Husteel Co., Ltd. v. United States

Slip Op. 21-51
UNITED STATES COURT OF INTERNATIONAL TRADE
HUSTEEL CO., LTD.,
Plaintiff,
and
SEAH STEEL CORPORATION,
HYUNDAI STEEL COMPANY,
and NEXTEEL CO., LTD.,
Consolidated Plaintiffs,
v.
UNITED STATES,
Defendant,
and
WHEATLAND TUBE COMPANY,
Defendant-Intervenor.
Before: Jennifer Choe-Groves, Judge
Consol. Ct. No. 19-00107
OPINION AND ORDER
[Granting Defendant’s motion for partial voluntary remand and sustaining in part
and remanding in part the U.S. Department of Commerce’s remand results in the
2016–2017 administrative review of the antidumping duty order on circular welded
non-alloy steel pipe from the Republic of Korea.]
Dated: May 3, 2021
Donald B. Cameron, Julie C. Mendoza, R. Will Planert, Brady W. Mills, Mary S.
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Hodgins, Eugene Degnan, Edward J. Thomas, III, Jordan L. Fleischer, and
Nicholas C. Duffey, Morris, Manning & Martin LLP, of Washington, D.C., for
Plaintiff Husteel Co., Ltd.
Jeffrey M. Winton and Amrietha Nellan, Winton & Chapman PLLC, of
Washington, D.C., for Consolidated Plaintiff SeAH Steel Corporation.
Robert G. Gosselink and Jarrod M. Goldfeder, Trade Pacific PLLC, of
Washington, D.C., for Consolidated Plaintiff Hyundai Steel Company.
J. David Park, Henry D. Almond, Daniel R. Wilson, Leslie C. Bailey, and Kang
Woo Lee, Arnold & Porter Kaye Scholer LLP, of Washington, D.C., for
Consolidated Plaintiff NEXTEEL Co., Ltd.
Patricia M. McCarthy, Assistant Director, U.S. Department of Justice, Civil
Division, Commercial Litigation Branch, of Washington, D.C., for Defendant
United States. With her on the brief were Brian M. Boynton, Acting Assistant
Attorney General, and Jeanne E. Davidson, Director. Of counsel on the brief was
Elio Gonzalez, Senior Attorney, U.S. Department of Commerce, Office of the
Chief Counsel for Trade Enforcement & Compliance.
Roger B. Schagrin, Elizabeth J. Drake, and Christopher T. Cloutier, Schagrin
Associates, of Washington, D.C., for Defendant-Intervenor Wheatland Tube
Company.
Choe-Groves, Judge: Plaintiff Husteel Co., Ltd. (“Husteel”) and
Consolidated Plaintiffs SeAH Steel Corporation (“SeAH”), Hyundai Steel
Company (“Hyundai Steel”), and NEXTEEL Co., Ltd. (“NEXTEEL”),
(collectively, “Plaintiffs”), filed this consolidated action challenging the final
results published by the U.S. Department of Commerce (“Commerce”) in the
2016–2017 administrative review of the antidumping duty order on circular welded
non-alloy steel pipe (“CWP”) from the Republic of Korea (“Korea”). See Circular
Welded Non-Alloy Steel Pipe From the Republic of Korea (“Final Results”), 84
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Fed. Reg. 26,401 (Dep’t Commerce June 6, 2019) (final results of admin. review;
2016–2017);1 see also Issues and Decision Mem. for the Final Results of the 2016–
2017 Admin. Review of the Antidumping Duty Order on Circular Welded Non-
Alloy Steel Pipe from the Republic of Korea, PD 173 (May 30, 2019) (“Final
IDM”). Before the court are the Final Results of Redetermination Pursuant to
Court Order, ECF Nos. 47-1, 48-1 (“Remand Results”), which the court ordered in
Husteel Co. v. United States (“Husteel I”), 44 CIT __, 476 F. Supp. 3d 1363
(2020), and Defendant’s Motion for Partial Voluntary Remand, ECF No. 56
(“Defendant’s Motion” or “Def. Mot.”).
