Husteel Co., Ltd. v. United States

Slip Op. 20-2
UNITED STATES COURT OF INTERNATIONAL TRADE
Before: Claire R. Kelly, Judge
Consol. Court No. 18-00169
PUBLIC VERSION
OPINION AND ORDER
[Remanding 	the 	U.S. 	Department 	of 	Commerce’s 	final 	determination 	in 	the 	first
administrative review of the antidumping duty order covering welded line pipe from the
Republic of Korea.]
Dated: January 3, 2020
R. Will Planert and Donald B. Cameron, Morris, Manning & Martin LLP, of Washington,
DC, argued for plaintiff Husteel Co., Ltd. With them on the briefs were Julie C. Mendoza,
Brady W. Mills, Mary S. Hodgins, Eugene Degnan, Sabahat Chaudhary, and Ragan W.
Updegraff.
Henry D. Almond and Kang W. Lee, Arnold & Porter Kaye Scholer LLP, of Washington,
DC, argued for consolidated plaintiffs Hyundai Steel Company and NEXTEEL Co., Ltd.
With them on the briefs were J. David Park and Daniel R. Wilson.
Jeffrey M. Winton, Law Office of Jeffrey M. Winton PLLC, of Washington, DC, argued for
consolidated plaintiff SeAH Steel Corporation. With him on the brief was Amrietha Nellan.
HUSTEEL CO., LTD. ET AL.,
Plaintiff and Consolidated
Plaintiffs,
v.
UNITED STATES,
Defendant,
and
CALIFORNIA STEEL INDUSTRIES ET AL.,
Defendant-Intervenors and
Consolidated Defendant-
Intervenors.
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Joshua E. Kurland, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, DC, argued for defendant. With him on the briefs
were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and L.
Misha Preheim, Assistant Director. Of Counsel was Reza Karamloo, Senior Attorney,
Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of
Commerce, of Washington, DC.
Elizabeth J. Drake, Schagrin Associates, of Washington, DC, argued for defendant-
intervenors California Steel Industries, TMK IPSCO, and Welspun Tubular LLC USA. With
her on the brief was Roger B. Schagrin, Christopher T. Cloutier, and Luke A. Meisner.
Frank J. Schweitzer, White & Case LLP, of Washington, DC, argued for defendant-
intervenor Maverick Tube Corporation. With him on the brief was Gregory J. Spak,
Kristina Zissis, and Matthew W. Solomon.
Kelly, Judge: This consolidated action is before the court on motions for judgment
on the agency record filed respectively by SeAH Steel Corporation (“SeAH”), Hyundai
Steel Company (“Hyundai”), NEXTEEL Co., Ltd. (“NEXTEEL”), and Husteel Co., Ltd.
(“Husteel”). See Pl. [SeAH]’s Mot. J. Agency R., Feb. 1, 2019, ECF No. 37; Consol. Pl.
[Hyundai]’s 56.2 Mot. J. Agency R., Feb. 1, 2019, ECF No. 39; Consol. Pl. [NEXTEEL]’s
56.2 Mot. J. Agency R., Feb. 1, 2019, ECF No. 41; Pl. [Husteel]’s Mot. J. Agency R., Feb.
1, 2019, ECF No. 42. These parties challenge various aspects of the final results of the
U.S. Department of Commerce’s (“Department” or “Commerce”) first administrative
review of the antidumping duty (“ADD”) order covering welded line pipe from the Republic
of Korea (“Korea”). See [SeAH]’s Br. Supp. 56.2 Mot. J. Agency R. Confidential Version,
Feb. 1, 2019, ECF No. 37-1 (“SeAH’s Br.”); Consol. Pl. [Hyundai]’s Memo. Supp. 56.2
Mot. J. Agency R. Confidential Version, February 1, 2019, ECF No. 39-1 (“Hyundai’s Br.”);
Consol. Pl. [NEXTEEL]’s Memo. Supp. 56.2 Mot. J. Agency R., Feb. 1, 2019, ECF No.
41-1 (“NEXTEEL’s Br.”); Pl. [Husteel]’s Br. Supp. Mot. J. Agency R., Feb. 1, 2019, ECF
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No. 42-1 (“Husteel’s Br.”); see also Welded Line Pipe from the Republic of Korea, 83 Fed.
Reg. 33,919 (Dep’t Commerce July 18, 2018) (final results of [ADD] admin. review; 2015–
2016 ) (“Final Results”) as amended by Welded Line Pipe from the Republic of Korea, 83
Fed. Reg. 39,682 (Dep’t Commerce Aug. 10, 2018) (amended final results of [ADD]
admin. review; 2015–2016) (“Amended Final Results”) and accompanying Issues and
Decisions Memo. for the Final Results of the 2015–2016 Admin. Review of the [ADD]
Order on Welded Line Pipe from Korea, A-580-876, (July 11, 2018), ECF No. 25-5 (“Final
Decision Memo.”).
SeAH challenges as contrary to law and unsupported by substantial evidence
Commerce’s decision to reject third country sales and use constructed value to calculate
its margins. SeAH’s Br. at 11–19. Plaintiffs challenge as contrary to law and unsupported
by substantial evidence Commerce’s particular market situation (“PMS”) finding and
subsequent adjustments. 	See SeAH’s Br. at 19–27; Hyundai’s Br. at 17–29; Husteel’s
Br. at 11–19; see generally NEXTEEL’s Br. 	Husteel challenges Commerce’s statutory
authority to adjust reported costs of production to account for a PMS in Korea. See
Husteel’s Br. at 18–19. 	Husteel also challenges Commerce’s calculation of the non-
examined companies’ rate. See Husteel’s Br. at 19–23.
For the reasons that follow, this court remands Commerce’s adjustment of the
reported costs of production for welded line pipe for purposes of the sales below costs
test when calculating normal value; Commerce’s determination that distortions in the
Korean market give rise to a particular market situation; Commerce’s decision to resort
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to constructed value when calculating SeAH’s margins; and accordingly, Commerce’s
calculation of the all-others rate for non-examined respondents.
BACKGROUND
On February 13, 2017, in response to timely requests by interested parties,
Commerce initiated an administrative review of various ADD and countervailing duty
(“CVD”) orders and findings, including an ADD order covering welded line pipe (“WLP”)
from Korea. 1 See Initiation of Antidumping and Countervailing Duty Admin. Reviews, 80
Fed. Reg. 10,457 (Dep’t Commerce Feb. 13, 2017); see also Welded Line Pipe from the
Republic of Korea, 82 Fed. Reg. 75,056 (Dep’t Commerce Dec. 1, 2015) ([ADD] orders).
On March 7, 2017, Commerce selected Hyundai and SeAH as mandatory respondents.
See Selection of Resp’t for Individual Review at 2–4, PD 22, bar code 3549464-01 (Mar.
7, 2017).
