Ellwood City Forge Co. v. United States

1

ELLWOOD CITY FORGE CO., ELLWOOD NATIONAL STEEL CO., ELLWOOD QUALITY STEELS CO., and A. FINKL &SONS, Plaintiffs/Defendant-Intervenors, v. UNITED STATES, Defendant, and BGH EDELSTAHL SIEGEN GMBH, Defendant-Intervenor/Plaintiff.

No. 1:21-00077

Slip Op. No. 23-110

Court of Appeals of International Trade

July 24, 2023

[Granting Commerce's request for a voluntary remand and remanding for further explanation.]

Myles S. Getlan, Cassidy Levy Kent LLP, of Washington, DC, for Plaintiffs. With him on the brief were Jack A. Levy, Thomas M. Beline, James E. Ransdell, IV, and Nicole Brunda.

Sarah E. Kramer, Trial Attorney, Commercial Litigation Branch Civil Division, U.S. Department of Justice, of Washington DC, for Defendant United States. With her on the brief were Brian M. Boynton, Principal Deputy Assistant Attorney General, Patricia M. McCarthy, Director, Commercial Litigation Branch, Franklin E. White, Jr., Assistant Director, and Alexander Fried, Office of Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.

Marc E. Montalbine, deKieffer & Horgan, PLLC, of Washington DC, for DefendantIntervenor. With him on the brief were Gregory S. Menegaz, Alexandra H. Salzman, and Merisa A Horgan.

Before: Stephen Alexander Vaden, Judge

OPINION

Stephen Alexander Vaden, Judge

Before the Court is the U.S. Department of Commerce's (Commerce) Remand Redetermination in the antidumping investigation of forged steel fluid end blocks from Germany. See Forged Steel Fluid End Blocks from the Federal Republic of Germany: Final Determination of Sales at Less Than Fair Value (Final Determination), 85 Fed.Reg. 80,018 (Dec. 11, 2020). Ellwood City Forge Company, Ellwood National Steel Company, Ellwood Quality Steels Company, and A. Finkl &Sons (collectively "Ellwood City" and "Plaintiffs") argue that Commerce failed to explain why it refused to consider alternative pathways to make a particular market situation adjustment, meaning substantial evidence does not support its decision. Pls' Comments at 7-17, ECF No. 62. Meanwhile, Commerce has requested a voluntary remand to address alleged errors in its calculation of the antidumping margin. Def.'s Resp. at 4, ECF No. 65. Defendant-Intervenor BGH Edelstahl Siegen GmbH (BGH), a German producer of fluid end blocks and mandatory respondent in this investigation objects that administrative exhaustion bars Commerce's request for a voluntary remand. See Def.-Int.'s Resp. at 1-6, ECF No. 66. For the reasons set forth below, Commerce's request for a voluntary remand is GRANTED; and the case is also REMANDED to Commerce for further explanation of its refusal to address Plaintiffs' arguments regarding alternative pathways for a particular market situation adjustment.

BACKGROUND

The Court presumes familiarity with the facts of this case as set out in its previous opinion and now recounts those facts relevant to the review of the Remand Redetermination. See Ellwood City Forge Co. v. United States, 600 F.Supp.3d 1281 (CIT 2022). The investigation at issue began on December 18, 2019, when Plaintiffs filed a petition with Commerce alleging that German producers were selling fluid end blocks at less than fair market value in the United States. Forged Steel Fluid End Blocks from the Federal Republic of Germany, India, and Italy: Initiation of Less-Than-Fair-Value Investigations, 85 Fed.Reg. 2,394 (Jan. 15, 2020). On December 8, 2020, Commerce issued its Final Issues and Decision Memorandum (IDM), explaining its decision to assign a dumping margin of 3.82% to BGH. J.A. at 83,987, ECF No. 42. Commerce published the Final Determination on December 11, 2020. Final Determination, 85 Fed.Reg. 80,018.

Ellwood City sued Commerce in February 2021, challenging the final determination regarding BGH. Compl. ¶¶ 23-39, ECF No. 6. BGH moved to intervene as Defendant-Intervenor on March 29, 2021. Consent Mot. Intervene, ECF No. 10. On May 6, 2021, the parties moved to consolidate with companion case 2100079, in which BGH as Plaintiff challenges elements of the same determination. ECF No. 17. The Court granted that Motion on May 7, 2021, designating the present case as the lead consolidated case. Order Granting Mot. to Consolidate Cases, ECF No. 18. Ellwood City asked this Court to reverse Commerce's final determination on the bases that (1) Commerce's failure to conduct on-site verification was contrary to law and (2) Commerce's overall determination is unsupported by substantial evidence and contrary to law because it relied on unreconciled cost data. Mot. for J. on Agency R. at 13-36, ECF No. 25. BGH similarly asked this Court to remand Commerce's final determination but on the bases that (1) Commerce erred in making particular market situation adjustments to BGH's reported costs and (2) Commerce erred in its application of differential pricing methodology. BGH's Mot. J. on Agency R. at 3-22, ECF No. 23. Commerce filed its response on December 17, 2021, and did not oppose a remand on BGH's particular market situation claim. Resp. Br. at 29, ECF No. 37. Ellwood City and BGH filed reply briefs on January 18, 2022. Ellwood City's Reply Br., ECF No. 40; BGH's Reply Br., ECF No. 38.

