Hitachi Energy USA Inc. v. United States

Slip Op. 17-138
UNITED STATES COURT OF INTERNATIONAL TRADE
ABB, INC.,
Plaintiff,
v.
UNITED STATES,
Defendant,
and
HYUNDAI HEAVY INDUSTRIES CO.,
LTD., HYUNDAI CORPORATION USA,
AND HYOSUNG CORPORATION.
Defendant-Intervenors.
Before: Mark A. Barnett, Judge
Consol. Court No. 16-00054
PUBLIC VERSION
OPINION AND ORDER
[Defendant’s request for a remand is granted with respect to Commerce’s treatment of
respondents’ commissions and its revenue capping practice; Commerce’s decision to
cap Hyosung’s reported freight revenue by Hyosung’s reported domestic inland freight
expense is sustained.]
Dated: October 10, 2017
R. Alan Luberda, Kelley Drye & Warren LLP, of Washington, DC, argued for plaintiff.
With him on the brief were David C. Smith, Jr., and Melissa Marie Brewer.
John J. Todor, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, DC, argued for defendant. With him on the brief
were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Jeanne E.
Davidson, Director, and Franklin E. White, Jr., Assistant Director. Of Counsel on the
brief was James H. Ahrens, II, Attorney, U.S. Department of Commerce, Office of Chief
Counsel for Trade Enforcement and Compliance, of Washington, DC.
David Edward Bond, White & Case, LLP, of Washington, DC, argued for defendant-
intervenors Hyundai Heavy Industries, Co., Ltd., and Hyundai Corporation USA. With
him on the brief were Walter Joseph Spak, William Joseph Moran, and Ron Kendler.
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Jaehong David Park, Arnold & Porter Kaye Scholer LLP, of Washington, DC, argued for
consolidated plaintiff and defendant-intervenor Hyosung Corporation. With him on the
brief were Henry David Almond, Andrew Mercer Treaster, Daniel Robert Wilson and
Sylvia Yun Chu Chen.
Barnett, Judge: ABB, Inc. (“Plaintiff” or “ABB”) and Hyosung Corporation
(“Hyosung”) each challenge certain aspects of the final results of the U.S. Department
of Commerce’s (“Commerce”) second administrative review of the antidumping duty
order on large power transformers from the Republic of Korea for the period of review
(“POR”) August 1, 2013, to July 31, 2014 (“POR 2”). 1 Large Power Transformers from
the Republic of Korea, 81 Fed. Reg. 14,087 (Dep’t Commerce March 16, 2016) (final
results of antidumping duty admin. review; 2013-2014) (“Final Results”), CJA 1; PJA 1;
PR 205; ECF No. 73-1; and accompanying Issues and Decision Mem., A-580-867 (Mar.
8, 2016) (“I&D Mem.”), CJA 2; PJA 2; PR 198; ECF No. 73-1.
ABB argues that “Commerce failed to deduct U.S. commission expenses from
constructed export price (‘CEP’) and instead added the U.S. commission expense to
normal value,” and that it “improperly granted both respondents a commission offset to
normal value” for commissions on U.S. sales incurred in the United States. Confidential
Pl.’s Mem. of Law in Supp. of Mot. for J. on the Agency R. (“ABB’s MJAR”) at 2, ECF
1 The administrative record for this case is divided into a Public Administrative Record
(“PR”), ECF No. 27-3, and a Confidential Administrative Record (“CR”), ECF No. 27-4.
Parties further submitted joint appendices containing record documents cited in their
briefs. See Public Joint Appendix (“PJA”), ECF No. 74; Confidential Joint Appendix
(“CJA”), ECF No. 73. Citations are to the confidential joint appendix unless stated
otherwise. Additionally, the court requested complete versions of certain record
documents for which parties had only submitted selected pages in the joint appendices.
These are cited separately as they appear in this opinion
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No. 41-2. ABB also argues that “Commerce failed to cap the revenues [Hyundai Heavy
Industries Co., Ltd. and Hyundai Corporation USA (collectively, “Hyundai”)] included in
its gross unit prices for subject merchandise for sales-related services that were
separately purchased by the customer by the amount of the related expenses incurred
by Hyundai on those services” and, as a result, Hyundai’s constructed export price is
“overstated” and its dumping margin is “understated.” Id. at 4. Defendant has
requested remand on the issues raised by ABB. Def.’s Resp. to Pl.’s Rule 56.2 Mots.
for J. Upon the Agency R. (“Def.’s Resp.”) at 11-12, ECF No. 50; see also Def.’s Suppl.
