Dillinger Fr. S.A. v. United States

651 F.Supp.3d 1294

DILLINGER FRANCE S.A., Plaintiff, v. UNITED STATES, Defendant,andNucor Corporation and SSAB Enterprises LLC, Defendant-Intervenors.

Slip Op. 23-114 Court No. 17-00159

United States Court of International Trade

August 15, 2023

Marc E. Montalbine, DeKieffer & Horgan PLCC, of Washington, D.C., argued for Plaintiff Dillinger France S.A. With him on the briefs were Gregory S. Menegaz, Alexandra H. Salzman, Merisa A. Horgan, and Alexandra H. Salzman.

Kara M. Westercamp, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for Defendant United States. With her on the brief were Brian M. Boynton, Principal Deputy Assistant Attorney General, Patricia M. McCarthy, Director, and Tara K. Hogan, Assistant Director. Of counsel on the brief was Ayat Mujais, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C.

Stephanie M. Bell, Wiley Rein, LLP, of Washington, D.C., argued for Defendant-Intervenor Nucor Corporation. With her on the brief were Alan H. Price and Christopher B. Weld.

Roger B. Schagrin, Schagrin Associates, of Washington D.C., for Defendant-Intervenor SSAB Enterprises LLC.

OPINION

Katzmann, Judge:

The court returns to the less-than-fair-value ("LTFV") investigation of certain carbon and alloy steel cut-to-length plate from France to consider the U.S. Department of Commerce ("Commerce")'s latest remand results. See Certain Carbon and Alloy Steel Cut-to-Length Plate from Austria, Belgium, France, the Federal Republic of Germany, Italy, Japan, the Republic of Korea, and Taiwan: Amended Final Affirmative Antidumping Determinations for France, the Federal Republic of Germany, the Republic of Korea and Taiwan, 82 Fed. Reg. 24096 (Dep't Com. May 25, 2017), P.R. 456 ("Am. Final Determination"); see also Final Results of Redetermination Pursuant to Court Remand (Dep't Com. Nov. 15, 2022), Nov. 16, 2022, ECF No. 120-1 ("Third Remand Results"). The sole issue is whether -- following the Federal Circuit's ruling in Dillinger France S.A. v. United States, 981 F.3d 1318 (Fed. Cir. 2020) ("Dillinger III") -- Commerce permissibly relied on Plaintiff Dillinger France S.A. ("Dillinger")'s normal books and records to supply missing cost information in calculating antidumping duties.

For the reasons outlined below, the court sustains Commerce's Third Remand Results.

BACKGROUND

While the court presumes familiarity with Dillinger France S.A. v. United States, 42 CIT —, 350 F. Supp. 3d 1349 (2018) ("Dillinger I"), Dillinger France S.A. v. United States, 43 CIT —, 393 F. Supp. 3d 1225 (2019) ("Dillinger II"), Dillinger III, 981 F.3d 1318, and Dillinger France S.A. v. United States, 46 CIT —, 589 F. Supp. 3d 1252 (2022) ("Dillinger IV"), for ease of reference, the court sets out the relevant legal, factual, and procedural background below.

I. Legal Background

A. Normal Value

When a foreign firm sells a product for less than fair value in the United States, such a product is deemed to be "dumped." See Saha Thai Steel Pipe (Pub.) Co. v. United States, 635 F.3d 1335, 1338 (Fed. Cir. 2011). Commerce identifies "dumping" by assessing whether an investigated product ("subject merchandise")'s export price -- as measured by U.S. sales price -- is lower than the product's normal value, which is typically measured by the price of the product in the home market. See Maverick Tube Corp. v. Toscelik Profil, 861 F.3d 1269, 1271 (Fed. Cir. 2017); see also 19 U.S.C. § 1677b(a)(1)(B)(i). Where Commerce identifies dumping,¹ the agency imposes antidumping duties on the foreign merchandise proportional to the amount by which normal value exceeds the export price. See 19 U.S.C. § 1673; id. § 1677(35)(A).

To complete these assessments and calculations, Commerce must establish the normal value of the investigated foreign merchandise, which again, generally requires establishing the home market sales price. In determining home market sales price, "Commerce may disregard sales made at less than the manufacturer's cost of production." Saha Thai, 635 F.3d at 1338 (citing 19 U.S.C. § 1677b(b)(1)). "Cost of production" is defined as

[A]n amount equal to the sum of—

(A) the cost of materials and of fabrication or other processing of any kind employed in producing the foreign like product, during a period which would ordinarily permit the production of that foreign like product in the ordinary course of business;

(B) an amount for selling, general, and administrative expenses based on actual data pertaining to production and sales of the foreign like product by the exporter in question; and

(C) the cost of all containers and coverings of whatever nature, and all other expenses incidental to placing the foreign like product in condition packed ready for shipment.

