Nexteel Co. v. United States

450 F.Supp.3d 1333

NEXTEEL CO., LTD., Plaintiff,andSeAH Steel Corporation, Consolidated Plaintiff,

v. UNITED STATES, Defendant,andUnited States Steel Corporation, et al., Defendant-Intervenors.

Slip Op. 20-69

Consol. Court No. 18-00083

United States Court of International Trade.

May 18, 2020

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 NEXTEEL Co., Ltd.

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

Hardeep K. Josan, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of New York, N.Y., for Defendant United States. With her on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and Claudia Burke, Assistant Director. Of counsel was Mykhaylo Gryzlov, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, D.C.

Thomas M. Beline, Myles S. Getlan, and James E. Ransdell, Cassidy Levy Kent (USA) LLP, of Washington, D.C., for Defendant-Intervenor United States Steel Corporation.

Gregory J. Spak, Frank J. Schweitzer, Kristina Zissis, and Matthew W. Solomon, White & Case LLP, of Washington, D.C., for Defendant-Intervenors Maverick Tube Corporation and Tenaris Bay City, Inc.

OPINION AND ORDER

Choe-Groves, Judge:

The court revisits the second administrative review of the antidumping duty order on oil country tubular goods ("OCTG") from the Republic of Korea ("Korea") conducted by the Department of Commerce ("Commerce"), covering the period from September 1, 2015 to August 31, 2016. See Certain Oil Country Tubular Goods From the Republic of Korea, 83 Fed. Reg. 17,146 (Dep't Commerce Apr. 18, 2018) (final results of antidumping duty administrative review and final determination of no shipments; 2015–2016) ("Final Results"), and accompanying Issues and Decision Memorandum for the Final Results of the 2015–2016 Administrative Review of the Antidumping Duty Order on Certain Oil Country Tubular Goods from the Republic of Korea, P.R. 368 (Apr. 11, 2018) ("Final IDM").¹ Before the court are Commerce's Final Results of Redetermination Pursuant to Court Remand, ECF No. 81-1 ("Remand Redetermination"), which the court ordered in NEXTEEL Co., Ltd. v. United States, 43 CIT ––––, 392 F. Supp. 3d 1276 (2019) (" NEXTEEL II").

I. 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 Remand Redetermination. NEXTEEL II, 392 F. Supp. 3d at 1283–84.

In this second administrative review of OCTG from Korea ("OCTG II"), Commerce selected Plaintiff NEXTEEL Co., Ltd. ("NEXTEEL") and Consolidated Plaintiff SeAH Steel Corporation ("SeAH") (together, "Plaintiffs") as mandatory respondents for individual examination. In the Final Results, Commerce concluded that: (1) NEXTEEL failed to cooperate to the best of its ability and thus calculated its dumping margin using total facts available with an adverse inference ("AFA"), id. at 43; (2) an upward adjustment to SeAH's reported costs of producing OCTG was warranted to correct for a particular market situation that existed for hot-rolled coil in Korea, id. at 17 ; (3) SeAH's proprietary grade OCTG products should be classified as grade code "080," id. at 84; and (4) SeAH's general and administrative expenses related to resold U.S. products for its U.S. affiliate, Pusan Pipe America Inc. ("PPA"), should be deducted as U.S. selling expenses, id. at 89.²

Plaintiffs filed separate actions challenging several aspects of the Final Results, which were later consolidated before this Court. NEXTEEL II, 392 F. Supp. 3d at 1284. In NEXTEEL II, the court sustained in part and remanded in part the Final Results. Id. at 1282. Specifically, the court ordered Commerce to reconsider or further explain: (1) the application of total AFA to NEXTEEL's margin calculation, id. at 1286 ; (2) the finding of a particular market situation in Korea, id. at 1288 ; (3) the classification of SeAH's proprietary products, id. at 1292 ; and (4) the deduction of PPA's G&A expenses as U.S. selling expenses, id. at 1293–94.

On remand, Commerce filed under protest and "calculated NEXTEEL's dumping margin based on NEXTEEL's reported data rather than [AFA]." Remand Redetermination at 44.³ As to the particular market situation finding, Commerce reviewed the record de novo , provided more explanation, and again found that a particular market situation in Korea distorted the cost of producing OCTG. See id. at 19–29 (adjusting the mandatory respondents’ margins based on a countervailing duty rate found in an investigation of certain hot-rolled steel flat products from Korea).⁴ Commerce further explained the basis for classifying SeAH's proprietary grade OCTG products as grade code "080" (the grade for normalized N-80 pipe) and for deducting PPA's G&A expenses as U.S. selling expenses. See id. at 30–42. Commerce thus recalculated the weighted-average dumping margins of NEXTEEL, SeAH, and the non-examined companies, which changed from 6.75% to 5.41%, 75.81% to 46.71%, and 6.75% to 26.06%. Id. at 76.