Plaintiffs assert that the facts and Commerce’s analysis and explanations on
remand with respect to its particular market situation determinations and
adjustments are essentially identical to those in its remand results in the 2016–2017
administrative review of the antidumping duty order covering circular welded
carbon steel pipes and tubes from Thailand, and urge the court to follow its
decision in Saha Thai Steel Pipe Public Co. v. United States (“Saha Thai II”), 44
CIT __, 487 F. Supp. 3d 1323 (2020) (remanding the remand results in the 2016–
2017 administrative review of the antidumping duty order covering circular welded
carbon steel pipes and tubes from Thailand). See Pl. Husteel Co., Ltd.’s
1 Citations to the administrative record reflect the public record (“PD”) document numbers.
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Comments Redetermination Pursuant Ct. Remand Order at 2–6, ECF No. 51
(“Husteel Cmts.”); Comments Consol. Pl., Hyundai Steel Company, Commerce’s
Remand Redetermination at 4–7, ECF No. 52 (“Hyundai Cmts.”); Comments
SeAH Steel Corporation Commerce’s Dec. 17, 2020, Redetermination at 4–6, ECF
No. 53 (“SeAH Cmts.”); Remand Comments Consol. Pl. NEXTEEL Co., Ltd. at
1–2, ECF No. 54 (“NEXTEEL Cmts.”). 2 Hyundai Steel contends that Commerce’s
decision to base normal value on constructed value is contrary to the law because
Commerce did not explain under 19 U.S.C. § 1677(15)(C) how a “particular
market situation prevents a proper comparison [of] the export price or constructed
export price” with normal value based on home market sales, or determine under
19 U.S.C. § 1677b(a)(4) that “the normal value of the subject merchandise cannot
be determined.” Hyundai Cmts. at 9–12; see also Husteel Cmts. at 5–6. Hyundai
Steel argues that on remand Commerce made a “sales-based” particular market
situation determination (rather than a “cost-based” particular market situation
determination as Commerce had made in the Final Results), despite the fact that no
party made a market viability allegation and interested parties were not given the
opportunity to respond pursuant to 19 C.F.R. § 351.301(c)(2). Hyundai Cmts. at
8–9. Defendant-Intervenor Wheatland Tube Company (“Wheatland”) did not file
2 NEXTEEL concurs with, refers to, and incorporates by reference Hyundai Steel’s and
Husteel’s arguments, and does not make any independent arguments. NEXTEEL Cmts. at 1–2.
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comments.
On March 12, 2021, Defendant United States (“Defendant”) filed
Defendant’s Motion, requesting that the court remand partially the Remand Results
for Commerce “to reconsider its approach of basing normal value on constructed
value and making certain particular market situation adjustments to the
respondents’ costs when calculating constructed value” “in light of Saha Thai II.”
Def. Mot. at 6, 5. Defendant asks the court to sustain Commerce’s determination
on remand that Hyundai Steel and Hyundai Steel (Pipe Division) are the same legal
entity. Def.’s Resp. Comments Remand Redetermination at 2, 4, ECF No. 57.
For the following reasons, the court sustains in part and remands in part the
Remand Results.
ISSUES PRESENTED
The court reviews the following issues:
1. Whether remand is warranted on the particular market situation issue;
and
2. Whether Commerce’s treatment of Hyundai Steel and Hyundai Steel
(Pipe Division) as a single entity is supported by substantial evidence.
BACKGROUND
The court presumes familiarity with the facts and procedural history as set
forth in its prior opinion and recounts the facts relevant to the court’s review of the
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Remand Results. See Husteel I, 44 CIT at __, 476 F. Supp. 3d at 1367–68.
In its request for review, Wheatland included Hyundai Steel (Pipe Division)
in its list of proposed respondents and did not separately include Hyundai Steel.
