TMK IPSCO v. United States

179 F.Supp.3d 1328

TMK IPSCO et al., Plaintiffs and Consolidated Plaintiffs,andMaverick Tube Corporation et al., Plaintiff-Intervenors and Consolidated Plaintiff-Intervenors,

v. United States, Defendant,andTianjin Pipe (Group) Corp. et al., Defendant-Intervenors and Consolidated Defendant-Intervenors.

Slip Op. 16-62

Consol. Court No. 10-00055

United States Court of International Trade.

Signed June 24, 2016

Roger Brian Schagrin , Schagrin Associates, of Washington, DC, argued for plaintiffs TMK IPSCO, V&M Star L.P., Wheatland Tube Corp., Evraz Rocky Mountain Steel, and United Steelworkers. With him on the brief was John Winthrop Bohn .

Alan Hayden Price and Robert Edward DeFrancesco, III , Wiley Rein, LLP, of Washington, DC, for consolidated plaintiff and plaintiff-intervenor Maverick Tube Corporation.

Jonathan Gordon Cooper , Quinn Emanuel Urquhart & Sullivan, LLP, of Washington, DC, argued for consolidated plaintiff and plaintiff-intervenor United States Steel Corporation. With him on the brief were Jon David Corey and Susan Rachael Estrich .

Loren Misha Preheim , Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for defendant United States. With him on the brief were Benjamin C. Mizer , Principal Deputy Assistant Attorney General, Jeanne E. Davidson , Director, and Claudia Burke , Assistant Director. Of counsel on the brief was Shelby Mitchell Anderson , Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, DC.

Daniel Lewis Porter , Claudia Denise Hartleben , Matthew Paul McCullough and William Henry Barringer , Curtis, Mallet-Prevost, Colt & Mosle LLP, of Washington, DC, for defendant-intervenors Tianjin Pipe (Group) Corp. and Tianjin Pipe International Economic & Trading Corp.

OPINION AND ORDER

Kelly, Judge:

This consolidated action comes before the court on USCIT Rule 56.2 motions for judgment on the agency record challenging the U.S. Department of Commerce's (“Department” or “Commerce”) determination in the countervailing duty investigation of certain oil country tubular goods (“OCTG”) from the People's Republic of China. See Certain Oil Country Tubular Goods From the People's Republic of China, 74 Fed. Reg. 64,045 (Dep't Commerce Dec. 7, 2009) (final affirmative countervailing duty determination, final negative critical circumstances determination) (“Final Results”), as amended, 75 Fed. Reg. 3,203 (Dep't Commerce Jan. 20, 2010) (amended final affirmative countervailing duty determination and countervailing duty order) (“Amended Final Results”); see also Issues and Decision Memorandum for the Final Determination in the Countervailing Duty Investigation of Certain Oil Country Tubular Goods (“OCTG”) from the People's Republic of China, C-570-944, (Nov. 23, 2009), available at http://ia.ita.doc.gov/frn/summary/prc/E9-28779-1.pdf (last visited June 3, 2016) (“Final Decision Memo”).

Plaintiffs TMK IPSCO, V&M Star L.P., Evraz Rocky Mountain Steel, Wheatland Tube Corp., and United Steelworkers (collectively “TMK”), domestic producers of OCTG and a union of OCTG workers, commenced this action pursuant to section 516A of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a (2006).¹ The court consolidated TMK's action with actions filed by: (1) Tianjin Pipe (Group) Corp. (“TPCO”) and Tianjin Pipe International Economic & Trading Corp. (collectively “TPCO Group”), exporters of OCTG; (2) Maverick Tube Corporation (“Maverick”), a domestic producer of OCTG; and (3) United States Steel Corporation (“U.S. Steel”), also a domestic producer of OCTG. See Order, Oct. 6, 2010, ECF No. 46. TMK, TPCO Group, Maverick, U.S. Steel, and Plaintiff-Intervenor Bureau of Fair Trade Imports & Exports, Ministry of Commerce, People's Republic of China (“Bureau of Fair Trade”) filed Rule 56.2 motions for judgment on the agency record. See Mem. in Supp. Mot. J. Agency R. of TMK IPSCO, V&M Star L.P., Wheatland Tube Corp., Evraz Rocky Mountain Steel, and the United Steelworkers, Oct. 6, 2010, ECF No. 55 (“TMK Mot.”); Pls. Tianjin Pipe (Group) Corp.'s and Tianjin Pipe International Economic and Trading Corp.'s Mem. P. & A. Supp. Mot. J. Agency R., Oct. 6, 2010, ECF No. 54; Mem. in Supp. Maverick Tube Corporation's 56.2 Mot. J. Agency R., Oct. 7, 2010, ECF No. 71 (“Maverick Mot.”); Mem. in Supp. Pl. United States Steel Corporation's Mot. J. Agency R. Under Rule 56.2, Oct. 6, 2010, ECF No. 67 (“U.S. Steel Mot.”); Rule 56.2 Mot. J. Agency R. of Pl.-Intervenor Bureau of Fair Trade for Imports and Exports, Ministry of Commerce, The People's Republic of China, Oct. 6, 2010, ECF No. 56. Defendant thereafter filed a response to the Rule 56.2 motions for judgment on the agency record filed by the above named parties. See Def.'s Resp. Opp'n to Pls.,' Pl.Intervenors,' and Def.-Intervenors' Mots. J. Agency R., May 5, 2011, ECF No. 86 (“Def. Resp.”). U.S. Steel also filed a supplemental brief and Defendant submitted a supplemental response brief.² SeeOpening Suppl. Br. Supp. Pl. United States Steel Corporation's Mot. J. Agency R. Under Rule 56.2, Sept. 30, 2015, ECF No. 142 (“U.S. Steel Suppl. Br.”); Def.'s Suppl. Resp. Br. Pursuant to This Ct.'s July 2, 2015 Scheduling Order, Dec. 17, 2015, ECF No. 145 (“Def. Suppl. Resp.”). TMK and U.S. Steel each filed replies to Defendant's response to their motions for judgment on the agency record. See Reply Mem. Supp. Mot. J. Agency R. of TMK IPSCO, V&M Star L.P., Wheatland Tube Corp., Evraz Rocky Mountain Steel, and the United Steelworkers, Feb. 16, 2016, ECF No. 146; Reply Br. Supp. Pl. United States Steel Corp.'s Mot. J. Agency R. Under Rule 56.2, Feb. 16, 2016, ECF No. 147 (“U.S. Steel Reply”).

