Rebar Trade Action Coal. v. United States, Slip Op. 19-107

• Citation: 398 F.Supp.3d 1374
• Decision Date: 08 August 2019
• Docket Number: Court No. 18-00106,Slip Op. 19-107
• Parties: REBAR TRADE ACTION COALITION, Plaintiff, v. UNITED STATES, Defendant, and Colakoglu Dis Ticaret A.S. and Colakoglu Metalurji A.S., Defendant-Intervenors.
• Court: U.S. Court of International Trade

398 F.Supp.3d 1374

REBAR TRADE ACTION COALITION, Plaintiff,

v.UNITED STATES, Defendant,andColakoglu Dis Ticaret A.S. and Colakoglu Metalurji A.S., Defendant-Intervenors.

Slip Op. 19-107

Court No. 18-00106

United States Court of International Trade.

August 8, 2019

Maureen E. Thorson, Wiley Rein LLP, of Washington, D.C., argued for Plaintiff Rebar Trade Action Coalition. With her on the brief were John R. Shane and Alan H. Price, Wiley Rein LLP, of Washington, D.C.

Robert R. Kiepura, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C.; and Reza Karamloo, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C., argued for Defendant. With them on the brief were Joseph M. Hunt, Assistant Attorney General, Civil Division, U.S. Department of Justice; Jeanne E. Davidson, Director; and L. Misha Preheim, Assistant Director.

Friederike S. Görgens, Arent Fox LLP, of Washington, D.C., argued for Defendant-Intervenors Colakoglu Dis Ticaret A.S. and Colakoglu Metalurji A.S. With her on the brief was Matthew M. Nolan, Arent Fox LLP, of Washington, D.C.

OPINION

Richard W. Goldberg, Senior Judge

This action comes to the court upon a motion by Plaintiff Rebar Trade Action Coalition ("RTAC") under Rule 56.2 of the USCIT Rules, Mot. for J. on the Agency R., ECF No. 22 (Oct. 29, 2018); see also Mem. of Pl. in Support of its Mot. for J. on the Agency R., ECF No. 25 (Oct. 30, 2018) ("Pl.'s Br."), appealing from the administrative review of the countervailing duty ("CVD") order on steel concrete reinforcing bar ("rebar") from the Republic of Turkey ("Turkey"), Steel Concrete Reinforcing Bar from the Republic of Turkey , 83 Fed. Reg. 16,051 (Dep't Commerce Apr. 13, 2018) (final results and partial rescission) ("Final Results") and accompanying Issues & Decision Mem., P.R. 205 (Apr. 9, 2018) ("I & D Mem."). Both the Government and Defendant-Intervenors Colakoglu Dis Ticaret A.S. and Colakoglu Metalurji A.S. (collectively "Colakoglu") filed responses to RTAC's motion, asking the court to sustain the determinations made by the U.S. Department of Commerce ("Commerce" or "the Department"). Def.'s Resp. to Pl.'s Mot. for J. on the Agency R., ECF No. 34 (Mar. 11, 2019) ("Gov't's Br."); Resp. Br. of Def.-Intervenor in Opp'n to Pl.'s Rule 56.2 Mot. for J. on the Agency R., ECF No. 35 (Mar. 11, 2019). Upon consideration of the record, the parties' briefing, and oral argument, the court finds the Department's determinations to be supported by substantial evidence and in accordance with law. Therefore, the court sustains the Final Results and judgment will enter accordingly.

BACKGROUND

In November of 2014, the Department of Commerce issued a countervailing duty order on rebar from Turkey pursuant to 19 U.S.C. § 1671. Steel Concrete Reinforcing Bar from the Republic of Turkey , 79 Fed. Reg. 65,926 (Dep't Commerce Nov. 6, 2014) (CVD order). Roughly two years later, in response to a notice from Commerce, Opportunity to Request Admin. Review , 81 Fed. Reg. 76,920 (Dep't Commerce Nov. 4, 2016), RTAC¹ requested review of the Department's CVD order, Request for Admin. Review, P.R. 4 (Nov. 30, 2016), which in turn prompted Commerce to initiate a review of Turkish rebar for the period covering January 1, 2015 to December 31, 2015. Initiation of Antidumping and Countervailing Duty Admin. Reviews , 82 Fed. Reg. 4,294, 4,297 (Dep't Commerce Jan. 13, 2017). Involved in that review were mandatory respondents Colakoglu and Icdas Celik Enerji Tersane ve Ulasim Sanayi A.S. ("Icdas") as well as seventeen other producers and exporters of Turkish rebar. Id.

In the Department's initial administrative review of the CVD order, Commerce had determined that Turkish manufacturers of rebar received countervailable subsidies from the involvement of the Government of Turkey ("GOT") in the market for natural gas. See Steel Concrete and Reinforcing Bar from the Republic of Turkey , 79 Fed. Reg. 54,963 (Dep't Commerce Sept. 15, 2014) (final affirm. CVD determ.) and accompanying Issues & Decision Mem. at 8–13 ("Turkey Rebar Final Determ. I"). Subsequent reviews determined that: (a) the product receiving the subsidy to be natural gas in gaseous form, not liquefied natural gas or compressed natural gas; and (b) the gaseous form is only transported via pipeline. Steel Concrete Reinforcing Bar from the Republic of Turkey , 82 Fed. Reg. 23,188 (Dep't Commerce May 22, 2017) (final affirm. CVD determ.) and accompanying Issues & Decision Mem. at 10, 24, and 25 ("Turkey Rebar Final Determ. II").

