Maverick Tube Corporation v. United States

Slip Op. 17-84
UNITED STATES COURT OF INTERNATIONAL TRADE
Before: Leo M. Gordon, Judge
Consol. Court No. 14-00218
OPINION
[Remand results sustained.]
Dated: July 12, 2017
Kelly A. Slater, Jay Y. Nee, and Edmund W. Sim, Appleton Luff Pte Ltd. of
Washington, DC for Plaintiff Tension Steel Industries Co., Ltd.
L. Misha Preheim, Senior Trial Counsel, Commercial Litigation Branch, Civil
Division, U.S. Department of Justice of Washington, DC for Defendant United States. On
the brief with him were Chad A. Readler, Acting Assistant Attorney General, Jeanne E.
Davidson, Director, and Claudia Burke, Assistant Director. Of counsel on the brief was
Mercedes 	C. 	Morno, 	Attorney, 	Office 	of 	the 	Chief 	Counsel 	for 	Enforcement 	and
Compliance, U.S. Department of Commerce of Washington, DC.
Robert E. DeFrancesco, III and Alan H. Price, Wiley Rein, LLP of Washington, DC
for Defendant-Intervenor Maverick Tube Corporation.
Jeffrey D. Gerrish and Jamieson L. Greer, Skadden, Arps, Slate, Meagher & Flom
LLP of Washington, DC for Defendant-Intervenor United States Steel Corporation.
Roger B. Schagrin, John W. Bohn, and Paul W. Jameson, Schagrin Associates of
Washington, 	DC 	for 	Defendant-Intervenors 	Boomerang 	Tube 	LLC, 	Energex 	Tube
(a Division of JMC Steel Group), Tejas Tublar Products, TMK IPSCO, Vallourec Star,
L.P., and Welded Tube USA Inc.
TENSION STEEL INDUSTRIES CO., LTD.,
Plaintiff,
v.
UNITED STATES,
Defendant.
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Gordon, 	Judge: 	This 	action 	involves 	the 	U.S. 	Department 	of 	Commerce’s
(“Commerce”) final determination in the less than fair value investigation of certain oil
country tubular goods from Taiwan. See Certain Oil Country Tubular Goods from Taiwan,
79 	Fed. 	Reg. 	41,979 	(Dep’t 	of 	Commerce 	July 	18, 	2014) 	(final 	LTFV 	determ.),
as amended, 	79 	Fed. 	Reg. 	46,403 	(Dep’t 	of 	Commerce 	Aug. 	8, 	2014)
(“Final Determination”), and accompanying Issues and Decisions Memorandum for the
Final Determination of the Antidumping Duty Investigation of Certain Oil Country Tubular
Goods from Taiwan, A-583-850 (Dep’t of Commerce July 10, 2014), available at
http://enforcement.trade.gov/frn/summary/taiwan/2014-16861-1.pdf 	(last 	visited 	this
date) (“Decision Memorandum”); Antidumping Duty Investigation of Certain Oil Country
Tubular Goods from Taiwan: Proprietary Issues (Dep’t of Commerce July 10, 2014),
CD 388 (“Confidential Decision Memorandum”). 1
Before the court are the Results of Remand Determination, ECF No. 87-1
(“Remand Results”), filed by Commerce pursuant to the court’s remand order in Tension
Steel 	Indus. 	Co. 	v. 	United 	States, 	40 	CIT 	___, 	179 	F. 	Supp. 	3d 	1185 	(2016)
(“Tension Steel I”). The court has jurisdiction pursuant to Section 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). For the reasons set forth below, the court sustains the Remand Results.
1 “CD” refers to a document contained in the confidential administrative record.
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.
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I. Standard of Review
For 	administrative 	reviews 	of 	antidumping 	duty 	orders, 	the 	court 	sustains
Commerce’s “determinations, findings, or conclusions” unless they are “unsupported by
substantial evidence on the record, or otherwise not in accordance with law.” 19 U.S.C.
§ 1516a(b)(1)(B)(i). More specifically, when reviewing agency determinations, findings,
or conclusions for substantial evidence, the court assesses whether the agency action is
reasonable given the record as a whole. Nippon Steel Corp. v. United States, 458 F.3d
1345, 1350-51 (Fed. Cir. 2006); see also Universal Camera Corp. v. NLRB, 340 U.S. 474,
488 (1951) (“The substantiality of evidence must take into account whatever in the record
fairly detracts from its weight.”). Substantial evidence has been described as “such
relevant evidence as a reasonable mind might accept as adequate to support a
conclusion.” DuPont Teijin Films USA v. United States, 407 F.3d 1211, 1215 (Fed. Cir.