Commerce published its preliminary results on January 9, 2018. See Welded Line
Pipe from Korea, 83 Fed. Reg. 1,023 (Dep’t Commerce Jan. 9, 2018) (prelim. results of
[ADD] admin. review; 2015–2016) (“Prelim. Results”) and accompanying Decisions
Memo. for the [Prelim. Results], A-580-876, PD 259, bar code 3657712-01 (Jan. 2, 2018)
(“Prelim. Decision Memo.”). 	Commerce calculated SeAH’s margin by using Canada as
the comparator market because the aggregate volume of SeAH’s home market sales
were insufficient to permit a proper comparison with United States sales. 	See Prelim
Decision Memo. at 15–16 (citing to section 773(a)(1)(C)(ii) of the Tariff Act of 1930, as
1 Each year during the anniversary month of the publication of an ADD duty order, interested
parties may request that Commerce conduct an administrative review of that order. See 19 C.F.R.
§ 351.213; see also 19 U.S.C. § 1677 (defining interested parties).
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amended, 19 U.S.C. § 1677b(a)(1)(C)(ii) (2012)) 2. On September 22, 2017, Defendant-
Intervenor Maverick Tube Corporation (“Maverick”) sent to Commerce a letter alleging
that a PMS in Korea distorted the cost of production (“COP”) of WLP. 	See generally
Letter from [Maverick] Pertaining to PMS Allegation and Factual Info., CD 230–297, bar
codes 3622608-01–68 (Sept. 22, 2017). Namely, Maverick alleged that the PMS in Korea
distorted the cost of hot-rolled coil (“HRC”), an input in the production of WLP. 	See
generally id. 	To account for the PMS, Commerce made an upward adjustment to
Hyundai’s and SeAH’s reported costs for the HRC input when calculating normal value.
See generally Prelim. Decision Memo. 	Commerce preliminarily calculated weighted-
average dumping margins of 19.42 percent for Hyundai, 2.30 percent for SeAH, and
10.86 percent for non-selected respondents. Prelim. Results 83 Fed. Reg. at 1,024.
On June 25, 2018, Commerce placed on the record the Canadian International
Trade Tribunal’s (“CITT”) 3 final determination that SeAH’s sales of steel line pipe into
Canada were dumped and permitted interested parties to comment. 	See Memo. from
Commerce Pertaining to Canadian [ADD] Final Determination on [WLP], PD 303, bar
code 3722970-01 (June 25, 2018) (“CITT Final Determination”); see also id. Attachment
at 2. 	On August 10, 2018, Commerce published its Amended Final Results, and
2 Further citations to the Tariff Act of 1930, as amended, are to the relevant provisions of Title 19
of the U.S. Code, 2012 edition.
3 The CITT reviews determinations made by the Canada Border Services Agency (“CBSA”).
When referencing the dumping determination at issue, the parties refer interchangeably to both
the CITT and the CBSA. 	Commerce placed on the record the CITT’s findings. 	Because both
references pertain to the same dumping determination at issue, this court will refer to the CITT’s
determination.
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recalculated the weighted-average dumping margins. 	See generally, Amended Final
Results and Final Decision Memo. 4 Commerce continued to apply the upward adjustment
to Hyundai and SeAH’s reported HRC costs. Final Decision Memo. at 12–17. 	Relying
on the CITT’s dumping determination, Commerce calculated SeAH’s margin using the
constructed value methodology. 	Final Decision Memo. at 45–47. 	After correcting for
ministerial errors, see Final Decision Memo. at 3, Commerce assigned rates of 18.77
percent for Hyundai, 14.39 percent for SeAH, and 16.58 percent for non-selected
respondents. See Amended Final Results, 83 Fed. Reg. at 39,682.
JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction pursuant to 19 U.S.C. § 1516a(a)(2)(B)(iii) and 28 U.S.C.
§ 1581(c) (2012), which grant the court authority to review actions contesting the final
determination in an investigation of an [ADD] order. 	The court will uphold Commerce’s
determination unless it is “unsupported by substantial evidence on the record, or
otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i).
DISCUSSION
I. 	The Statute Precludes Commerce’s PMS Adjustment
A. Exhaustion and Waiver
As a threshold matter, Defendant argues Husteel failed to exhaust its argument
that Commerce lacked authority to make a PMS adjustment to COP for purposes of
determining below cost sales before the agency. 	Defendants also argue that Husteel
4 Commerce amended its Final Results to correct for ministerial error not relevant to this dispute.
Amended Final Results, 83 Fed. Reg. at 39,682.
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waived its claim with respect to this argument before this court. 	Because the question
before the court concerns a pure question of law, the court will not require exhaustion
before the agency. 	Moreover, Husteel sufficiently pled and briefed its claim that
Commerce acted contrary to law before this court.
Parties are required to exhaust administrative remedies before the agency by
raising all issues in their initial case briefs before Commerce. 	Dorbest Ltd. v. United
States, 604 F.3d 1363, 1375 (Fed. Cir. 2010) (citing to 19 C.F.R. § 351.309(c)(2), (d)(2);
Mittal Steel Point Lisas Ltd. v. United States, 548 F.3d 1375, 1383 (Fed. Cir. 2008)).
However, the court has discretion not to require exhaustion of administrative remedies
where a pure legal question arises. 19 U.S.C. § 2637(d); see also Agro Dutch Indus. Ltd.
v. United States, 508 F.3d 1024, 1029–30 (Fed. Cir. 2007). 5 The court is not required to
resort to agency expertise or factual determinations to dispose of this purely legal
question. As explained below, the language of the statute precludes Commerce’s action
and therefore exhaustion is not appropriate.
Further, Husteel has not waived its claim that Commerce acted contrary to law. At
paragraph 15 of its complaint, Husteel states that “Commerce’s [PMS] determination and
resulting adjustment are unsupported by substantial record evidence and contrary to law
5 The “pure legal question” exception generally does not apply where determination of the
pertinent issue requires any additional development of a factual record either before or after the
court’s review. 	See Consol. Bearings Co. v. United States, 348 F.3d 997, 1003–04 (Fed. Cir.
2003); see also Consol. Bearings Co. v. United States, 25 CIT 546, 166 F. Supp. 2d 580 (2001),
rev’d on other grounds, 348 F.3d 997 (Fed. Cir. 2003) (synthesizing from numerous decisions
four non-exhaustive requirements for application of the “pure legal question” doctrine: (a) a new
argument that is (b) purely legal and (c) does not require agency involvement or fact finding and
(d) does not create undue delay) (internal citations omitted).
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in a number of respects.” See Husteel’s Compl. ¶ 15, Aug. 2, 2018, ECF No. 6. Moreover,
Husteel fully explicates the argument in support of its claim in its moving brief. 	Thus,
Husteel’s claim and legal arguments are not waived.
B. Commerce’s Below Cost Sales Adjustment
The 	statutory scheme 	precludes 	Commerce’s 	PMS 	adjustment to 	COP for
purposes of a below cost sales analysis. 	Congress specifically delineated Commerce’s
options to account for a PMS whether using market sales or constructed value as normal
value. Congress also provided for how to calculate the COP to identify sales below cost
in the market sales context and, in doing so, did not provide a means to adjust for a PMS.
