Marmen Inc. v. United States

545 F.Supp.3d 1305

MARMEN INC., Marmen Énergie Inc., and Marmen Energy Co., Plaintiffs,andWind Tower Trade Coalition, Consolidated Plaintiff,

v. UNITED STATES, Defendant,andWind Tower Trade Coalition, Marmen Inc., Marmen Énergie Inc., and Marmen Energy Co., Defendant-Intervenors.

Slip Op. 21-148

Consol. Court No. 20-00169

United States Court of International Trade.

October 22, 2021

Jay C. Campbell, Allison J.G. Kepkay, Ron Kendler, and Ting-Ting Kao, White & Case, LLP, of Washington, D.C., for Plaintiffs and Defendant-Intervenors Marmen Inc., Marmen Energy Co., and Marmen Energie Inc.

Alan H. Price, Daniel B. Pickard, Robert E. DeFrancesco, III, Maureen E. Thorson, and Laura El-Sabaawi, Wiley Rein, LLP, of Washington, D.C., for Consolidated Plaintiff and Defendant-Intervenor Wind Tower Trade Coalition.

Joshua E. Kurland, Trial Attorney, Commercial Litigation Branch, U.S. Department of Justice, of Washington, D.C., for Defendant United States. With him on the brief were Brian M. Boynton, Acting Assistant Attorney General, and Jeanne E. Davidson, Director. Of counsel on the brief were Kirrin A. Hough, Attorney, and Natalie M. Zink, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.

OPINION AND ORDER

Choe-Groves, Judge:

Plaintiffs Marmen Inc., Marmen Energy Co., and Marmen Energie Inc. (collectively, "Marmen") and Consolidated Plaintiff Wind Tower Trade Coalition ("WTTC") filed this consolidated action challenging the final determination published by the U.S. Department of Commerce ("Commerce") in the antidumping duty investigation on utility scale wind towers from Canada. See Utility Scale Wind Towers from Canada ("Final Determination"), 85 Fed. Reg. 40,239 (Dep't of Commerce July 6, 2020) (final determination of sales at less than fair value and final negative determination of critical circumstances; 2018–2019); see also Issues and Decision Mem. for the Final Affirmative Determination in the Less-Than-Fair-Value Investigation of Utility Scale Wind Towers from Canada (June 29, 2020) ("Final IDM"), ECF No. 18-5. Before the Court are the Rule 56.2 Motion for Judgment on the Agency Record on Behalf of Plaintiffs Marmen Inc., Marmen Energie Inc., and Marmen Energy Co., ECF Nos. 23, 24, and Wind Tower Trade Coalition's Rule 56.2 Motion for Judgment on the Agency Record, ECF Nos. 25, 26. See also Mem. P. & A. Supp. Pls.’ Rule 56.2 Mot. J. Agency R. ("Marmen's Br."), ECF Nos. 23-2, 24-2; Wind Tower Trade Coalition's Mem. Supp. Rule 56.2 Mot. J. Agency R. ("WTTC's Br."), ECF Nos. 25-1, 26-1. For the following reasons, the Court sustains in part and remands in part the Final Determination.

ISSUES PRESENTED

The Court reviews the following issues:

1. Whether Commerce's determination to weight-average product-specific plate costs is supported by substantial evidence;

2. Whether Commerce's determination to reject Marmen's additional cost reconciliation information was an abuse of discretion;

3. Whether Commerce's determination to apply an average-to-transaction comparison method is supported by substantial evidence;

4. Whether Commerce's determination regarding the home market and the U.S. date of sale is supported by substantial evidence;

5. Whether Commerce's determination to treat Marmen's home market sales as being sales of tower sections rather than complete towers is supported by substantial evidence; and

6. Whether Commerce's determination not to apply facts otherwise available with an adverse inference is supported by substantial evidence.

BACKGROUND

In August 2019, Commerce initiated an antidumping duty investigation into wind towers from Canada for the period covering July 1, 2018 through June 30, 2019. Utility Scale Wind Towers from Canada, Indonesia, the Republic of Korea, and the Socialist Republic of Vietnam, 84 Fed. Reg. 37,992, 37,992 –93 (Dep't of Commerce Aug. 5, 2019) (initiation of less-than-fair-value investigations). Commerce selected Marmen Inc. and Marmen Energie Inc. as mandatory respondents. See Decision Mem. for the Prelim. Determination in the Less-Than-Fair-Value Investigation of Utility Scale Wind Towers from Canada (Feb. 4, 2020) ("Prelim. DM") at 1–2, PR 146.¹

In the Final Determination, Commerce assigned weighted-average dumping margins of 4.94% to Marmen Inc. and Marmen Energie Inc.² Final Determination, 85 Fed. Reg. at 40,239. Commerce determined the all-others weighted average dumping margin of 4.94% based on Marmen's dumping margin. Id.