Wheatland’s Req. for Admin. Review at 3, PD 4 (Nov. 30, 2017) (“Wheatland’s
Request for Administrative Review” or “Wheatland Req.”). Hyundai Steel and
Hyundai Steel (Pipe Division) were identified separately in the Initiation of
Antidumping and Countervailing Duty Administrative Reviews (“Initiation
Notice”), 83 Fed. Reg. 1329, 1331 (Dep’t Commerce Jan. 11, 2018).
In the Final Results, Commerce assigned weighted-average dumping rates of
10.91% for Husteel, 8.14% for Hyundai Steel, and the all-others rate of 9.53% for
NEXTEEL and Hyundai Steel (Pipe Division). Final Results, 84 Fed. Reg. at
26,402. Commerce determined that a particular market situation existed in Korea
that distorted the cost of production of CWP based on the cumulative impact of
four factors, namely: (1) Korean subsidies of hot-rolled steel coil; (2) Korean
imports of hot-rolled steel coil from China; (3) strategic alliances between Korean
hot-rolled steel coil producers and Korean CWP producers; and (4) distortions in
the Korean electricity market. Final IDM at 6, 12–14. Commerce applied an
upward adjustment to the cost of production for purposes of the sales-below-cost
test based on subsidy rates of hot-rolled steel coil from POSCO v. United States,
43 CIT __, 378 F. Supp. 3d 1348 (2019). See Final IDM at 5, 18 (citing Certain
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Hot-Rolled Steel Flat Products From the Republic of Korea, 81 Fed. Reg. 53,439
(Dep’t Commerce Aug. 12, 2016) (countervailing duty investigation final
affirmative determination), amended by 81 Fed. Reg. 67,960 (Dep’t Commerce
Oct. 3, 2016)). Commerce conducted a sales-below-cost test and disregarded
certain below-cost home market sales. See Decision Mem. for the Prelim. Results
of Antidumping Duty Admin. Review: Circular Welded Non-Alloy Steel Pipe
from the Republic of Korea: 2016–2017 at 21, PD 135 (Dec. 3, 2018) (“Prelim.
DM”); Final IDM at 3 (noting that Commerce used the same calculation
methodology for the Final Results as explained in the Prelim. DM). Commerce
calculated normal value from the remaining above-cost home market sales for
mandatory respondents Hyundai Steel and Husteel. Prelim. DM at 21.
The court remanded the Final Results in Husteel I, concluding that
Commerce’s adjustment to the cost of production for purposes of the sales-below-
cost test pursuant to 19 U.S.C. § 1677b(b)(1) and Commerce’s cost-based
particular market situation determination under 19 U.S.C. § 1677b(e) were not in
accordance with the law because 19 U.S.C. § 1677b(e) applies only when
Commerce bases normal value on constructed value. Husteel I, 44 CIT at __, 476
F. Supp. 3d at 1373–74, 1377.
Commerce filed the Remand Results on December 17, 2020 under protest.
Remand Results at 1, 6. Commerce maintained its determination that a particular
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market situation distorted the cost of production. Id. at 7–8. Commerce did not
conduct the sales-below-cost test because, it explained, the sales-below-cost test
would not be “meaningful” without an adjustment to the cost of production to
account for the particular market situation. Id. at 7. Instead, Commerce made a
particular market situation determination under 19 U.S.C. § 1677(15)(C), stating
that the distorted cost of production prevented a proper comparison between home
market sales and export prices. Id. “[A]bsent the ability to determine whether the
comparison market sales were made within the ordinary course of trade,” on
remand Commerce based normal value on constructed value under 19 U.S.C.
§ 1677b(a)(4) for each respondent. Id. at 7, 9. In calculating constructed value,
Commerce made a cost-based particular market situation determination under 19
U.S.C. § 1677b(e) and adjusted the cost of production as an alternative calculation
methodology. Id. at 8–9.
JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction under 19 U.S.C. § 1516a(a)(2)(B)(iii) and 28
U.S.C. § 1581(c), which grant the court authority to review actions contesting the
final results of an administrative review of an antidumping duty order. The court
will uphold Commerce’s determinations unless they are unsupported by substantial
record evidence or are otherwise not in accordance with the law. 19 U.S.C.