Here, Commerce eschewed the options, provided by Congress, to account for a PMS;
Commerce instead chose to adjust the COP in a manner not permitted by statute. The
plain language of the statute prohibits Commerce’s action and therefore its PMS
adjustment is contrary to law. 6
In order to determine whether subject merchandise is sold at less than fair value
“a fair comparison shall be made between the export price or constructed export price
and normal value.” 	19 U.S.C. § 1677b(a). 	The statute explains how a comparison is
made between normal value and export price. First, the statute provides a methodology
6 Defendant and Defendant-Intervenor argue that, to the extent that the statute is ambiguous,
Commerce’s interpretation is reasonable and thus entitled to Chevron deference. Def.’s Resp. Br.
at 8–9, 12–23; Resp. Br. Def.-Intervenors California Steel Industries, TMK IPSCO, & Welspun
Tubular LLC USA at 8–9, 11–15, July 29, 2019, ECF No. 63 (“Resp. Br. Def.-Intervenors”); see
also Chevron U.S.A., Inc. v. Nat. Resources Def. Council, Inc., 467 U.S. 837, 844 (1984). Here,
Congress clearly set forth the means by which Commerce is to calculate COP for purposes of the
below cost sales test. 	Congress has spoken to the precise issue and therefore the matter is
resolved according to the plain meaning of the statute.
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for determining which sales should be considered, and disregarded, when calculating
normal value, see § 1677b(a)(1), (b)(1); second, the statute sets forth what adjustments,
if any, should be made to normal value, see § 1677b(a)(6), (7); and, third, the statute
provides for what should be done if Commerce determines that, because of a PMS, a fair
comparison between normal value and export price or constructed export price cannot be
made. See 19 U.S.C. §§ 1677(15); 1677b(a)(1)(B), (C), 1677b(a)(4).
First, when determining normal value, Commerce may disregard sales that are not
made in the ordinary course of trade. 	The statute defines normal value as the price at
which the foreign like product is “first sold . . . for consumption in the exporting country, in
the usual commercial quantities and in the ordinary course of trade[.]” 	19 U.S.C.
§ 1677b(a)(1)(B)(i). Therefore, sales outside the ordinary course of trade cannot be
included in normal value. “Ordinary course of trade” is defined by statute and specifically
excludes below cost sales, certain transactions between affiliated parties, and situations
where a PMS would not allow for a proper comparison between normal value and export
price or constructed export price. 19 U.S.C. § 1677(15)(A)–(C). 7
7 (15) Ordinary course of trade.
The term “ordinary course of trade” means the conditions and practices which, for
a reasonable time prior to the exportation of the subject merchandise, have been
normal in the trade under consideration with respect to merchandise of the same
class or kind. The administering authority shall consider the following sales and
transactions, among others, to be outside the ordinary course of trade:
(A) Sales disregarded under section 1677b(b)(1) of this title.
(B) Transactions disregarded under section 1677b(f)(2) of this title.
(C) Situations in which the administering authority determines that the particular
market situation prevents a proper comparison with the export price or constructed
export price.
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When identifying normal value sales, Commerce may also disregard sales made
at less than the COP. 19 U.S.C. § 1677b(b)(1). The COP is defined by statute to include
the costs of materials and fabrication, amounts for selling and general expenses, and the
cost of containers and other expenses incidental to putting the product into a condition
ready for shipment. 8 	Congress provided additional special rules for the calculation of
8 More specifically the statute provides that the cost of production equals the sum of:
(A) the cost of materials and of fabrication or other processing of any kind
employed in producing the foreign like product, during a period which would
ordinarily permit the production of that foreign like product in the ordinary course
of business;
(B) an amount for selling, general, and administrative expenses based on actual
data pertaining to production and sales of the foreign like product by the exporter
in question; and
(C) the cost of all containers and coverings of whatever nature, and all other
expenses incidental to placing the foreign like product in condition packed ready
for shipment.
For purposes of subparagraph (A), if the normal value is based on the price of the
foreign like product sold for consumption in a country other than the exporting
country, the cost of materials shall be determined without regard to any internal
tax in the exporting country imposed on such materials or their disposition which
are remitted or refunded upon exportation.
19 U.S.C. § 1677b(b)(3). 	Defendant argues that the phrase “ordinary course of business” in
section 1677b(b)(3)(A) is similar to “ordinary course of trade” so as to justify reading a PMS
adjustment into this portion of the statute. Def.’s Resp. Br. at 22. This argument proves contrary
to Defendant’s position. 	Congress amended the statute in 2015. 	See Trade Preferences
Extension Act of 2015, Pub. L. No. 114-27, § 504, 129 Stat. 362 (2015) (“TPEA”). In doing so,
Congress authorized Commerce to adjust its constructed value methodology where it finds that a
PMS exists. Id. Congress also amended § 1677b(e)(1) to change the phrase “ordinary course
of business” to “ordinary course of trade.” 	Id. 	It amended the definition of “ordinary course of
trade.” Id. Congress did not modify section 1677b(f). That Congress chose to leave the phrase
“ordinary course of business” in section 1677b(f) when it changed the very same phrase in section
1677b(e) to “ordinary course of trade” indicates that it did not intend to incorporate a PMS
adjustment to the sales-below-cost analysis. 	Defendant-Intervenor points out that the phrase
“ordinary course of trade” is nonetheless found in the provision of the statute which tasks
(footnote continued)
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COP including adjustments to be made in certain circumstances. 	See 19 U.S.C.
§ 1677b(f). 9 Specifically, the statute provides:
Costs shall normally be calculated based on the records of the exporter or
producer of the merchandise, if such records are kept in accordance with
the generally accepted accounting principles of the exporting country (or the
producing country, where appropriate) and reasonably reflect the costs
associated 	with 	the 	production 	and 	sale 	of 	the 	merchandise. 	The
administering authority shall consider all available evidence on the proper
allocation of costs, including that which is made available by the exporter or
producer on a timely basis, if such allocations have been historically used
by the exporter or producer, in particular for establishing appropriate
amortization 	and 	depreciation 	periods, 	and 	allowances 	for 	capital
expenditures and other development costs.
Commerce to disregard below costs sales. Oral Arg. at 00:46:05– 00:46:20, Nov. 26, 2019, ECF
No. 101. See also Def.-Intervenors Resp. Br. at 14. The statute provides that where sales have
been disregarded, normal value shall be based on the “remaining sales of the foreign like product
in the ordinary course of trade.” 19 U.S.C. § 1677b(b)(1). The mere presence of this phrase in
this portion of the statute does not advance Defendant’s position.
9 These rules also apply to calculation of constructed value. 	Notably, the constructed value
portion of the statute includes a provision for accounting for a PMS, which is not included here.
Compare 19 U.S.C. § 1677b(e) with id. § 1677b(f).
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19 U.S.C. § 1677b(f)(1)(A). The statute provides for adjustments to be made for startup
operations when determining COP, 10 and makes provisions for transactions between
affiliated persons. 11
10 19 U.S.C. § 1677b(f)(1)(C)(ii) and (iii) provide:
(ii) Startup operations.
Adjustments shall be made for startup operations only where--
(I) a producer is using new production facilities or producing a new product that
requires substantial additional investment, and
(II) production levels are limited by technical factors associated with the initial
phase of commercial production.
