Seah Steel Corp. v. United States
| Citation | 539 F.Supp.3d 1341 |
| Decision Date | 19 October 2021 |
| Docket Number | Slip Op. 21-146,Court No. 20-00150 |
| Parties | SEAH STEEL CORPORATION, Plaintiff, v. UNITED STATES, Defendant, and United States Steel Corporation, Maverick Tube Corporation, IPSCO Tubulars Inc., Tenaris Bay City, Inc., and Vallourec Star L.P., Defendant-Intervenors. |
| Court | U.S. Court of International Trade |
Jeffrey M. Winton, Michael J. Chapman, Amrietha Nellan, and Vi N. Mai, Winton & Chapman PLLC, of Washington, D.C., for Plaintiff SeAH Steel Corporation.
Hardeep K. Josan, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of New York, N.Y., for Defendant United States.
With her on the brief were Brian M. Boynton, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Claudia Burke, Assistant Director. Of counsel on the brief was Mykhaylo Gryzlov, Senior Counsel, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C.
Thomas M. Beline, Myles S. Getlan, James E. Ransdell, and Nicole Brunda, Cassidy Levy Kent (USA) LLP, of Washington, D.C., for Defendant-Intervenor United States Steel Corporation.
Gregory J. Spak, Frank J. Schweitzer, Kristina Zissis, and Matthew W. Solomon, White & Case LLP, of Washington, D.C., for Defendant-Intervenors Maverick Tube Corporation, IPSCO Tubulars Inc., and Tenaris Bay City, Inc.
Plaintiff SeAH Steel Corporation ("SeAH" or "Plaintiff") filed this action challenging the final results published by the U.S. Department of Commerce ("Commerce") in the 2017–2018 administrative review of the antidumping duty order on oil country tubular goods ("OCTG") from the Republic of Korea ("Korea"). See Certain Oil Country Tubular Goods from the Republic of Korea ("Final Results"), 85 Fed. Reg. 41,949 (Dep't of Commerce July 13, 2020) (final results of antidumping duty administrative review; 2017–2018); see also Issues and Decision Mem. for the Final Results of the 2017–2018 Admin. Review of the Antidumping Duty Order on Certain Oil Country Tubular Goods from the Republic of Korea (July 6, 2020) ("Final IDM"), ECF No. 20-5. Before the Court is the Motion of Plaintiff SeAH Steel Corporation for Judgment on the Agency Record, ECF Nos. 43, 44. See also Br. SeAH Steel Corp. Supp. Its Rule 56.2 Mot. J. Agency R. ("SeAH's Br."), ECF Nos. 43-1, 44-1. For the following reasons, the Court sustains in part and remands in part the Final Results.
The Court reviews the following issues:
Commerce initiated this fourth administrative review ("OCTG IV") of the antidumping duty order on OCTG from Korea for the period covering September 1, 2017 through August 31, 2018. Initiation of Antidumping and Countervailing Duty Admin. Reviews, 83 Fed. Reg. 57,411, 57,413 –14 (Dep't of Commerce Nov. 15, 2018) (initiation notice). Commerce selected Hyundai Steel Company ("Hyundai Steel") and SeAH as mandatory respondents for individual examination. Certain Oil Country Tubular Goods from the Republic of Korea, 84 Fed. Reg. 63,615, 63,615 (Dep't of Commerce Nov. 18, 2019) (prelim. results of antidumping duty admin. review; 2017–2018); see also Decision Mem. for the Prelim. Results of the 2017–2018 Admin. Review of the Antidumping Duty Order on Certain Oil Country Tubular Goods from the Republic of Korea (Nov. 8, 2019) ( ), PR 285.1
In the Final Results, Commerce assigned weighted-average dumping margins of 0% for Hyundai Steel, 3.96% for SeAH, and 3.96% for non-examined companies. Final Results, 85 Fed. Reg. at 41,950. Commerce based normal value on constructed value for Hyundai Steel and SeAH because neither mandatory respondent had a viable home market or third-country market during the period of review. Final IDM at 68.