Mem. Addressing Standard for Voluntary Remand (“Def.’s Suppl. Br.”), ECF No. 79.
Hyosung argues that “Commerce’s decision to use Hyosung’s reported Korean
domestic inland freight expenses as the [] cap for [its] reported inland freight revenue,
when that revenue was made up primarily of U.S. inland freight revenue” is unsupported
by substantial evidence and not in accordance with law. Confidential Mem. in Supp. of
Consol. Pl. Hyosung’s Rule 56.2 Mot. for J. Upon the Agency R. (“Hyosung’s MJAR”) at
10, ECF No. 40-2. Defendant argues that Commerce’s decision to cap Hyosung’s
inland freight revenue by its domestic inland freight expenses is supported by
substantial evidence and otherwise in accordance with law. Def.’s Resp. at 12-16.
The motions are fully briefed and the court heard oral argument on August 1,
2017. See Docket Entry, ECF No. 83. For the reasons discussed below, the court
grants Defendant’s request to remand the issues raised by ABB, and sustains
Commerce’s determination with respect to Hyosung’s inland freight revenue cap.
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J URISDICTION AND S TANDARD OF REVIEW
The court has jurisdiction pursuant to § 516A(a)(2)(B)(iii) of the Tariff Act of 1930,
as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2012), 2 and 28 U.S.C. § 1581(c) (2012).
The court will uphold an agency determination that is supported by substantial
evidence and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i).
“Substantial evidence is ‘such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion.’” Huaiyin Foreign Trade Corp. (30) v. United States,
322 F.3d 1369, 1374 (Fed. Cir. 2003) (quoting Consol. Edison Co. v. NLRB, 305 U.S.
197, 229 (1938)). It “requires more than a mere scintilla,” but “less than the weight of
the evidence.” Nucor Corp. v. United States, 34 CIT 70, 72, 675 F. Supp. 2d 1340,
1345 (2010) (quoting Altx, Inc. v. United States, 370 F.3d 1108, 1116 (Fed. Cir. 2004)).
In determining whether substantial evidence supports Commerce’s determination, the
court must consider “the record as a whole, including evidence that supports as well as
evidence that ‘fairly detracts from the substantiality of the evidence.’” Nippon Steel
Corp. v. United States, 337 F.3d 1373, 1379 (Fed. Cir. 2003) (quoting Atl. Sugar, Ltd. v.
United States, 744 F.2d 1556, 1562 (Fed. Cir. 1984)). However, that a plaintiff can
point to evidence that detracts from the agency’s conclusion or that there is a possibility
of drawing two inconsistent conclusions from the evidence does not preclude the
agency’s finding from being supported by substantial evidence. Matsushita Elec. Indus.
Co. v. United States, 750 F.2d 927, 933 (Fed. Cir. 1984) (citing Consolo v. Fed. Mar.
2 All further citations to the Tariff Act of 1930, as amended, are to Title 19 of the U.S.
Code, 2012 edition, and all references to the United States Code are to the 2012
edition, unless otherwise stated.
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Comm’n, 383 U.S. 607, 619-20 (1966)). The court may not “reweigh the evidence or . .
. reconsider questions of fact anew.” Downhole Pipe & Equip., L.P. v. United States,
776 F.3d 1369, 1377 (Fed. Cir. 2015) (quoting Trent Tube Div., Crucible Materials Corp.
v. Avesta Sandvik Tube AB, 975 F.2d 807, 815 (Fed. Cir. 1992)); see also Usinor v.
United States, 28 CIT 1107, 1111, 342 F. Supp. 2d 1267, 1272 (2004) (citation omitted)
(the court “may not reweigh the evidence or substitute its own judgment for that of the
agency.”).
Separately, the two-step framework provided in Chevron, U.S.A., Inc. v. Nat.
Res. Def. Council, Inc., 467 U.S. 837, 842-45 (1984), guides judicial review of
Commerce’s interpretation of the antidumping and countervailing duty statutes. See
Nucor Corp. v. United States, 414 F. 3d 1331, 1336 (Fed. Cir. 2005).
DISCUSSION
I. Defendant’s Remand Request
Defendant requests that the court remand Commerce’s determination with
respect to two issues: (1) Commerce’s treatment of Hyundai’s and Hyosung’s
(collectively “respondents”) U.S. commissions, and (2) Commerce’s treatment of
Hyundai’s sales related revenue. Def.’s Resp. at 11-12; Def.’s Suppl. Br. at 2-3. ABB
supports Defendant’s request, see generally Confidential Pl.’s Reply Br. (“ABB’s
Reply”), ECF No. 71, but both respondents oppose the remand request. 3
3 Respondents did not have an opportunity to brief their response to Defendant’s
request. However, at oral argument Hyundai spoke for both Parties in opposition to the
remand request.
