Union Steel Mfg. Co. v. United States

• Decision Date: 25 May 2012
• Citation: 837 F.Supp.2d 1307,34 ITRD 1527
• Parties: UNION STEEL MANUFACTURING CO., 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

837 F.Supp.2d 1307

34 ITRD 1527

UNION STEEL MANUFACTURING CO., LTD., Plaintiff,

and

Whirlpool Corporation, Plaintiff–Intervenor,

v.UNITED STATES, Defendant,andUnited States Steel Corporation, Nucor Corporation, and Hyundai HYSCO, Defendant–Intervenors.

United States Court of

International Trade.

Slip Op. 12–67.

Court No. 10–00106.

May 25, 2012.

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

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

William R. Rucker and Nicolas Guzman, Drinker Biddle & Reath, LLP, of Chicago, IL, for plaintiff-intervenor.

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 Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, and Claudia Burke, Senior Trial Counsel, 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, Robert E. Lighthizer, Soo–Mi Rhee, and Luke A. Meisner, 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 were J. David Park and Natalia D. Dobrowolsky, of Washington, DC.

OPINION AND ORDER

STANCEU, Judge:

In this consolidated action, four plaintiffs, Union Steel Manufacturing Co., Ltd. (“Union”), Dongbu Steel Co., Ltd. (“Dongbu”), Hyundai HYSCO (“HYSCO”), and United States Steel Corporation (“U.S. Steel”), challenge the final determination (“Final Results”) issued by the International Trade Administration, U.S. Department of Commerce (“Commerce” or the “Department”) in the fifteenth administrative review of an antidumping duty order on imports of certain corrosion-resistant carbon steel flat products (“CORE” or “subject merchandise”) from the Republic of Korea (“Korea”) for the period of August 1, 2007 through July 31, 2008 (“POR” or “period of review”). Certain 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 ”). Three of these plaintiffs—Union, Dongbu, and HYSCO—are Korean exporters of the subject merchandise and were respondents in the fifteenth administrative review. The remaining plaintiff, U.S. Steel, is a member of the domestic industry. U.S. Steel and HYSCO are also defendant-intervenors in this consolidated case, as is Nucor Corporation (“Nucor”), a member of the domestic industry. Before the court are the USCIT Rule 56.2 motions for judgment on the agency record filed by each plaintiff and two motions by defendant for a voluntary remand on certain claims in this case.

The court determines that: (1) the Department's decision to use financial data pertaining only to the 2008 fiscal year of Union's parent company in determining Union's interest expense ratio cannot be upheld on judicial review; (2) in response to defendant's request for a voluntary remand, the court will order the Department to reconsider the “quarterly-cost methodology” used to apply the “recovery-of-costs” test to the home-market sales of Union and HYSCO and the “indexing” methodology wherever used in the Final Results; (3) on remand, the Department must reconsider the use in the Final Results of the quarterly-cost and indexing methodologies for various other purposes; (4) the Department must reconsider its decision to depart from its normal method for selecting comparison months of normal value sales; (5) in response to defendant's request for a voluntary remand, the court will order the Department to reconsider its decision to compare laminated CORE and non-laminated, painted CORE as “identical” merchandise; (6) in response to defendant's request for a voluntary remand, the court will order that Commerce reconsider the use of the zeroing methodology in the fifteenth review; (7) no relief is available on Dongbu's claim seeking an individually-determined dumping margin; and (8) in response to the defendant's request for a voluntary remand, remand is appropriate on U.S. Steel's challenge to the date of sale used for certain sales by HYSCO through a U.S. affiliate. The court determines, in addition, that any modifications to the weighted-average dumping margins of Union and HYSCO resulting from this remand shall be reflected in the rate applied to Dongbu.

I. Background

The court summarizes below the procedural history of the fifteenth administrative review of the order on CORE from Korea and the procedural history of this litigation, both of which are somewhat complex.

