Hyundai Steel Co. v. United States
Docket Number | 2021-1748 |
Decision Date | 10 December 2021 |
Parties | HYUNDAI STEEL COMPANY, SEAH STEEL CORP., NEXTEEL CO., LTD., Plaintiffs-Appellees v. UNITED STATES, CALIFORNIA STEEL INDUSTRIES, IPSCO TUBULARS INC., MAVERICK TUBE CORPORATION, Defendants HUSTEEL CO., LTD., Plaintiff WELSPUN TUBULAR LLC USA, Defendant-Appellant |
Court | U.S. Court of Appeals — Federal Circuit |
Appeal from the United States Court of International Trade in Nos 1:18-cv-00169-CRK, 1:18-cv-00173-CRK, 1:18-cv-00177-CRK 1:18-cv-00178-CRK, Judge Claire R. Kelly.
HENRY DAVID ALMOND, Arnold &Porter Kaye Scholer LLP Washington, DC, argued for plaintiff-appellee Hyundai Steel Company. Hyundai Steel Company and NEXTEEL Co., Ltd. also represented by LESLIE BAILEY, KANG WOO LEE, JAEHONG DAVID PARK, DANIEL WILSON.
JEFFREY M. WINTON, Winton &Chapman PLLC, Washington, DC, argued for plaintiff-appellee SeAH Steel Corp. Also represented by MICHAEL JOHN CHAPMAN, JOOYOUN JEONG, VI MAI.
ELIZABETH DRAKE, Schagrin Associates, Washington, DC, argued for defendant-appellant. Also represented by BENJAMIN JACOB BAY, NICHOLAS J. BIRCH, CHRISTOPHER CLOUTIER, GEERT M. DE PREST, WILLIAM ALFRED FENNELL, LUKE A. MEISNER, KELSEY RULE, ROGER BRIAN SCHAGRIN.
Before O'MALLEY, BRYSON, and HUGHES, Circuit Judges.
Appellant Welspun Tubular LLC USA appeals from a decision of the Court of International Trade ("the Trade Court") regarding an administrative review of an antidumping duty order on welded line pipe from the Republic of Korea. In that review, the Department of Commerce found that a "particular market situation" ("PMS") existed in the Korean market for welded line pipe. Based on that finding, Commerce made an upward adjustment in its calculation of the costs of production of the subject welded line pipe for the two selected respondents, Hyundai Steel Company and SeAH Steel Corporation, which resulted in enhanced antidumping duties.[1]
The Trade Court overturned Commerce's determination on the ground that Commerce was not statutorily authorized to adjust the exporters' costs of production to account for the existence of a PMS. The court also found that Commerce's determination that a PMS existed in Korea was unsupported by substantial evidence. We agree with the Trade Court that the 2015 amendments to the antidumping statute do not authorize Commerce to use the existence of a PMS as a basis for adjusting a respondent's costs of production to determine whether a respondent has made home market sales below cost. In light of our decision on the statutory construction issue, it is unnecessary for us to decide whether Commerce's finding of a PMS was supported by substantial evidence.
The administrative review at issue in this case focused on sales of welded line pipe made by Hyundai and SeAH between May 22 2015, and November 30, 2016. After its investigation, Commerce issued a preliminary determination finding that sales of welded line pipe in the United States had been made below "normal value." Welded Line Pipe from Korea: Preliminary Results of Antidumping Duty Administrative Review; 2015-2016, 83 Fed. Reg. 1, 023 (Jan. 9, 2018). In determining normal value, Commerce found that a PMS existed in Korea during the review period. Based on that finding, Commerce made an upward adjustment to the costs of production for both Hyundai and SeAH. See id.; Decision Memorandum for the Preliminary Results of the 2015-2016 Administrative Review of the Antidumping Duty Order on Welded Line Pipe from Korea (Dep't Commerce Jan. 9, 2018) ("Preliminary Memo"), https://enforcement.trade.gOv/frn/summary/korea-south/2 018-00183-1.pdf. When Commerce issued its final determination on July 18, 2018, it continued to apply that upward adjustment.[2] See Welded Line Pipe from the Republic of Korea: Final Results of Antidumping Duty Administrative Review; 2015-2016, 83 Fed. Reg. 33, 919 (Dep't Commerce July 18, 2018); Issues and Decision Memorandum for the Final Results of the 2015-2016 Administrative Review of the Antidumping Duty Order on Welded Line Pipe, at 23 (Dep't Commerce July 18, 2018) ("Final Memo"), https://enforcement.trade.goV/frn/summary/korea-south/2 018-15327-1.pdf. Based in part on that upward adjustment, Commerce found that Hyundai and SeAH were selling welded line pipe for less than fair value in the United States and therefore assessed antidumping duties against them.
In general, when Commerce determines whether a product is being sold for less than fair value, it must make "a fair comparison . . . between the export price or constructed export price and normal value." 19 U.S.C. § 1677b(a).[3] The normal value of merchandise is ordinarily determined by the price at which comparable goods were sold in the exporter's home market during the period of review. In determining normal value, Commerce looks first at home market sales of comparable goods; it may also use third-country market sales of comparable goods as the basis for normal value if certain conditions are met. See id. § 1677b(a)(1)(C). In either case, Commerce is directed to exclude sales made below the exporter's cost of production. Id. § 1677b(b)(1). That inquiry is referred to as the "sales-below-cost test." If all market sales in the ordinary course of trade[4] fail the sales-below-cost test (i.e., those sales are all below the exporter's cost of production), then Commerce may base normal value on the constructed value of the goods.[5] Id. However, if there are market sales in the ordinary course of trade that pass the sales-below-cost test, Commerce must use those sales in determining normal value unless it makes one of a few specified findings, such as that a PMS "prevents a proper comparison with the export price or constructed export price." Id. § 1677b(a)(1)(B)(ii)(III); see also id. § 1677b(a)(1)(C)(iii).[6]
Here, Commerce based Hyundai's normal value on home market sales and SeAH's normal value on third-country sales. Preliminary Memo at 15 (discussing Hyundai); J.A. 27 (discussing SeAH). Accordingly, Commerce applied the sales-below-cost test to determine which of those sales should be included in the normal value calculation. See Preliminary Memo at 21. With respect to both respondents, Commerce calculated normal value using the respondents' market sales above the cost of production, as provided in section 1677b(b). To determine the dumping margins that are now before the court, Commerce did not calculate either respondent's normal value using the constructed value provision, section 1677b(e).[7]
Section 1677b(b)(3) sets forth a specific methodology for calculating the cost of production for a particular product for purposes of the sales-below-cost test:
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