In the immediate review, Commerce issued a questionnaire to the GOT. Countervailing Duty Questionnaire, P.R. 21 (Feb. 7, 2017). The questionnaire dedicated several questions to gathering information about the Turkish government entity that operates the Turkish natural gas pipeline network, Boru Hatlari Ile Petrol Tasima A.S. ("BOTAS"). Id. at 21–24. One such question requested "Annual Report(s) pertaining to the POR, and the two preceding years," id. at 30, 48, to which the GOT responded by attaching an exhibit containing annual reports for the years 2013–2015, Questionnaire Resp. of the Gov't of Turkey 11, P.R. 54–87 (Apr. 3, 2017) ("GOT Questionnaire Resp."). Those reports provide general information on the operation of the pipeline network. In particular, the report from 2015 ("2015 Annual Report"), id. ex. 6d, contains descriptions of specific segments of the pipeline, id. ex. 6d at 28–30, as well as a map titled "Natural Gas and Crude Oil Pipeline System, Natural Gas Supply-Export Contracts" ("BOTAS map"), id. ex. 6d at 22–23. The GOT's response also includes information on the Turkish natural gas pipeline "exit and entry points," which lists entry points numbered 1–9 and also "Export Exit Point (Greece)." Id. at 21–22.

Pursuant to 19 C.F.R. § 351.301(c)(3)(ii),² Colakoglu also submitted factual information for use in calculating a benchmark. Colakoglu's Submission Regarding Natural Gas Benchmark Pricing Data, P.R. 172–73 (Oct. 27, 2017) ("Colakoglu Benchmark Submission"). Colakoglu requested, if Commerce were to decline to employ a Tier 1 benchmark, that "the Department select a [Tier 2] benchmark price which enables it to compare BOTAS prices to a world market price that would actually be available to Colakoglu." Id. at 3. Based on the BOTAS map, Colakoglu suggested that "Turkey has [a] natural gas pipeline connection with Russia, Azerbaijan, [and] Iran" and, thus, only those countries could serve as a source price of natural gas available in Turkey. Id. The submission further provided amounts of imported natural gas organized by source country, concluding that "almost 60% of natural gas [was imported] from Russia and [a] signification portion of the remaining share came from Iran and Azerbaijan." Id. at 4. Colakoglu also submitted natural gas prices published by the Romanian Energy Regulatory Authority ("RERA") and Global Trade Information Services ("GTIS"). Id. exs. 5–8.

For its part, RTAC submitted natural gas prices provided by the International Energy Agency ("IEA") to be used by the Department in calculating the CVD rate. RTAC Benchmark Information Submission ex. 6, P.R. 174–177 (Oct. 31, 2017). Included in the IEA dataset are natural gas sales prices from a variety of IEA-member states, including several prices from European countries. Id.

On December 6, 2017, the Department issued its preliminary results. See Steel Concrete Reinforcing Bar from the Republic of Turkey , 82 Fed. Reg. 57,574 (Dep't Commerce Dec. 6, 2017) (prelim. results) and accompanying Prelim. Decision Mem., P.R. 190 (Nov. 30, 2017) ("PDM"). Commerce preliminarily determined that, pursuant to the Department's prior determinations and due to the continued presence of BOTAS in the market, the price of natural gas in Turkey is distorted. PDM at 12–14 (citing, inter alia , Turkey Rebar Final Determ. I). In calculating the accompanying CVD rate, Commerce rejected Turkish domestic prices as a benchmark due to BOTAS's prevailing control over the market for natural gas, id. at 15, and instead relied on domestic natural gas prices from Azerbaijan, id. at 16. The Department determined that the use of Azerbaijani domestic prices as a Tier 2 benchmark was most appropriate "as that price represents natural gas (a) that would be available through the pipeline system to purchasers in Turkey and (b) excludes any prices on sales to Turkey itself, i.e. , import prices in Turkey ...." Id. (citing 19 C.F.R. § 351.511(a)(2)(ii) ). In so doing, Commerce rejected both: (a) the RERA prices and the IEA prices because there ia no pipeline connection between Turkey and the source countries from which those prices originated, as well as (b) the Russian and Iranian prices because those figures are either distorted or unavailable in the record. Id. at 15–16. In order to arrive at the ultimate countervailable benefit, the Department then "added the per-unit transmission and capacity fees charged by BOTAS to the Azerbaijan annual price." Id. at 16.

After Commerce released the Preliminary Results, RTAC submitted a case brief arguing that the Department should rely on data from the IEA instead of the Azerbaijani pricing data. See RTAC's Case Br. & Request for Hr'g, P.R. 198 (Jan. 8, 2018) ("RTAC Case Br."). At RTAC's request, Commerce conducted a hearing on the calculation of the CVD rate. See Hr'g Tr., P.R. 202 (Feb. 16, 2018).

In its Final Results, Commerce adopted the determinations made in the Preliminary Results over objection from RTAC, see RTAC Case Brief. The Final Results determined that Colakoglu and Icdas did not receive countervailable subsidies, but that eleven companies who had not been individually examined had received countervailable subsidies. Final Results at 16,051–52. Specifically, as to the CVD calculation, the Department rejected RTAC's arguments that Azerbaijani prices could not serve a reasonable Tier 2 benchmark. I & D Mem. at...