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When an agency determination is challenged in the courts, the agency may
“request a remand (without confessing error) in order to reconsider its previous position”
and “the reviewing court has discretion over whether to remand.” SKF USA Inc. v.
United States, 254 F.3d 1022, 1029 (Fed. Cir. 2001) (citations omitted). Remand is
appropriate “if the agency’s concern is substantial and legitimate,” but “may be refused
if the agency’s request is frivolous or in bad faith.” Id.
Commerce’s concerns are substantial and legitimate. In its motion for judgment
on the agency record, ABB argues that Commerce improperly added U.S. commission
expenses to normal value when it should have deducted them from the CEP, and
improperly granted to both respondents commission offsets to normal value for
commissions on U.S. sales incurred in the United States. ABB’s MJAR at 2.
Referencing Commerce’s remand redetermination in the first administrative review of
the antidumping duty order on LPT’s from Korea, 4 Defendant acknowledges that
Commerce recently has reconsidered its practice on U.S. commissions and explains
that it seeks remand to “reconsider whether it is acting consistently with respect to U.S.
commission expenses in this case.” Def.’s Suppl. Br. at 2-3. Commerce has a
substantial and legitimate interest in ensuring that its determinations reflect its practice
regarding U.S. commission expenses. See SKF USA Inc., 254 F. 3d at 1029.
Therefore, even though each administrative review is a separate proceeding, and the
4 This remand redetermination is the subject of separate litigation before this court. See
generally ABB v. United States, Court No. 15-00108.
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records may differ between the two administrative reviews, remand is appropriate. 5 See
id.
Separately, ABB argues that Commerce erred when it “failed to cap revenues
included by Hyundai in gross unit price for [certain] sales-related services . . . by the
expenses associated with those services,” and that this is contrary to Commerce’s
established practice of capping service-related revenues at the amount of the
corresponding expense. ABB’s MJAR at 31-35. ABB maintains that “the record
demonstrates that Hyundai improperly included revenues in excess of related expenses
in gross unit price,” such that Commerce’s decision is not supported by substantial
evidence. Id. at 35-45 (capitalization omitted). Defendant requests remand on this
issue so that Commerce may evaluate its revenue capping practice and ensure that its
application of this practice is consistent with respect to both respondents. Def’s
Response at 12. 6 The court agrees that in articulating a desire for consistent treatment
5 At oral argument and in briefing before the court, Hyundai expressed concern that
remand will complicate the legal issues before the court because the court has yet to
rule on Commerce’s treatment of U.S. commissions issue in the first administrative
review remand redetermination, and because it would only allow Commerce to apply
factors that are incorrect and issue a determination that is contrary to law. See Def.-
Intervenor’s Mot. to Stay Proceedings Pending Resolution of the Commission Offset
Issue at 5, ECF No. 61. In a separate opinion issued concurrently with this opinion, the
court is affirming Commerce’s treatment of U.S. commission expenses in the first
administrative review. ABB Inc. v. United States, 41 CIT ___, Slip Op. 17-137 (Oct. 10,
2017). Moreover, Commerce has articulated a substantial and legitimate interest in
making its remand request and, as such, remand is appropriate.
6 Hyundai again registered its concerns at oral argument, namely that Commerce may
be requesting a remand so that it may apply an allegedly new practice relating to the
identification of service-related revenue that it developed for the first time in the third
administrative review, currently on appeal before this court. See Hyundai Heavy
Industries Co., Ltd. v. United States, Court No. 17-00054. Here, however, Commerce
has requested remand in order to ensure that its revenue capping practice is consistent
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with respect to both respondents, Defendant has identified a concern that is substantial
and legitimate. It is within the court’s discretion to grant remand when appropriate, as it
is here. See SKF USA Inc., 254 F. 3d at 1029.
II. The Cap on Hyosung’s Inland Freight Revenue
Hyosung challenges Commerce’s decision to cap Hyosung’s reported inland
freight revenue by Hyosung’s reported domestic (i.e., within Korea) inland freight
expense. See generally Hyosung’s MJAR.