Plaintiffs oppose certain aspects of the Remand Redetermination. Comments of SeAH Steel Corp. on Commerce's Nov. 5, 2019, Remand Redetermination, ECF No. 83 ("SeAH Br."); Pl. NEXTEEL's Comments in Opp'n to Remand Redetermination, ECF No. 85 ("NEXTEEL Br."). Defendant United States and Defendant-Intervenors Maverick Tube Corp. ("Maverick"), Tenaris Bay City, and United States Steel Corporation ("U.S. Steel") urge the court to sustain the Remand Redetermination. Responsive Comments of Def.-Intervenors Maverick Tube Corp. and Tenaris Bay City, Inc. in Supp. of Commerce's Remand Redetermination, ECF No. 88 ("Maverick Br."); Def.’s Resp. to Comments Regarding the Remand Redetermination, ECF No. 89 ("Def. Br."); and Def.-Intervenor United States Steel Corp.’s Comments in Supp. of Commerce's Remand Redetermination, ECF No. 90 ("U.S. Steel Br."). For the following reasons, the court sustains in part and remands in part the Remand Redetermination.

II. 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 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, including redeterminations made on remand, unless the findings are unsupported by substantial record evidence, or otherwise not in accordance with the law. 19 U.S.C. § 1516a(b)(1)(B)(i).

III. DISCUSSION

A. Particular Market Situation Finding

Plaintiffs challenge the particular market situation finding on multiple fronts. Plaintiffs argue that the court's remand instructions in NEXTEEL II barred Commerce from conducting a new examination and finding a particular market situation on remand because Commerce neither reopened the record nor gathered additional facts. NEXTEEL Br. at 6; see SeAH Br. at 3 (asserting that Commerce cannot use its redetermination "as a vehicle for relitigating the issues on which the Court ruled against it"). Plaintiffs also contend that Commerce's reliance on the same record developed during the prior (first) OCTG administrative review ("OCTG I") infects Commerce's finding of a particular market situation here in OCTG II. In OCTG I, this Court found Commerce's particular market situation finding was unsupported by substantial evidence. Additionally, here, Commerce considered a new fifth factor that was absent from the OCTG I review:

an alleged "steel industry restructuring effort" by the Korean Government. See NEXTEEL Br. at 6; SeAH Br. at 2–3. NEXTEEL further adds that Commerce's consideration of the fifth factor was procedurally improper because, until this remand proceeding, Commerce gave respondents no notice or opportunity to rebut the claim that industry restructuring efforts contributed to a particular market situation. NEXTEEL Br. at 26–27. Even if considered, Plaintiffs contend that the record evidence Commerce identified as showing government-influenced steel industry restructuring efforts cannot fill the evidentiary void infecting the particular market situation finding because there is no evidence of actual restructuring and no evidence of actual government interference. Id. at 27–28; see SeAH Br. at 6–8.

In OCTG I, Commerce reviewed Maverick's four allegations as each supporting a finding of a particular market situation in Korea: (1) subsidization of Korean hot-rolled coil ("HRC") products by the Korean Government; (2) distortive pricing of unfairly-traded Chinese HRC; (3) "strategic alliances" between Korean HRC suppliers and Korean OCTG producers; and (4) distortive government control over electricity prices in Korea. NEXTEEL Co., Ltd. v. United States, 43 CIT at ––––, 355 F. Supp. 3d 1336, 1345–46 (2019) (" NEXTEEL I"). Addressing each allegation in turn, Commerce made a preliminary determination that no particular market situation existed based on the record evidence. Id. at 1346 (citation omitted). Nevertheless, without receiving any new record evidence, Commerce reversed itself and found an extant particular market situation in OCTG I based on the "cumulative effect" of the four allegations. Id. at 1346, 1349. Although "Commerce's particular market situation approach was reasonable in theory[,]" the court held that the finding was unreasonable as unsupported by substantial evidence because a reasonable mind could not find that "individually the facts would not support a particular market situation, but when viewed as a whole, these same facts could support the opposite conclusion." Id. at 1351. The court directed Commerce "to reverse the finding of a particular market situation and recalculate the dumping margin for the mandatory respondents and non-examined...