Hyundai Steel Co. v. United States

581 F.Supp.3d 1284

HYUNDAI STEEL COMPANY, Plaintiff,andSeah Steel Corporation, Consolidated Plaintiff and Plaintiff-Intervenor,

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

Slip Op. 22-67

Consol. Court No. 18-00154

United States Court of International Trade.

June 15, 2022

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 Plaintiff Hyundai Steel Company.

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

Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for Defendant United States. With her on the brief were Brian M. Boynton, Acting Assistant Attorney General, and Jeanne E. Davidson, Director. Of counsel on the brief was Elio Gonzalez, Senior Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce.

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

OPINION AND ORDER

Choe-Groves, Judge:

Plaintiff Hyundai Steel Company ("Hyundai Steel") and Consolidated Plaintiff and Plaintiff-Intervenor SeAH Steel Corporation ("SeAH") (collectively, "Plaintiffs") challenge the final determination in the 2015–2016 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 ("Final Results"), 83 Fed. Reg. 27,541 (Dep't of Commerce June 13, 2018) (final results of antidumping duty administrative review; 2015–2016); see also Issues and Decision Mem. for the Final Results of Antidumping Duty Admin. Review of Circular Welded Non-Alloy Steel Pipe from the Republic of Korea; 2015–2016 ("Final IDM"), PR 314.¹

Before the Court are the Final Results of Redetermination Pursuant to Court Remand ("Third Remand Results"), ECF No. 94-1, ordered in Hyundai Steel Co. v. United States ("Hyundai Steel III"), 45 CIT ––––, ––––, 531 F. Supp. 3d 1344, 1353–54 (2021). Hyundai Steel requests that the Court sustain Commerce's Third Remand Results, noting that although Commerce continues to find that a particular market situation existed in Korea during the period of review, Commerce under protest recalculated Hyundai Steel's weighted-average dumping margin by eliminating the particular market situation adjustment of the Final Results with respect to Hyundai Steel. Pl. Hyundai Steel's Comments Commerce's Third Remand Results ("Hyundai Steel's Cmts.") at 1–5, ECF No. 99. SeAH, a non-examined respondent, argues that remand is again required because the margin rate that Commerce recalculated is a simple average of the margins for the two mandatory respondents, Hyundai Steel and Husteel Co., Ltd. ("Husteel"). See Comments SeAH Opp'n Commerce's Sept. 8, 2021 Redetermination ("SeAH's Cmts.") at 1–6, ECF No. 96. According to SeAH, Commerce eliminated the particular market situation adjustment for Hyundai Steel and also eliminated the particular market situation adjustment to the sales-below-cost test for Husteel during the third remand, but Commerce continued to make an improper particular market situation adjustment to Husteel's normal value for transactions determined to be based on constructed value when recalculating SeAH's rate, and therefore this non-examined respondent rate continues to be tainted. See id. at 3–5; see also Third Remand Results at 6–7.

Defendant United States ("Defendant") argues that Commerce complied with the Court's remand order when it removed the particular market situation adjustment for Hyundai Steel under protest. Def.’s Resp. Comments Regarding Third Remand Redetermination ("Def.’s Resp.") at 6–7, ECF No. 104. Defendant also argues that Commerce calculated the dumping margin for SeAH by permissibly averaging the rates of the two mandatory respondents. Id. at 7–8. Defendant-Intervenor Wheatland Tube Company ("Wheatland") filed comments in partial opposition, noting its support of Commerce's remand determination filed under protest. Def.-Interv.’s Comments Partial Opp'n Remand Redetermination ("Def.-Interv.’s Cmts.") at 1, ECF No. 100.

For the following reasons, the Court sustains in part and remands in part the Third Remand Results.

ISSUES PRESENTED

The Court reviews the following issues:

1. Whether Commerce's removal of the particular market situation adjustment when calculating Hyundai Steel's dumping margin is in accordance with the law; and

2. Whether Commerce's calculation of SeAH's dumping margin is in accordance with the law.

BACKGROUND

The Court presumes familiarity with the facts and procedural history of this case and recites the facts relevant to the Court's review of the Third Remand Results See Hyundai Steel III, 45 CIT at ––––, 531 F. Supp. 3d at 1347–48 ; see also Hyundai Steel Co. v. United States ("Hyundai Steel II"), 44 CIT ––––, ––––, 483 F. Supp. 3d 1273, 1275–76 (2020) ; Hyundai Steel Co. v. United States ("Hyundai Steel I"), 43 CIT ––––, ––––, 415 F. Supp. 3d 1293, 1295–1301 (2019).