Hyosung reported inland freight revenue in a field it labelled “REV_INLFT” and
described that data field as freight revenue “plant to port.” Id. at 4; see also Def.’s Resp.
at 13 (citing Hyosung’s June 8, 2015 Supp. Questionnaire Resp. at Ex. S-18, CJA 16;
CR 185-186; PJA 16; PR 137; ECF No. 73-2; Hyosung Aug. 3, 2015 Third Supp. Sales
Questionnaire Resp. at Ex. S-10, CJA 17; CR 227; PJA 17; PR 157; ECF No. 73-2
(identifying the REV_INLFT field as “Freight Revenue – Plant to Port”)). In the
preliminary results, Commerce made deductions “[i]n accordance with section 772(c)(2)
of the Act[,19 U.S.C. § 1677a(c)(2)], and where appropriate, [] from the starting price for
certain movement expenses, including [domestic (i.e., Korean)] inland freight . . . [and]
U.S. inland freight.” Analysis of Data Submitted by Hyosung Corp. in the Prelim.
Results of the 2013-2014 Admin. Review of the Antidumping Duty Order on Large
Power Transformers from the Republic of Korea (Dep’t Commerce Aug. 31, 2015)
(“Prelim. Mem. - Hyosung”) at 11, CJA 24; CR 239; PJA 24; PR 169; ECF No. 73-3
with respect to both respondents; anything beyond that is conjecture. As with the earlier
issue, Commerce’s interest in providing consistent treatment to both respondents is
substantial and legitimate and, as such, remand is appropriate.
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(proprietary prelim. mem. for Hyosung). Commerce capped Hyosung’s reported inland
freight revenue by its domestic inland freight expenses. Id. at 4 (“Consistent with
[Commerce’s] normal practice, we have capped sales-related revenues to offset directly
associated sales expenses (i.e., with respect to fields . . . DINLFTPU/REV_INLFT.”).
Thus, Commerce used the data reported by Hyosung in the field DINLFTPU (i.e.,
domestic inland freight expense to port in Korea) to cap the freight revenue reported in
REV_INLFT. See Case Br. of Hyosung Corp. (“Hyosung Case Br.”) at 4-5, CJA 31; CR
259; PJA 31; PR 184; ECF No. 73-3.
In its administrative case brief, Hyosung first argued that Commerce should not
cap its expense revenue amounts, but that if it continued to do so, it should “revise its
programming language so that the inland freight expenses incurred in the United States
are also included in the pool of expenses included in the cap.” Id. at 5. Hyosung
sought to persuade Commerce that it should include U.S. inland freight expenses with
domestic inland freight expenses in the cap, explaining that Hyosung and its customers
negotiate both the domestic inland freight and the terms for delivery to the U.S. location.
Id. at 5. 7 Hyosung argued that the record demonstrated that its reported inland freight
revenue amounts were tied to its U.S. inland freight expenses. Id. at 5-6. To this
7 Hyosung references a transaction identified as SEQU 21. Hyosung Case Br. at 6 n.6
(citing Hyosung’s May 11, 2015 Supp. Questionnaire Resp. (“Hyosung’s May 11 SQR”)
at Ex. SA-7-D, CJA 12; CR 109-112; PJA 12; PR 101; ECF No. 73-2). Hyosung argued
that the “invoice to the customer for this sale includes a single line for freight, and the
customer’s purchase order specifies a delivery point in [[ 	]] . . . [as well as] [[
]],” and it “stipulates that [[ 	]].” Id. at 6. Hyosung
contended this meant that “freight charges at issue relate primarily to the freight
incurred in the United States, and not only to the minimal inland freight expenses
incurred in Korea.” Id.
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assertion, Hyosung appended a footnote in which it suggested that Commerce’s
decision to use domestic inland freight expense alone as the cap “may have been the
result of confusion caused by the variable labels listed in Hyosung’s database
summaries.” 8 Id. at 6 n.5.
In the Final Results, Commerce continued to cap Hyosung’s inland freight
revenue by its domestic inland freight expenses, noting that the record demonstrated a
direct relationship between Hyosung’s reported freight revenue and its domestic inland
freight expenses, and that Hyosung itself “linked the inland freight revenue directly to
the underlying expense, which is domestic inland freight from Hyosung’s plant to port of
exportation.” I&D Mem. at 24 nn.108-109. Commerce determined that the record did
not link Hyosung’s U.S. inland freight expense to its reported inland freight revenue and
that it would not “permit respondents to expand the expense fields to include revenue
offsets for expenses that did not generate the revenue.” Id.
