Husteel Co. v. United States

476 F.Supp.3d 1363

HUSTEEL CO., LTD., Plaintiff,andSeAH Steel Corporation, Hyundai Steel Company, and NEXTEEL Co., Ltd., Consolidated Plaintiffs,

v. UNITED STATES, Defendant,andWheatland Tube Company, Defendant-Intervenor.

Slip Op. 20-147

Consol. Ct. No. 19-00107

United States Court of International Trade.

October 19, 2020

Donald B. Cameron, Julie C. Mendoza, R. Will Planert, Brady W. Mills, Mary S. Hodgins, Eugene Degnan, and Sabahat Chaudhary, Morris, Manning & Martin LLP, of Washington, D.C., for Plaintiff Husteel Co., Ltd.

Jeffrey M. Winton and Amrietha Nellan, Winton & Chapman PLLC, of Washington, D.C., for Consolidated Plaintiff SeAH Steel Corporation.

Robert G. Gosselink and Jarrod M. Goldfeder, Trade Pacific PLLC, of Washington, D.C., for Consolidated Plaintiff Hyundai Steel Company.

J. David Park, Henry D. Almond, Daniel R. Wilson, Leslie C. Bailey, and Kang Woo Lee, Arnold & Porter Kaye Scholer LLP, of Washington, D.C., for Consolidated Plaintiff NEXTEEL Co., Ltd.

Joshua E. Kurland, Trial Attorney, U.S. Department of Justice, Civil Division, Commercial Litigation Branch, of Washington, D.C., for Defendant United States. With him on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and L. Misha Preheim, Assistant Director. Of counsel on the brief was Elio Gonzalez, Attorney, U.S. Department of Commerce, Office of the Chief Counsel for Trade Enforcement & Compliance.

Roger B. Schagrin, Elizabeth J. Drake, and Christopher T. Cloutier, Schagrin Associates, of Washington, D.C., for Defendant-Intervenor Wheatland Tube Company.

OPINION AND ORDER

Choe-Groves, Judge:

Plaintiff Husteel Co., Ltd. ("Husteel") and Consolidated Plaintiffs SeAH Steel Corporation ("SeAH"), Hyundai Steel Company ("Hyundai Steel"), and NEXTEEL Co., Ltd. ("NEXTEEL") (collectively, "Plaintiffs") bring this consolidated action challenging the U.S. Department of Commerce's ("Commerce") final results in the 2016–2017 administrative review of the antidumping duty order on circular welded non-alloy steel pipe ("CWP") from the Republic of Korea ("Korea"). See Circular Welded Non-Alloy Steel Pipe From the Republic of Korea ("Final Results"), 84 Fed. Reg. 26,401 (Dep't Commerce June 6, 2019) (final results of administrative review; 2016–2017), PD 180, and accompanying Issues & Decision Mem. for the Final Results of the 2016–2017 Admin. Review of the Antidumping Duty Order on Circular Welded Non-Alloy Steel Pipe from the Republic of Korea¹ ("Final IDM") (May 30, 2019), ECF No. 20-5, PD 173. Before the court are Plaintiffs' Rule 56.2 motions for judgment on the agency record. Mot. Pl. [SeAH] J. Agency R., ECF No. 26; Br. [SeAH] Supp. Rule 56.2 Mot. J. Agency R., ECF No. 26-1 ("SeAH Br.")² ; Pl. [Husteel]'s Mot. J. Agency R., ECF No. 27; Pl. [Husteel]'s Br. Supp. Mot. J. Agency R., ECF No. 27-2 ("Husteel Br."); Rule 56.2 Mot. J. Agency R. Consol. Pl. [NEXTEEL], ECF No. 28; Mem. Supp. Consol. Pl. [NEXTEEL]'s Rule 56.2 Mot. J. Agency R., ECF No. 28-2 ("NEXTEEL Br.")³ ; Consol. Pl.'s Rule 56.2 Mot. J. Agency R., ECF Nos. 29, 30; Mem. Supp. Rule 56.2 Mot. Consol. Pl. [Hyundai Steel] J. Agency R., ECF Nos. 29-1, 30-1 ("Hyundai Br."). For the following reasons, the court sustains in part and remands in part the Final Results.

ISSUES PRESENTED

The court reviews the following issues:

1. Whether Commerce's particular market situation adjustment to the cost of production when conducting a sales-below-cost test is in accordance with the law;

2. Whether Commerce's particular market situation determination is in accordance with the law; 3. Whether Commerce's differential pricing methodology is in accordance with the law; and

4. Whether Commerce's treatment of Hyundai Steel (Pipe Division) as a separate entity is supported by substantial evidence in the record.

BACKGROUND

Commerce invited requests for administrative review of the antidumping duty order of CWP from Korea for the period covering November 1, 2016 to October 31, 2017. Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation, 82 Fed. Reg. 50,620, 50,621 (Dep't Commerce Nov. 1, 2017) (opportunity to request administrative review), PD 1. Hyundai Steel and Defendant-Intervenor Wheatland Tube Company ("Wheatland") timely requested review. Hyundai Steel's Req. for Admin. Review, PD 3 (Nov. 28, 2017); Wheatland's Req. for Admin. Review ("Wheatland's Req."), PD 4 (Nov. 30, 2017). Wheatland included Hyundai Steel (Pipe Division) in its list of proposed respondents and did not separately include Hyundai Steel. Wheatland Req. 3.

