Hyundai Steel Co. v. United States

415 F.Supp.3d 1293

HYUNDAI STEEL COMPANY, Plaintiff,andSeAH Steel Corporation, Consolidated Plaintiff,

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

Slip Op. 19-148

Consol. Court No. 18-00154

United States Court of International Trade.

November 25, 2019

Henry D. Almond and Kang Woo Lee, Arnold & Porter Kaye Scholer LLP, of Washington, D.C., argued for Plaintiff Shandong Yongtai Group Co., Ltd. With them on the briefs were J. David Park and Daniel R. Wilson.

Jeffrey M. Winton and Amrietha Nellan, Law Office of Jeffrey M. Winton PLLC, of Washington, D.C., argued for Consolidated Plaintiff SeAH Steel Corp.

Joshua E. Kurland, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., and Hardeep K. Josan, International Trade Field Office, U.S. Department of Justice, of New York, NY, argued for Defendant United States. With them on the brief were Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and L. Misha Preheim, Assistant Director. Of counsel on the briefs was James Ahrens, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.

Paul W. Jameson, Schagrin Associates, of Washington, D.C., argued for Defendant-Intervenor Wheatland Tube Company. With him on the brief was Roger B. Schagrin.

OPINION

Choe-Groves, Judge:

Plaintiff Hyundai Steel Company ("Plaintiff" or "Hyundai") and SeAH Steel Corporation ("Consolidated Plaintiff" or "SeAH") (collectively, "Plaintiffs") bring this consolidated action contesting Commerce's final results in the administrative review of the antidumping duty order covering circular welded non-alloy steel pipe ("CWP") from the Republic of Korea ("Korea"). Circular Welded Non-Alloy Steel Pipe from the Republic of Korea, 83 Fed. Reg. 27,541 (Dep't Commerce June 13, 2018) (final results of antidumping duty administrative review; 2015–2016) ("Final Results"); see also Issues and Decision Memorandum for the Final Results of Antidumping Duty Administrative Review of Circular Welded Non-Alloy Steel Pipe from the Republic of Korea; 2015-2016, bar code 3716138-01 (June 7, 2018) ("Final IDM"). Before the court are Plaintiffs' Rule 56.2 motions for judgment on the agency record. For the reasons discussed below, the court remands Commerce's Final Results.

ISSUES PRESENTED

1. Whether Commerce's particular market situation finding was supported by substantial evidence; and

2. Whether Commerce's calculation of a combined single assessment rate for Hyundai Steel USA ("HSU") and Hyundai Corporation USA ("HCU") was supported by substantial evidence and in accordance with law.

BACKGROUND

The U.S. Department of Commerce ("Commerce") published the Final Results on June 13, 2018. Final Results. Plaintiff commenced this action to contest certain aspects of the Final Results on June 28, 2018. Summons, June 28, 2018, ECF No. 1; Compl., June 28, 2018, ECF No. 5. The court entered a statutory injunction on July 6, 2018. Order for Statutory Inj. Upon Consent, July 6, 2018, ECF. No. 9. Wheatland Tube Company ("Defendant-Intervenor" or "Wheatland") intervened on July 30, 2018. Order, July 30, 2018, ECF No. 21. The administrative record was filed on August 7, 2018. Letter from Zachary Simmons, Office of Chief Counsel for Trade Enforcement & Compliance, Commerce, to Mario Toscano, Clerk of the Court, U.S. Court of International Trade, Aug. 7, 2018, ECF No. 22. This case was consolidated with Court No. 18-00164 on August 27, 2018. Order, Aug. 27, 2018, ECF No. 25.

Hyundai and SeAH moved for judgment on the agency record. Pl.'s Mot. J. Agency R. ("Pl.'s Mot."), Jan. 15, 2019, ECF No. 38; Consol. Pl.'s Mot. J. Agency R. ("Consol. Pl.'s Mot."), Jan. 14, 2019, ECF No. 36. Defendant United States ("Defendant" or "United States") and Defendant-Intervenor responded. Def.'s Resp. Opp'n Mots. J. Agency R. ("Def.'s Resp.") May 7, 2019, ECF No. 44; Def.-Intervenor's Resp. Opp'n Mots. J. Agency R. ("Def.-Intervenor's Resp."), May 7, 2019, ECF No. 42. Plaintiff and Consolidated Plaintiff replied. Pl.'s Reply, June 6, 2019, ECF No. 47; Consol. Pl.'s Reply, June 6, 2019, ECF No. 46. The joint appendix was filed on June 20, 2019. Joint App'x, June 20, 2019, ECF No. 51. The court heard oral argument on September 11, 2019. Oral Argument Hr'g, Sept. 11, 2019, ECF No. 58. The Parties filed supplemental briefing. Wheatland's Resp., Sept. 13, 2019, ECF No. 59; Hyundai's Resp., Sept. 13, 2019, ECF No. 60; SeAH's Resp., Sept. 13, 2019, ECF No. 61; Commerce's Resp., Sept. 13, 2019, ECF No. 61.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to 19 U.S.C. § 1516a(a)(2)(B)(i) and 28 U.S.C. § 1581(c), which grant the court the authority to review actions contesting the final results of an administrative review of an antidumping duty order. The court will uphold Commerce's determinations, findings, or conclusions 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).