For purposes of subclause (II), the initial phase of commercial production ends at
the end of the startup period. In determining whether commercial production levels
have been achieved, the administering authority shall consider factors unrelated
to startup operations that might affect the volume of production processed, such
as demand, seasonality, or business cycles.
(iii) Adjustment for startup operations. The adjustment for startup operations shall
be made by substituting the unit production costs incurred with respect to the
merchandise at the end of the startup period for the unit production costs incurred
during the startup period. If the startup period extends beyond the period of the
investigation or review under this title, the administering authority shall use the
most recent cost of production data that it reasonably can obtain, analyze, and
verify without delaying the timely completion of the investigation or review. For
purposes of this subparagraph, the startup period ends at the point at which the
level of commercial production that is characteristic of the merchandise, producer,
or industry concerned is achieved.
11 Transactions between affiliated persons are provided for under the transactions disregarded
rule and the major input rule. Specifically, 19 U.S.C. § 1677b(f)(2) provides:
Transactions disregarded. A transaction directly or indirectly between affiliated
persons may be disregarded if, in the case of any element of value required to be
considered, the amount representing that element does not fairly reflect the
amount usually reflected in sales of merchandise under consideration in the market
under consideration. If a transaction is disregarded under the preceding sentence
and no other transactions are available for consideration, the determination of the
amount shall be based on the information available as to what the amount would
have been if the transaction had occurred between persons who are not affiliated.
19 U.S.C. § 1677b(f)(3) provides:
(footnote continued)
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Second, when using market prices to determine normal value, Commerce may
need to make certain adjustments. Congress provided for those adjustments, specifically
to account for the cost of containers and other expenses incident to making the goods
ready for shipment, direct taxes, differences in the quantities sold or physical differences
Major input rule. If, in the case of a transaction between affiliated persons involving
the production by one of such persons of a major input to the merchandise, the
administering authority has reasonable grounds to believe or suspect that an
amount represented as the value of such input is less than the cost of production
of such input, then the administering authority may determine the value of the
major input on the basis of the information available regarding such cost of
production, if such cost is greater than the amount that would be determined for
such input under paragraph (2).
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and differences in the circumstances of sale. 12 Additional adjustments are allowed for
differences in levels of trade. 13
12 19 U.S.C. § 1677b(a)(6) provides for adjustments:
The price described in paragraph (1)(B) shall be--
(A) increased by the cost of all containers and coverings and all other costs,
charges, and expenses incident to placing the subject merchandise in condition
packed ready for shipment to the United States;
(B) reduced by--
(i) when included in the price described in paragraph (1)(B), the cost of all
containers and coverings and all other costs, charges, and expenses incident to
placing the foreign like product in condition packed ready for shipment to the place
of delivery to the purchaser,
(ii) the amount, if any, included in the price described in paragraph (1)(B),
attributable to any additional costs, charges, and expenses incident to bringing the
foreign like product from the original place of shipment to the place of delivery to
the purchaser, and
(iii) the amount of any taxes imposed directly upon the foreign like product or
components thereof which have been rebated, or which have not been collected,
on the subject merchandise, but only to the extent that such taxes are added to or
included in the price of the foreign like product, and
(C) increased or decreased by the amount of any difference (or lack thereof)
between the export price or constructed export price and the price described in
paragraph (1)(B) (other than a difference for which allowance is otherwise provided
under this section) that is established to the satisfaction of the administering
authority to be wholly or partly due to--
(i) the fact that the quantities in which the subject merchandise is sold or agreed
to be sold to the United States are greater than or less than the quantities in which
the foreign like product is sold, agreed to be sold, or offered for sale,
(ii) the fact that merchandise described in subparagraph (B) or (C) of section
1677(16) of this title is used in determining normal value, or
(iii) other differences in the circumstances of sale.
13 19 U.S.C. § 1677b(a)(7) provides for additional adjustments.
(A) Level of trade. The price described in paragraph (1)(B) shall also be increased
or decreased to make due allowance for any difference (or lack thereof) between
the export price or constructed export price and the price described in paragraph
(footnote continued)
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Third, when using home market sales for normal value, Commerce may discover
there is a PMS that prevents the proper comparison of normal value and export price or
constructed export price. Congress specifically provided for such situations. If Commerce
determines 	that 	a 	PMS 	“prevents 	a 	proper 	comparison 	with 	the 	export 	price 	or
constructed export price” then normal value will be determined by third country sales or
constructive value. 19 U.S.C. § 1677b(a)(1)(B)(ii)(III), 1677b(a)(1)(C)(iii), 1677b(a)(4).
If there are insufficient home market or third country sales, or if a PMS prevents
the fair comparison of normal value and export price or constructed export price,
Commerce may use constructed value to determine the price for comparison to export
price. See 19 U.S.C. § 1677b(a)(1)(B)(ii), § 1677b(a)(1)(C)(iii), 1677b(b)(1), 1677b(a)(4).
Commerce shall determine constructed value by adding “the cost of materials and
fabrication or other processing of any kind employed in producing the merchandise,
during a period which would ordinarily permit the production of the merchandise in the
ordinary course of trade[.]” See 19 U.S.C. § 1677b(e)(1). If, however when determining
constructed value, Commerce determines that a PMS exists such that the cost of
(1)(B) (other than a difference for which allowance is otherwise made under this
section) that is shown to be wholly or partly due to a difference in level of trade
between the export price or constructed export price and normal value, if the
difference in level of trade--
(i) involves the performance of different selling activities; and
(ii) is demonstrated to affect price comparability, based on a pattern of consistent
price differences between sales at different levels of trade in the country in which
normal value is determined.
In a case described in the preceding sentence, the amount of the adjustment shall
be based on the price differences between the two levels of trade in the country in
which normal value is determined.
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materials and fabrication or other processing of any kind does not accurately reflect the
COP in the ordinary course of trade, Commerce may use “any other calculation
methodology.” 19 U.S.C. § 1677b(e).
Therefore, the plain language of the statute provides: a definition of normal value
as based on home market sales, third country sales, or constructed value, 19 U.S.C.
§ 	1677b(a)(1), 	(4); 	sales 	to 	be 	disregarded, 	§ 	1677b(a)(1)(B)(i), 	(b)(1); 	available
adjustments, § 1677b(a)(6), (7); and, alternatives where a PMS prevents a proper
comparison 	between 	normal 	value 	and 	export 	price 	or 	constructed 	export 	price,
§ 1677b(a)(1)(B), (C); 1677b(a)(4). The statute separately provides that when Commerce
is using constructed value and encounters a PMS that it may resort to “any other
calculation methodology.” 19 U.S.C. § 1677b(e).
Here, Commerce chose a path not permitted by the statutory scheme. Commerce
misappropriated the language of 19 U.S.C. § 1677b(e), which provides that when using
constructed value, Commerce may use any reasonable calculation methodology if it finds
a PMS affected the COP. In the Final Decision Memo., Commerce explains its authority
to act:
Section 504 of the TPEA added the concept of “particular market situation”
in the definition of the term “ordinary course of trade,” for purposes of CV
under section 773(e) of the Tariff Act of 1930, as amended (the Act), and
through these provisions for purposes of the COP under section 773(b)(3)
of the Act. Section 773(e) of the Act states that “if a particular market
situation exists such that the cost of materials and fabrication or other
processing of any kind does not accurately reflect the cost of production in
the ordinary course of trade, the administering authority may use another
calculation 	methodology 	under 	this 	subtitle 	or 	any 	other 	calculation
methodology.
