Saha Thai Steel Pipe Pub. Co. v. United States

663 F.Supp.3d 1356

SAHA THAI STEEL PIPE PUBLIC COMPANY LTD., Plaintiff,andThai Premium Pipe Co. Ltd., Plaintiff-Intervenor, v. UNITED STATES, Defendant,andNucor Tubular Products, Inc. and Wheatland Tube Co., Defendant-Intervenors.

Slip Op. No. 23-158 Court No. 1:21-cv-00627

United States Court of International Trade

November 13, 2023

Daniel L. Porter, Curtis, Mallet-Prevost, Colt & Mosle LLP, of Washington, DC, for Plaintiff. With him on the brief were James P. Durling, James C. Beaty, and Ana Amador.

Robert G. Gosselink, Trade Pacific PLLC, of Washington, DC, for Plaintiff-Intervenor. With him on the brief was Aqmar Rahman.

Elizabeth Anne Speck, Senior Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendant United States. With her on the brief were Brian M. Boynton, Principal Deputy Assistant Attorney General, Patricia M. McCarthy, Director, Commercial Litigation Branch, Franklin E. White, Assistant Director, Commercial Litigation Branch, and JonZachary Forbes, Office of Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.

Robert E. DeFrancesco, III, Wiley Rein LLP, of Washington, DC, for Defendant-Intervenor Nucor Tubular Products Inc. With him on the brief were Alan H. Price and Theodore P. Brackemyre.

Elizabeth J. Drake, Schagrin Associates, of Washington, DC, for Defendant-Intervenor Wheatland Tube Company. With her on the brief were Roger B. Schagrin, Christopher T. Cloutier and Saad Y. Chalchal.

OPINION

Vaden, Judge:

Saha Thai Steel Pipe Public Company Ltd. (Saha Thai or Plaintiff) filed this case under Section 516A of the Tariff Act of 1930, as amended. Saha Thai challenges the Final Determination issued by the U.S. Department of Commerce (Commerce) after the agency conducted an administrative review of its 1986 antidumping duty order on circular welded carbon steel pipes and tubes imported from Thailand. See Circular Welded Carbon Steel Pipes and Tubes from Thailand: Final Results of Antidumping Duty Administrative Review and Final Determination of No Shipments; 2019-2020 (Final Determination), 86 Fed. Reg. 69,620 (Dec. 8, 2021). It challenges (1) Commerce's decision to apply adverse inferences drawn from facts otherwise available to find that Saha Thai was affiliated with seven customers and (2) Commerce's inclusion of out-of-scope merchandise in its calculation of the final antidumping margin. See Compl. ¶¶ 18-31, ECF No. 39; 19 U.S.C. § 1677e(b)(1)(A). For the reasons set forth below, the Court GRANTS IN PART and DENIES IN PART Plaintiff's Motion and REMANDS the Final Determination to Commerce to act consistently with the Court's opinion.

BACKGROUND

Saha Thai is a foreign producer and exporter of welded carbon steel pipes and tubes. Compl. ¶ 3, ECF No. 39. The relevant antidumping order defines covered pipes and steel tubes:

[C]ertain circular welded carbon steel pipes and tubes (referred to in this notice as 'pipes and tubes'), also known as 'standard pipe' or 'structural tubing,' which includes pipe and tube with an outside diameter of 0.375 inch or more but not over 16 inches, of any wall thickness, as currently provided in items 610.3231, 610.3234, 610.3241, 610.3242, 610.3243, 610.3252, 610.3254, 610.3256, 610.3258, and 610.4925 of the Tariff Schedules of the United States Annotated (TSUSA).

Antidumping Duty Order: Circular Welded Carbon Steel Pipes and Tubes from Thailand, 51 Fed. Reg. 8341 (Mar. 11, 1986).¹

I. The Disputed Final Determination

Commerce issued the original antidumping order on circular welded carbon steel pipes and tubes from Thailand (Order) in 1986. See Antidumping Duty Order; Circular Welded Carbon Steel Pipes and Tubes from Thailand, 51 Fed. Reg. 8,341 (Mar. 11, 1986). The subject of that Order and the products at issue in this case are standard pipes imported from Thailand to the United States. The International Trade Commission (ITC) explained the differences between standard pipe and line pipe in its original investigation:

Standard pipe is manufactured to American Society of Testing and Materials (ASTM) specifications and line pipe is manufactured to American Petroleum Institute (API) specifications. Line pipe is made of higher grade steel and may have a higher carbon and manganese content than is permissible for standard pipe. Line pipe also requires additional testing. Wall thicknesses for standard and line pipes, although similar in the smaller diameters, differ in the larger diameters. Moreover, standard pipe (whether imported or domestic) is generally used for low-pressure conveyance of water, steam, air, or natural gas in plumbing, air-conditioning, automatic sprinkler and similar systems. Line pipe is generally used for the transportation of gas, oil, or water in utility pipeline distribution systems.