DISCUSSION

I. Particular Market Situation

A. Governing Law

Under the Tariff Act of 1930, as amended, Commerce conducts antidumping duty investigations and determines whether goods are being sold at less-than-fair value. See 19 U.S.C. § 1673. If the Department finds that subject merchandise is being sold at less-than-fair value, and if the U.S. International Trade Commission finds that these less-than-fair value imports materially injure a domestic industry, the Department issues an antidumping duty order imposing antidumping duties equivalent to "the amount by which the normal value exceeds the export price (or the constructed export price) for the merchandise." Id. Generally, export price is defined as the price at which the subject merchandise is first sold in the United States, whereas the normal value represents the price at which the subject merchandise is sold in the exporting country. See id. §§ 1677a(a), 1677b(a)(1)(B)(i). If Commerce cannot determine the normal value of the subject merchandise based on price, then the statute authorizes Commerce to calculate a constructed value. Id. § 1677b(a)(4). The constructed value shall be an amount equal to the sum of, for instance, "the cost of materials and fabrication or other processing of any kind employed in producing the merchandise, during a period which would ordinarily permit the production of the merchandise in the ordinary course of trade." Id. § 1677b(e)(1).

The Trade Preferences Extension Act of 2015 ("TPEA") amended the Tariff Act to allow Commerce to consider certain sales and transactions to be outside of the ordinary course of trade when "the particular market situation prevents a proper comparison with the export price or constructed export price." Id. § 1677(15). When calculating constructed value under the revised version of the statute, if Commerce finds the existence of a particular market situation "such that the cost of materials and fabrication or other processing of any kind does not accurately reflect the cost of production in the ordinary course of trade, the administering authority may use another calculation methodology under this subtitle or any other calculation methodology." Id. § 1677b(e).

The legislative history of the TPEA reflects a desire to give Commerce the ability to choose the appropriate methodology when a particular market situation exists. One Senate Report stated that modifications to the Tariff Act under the TPEA "provide that where a particular market situation exists that distorts pricing or cost in a foreign producer's home market, the Department of Commerce has flexibility in calculating a duty that is not based on distorted pricing or costs." S. Rep. No. 114-45, at 37 (2015). In a hearing before the House of Representatives, Representative Patrick Meehan noted that under the TPEA, Commerce would be "empowered ... to disregard prices or costs of inputs that foreign producers purchase if the Department of Commerce has reason to believe or suspects that the inputs in question have been subsidized or dumped" in the interest of creating an accurate record and protecting domestic workers. 161 Cong. Rec. H4690 (daily ed. June 25, 2015) (statement of Rep. Meehan).

Commerce has the ability to choose the appropriate methodology so long as it comports with its statutory mandate and provides a reasoned explanation. See Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 48–49, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983) ; Fujitsu Gen. Ltd. v. United States, 88 F.3d 1034, 1039 (Fed. Cir. 1996). The statute's language and legislative history permit Commerce to consider the cumulative effect and the totality of the conditions in the foreign market when making a finding of a particular market situation. See Nexteel Co., Ltd. v. United States, 43 CIT ––––, ––––, 355 F. Supp. 3d 1336, 1349 (2019) (" Nexteel I").

Plaintiffs challenge Commerce's finding that a particular market situation existed in Korea that distorted the cost of production of CWP. Plaintiffs contend that in finding the existence of a particular market situation, Commerce relied upon the same insufficient facts and record evidence that formed the basis of its unsupported finding of a particular market situation in the first administrative review of the antidumping duty order covering oil country tubular goods ("OCTG") from Korea. Pl.'s Reply 1–3; Consol. Pl.'s Reply 1–5.¹

B. Commerce's Findings Pertaining to a Particular Market Situation in the First Administrative Review of OCTG and the Court's Ruling in Nexteel I

Plaintiffs assert that because the U.S. Court of International Trade concluded that Commerce's finding of a particular market situation in the OCTG first administrative review was unsupported by substantial evidence, see Nexteel I, 43 CIT at ––––, 355 F. Supp. 3d at 1350–51, Commerce's finding of a particular market situation in this...