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Final Decision Memo. at 12 (footnote omitted). 	Although Commerce’s phrasing “and
through these provisions for purposes of the COP under section 773(b)(3) of the Act” is
vague, it appears to be saying that the “any other calculation” language of the constructed
value portion of the statute applies to the COP and below cost sales portion of the statute.
However, there is nothing in the statutory scheme which can be read to grant
Commerce the authority to modify the below cost sales test to account for a PMS. Indeed,
the statute precludes a PMS adjustment to COP for the below cost sales analysis because
it specifically lists the method of calculation and the adjustments to be made, and there
is no ambiguity in this portion of the statute. See Conn. Nat’l Bank v. Germain, 503 U.S.
249, 253–44 (1992) (a cardinal canon of statutory interpretation is that “courts must
presume that a legislature says in a statute what it means and means in a statute what it
says there.”); see also Duncan v. Walker, 533 U.S. 167, 173 (2001) (“[W]here Congress
includes particular language in one section of a statute but omits it in another section of
the same Act, it is generally presumed that Congress acts intentionally and purposely in
the disparate inclusion or exclusion.”) (citation and internal quotations omitted). Section
1677b(b)(3) lays out how to calculate the COP and does not provide for PMS adjustments.
Compare 19 U.S.C. § 1677b(b)(3) with id. § 1677b(e).
Commerce apparently assumes, and Defendant argues, that when Congress
amended the statute to define “ordinary course of trade” in 2015, it enabled Commerce
to make PMS adjustments to the COP for purposes of the below cost sales test. 	See
Final Decision Memo. at 12–18; Def.’s Resp. Pls.’ Mots. J. Agency R. at 21–23, July 29,
2019, ECF No. 64 (“Def.’s Resp. Br.”). Section 504 of the Trade Preferences Extension
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Act 	of 	2015 	amended 	section 	1677(15) 	to 	provide 	that 	“situations 	in 	which 	the
administering authority determines that the particular market situation prevents a proper
comparison with the export price or constructed export price” are considered to be outside
the ordinary course of trade. Trade Preferences Extension Act of 2015, Pub. L. No. 114-
27, § 504, 129 Stat. 362 (2015) (“TPEA”); see also 19 U.S.C. § 1677(15); Final Decision
Memo. at 12; Def.’s Resp. Br. at 22–23. 	However, this amendment does not help
Commerce’s position. 	If a PMS prevents a proper comparison with export price or
constructed export price, sales would indeed be considered outside the ordinary course
of trade; as such, they shall be disregarded. See 19 U.S.C. § 1677b(a)(1); see also id.
§ 1677(15). Alternatively, the existence of the PMS would justify Commerce using third
country sales or constructed value. § 1677b(a)(1)(B)(ii), (a)(4). However, Commerce is
not authorized to tinker with the below cost sales calculation because of a PMS. No part
of the statute allows Commerce to use “any other methodology” when market sales are
used for normal value. The “any other methodology” language is reserved solely for when
normal value is determined by constructed value. 14
Defendant argues that it would be “illogical to conclude that Congress intended for
Commerce not to rely on costs distorted by a [PMS] for constructed value, but still to rely
on those same distorted costs for purposes of cost of production and the sales-below-
14 Indeed, Commerce found that “the collective impact of Korean HRC subsidies, Korean imports
of HRC from China, strategic alliances, and government involvement in the Korean electricity
market, a PMS exists in Korea which distorts the cost of production for WLP.” 	Final Decision
Memo. at 13. 	The statute enquires whether the PMS “prevents a proper comparison with the
export price or constructed export price.” 19 U.S.C. § 1677(15).
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cost test.” Def.’s Resp. Br. at 23. Defendant explains that Commerce reasoned that the
language of the constructed value portion of the statute that allows Commerce to use
“any other calculation methodology” must therefore apply to the COP portion of the statute
and allow Commerce to adjust the COP for the purposes of its below cost sales analysis
in the normal value portion of the statute. Def.’s Resp. Br. at 22–23 (citing Final Decision
Memo. at 12). Defendant’s argument is not persuasive.
The plain meaning of the statutory scheme is not illogical. Congress provided for
the existence of a PMS when market sales are used for normal value by allowing
Commerce to disregard specific sales (because they were made outside the ordinary
course of trade) or to move off of home market sales to use third country sales or
constructed value. 	19 U.S.C. § 1677b(a)(1)(B)–(C), (a)(4). 	Congress provided for the
existence of the PMS in a constructed value context by allowing Commerce to choose
another reasonable means to calculate costs. Indeed, Congress’s choice makes a great
deal of sense. A PMS that affects costs of production would presumably affect prices for
domestic sales and export sales so there would be no reason to adjust only the home
market prices. If the PMS was of a kind that only affected domestic sales, then it would
be one which prevented “a proper comparison with the export price or constructed export
price” and Commerce would move to either third country sales or constructed value. 19
U.S.C. § 1677b(a)(1)(B)(ii)(III), (C)(iii); see also id. § 1677b(a)(4).
If a PMS only affected some sales, then those sales would be outside the ordinary
course of trade and would be disregarded by Commerce in identifying normal value. At
oral argument Defendant argues that, effectively, Commerce did simply disregard sales
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affected by a PMS in this case. Oral Arg. at 00:14:45, Nov. 26, 2019, ECF No. 101. In
its Final Decision Memo, Commerce does not claim it is disregarding sales that are
outside the ordinary course of trade because they are affected by a PMS. More
importantly, that is not what Commerce did. Commerce did not exclude sales affected by
a PMS, it adjusted reported costs affected by a PMS. Final Decision Memo. at 13–15.
Commerce alleged a PMS that pertained to a specific input, HRC. Commerce made an
adjustment to its 	COP 	calculation for purposes of 	its below cost 	sales analysis.
Thereafter, some portion of sales were excluded as being below COP.
Ultimately, Commerce’s argument hinges upon a view that when Congress
amended the statute in 2015 to add the PMS language to the constructed value section
of the statute that it also amended the below cost sales test to allow Commerce to
calculate the COP to account for a PMS. 	Undeniably Congress did not amend either
section 1677b(b)(1) (below costs sales) or section 1677b(f) (calculation of a cost of
production) to allow for a PMS adjustment. 15 	Commerce attempts to bootstrap such an
amendment in its Final Decision Memo. by stating “Section 504 of the TPEA added the
concept of ‘particular market situation’ in the definition of the term ‘ordinary course of
trade,’ for purposes of CV under section 773(e) of the Tariff Act of 1930, as amended (the
Act), and through these provisions for purposes of the COP under section 773(b)(3) of
the Act.” 	Final Decision Memo. at 12. 	Commerce and the Defendant thus claim that
although the PMS language was not added to the cost of sales or calculation of COP
15 Section 505 of the TPEA did amend the below cost sales in ways not relevant here. See Trade
Preferences Extension Act of 2015, Pub. L. No. 114-27, 129 Stat. 362 (2015).
