Nexteel Co. v. United States

578 F.Supp.3d 1354

NEXTEEL CO., LTD., Plaintiff,

Hyundai Steel Company and SeAH Steel Corporation, Consolidated Plaintiffs,

and

Hyundai Steel Company, Plaintiff-Intervenor,

v.UNITED STATES, Defendant,andWheatland Tube Company and Nucor Tubular Products Inc., Defendant-Intervenors.

Slip Op. 22-69

Consol. Court No. 20-03868

United States Court of International Trade.

June 16, 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 NEXTEEL Co., Ltd.

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

Jeffrey M. Winton, Michael J. Chapman, Amrietha Nellan, Vi N. Mai, and Jooyuon Jeong, Winton & Chapman PLLC, of Washington, D.C., for Consolidated Plaintiff SeAH Steel Corporation.

Robert R. Kiepura, Trial Attorney, Commercial Litigation Branch, Civil Division, 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, Patricia M. McCarthy, Director, and Franklin E. White, Jr., Assistant Director. Of counsel on the brief was JonZachary Forbes, Attorney, Office of the Chief Counsel for Trade Enforcement and 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.

Alan H. Price, Robert E. DeFrancesco, III, Theodore P. Brackemyre, and Paul A. Devamithran, Wiley Rein LLP, of Washington, D.C., for Defendant-Intervenor Nucor Tubular Products Inc.

OPINION

Choe-Groves, Judge:

Plaintiff NEXTEEL Co., Ltd. ("NEXTEEL"), Consolidated Plaintiff and Plaintiff-Intervenor Hyundai Steel Company ("Hyundai Steel"), and Consolidated Plaintiff SeAH Steel Corporation ("SeAH"), (collectively, "Plaintiffs"), challenged the final results in the 2017–2018 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"), 85 Fed. Reg. 71,055 (Dep't of Commerce Nov. 6, 2020) (final results of antidumping duty administrative review; 2017–2018) and accompanying Issues & Decisions Mem. for the Final Results of the 2017–2018 Admin. Review of the Antidumping Duty Order on Circular Non-Alloy Steel Pipe from the Republic of Korea ("Final IDM"), PR 247.¹

Before the Court are the [Amended] Final Results of Redetermination Pursuant to Court Order ("Remand Results"), ECF No. 54-1, which the Court ordered in NEXTEEL Co. v. United States ("NEXTEEL"), 45 CIT ––––, 540 F. Supp. 3d 1320 (2021). Defendant-Intervenors Wheatland Tube Company and Nucor Tubular Products Inc. (collectively, "Defendant-Intervenors" or "Def.-Intervs.") filed comments stating that the Remand Results comply with the Court's order. Def.-Intervs.’ Comments Partial Opp'n Remand Redetermination ("Def.-Intervs.’ Cmts.") at 1, ECF No. 56. NEXTEEL filed comments indicating partial opposition to the Remand Results because the Court's prior decision held that the particular market situation determination made by the U.S. Department of Commerce ("Commerce") was contrary to the law but Commerce continued to find on remand that a particular market situation existed in Korea during the period of review. NEXTEEL's Remand Comments ("NEXTEEL's Cmts.") at 1–4, ECF No. 57.

Defendant United States ("Defendant") filed its response in support of the Remand Results. Def.’s Resp. Comments Remand Redetermination ("Def.’s Cmts."), ECF No. 59. Hyundai Steel filed comments expressing general support for the Remand Results and opposition in part. Hyundai Steel's Comments Commerce's Remand Redetermination ("Hyundai Steel's Cmts.") at 2, ECF No 60.

For the following reasons, the Court sustains the Remand Results.