§ 1516a(b)(1)(B)(i). The court reviews also determinations made on remand for
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compliance with the court’s remand order. Ad Hoc Shrimp Trade Action Comm.
v. United States, 38 CIT __, __, 992 F. Supp. 2d 1285, 1290 (2014), aff’d, 802
F.3d 1339 (Fed. Cir. 2015).
DISCUSSION
I. 	Partial Remand
Defendant asks the court to remand partially the Remand Results for
Commerce to reconsider its decisions to base normal value on constructed value
and make certain particular market situation adjustments to the cost of production
when calculating constructed value in light of the subsequent issuance of this
court’s December 21, 2020 Saha Thai II decision. Def. Mot. at 1–2, 6. Defendant
notes that Plaintiffs cited Saha Thai II in their respective comments to the Remand
Results. Id. at 4 (citing Husteel Cmts. at 2–6; Hyundai Cmts. at 4–7; SeAH Cmts.
at 4–6; NEXTEEL Cmts. at 1 (incorporating by reference Husteel’s and Hyundai
Steel’s arguments)). Defendant represents that the request is made in good faith
and out of a substantial and legitimate concern. Id. at 5. Hyundai Steel does not
oppose Defendant’s Motion. Resp. Consol. Pl., Hyundai Steel Company, Def.’s
Mot. Voluntary Remand at 1, ECF No. 60. No other party filed a response to
Defendant’s Motion.
The U.S. Court of Appeals for the Federal Circuit has recognized that an
agency may seek a remand if an intervening event outside of the agency’s control,
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such as the issuance of a new legal decision or the passage of new legislation, may
affect the validity of the agency action. SKF USA, Inc. v. United States, 254 F.3d
1022, 1028–29 (Fed. Cir. 2001) (citing Ethyl Corp. v. Browner, 989 F.2d 522, 524
(D.C. Cir. 1993) (“We commonly grant such motions, preferring to allow agencies
to cure their own [determinations] rather than [consuming] the courts’ and the
parties’ resources . . . .”)) (other citations omitted).
Plaintiffs and Defendant agree that the facts and Commerce’s actions and
explanations on remand in the instant case are analogous to the facts and
Commerce’s actions and explanations in Saha Thai II. See Husteel Cmts. at 2–6;
Hyundai Cmts. at 4; SeAH Cmts. at 4–5; Def. Mot. at 4. In Saha Thai II, which
the court issued after Commerce filed the Remand Results in this case, the court
discussed Commerce’s decision to base normal value on constructed value after
disregarding all of the respondents’ home market sales as outside the ordinary
course of trade under 19 U.S.C. § 1677(15)(C) without conducting the sales-
below-cost test because Commerce determined that the sales-below-cost test would
not be “meaningful” without an adjustment to the cost of production to account for
the alleged particular market situation. Saha Thai II, 44 CIT at __, 487 F. Supp. 3d
at 1330–35; see generally Saha Thai Steel Pipe Pub. Co. v. United States, 43 CIT
__, __, 422 F. Supp. 3d 1363, 1368–70 (2019) (concluding that an adjustment to
the cost of production for purposes of the sales-below-cost test is not in accordance
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with the law). The court concluded that Commerce’s exclusion of home market
sales without conducting the sales-below-cost test to affirmatively confirm that
sales were made below the cost of production as required by 19 U.S.C.
§ 1677b(b)(1) was not in accordance with the law. Saha Thai II, 44 CIT at __, 487
F. Supp. 3d at 1331–32. The court concluded further that the statute did not
authorize Commerce to exclude home market sales under 19 U.S.C. § 1677(15)(C)
when Commerce had conceded that “it had not considered whether a particular
market situation existed in the home market for the sale of the foreign like product
such that home market sales cannot be used as the basis for normal value.” Id. at
__, 487 F. Supp. 3d at 1332 (brackets and internal quotation marks omitted).
It is undisputed that Saha Thai II was issued after Commerce published the
Remand Results and that Commerce’s determinations that were discussed in Saha
Thai II are analogous to Commerce’s determinations in the Remand Results. The
court concludes that the issuance of Saha Thai II is an intervening event that may
affect the validity of Commerce’s Remand Results and remands Commerce’s
particular market situation determinations and adjustments for reconsideration.