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sections of the statute, the PMS concept should be read into those provisions because of
the phrase “ordinary course of trade” language was amended to exclude situations where
a PMS prevents a proper comparison with the export price or constructed export price.
However, between the below cost sales section, and the COP section, the only reference
to “ordinary course of trade” simply says that where sales have been disregarded, normal
value shall be based on the “remaining sales of the foreign like product in the ordinary
course of trade.” See 19 U.S.C. § 1677b(b)(1). The words of the statute cannot support
the adjustment made here by Commerce.
C. Commerce’s PMS Determination
Plaintiffs also challenge Commerce’s PMS determination as unsupported by
substantial evidence and contrary to law. Commerce relied in part on its analysis in past
reviews. Final Decision Memo. at 12–13 (“[W]e determine that the circumstances present
during this review–that is, the PMS allegation itself and the record evidence concerning
the allegation–remained largely unchanged from those which led to the finding of a PMS
in Korea in the other reviews.”) 	Commerce found that the “collective impact of Korean
HRC subsidies, Korean imports of HRC from China, strategic alliances, and government
involvement in the Korean electricity market” constituted a PMS in Korea “which distorts
the cost of production for WLP.” 	Id. 	Commerce’s PMS finding is unsupported by
substantial evidence. 16
16 SeAH does not challenge Commerce’s statutory authority to make the PMS adjustment to cost
of production for purposes of the sales below cost test under normal value—as Commerce
(footnote continued)
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To establish the existence of a PMS, Commerce must demonstrate both that there
are distortions present in the market and that those distortions prevent a proper
comparison of normal value with export price or constructed export price. See 19 U.S.C.
§ 1677b(a)(1)(B)(ii)(III), (C)(iii) (stating that home market or third market prices that
Commerce determines are affected by a PMS which prevents a proper comparison with
export price or constructed price cannot be used to calculate normal value). 	Those
determinations must be supported by substantial evidence. 	The evidence must be
sufficient that a reasonable mind might accept the evidence as adequate to support its
conclusion while considering contradictory evidence. See Consol. Edison Co. v. NLRB,
305 U.S. 197, 229 (1938); see also Suramerica de Aleaciones Laminadas, C.A. v. United
States, 44 F.3d 978, 985 (Fed. Cir. 1994).
calculated SeAH’s margins using constructed value. 	However, SeAH challenges Commerce’s
PMS finding as unsupported by substantial evidence, see SeAH’s Br. at 19–26, and its
subsequent adjustment as contrary to law. 	See SeAH’s Br. at 26–27. 	SeAH argues that, by
relying on an AFA subsidy rate in a previous proceeding to calculate the adjustment to SeAH’s
COP, Commerce effectively applied AFA against a cooperative respondent. See id. Commerce’s
PMS finding is unsupported by substantial evidence, and thus, this court does not reach the issue
of the lawfulness of Commerce’s resulting adjustment.
Hyundai and SeAH both argue that Section 19 U.S.C. § 1677-1 which allows Commerce
to remedy upstream subsidies precludes the use of the PMS provision in this case as a matter of
law. Hyundai’s Br. at 31–33; SeAH’s Br. at 26. Defendant argues that the PMS provisions and
the upstream subsidy provisions are two distinct provisions that serve different purposes. Def.’s
Resp. Br. at 20–21. The question before Commerce in this proceeding was whether a confluence
of factors gave rise to a PMS that affected the less than fair value equation when calculating
margins pursuant to an [ADD] order review–not whether or not there existed remediable subsidies
within the Korean market. Therefore, the court need not reach the argument posed by Hyundai
and SeAH as to whether the statutory provisions remedying upstream subsidies preclude the use
of the PMS provisions to remedy alleged market distortions that affect the cost of an input, where
those alleged distortions include allegations of subsidies.
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Here, Commerce found that four factors, based on their cumulative effect,
warranted a PMS finding and subsequent adjustment. 	Final Decision Memo. at 13.
Nonetheless, 	Commerce 	acknowledged 	that 	the 	information 	on 	the 	record 	was
insufficient to permit it to quantify three out of four of those factors. 	See Final Decision
Memo. at 14–15, 18, 23, and 24. 	Commerce possessed only enough information to
quantify the impact of Korean HRC subsidies, and in doing so, relied on AFA 17 CVD rates
assigned to HRC producers from a previous administrative proceeding. 	Final Decision
Memo. at 14–15 (citing to Hot-Rolled Steel Flat Products from Korea, 81 Fed. Reg. 53,439
(Dep’t Commerce Aug. 12, 2016) (final affirm. determination) as amended by 81 Fed.
Reg. 67,960 (Dep’t Commerce Oct. 3, 2016) (“Hot-Rolled Steel from Korea”) and
accompanying Issues and Decisions Memo. for [Hot-Rolled Steel from Korea], C-580-
884, 	(Aug. 	4, 	2016) 	available 	at 	https://enforcement.trade.gov/frn/summary/korea-
south/2016-19377-1.pdf (last visited Dec. 30, 2019)). 18
Commerce failed to substantiate three out of the four factors upon which it relied.
Defendant argues that Chinese overcapacity affects the Korean market in particular
because Chinese imports constitute a significant and growing portion of the HRC market
17 	Parties and Commerce sometimes use the shorthand "AFA" or "adverse facts available" to
refer to Commerce's reliance on facts otherwise available with an adverse inference to reach a
final determination. AFA, however, encompasses a two-part inquiry established by a statute. See
19 U.S.C. § 1677e(a)–(b). It first requires Commerce to identify information missing from the
record, and second, explain how a party failed to cooperate to the best of its ability as to warrant
the use of an adverse inference when "selecting among the facts otherwise available." Id.
18 The only record evidence of strategic alliances on the record appears to be a declaration from
the 	that these
alliances exist. 	See [Maverick’s] Particular Market Situation Allegation at Ex. 31, CD 296, bar
code 3622608-67 (Sept. 25, 2017) 	Declaration”).
[[ 	]],
(“[[ 	]]
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PUBLIC VERSION
in Korea, resulting in a downward pressure on steel prices and incentives for government
interventions which would cause further distortions, see Def.’s Resp. Br. at 26–27 (citing,
inter alia, Final Decision Memo. at 13, 17; Prelim. Decision Memo. at 15). However,
Defendant concedes that Chinese overcapacity is “not a phenomenon specific to the
Korean market.” 	See Def.’s Resp. Br. at 27. 	Although 19 U.S.C. § 1677b may not
demand that a PMS be such that it only affects the subject market, there is no evidence
on the record that Chinese overcapacity affects the Korean market in some way that is
specific to the Korean market at all. Commerce’s support for the other factors is likewise
lacking. 19 Regarding evidence of strategic alliances and government involvement in the
Korean electricity market, both Defendant and Commerce seem to acknowledge that
these factors support the PMS finding only to the extent that they lend credence to a
determination based on the totality of the circumstances in the market. See Def.’s Resp.
