Nakornthai Strip Mill Public Co. v. U.S.

• Decision Date: 28 May 2008
• Docket Number: Slip Op. 08-58. Court No. 07-00180.
• Citation: 558 F.Supp.2d 1319
• Parties: NAKORNTHAI STRIP MILL PUBLIC COMPANY LIMITED, Plaintiff, v. UNITED STATES, Defendant, United States Steel Corporation, Defendant-Intervenor.
• Court: U.S. Court of International Trade

558 F.Supp.2d 1319

NAKORNTHAI STRIP MILL PUBLIC COMPANY LIMITED, Plaintiff, v. UNITED STATES, Defendant United States Steel Corporation, Defendant-Intervenor.

Slip Op. 08-58. Court No. 07-00180.

United States Court of International Trade.

May 28, 2008.

COPYRIGHT MATERIAL OMITTED

Vinson & Elkins (Kenneth J. Pierce, Robert L. LaFrankie, Victor S. Mroczka) for the Plaintiff.

Gregory G. Katsas, Acting Assistant Attorney General; Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Claudia Burke); Matthew D. Walden, Attorney, Of Counsel, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, for the United States Department of Commerce.

Skadden, Arps, Slate, Meagher & Flom LLP (Robert E. Lighthizer, John J. Mangan, Jeffrey Gerrish, Luke A. Meisner) for the Defendant-Intervenor.

OPINION

POGUE, Judge.

In this action, Plaintiff Nakornthai Strip Mill Public Company Limited ("Nakornthai") challenges the final results of the Department of Commerce's ("Commerce") administrative review of the antidumping order on Nakornthai's imports. Certain Hot-Rolled Carbon Steel Flat Products from Thailand, 72 Fed.Reg. 27,802 (Dep't Commerce May 17, 2007) (final results and partial recision of antidumping duty administrative review)("Final Results"). Specifically, Nakornthai challenges Commerce's selection of the invoice date as the date of sale in the United States for Plaintiff's merchandise.¹ Because of Commerce's determination that the material terms of the contract for Plaintiff's sales were not final by the contract date, Commerce utilized the invoice date as the date of sale.

The court finds that Commerce's conclusion identifying the potentially material terms of Plaintiffs contract is based on the agency's reasonable interpretation of its own regulation; therefore, the court affirms this legal conclusion. However, because Commerce's factual finding of finality of the terms of sale is incomplete, the court remands this issue for further consideration. The court also refrains from adjudicating Nakornthai's request for consideration of alternate dates—other than the contract date—as the date of sale because Nakornthai failed to exhaust its administrative remedies on these claims.

Background

The original antidumping investigation, which gave rise to the proceeding here, involved hot-rolled carbon steel products imported from Thailand by Sahaviriya Steel Industries ("SSI"). In the initial investigation, Commerce found that SSI was dumping the subject merchandise and imposed a duty of 4.44 percent. Certain Hot-Rolled Carbon Steel Flat Products From Thailand, 66 Fed.Reg. 59,562, 59,563 (Dep't Commerce Nov. 29, 2001) (notice of antidumping duty order).² After Commerce published an opportunity to request an administrative review of the order, see Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation, 70 Fed.Reg. 65,883 (Dep't Commerce Nov. 1, 2005) (opportunity to request administrative review); see also Section 751 of the Tariff Act of 1930, 19 U.S.C. § 1675,³ Defendant-intervenor U.S. Steel, and Nucor Corporation ("Nucor"), pursuant to 19 C.F.R. § 351.213(b)(1), requested an administrative review for the period of November 1, 2004, through October 31, 2005.⁴ Commerce granted the request, see Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 70 Fed.Reg. 76,024, 76,025 (Dep't Commerce Dec. 22, 2005), and issued an initial antidumping questionnaire ("Part A") to Nakornthai on January 3, 2006. Three other sets of questionnaires followed, Parts B, C, and D, and by March 9, 2006, Nakornthai had also responded to these supplemental questionnaires.

Nakornthai's questionnaire responses indicated that, during the period of review, Nakorthai contracted with one wholesaler of metals and metal ores, to import its products. This contract was the only U.S. sale of the subject merchandise that Nakornthai made during the period of review. Pl.'s Mot. for J. on the Agency R. 2 ("Pl.'s Mot."); Def.-Intervenor's Mem. in Opp. to Pl.'s Mot. for J. on the Agency R. 1 ("Def.-Intervenor's Opp. Mem."). Nakornthai's original contract, dated in a specific month in 2004, identified multiple line items designating products to be shipped to several end users in the United States. The parties later made three changes to the contract. The first amendment, made the next month in 2004, removed the specification of the range of quantities to be purchased for each item to be sold under the contract (the "per-item tolerance level"),⁵ leaving only a total quantity tolerance level. The second amendment, made in yet again the following month, changed the payment terms, and the third amendment, made in yet again the following month, changed both the expiration date on the letter of credit and the last shipment date for the merchandise. In other words, in each of the three months following the original contract, the parties amended its terms.

