Seah Steel Vina Corp. v. United States

• Decision Date: 28 September 2017
• Docket Number: Consolidated Court No. 14–00224,Slip Op. 17–133
• Citation: 269 F.Supp.3d 1335
• 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

269 F.Supp.3d 1335

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. 17–133

Consolidated Court No. 14–00224

United States Court of International Trade.

September 28, 2017

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

Emma E. Bond, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for defendant. With her on the brief were Chad A. Readier, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Claudia Burke, Assistant Director. Of counsel on the brief was Catherine Miller, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of Washington, DC.

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

Alan H. Price, Adam M. Teslik, Laura El–Sabaawi, Robert E. DeFrancesco, III, Wiley Rein, LLP, of Washington, DC, for defendant-intervenor Maverick Tube Corporation.

Roger B. Schagrin, Christopher T. Cloutier, John W. Bohn, Paul W. Jameson, Schagrin Associates, of Washington DC, 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 case concerns challenges to the antidumping duty determination of the U.S. Department of Commerce ("Commerce" or "the Department") for oil country tubular goods ("OCTG") from the Socialist Republic of Vietnam ("Vietnam"). See Certain Oil Country Tubular Goods from the Socialist Republic of Vietnam , 79 Fed. Reg. 41,973 (Dep't Commerce July 18, 2014) (final determ.) (" Final Determination ") and accompanying Issues & Decision Mem. ("I & D 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.).

Both Plaintiff, SeAH Steel VINA Corporation ("SSV"), and Defendant-intervenor, United States Steel Corporation ("U.S. Steel") moved for judgment on the agency record under USCIT Rule 56.2. SSV challenged five aspects of the Final Determination. Pl.'s Mot. for J. on Agency R. 4–11, ECF No. 54 ("SSV Br."). U.S. Steel challenged four aspects of the Final Determination. Def.–Intervenor's Mot. for J. on Agency R. 6–8, ECF No. 56 ("U.S. Steel Br."). On August 31, 2016, the court resolved these motions by remanding for reconsideration all but one of the challenges to Commerce's Final Determination. SeAH Steel VINA Corp. v. United States , 40 CIT ––––, 182 F. Supp. 3d 1316 (2016). On May 1, 2017, Commerce issued its Final Results of Redetermination Pursuant to Court Remand ("Remand Results"), ECF No. 131–1.

Both SSV and U.S. Steel now challenge aspects of the Remand Results. For the reasons below, the court remands in part and sustains in part.

GENERAL BACKGROUND

The court assumes familiarity with the facts and law as discussed in its prior opinion. Nevertheless, the court summarizes the relevant details in its discussion of each challenge to the Remand Results.

U.S. Steel challenges two aspects of the Remand Results. Comments of U.S. Steel Corp. on the Final Results of Redetermination Pursuant to Court Remand ("U.S. Steel Comments"), ECF No. 137. First, U.S. Steel challenges Commerce's selection of surrogate values for SSV's hot rolled coil ("HRC"). U.S. Steel Comments 1–14. Second, U.S. Steel challenges Commerce's calculation of yield loss. U.S. Steel Comments 22–29. The court remands Commerce's determination concerning the first challenge, and sustains Commerce's determination concerning the second challenge.

SSV raises four main challenges to the Remand Results. Comments of Pl. on Commerce's Redeterminations ("SSV Comments"), ECF No. 138. First, SSV argues that Commerce erred when it used the financial statements of Bhushan Steel Ltd. as a source of surrogate values. SSV Comments 10–23. Second, SSV argues that Commerce (1) erred in its finding that SSV purchased domestic inland insurance and (2) erred in its valuation of the alleged domestic inland insurance. SSV Comments 2–10. Third, SSV argues that Commerce "improperly included ‘document preparation’ costs in the calculation of export and import brokerage and handling costs." SSV Comments 23–27. Fourth, SSV argues that Commerce improperly allocated its brokerage and handlings costs. SSV Comments 27–33. The court remands Commerce's determinations concerning the second and fourth challenges, but sustains Commerce's determinations concerning the first and third challenges.

JURISDICTION AND STANDARD OF REVIEW

The court exercises jurisdiction to hear this appeal under 28 U.S.C. § 1581(c). The court will sustain Commerce's determination unless the court concludes that the determination is "unsupported by substantial evidence on the record, or otherwise not in accordance with law ...." 19 U.S.C. § 1516a(b)(1)(B)(i). Substantial evidence amounts to "more than a mere scintilla" of evidence. Universal Camera Corp. v. NLRB , 340 U.S. 474, 477, 71 S.Ct. 456, 95 L.Ed. 456 (1951) (citation omitted). It is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Id. (citation omitted). In other words, "substantial evidence" "can be translated roughly to mean ‘is [the determination] unreasonable?’ " Nippon Steel Corp. v. United States , 458 F.3d 1345, 1351 (Fed. Cir. 2006).

