Prosperity Tieh Enter. Co. v. United States

• Decision Date: 23 January 2018
• Docket Number: Consol. Court No. 16–00138,Slip Op. 18–5
• Citation: 284 F.Supp.3d 1364
• Parties: PROSPERITY TIEH ENTERPRISE CO., LTD., Plaintiff, and Yieh Phui Enterprise Co., Ltd., Plaintiff, v. UNITED STATES, Defendant, and AK Steel Corp., Nucor Corp., Steel Dynamics, Inc., California Steel Industries, Inc., ArcelorMittal USA LLC, and United States Steel Corp., Defendant–Intervenors.
• Court: U.S. Court of International Trade

284 F.Supp.3d 1364

PROSPERITY TIEH ENTERPRISE CO., LTD., Plaintiff,

and

Yieh Phui Enterprise Co., Ltd., Plaintiff,

v.UNITED STATES, Defendant,andAK Steel Corp., Nucor Corp., Steel Dynamics, Inc., California Steel Industries, Inc., ArcelorMittal USA LLC, and United States Steel Corp., Defendant–Intervenors.

Slip Op. 18–5

Consol. Court No. 16–00138

United States Court of International Trade.

Dated: January 23, 2018

Donald B. Cameron, Morris, Manning & Martin LLP, of Washington, D.C., for plaintiff Prosperity Tieh Enterprise Co., Ltd. With him on the brief were Julie C. Mendoza, R. Will Planert, Brady W. Mills, Eugene Degnan, and Mary S. Hodgins.

Kelly A. Slater, Appleton Luff Pte. Ltd., of Washington, D.C., for plaintiff Yieh Phui Enterprise Co., Ltd. With her on the brief were Jay Y. Nee and Edmund W. Sim.

Elizabeth A. Speck, Senior Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for defendant. With her on the brief were Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Claudia Burke, Assistant Director. Of counsel was Michael T. Gagain, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce.

Stephen A. Jones, King & Spalding, LLP, of Washington, D.C., for defendant-intervenor AK Steel Corp. With him on the brief was Daniel L. Schneiderman.

Alan H. Price, Wiley Rein LLP, of Washington, D.C., for defendant-intervenor Nucor Corp. With him on the brief was Timothy C. Brightbill.

Roger B. Schagrin, Schagrin Associates, of Washington, D.C., for defendant-intervenors Steel Dynamics, Inc. and California Steel Industries, Inc.

John M. Herrmann, II, Kelley Drye & Warren, LLP, of Washington, D.C., for defendant-intervenor ArcelorMittal USA LLC.

Jeffrey D. Gerrish, Skadden Arps Slate Meagher & Flom, of Washington, D.C., for defendant-intervenor United States Steel Corp.

OPINION AND ORDER

Stanceu, Chief Judge:

In this consolidated action,¹ plaintiffs contest an administrative decision issued by the International Trade Administration, U.S. Department of Commerce ("Commerce" or the "Department") to conclude an antidumping duty investigation on certain corrosion-resistant steel products ("CORE") from Taiwan (the "subject merchandise").² The court remands the determination to Commerce for further consideration and redetermination.

I. BACKGROUND

A. The Parties in this Litigation

Plaintiffs Prosperity Tieh Enterprise Co., Ltd. ("Prosperity") and Yieh Phui Enterprise Co. Ltd. ("Yieh Phui") are Taiwanese producers and exporters of CORE. AK Steel Corporation, Nucor Corporation, Steel Dynamics, Inc., California Steel Industries, Inc., ArcelorMittal USA LLC, and United States Steel Corporation were petitioners in the investigation and are each defendant-intervenors in this consolidated action (together, the "defendant-intervenors").

B. The Contested Decision

Challenged in this litigation is Certain Corrosion–Resistant Steel Products From India, Italy, the People's Republic of China, the Republic of Korea and Taiwan: Amended Final Affirmative Antidumping Determination for India and Taiwan, and Antidumping Duty Orders , 81 Fed. Reg. 48,390 (Int'l Trade Admin. July 25, 2016) ("Amended Final Determination "). The Amended Final Determination modified the Department's decision in Certain Corrosion–Resistant Steel Products From Taiwan: Final Determination of Sales at Less Than Fair Value and Final Affirmative Determination of Critical Circumstances, in Part , 81 Fed. Reg. 35,313 (Int'l Trade Admin. June 2, 2016) ("Final Determination "). The period of investigation ("POI") was April 1, 2014 through March 31, 2015. Id. at 35,313.