Following the Final Results, Hyosung made ministerial error allegations, claiming
it had “confirmed to [Commerce] that any identification of the freight revenue amounts
being associated with freight from the factory to the port was an inadvertent labeling
8 The footnote read: “Hyosung believes [Commerce’s] preliminary decision to treat
DINLFTPU alone as the revenue cap may have been the result of confusion caused by
the variable labels listed in Hyosung’s database summaries. Specifically, Hyosung’s
SAS database print out and file description materials included the label ‘Freight
Revenue plant to Port.’ Although this variable label nominally identifies the revenue as
associated with plant to port shipments, this label was for informational purposes and
merely identified one component of the freight revenue. As discussed above, the record
makes clear that the inland freight revenue refers to transportation to the customer’s site
and is not limited to transport to the Korean port from the factory.” Hyosung Case Br. at
6 n.5 (internal citation omitted).
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error in preparing the database summary sheets and databases in its submissions.”
Large Power Transformers from the Republic of Korea: Ministerial Error Allegations
(“Hyosung Ministerial Error”) at 4-5, CJA 41; CR 279; PJA 41; PR 206; ECF No. 73-4
(citing Hyosung Case Br. at 6 n.5). It also alleged that Commerce ignored record
evidence that the inland freight revenue field included U.S. inland freight revenue. Id. at
5-8. Hyosung argued that Commerce based the Final Results on this single labeling
error that was contradicted by the record. Id. at 7. Hyosung also pointed to the
documents provided regarding two sample sales in support of its position. 9 Id. at 5-7.
In the Amended Final Results, Commerce referred to the I&D Memo, noting that
the record did not link U.S. inland freight expense to Hyosung’s reported inland freight
revenue and that Hyosung had itself linked the inland freight revenue to the underlying
expense; therefore, the adjustment was methodological in nature and there was no
ministerial error. Ministerial Error Mem. for the Am. Final Results of the 2013/2014
Admin. Review of the Antidumping Duty Order on Large Power Transformers from the
Republic of Korea (“Am. Final Results”) at 5, CJA 44; CR 283; PJA 44; PR 219; ECF
No. 73-4 (citing I&D Mem. at Comment 3).
Before this court, Hyosung argues that Commerce ignored record evidence that
Hyosung’s inland freight revenue field related to U.S. inland freight expenses (or was at
least inclusive of the same). See Hyosung’s MJAR at 5-8, 11-21. Specifically, Hyosung
argues, Commerce ignored the “the huge disparity between the minimal domestic
9 Specifically, transactions referenced as SEQUs 4 and 21. Hyosung Ministerial Error at
5-7.
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Korean inland freight expenses (related to the short trip from Hyosung’s factory in Korea
to the port in Korea) and the U.S. inland freight expenses and revenues (for shipping
the [large power transformer] units from U.S. ports to their final destination within the
United States),” as well as documentation for sample sales transactions, id. at 7-8, and
instead “relied solely on informational data descriptors and labels related to the expense
[sic] fields in Hyosung’s reported U.S. sales databases.” Id. at 10. Thus, Hyosung
argues that Commerce’s failure to weigh all the evidence before it renders its
determination unsupported by substantial evidence in the record. Id. at 11. Defendant
responds that Hyosung’s arguments are speculative and that Commerce’s
determination was based on the record created by Hyosung during the administrative
review. Def.’s Resp. at 12-16. ABB also argues in support of Commerce’s
determination. Confidential Pl. and Def.-Int.’s Resp. in Opp’n to Consol. Pl. Hyosung’s
Mot. for J. on the Agency Record at 12-27, ECF No. 51.
The court will sustain Commerce’s decision to use Hyosung’s reported domestic
inland freight expenses as the applicable cap if it is supported by substantial evidence.
See 19 U.S.C. § 1516a(b)(1)(B)(i). Section 1677a(c)(2) directs Commerce to reduce
the price used to establish CEP by “the amount, if any, included in such price,
attributable to any additional costs, charges, or expenses . . . which are incident to
bringing the subject merchandise from the original place of shipment in the exporting
country to the place of delivery in the United States.” 	19 U.S.C. § 1677a(c)(2).
Commerce offsets respondents’ freight expenses with related freight revenues, capping
those revenues at the level of the associated expenses. This court previously has
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deemed Commerce’s approach reasonable. Donnguan Sunrise Furniture Co., Ltd. v.
United States, 36 CIT ___,___, 865 F. Supp. 2d 1216, 1248 (2012) (“Commerce’s
approach is reasonable under the statute” when it “deducts respondent’s freight
expenses from [the price used to establish CEP] . . . [and] then offsets respondent’s
freight expenses with related freight revenues, resulting in a net freight expense.”).
