Union Steel Mfg. Co. v. United States

• Decision Date: 04 March 2014
• Docket Number: Slip Op. 14–27.,Court No. 10–00106.
• Parties: UNION STEEL MANUFACTURING COMPANY, LTD., Plaintiff, and Whirlpool Corporation, Plaintiff-intervenor, v. UNITED STATES, Defendant, and United States Steel Corporation, Nucor Corporation, and Hyundai Hysco, Defendant-intervenors.
• Court: U.S. Court of International Trade

968 F.Supp.2d 1297

UNION STEEL MANUFACTURING COMPANY, LTD., Plaintiff,andWhirlpool Corporation, Plaintiff-intervenor,

v. UNITED STATES, Defendant,andUnited States Steel Corporation, Nucor Corporation, and Hyundai Hysco, Defendant-intervenors.

Slip Op. 14–27. Court No. 10–00106.

United States Court of International Trade.

March 4, 2014.

Brady W. Mills and Donald B. Cameron, Morris, Manning & Martin, LLP, of Washington, DC, argued for plaintiff Union Steel Manufacturing Company, Ltd. With them on the brief were Julie C. Mendoza, R. Will Planert, and Mary S. Hodgins, of Washington, DC.

Donald B. Cameron, Morris, Manning & Martin, LLP, of Washington, DC, for consolidated plaintiff Dongbu Steel Company, Ltd. With him on the brief were Brady W. Mills, Julie C. Mendoza, R. Will Planert, and Mary S. Hodgins, of Washington, DC.

Donald Harrison, Andrea Fraser–Reid Farr, and John Christopher Wood, Gibson, Dunn & Crutcher, LLP, of Washington, DC, for plaintiff-intervenor Whirlpool Corporation.

L. Misha Preheim, Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for defendant. With him on the brief were Stuart F. Delery, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, of Washington, DC. Of counsel on the brief was Daniel J. Calhoun, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of Washington, DC.

Ellen J. Schneider, Skadden, Arps, Slate, Meagher & Flom LLP, of Washington, DC, argued for defendant-intervenor and consolidated plaintiff United States Steel Corporation. With her on the brief were Jeffrey D. Gerrish and Robert E. Lighthizer of Washington, DC.

Timothy C. Brightbill, Wiley Rein LLP, of Washington, DC, argued for defendant-intervenor Nucor Corporation. With him on the brief was Alan H. Price, of Washington, DC.

Jarrod M. Goldfeder, Akin Gump Strauss Hauer & Feld LLP, of Washington, DC, argued for consolidated plaintiff and defendant-intervenor Hyundai HYSCO. With him on the brief was J. David Park, of Washington, DC.

OPINION AND ORDER

STANCEU, Judge:

In this consolidated action, four plaintiffs challenge the determination (“Final Results”) the International Trade Administration, U.S. Department of Commerce (“Commerce” or the “Department”) issued to conclude the fifteenth administrative review of an antidumping order on certain corrosion-resistant carbon steel flat products (“CORE” or “subject merchandise”) from the Republic of Korea (“Korea”).¹Certain Corrosion–Resistant Carbon Steel Flat Products from the Republic of Korea: Notice of Final Results of the Fifteenth Admin. Review, 75 Fed.Reg. 13,490 (Mar. 22, 2010) (“ Final Results ”). The fifteenth review pertained to entries of subject merchandise made during the period of August 1, 2007 through July 31, 2008 (“period of review” or “POR”). Id.

Before the court is a determination (the “Remand Redetermination”) Commerce issued in response to the court's remand order in Union Steel Mfg. Co., Ltd. v. United States, 36 CIT ––––, 837 F.Supp.2d 1307 (2012) (“Union Steel Mfg. Co., Ltd.”).Results of Redetermination Pursuant to Remand (Sept. 24, 2012), ECF No. 161 (“ Remand Redetermination ”).

For the reasons discussed in this Opinion and Order, the court sustains the Remand Redetermination as to: (1) the general and administrative (“G & A”) expense ratio Commerce used to determine the cost of production (“COP”) of the foreign like product for Union Steel Manufacturing Co., Ltd. (“Union”); (2) the Department's decision to calculate Union's interest expense ratio using financial statements from both the 2007 and 2008 fiscal years; (3) the Department's application of its modified “sales-below-cost” and “recovery-of-costs” tests to calculate Union's normal value; (4) the Department's decision to create separate product categories for laminated CORE and non-laminated, painted CORE for use in a model-match methodology comparing Union's home market and U.S. sales; and (5) the Department's use of the “zeroing” methodology to calculate Union's weighted average dumping margin.

The court orders a second remand for further proceedings to address a number of the Department's decisions in the remand determination: (1) the decision to make a major input adjustment when calculating Union's interest expense ratio; (2) the application of the modified “quarterly cost” methodology wherever used in the normal value calculations for Hyundai HYSCO (“HYSCO”), including the difference-in-merchandise (“DIFMER”) adjustments and constructed value (“CV”) determinations; (3) the application of the modified “quarterly cost” methodology for all aspects of the normal value calculations for Union except the revised sales-below-cost and recovery-of-costs tests; (4) the decision to depart from the normal method for selecting a comparison month when determining antidumping margins for Union and HYSCO; and (5) the decision to depart from the normal method by selecting the date of shipment, rather than the date of invoice, as the date of sale for certain sales that HYSCO made through a U.S. affiliate, Hyundai HYSCO USA, Inc. (“HHU” or “HYSCO USA”).

