United States Court of International Trade
Motion for Reconsideration Denied
In Elkay Manufacturing Company v. United States, et al., Court No. 13-176, Slip Op. 15-33 (April 20, 2015), Guangdong Dongyuan Kitchenware Industrial Company, Ltd.(“Dongyuan”), defendant-intervenor and consolidated plaintiff in this case, moved for reconsideration of the court’s December 22, 2014 decision remanding a determination of the International Trade Administration, U.S. Department of Commerce (“Commerce” or the “Department”) in an antidumping duty investigation. This case emerged from consolidation of challenges by Dongyuan, a producer/exporter of subject merchandise and Elkay Manufacturing Company (“Elkay”), domestic producer and petitioner, to the Department’s final determination (“Final Determination”) in the less-than-fair value investigation of drawn stainless steel sinks (“subject merchandise”) from the People’s Republic of China (“China” or the “PRC”). See Drawn Stainless Steel Sinks From the People’s Republic of China: Investigation, Final Determination, 78 Fed. Reg. 13,019 (Int’l Trade Admin. Feb. 26, 2013) (“Final Determination”); Drawn Stainless Steel Sinks from the People’s Republic of China: Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order, 78 Fed. Reg. 21,592 (Int’l Trade Admin. April 11, 2013) (“Order”). On December 22, 2014, the court issued an opinion and order remanding the Final Determination to Commerce for reconsideration. See Elkay Mfg. Co. v. United States, 38 CIT __, 34 F. Supp. 3d 1369 (2014) (“Elkay”). The court’s opinion and order in Elkay addressed two challenges to the Final Determination: (1) Dongyuan’s challenge to the Department’s use of import data from Thailand to determine a surrogate value for a factor of production (FOP), the cold-rolled stainless steel coil that Dongyuan used as the primary material in producing subject merchandise; and (2) Elkay’s challenge to the Department’s method of accounting for selling, general, and administrative (“SG&A”) labor expenses in the normal value determinations for Dongyuan and another individually-investigated producer/exporter.
In response to Dongyuan’s first objection, Commerce voluntarily requested a remand to place on the record additional data that would allow it to consider whether the Thai import data Commerce used to determine a surrogate value for the steel coil input were aberrational. The court thus ordered Commerce to “reconsider the use of surrogate information from Thailand to value cold-rolled stainless steel coil when determining the normal value of Dongyuan’s subject merchandise . . . .”As for the second, the court ordered Commerce to reconsider the method it used to account for SG&A labor expenses in the normal value calculations and, as necessary, to revise the antidumping duty margins for both the investigated and separate rate respondents. Dongyuan seeks reconsideration on both points ordered by the Court.
Here in its Reconsideration Motion, Dongyuan argued that Commerce had numerous opportunities to consider the Thai data, that Commerce should not reopen the record because it is untimely, and that including additional data on remand was in violation of Commerce’s regulations. The court held that there is nothing in the law or regulations to prevent Commerce from reopening the record on remand and considering additional data. Other arguments by Dongyuan were attempts to relitigate issues already decided before the court. Thus the court did not reconsider decisions made regarding the steel coil FOP issue.
As for the court’s determination asking Commerce to reconsider the method used for SG&A labor expenses, Dongyuan failed to identify any clear error or manifest injustice and simply offered argument as to why ILO Chapter 6 labor data should not be used. Yet this argument was premature. Dongyuan will have the opportunity to comment on the submission Commerce makes upon remand, including the Department’s method of addressing the treatment of SG&A labor expenses in the normal value calculation. If Commerce chooses to reconsider its choice of data with which to value the labor hours, Dongyuan will have the opportunity to comment on and make arguments concerning that specific aspect of the Department’s decision. Moreover, the record information submitted by Dongyuan in support of its Motion for Reconsideration did not show that the court erred in its statements concerning the absence from the record of source data underlying the Thailand’s National Statistics Office (“NSO”) labor rate, nor was there evidence that court statements regarding adjustments to SG&A/interest expense ratios were contrary to Commerce methodology and policy. For all these reasons, the court denied Dongyuan’s motion for reconsideration.
Court Sustained Remand Results
In Home Meridian International, Inc. et al. v. United States, et al., Court No. 11-325, Slip Op. 15-34, (April 22, 2015), the court sustained the Department of Commerce’s (“Commerce”) remand results. The Court of Appeals for the Federal Circuit (“CAFC”) in Home Meridian International, Inc. v. United States, 772 F.3d 1289 (Fed. Cir. 2014) vacated Commerce’s remand results filed pursuant to the Court of International Trade’s (“CIT”) decision in Home Meridian International, Inc. v. United States, 922 F. Supp. 2d 1366 (CIT 2013) (“Home Meridian II”), and directed the CIT to reinstate Commerce’s valuation in the Final Results of Redetermination Pursuant to Court Order, ECF No. 96 (“First Remand Results”). Because at least one issue decided after the First Remand Results was not appealed, the court inquired of the parties as to the proper procedure to implement the CAFC’s ruling. The parties agreed that a remand was warranted in order to comply with the spirit of the CAFC’s mandate while maintaining the determinations sustained by the CIT on the issue not appealed to the CAFC. Because no party objected to the remand results and process by which to comply with the CAFC’s order, the court sustained the results.