The inclusion of multiple expense fields in the cap on Hyosung’s domestic inland
freight revenue would allow the revenue to offset more expenses and, therefore, be a
favorable adjustment for the respondent. It is well established that a respondent bears
the burden of establishing its entitlement to any favorable adjustment. See e.g., Allied
Tube and Conduit Corp. v. United States, 25 CIT 23, 29, 132 F. Supp. 2d 1087, 1093
(2001) (“Commerce has reasonably placed the burden to establish entitlement to
adjustments on [respondent], the party seeking the adjustment and the party with
access to the necessary information.”) (quoting Fujitsu Gen. Ltd. v. United States, 88
F.3d 1034, 1040 (Fed. Cir. 1996)); Asociacion Colombiana de Exportadores de Flores
v. United States, 13 CIT 13, 24, 704 F. Supp. 1114, 1124, (1989), aff’d, 901 F.2d 1089
(Fed. Cir. 1990) (“[I]f these investigations are to be successful, parties must submit data
promptly, and be very clear as to what the data indicates . . . [Commerce] did not abuse
its discretion in refusing to recalculate the margin when the error made by [Commerce]
is attributable to plaintiffs’ late submission of ambiguous information.”).
Hyosung argues that Commerce’s decision to cap its reported inland freight
revenue by its domestic inland freight expense is not supported by substantial evidence
because Commerce “pointed only to database labels and summary descriptors to
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support its conclusion that Hyosung’s reported inland freight revenues pertained solely
to domestic inland freight.” Hyosung’s MJAR at 11. However, it was Hyosung’s burden
to establish its entitlement to the more favorable adjustment based on both domestic
and U.S. inland freight expense. See Fujitsu Gen. Ltd., 88 F.3d at 1040. Hyosung
twice provided supplemental questionnaire responses in which it labelled the relevant
data field “Freight Revenue -- Plant to Port,” thus linking this “inland freight revenue
directly to the underlying expense, which is domestic inland freight from Hyosung’s plant
to the port of exportation.” I&D Mem. at 24. Hyosung did not seek to revise its
database labels or otherwise definitively explain the contents of its inland freight
revenue field, even when it had, by its own admission, identified a point of confusion.
See Hyosung – Case Br. at 6 n.5. Instead of clearly indicating that it had made an
error, Hyosung made various methodological arguments that Commerce should (a)
include U.S. freight expenses in the cap because that reflected how Hyosung
negotiated freight with its customers, (b) change its programming language to include
U.S. inland freight expenses in the cap, or (c) substitute U.S. inland freight expenses as
the cap. Hyosung Case Br. at 4-6.
Hyosung asserts that its business proprietary table comparing domestic and U.S.
inland freight expenses and its reported inland freight revenues establishes that the
U.S. inland freight expenses bear a closer relation to the freight revenue than domestic
inland freight expenses. Hyosung’s MJAR at 12-13. Whether true or not, this is not an
explanation of exactly what data Hyosung included in its inland freight revenue.
Moreover, even if Hyosung’s assertion about the aggregate revenue and expense fields
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being sufficiently correlated is accepted, Commerce performs its analysis on a
transaction-specific basis and this table does not clearly suggest any correlation
between the revenue and expense fields at the transaction level. See id. at 13.
Hyosung relies on two sample sales to bolster its argument that “record
documentation confirms that Hyosung’s reported inland freight revenue amounts relate
to U.S. inland freight” because Hyosung and its customers focus on delivery and
installation in the United States. 10 See Hyosung’s MJAR at 15-18. With regard to
Hyosung’s assertion that its sample documentation casts doubt on Commerce’s
determination, Hyosung is asking the court to infer something about an entire data set
of sales based on what it contends is evident from a few select sales. Not only is this
requested inference not self-evident from the documentation to which it points, 11
Hyosung is not clear whether it is arguing that U.S. inland freight expense is also linked
to the revenue such that it should be included in the cap or is the only expense linked to
the revenue such that it should serve as an alternate cap. 12
10 The particular sales in question are referenced as SEQUs 4 and 21. Hyosung’s
MJAR at 15-17. Regarding SEQU 4, for example, Hyosung avers that “there is nothing
in the extensive sales documentation for this sale to indicate that the customer
negotiated, let alone contemplated, charges related to inland freight in Korea.” Id. at 15.