19 U.S.C. § 1677b(b)(3).

"If no sales in the exporting country remain after disregarding sales below [cost of production], then Commerce will alternatively base [normal value] on the constructed value . . . of the merchandise." Saha Thai, 635 F.3d at 1338. The Federal Circuit has explained that cost of production and constructed value "are closely related." Id. Constructed value "includes the same or similar elements as [cost of production]" -- namely, "(1) the cost of manufacture; (2) 'selling, general, and administrative expenses;' and (3) packaging expenses" -- "but with the additional component of profit." Id. (quoting 19 U.S.C. § 1677b(b)(3), (e)).

"The statute further explains that such '[c]osts shall normally be calculated based on the records of the exporter or producer of the merchandise, if such records are kept in accordance with the generally accepted accounting principles [GAAP] of the exporting country . . . and reasonably reflect the costs associated with the production and sale of the merchandise.' " Id. at 1341-42 (alterations in original) (quoting 19 U.S.C. § 1677b(f)(1)(A)). The Federal Circuit has interpreted "the legislative history of section 1677b(f) . . . [and] its plain meaning[ ] [to] indicate[ ] Congress intended that Commerce rely on a producer's or exporter's books and records if they . . . reasonably reflect the costs of production." Dillinger III, 981 F.3d at 1323.

B. Facts Otherwise Available & Adverse Inferences

If an interested party "withholds information" or otherwise does not comply with Commerce's requests, see 19 U.S.C. § 1677e(a)(2), or if "necessary information is not available on the record," id. § 1677e(a)(1), Commerce "shall . . . use facts otherwise available" to fill informational gaps and render determinations, id. § 1677e(a). The Federal Circuit has interpreted this provision to mean that "[t]he mere failure of a respondent to furnish requested information -- for any reason -- requires Commerce to resort to other sources of information to complete the factual record on which it makes its determination." Nippon Steel Corp. v. United States, 337 F.3d 1373, 1381 (Fed. Cir. 2003) ("The focus of [1677e(a)(1)] is respondent's failure to provide information. The reason for the failure is of no moment." (emphasis in original)).

Moreover, where Commerce makes a "valid decision to use facts otherwise available," Shandong Huarong Mach. Co. v. United States, 30 CIT 1269, 1301, 435 F. Supp. 2d 1261, 1289 (2006), Commerce may then make the additional decision to "use an inference that is adverse to the interests of [a respondent] in selecting from among the facts otherwise available" provided that Commerce supportably finds the respondent "has failed to cooperate by not acting to the best of its ability," Nippon Steel, 337 F.3d at 1380-81 (alteration in original) (quoting 19 U.S.C. § 1677e(b)(1)).

II. Factual Background

On May 25, 2017, Commerce imposed an antidumping margin of 6.15 percent on Dillinger's cut-to-length plate products. See Certain Carbon and Alloy Steel Cut-to-Length Plate from France: Final Determination of Sales at Less than Fair Value, 82 Fed. Reg. 16363 (Dep't Com. Apr. 4, 2017), P.R. 451; Mem. from J. Maeder to G. Taverman, re: Issues and Decision Memorandum for the Final Affirmative Antidumping Duty Determination and Determination of Sales at Less Than Fair Value (Dep't Com. Mar. 29, 2017), P.R. 445 ("IDM"); see also Am. Final Determination, 82 Fed. Reg. at 24098. Dillinger sells plate designated as prime and non-prime, with non-prime plate comprising plates that are rejected for failing to meet the standards for prime plate. See Dillinger III, 981 F.3d at 1321. Such non-prime products are an inevitable consequence of the production process of prime products. Because non-prime plate are sold without certification as to grade, type, or chemistry and cannot be used in applications that require such certifications, non-prime plate attract a lower market value than prime plate. See IDM at 58-60.

In its normal books and records, Dillinger values non-prime products at their likely selling price -- which comes out to [[ ]] Euros/ton. See IDM at 59; see also Mem. from R.B. Greger to N.M. Harper, re: Cost of Production and Constructed Value Calculation Adjustments for the Final Determination (Dep't Com. Mar. 29, 2017), P.R. 447, C.R. 701; Mem. from R.B. Greger to N.M. Halper, re: Cost of Production and Constructed Value Calculation Adjustments for the Preliminary Determination at attach. 2 (Dep't Com. Nov. 4, 2016), P.R. 366, C.R. 405. However, when responding to Commerce's questionnaires in the LTFV investigation, Dillinger reported its costs of production for non-prime plate as the average cost of production for all prime plate sold during the period of investigation ("POI") of [[ ]] Euros/ton -- a figure higher than the likely selling price. See IDM at 59; see also Dillinger Second Supplemental Section D Response Part II at app. SD-24 (Sept. 28, 2016), P.R. 289, C.R. 338 & 342.

For its part, when calculating normal value, Commerce adjusted the reported costs for nonprime products back to the value recorded in...