Br. at 27–28; see also Final Decision Memo. at 13, 17–18. 	Defendant and Commerce
rely on the cumulative effect of these distortions taken together. 	Id.; see also Final
Decision Memo. at 13. Although Commerce may rely on the cumulative effect of multiple
distortions to arrive at a PMS determination, it cannot use that phrase to circumvent a
meaningful review of the sufficiency of the record.
19 Defendant cites to a declaration in support of Commerce’s finding that there are strategic
alliances in the Koreans government, see generally 	Declaration, and previous
administrative proceeding in support of Commerce’s finding that electricity operates as a tool of
the government’s industrial policy in Korea. Def.’s Resp. Br. at 27–28 (citing, inter alia Oil Country
Tubular Goods from The Republic of Korea, 82 Fed. Reg. 18,105 (Dep’t Commerce Apr. 17, 2017)
(final results of [ADD] admin. rev.; 2014–2015) (“OCTG from Korea”) and accompanying Issues
and Decisions Memo. for [OCTG from Korea] at 13–14, A-580-870, (Apr. 10, 2017) available at
https://enforcement.trade.gov/frn/summary/korea-south/2017-07684-1.pdf (last visited Dec. 30,
2019).
[[ 	]]
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Furthermore, even if this court agreed that Commerce’s findings of various
distortions were supported, Commerce fails to explain how these distortions prevent a
proper comparison. 	See 19 U.S.C. § 1677b(a)(1)(B)(ii)(III); see also Uruguay Round
Agreements Act, Statement of Administrative Action, H.R. Doc. No. 103-316, vol. 1, at
822 (1994) reprinted in 1994 U.S.C.C.A.N 4040, 4162 (“SAA”). 	Chinese overcapacity
may affect the COP by lowering the price of HRC, however, it is unclear how that finding
alone would support the determination that the home market price and export price (or
constructed export price) cannot be compared because Commerce does not address
whether costs would be lowered on both sides of the less than fair value equation. See
id. Therefore, Commerce’s PMS finding is unsupported by substantial evidence. 20
20 Hyundai argues that Commerce’s determination is contrary to law because it failed to make a
respondent-specific determination. 	See Hyundai’s Br. at 18–22; Def.’s Resp Br. at 12–23.
Hyundai argues that Commerce has “historically” and “properly focused its analysis ‘on the
behavior of the specific respondent(s) under [investigation or review.]” See Hyundai Br. at 21–22
(quoting Certain Pasta from Italy, 72 Fed. Reg. 7,011 (Dep’t Commerce Feb. 14, 2007) (notice of
final results of the ninth admin. review of the [ADD] order on certain pasta from Italy) (“Certain
Pasta from Italy”), accompanying Issues and Decisions Memo. for [Certain Pasta from Italy] cmt.
1 	at 	9, 	A-475-818, 	(Feb. 	14, 	2007), 	available 	at
https://enforcement.trade.gov/frn/summary/ITALY/E7-2563-1.pdf (last visited Dec. 30, 2019)
(“Certain Pasta from Italy IDM”); see also id. (citing Steel Concrete Reinforcing Bar from Taiwan,
82 Fed. Reg. 34,925 (Dep’t Commerce July 27, 2017) (final determination of sales at less than
fair value) (“Rebar from Taiwan”) and accompanying Issues and Decisions Memo. for [Rebar from
Taiwan], 	A-583-859, 	(July 	20, 	2017) 	available 	at
https://enforcement.trade.gov/frn/summary/taiwan/2017-15840-1.pdf (last visited Dec. 30, 2019)
(“Rebar from Taiwan IDM”). 	In the proceedings Hyundai cites, however, Commerce either
deviates 	from 	the 	respondent-specific 	approach 	or 	expressly 	acknowledges 	there 	are
circumstances where a general market-analysis (i.e., “totality of the circumstances”) approach
would be appropriate. See e.g., Biodiesel from Indonesia, 83 Fed. Reg. 8,835 (Dep’t Commerce
Mar. 1, 2018) (final determination of sales at less than fair value) and accompanying Issues and
Decisions Memo. for the Final Affirmative Determination in the Antidumping Duty Investigation of
Biodiesel 	from 	Indonesia 	at 	23, 	A-560-830, 	(Feb. 	20, 	2018) 	available 	at
https://enforcement.trade.gov/frn/summary/indonesia/2018-04138-1.pdf 	(last 	visited 	Dec. 	30,
2019) (adopting a general market-analysis approach and stating that Commerce “do[es] not
(footnote continued)
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D. Third Country Sales
Commerce’s finding that third country sales are unrepresentative is unsupported
by substantial evidence. After finding that there were insufficient home market sales for
purposes of normal value, Commerce considered, but ultimately rejected, SeAH’s sales
into the Canadian market. Commerce based its finding on the CITT’s determination that
SeAH’s sales into the Canadian market were dumped. 	Here, it is unreasonable to rely
solely on the CITT’s determination when confronted with evidence that those findings are
not reliable.
Where Commerce finds that home market sales are an inappropriate basis for
determining 	normal 	value, 	it 	may 	resort 	to 	third 	country 	sales. 	See 	19 	U.S.C.
§ 1677b(a)(1). 	Commerce may only rely on third country sales where the prices are
representative, where the aggregate quantity of sales are at a sufficient level, and where
Commerce does not determine that a PMS prevents a proper comparison between the
export price, or constructed export price, and the third country price. 	See 19 U.S.C.
§ 1677b(a)(1)(B)(ii). 	If Commerce determines that the conditions for third country sales
are not met, then it resorts to constructed value. See 19 U.S.C. § 1677b(a)(4), 1677b(e).
believe [a comparison of specific sales and transactions to the general market] is always
appropriate within the context of a PMS analysis); Certain Pasta from Italy IDM at 8–9 (stating
that “it may be appropriate in some instances to consider general market conditions in determining
whether a PMS exists[.]”); Rebar from Taiwan IDM cmt. 1 at 10 (acknowledging the totality of the
circumstances approach taken in OCTG from Korea because of the confluence of distortions
present in that proceeding) (internal citation omitted); see also Def.’s Resp. Br. at 19. Commerce’s
practice is to vary its approach based on the facts presented to it and this practice is reasonable.
Commerce has discretion to determine its methodology in the first instance as long as it does not
exercise its discretion in an arbitrary and unlawful manner.