11 For example, regarding SEQU 4, what Hyosung claims is the basis for the inland
freight revenue appears to the court to be revenue associated with [[
]]. Hyosung’s May 11 SQR at Ex. SA-7-C.
12 Compare Hyosung’s MJAR at 1-2 (“Specifically, Hyosung’s reported inland freight
revenue was not only inclusive of (but made up primarily of) U.S. inland freight revenue
(i.e., revenue from inland freight incurred in the United States), but Commerce capped
this revenue based solely on Hyosung’s reported expenses for Korean domestic inland
freight.”)(original italics) with id., at 18 (“the agency’s decision should be remanded so
that it can recalculate Hyosung’s margin using the reported U.S. inland freight expenses
as the applicable cap to its reported freight revenue amounts.”).
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Hyosung bore the burden to properly document its entitlement to the favorable
adjustment. Fujitsu Gen. Ltd. 88 F.3d at 1040. Instead, it provided information to
Commerce that it subsequently characterized as confusing and, later, erroneous.
Hyosung Case Br. at 6 n.5; Hyosung Ministerial Error at 4. However, Hyosung failed to
adequately correct the information or otherwise document the error. In failing to act in a
manner that would correct its error, Hyosung failed to carry its burden to prove its
entitlement to the adjustment it seeks. See Asociacion Colombiana de Exportadores de
Flores, 13 CIT at 24, 704 F. Supp. at 1124 (“[P]arties must submit data promptly, and be
very clear as to what the data indicates”).
Considering the record as a whole and Commerce’s explanations of its
determination in the preliminary results and Final Results, Hyosung’s identification of
certain sample sales from which Commerce should have inferred that its inland freight
revenue field was mislabeled is not enough to call into question the conclusions
Commerce reached after reviewing all the data that Hyosung provided. Matsushita
Elec., 750 F.2d at 933 (evidence that detracts from the agency’s conclusion or the
possibility of two inconsistent conclusions does not preclude the agency’s finding from
being supported by substantial evidence). Hyosung asks the court to reweigh the
evidence reviewed by the agency. This it cannot do. Downhole Pipe, 776 F.3d at 1377.
Commerce’s decision is based on substantial evidence in the record because
Hyosung failed to identify and support its entitlement to a more favorable adjustment.
When it presumably became aware that it had committed an error in reporting, instead
of seeking to correct the error, Hyosung obfuscated it by referring to the database label
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as “informational” and one that “merely identified one component of freight revenue” –
referring to the overall result as “confusion.” 13 Hyosung Case Br. at 6 n.5. This court
sustains Commerce determinations when they are based on substantial evidence in the
record; here, Hyosung fails to provide the court with a sufficient basis to disturb
Commerce’s finding.
III. Whether Commerce was Required to Correct the Error Alleged by Hyosung
Subsequent to the Final Results, Hyosung raised a ministerial error allegation,
asking Commerce to correct its “inadvertent labeling error.” Hyosung Ministerial Error at
4. Commerce declined Hyosung’s request, noting that its decision to use Hyosung’s
reported domestic inland freight expense as the cap “d[id] not constitute a ministerial
error . . . because our adjustment is methodological in nature and . . . was consistent
13 According to Hyosung, Commerce “confirm[ed] that the documentation on the record
supports the conclusion that Hyosung’s reported inland freight revenue related to U.S.
inland freight.” Hyosung’s MJAR at 17. Hyosung is referring, in part, to Commerce’s
statement that “[f]or SEQUs 4 and 21 Hyosung also received freight revenue (for U.S.
inland freight).” Analysis of Data Submitted by Hyosung Corp. in the Final Results of
the Antidumping Duty Admin. Review of Large Power Transformers from the Republic
of Korea; 2013-2014 at 7, CJA 36; CR 264; PJA 36; PR 200; ECF No. 73-3. In its
response, Defendant refers to this statement as a “clerical error” and points the court to
Commerce’s determination in the Final Results that record evidence did not link U.S.
inland freight to Hyosung’s reported inland freight revenue. Def.’s Resp. at 15 (citing
I&D Mem. at 24). Regardless of whether Commerce’s statement was a clerical error,
documentation regarding SEQUs 4 and 21 does not, by itself, call into question the
entire set of sales reported to Commerce during the administrative proceeding. For
purposes of this court’s review, because Commerce relied on two separate
questionnaire responses, in which “Hyosung itself linked the inland freight revenue
directly to the underlying expense, which is domestic inland freight from Hyosung’s plant
to the port of exportation,” I&D Mem. at 24 (emphasis omitted), and because the record
evidence does not establish that all the reported inland freight revenue data was
mislabeled, substantial evidence supports Commerce’s decision to cap the revenue
based on domestic inland freight expense.