2005) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)). Substantial
evidence has also been described as “something less than the weight of the evidence,
and the possibility of drawing two inconsistent conclusions from the evidence does not
prevent an administrative agency’s finding from being supported by substantial evidence.”
Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 620 (1966). Fundamentally, though,
“substantial evidence” is best understood as a word formula connoting reasonableness
review. 3 Charles H. Koch, Jr., Administrative Law and Practice § 9.24[1] (3d ed. 2017).
Therefore, when addressing a substantial evidence issue raised by a party, the court
analyzes whether the challenged agency action “was reasonable given the circumstances
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presented by the whole record.” 8A West’s Fed. Forms, National Courts § 3.6 (5th ed.
2017).
II. Discussion
In the Final Determination, Commerce rejected adjustments for rebate payments
made by the respondent, Tension Steel Industries Co., Ltd. (“Respondent” or “Tension”),
pursuant to sales contracts that did not specifically include a rebate clause. Decision
Memorandum at 11. According to Commerce, the only “legitimate rebates” proffered by
Tension were those known by customers at or before the time of the sale. Id. Tension
persuaded the court that Commerce’s practice of rejecting rebates when Commerce is
not satisfied that customers were aware of the terms and conditions of the rebate at the
time of the sale violated Papierfabrik August Koehler AG v. United States, 38 CIT ___,
971 F. Supp. 2d 1246 (2014) (“Papierfabrik”), which held that Commerce’s practice
contravened the plain language of Commerce’s regulations. Tension Steel I, 40 CIT
at ___, 179 F. Supp. 3d at 1190-91. The court noted that Papierfabrik explained that “the
plain language of Commerce’s regulations require [Commerce] to calculate normal value
‘net of any price adjustment . . . that is reasonably attributable to the . . . foreign like
product’ that ‘[is] reflected in the purchaser’s net outlay.’” Tension Steel I, 40 CIT at ___,
179 F. Supp. 3d at 1190 (quoting Papierfabrik, 38 CIT at ___, 971 F. Supp. 2d at 1252-
53 (quoting 19 C.F.R. §§ 351.102(b)(38), 351.401(c))). The court also observed that
Papierfabrik had become final, and instead of filing an appeal, Commerce chose to
amend 	the 	applicable 	regulation. 	Accordingly, 	the 	court 	remanded 	this 	issue 	to
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Commerce to grant all of Tension’s rebate adjustments. Tension Steel I, 40 CIT at ___,
179 F. Supp. 3d at 1191.
On 	remand, 	Commerce 	granted 	all 	of 	Respondent’s 	reported 	rebates 	and
recalculated Tension’s antidumping duty margin. 3 Remand Results at 3. The petitioners,
Maverick 	Tube 	Corporation 	(“Maverick”), 	United 	States 	Steel 	Corporation, 	and
Boomerang Tube LLC (collectively “Petitioners”), argued that Papierfabrik is an outlier
and that the then-existing regulations permitted Commerce to deny Tension’s claimed
adjustments for rebates that were not contemplated at the time of sale. Id. Though it “did
not disagree” with Petitioners’ arguments, Commerce determined that it would comply
with the court’s remand in Tension Steel I. Id. at 4.
Maverick now challenges Commerce’s determination to comply with the court’s
remand and grant all of Tension’s reported rebate adjustments. In particular, Maverick
argues that in Tension Steel I the court inappropriately relied upon Papierfabrik, “as
[Papierfabrik] is an outlier, reflecting an unreasonable standard that is contrary to
established Commerce practice as well as the spirit of the antidumping duty laws.”
Maverick’s Comments on Remand Results at 3, ECF No. 93 (“Maverick’s Br.”). Maverick
also contends that Commerce did not explain how its decision is supported by the record.
Id. at 6.
