United States Court of International Trade
Sustained Determination in Hot-Rolled Steel Case
Before the Court in Severstal Exp. GmbH, et. al. v. United States, Slip Op. 19-39, Court No. 17-00209 (March 27, 2019) was plaintiffs’ challenge to Commerce’s application of the adverse facts available (“AFA”) against the plaintiff in the administrative review of the antidumping duty order on hot-rolled steel from the Russian Federation. Plaintiffs argued “that Commerce wrongfully (1) denied an extension request and (2) rejected its revised databases, applied facts otherwise available, and used total AFA with an adverse inference.” Id. at 2. For the following reasons, the Court sustained Commerce’s use of AFA.
In regards to the extension request issue, the Court said plaintiff argued “that despite being aggrieved by Commerce’s handling of its April 14 extension request, it timely, completely, and accurately provided all information requested.” Id. at 4. This shows that there really was no disadvantage. The Court said plaintiff had admitted “it left itself only two days to prepare,” and thus sustained Commerce on the issue. Turning to the AFA issue, “Commerce follows a two-step process to apply facts available with an adverse inference. First, Commerce must use facts otherwise available to fill gaps in the record if, among other things, an interested party withholds information requested by Commerce, fails to provide such information in the form and manner requested, significantly impedes the proceeding, or provides information that cannot be verified. Second, Commerce may apply an adverse inference in selecting among the facts available if an interested party fails to cooperate to the best of its ability.” Id. at 6. Commerce argued that discrepancies in plaintiff’s questionnaires were discovered regarding reported home market sales. To address the issue, Commerce issued further questionnaires. In answering the additional questionnaires “Severstal failed to inform Commerce that it had made additional, unrequested changes by changing all CONNUMs in the home market sales databases” and to the U.S. sales database, Commerce rejected the data and applied the AFA Id. at 9. The Court said “Commerce reasonably explained its application of facts otherwise available and an adverse inference against Severstal.” Id. at 11.
Pet Carriers are Classified under Heading 6307
Before the Court in Quaker Pet Grp., LLC v. United States, Slip Op. 19-40, Court No. 13-00393 (March 29, 2019) was the question of the tariff classification of plaintiff’s pet carrier products. The court had previously held that the pet carriers could not be classified under HTSUS heading 4202, which comprises containers that organize, store, protect, and carry various items, because pets are living beings. The parties continued discovery, to enable to Court to decide if the pet carriers were properly classifiable under HTSUS 6307, a provision containing made up articles of textile that are not included under another tariff category, or some other HTSUS heading. For the following reasons the Court held that Quaker Pet’s carriers should be classified under HTSUS 6307.
“Tariff classification is determined according to the General Rules of Interpretation (“GRIs”), and, if applicable, the Additional U.S. Rules of Interpretation,” and are applied in numerical order. Id. at 3. “Under GRI 1, classification shall be determined according to the terms of the headings and any relative section or chapter notes.” Id. In interpreting the Section Notes for Chapter 67, the Court determined “for merchandise to be classified under heading 6307, it must be an assembled textile article that fits under no other HTSUS heading.” Id. at 10. The Court determined that the merchandise could not be classified under competing Chapter 4201 as saddlery and harness because the “products do not share the unifying characteristic of fastening to the animal that the imports included under heading 4201 share,” in accordance with common meaning of the phrase “saddlery and harness.” Id. at 12. Therefore, the Court classified the goods under HTSUS 6307 because they did fit in any other HTSUS heading.
Commerce Decision Regarding Welded Carbon Steel Pipe Sustained and Remanded in Part
Before the Court in Tosçelik Profil ve Sac Endüstrisi A.S. v. United States et. al., Slip Op. 19-41, Court No. 17-00018 were Commerce’s remand redeterminations in the 2014–2015 administrative review of the antidumping duty order on welded carbon steel standard pipe and tube products from Turkey. The court had previously remanded the Final Results for Commerce to reconsider its calculation of Tosçelik’s duty drawback adjustment and its grant of a circumstances of sale adjustment to Tosçelik for warehousing expenses. For the following reasons the Court sustained Commerce in part and remanded in part.
In regards to the duty drawback adjustment, Toscelik challenged Commerce’s subsequent circumstances of sale adjustment, and argued that increase to normal value nullifies duty drawback adjustment. Commerce continued to rely on precedent which the Court specifically determined was misinterpreted and misplaced. As such, the Court remanded the issue. The next issue was Commerce’s grant to Tosçelik of a circumstances of sale adjustment for Tosçelik’s warehousing expenses. The Court said “Tosçelik’s requested adjustment was based on data reflecting the greatest level of detail maintained in Tosçelik’s accounting records. The accounting records showed the total quantity of goods shipped at the warehouse.” Id. at 8. The Court also noted that “Tosçelik removed scrap generation expenses that related exclusively to cut-to-length services, which do not qualify as warehousing expenses, from its requested adjustment.” Id. As such, the determination was based on substantial evidence and was sustained by the Court.
United States District Court
District Court Denies Summary Judgment in Antidumping Duty Dispute
A dispute between a New Jersey-based importer and a German supplier of glycine regarding the assessment of antidumping duties cannot be resolved by summary judgment and will proceed to trial, according to a recent decision of the United States District Court for the District of New Jersey.
In Pharm-Rx Corp. v. B.M.P., Bulk Meds. & Pharms. Prod. GMBH, 2019 U.S. Dist. LEXIS 54931 (March 31, 2019), Pharm-Rx sued its German Supplier B.M.P. for breach of contract, misrepresentation, Lanham Act violations and other claims with respect to shipments of glycine that were supplied to it. The glycine was represented to be a product of Germany, and B.M.P. held itself out to be a manufacturer, the plaintiff contends. However, Customs and Border Protection questioned the origin of the glycine and subsequently determined it to be of Chinese origin, assessing antidumping duties in the amount of 479.35 percent ad valorem – more than $700,000. Pharm-Rx paid the duties, then sued B.M.P. for recompense.
BMP moved for summary judgment, alleging that “choice of forum” clause in the contract between the two companies required an action to be brought in Germany and further alleging that there was no basis to hold it liable for misrepresentation of the origin of the product. The Court, per Judge Katherine Hayden, disagreed. She noted that B.M.P., in seeking summary judgment on the forum choice issue, had completely failed to follow the Court’s rules for supporting a summary judgment motion with factual allegations, leaving it to the Court to pick through a thicket of facts in an attempt to make a determination. B.M.P. had failed to meet its burden, so that aspect of the action could not be resolved on summary judgment.
With respect to the question of misrepresentation, the Court noted that the two parties had conflicting views of what actually occurred in their negotiations, and in discussions after CBP questioned the origin of the glycine. It appears that at one point, B.M.P. counseled the plaintiff to represent the glycine as a product of India.
Holding that the parties’ motion established contested issues of fact requiring trial, the Court denied the motion for summary judgment. The case will now proceed to trial.