DISCUSSION

I. Substantial Evidence Supports Commerce's Selection of a Surrogate Value for high-chromium J55 Hot–Rolled Coil, but the Court Remands for Further Explanation or Reconsideration of Commerce's Selection of a Surrogate Value for J55 Hot–Rolled Coil Containing a Higher Carbon Content.

Although U.S. Steel supports Commerce's decision on remand to separately value the three variations of J55 HRC, U.S. Steel argues that Commerce erred in selecting surrogate values for the high-chromium J55 HRC and the upgradeable J55 HRC containing a higher carbon content ("J55–H"). U.S. Steel Comments 4–14. Substantial evidence supports Commerce's surrogate value selection for high-chromium J55 HRC but not J55–H HRC.

A. Background

When companies from a nonmarket economy ("NME") country export merchandise, Commerce typically "determine[s] the normal value of the subject merchandise on the basis of the value of the factors of production utilized in producing the merchandise ...." 19 U.S.C. § 1677b(c)(l)(B). This "valuation of the factors of production shall be based on the best available information regarding the values of such factors in a market economy [ ("ME") ] country ...." Id.

To accomplish this valuation, Commerce asked SSV to disclose "each type and grade of material used in the production process" of OCTG. Commerce Questionnaire to SSV at D–8, PD 56–59 (Aug. 23, 2013), ECF No. 92. SSV disclosed three types of J55 HRC. First, reported that it consumed regular J55. SSV Resp. to Sections C & D Questionnaire app. D–4–C ("C & D Resp."), PD 87–91 (Oct. 30, 2013), ECF No. 60. SSV explained that [[ ]] of its J55 came from ME suppliers and [[ ]] came from NME suppliers. C & D Resp. app. D–6, CD 21–28 (Oct. 30, 2013), ECF No. 60. Second, SSV reported that it consumed high-chromium J55. SSV Resp. to Suppl. Section D Questionnaire ("Suppl. D Resp") app. SD–10, CD 36–39 (Jan. 13, 2014), ECF No. 60. Third, SSV reported that it used J55 containing a higher carbon content ("J55–H") than regular J55. SSV Resp. to Suppl. Section D Questionnaire ("Suppl. D Resp") app. SD–10, CD 36–39 (Jan. 13, 2014), ECF No. 60; see also Pl.'s Resp. to Def.–Intervenor's Mot. for J. on Agency R. 10, ECF No. 66. SSV purchased [[ ]] of its J55–H HRC from ME suppliers. U.S. Steel Comments 4.

On remand, Commerce decided to assign a separate surrogate value to each of the three variations of J55 HRC. Remand Results 9. Commerce explained that "valuing the three types of J55 using values specific to each input would be consistent with [Commerce's] normal practice." Remand Results 9. Moreover, Commerce reasoned that "a calculation that takes into account physical differences between inputs will result in a valuation that is more specific to the input which is likely, in turn, to lead to a more accurate calculation of normal value." Remand Results 9. Commerce then explained its process for selecting surrogate values:

The Department's practice when selecting factors of production, in accordance with section 773(c)(1) of the Tariff Act, is to use, to the extent practicable, surrogate values which are publicly available, product-specific, representative of a broad market average, tax-exclusive, and contemporaneous with the POI. The Department's practice at the time of ... [the investigation] underlying this remand redetermination was to value an input using the actual price paid by the respondent where the respondent sourced an input from a ME supplier in meaningful quantities (i.e. , 33 percent or more of total purchases of the input) and paid in an ME currency ....

Remand Results 9 (citations omitted).

Commerce began its valuation of the regular J55 by explaining that "the record shows that SSV purchased more than 33 percent of its regular J55 HRC from ME sources during the POI ...." Remand Results 10. For that reason, Commerce found it "appropriate to value SSV's regular J55 using [the above-explained] standard methodology for valuing ME-sourced inputs." Remand Results 10. Thus, Commerce valued the regular J55 using SSV's ME purchases of regular J55. U.S. Steel does not challenge this decision.

With regard to J55–H, Commerce decided to use Indian import price data for the HTS...