Commerce determined that Marmen's steel plate costs did not reasonably reflect the costs associated with the production and sale of the products and weight-averaged Marmen's reported steel plate costs. Final IDM at 4–6. Commerce rejected a portion of the supplemental cost reconciliation information submitted by Marmen as untimely, unsolicited new information. Id. at 7–9. Commerce applied a differential pricing analysis, using the Cohen's d test, and determined that there was a pattern of export prices that differed significantly. Id. at 10–11. As a result, Commerce calculated Marmen's weighted-average dumping margin by using the alternative average-to-transaction method. Id. Commerce determined that Marmen complied with its instructions by reporting invoice dates as the home market and U.S. dates of sale and by reporting home market sales as sales of wind tower sections. Id. at 13–18. Further, Commerce determined that the record contained the necessary information to calculate Marmen's dumping margin and relied on the data provided by Marmen, declining to apply facts otherwise available or an adverse inference. Id. at 18–20.

JURISDICTION AND STANDARD OF REVIEW

The Court has jurisdiction 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 the final determination in an antidumping duty investigation. The Court shall 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).

DISCUSSION

I. Commerce's Determination to Weight-Average Marmen's Steel Plate Costs

In order to determine whether certain products are being sold at less than fair value in the United States, Commerce compares the export price, or constructed export price, with normal value. 19 U.S.C. § 1677b(a)(1)(A). Export price or constructed export price is the price at which the subject merchandise is being sold in the U.S. market, while normal value is the price at which a "foreign like product" is sold in the producer's home market or in a comparable third-country market. Id. § 1677a(a)–(b). Before calculating a dumping margin, Commerce must identify a suitable "foreign like product" with which to compare the exported subject merchandise. A "foreign like product," in order of preference, is:

(A) The subject merchandise and other merchandise which is identical in physical characteristics with, and was produced in the same country by the same person as, that merchandise.

(B) Merchandise —

(i) produced in the same country and by the same person as the subject merchandise,

(ii) like that merchandise in component material or materials and in the purposes for which used, and

(iii) approximately equal in commercial value to the subject merchandise.

(C) Merchandise —

(i) produced in the same country and by the same person and of the same general class or kind as the subject merchandise,

(ii) like that merchandise in the purposes for which used, and

(iii) which the administering authority determines may reasonably be compared with that merchandise.

Id. § 1677(16); see NSK Ltd. v. United States, 26 C.I.T. 650, 656, 217 F. Supp. 2d 1291, 1299–1300 (2002). To identify such merchandise, Commerce employs a "model match" methodology consisting of a hierarchy of certain characteristics used to sort merchandise into groups. See SKF USA, Inc. v. United States, 537 F.3d 1373, 1378–80 (Fed. Cir. 2008). Each group is assigned a control number ("CONNUM"), used to match home market sales with U.S. sales. See Thuan An Prod. Trading & Serv. Co. v. United States, 42 CIT ––––, ––––, 348 F. Supp. 3d 1340, 1344 n.7 (2018).

When determining costs of production, the statute states that:

[c]osts shall normally be calculated based on the records of the exporter or producer of the merchandise, if such record are kept in accordance with the generally accepted accounting principles ["GAAP"] of the exporting country (or the producing country, where appropriate) and reasonably reflect the costs associated with the production and sale of the merchandise.

19 U.S.C. § 1677b(f)(1)(A). The statute requires that "reported costs must normally be used only if (1) they are based on the records ... kept in accordance with the GAAP and (2) reasonably reflect the costs of producing and selling the merchandise." See Dillinger France S.A. v. United States, 981 F.3d 1318, 1321 (Fed. Cir. 2020) (emphasis in original) (internal quotation marks and citations omitted). Commerce is not required to accept the exporter's records. Thai Plastic Bags Indus. Co. v. United States, 746 F.3d 1358, 1365 (Fed. Cir. 2014) (citing 19 U.S.C. § 1677b(f)(1)(A) ). Commerce may reject a company's records if it determines that accepting them would distort the company's true costs. See Am. Silicon Techs. v. United States, 261 F.3d 1371, 1377 (Fed. Cir. 2001). Commerce is directed to consider all available evidence on the proper allocation of costs. 19 U.S.C. § 1677b(f)(1)(A). Physical characteristics are a prime consideration when Commerce conducts its analysis. Thai Plastic Bags, 746 F.3d at 1368. If factors beyond the physical characteristics influence the costs, however, Commerce will normally adjust the reported costs in order to reflect the costs that are based only on the physical characteristics. See id.

To determine whether the subject merchandise wind towers from Canada were sold in the United States at less than fair value under section 731 of the...