Commerce initiated this administrative review. Initiation of Antidumping and Countervailing Duty Administrative Reviews ("Initiation Notice"), 83 Fed. Reg. 1329, 1331 (Dep't Commerce Jan. 11, 2018), PD 18. Hyundai Steel and Hyundai Steel (Pipe Division) were identified separately in the Initiation Notice. Id. Commerce selected Husteel and Hyundai Steel as mandatory respondents. Resp't Selection Mem. 5, PD 19 (Feb. 20, 2018).

Wheatland submitted a particular market situation allegation on July 12, 2018. See Letter Re: Rejection of Wheatland's July 12, 2018 Submission 1, PD 82 (Aug. 20, 2018). Commerce rejected this submission for failing to comport with regulation requirements and relate to the instant period of review. Id. at 1–2.

Wheatland re-submitted the particular market situation allegation. Wheatland's Re-Submitted Allegation, PD 88–104 (Aug. 27, 2018). Citing Commerce's determinations of a particular market situation in Korea in previous administrative reviews covering the period of review from 2015 to 2016⁴ , Wheatland asserted that the particular market situation continued to exist during the instant 2016 to 2017 period of review. Id. at 1–2. In support of its allegation, Wheatland attached several documents, including: Wheatland's October 16, 2017 allegation submitted in Circular Welded Non-Alloy Steel Pipe From the Republic of Korea; 2015–2016; a World Trade Organization report that "indicates the distortions Commerce has previously found to exist in Korea have not gone away;" a Korean government document purporting to demonstrate strategic alliances affecting the Korean pipe market; and a Commerce document "indicating that Chinese imports remained a significant factor in the Korean steel market." Id. at 3–4. Wheatland argued that the allegation need not be restricted to the instant period of review. Id. at 2 ("Commerce's letter of August 20, 2018 also asks for clarification of ‘whether and how the information submitted in support of the [particular market situation] allegation is relevant to the current POR’ or the provision of ‘additional information that is relevant to this POR.’ This request is misguided."). Analogizing particular market situation determinations to non-market economy determinations, Wheatland asserted that once Commerce makes a particular market situation determination, the respondents in subsequent administrative reviews should be required "to show that something had changed such that a re-examination of Commerce's prior findings is merited." Id. at 2–3. Wheatland contended that the burden was on the respondents to submit evidence of changes in the factors that formed the basis of Commerce's prior determinations regarding a particular market situation in Korea, namely: hot-rolled steel coil subsidies, Chinese hot-rolled steel coil imports, strategic alliances between Korean companies, and electricity subsidies. See id. at 3. Commerce accepted Wheatland's re-submission. Letter Setting Deadline for Factual Information, PD 107 (Sept. 14, 2018).

Commerce calculated preliminary dumping margins of 8.47% for Hyundai Steel and the all-others rate of 10.56% for Hyundai Steel (Pipe Division). Circular Welded Non-Alloy Steel Pipe From the Republic of Korea ("Preliminary Results"), 83 Fed. Reg. 63,619, 63,620 (Dep't Commerce Dec. 11, 2018) (preliminary results of administrative review; 2016–2017), PD 143. Commerce determined that a particular market situation existed in Korea that distorted the cost of production of CWP and applied an upward adjustment to the cost of production based on subsidy rates of hot-rolled steel coil. Decision Mem. for the Prelim. Results of Antidumping Duty Admin. Review: Circular Welded Non-Alloy Steel Pipe from the Republic of Korea: 2016–2017 ("Prelim. DM") 9–16, PD 135 (Dec. 3, 2018) (citing Countervailing Duty Investigation of Certain Hot-Rolled Steel Flat Products from the Republic of Korea, 81 Fed. Reg. 53,439 (Dep't Commerce Aug. 12, 2016) (final affirmative determination), as amended, 81 Fed. Reg. 67,960 (Dep't Commerce Oct. 3, 2016) ). Commerce conducted a sales-below-cost test and disregarded certain below-cost sales. Prelim. DM IX, F, 2–3 (Dep't Commerce Dec. 3, 2018). Commerce calculated normal value from the remaining above-cost home market sales for mandatory respondents Hyundai Steel and Husteel. Id. at 16.

In the Final Results, Commerce used the methodology applied in the Preliminary Results and modified the amount of the particular market situation adjustment to the cost of production according to the subsidy amount determined in POSCO v. United States, 43 CIT ––––, 378 F. Supp. 3d 1348 (2019). Final IDM 3. Commerce assigned weighted-average dumping rates of 10.91% for Husteel, 8.14% for Hyundai Steel, and the all-others rate of 9.53% for NEXTEEL and Hyundai Steel (Pipe Division). Final Results, 84 Fed. Reg. at 26,402.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction under 19 U.S.C. § 1516a(a)(2)(B)(iii) and 28 U.S.C. § 1581(c), which grant the court authority to review actions contesting the final results of an administrative review of an antidumping duty order. The court will uphold Commerce's determinations unless they are unsupported by substantial record evidence, or otherwise not in accordance with the law. 19 U.S.C. § 1516a(b)(1)(B)(i).

DISCUSSION

I. Particular Market Situation

A. Governing Law

Commerce determines antidumping duties by calculating the amount...