The Court held oral argument on April 25, 2022. ECF No. 52. The resulting opinion held that Elwood City had forfeited its verification claim and that Commerce did not err in its pricing methodology while also remanding the case back to Commerce to remove the particular market situation adjustment in accordance with the Federal Circuit's decision in Hyundai Steel Co. v. United States, 19 F.4th 1346, 1352 (Fed. Cir. 2021). See Ellwood City Forge, 600 F.Supp.3d at 1292. In Hyundai Steel, the Federal Circuit confirmed the consistent position of the Court of International Trade and held that applying a particular market situation adjustment to the calculation of the cost of production under 19 U.S.C. § 1677b(b) for sales below cost is illegal. 19 F.4th at 1352. This Court therefore "remand[ed] this issue to allow Commerce to recalculate the dumping margin without impermissible cost-based particular market situation adjustments." Ellwood City, 600 F.Supp.3d at 1303.

Commerce filed its Remand Redetermination with the Court on March 14, 2023. ECF No. 59. The agency removed the particular market situation adjustment to BGH's antidumping margin, and BGH received a new antidumping margin of zero. Remand Redetermination at 4, ECF No. 59. In response to comments proffered by Ellwood City arguing that Commerce improperly ignored alternative avenues to make a particular market situation adjustment to BGH's production costs, Commerce replied "that this remand redetermination is not the appropriate proceeding in which Commerce should address, for the first time, alternative possible interpretations of the CAFC's analysis in Hyundai Steel." Id. at 6. Ellwood City filed comments opposing the Remand Redetermination, arguing that Commerce's revision to the margin calculation contained an error that distorted BGH's dumping margin and that the agency unlawfully refused to consider alternative pathways to adjust BGH's production costs. Pls.' Comments at 2-17, ECF No. 62. Commerce filed a response requesting a voluntary remand to review the alleged calculation error and arguing that it was barred from considering the alternative pathways on remand. Def.'s Resp. at 4-8, ECF No. 65. BGH also replied to Plaintiffs' comments, opposing Commerce's request for a voluntary remand and arguing that administrative exhaustion barred the agency from considering Plaintiffs' proposed alternative pathways. Def.-Int.'s Resp. at 1-6, ECF No. 66. Seeking an opportunity to respond to these arguments, Ellwood City filed a Motion for Leave to File a Reply with the proposed reply attached. See ECF No. 68. In that reply, Plaintiffs argued that exhaustion did not apply because the Federal Circuit's Hyundai Steel decision was not issued until after the initiation of the present litigation. See Pls.' Reply at 2-5. The Court granted the Motion. ECF No. 75. The issues are fully briefed, and the case is now ripe for adjudication.

JURISDICTION AND STANDARD OF REVIEW

This Court has exclusive jurisdiction over Ellwood City and BGH's challenge to Commerce's Remand Redetermination under 19 U.S.C. § 1516a(a)(2)(B)(i) and 28 U.S.C. § 1581(c), which grant the Court authority to review actions contesting final affirmative determinations, including any negative part of such determinations, in an antidumping order. The Court will sustain Commerce's remand results unless they are "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i). "[T]he question is not whether the Court would have reached the same decision on the same record[;] rather, it is whether the administrative record as a whole permits Commerce's conclusion." New Am. Keg v. United States, No. 20-00008, 2021 WL 1206153, at *6 (CIT Mar. 23, 2021). Additionally, "[t]he results of a redetermination pursuant to court remand are also reviewed 'for compliance with the court's remand order.'" Xinjiamei Furniture (Zhangzhou) Co. v. United States, 968 F.Supp.2d 1255, 1259 (CIT 2014) (quoting Nakornthai Mill Pub. Co. v. United States, 587 F.Supp.2d 1303, 1306 (CIT 2008)).

DISCUSSION

I. Summary

The Remand Redetermination presents two distinct issues: (1) Commerce's request for a voluntary remand to reconsider its calculation of the variable cost difference and (2) Commerce's refusal to address Plaintiffs' proposed alternatives to the withdrawn particular market situation adjustment. See Pls.' Comments at 2-17, ECF No 62; Def.'s Resp. at 4-8, ECF No. 65. Both are easily dispatched. First, Commerce's remand request raises "substantial and legitimate"...