II. 	Treatment of Hyundai Steel (Pipe Division)
In Husteel I, the court remanded Commerce’s treatment of Hyundai Steel
and Hyundai Steel (Pipe Division) as separate entities for reconsideration in light
of record documents appearing to support a determination that Hyundai Steel (Pipe
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Division) is a component of Hyundai Steel’s Ulsan factory, not a separate entity.
Husteel I, 44 CIT at __, 476 F. Supp. 3d at 1376–77. Commerce determined on
remand that the record did not support a distinction between Hyundai Steel and
Hyundai Steel (Pipe Division) and that they “should be treated as a single entity for
cash deposit and suspension of liquidation purposes upon the conclusion of
litigation.” Remand Results at 2, 12–13, 26. No party opposed.
On remand, Commerce determined that the record did not support separate
entity treatment of Hyundai Steel and Hyundai Steel (Pipe Division). Id. at 12.
Commerce observed that the headquarters address provided by Hyundai Steel and
the headquarters address for Hyundai Steel (Pipe Division) provided in
Wheatland’s Request for Administrative Review were the same address. Id. at 12
& n.46 (citing Wheatland Req. at 3, Hyundai’s Section A Questionnaire Resp. Ex.
A-3, PD 30–42 (Mar. 20, 2018)). Commerce noted also that Hyundai Steel
referred in its questionnaire responses to its “pipe division” in Ulsan. Id. at 12 &
n.48;3 see Hyundai’s Section B–D Questionnaire Resps. at D-28, PD 62 (Apr. 17,
2018)). Commerce determined from review of the record that Hyundai Steel and
Hyundai Steel (Pipe Division) were the same legal entity. Id. at 2, 12, 26.
3 Commerce cited Exhibit A-2 of Hyundai Steel’s Section A Questionnaire Response and pages
B-7 and D-25 of Hyundai Steel’s Section B, C, and D Questionnaire Responses, which were not
included in the Joint Appendix filed with the court. See Remand Results at 12 nn.47–48. The
court reviewed the documents cited by Commerce that were included in the Joint Appendix.
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Commerce’s determination that Hyundai Steel (Pipe Division) is a
component of Hyundai Steel is reasonable based on record evidence reflecting
Hyundai Steel’s references to its pipe division in Ulsan and the same address
provided for the headquarters of Hyundai Steel and Hyundai Steel (Pipe Division).
The court concludes that Commerce’s decision to recognize Hyundai Steel and
Hyundai Steel (Pipe Division) as a single entity and assign a single dumping
margin is reasonable and complies with the court’s order in Husteel I.
CONCLUSION
The court remands Commerce’s particular market situation determinations
and adjustments. The court sustains Commerce’s treatment of Hyundai Steel and
Hyundai Steel (Pipe Division) as a single entity.
Accordingly, it is hereby
ORDERED that Defendant’s Motion for Partial Voluntary Remand, ECF
No. 56, is granted; and it is further
ORDERED that the Remand Results are remanded for Commerce to
reconsider its particular market situation determinations and adjustments in light of
caselaw from this Court; and it is further
ORDERED that this action will proceed according to the following
schedule:
1. Commerce shall file the second remand results on or before June 30,
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2021;
2. Commerce shall file the administrative record on or before July 14, 2021;
3. Comments in opposition to the second remand results shall be filed on or
before August 13, 2021;
4. Comments in support of the second remand results shall be filed on or
before September 13, 2021; and
5. The joint appendix shall be filed on or before September 27, 2021.
/s/ Jennifer Choe-Groves
Jennifer Choe-Groves, Judge
Dated: 	May 3, 2021
New York, New York
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