Stupp Corp. v. United States

• Decision Date: 08 January 2019
• Docket Number: Slip Op. 19-2,Consol. Court No. 15-00334
• Parties: STUPP CORPORATION et al., Plaintiffs and Consolidated Plaintiffs, and Maverick Tube Corporation et al., Plaintiff-Intervenor and Consolidated Plaintiff-Intervenors, v. UNITED STATES, Defendant, and SeAH Steel Corporation et al., Defendant-Intervenors and Consolidated Defendant-Intervenors.
• Court: U.S. Court of International Trade

359 F.Supp.3d 1293

STUPP CORPORATION et al., Plaintiffs and Consolidated Plaintiffs,andMaverick Tube Corporation et al., Plaintiff-Intervenor and Consolidated Plaintiff-Intervenors,

v. UNITED STATES, Defendant,andSeAH Steel Corporation et al., Defendant-Intervenors and Consolidated Defendant-Intervenors.

Slip Op. 19-2

Consol. Court No. 15-00334

United States Court of International Trade.

January 8, 2019

Paul Wright Jameson, Schagrin Associates, of Washington, DC, argued for plaintiffs, consolidated plaintiff intervenors, and consolidated defendant intervenors Stupp Corporation, a Division of Stupp Bros., Inc., TMK IPSCO, and Welspun Tubular LLC USA. With him on the brief was Roger Brian Schagrin.

Robert Edward DeFrancesco, III, Wiley Rein, LLP, of Washington, DC, argued for plaintiff intervenor, consolidated plaintiff, and consolidated defendant intervenor Maverick Tube Corporation. With him on the brief were Alan Hayden Price and Adam Milan Teslik.

Elizabeth Anne Speck, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for defendant. With her on the brief were Claudia Burke, Assistant Director, Jeanne E. Davidson, Director, and Chad A. Readler, Acting Assistant Attorney General. Of Counsel on the brief was Reza Karamloo, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

Jeffrey Michael Winton, Law Office of Jeffrey M. Winton PLLC, of Washington, DC, argued for defendant intervenor, consolidated plaintiff, and consolidated defendant intervenor SeAH Steel Corporation.

Henry David Almond and Jaehong David Park, Arnold & Porter LLP, of Washington, DC, argued for defendant intervenor and consolidated defendant intervenor Hyundai Steel Company. With them on the brief was Sylvia Yun Chu Chen.

OPINION AND ORDER

Kelly, Judge:

This consolidated action is before the court on several motions for judgment on the agency record filed respectively by Stupp Corporation, a division of Stupp Bros., Inc., TMK IPSCO, and Welspun Tubular LLC USA (collectively "Stupp et al."), SeAH Steel Corporation ("SeAH"), and Maverick Tube Corporation ("Maverick").¹ See Pls. [Stupp et al.'s] Mot. J.R.

Pursuant Rule 56.2, July 5, 2016, ECF No. 39; Mot. Pl. SeAH [ ] J. Agency R., July 5, 2016, ECF No. 40; Pl.-Intervenor [Maverick]'s Rule 56.2 Mot. J. Agency R., July 5, 2016, ECF No. 41. These parties challenge various aspects of the U.S. Department of Commerce's ("Department" or "Commerce") final determination in the less than fair value ("LTFV") investigation of imports of welded line pipe from the Republic of Korea ("Korea") for the period October 1, 2013, through September 30, 2014, which resulted in an antidumping duty order ("ADD"). See [Stupp et al.'s] Mem. Supp. Mot. J. [Agency] R. Pursuant USCIT Rule 56.2 at 4 – 27, July 5, 2016, ECF No. 39 ("Stupp et al. Br."); Br. SeAH [ ] Supp. Rule 56.2 Mot. J. Agency R. at 26–50, July 5, 2016, ECF No. 40 ("SeAH's Br."); Mem. Pl.-Intervenor Maverick [ ] Supp. Mot. J. Agency R. at 12–43, July 6, 2016, ECF No. 44 ("Maverick's Br."); see Welded Line Pipe From [Korea], 80 Fed. Reg. 61,366 (Dep't Commerce Oct. 13, 2015) (final determination of sales at [LTFV] ), as amended by Welded Line Pipe From [Korea], 80 Fed. Reg. 69,637 (Dep't Commerce Nov. 10, 2015) (amended final determination of sales at [LTFV] ) ("Amended Final Determination") and accompanying Issues & Decision Mem. for the Final Affirmative Determination in the [LTFV] Investigation of Welded Line Pipe from [Korea], A-580-876, (Oct. 5, 2015), ECF No. 30-3 ("Final Decision Memo"); Welded Line Pipe From [Korea] and the Republic of Turkey [ ("Turkey") ], 80 Fed. Reg. 75,056, 75,057 (Dep't Commerce Dec. 1, 2015) ( [ADD] orders). On September 28, 2018, this consolidated action was reassigned to Judge Claire R. Kelly by the Chief Judge pursuant to 28 U.S.C. § 253(c) (2012) and Rule 77(e)(4) of the Rules of the U.S. Court of International Trade. See Order of Reassignment, Sept. 28, 2018, ECF No. 107.