Commerce applied a differential pricing analysis and calculated SeAH's weighted-average duty margin by the alternative average-to-transaction method. Id. at 79–91. Commerce determined that a particular market situation existed in Korea based on a totality-of-the-circumstances assessment of five factors, namely: (1) subsidies from the Government of Korea to producers of hot-rolled coil, (2) the deluge of Chinese hot-rolled products exerting downward pressure on Korean domestic hot-rolled coil prices, (3) strategic alliances between Korean hot-rolled coil suppliers and Korean OCTG producers, (4) the Government of Korea's influence over the cost of electricity, and (5) steel industry restructuring efforts by the Government of Korea. See id. at 5–6. Commerce used a regression-based analysis to quantify the impact of the particular market situation in Korea and adjusted for the particular market situation determination by increasing the reported hot-rolled coil costs by a rate of 17.13%. See id. at 49, 61; Final Calculations Mem. – SeAH Steel Corp. (July 6, 2020) ("SeAH Final Calculations Mem.") at 2, PR 350. Commerce utilized the 2018 financial statements of Tenaris S.A. ("Tenaris") and PAO TMK ("TMK") to calculate SeAH's constructed value profit and selling expenses. See Final IDM at 67. Commerce deducted SeAH's reported freight revenue up to actual freight cost and calculated SeAH's constructed export price profit rate using the Tenaris and TMK 2018 financial statements. See id. at 106, 109–11; see also Analysis of Data Submitted by SeAH Steel Corp. for Prelim. Results (Nov. 8, 2019) ( ) at 3, PR 290.
The Court has jurisdiction under 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 shall hold unlawful any determination found to be unsupported by substantial evidence on the record or otherwise not in accordance with the law. 19 U.S.C. § 1516a(b)(1)(B)(i).
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. Id. § 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).
Commerce normally determines dumping margins "by comparing the weighted average of the normal values to the weighted average of the export prices (and constructed export prices) for comparable merchandise" or "by comparing the normal values of individual transactions to the export prices (or constructed export prices) of individual transactions for comparable merchandise." See id. § 1677f-1(d)(1)(A)(i)–(ii) ; JBF RAK LLC v. United States, 790 F.3d 1358, 1364–65 (Fed. Cir. 2015). Commerce may "compar[e] the weighted average of the normal values to the export prices (or constructed export prices) of individual transactions for comparable merchandise," if two statutory conditions are met: "there is a pattern of export prices (or constructed export prices) for comparable merchandise that differ significantly among purchasers, regions, or periods of time," and "[Commerce] explains why such differences cannot be taken into account using a method described in paragraph (1)(A)(i) or (ii)." 19 U.S.C. § 1677f-1(d)(1)(B).
If Commerce cannot determine the normal value of the subject merchandise based on home market sales, then Commerce may use qualifying third-country sales or constructed value as a basis for normal value. Id. § 1677b(a)(4), (a)(1)(B)(ii), (b)(1). Constructed value represents: (1) the cost of materials and fabrication or other processing of any kind used in producing the merchandise; (2) the actual amounts incurred and realized for selling, general, and administrative expenses, and for profits, in connection with the production and sales of a foreign like product, in the ordinary course of trade, for consumption in the foreign country; and (3) the cost of packing the subject merchandise. Id. § 1677b(e). When calculating constructed value, if Commerce determines that a particular market situation exists "such that the cost of materials and fabrication or other processing of any kind does not accurately reflect the cost of production in the ordinary course of trade, [then] [Commerce] may use ... any other calculation methodology." Id. The statute directs Commerce to calculate cost of production and constructed value "based on the records of the exporter or producer of the merchandise, if such records are kept in accordance with the generally accepted accounting principles of the exporting country (or the producing country, where appropriate) and reasonably reflect the costs associated with the production and sale of the merchandise." Id. § 1677b(f)(1)(A).
When Commerce is required to calculate constructed value for a respondent, Commerce must utilize the respondent's actual selling, general, and administrative expenses and profits...
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Seah Steel Corp. v. United States
...evidence and (2) Commerce's application of the Cohen's d test as part of the differential pricing analysis for further explanation. Id. remand under protest, Commerce determined that "[n]otwithstanding Commerce's objections to the Court's position that the evidence on which Commerce relied ......