Maverick’s challenge to Papierfabrik is a continuation of the arguments raised by
the Government and adopted by Maverick in the initial USCIT Rule 	56.2 briefs on the
3 The recalculated weighted-average margin for Tension was zero percent.
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merits in this action. See Def.’s Opposition to Pls.’ R. 56.2 Mot. for J. upon Agency Record
at 33-36, ECF No. 62; Maverick Tube Corp.’s Response to Tension’s Mem. in Support of
its R. 56.2 Mot. for J. on the Agency Record at 2, ECF No. 65 (agreeing, supporting, and
incorporating by reference Defendant’s arguments (pages 25-36 of Defendant’s brief) on
Commerce’s denial of certain rebate adjustments sought by Tension). Maverick again
argues that Papierfabrik is “an outlier” from prior court decisions. See Maverick’s Br. 4
(citing Koenig & Bauer Albert AG v. United States, 22 CIT 574, 15 F. Supp. 2d 834 (1998);
Nachi-Fujikoshi 	Corp. 	v. 	United 	States, 	19 	CIT 	914, 	890 	F. 	Supp. 	1106 	(1995);
Dupont Teijin Films USA, LP v. United States, 28 CIT 896 (2004); and Mitsubishi Electric
Corp. v. United States, 12 CIT 1025, 700 F. Supp. 538 (1988)). Specifically, Maverick
contends that these decisions demonstrate that Commerce maintains broad discretion to
require a respondent to prove the existence of claimed rebates and to reject any claimed
price adjustments that are intended to evade or circumvent the antidumping duty law. Id.
The court disagrees that these cases support Maverick’s argument. As noted in
Papierfabrik, 	Koenig 	and 	Nachi-Fujikoshi 	are 	inapplicable 	as 	they 	arose 	from
administrative determinations made prior to the implementation of the regulations
applicable in this action. See Papierfabrik 38 CIT at ___, 971 F. Supp. 2d at 1256.
Furthermore, Maverick’s reliance on these four decisions is misplaced because Maverick
does not contend, nor does the administrative record demonstrate, that any of Tension’s
claimed rebates are either illusory or pose the risk of manipulation. See Koenig, 22 CIT
at 	576, 	15 	F. 	Supp 	2d 	at 	840 	(upholding 	Commerce’s 	authority 	“to 	reject 	price
amendments that present the potential for price manipulation”); Nachi-Fujikoshi, 19 CIT
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at 920, 890 F. Supp at 1110 (sustaining Commerce’s disallowance of claimed rebate
given respondent’s failure to adequately provide record information supporting the rebate
claim); Dupont, 28 CIT at 904 (noting Commerce’s authority to interpret the statutory price
adjustment provisions in a manner that accounts for the risk of manipulation); Mitsubishi,
12 CIT at 1046, 700 F. Supp. at 555 (upholding Commerce’s authority to act with “the
purpose in mind of preventing the intentional evasion or circumvention of the antidumping
duty law.”). Commerce has made no finding that Respondent’s claimed rebates were
illusory, posed the risk of manipulation, or were otherwise aimed at the evasion or
circumvention of the antidumping duty law. To the contrary, as the court has already
noted, “Commerce was able to verify all of Tension’s proposed rebate amounts while on-
site in Taiwan.” Tension Steel I, 40 CIT at ___, 179 F. Supp. 3d at 1197 (citing Confidential
Decision Memorandum at 10-11).
Maverick’s 	preferred 	arguments 	regarding 	Commerce’s 	practice 	of 	rejecting
certain claimed rebate adjustments under the prior version of the applicable regulations
were considered and rejected in Papierfabrik. In challenging the Remand Results,
Maverick is essentially asking the court to reconsider its decision in Tension Steel I. The
court will not do this and continues to follow Papierfabrik.
Turning to whether Commerce failed to explain how the record supports its
Remand Results, the court concludes that Maverick’s argument lacks merit. In its remand
order, the court examined and considered Papierfabrik in detail. This action presents the
same scenario as in Papierfabrik, namely that Commerce found sufficiently documented
rebates but rejected those rebates whose terms were not known to the buyer at the time
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of purchase. Here the court concluded that the same result as in Papierfabrik was
appropriate—an order to grant all the rebates properly claimed by the Respondent.
Tension Steel I, 40 CIT ___, 179 F. Supp. 3d at 1191. In its Remand Results, Commerce
acknowledged Maverick’s continued challenge to Paperfabrik while explaining that it was
following the court’s order. Remand Results at 4. Given the administrative record,
Commerce’s decision to obey that order and grant all proposed rebates is reasonable
and must be sustained. Maverick’s re-reiteration of its dissatisfaction with Papierfabrik
has once again failed to persuade the court otherwise.
III. Conclusion
For the reasons set forth above, Commerce’s Remand Results are sustained.
Judgment will be entered accordingly.
/s/ Leo M. Gordon
Judge Leo M. Gordon
Dated: July 12, 2017
New York, New York
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