SeAH challenges as contrary to law and unsupported by substantial evidence Commerce's (i) decision to reject portions of its September 1, 2015 case brief, see SeAH's Br. at 36–42; (ii) differential pricing analysis, see id. at 26–36, 42–45; and (iii) calculation of credit expenses on its back-to-back sales. See id. 46–50. Stupp et al. challenge as arbitrary and capricious and unsupported by substantial evidence Commerce's treatment of Hyundai HYSCO's ("HYSCO")² and SeAH's pipe for purposes of product matching. See Stupp et al. Br. at 4–27. Maverick challenges Commerce's decision to include certain local sales in HYSCO's home market sales database as contrary to law and unsupported by substantial evidence, see Maverick's Br. at 12–35, and Commerce's decision to reject Maverick's supplemental case brief as an abuse of discretion. See id. at 35–43.

For the reasons that follow, the court sustains Commerce's (1) differential pricing analysis; (2) rejection of portions of SeAH's case brief that contained untimely new factual information; (3) calculation of credit expenses on SeAH's back-to-back sales; and (4) treatment of grades B and X42 pipe as separate grades for purposes of product matching. The court, however, remands Commerce's decision to include certain local sales in HYSCO's home market sales database for further explanation or reconsideration consistent with this opinion. The court also finds that Commerce abused its discretion by rejecting Maverick's supplemental case brief.

BACKGROUND

On November 14, 2014, in response to petitions filed by domestic producers of welded line pipe, Commerce initiated an ADD investigation of welded line pipe from Korea. See Welded Line Pipe From [Korea] and [Turkey], 79 Fed. Reg. 68,213, 68,213 (Dep't Commerce Nov. 14, 2014) (initiation of [LTFV] investigations) ("Initiation"). On December 5, 2014, Commerce selected HYSCO and SeAH for individual examination as mandatory respondents. See Resp't Selection for [ADD] Investigation of Welded Line Pipe from [Korea] at 4–5, PD 49, bar code 3245872-01 (Dec. 5, 2014).³

Commerce published its preliminary determination on May 22, 2015. See generally Welded Line Pipe From [Korea], 80 Fed. Reg. 29,620 (Dep't Commerce May 22, 2015) (preliminary determination of sales at [LTFV] and postponement of final determination) ("Prelim. Determination") and accompanying Decision Mem. for the Prelim. Determination in the [ADD] Investigation of Welded Line Pipe from [Korea], A-580-876, PD 305, bar code 3277027-01 (May 14, 2015) ("Prelim. Decision Memo"). Commerce applied the Average-to-Average ("A-to-A") methodology to all of SeAH's U.S. sales, explaining that although 40.61% of the sales passed Commerce's Cohen's d test, the A-to-A methodology could account for the price differences identified.⁴ Prelim. Decision Memo at 9. Commerce preliminarily calculated weighted-average dumping margins of 2.52% for HYSCO, 2.67% for SeAH, and 2.60% for the all-others. Prelim. Determination, 80 Fed. Reg. at 29,620.

On September 1, 2015, SeAH filed a case brief with the agency challenging certain aspects of the agency's preliminary determination. [SeAH's] Case Br., PD 377–79, bar codes 3301610-01–03 (Sept. 1, 2015) ("SeAH's Rejected Case Br."). On September 3, 2015, Commerce determined that portions of SeAH's case brief contained "untimely factual information," as defined by 19 C.F.R. § 351.102(b)(21)(iv),(v) (2014),⁵ rejected the brief, and allowed SeAH an opportunity to file a redacted version, which SeAH did. [Letter from Commerce Rejecting SeAH's Sept. 1, 2015 Case Br.] at 1–2, PD 384, bar code 3302027-01 (Sept. 3, 2015) ("Letter Rejecting SeAH's Case Br."). On September 9, 2015, Commerce rejected Maverick's supplemental case brief in whole, explaining that the brief addressed issues beyond the scope for comment Commerce established. [Letter from Commerce Rejecting Maverick's Suppl. Br.] at 1, PD 407, bar code 3303866-01 (Sept. 9, 2015) ("Letter Rejecting Maverick's Suppl. Case Br.").

Commerce published its final determination on October 5, 2015, and later amended the determination to account for a ministerial error. In contrast to the preliminary determination, for the final determination, Commerce found that a lesser percentage, 39.72%, of SeAH's U.S. sales passed Commerce's Cohen's d test, that the A-to-A methodology could not account for the price differences identified, and that the mixed methodology should be applied to SeAH's U.S. sales.⁶ See Final Decision Memo at 4. Commerce calculated weighted-average dumping margins of 6.23% for HYSCO, 2.53% for SeAH, and 4.38% for the all-others. See Amended Final Determination, 80 Fed. Reg. at 69,638.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to section 516A(a)(2)(B)(i) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(i) (2012)⁷ and 28 U.S.C. § 1581(c) (2012), which grant the court authority to review actions contesting the final determination in an investigation of an antidumping duty order. The court will uphold Commerce's determination unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i).

DISCUSSION

I. Commerce's Rejection of Portions of SeAH's Case Brief

SeAH challenges Commerce's rejection of portions of its case brief as contrary to law. See SeAH's Br. at 36–42; see also Letter Rejecting SeAH's Case Br. Specifically, SeAH argues that the rejected materials do not fall within the regulatory definition of factual information, see SeAH's Br. at 37–40, and that Commerce abandoned its commitment to allow continuing comment on its differential pricing analysis. See id. at 40–42. Defendant argues that Commerce's determination is in accordance with law and is reasonable. See Def.'s Mem. Opp'n Rule 56.2 Mots. J. Agency R. at 35–39, Nov. 14, 2016, ECF No. 66 ("Def.'s Resp. Br."). For the reasons that follow, the...