BACKGROUND

On April 28, 2009, in response to a petition filed by TMK, Maverick, U.S. Steel, and other domestic companies (collectively “Petitioners”), Commerce initiated a countervailing duty investigation of OCTG from the People's Republic of China for the period of January 1, 2008 through December 31, 2008. See Certain Oil Country Tubular Goods from the People's Republic of China, 74 Fed. Reg. 20,678, 20,679 –80 (Dep't Commerce May 5, 2009) (initiation of countervailing duty investigation); see also Petitions for the Imposition of Antidumping and Countervailing Duties: Certain Oil Country Tubular Goods From the People's Republic of China, PD 3 (Apr. 8, 2009) (“Petition”).³ Commerce selected four Chinese producers and exporters of subject merchandise as mandatory respondents: Jiangsu Changbao Steel Tube Co., Ltd. (“Changbao”), TPCO, Wuxi Seamless Oil Pipe Co., Ltd. (“Wuxi”), and Zhejiang Jianli Enterprise Co., Ltd. (“Jianli”). See Respondent Selection Memorandum at 6, PD 69 (June 3, 2009). Commerce issued its final determination on November 23, 2009, see Final Results, 74 Fed. Reg. at 64,045, which Commerce later amended to correct certain ministerial errors resulting in final net countervailing duty rates of 12.46% for Changbao, 10.49% for TPCO, 14.95% for Wuxi, and 15.78% for Jianli, from which Commerce calculated an all others rate of 13.41%. Amended Final Results, 75 Fed. Reg. at 3,204 –05.

The parties in this action make the following challenges to Commerce's final determination: (i) TMK, Maverick, and U.S. Steel (collectively “Plaintiffs”) challenge Commerce's decision to postpone its investigation of certain subsidies first alleged during the course of the investigation and its refusal to investigate alleged export restraints on steel rounds and billets;⁴ (ii) TMK challenges Commerce's refusal to investigate alleged subsidies received by Changbao; (iii) Plaintiffs challenge Commerce's refusal to investigate subsidies prior to the date that China acceded to the World Trade Organization (“WTO”); (iv) Maverick and U.S. Steel contest Commerce's inclusion of certain benchmarks for steel rounds and billets; (v) Plaintiffs challenge Commerce's refusal to make a quality adjustment to the benchmarks for steel rounds and billets; (vi) U.S. Steel disputes Commerce's freight cost adjustments to the benchmark for steel rounds and billets; (vii) TMK and U.S. Steel argue that Commerce erroneously attributed subsidies received by Changbao and Changbao's subsidiary Jiangsu Changbao Precision Steel Tube Co., Ltd. (“Precision”); (viii) U.S. Steel argues that Commerce incorrectly attributed subsidies received by TPCO and four of TPCO's subsidiaries; (ix) U.S. Steel argues that Commerce failed to tie the provision of steel rounds and billets for less-than-adequate-remuneration (“LTAR”) only to TPCO's sales of steel pipe; and (x) Maverick challenges Commerce's decision not to apply facts otherwise available with an adverse inference (“AFA”)⁵ to Jianli's purchases of steel rounds and billets. See TMK Mot. 12–40; Maverick Mot. 13–49; U.S. Steel Mot. 13–42, 46–65.

For the reasons set forth below, the court finds that Commerce failed to adequately explain its decision to use China's WTO accession date as a cut-off for identifying and measuring countervailable subsidies, failed to reasonably explain how the Maersk and Jianli freight rates included in the benchmark price for steel rounds and billets are both representative of what an importer would pay, erred in attributing subsidies received by Precision to the sales of Changbao's other subsidiaries and in attributing subsidies received by four of TPCO's subsidiaries to the sales of TPCO's other subsidiaries, and failed to make a determination regarding whether the provision of steel rounds and billets at LTAR to TPCO were tied to its sales of seamless steel pipe. Additionally, the court grants Defendant's remand request for Commerce to recalculate its benchmark excluding the SBB East Asia pricing data. The court sustains Commerce's decision in all other respects.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to 19 U.S.C. § 1516a(a)(2)(B)(i) and 28 U.S.C. § 1581(c) (2006),⁶ which grant the court authority to review actions contesting the...