Nakornthai shipped its products under this contract shortly after the third contractual amendment. The day after the last date of the shipments, Nakornthai issued a final invoice for its products.

Nakornthai's responses to Commerce's questionnaires identified its original contract date as the United States date of sale. Attach, to Letter from Kenneth J. Pierce, Willkie Farr & Gallagher LLP, on behalf of Nakornthai; to the Honorable Carlos M. Gutierrez, Secretary of Commerce, Re: Antidumping Duty Administrative Review of Certain Hot-Rolled Carbon Steel Flat Products from Thailand Resp. to Section A of the Department's Questionnaire (Feb. 14, 2005), C.R. Doc. 3 at A-3 ("Nakornthai's Resp. to Part A Questionnaire"). Nakornthai also stated in its responses that it considered the contract's amendments to be minimal and not material to the overall contract and sale. Id. at A-27; Pl.'s Resp. to the Dep't's July 26, 2006, Third Supplemental Questionnaire Re: Section C, Aug. 7, 2006, at 6.

Commerce made a preliminary determination that Nakornthai's products had been sold at less than fair value, i.e., a dumping determination, for the period of review. Commerce's preliminary determination did not adopt the contract date as the date of sale as Nakornthai had proposed in its questionnaire responses. Rather, Commerce, in calculating the dumping margin, used the final invoice date as the U.S. date of sale rather than the original contract date. Certain Hot-Rolled Carbon Steel Flat Products from Thailand, 71 Fed.Reg. 65,458, 65,461-62 (Dep't Commerce Oct. 31, 2006) (preliminary results of antidumping duty administrative review and rescission in part)("Preliminary Results"). In addition, Commerce determined that the amendments made material changes to the contract. In coming to these conclusions, Commerce reasoned, first, that department regulations created a presumption in favor of using the invoice date as the date of sale. Furthermore, Commerce reasoned, the fact that the parties had made three amendments to the contract in the space of a few months meant that the terms of the contract were not settled until the commercial invoice actually issued.

Commerce's preliminary results also reasoned that the amendments to the contract constituted material changes to the terms of sale because they "altered the payments terms and the letter of credit." Mem. From Stephen Bailey, Case Analyst, to File, Preliminary Results Analysis for Nakornthai Strip Mill Public Co. Ltd: Antidumping Duty Administrative Review of Certain Hot-Rolled Carbon Steel Flat Products from Thailand, C.R. Doc. 39, 2 (Dep't Commerce Oct. 31, 2006) ("Preliminary Results Mem."). In Commerce's view, the fact that material terms were being changed throughout the period of review also supported its choice of the invoice date as the date of sale; not only were the terms of the contract not finalized until the invoice issued, but also, the changes being made affected quantities at the heart of the contract. Def.'s Mem. in Opp. to Pl.'s Mot. for J. Upon the Admin. R., 8-9 ("Def.'s Opp. Mem.").

After Commerce made its preliminary determination, Nakornthai submitted a case brief, pursuant to 19 C.F.R. § 351.309(c).⁶ In its case brief, Nakornthai objected to Commerce's use of the invoice date and argued generally for an alternative date of sale to be used instead of the invoice date. Specifically, the company again proposed that Commerce use the date on which the contract was formed, i.e., the original contract date. Case Brief of Nakornthai Strip Mill Public Company Limited, 6-7 (Jan. 8, 2007)("Nakornthai Case Br.").

Nakornthai also objected to Commerce's determination that the amendments to the contract affected the material terms of the sale. Nakornthai argued that "[n]one of [the changes] impacted the material terms of sale (i.e., price and quantity)." Nakornthai Case Br. 3. "In other words, there is no variance in the material terms of sale from the contract to the invoice." Id. at 4. The contract's first amendment "merely modified the tolerance level in the contract from per item to per total." Id. While the contract's second amendment changed the timing of the payment, and the third amendment changed the letter of credit's expiration date and the last date of shipment, Nakornthai maintained that the contract's "material terms," i.e., price and quantity, were not changed by any of the three amendments. Id.

In its final determination, Commerce continued to use the invoice date as the U.S. date of sale, based on its determination that one of the contract's amendments made a material change to the contract. Final Results, 72 Fed.Reg. 27,802, and accompanying Proprietary Arguments from the Issues and Decision Memorandum for the Final Results of Certain Hot-Rolled Carbon Steel Flat Products from Thailand 13-14 ("Proprietary Issues and Decision Mem.") Commerce reasoned that...