C. Proceedings before Commerce

A petition filed in June 2015 sought an antidumping duty order on imports of CORE from Italy, India, China, Korea, and Taiwan. See Certain Corrosion–Resistant Steel Products From Italy, India, the People's Republic of China, the Republic of Korea, and Taiwan: Initiation of Less–Than–Fair–Value–Investigations , 80 Fed. Reg. 37,228 (Int'l Trade Admin. June 30, 2015). Following initiation, Commerce selected Yieh Phui and Prosperity as the Taiwanese mandatory respondents for individual investigation. Selection of Respondents for the Antidumping Duty Investigation on Certain Corrosion–Resistant Steel Products from Taiwan at 4 (July 20, 2015) (P.R. Doc. 62).³

Commerce published a preliminary determination on CORE from Taiwan on January 4, 2016. See Certain Corrosion–Resistant Steel Products from Taiwan: Negative Preliminary Determination of Sales at Less Than Fair Value , 81 Fed. Reg. 72 (Int'l Trade Admin. Jan. 4, 2016) ("Prelim. Determination "); see also Decision Memorandum for the Preliminary Determination in the Antidumping Duty Investigation of Certain Corrosion–Resistant Steel Products from Taiwan , A–583–856, (Dec. 22, 2015) (P.R. Docs. 262–263), available at https://enforcement.trade.gov/frn/summary/taiwan/201532761-1.pdf (last visited Jan. 18, 2018) ("Prelim. Decision Mem. "). In the Preliminary Determination, Commerce treated Yieh Phui and Synn Industrial Co., Ltd. ("Synn") as a single entity (the "Yieh Phui/Synn" entity).⁴ Prelim. Decision Mem. at 4. Commerce did not include Prosperity within the Yieh Phui/Synn entity. Id. Commerce calculated a preliminary zero percent dumping margin for both Prosperity and the Yieh Phui/Synn entity and preliminarily determined that CORE from Taiwan was not being, and is not likely to be, sold in the United States at less than fair value. Prelim. Determination , 81 Fed. Reg. at 72–73.

In the Final Determination, Commerce found that CORE from Taiwan was being, or was likely to be, sold in the United States at less than fair value. Final Determination , 81 Fed. Reg. at 35,313 ; see also Issues and Decision Memorandum for the Final Determination in the Antidumping Duty Investigation of Certain Corrosion–Resistant Steel Products from Taiwan , A–583–856, (May 26, 2016) (P.R. Doc. 372), available at https://enforcement.trade.gov/frn/summary/taiwan/2016-12975-1.pdf (last visited Jan. 18, 2018) ("Final Decision Mem. "). In reaching this determination, Commerce treated Yieh Phui, Prosperity, and Synn as a single entity (the "Yieh Phui/Prosperity/Synn" entity). Final Determination , 81 Fed. Reg. at 35,314 ; Final Decision Mem. at 24–28. In the Final Determination, Commerce declined to make downward adjustments to Yieh Phui's and Synn's home market sales prices to account for certain rebates granted to their respective home market customers. Final Decision Mem. at 20–24. Commerce further determined that Prosperity failed to report properly the yield strength of certain sales of CORE and applied facts otherwise available, with an adverse inference, to the costs of the sales found to have been misclassified. Id. at 11–19. Commerce assigned the Yieh Phui/Prosperity/Synn entity a weighted-average dumping margin of 3.77%. Final Determination , 81 Fed. Reg. at 35,314.

Following a ministerial error allegation, Commerce published an amended final determination that increased the weighted-average dumping margin assigned to the Yieh Phui/Prosperity/Synn entity from 3.77% to 10.34%. Amended Final Determination , 81 Fed. Reg. at 48,391, 48,393.

II. DISCUSSION

A. Jurisdiction and Standard of Review

The court exercises jurisdiction according to section 201 of the Customs Courts Act of 1980, as amended , 28 U.S.C. § 1581(c), which provides the court jurisdiction to review a final affirmative determination of sales at less than fair value in an action brought under section 516A(a)(2) of the Tariff Act of 1930 (the "Tariff Act"); see 19 U.S.C. §§ 1516a(a)(2)(A), (a)(2)(B)(i).⁵ In reviewing a final determination, the court will hold unlawful any finding, conclusion, or determination not supported by substantial record evidence or otherwise not in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i). Substantial evidence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consol. Edison Co. v. NLRB , 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938).

B. Commerce Unlawfully Failed to Adjust the Prices in Home Market Sales for Rebates

Commerce determines an antidumping duty margin by comparing the normal value of the subject merchandise to the export price (or constructed export price) at which the subject merchandise is sold in the United States. 19 U.S.C. § 1673. Normal value ordinarily is determined from the "price at which the foreign like product is first sold ... for consumption in the exporting country," with certain adjustments. Id. § 1677b(a)(1)(B). In pertinent part, the Department's regulation, 19 C.F.R. § 351.401(c), provides as follows:

Use of price net of price adjustments . In calculating export price, constructed export price, and normal value (where normal value is based on price), the Secretary will use a price that is net of any price adjustment, as defined in § 351.102(b), that is reasonably attributable to the subject merchandise or the foreign like product (whichever is applicable).

19 C.F.R. § 351.401(c). " ‘Price adjustment’ means any change in the price charged for subject merchandise or the foreign like product, such as discounts, rebates and post-sale price adjustments, that are [sic ] reflected in the purchaser's net outlay." 19 C.F.R. § 351.102(b)(38).

Yieh Phui and Synn provided their home market customers what they called "quantity rebates" or "purchase rewards rebates." The terms and conditions for these rebates were not established prior to the time of sale. Rather, Yieh Phui and Synn would consider, on a customer-by-customer basis, the total quantity shipped, market conditions, and the potential for future orders in determining the rebates.

Yieh Phui claims that Commerce violated 19 C.F.R. § 351.401(c) when it failed to make corresponding downward adjustments in the starting prices Commerce used in determining normal value, i.e. , the prices at which Yieh Phui and Synn sold the...