Hyundai Steel Company v. United States

• Decision Date: 19 July 2021
• Docket Number: Consol. Court No. 18-00154,Slip Op. 21-88
• 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

531 F.Supp.3d 1344

HYUNDAI STEEL COMPANY, Plaintiff,

and

Seah Steel Corporation, Consolidated Plaintiff,

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

Slip Op. 21-88

Consol. Court No. 18-00154

United States Court of International Trade.

July 19, 2021

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.

Jeffrey M. Winton and Amrietha Nellan, Winton & Chapman PLLC, of Washington, D.C., for Consolidated Plaintiff and Plaintiff-Intervenor SeAH Steel Corporation.

Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for Defendant United States. With her on the brief were Brian M. Boynton, Acting Assistant Attorney General, and Jeanne E. Davidson, Director. Of counsel on the brief was Elio Gonzalez, Senior Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce.

Roger B. Schagrin, 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"), (collectively, "Plaintiffs"), 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); 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. 51-22, PD 314 ("Final IDM").¹

Before the court are the Final Results of Redetermination Pursuant to Court Remand, ECF No. 85-1 ("Second Remand Results"), which the court ordered in Hyundai Steel Co. v. United States ("Hyundai Steel II"), 44 CIT ––––, 483 F. Supp. 3d 1273 (2020). Because the Second Remand Results explained the basis for the remand particular market situation adjustment and determination by the U.S. Department of Commerce ("Commerce"), the court reviews both the Final Results of Redetermination Pursuant to Court Remand, ECF No. 73-1 ("Remand Results"), and the Second Remand Results in this opinion. Plaintiffs argue that Commerce failed to comply with the court's remand instructions when Commerce repeated and explained its particular market situation determination and adjustment in the Second Remand Results. Pl. [Hyundai Steel]’s Comments Opp'n Second Remand Redetermination at 1–2, ECF No. 89 ("Hyundai Cmts."); Comments [SeAH] Commerce's Feb. 2, 2021, Redetermination at 2, ECF No. 88 ("SeAH Cmts."). Hyundai Steel argues that Commerce's particular market situation determination is not in accordance with the law and that the "underlying [particular market situation] determination and consequent calculations still remain unsupported by substantial record evidence and contrary to law." Hyundai Cmts. at 2–3. Hyundai Steel reiterates its contention that Commerce's particular market situation determination and subsequent adjustment to the cost of production are not authorized by statute. Id. at 3–12. Defendant United States ("Defendant") argues that Commerce complied with the court's remand order and made its particular market situation determination and adjustment in accordance with the law. Def.’s Resp. Comments Regarding Second Remand Redetermination at 6–9, ECF No. 90 ("Def. Cmts."). Defendant-Intervenor Wheatland Tube Company did not file comments.

For the following reasons, the court remands the Second Remand Results.

ISSUES PRESENTED

The court reviews the following issues:

1. Whether Commerce's particular market situation adjustment to the cost of production when conducting a sales-below-cost test is in accordance with the law; and

2. Whether Commerce's particular market situation determination is in accordance with the law.

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 Second Remand Results. See Hyundai Steel II, 44 CIT at ––––, 483 F. Supp. 3d at 1275–77 ; see also Hyundai Steel Co. v. United States ("Hyundai Steel I"), 43 CIT ––––, ––––, 415 F. Supp. 3d 1293, 1295–1301 (2019).

In the Final Results, Commerce determined that a particular market situation in Korea distorted the cost of production of CWP. Final IDM at 3. Commerce applied an upward adjustment to the cost of production of CWP 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 at 19–20, PD 275 ("Prelim. DM"); Final IDM at 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 Steel Company. Prelim. DM at 15, 19–20; Final IDM at 3.

In Hyundai Steel I, the court concluded that Commerce's particular market situation determination was unsupported by substantial evidence. Hyundai Steel I, 43 CIT at ––––, 415 F. Supp. 3d at 1301. In the Remand Results, Commerce conducted a new review of the record and determined again that a particular market situation distorted the cost of hot-rolled steel coil in the Korean market. Remand Results at 4–5. Commerce made an upward adjustment to the cost of hot-rolled steel coil, performed the sales-below cost test, and calculated normal value from the remaining above-cost home market sales. See id. at 4 n.22.

Hyundai Steel argued for the first time on remand that Commerce's particular market situation determination and subsequent upward adjustment to the cost of production for the sales-below-cost test contravened the statute. Hyundai Steel II, 44 CIT at ––––, 483 F. Supp. 3d at 1276–77 ; see also Remand Results at 24, 39. Commerce asserted that it was not required to address those legal arguments and Defendant argued that Hyundai Steel waived the arguments. Hyundai Steel II, 44 CIT at ––––, 483 F. Supp. 3d at 1276–77. The court concluded that departure from the general rule of waiver was warranted and remanded for Commerce to explain the statutory authority to conduct a cost-based particular market situation analysis when normal value is based on home market sales and to adjust the cost of production for purposes of the sales-below-cost test of 19 U.S.C. § 1677b(b), specifically within the context of relevant caselaw from this Court. Hyundai Steel II, 44 CIT at ––––, 483 F. Supp. 3d at 1276–77, 1281.

Commerce explained on second remand its view that Section 504 of the Trade Preferences Extension Act of 2015 ("TPEA"), Pub. L. No. 114-27, § 504, 129 Stat. 362, 385, authorizes Commerce to make particular market situation determinations and adjust the cost of production for the sales-below-cost test when calculating normal value based on home market sales. Second Remand Results at 3.

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. Governing Law

Commerce determines antidumping duties by calculating the amount by which the normal value of subject merchandise exceeds the export price or the constructed export price for the merchandise. 19 U.S.C. § 1673. When reviewing antidumping duties in an administrative review, Commerce must determine: (1) the normal value and export price or constructed export price of each entry of the subject merchandise, and (2) the dumping margin for each such entry. Id. § 1675(a)(1)(B), (a)(2)(A). The statute dictates the steps by which Commerce may calculate normal value "to achieve a fair comparison" with export price or constructed export price. Id. § 1677b(a).

First, the statute specifies the methodology for Commerce to determine which sales should be considered and disregarded in calculating normal value. Normal value is "the price at which the foreign like product is first sold ... in the exporting country ... in the ordinary course of trade." Id. § 1677b(a)(1)(B)(i). Sales outside the ordinary course of trade are excluded from normal value. "Ordinary course of trade" is defined in Section 1677(15) as excluding: (1) sales made at less than the cost of production, and (2) sales that cannot be compared properly with the export price or constructed export price due to a particular market situation. Id. § 1677(15)(A), (C). To determine whether "sales ... have been made at prices that represent less than the cost of production," the statute directs Commerce to conduct the sales-below-cost test. Id. § 1677b(b)(1). The cost of production is...