company and NEXTEEL Co., Ltd. Also on the briefs were Henry D. Almond, Daniel R. Wilson, Leslie C. Bailey, and Kang Woo Lee.

Jeffrey M. Winton, Winton & Chapman PLLC, of Washington, DC, for consolidated plaintiff SeAH Steel Corporation. Also on the briefs was Amrietha Nellan.

Robert R. Kiepura, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for defendant. Also on the brief were Bryan M. Boynton, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and L. Misha Preheim, Assistant Director. Of Counsel was Reza Karamloo, Senior Counsel, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

Elizabeth J. Drake, Roger B. Schagrin, Christopher T. Cloutier, and Luke A. Meisner, Schagrin Associates, of Washington, DC, for defendant-intervenors California Steel Industries and Welspun Tubular LLC USA.

Gregory J. Spak, White & Case, LLP, of Washington, DC, for defendant-intervenors Maverick Tube Corporation and IPSCO Tubulars Inc. Also on the briefs were Frank J. Schweitzer, Kristina Zissis, and Matthew W. Solomon.

OPINION AND ORDER

Kelly, Judge:

Before the court is the U.S. Department of Commerce's ("Commerce") remand redetermination in the 2016–2017 administrative review of the antidumping duty ("ADD") order on welded line pipe ("WLP") from the Republic of Korea ("Korea") filed pursuant to the court's remand order in Husteel Co. v. United States, as later corrected pursuant to the court's order granting Commerce's request for a remand. See 44 CIT ––––, ––––, 471 F. Supp. 3d 1349, 1371 (2020) (" Husteel"); Final Results of Redetermination Pursuant to Ct. Remand, Jan. 8, 2021, ECF No. 84 ("Remand Results"); see also Order, Jan. 15, 2021, ECF No. 87 ("Remand Order") (granting Defendant's request for an expedited remand to correct a clerical error); Corrected Final Results of Redetermination Pursuant to Ct. Remand, Jan. 22, 2021, ECF No. 88 ("Corrected Remand Results").

In Husteel, the court remanded Commerce's decision to reject SeAH Steel Corporation's ("SeAH") third country sales (into Canada) and instead to calculate the normal value of SeAH's subject WLP based on constructed value. See 44 CIT at ––––, 471 F. Supp. 3d at 1359–61. Moreover, with respect to Commerce's methodology for calculating the constructed value of SeAH's and NEXTEEL Co. Ltd.’s ("NEXTEEL") subject WLP, the court remanded for further explanation or reconsideration: Commerce's finding that a particular market situation ("PMS") in Korea distorted the cost of producing WLP during the period of review ("POR"), see id. at ––––, 471 F. Supp. 3d at 1361–64 ; Commerce's reliance on Hyundai Steel Company's ("Hyundai") constructed value profit ratio ("CV profit ratio") and selling expenses from the first administrative review to construct profit and selling expenses associated with SeAH's and NEXTEEL's foreign market sales during this administrative review, as well as Commerce's decision to establish Hyundai's information as the only reasonable profit cap pursuant to section 773(e)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1677b(e)(2)(B)(iii) (2018),¹ see Husteel, 44 CIT at ––––, 471 F. Supp. 3d at 1364–66 ; Commerce's reallocation of costs reported by NEXTEEL associated with the sale of non-prime products and resultant deduction to NEXTEEL's constructed value, see id. at ––––, 471 F. Supp. 3d at 1366–67 ; Commerce's reallocation of costs reported by NEXTEEL associated with the suspension of certain product lines from cost of goods sold assigned to those products specifically to general and administrative ("G&A") expenses, and resultant adjustment to NEXTEEL's reported G&A expense ratio for WLP, see id. at ––––, 471 F. Supp. 3d at 1367–68 ; and Commerce's decision to use annual weighted-averages for the review period to calculate SeAH's costs. See id. at ––––, 471 F. Supp. 3d at 1368–69. With respect to its calculation of the export price (here, constructed export price) of SeAH's U.S. sales, the court remanded for further explanation or reconsideration Commerce's decision to deduct certain G&A expenses incurred by SeAH's U.S. sales affiliate Pusan Pipe America ("PPA"). See id. at ––––, 471 F. Supp. 3d at 1369–70. The court instructed Commerce to recalculate the non-examined company's rate applicable to Husteel Co., Ltd. ("Husteel") as appropriate to reflect any adjustments to its calculation of NEXTEEL's and SeAH's dumping margin. Id. at ––––, 471 F. Supp. 3d at 1370–71.

