Hyundai Steel Co. v. United States

• Decision Date: 23 November 2020
• Docket Number: Consol. Court No. 18-00154,Slip Op. 20-168
• Parties: HYUNDAI STEEL COMPANY, Plaintiff, and SeAH Steel Corporation, Consolidated Plaintiff, v. UNITED STATES, Defendant, and Wheatland Tube Company, Defendant-Intervenor.
• Court: U.S. Court of International Trade

483 F.Supp.3d 1273

HYUNDAI STEEL COMPANY, Plaintiff,

and

SeAH Steel Corporation, Consolidated Plaintiff,

v.UNITED STATES, Defendant,andWheatland Tube Company, Defendant-Intervenor.

Slip Op. 20-168

Consol. Court No. 18-00154

United States Court of International Trade.

November 23, 2020

J. David Park, Henry D. Almond, Daniel R. Wilson, and Kang Woo Lee, Arnold & Porter Kaye Scholer LLP, of Washington, D.C., for Plaintiff Hyundai Steel Company.

Joshua E. Kurland, Trial Attorney, and L. Misha Preheim, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for Defendant United States. With them on the brief were Joseph H. Hunt, Assistant Attorney General, and Jeanne E. Davidson, Director. Of counsel on the brief was Elio Gonzalez, Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce.

Roger B. Schagrin and Paul W. Jameson, Schagrin Associates, of Washington, D.C., for Defendant-Intervenor Wheatland Tube Company.

OPINION AND ORDER

Choe-Groves, Judge:

Plaintiff Hyundai Steel Company ("Hyundai Steel") and Consolidated Plaintiff SeAH Steel Corporation ("SeAH") challenge the final determination in the 2015–2016 administrative review of the antidumping duty order covering circular welded non-alloy steel pipe ("CWP") from the Republic of Korea ("Korea"). Circular Welded Non-Alloy Steel Pipe From the Republic of Korea ("Final Results"), 83 Fed. Reg. 27,541 (Dep't Commerce June 13, 2018) (final results of antidumping duty administrative review; 2015–2016), ECF No. 22; see also Issues and Decision Mem. for the Final Results of Antidumping Duty Admin. Review of Circular Welded Non-Alloy Steel Pipe from the Republic of Korea; 2015–2016 (Dep't Commerce June 7, 2018), ECF No. 22, PD 314 ("Final IDM").¹ Before the court are the Final Results of Redetermination Pursuant to Court Remand ("Remand Results"), ECF No. 73-1, which the court ordered in Hyundai Steel Co. v. United States ("Hyundai Steel I"), 43 CIT ––––, 415 F. Supp. 3d 1293 (2019).

Hyundai Steel argues that the U.S. Department of Commerce ("Commerce") failed to comply with the court's remand instructions when Commerce re-evaluated the record and repeated its particular market situation determination in the Remand Results. Pl. [Hyundai Steel]’s Comments Opp'n Remand Redetermination ("Hyundai Cmts.") 2, ECF No. 75. Hyundai Steel contends that Commerce's determination that a particular market situation existed as to costs of production was not authorized by statute without a threshold determination that the costs were outside the ordinary course of trade based on a comparison to the reported costs. Id. at 4–5. Hyundai Steel also faults the particular market situation determination as unsupported by the record. Id. at 7–22. Hyundai Steel argues that a cost-based adjustment for purposes of the sales-below-cost test is contrary to law. Id. at 27–29. SeAH did not file comments.

For the following reasons, the court sustains in part and remands in part the Remand Results.

BACKGROUND

The court presumes familiarity with the facts and procedural history of this case and recites the facts relevant to the court's review of the Remand Results. Hyundai Steel I, 43 CIT at ––––, 415 F. Supp. 3d at 1295–1301. In the Final Results, Commerce determined that a particular market situation in Korea distorted the cost of production of CWP based on the cumulative impact of four factors: (1) Korean subsidies of hot-rolled steel coil; (2) Korean imports of hot-rolled steel coil from China; (3) strategic alliances between Korean hot-rolled steel coil producers and CWP producers; and (4) distortions in the Korean electricity market. Final IDM 23. Commerce applied an upward adjustment to the cost of production based on the subsidy rate of hot-rolled steel coil. Id. (citing Countervailing Duty Investigation of Certain Hot-Rolled Steel Flat Products From the Republic of Korea, 81 Fed. Reg. 53,439 (Dep't Commerce Aug. 12, 2016) (final affirmative determination), as amended, 81 Fed. Reg. 67,960 (Dep't Commerce Oct. 3, 2016) ). Commerce conducted a sales-below-cost test and disregarded certain sales made at prices below the cost of production. See Decision Mem. for the Prelim. Results of Antidumping Duty Admin. Review: Circular Welded Non-Alloy Steel Pipe from the Republic of Korea: 2015–2016 ("Prelim. DM") 19–20, PD 275 (Dec. 1, 2017); Final IDM 3 (noting that Commerce used the same calculation methodology for the Final Results as explained in the Prelim. DM). Commerce calculated normal value from the remaining above-cost home market sales for mandatory respondents Hyundai Steel and Husteel. Prelim. DM 20. Commerce also calculated a combined assessment rate for Hyundai Steel's importers. Final IDM 29. In Hyundai Steel I, the court concluded that the particular market situation determination was unsupported by substantial evidence because Commerce relied only on record documents submitted previously in the administrative review of oil country tubular goods from the Republic of Korea for the 2014–2015 period of review, which the court determined in NEXTEEL Co. v. United States, 43 CIT ––––, ––––, 392 F. Supp. 3d 1276, 1287–88 (2019), were insufficient to support Commerce's particular market situation determination in that administrative review. Hyundai Steel I, 415 F. Supp. 3d at 1301.

