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

487 F.Supp.3d 1323

SAHA THAI STEEL PIPE PUBLIC COMPANY LIMITED, Plaintiff,andThai Premium Pipe Company Ltd. and Pacific Pipe Public Company Limited, Consolidated Plaintiffs,

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

Slip Op. 20-181

Consol. Court No. 18-00214

United States Court of International Trade.

December 21, 2020

Daniel L. Porter, Tung Nguyen, and Kimberly Reynolds, Curtis, Mallet-Prevost, Colt & Mosle LLP, of Washington, D.C., for Plaintiff Saha Thai Steel Pipe Public Company Limited.

Robert G. Gosselink, Jonathan M. Freed, and Aqmar Rahman, Trade Pacific, PLLC, of Washington, D.C., for Consolidated Plaintiff Thai Premium Pipe Company Ltd.

Lizbeth R. Levinson, Ronald M. Wisla, and Brittney R. Powell, Fox Rothschild LLP, of Washington, D.C., for Consolidated Plaintiff Pacific Pipe Public Company Limited.

Elizabeth A. Speck, Senior Trial Counsel, and L. Misha Preheim, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for Defendant United States. With them on the brief were Joseph H. Hunt, Assistant Attorney General, and Jeanne E. Davidson, Director. Of counsel on the brief was Brandon J. Custard, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.

Roger B. Schagrin, Elizabeth J. Drake, Christopher T. Cloutier, and Luke A. Meisner, Schagrin Associates, of Washington, D.C., for Defendant-Intervenor Wheatland Tube Company.

OPINION AND ORDER

Choe-Groves, Judge:

Plaintiff Saha Thai Steel Pipe Public Company Limited ("Saha Thai") and Consolidated Plaintiffs Thai Premium Pipe Company Limited ("Thai Premium") and Pacific Pipe Public Company Limited ("Pacific Pipe") (collectively, "Plaintiffs") filed this consolidated action challenging the final results published by the U.S. Department of Commerce ("Commerce") in the 2016–2017 administrative review of the antidumping duty order on circular welded carbon steel pipes and tubes ("CWP") from Thailand. See Circular Welded Carbon Steel Pipes and Tubes From Thailand ("Final Results"), 83 Fed. Reg. 51,927 (Dep't Commerce Oct. 15, 2018) (final results of antidumping duty administrative review; 2016–2017); see also Decision Mem. for the Final Results of Antidumping Duty Admin. Review; 2016–2017, PD 143 (Oct. 4, 2018) ("Final Decision Memorandum" or "Final IDM").¹ Before the court are the Final Results of Redetermination Pursuant to Remand, ECF Nos. 62, 63 ("Remand Results"), which the court ordered in Saha Thai Steel Pipe Public Co. v. United States ("Saha Thai I"), 43 CIT ––––, 422 F. Supp. 3d 1363 (2019).

Plaintiffs argue that Commerce did not comply with the court's remand order, which required Commerce to reconsider its unlawful particular market situation adjustment in accordance with the court's opinion, noting the absence of a direct instruction from the court for Commerce to reverse its particular market situation adjustment. [Thai Premium]’s Comments O'ppn Remand Redetermination at 5–6, ECF Nos. 65, 66 ("Thai Premium Cmts."); Pl. Saha Thai's Comments Commerce's Redetermination Remand at 2–3, ECF No. 67 ("Saha Thai Cmts."); Pl. Pacific Pipe's Comments Commerce's Remand Redetermination at 2–3, ECF No. 68 ("Pacific Pipe Cmts."). Plaintiffs assert that Commerce's Remand Results set forth an impermissible new justification for a particular market situation adjustment to the cost of production that is contrary to the court's remand order, Commerce's regulations, the applicable statute, and procedural fairness. Thai Premium Cmts. at 7, 9; Saha Thai Cmts. at 3; Pacific Pipe Cmts. at 3.

Thai Premium asserts that normal value for Thai Premium was based on constructed value in the Final Results and asks the court to address whether Commerce's particular market situation adjustments in the Final Results were supported by substantial evidence. Thai Premium Cmts. at 3–4. In the Constructed Value Profit section of the Remand Results, Commerce noted Thai Premium's assertion that in the Final Results "Commerce used [constructed value] as a basis for normal value for Thai Premium because Thai Premium did not have sales of the foreign like product in the ordinary course of trade ...." Remand Results at 22–23 (citing Thai Premium's comments to the draft remand results). On remand, however, the basis for Thai Premium's constructed value was not the lack of sales of the foreign like product in the ordinary course of trade but Commerce's particular market situation determinations, which the court discusses below. Id. at 7–9. Because Commerce changed its methodology in the Remand Results, the issues of (1) whether Thai Premium's normal value was properly based on constructed value due to the lack of sales of the foreign like product in the ordinary course of trade, and (2) whether Commerce's subsequent particular market situation adjustments were supported by substantial evidence in the Final Results are not before the court at this time.