Fourth Remand Results Sustained
In Mid Continental Nail Corporation v. United States and Target Corporation, Court No. 10-427, Slip Op. 15-35 (April 22, 2015), the court sustained the Fourth Remand Results concerning a redetermination of scope ruling on nails within toolkits imported by Defendant-Intervenor, Target Corporation. See Final Results of Redetermination Pursuant to Remand Order, ECF No. 123 (Jan. 21, 2015) (“Fourth Remand Results”). In the Fourth Remand Results Commerce “examine[d] the nails themselves, without regard to the toolkits,” and therefore concluded that the nails were within the scope of the antidumping duty order on nails from the People’s Republic of China. Because Target had not exhausted its administrative remedies in making objections to such results, the court did not entertain Target’s comments. As there were no further objections from parties procedurally entitled, the court found substantial evidence and sustained the results.
CVD Determination Remanded
In Borusan Mannesmann Boru Sanayi ve Ticaret A.S. and Borusan Istikbal Ticaret v. United States et al., Court No. 14-214, Slip Op. 15-36 (April 22, 2015), the court reviewed a challenge to Certain Oil CountryTubular Goods From the Republic of Turkey, 79 Fed. Reg. 41964 (July 18, 2014), and accompanying issues and decision memorandum (July 10, 2014) (collectively“Final Determination”), a final affirmative countervailing duty (“CVD”) investigation determination conducted by the International Trade Administration, U.S. Department of Commerce (“Commerce”). The period of investigation (“POI”) was January 1, 2012, through December 31, 2012. The plaintiffs Borusan Mannesmann Boru Sanayi ve Ticaret A.S. and Borusan Istikbal Ticaret (together “Borusan”) challenged these determinations: (1) that Erdemir and its subsidiary Isdemir (Eregli Demir ve Celik Fabrikalari T.A.S. and Iskenderun Iron & Steel Works Co., (collectively as “Erdemir and Isdemir”)), suppliers to Borusan of the hot rolled steel (“HRS”) input, are statutory “authorities”; (2)that in measuring the “benefit” Borusan received under the statute, the level of government involvement in the Turkish HRS market is so significant that the price of HRS sold in Turkey is significantly distorted, thereby warranting rejection of Borusan’s “tier-one” purchases of HRS from domestic and import suppliers; (3) the use of a “tier-two” monthly weighted-average world market prices for HRS derived from the Global Trade Atlas (“GTA”) maintained by Global Trade Information Services as benchmarks to measure the benefit; (4) that HRS was provided for less than adequate remuneration (“LTAR”) to a “limited” number of industries as a matter of fact and was therefore a “specific” subsidy; (5) the application of facts available with an adverse inference for failing to provide information about HRS purchases with respect to two of Borusan’s pipe manufacturing facilities in Turkey in two different questionnaires.
As for the authority finding, Commerce determined that the Turkish government controls Erdemir and Isdemir through its ownership and control of the military pension fund OYAK Ordu Yardimlasma Kurum (“OYAK”) and through other means of control. Commerce explained that under its practice, majority-ownership of an entity by the government creates a rebuttable presumption of government control over that entity. Because Borusan asked the court to reweigh evidence, the court does not have power to do so. While Borusan had not provided information that counters a substantial evidence finding, the court asked on remand to have Commerce define the term “meaningful control” for purposes of finding Edemire and Isdemir to be authorities.
As to measuring the benefit Borusan received from suppliers Edemir and Isdemir, Borusan contested Commerce’s disregard of the information Borusan submitted in support of tier one pricing. In making such an assessment, Commerce resorted to tier two pricing, which was a comparison of the government price to world market prices, after concluding that the Turkish HRS market was “significantly distorted” by the Turkish government’s “substantial portion” involvement in it and therefore there were no useable market-determined prices for HRS in Turkey. Thus, Commerce declined to use Borusan prices of HRS in Turkey and resorted to two tier pricing. What Commerce did not explain was how the Turkish government’s “substantial portion” involvement translates factually to significant distortion to avoid use of tier one pricing. The court therefore asked for further explanation on this matter.
Commerce’s selection of a benchmark to measure the benefit Borusan received from the HRS subsidy was also at issue. Commerce calculated a data set of weighted-average prices derived from Global Trade Information Services’ Global Trade Atlas (“GTA”) for each month of the period of investigation, with allowances for import duties, Value Added Tax (VAT), and freight expenses. Borusan submitted HRS prices reported by “Steel Business Briefing” (“SBB”) that pertained to a series of domestic, ex-works prices from South Europe and also Black Sea Export free-on-board prices. The court asked Commerce to explain its GTA selection with respect to the prices of the not-to-Turkey exports of those countries that also actually exported to Turkey during the POI. The court also asked for further explanation as to “factors affecting comparability in its selection of the benchmark” – comparability of the shipping costs to which a typical Turkish purchaser (or purchasers) would agree, and the inclusion of inland freight benchmark adjustment.
As for LTAR, the applicable statute directs Commerce to consider the “actual number of recipients” either on an enterprise basis or an industry basis. Commerce did so, including information on eight separate industries, and it was not the court’s function to substitute a different “fairly conflicting” view of the record.
As for findings of adverse inferences, the court held that Commerce abused its discretion by requiring HRS purchase information from factories that produced non-subject merchandise. On remand, Commerce must “clarify and persuade that the HRS purchase information pertaining to the Halkali and Izmit plants was ‘necessary’” where it appears on the record that Borusan’s response was not the type of “willful” non-compliance that would merit imposition of an adverse inference. For all these reasons, the Commerce’s findings were remanded.