Seah Steel Vina Corp. v. United States, Slip Op. 18-98

• Decision Date: 13 August 2018
• Docket Number: Slip Op. 18-98,Consolidated Court No. 14-00224
• Citation: 332 F.Supp.3d 1314
• Parties: SEAH STEEL VINA CORPORATION, Plaintiff, v. UNITED STATES, Defendant, and Maverick Tube Corporation, United States Steel Corporation, Boomerang Tube LLC, Energex Tube (a Division of JMC Steel Group), Tejas Tubular Products, TMK IPSCO, Vallourec Star, L.P., and Welded Tube USA Inc., Defendant-Intervenors.
• Court: U.S. Court of International Trade

332 F.Supp.3d 1314

SEAH STEEL VINA CORPORATION, Plaintiff,

v. UNITED STATES, Defendant,andMaverick Tube Corporation, United States Steel Corporation, Boomerang Tube LLC, Energex Tube (a Division of JMC Steel Group), Tejas Tubular Products, TMK IPSCO, Vallourec Star, L.P., and Welded Tube USA Inc., Defendant-Intervenors.

Slip Op. 18-98

Consolidated Court No. 14-00224

United States Court of International Trade.

Dated: August 13, 2018

Jeffrey M. Winton, Law Office of Jeffrey M. Winton PLLC, of Washington, D.C., for plaintiff.

Agatha Koprowski, 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 on the brief was Catherine D. Miller, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C.

Jeffrey D. Gerrish and Luke A. Meisner, Skadden, Arps, Slate, Meagher & Flom LLP, of Washington, D.C., for defendant-intervenor United States Steel Corporation.

Alan H. Price, Wiley Rein, LLP, of Washington, DC, for defendant-intervenor Maverick Tube Corporation.

Roger B. Schagrin, Schagrin Associates, of Washington D.C., for defendant-intervenors Boomerang Tube LLC, Energex Tube (a Division of JMC Steel Group), Tejas Tubular Products, TMK IPSCO, Vallourec Star, L.P., and Welded Tube USA Inc.

OPINION AND ORDER

Goldberg, Senior Judge:

This appeal arrives after the court's second remand to the U.S. Department of Commerce ("Commerce" or "the Department") from challenges by SeAH Steel VINA Corporation ("SSV") to the Department's antidumping duty determination for oil country tubular goods ("OCTG") from the Social Republic of Vietnam ("Vietnam").See Certain Oil Country Tubular Goods from the Social Republic of Vietnam , 79 Fed. Reg. 41,973 (Dep't Commerce July 18, 2014) (final determ.) and accompanying Issues & Decision Mem., as amended by Certain Oil Country Tubular Goods from India, the Republic of Korea, Taiwan, the Republic of Turkey, and the Socialist Republic of Vietnam , 79 Fed. Reg. 53,691 (Dep't Commerce Sept. 10, 2014) (amended final determ.). Previously, the court had remanded this case twice to Commerce. SeAH Steel VINA Corp. v. United States , 40 CIT ––––, 182 F.Supp.3d 1316 (2016) (" SeAH I "); SeAH Steel VINA Corp. v. United States , 41 CIT ––––, 269 F.Supp.3d 1335 (2017) (" SeAH II "). In its most recent Remand Redetermination, Commerce addressed certain topics as directed by the court's remand order. See Final Results of Redetermination Pursuant to Court Remand, ECF No. 179 (Feb. 8, 2018) ("Remand Redetermination"). The court now reviews those findings, sustaining Commerce's determinations on all issues.

BACKGROUND

The court assumes familiarity with the facts and law as discussed in its prior opinions, see SeAH I , 182 F.Supp.3d at 1316 ; SeAH II , 269 F.Supp.3d at 1335, and summarily recounts only the pertinent details of the instant appeal below.

Commerce issued its Remand Redetermination on February 8, 2018, addressing three issues: 1) the surrogate value ("SV") for hot-rolled coil J55-H, Remand Redetermination at 2–7, 20–21; 2) the valuation of domestic inland insurance, id. at 7–11, 23–27; and 3) the allocation of domestic brokerage and handling ("B & H") costs, id. at 11–18, 29–35. Regarding the SV for hot-rolled coil, the Department determined that it was more appropriate to value the J55-H using "the average of SSV's [market economy ("ME") ] purchase prices of J55-H in the year prior to the [period of investigation ("POI") ], and adjusted to the POI using an inflator." Id. at 21. In so doing, Commerce rejected data from the harmonized tariff schedule ("HTSUS") 7208.37.00 because it was, as a "basket category," overly broad in that it could capture "all non-alloy steel with width greater than 600 millimeters, rather than just J55-H." Id. at 6. Next, Commerce supplemented the record with a more legible version of a document, the Agro Dutch data worksheet, and continues to use this document to calculate a SV for inland insurance. Id. at 23–24. While the Department did omit the values for marine insurance, Commerce continues to interpret and apply the Agro Dutch values over SSV's objections. Id. at 23–27. Last, Commerce continues to value domestic B & H costs using data from a report titled Doing Business India: 2014 ("Doing Business Report"). Id. at 35.