BACKGROUND

The Court assumes familiarity with its previous opinion and recites the facts relevant to review of the Remand Results. See generally NEXTEEL, 45 CIT ––––, 540 F. Supp. 3d 1320. Commerce interpreted Section 504 of the Trade Preferences Extension Act of 2015 ("TPEA"), Pub. L. No. 114-27, § 504, 129 Stat. 362, 385, to confer discretion to adjust input purchase prices of producers for calculating cost of production as part of the sales-below costs test of 19 U.S.C. § 1677b(b)(1). In its Final Results, Commerce determined that a particular market situation existed that distorted the costs of Korean producers of subject merchandise based on the totality of four factors: (1) Korean subsidies of hot-rolled steel coil; (2) Korean imports of hot-rolled steel coil from the People's Republic of China; (3) strategic alliances between Korean hot-rolled steel coil producers and CWP producers; and (4) distortions in the Korean electricity market. NEXTEEL, 45 CIT at ––––, 540 F. Supp. 3d at 1328 (citing Final IDM at 8; Decision Mem. for the Prelim. Results of Antidumping Duty Admin. Review: Circular Welded Non-Alloy Steel Pipe from the Republic of Korea: 2017–2018 (Jan. 9, 2020) at 12, PR 203). After reviewing the language of Section 1677b (as amended) and other provisions and case law, the Court concluded that Congress did not authorize Commerce to adjust the cost of production as an alternative calculation methodology when using normal value based on home market sales under Section 1677b(e) because Section 504 of the TPEA did not amend Section 1677b(b), which sets out the calculation of the cost of production for the sales-below-cost test to determine whether and which sales should be disregarded as outside the ordinary course of trade when normal value is based on home market sales. Id. at ––––, 540 F. Supp. 3d at 1328–29. Commerce's particular market situation adjustment to the cost of production was therefore not in accordance with the law, and the Court remanded the Final Results for reconsideration of Commerce's particular market situation determination and adjustment. Id.

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 727, 730, 992 F. Supp. 2d 1285, 1290 (2014), aff'd, 802 F.3d 1339 (Fed. Cir. 2015).

DISCUSSION

NEXTEEL "fully supports Commerce's determination to remove any element of a particular market situation adjustment to the calculation of NEXTEEL's costs," which NEXTEEL argues "is the only possible reasonable outcome under the statute and the only outcome that would accord with the remand order," NEXTEEL's Cmts. at 2 (citing NEXTEEL, 45 CIT at ––––, 540 F. Supp. 3d at 1328, 1329 ), but it objects to Commerce's continued finding on remand that a particular market situation existed in Korea during the period of review, id. at 4. NEXTEEL contends that that determination is contrary to the Remand Order. Id. NEXTEEL contends further that Commerce's particular market situation determination is unreasonable and unsupported by substantial record evidence in any event, but also recognizes that the issue of Commerce's particular market situation determination is moot when the court concludes that the statute does not permit a particular market situation adjustment. Id. at 3–4 (quoting Borusan Mannesmann Boru Sanayi ve Ticaret A.S. v. United States, 45 CIT ––––, ––––, 494 F. Supp. 3d 1365, 1371 (2021) ("Because a [particular market situation] adjustment is not permitted for the purposes of the sales-below-cost test, any claims relating to ... Commerce's determination that a [particular market situation] existed are now mooted.")).

Defendant requests that the Court sustain the Remand Results and enter judgment. Defendant contends that because the Court did not consider whether Commerce's particular market situation determination is supported by substantial evidence on the record, "on remand Commerce continued to find that substantial evidence supported its particular market situation determination when calculating the cost of production where normal value is based on constructed value, in accordance with 19 U.S.C. § 1677b(e)." Def.’s Cmts. at 3 (citing, inter alia, Remand Results at 3). However, "[b]ecause all of Commerce's normal value calculations were based on home market sales, Commerce complied with this Court's order and recalculated the weighted-average dumping margins for the respondents without making a cost-based particular market situation adjustment." Id. at 4 (citing Remand Results at 3).

Defendant-Intervenors disagree with the Court's holding that the statute does not permit an adjustment to the cost of production to account for a particular market situation when normal value is based on home market sales, and they disagree with this aspect of Commerce's remand determination. Def.-Intervs.’ Cmts. at 1. Defendant-Intervenors ...