Commerce initiated the fifteenth administrative review of the order on CORE from Korea on September 30, 2008, identifying seven Korean exporters of subject merchandise: Dongbu; Dongkuk Industries Co., Ltd. (“Dongkuk”); Haewon MSC Co., Ltd. (“Haewon”); HYSCO; LG Chem, Ltd. (“LG”); Pohang Iron and Steel Co., Ltd./Pohang Coated Steel Co., Ltd. (“POSCO Group”); and Union. Initiation of Antidumping & Countervailing Duty Admin. Reviews & Requests for Revocation in Part, 73 Fed.Reg. 56,795 (Sept. 30, 2008). On October 2, 2008, Commerce determined that it would not examine individually each respondent in the review, citing its authority under section 777A of the Tariff Act of 1930 (“Tariff Act” or the “Act”), 19 U.S.C. § 1677f–1(c) (2006), and provided an opportunity for parties to comment on mandatory respondent selection. Mem. from Int'l Trade Compliance Analyst to the File 1–2 (Oct. 2, 2008) (Admin.R.Doc. No. 4745) (“ Invitation to Comment on Respondent Selection ”). Dongbu filed such comments on October 21, 2008. Letter from Dongbu to the Sec'y of Commerce (Oct. 21, 2008) (Admin.R.Doc. No. 4811) (“ Dongbu's Respondent Selection Comments ”).

On December 8, 2008, Commerce determined in a separate memorandum (the “Respondent Selection Memorandum”) that it would examine individually only two respondents, Union and HYSCO. Mem. from Int'l Trade Compliance Analyst to Dir., Office 3 AD/CVD Operations, at 7 (Dec. 8, 2008) (Admin.R.Doc. No. 4817) (“ Respondent Selection Mem.”). On June 17, 2009, Commerce announced that it was rescinding the review as to Dongkuk because Dongkuk exported no subject merchandise to the United States during the POR. Certain Corrosion–Resistant Carbon Steel Flat Products from the Republic of Korea: Notice of Rescission of Antidumping Duty Admin. Review, In Part, 74 Fed.Reg. 28,664, 28,665 (June 17, 2009). On July 8, 2009, Commerce determined that it would examine the POSCO Group individually as a voluntary respondent under section 782 of the Tariff Act, 19 U.S.C. § 1677m. Mem. from Program Manager to Office Dir., Office 3 AD/CVD Operation (July 8, 2009) (Admin.R.Doc. No. 4974).

Commerce issued the preliminary results of the fifteenth review (“Preliminary Results”) on September 8, 2009, preliminarily assigning weighted-average dumping margins of 0.43% to HYSCO, 0.16% to the POSCO Group, 3.94% to Union, and, as a simple “average” of the only non- de-minimis margin of the selected respondents, 3.94% to the non-selected respondents, which were Dongbu, Haewon, and LG. Certain Corrosion–Resistant Carbon Steel Flat Products from the Republic of Korea: Notice of Prelim. Results of the Antidumping Duty Admin. Review, 74 Fed.Reg. 46,110, 46,114 (Sept. 8, 2009) (“ Prelim. Results ”). On December 16, 2009, Commerce issued memoranda to Union, HYSCO, and the POSCO Group announcing the Department's decision that, for purposes of margin calculations, certain costs would be calculated using four quarterly weighted averages rather than one weighted average for the entire POR and that the Department was departing from its normal method of determining comparison months for normal value. See, e.g., Mem. from Accountant to Dir., Office of Accounting (Dec. 16, 2009) (Admin.R.Doc. No. 5166) (“ Union's Post–Prelim. Analysis Mem.”). On March 22, 2010, Commerce issued the Final Results, which assigned weighted-average dumping margins of 3.29% to HYSCO, 0.01% to the POSCO Group (a de minimis margin), 14.01% to Union, and, as a simple average of the non- de-minimis margins of the selected respondents, 8.65% to the non-selected respondents. Final Results, 75 Fed.Reg. at 13,491.

Union, Dongbu, HYSCO, and U.S. Steel each challenged the Final Results, and the court consolidated these cases on May 13, 2010. Order (May 13, 2010), ECF No. 44. Defendant has requested a voluntary remand as to four claims in this consolidated litigation: (1) Union's claim challenging the Department's comparing “painted CORE in the same category as laminated CORE,” Def.'s Resp. to Pls.' & Def.-intervenors' Mots. for J. upon the Agency R. 46–49 (Feb. 11, 2011), ECF No. 86 (“Def.'s Resp.”); (2) U.S. Steel's claim challenging the Department's using the “shipment date,” rather than a later “invoice date,” as the date of sale for certain sales by HYSCO, id. at 59–60; (3) Union and HYSCO's claim challenging the Department's “cost-recovery methodology,” Def.'s Mot. for Partial Voluntary Remand 1 (June 21, 2011), ECF No. 130 (“Def.'s June Remand Mot.”...