JURISDICTION AND STANDARD OF REVIEW

This dispute arises under 28 U.S.C. § 1581(c) and, thus, the court will sustain Commerce's determinations unless they are "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i). Doing so requires that the court assess the Department's reasoning under the arbitrary and capricious standard and review its factual findings for substantial evidence. See Changzhou Wujin Fine Chem. Factory Co. v. United States , 701 F.3d 1367, 1377 (Fed. Cir. 2012).

DISCUSSION

In this most recent challenge, SSV presents several arguments, all couched within an overarching accusation of bad faith by the Department. The court addresses the bad faith argument and then each of the subsequent challenges to individual findings below.

I. Bad Faith

SSV relies primarily on two cases to suggest that the court ought to infer bad faith based on an allegation of malicious prosecution by Commerce and its arbitrary, results-based findings. See Pl.'s Comments on Commerce's Redeterminations 3 n.3, ECF No. 183 (Mar. 12, 2018) ("Pl.'s Comments") (citing Kilopass Tech., Inc. v. Sidense Corp. , 738 F.3d 1302, 1311 (Fed. Cir. 2013) ; In re 60 E. 80th St. Equities, Inc. , 218 F.3d 109, 116 (2d Cir. 2000) ). But, as the Federal Circuit has made clear, "[s]ubjective bad faith is difficult to prove directly, essentially requiring the discovery of a smoking gun," Kilopass , 738 F.3d at 1311, circumstances not met—nor hardly even identified—here. Instead, SSV attempts to indirectly demonstrate Commerce's predisposition by pointing to a laundry list of "rationalizations that make no sense," Pl.'s Comments at 6, which SSV asserts make "an inference [of bad faith] abundantly warranted," id. at 3. Yet, put simply, a party's mere disagreement with Commerce's findings —however adamant and genuinely held it may be—in no way establishes bad faith.

What's more, when such an accusation of bad faith is lodged against the government, the burden of proof is even higher. In order to demonstrate that Commerce has acted in bad faith, SSV must present clear and convincing evidence to overcome the ordinary presumption that the government has acted in good faith. See SKF USA Inc. v. United States , 29 CIT 969, 971, 391 F.Supp.2d 1327, 1329 (2005). Suffice it to say, SSV has not met this heightened burden and its argument of bad faith is unsupported by the entirety of the circumstances found in the record.

II. SeAH II Remand Redetermination

The court remanded to Commerce to either further explain or modify its findings with respect to three different areas: 1) the Department's decision to discard SSV's purchases of J55-H as a SV for J55-H, 2) the calculation of inland insurance by use of the Agro Dutch data, and 3) the allocation of B & H costs. SeAH II , 269 F.Supp.3d at 1365.

A. Purchases of J55-H Coil

In its remand order, the court expressed a concern that Commerce had failed to adequately explain its valuation of J55-H hot-rolled coil. Specifically, the court could not discern why "Commerce decided to optimize accuracy by using [SVs] specific to the three variations of J55 HRC" and "discarded the more specific [SV]—SSV's actual ME purchases—because the sales occurred about six months before the POI." Id. at 1344. At that time, the court lacked the tools to "yet say that Commerce's decision was reasonable." Id. Thus, the court directed Commerce "to either provide a more exhaustive explanation of its preference or, alternatively, to change its preference." Id.

In its Remand Redetermination, Commerce recalculated the surrogate value for J55-H, selecting data from ME purchase data over the non-specific HTSUS 7208.37.00 information. Remand Redetermination at 4–7, 20–21. Commerce did concede that "in weighing contemporaneity versus specificity, [it] did not [previously] attach sufficient weight to the specificity of the SVs in [its] analysis in the First Remand Redetermination." Id. at 5. Ultimately, Commerce concluded that "the ME purchase data that is more specific and would require an inflation adjustment of only six months is the superior data source when compared with a less specific (i.e. , basket category) and three months more contemporaneous data source." Id. at 21. Therefore, the Department discarded the HTSUS 7208.37.00 information because that "is a ‘basket category’ that may contain all non-alloy steel with width greater than 600 millimeters, rather than just J55-H and, thus, is not specific to the input." Id. at 6–7.

SSV challenges Commerce's findings in this area, advocating that Commerce ought to have pursued an alternative in valuing J55-H: SSV's actual ME purchases of the subject merchandise. Arguing that since the "simultaneous purchases of J55 and J55H coil [in September 2012] demonstrated that the prices were the same," SSV asserts that "appl[ying] [ ] this historical price ratio requires the conclusion that the prices for J55 and J55H coils would also be the same during the investigation period." Pl.'s Comments at 9. In response, the Government argues that SSV's proposed alternative of using a single transaction would be less specific. Rather, the Government contends that there is "no record evidence of market economy purchases of J55-H hot-rolled coil during the [POI]" and Commerce resultantly "considered several imperfect options for selecting a [SV]." Def.'s Resp. to Comments Regarding the Remand Redetermination 10, ECF No. 188...