Finally, pursuant to the court's order in Union Steel Mfg. Co., Ltd., 36 CIT at ––––, 837 F.Supp.2d at 1337–38, the court concludes that the second remand redetermination must recalculate the margin for Dongbu based on the redetermined margins for Union and HYSCO.

I. Background

The background of this case is provided in the court's previous opinion and is supplemented herein. Union Steel Mfg. Co., Ltd., 36 CIT at ––––, 837 F.Supp.2d at 1311–12.

Three of the four plaintiffs in this action, Union, HYSCO, and Dongbu Steel Co., Ltd. (“Dongbu”), are Korean producers and exporters of the subject merchandise. Issues & Decision Mem., A–580–816, ARP 07–08, at 2 (Mar. 15, 2010), available at http:// ia. ita. doc. gov/ frn/ summary/ KOREA– SOUTH/ 2010– 6258– 1. pdf (last visited Feb. 26, 2014) (“ Decision Mem.”). Plaintiffs Union and HYSCO were the mandatory respondents in the fifteenth administrative review and plaintiff Dongbu was a non-examined respondent in the fifteenth review. Id. United States Steel Corporation (“U.S. Steel”), a petitioner in the fifteenth administrative review, is the fourth plaintiff and a defendant-intervenor in this action. Id. at 1; Compl. 1 (Apr. 21, 2010), ECF No. 6 (Court No. 10–00139). Nucor Corporation (“Nucor”), also a petitioner in the fifteenth administrative review, is another defendant-intervenor in this action. Id. at 1 n. 1.

Union challenged the Department's: (1) exclusive reliance on the 2008 financial statement of Union's parent company to calculate Union's interest expense ratio; (2) application of the quarterly costs and indexing methodologies to various calculationswhen determining normal value; (3) selection of the comparison month for normal value sales; (4) similar treatment of laminated CORE and non-laminated, painted CORE in the model-match process; and (5) use of zeroing in calculating the weighted average dumping margin for Union. Union Steel Mfg. Co., Ltd., 36 CIT at ––––, 837 F.Supp.2d at 1310, 1312, 1314, 1324. HYSCO challenged the Department's use of the quarterly costs and indexing methodologies and the Department's decision to use a nonstandard method for determining the comparison month. Id., 36 CIT at ––––, 837 F.Supp.2d at 1310, 1312, 1324. Dongbu raised the same challenges as Union and HYSCO and sought to be subject to a rate reflecting any modifications to the weighted average dumping margins for Union and HYSCO. Id., 36 CIT at ––––, 837 F.Supp.2d at 1310, 1335–36.² U.S. Steel challenged the Department's determination of the date of sale for the sales of subject merchandise that HYSCO made through a U.S. affiliate. Id., 36 CIT at ––––, 837 F.Supp.2d at 1310, 1312, 1334.

After the parties submitted all briefings in this action, defendant United States requested a voluntary remand so that Commerce could reconsider the quarterly cost and indexing methodologies used in the Final Results in light of an intervening decision by this Court.

In the court's previous opinion in this case, Union Steel Mfg. Co., Ltd., it concluded that Dongbu was entitled to a recalculated margin reflecting any changes made on remand to the margins for mandatory respondents HYSCO and Union. Id., 36 CIT at ––––, 837 F.Supp.2d at 1329–34. The court also concluded that all of the claims brought by Union, HYSCO, and U.S. Steel required a remand. Id., 36 CIT at ––––, 837 F.Supp.2d at 1337–38. Specifically, the court determined that it could not uphold the Department's decision to use financial data from Union's parent company pertaining only to the 2008 fiscal year when determining Union's interest expense ratio. Id., 36 CIT at ––––, 837 F.Supp.2d at 1313–21. The court also granted defendant's request for a voluntary remand on the quarterly cost and indexing issues but directed Commerce to reconsider the quarterly cost and indexing methodologies wherever Commerce applied the methodologies in the Final Results—including the sales-below-cost test, “recovery-of-costs” test, constructed value (“CV”) determinations, and difference-in-merchandise (“DIFMER”) adjustments. Id., 36 CIT at ––––, 837 F.Supp.2d at 1321–25. As defendant requested, the court also remanded the Department's decisions to: (1) depart from the normal method for selecting the comparison month when comparing U.S. and home market sales of Union and HYSCO; (2) treat Union's laminated CORE and non-laminated, painted CORE as “identical” merchandise in the Department's model-match methodology; (3) use the “zeroing methodology” in determining weighted average margins; and (4) use shipment dates as the date of sale for HYSCO's sales through a U.S. affiliate. Id., 36 CIT at ––––, 837 F.Supp.2d at 1325–29, 1334–35.

In its Remand Redetermination, filed on September 24, 2012, Commerce redetermined Union's interest...