Certain Welded Carbon Steel Pipes and Tubes from Thailand and Venezuela, Inv. Nos. 701-TA-242 and 731-TA-252 and 253 (Preliminary), USITC Pub. 1680 (Apr. 1985).

Commerce initiated the 2019-2020 administrative review of the Order in May 2020. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 88 Fed. Reg. 26,931 (May 6, 2020). It selected Saha Thai and Blue Pipe Steel Center² (Blue Pipe) as mandatory respondents. See Circular Welded Carbon Steel Pipes and Tubes from Thailand: Preliminary Results of Antidumping Duty Administrative Review and Preliminary Determination of No Shipments; 2019-2020 (Preliminary Results), 86 Fed. Reg. 30,405, 30,406 (June 8, 2021).

Seeking to collect information on potential affiliates, Commerce issued Section A of its Initial Antidumping Questionnaire to Saha Thai on October 13, 2020. Section A Questionnaire at A-1, J.A. at 3,307, ECF No. 56. Commerce requested that Saha Thai:

Identify all suppliers, (sub)contractors, lenders, exporters, distributors, resellers, and other persons involved in the development, production, sale and/or distribution of the merchandise under review which Commerce may also consider affiliated with your company, in accordance with section 771(33) of the Act and sections 351.102(b) and 351.401(f) of the regulations.

Id. at A-6, J.A. at 3,312. In Section B of its Questionnaire, Commerce further requested that:

If you had sales to an affiliated party that consumed all or some of the merchandise (i.e., used it in the production of merchandise that does not fall within the description provided in Appendix III), then report all of your sales to that affiliate, whether the merchandise was consumed or resold by the affiliate.

Section B Questionnaire Response at 5, J.A. at 8,197, ECF No. 56.

Saha Thai submitted its Section A Response to Commerce on November 10, 2020. Section A Resp., J.A. at 82,816 ECF No. 57. In its narrative response, Saha Thai explained that it divided its answer into the following three categories: "(1) sales to unaffiliated customers, (2) sales to potentially affiliated entities for consumption, and (3) sales to affiliated resellers." Id. at 3, J.A. at 82,819. The company then attached a table listing several companies as affiliated and indicating whether those companies resold the subject merchandise or bought it for consumption. Id. at Ex. A-1, J.A. at 82,854. It also reported that 16.68% of Saha Thai was owned by the Ratanasirivilai family, 24.32% of the company was owned by the Karuchit family, and that each family had two members serving as corporate directors. Id. at Ex. A-3, A-5, J.A. at 82,857, 83,667-8.

Needing more information from Saha Thai about certain reported affiliates, Commerce issued its First Supplemental Questionnaire, requesting Saha Thai "provide a detailed history, from January 1, 2015, through the present, of your business relationships with Blue Pipe [and other companies]." First Suppl. Questionnaire at 1 (Feb. 3, 2021), J.A. at 90,946, ECF No. 58. Saha Thai complied with this request and submitted its response on February 24, 2021. First Suppl. Questionnaire Resp., J.A. at 92,359, ECF No. 58. The agency then issued a Second Supplemental Questionnaire requesting revisions to Saha Thai's previously submitted customer list, including a request to "add a column to identify whether the customer is an affiliate." Second Suppl. Questionnaire at 1 (Mar. 11, 2021), J.A. at 96,071, ECF No. 58. Commerce issued a Third Supplemental Questionnaire on April 13, 2021. Third Suppl. Questionnaire, J.A. at 96,233, ECF No. 58. There, the agency requested Plaintiff:

Please submit a list of all stockholders and their equity positions, managers, directors, officers, and department heads for both Saha Thai . . . and Saha Thai's affiliates. Please state whether any stockholder, manager, director, officer, or department head is also a stockholder, manager, director, officer, or department head at any other company involved in the development, production, sale and/or distribution of the merchandise under review.

Please provide a complete family tree for . . . Saha Thai . . . . Please identify any member of these families that has any role in any company involved in the development, production, sale and/or distribution of the merchandise under review. For each such family member, please specify their role in the company, the English and Thai name of the company, and state whether that company is an affiliated party.

Id. at 1, J.A. at 96,235 (paragraph break added for readability).

Saha Thai submitted its response to the Third Supplemental Questionnaire in two parts. Third Suppl. Questionnaire Resp. Part 1 (Third Resp. Part 1) (May 4, 2021), J.A. at 96,420, ECF No. 58; Third Suppl. Questionnaire Resp. Part 2 (Third Resp. Part 2) (May 6, 2023), J.A. at 96,459, ECF No. 58. In its response, the company affirmed that "none of the individuals in the family grouping that owns Saha Thai is involved in the production, development, sale or distribution of merchandise under review other than the reported affiliations in Saha Thai's Section A response to the Department." Third Resp. Part 2 at 2, J.A. at...