In the Final Results, Commerce determined that a particular market situation in Korea distorted the cost of production of CWP. Final IDM at 3. Commerce also determined that it could quantify the amount of the distortion, and it made an upward adjustment to the cost of production of CWP based on the subsidy rate of hot-rolled steel coil. Id. (citing Countervailing Duty Investigation of Certain Hot-Rolled Steel Flat Products from the Republic of Korea, 81 Fed. Reg. 53,439 (Dep't of Commerce Aug. 12, 2016) (final affirmative determination), as amended, Certain Hot-Rolled Steel Flat Products from Brazil and the Republic of Korea, 81 Fed. Reg. 67,960 (Dep't of Commerce Oct. 3, 2016) (amended final affirmative countervailing duty determinations and countervailing duty orders)). Commerce then conducted a sales-below-cost test and disregarded certain sales made at prices below the cost of production, as adjusted. See Decision Mem. for the Prelim. Results of Antidumping Duty Admin. Review: Circular Welded Non-Alloy Steel Pipe from the Republic of Korea: 2015–2016 ("Prelim. DM") at 19–20, PR 275; Final IDM at 3 (noting that Commerce used the same calculation methodology for the respondents not selected for individual examination for the Final Results as explained in the Prelim. DM). Commerce calculated normal value from the remaining above-cost home market sales for mandatory respondents Hyundai Steel and Husteel. Prelim. DM at 20; Final IDM at 3.

In Hyundai Steel I, 43 CIT at ––––, 415 F. Supp. 3d at 1301, the Court concluded that Commerce's particular market situation determination was unsupported by substantial evidence. In the Final Results of Redetermination Pursuant to Remand ("Remand Results"), ECF No. 73-1, subsequent to Hyundai Steel I, Commerce conducted a new review of the record and again determined that a particular market situation distorted the cost of hot-rolled steel coil in the Korean market. Remand Results at 4. Commerce again made an upward adjustment to the cost of hot-rolled steel coil, performed the sales-below-cost test, and calculated normal value from the remaining above-cost home market sales. See id.

In Hyundai Steel II, 44 CIT at ––––, 483 F. Supp. 3d at 1279, 1281, the Court remanded for Commerce to explain the statutory authority to conduct a cost-based particular market situation analysis when normal value is based on home market sales and to adjust the cost of production for purposes of the sales-below-cost test of 19 U.S.C. § 1677b(b), specifically within the context of relevant caselaw from this Court. Commerce's second remand results explained its view that Section 504 of the Trade Preferences Extension Act of 2015 ("TPEA"), Pub. L. No. 114-27, § 504, 129 Stat. 362, 385, authorizes it to make such determinations and to adjust the cost of production for the sales-below-cost test when calculating normal value based on home market sales. Final Results of Redetermination Pursuant Court Remand ("Second Remand Results") at 3–4, ECF No. 85-1.

In Hyundai Steel III, 45 CIT at ––––, 531 F. Supp. 3d at 1353, the Court concluded that Commerce's cost-based particular market situation determination and subsequent adjustment were not in accordance with the law. The Court held that when normal value is based on home market sales, 19 U.S.C. § 1677b does not permit Commerce to make a particular market situation adjustment to the costs of production for purposes of the sales-below-cost test of 19 U.S.C. § 1677b(b). Id. Under protest, Commerce eliminated the particular market situation adjustment in its recalculation of the weighted-average dumping margin of Hyundai Steel. See Third Remand Results at 6; see also 19 C.F.R. § 351.405. Commerce recalculated the dumping margin rate for SeAH by recalculating the rate for the second mandatory respondent, Husteel, using a particular market situation adjustment for Husteel and then relying on a simple average of the recalculated rates for Hyundai Steel and Husteel. Third Remand Results at 6–7.

JURISDICTION AND STANDARD OF REVIEW

The Court has jurisdiction pursuant to Section 516A(a)(2)(B)(i) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(i), and 28 U.S.C. § 1581(c). The Court will hold unlawful any determination found to be unsupported by substantial evidence on the record or otherwise not in accordance with the law. 19 U.S.C. § 1516a(b)(1)(B)(i). The Court also reviews determinations made on remand for compliance with the Court's remand order. Ad Hoc Shrimp Trade Action Comm. v. United States, 38 CIT ––––, ––––, 992 F. Supp. 2d 1285, 1290 (2014), aff'd, 802 F.3d 1339 (Fed. Cir. 2015).

DISCUSSION

I. Recalculation of Hyundai Steel's Dumping Margin

In the Third Remand Results, Commerce stated...