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with our stated intention in the Final Results.” Ministerial Error Mem. for the Am. Final
Results of the 2013/2014 Admin. Review of the Antidumping Duty Order on Large
Power Transformers from the Republic of Korea at 5, CJA 44; CR 219; PJA 44; CR 283;
ECF No. 73-4. Hyosung now argues that, pursuant to NTN Bearing Corp. v. United
States, 74 F.3d 1204, 1208-09 (Fed. Cir. 1995), Commerce should have allowed
Hyosung to correct its error.
Commerce may correct errors, even those made by a respondent, that are timely
raised. Timken U.S. Corp. v. United States, 434 F.3d 1345, 1353 (Fed. Cir. 2006)
(“Commerce is free to correct any type of importer error-clerical, methodolog[ical],
substantive, or one in judgment-in the context of making an antidumping duty
determination, provided that the importer seeks correction before Commerce issues its
final results and adequately proves the need for the requested corrections.”).
Hyosung’s reliance on NTN Bearing to support its argument that Commerce should
have allowed it to correct its error is misplaced. In NTN Bearing, the Court of Appeals
for the Federal Circuit (“Federal Circuit”) ruled that Commerce had abused its discretion
when it declined to correct a clerical error purely on the basis of timeliness, when the
respondent had sought to correct the error after the publication of the preliminary results
and had provided Commerce with supporting documentation to establish the clerical
nature of the error. NTN Bearing, 74 F.3d at 1208-09. Here, Hyosung has not
established that it sought to correct the error during the administrative proceeding.
Instead, in its administrative case brief, in a footnote, it referred to a point of confusion,
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but otherwise made arguments to Commerce to include or substitute U.S. inland freight
expenses in the cap. See supra Section II.
Hyosung did not identify the database label as a “clerical error” until it filed its
ministerial error allegations after Commerce issued the Final Results. See Hyosung
Ministerial Error at 4 (phrasing it as an “inadvertent labeling error). Hyosung never
sought to submit a new dataset with corrected labels and did not provide supporting
documentation that clearly established the clerical nature of its error.
The Federal Circuit has found that “Commerce is not required to correct a final
determination reflecting an error made by a private party when that error is not apparent
from Commerce's final calculations released pursuant to 19 C.F.R. § 351.224(b), or
from the final determination itself.” Alloy Piping Prods., Inc. v. Kanzen Tetsu Sdn. Bhd.,
334 F.3d 1284, 1292 (Fed. Cir. 2003). Only “when an error is apparent (or should have
been apparent) from the face of the calculation or from the final determination itself and
goes uncorrected, that error, in effect, becomes a government error and, hence, a
‘ministerial’ error, and the government is required to correct it.” Id. (citing Koyo Seiko
Co. v. United States, 746 F. Supp. 1108, 1111 & n.4 (1990) (a respondent’s error was
sufficiently obvious to require correction when it resulted in negative and positive
dumping margins in excess of 16,000 percent)).
As the court discussed, Hyosung did not adequately establish that there was an
error or that any such error was apparent from the record. Instead, Hyosung asked
Commerce to make inferences based on a comparison of the relative expenses for
domestic versus U.S. freight, and then only provided substantiating documentation for a
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small subset of its sales. That documentation failed to clarify the situation. Thus,
Hyosung fails to show that its error was apparent from the record and Hyosung’s
ministerial error allegation is untimely.
CONCLUSION AND O RDER
In accordance with the foregoing, it is hereby
ORDERED that Commerce’s Final Results are remanded to Commerce so that it
may reconsider its treatment of respondents’ commissions as discussed in Section I;
and it is further
ORDERED that Commerce’s Final Results are remanded to Commerce so that it
may evaluate its revenue capping practice and ensure that its application of this practice
is consistent with respect to both respondents, as discussed in Section I; and it is further
ORDERED that Commerce shall file its remand results on or before January 8,
2018; and it is further
ORDERED that subsequent proceedings shall be governed by USCIT Rule
56.2(h); and it is further
ORDERED that any comments or responsive comments must not exceed 5,000
words; and it is further
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ORDERED that Commerce’s determination to cap Hyosung’s reported freight
revenue by Hyosung’s reported domestic inland freight expense is sustained.
/s/ 	Mark A. Barnett
Mark A. Barnett, Judge
Dated: October 10, 2017
New York, New York
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