Commerce conducted a new review of the record on remand and determined that a particular market situation distorted the cost of hot-rolled steel coil in the Korean market. Remand Results 4–5. In addition to the four factors Commerce considered previously, Commerce added a fifth factor to its particular market situation analysis, namely steel industry restructuring efforts by the Korean Government. Id. at 6, 7–15. Commerce adjusted the cost of hot-rolled steel coil based on the subsidy rate in POSCO v. United States, 43 CIT ––––, 378 F. Supp. 3d 1348 (2019), for purposes of the sales-below-cost test. See Remand Results 4, 29–30. Commerce assigned importer-specific assessment rates to Hyundai Steel's importers, based on Commerce's redetermination that the record failed to establish potential manipulation. Id. at 15.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to 19 U.S.C. § 1516a(a)(2)(B)(iii) and 28 U.S.C. § 1581(c), which grant the court authority to review actions contesting the final results of an administrative review of an antidumping duty order. The court will uphold Commerce's determinations unless they are unsupported by substantial record evidence, or otherwise not in accordance with the law. 19 U.S.C. § 1516a(b)(1)(B)(i). The court also reviews determinations made on remand for compliance with the court's remand order. Ad Hoc Shrimp Trade Action Comm. v. United States, 38 CIT ––––, ––––, 992 F. Supp. 2d 1285, 1290 (2014), aff'd, 802 F.3d 1339 (Fed. Cir. 2015).

DISCUSSION

I. Particular Market Situation

A. Waiver

Hyundai Steel argued for the first time on remand that Commerce's determination contravened the statute by adjusting the cost of production for purposes of the sales-below-cost test. Remand Results 24. Commerce declined to respond to Hyundai Steel's allegation, asserting that a response was unwarranted because Hyundai Steel did not raise the argument prior to remand and Commerce was not required by the court in Hyundai Steel I to address this legal argument. Id. at 39. Hyundai Steel raises this argument for the first time before this court. Hyundai Cmts. 27–29. Defendant United States ("Defendant") contends that Hyundai Steel waived the argument by failing to raise it in its opening or reply briefs prior to remand. Def.’s Resp. Pl.’s Comments Regarding Remand Redetermination ("Def. Resp.") 30, 31, ECF No. 78.

Generally, "arguments not raised in the opening brief are waived." SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d 1312, 1319 (Fed. Cir. 2006) (citation omitted). Courts may exercise discretion to depart from the general rule, however, on a case-by-case basis. Singleton v. Wulff, 428 U.S. 106, 121, 96 S.Ct. 2868, 49 L.Ed.2d 826 (1976) ; Icon Health & Fitness, Inc. v. Strava, Inc., 849 F.3d 1034, 1040 (Fed. Cir. 2017). The U.S. Court of Appeals for the Federal Circuit has recognized that consideration of an argument raised for the first time on appeal is appropriate "when there is a change in the jurisprudence of the reviewing court ... after consideration of the case by the lower court[.]" Golden Bridge Tech., Inc. v. Nokia, Inc., 527 F.3d 1318, 1323 (Fed. Cir. 2008) (internal quotation marks and citation omitted). "[A]pellate courts may [also] apply the correct law even if the parties did not argue it below[.]" Id. (internal quotation marks and citation omitted).

Here, departure from the general rule of waiver is warranted for both reasons. While there has not been an opinion from the U.S. Court of Appeals for the Federal Circuit on whether cost-based particular market situation determinations and subsequent adjustments are in accordance with the law, the jurisprudence of this Court was clarified after the court remanded the Final Results to Commerce in Hyundai Steel I on December 13, 2019, before Hyundai Steel filed its comments in opposition to the Remand Results on April 13, 2020. See Order, ECF No. 65; Hyundai Cmts. The Court of International Trade issued Saha Thai Steel Pipe Pub. Co. v. United States, 43 CIT ––––, 422 F. Supp. 3d 1363 (2019), on December 18, 2019; Husteel Co. v. United States, 44 CIT ––––, 426 F. Supp. 3d 1376 (2020), on January 3, 2020; and Borusan Mannesmann Boru Sanayi Ve Ticaret A.S. v. United States ("Borusan"), 44 CIT ––––, 426 F. Supp. 3d 1395 (2020), on January 7, 2020. The Court addressed the lawfulness of the cost-based particular market situation analysis and adjustment for the first time in Saha Thai Steel Pipe Pub. Co., 43 CIT at ––––, 422 F. Supp. 3d at 1368–70. The Court concluded consistently in all three opinions that the statute does...