For the following reasons, the court remands the Remand Results.

BACKGROUND

The court presumes familiarity with the facts and procedural history as set forth in its prior opinion and recounts the facts relevant to the court's review of the Remand Results. See Saha Thai I, 43 CIT at ––––, 422 F. Supp. 3d at 1365–67.

Defendant-Intervenor Wheatland Tube Company ("Wheatland") submitted factual information alleging that a particular market situation in Thailand during the period of review distorted the costs of hot-rolled steel coil. Wheatland Allegation Letter at 1, PD 69–71 (Feb. 5, 2018) ("Wheatland Allegation"). Wheatland alleged the existence of two independent particular market situations, either one of which was purportedly sufficient on its own to distort the cost of production of CWP: (1) the Royal Thai Government subsidized Thai producers of hot-rolled coil, enabling its sale at below-market prices to downstream producers of CWP, and (2) the prices for imports of hot-rolled coil into Thailand were distorted through dumping, subsidization, and global overcapacity. Id. at 4–5. Wheatland requested that Commerce "use an alternative calculation methodology to calculate constructed value under 19 U.S.C. § 1677b(e) in this proceeding." Id. at 1. Commerce accepted Wheatland's submission alleging the existence of a particular market situation as to cost of production under 19 C.F.R. § 351.301(c)(2)(v) and set a deadline for submissions to rebut, clarify, or correct the Wheatland Allegation. Commerce Deadline Mem. at 1–2, PD 81 (Mar. 21, 2018). Saha Thai and Pacific Pipe submitted rebuttal factual information. Saha Thai Rebuttal, PD 83 (Mar. 28, 2018); Pacific Pipe Rebuttal, PD 84–85 (Mar. 28, 2018).

In the Final Results, Commerce determined that a particular market situation distorted the acquisition cost of hot-rolled coil, a major CWP input, and applied an upward adjustment to the respondents’ reported cost of production.² Final IDM at 8–10. Commerce conducted the sales-below-cost test and disregarded certain of Saha Thai's, Pacific Pipe's, and Thai Premium's home market sales made at prices below the cost of production. See Circular Welded Carbon Steel Pipes and Tubes from Thailand: Decision Mem. for the Prelim. Results of Antidumping Duty Admin. Review; 2016–2017 at 15–16, PD 87 (Apr. 3, 2018) ("Preliminary Decision Memorandum" or "Prelim. DM"). Commerce calculated normal value from the remaining above-cost home market sales and stated expressly that "[it] calculated [normal value] based on the price Pacific Pipe, Saha Thai, and Thai Premium reported for home market sales ...." Id. at 16. "Where [Commerce] w[as] unable to determine [normal value] based on home market sale prices of comparable merchandise, ... [Commerce] based [normal value] on constructed value (CV)." Id. Commerce did not state in the Preliminary Decision Memorandum or the Final Decision Memorandum that normal value for Thai Premium was based on constructed value. See Prelim. DM; Final IDM. Commerce calculated Plaintiffs’ weighted-average antidumping margins as 28% for Saha Thai, 30.61% for Pacific Pipe, and 30.98% for Thai Premium. Final Results, 83 Fed. Reg. at 51,928. The court concluded in Saha Thai I that Commerce's cost-based particular market situation adjustment was unlawful and remanded to Commerce "for further consideration consistent with this opinion." 43 CIT at ––––, 422 F. Supp. 3d at 1371.

Commerce filed the Remand Results under respectful protest and stated that it disagreed with the court in Saha Thai I. Remand Results at 1, 6. Rather than reverse its particular market situation determination, Commerce maintained its determination that a particular market situation distorted the cost of production. Id. at 7–8. Commerce declined to conduct the sales-below-cost test because it explained that the sales-below-cost test would not be "meaningful" without an adjustment to the cost of production to account for the particular market situation. Id. Commerce instead made a particular market situation determination under 19 U.S.C. § 1677(15)(C), stating that the distorted cost of production prevented a proper comparison between home market sales and export prices, and disregarding all home market sales. Id. at 8. Commerce based normal value on constructed value for each respondent on remand. Id. at 1–2, 8–9. Commerce made a particular market situation determination under 19 U.S.C. § 1677b(e) as to cost of production and calculated constructed value with an adjustment to the cost of production as an alternative calculation methodology. Id. at 8–9. Commerce calculated constructed value profit for each respondent by the alternative method of using Saha Thai's home market selling expense ratios and profit rate from the 2015–2016 administrative review. Id. at 9–11.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction under 19 U.S.C. § 1516a(a)(2)(B)(iii) and 28 U.S.C. § 1581(c), which grant the court authority to review actions...