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Here, Commerce relied on CITT’s final determination that SeAH’s sales into
Canada were dumped to find that those sales were not representative. 	Final Decision
Memo. at 45–47; see also 19 U.S.C. § 1677b(a)(1)(B)(ii)(I). Commerce’s determination
is 	not 	supported 	by 	substantial 	evidence 	because 	Commerce 	failed 	to 	consider
contradictory evidence that Canadian antidumping law was materially inconsistent with
U.S. law. Specifically, SeAH argued that the Canada Border Services Agency (“CBSA”)
applied the equivalent of facts available to SeAH for failing to report home market sales
of merchandise produced by another manufacturer. Final Decision Memo. at 45; see also
[SeAH]’s Resp. New Factual Information at 2, PD 318, bar code 3725459-01 (June 27,
2018) (“SeAH’s NFI Resp.”); id. at Attachment 1. SeAH explained that, under U.S. law,
the reporting of such sales in unnecessary, because the “home market sales of
merchandise produced by one manufacturer may not be used to calculate [normal value]
for exports of merchandise produced by another manufacturer.” 	Id. 	Commerce thus
noted SeAH’s apparent contention that there is no evidence Canada would have found
SeAH’s sales to be dumped if it had applied Commerce’s methodology. 	See id. 	In
response, Commerce explained that “the fact that Commerce’s methodology may differ
from that of the CBSA does not negate Canada’s finding of dumping.” 	Final Decision
Memo. at 46. 	This response does not engage the apparent flaw in the evidence upon
which Commerce is relying to find that SeAH’s sales into the Canadian market were not
representative. Further, Commerce did not give weight to its previous determination that
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SeAH’s sales into the Canadian market were representative. 21 See SeAH’s Br. at 9; see
also Oil Country Tubular Goods from The Republic of Korea, 82 Fed. Reg. 18,105 (Dep’t
Commerce Apr. 17, 2017) (final results of [ADD] admin. rev.; 2014–2015) (“OCTG from
Korea”) and accompanying Issues and Decisions Memo. for [OCTG from Korea] at 13–
14, 	A-580-870, 	(Apr. 	10, 	2017) 	available 	at
https://enforcement.trade.gov/frn/summary/korea-south/2017-07684-1.pdf 	(last 	visited
Dec. 30, 2019). 	Commerce instead relied solely on the CITT’s findings. 	For these
21 In its Final Decision Memo, Commerce explained that it based its decision on Alloy Piping
Prods., Inc. v. United States to rely exclusively on a foreign government’s antidumping
determination when deciding between use of third country sales and constructed value. 	Final
Decision Memo at 46 n.242 (citing to Alloy Piping Prods., Inc. v. United States, 26 CIT 330, 341,
201 F. Supp. 2d 1267, 1277 (2002) (“Alloy Piping”); see also Def.’s Resp. Br. at 44 (stating that
this court has indicated Commerce may rely on a foreign government’s antidumping findings when
deciding third country sales are inappropriate for use as normal value; identifying Alloy Piping as
the basis for Commerce’s decision). However, Commerce’s reliance on Alloy Piping is misguided.
Alloy Piping held that Commerce’s decision to use third country sales as the basis for normal
value was supported by substantial evidence, and otherwise in accordance with law, where
Commerce’s record-based consideration of the representativeness of sales made to a single
customer in a third country market is met with unsupported contentions that a market comprised
of such sales cannot be representative. See Alloy Piping, 26 CIT at 340–42, 201 F. Supp. 2d at
1276–78. The court disposed of respondent’s argument that Commerce must avoid using prices
“that it has ‘reason to believe or suspect’ may be dumped” because it determined that the “reason
to believe or suspect” standard applied to non-market economy proceedings. See Alloy Piping,
26 CIT at 240–41, 201 F. Supp. 2d. at 1277–78. The court then reasoned, in the alternative, that
respondent’s application of the standard would not apply to a “suitable comparison market”
analysis absent a formal finding of dumping. 	Id. 	The present dispute is whether Commerce’s
decision to rely on the antidumping findings produced by a methodology inconsistent with U.S.
law is supported by substantial evidence. 	Commerce cannot rely on Alloy Piping in order to
circumvent its statutory obligations to render decisions based on substantial evidence and to
reasonably explain its determinations below.
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reasons, Commerce’s decision to disregard third country sales and calculate SeAH’s
sales based on constructed value are not supported by substantial evidence. 22
E. All-Others Rate
Husteel argues that the all-others rate is unlawful and unsupported by substantial
evidence because it is the product of a margin calculated with reference to rates that were
based on total and partial AFA. 	Husteel’s Br. at 19–23. 	Defendant counters that this
methodology is appropriate because Commerce may average rates that are based on
AFA when calculating the all-others rate, and also because the AFA rates were only
incorporated into the calculation of the all-others rate to the extent that Commerce
adjusted the cost of certain inputs when determining the margins for the mandatory
respondents. 	See Def.’s Resp. Br. at 40–42. 	Because Commerce’s PMS adjustment
and determination are being remanded the court will not reach Husteel’s argument.
The expected method for calculating the estimated margin, also known as the “all-
others” rate, is to weight average the margins assigned to the mandatory respondents—
excluding all zero margins, de minimis margins, and margins determined entirely under
19 U.S.C. § 1677e. 19 U.S.C. § 1673d(c)(5); see also SAA 1994 U.S.C.C.A.N at 4201.
However, if the only margins available to Commerce are those excluded under 19 U.S.C.
22 Indeed, in NEXTEEL Co. v. United States, 43 CIT __, Slip Op. 19-1 at 21 (Jan. 2, 2019), this
court sustained Commerce’s determination that SeAH’s sales to Canada were an appropriate
basis for normal value as reasonable. The only discernible difference between that proceeding
and this one is that the CITT rendered its final determination in the interim. See Def.’s Resp. Br.
at 45 (citing to CITT Final Determination). Commerce must explain why the CITT’s determination
reasonably justifies its decision to discard third country sales and instead rely on constructed
value when determining SeAH’s margin.
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§ 1673d(c)(5), Commerce may either apply the expected method to those margins, or
resort to any reasonable method to establish the separate rate. Id. When calculating the
all-others rate using the expected method, section 1673d(c)(5) provides that where no
other margins are available, zero, de minimis, and “any margins determined entirely under
section 1677e” can be used to calculate the separate rate. This court—in remanding to
Commerce its PMS methodology and determination as unlawful and unsupported by
substantial evidence, respectively—does not reach the issue of whether the all-others
rate is lawful in this instance because Commerce’s re-calculations on remand may result
in a change to the all-others rate. 23
CONCLUSION
The plain meaning of the statute precludes Commerce’s PMS adjustment to
Hyundai’s reported costs of production for purposes of the sales-below-cost test when
calculating normal value. 	Further, Commerce’s determination that sales of WLP in the
Korean market are affected by a PMS is not supported by substantial evidence. Finally,
Commerce’s decision to resort to constructed value when calculating SeAH’s margin is
unsupported by substantial evidence.
For the foregoing reasons, it is
ORDERED that Commerce’s determination is remanded for further consideration
and/or explanation consistent with this opinion; and it is further
23 SeAH also complains that Commerce’s differential pricing analysis is not supported by
substantial evidence and not in accordance with law. SeAH’s Br. at 4, 29–30. 	As both parties
agree, “at this moment . . . the issue is moot” because Commerce’s differential pricing analysis
did not affect the calculation of SeAH’s dumping margins. Id.; see also Def.’s Resp. Br. at 46.
Therefore, this court does not reach the issue.
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ORDERED that Commerce shall file its remand redetermination with the court
within 90 days of this date; and it is further
ORDERED that the parties shall have 30 days thereafter to file comments on the
remand redetermination; and it is further
ORDERED that the parties shall have 15 days to file their replies to comments on
the remand redetermination.
/s/ Claire R. Kelly
Claire R. Kelly, Judge
Dated:January 3, 2020
New York, New York
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