On remand, Commerce, under respectful protest,² reverses its decision to disregard SeAH's sales of WLP into Canada and uses those sales to determine the normal value of SeAH's entries. See Remand Results at 2, 22–23. Also under respectful protest, Commerce reverses its finding that a PMS in Korea distorted the cost of producing WLP during the POR, see id. at 2, 23–24, and uses SeAH's sales into Canada as the basis for constructing NEXTEEL's profit and selling expenses. See id. at 2, 24–25. However, Commerce further explains its decision to adjust NEXTEEL's constructed value to account for losses associated with the sale of non-prime WLP products, as well as its decision to reclassify NEXTEEL's reported losses relating to the suspension of certain product lines. See id. at 2, 9–13, 31–36. Commerce also further explains its decision to use an annual weighted-average of costs during the review period to calculate SeAH's costs. See id. at 13–17, 25–27. Lastly, Commerce further explains its decision to deduct certain G&A expenses incurred by PPA from SeAH's constructed export price. See id. at 17–21. For the following reasons, Commerce's remand redetermination is sustained in part and remanded in part.

BACKGROUND

The court presumes familiarity with the facts of this case as set out in its previous opinion ordering remand to Commerce, and now recounts those relevant to the court's review of Commerce's remand redetermination. See Husteel, 44 CIT at ––––, 471 F. Supp. 3d at 1357–59. On August 10, 2018, Commerce published the amended final results of its 2016–2017 administrative review of the ADD order covering WLP from Korea, spanning a period of review from December 1, 2016 through November 30, 2017. See Welded Line Pipe From the Republic of Korea, 84 Fed. Reg. 27,762, 27,762 (Dep't Commerce June 14, 2019) (final results of [ADD] admin. review and final determination of no shipments; 2016–2017) ("Final Results") as amended by 84 Fed. Reg. 35,371 (Dep't Commerce July 23, 2019) (amended final results of [ADD] admin. review; 2016–2017) ("Amended Final Results") and accompanying Issues and Decision Memo., A-580-876, (June 7, 2019), ECF No. 36-5 ("Final Decision Memo"). Commerce assigned rates of 38.87 percent for NEXTEEL, 22.70 percent for SeAH, and 29.89 percent for non-selected respondents. See Amended Final Results, 84 Fed. Reg. at 35,372. Pursuant to U.S. Court of International Trade Rule 56.2, Husteel, SeAH, NEXTEEL, and Hyundai brought this consolidated action challenging various aspects of Commerce's final determination. See Pl. [Husteel]’s Mot. J. Agency R., Dec. 18, 2019, ECF No. 46; [Consol. Pl. SeAH]’s Mot. J. Agency R., Dec. 18, 2019, ECF No. 41; Consol. Pl. [NEXTEEL]’s 56.2 Mot. J. Agency R., Dec. 18, 2019, ECF No. 44; Consol. Pl. [Hyundai]’s 56.2 Mot. J. Agency R., Dec. 18, 2019, ECF No. 45.

In Husteel, the court remanded Commerce's final determination for further explanation or reconsideration. See 44 CIT at ––––, 471 F. Supp. 3d at 1371. The court held that Commerce's decision to disregard SeAH's sales of WLP into Canada was unsupported by substantial evidence because Commerce relied solely on findings of the Canadian International Trade Tribunal ("CITT") to determine that SeAH's sales into Canada were unrepresentative, without addressing detracting evidence illustrating material differences between antidumping law in the U.S. and Canada. See id. at ––––, 471 F. Supp. 3d at 1359–61. The court also found wanting several aspects of Commerce's methodology for calculating the constructed value of SeAH's and NEXTEEL's entries of subject WLP.

Namely, the court held that Commerce did not support with substantial evidence its determination that global steel overcapacity, domestic subsidies, strategic alliances between manufacturers, and government involvement in the electricity market cumulatively created a PMS that distorted the cost of hot-rolled coil ("HRC")—a primary input in the manufacture of subject WLP—such that Commerce was prevented from conducting a proper comparison between the normal value and U.S. price of respondents’ entries of subject WLP during the POR. See id. at ––––, 471 F. Supp. 3d at 1361–64. The court also observed that Commerce's calculation of NEXTEEL's and SeAH's profit and selling expenses erred in two respects. First, the court held that Commerce's invocation of 19 U.S.C. § 1677b(e)(2)(B)(ii) as the basis for resorting to Hyundai's CV profit ratio and selling expense information from the first administrative review of the ADD order on subject WLP is contrary to law because § 1677b(e)(2)(B)(ii) requires Commerce to use a "weighted average of the actual amounts incurred and realized by exporters or producers that are subject to the investigation or review[.]" Husteel, 44 CIT at ––––, ...