Tosçelik Profil ve Sac Endüstrisi A.S. v. United States , 256 F. Supp. 3d 1260 ( 2017 )

Slip Op. 17-107
UNITED STATES COURT OF INTERNATIONAL TRADE
TOSÇELIK PROFIL VE SAC
ENDÜSTRISI A.ù., AND TOSYALI DIS
TICARET A.ù., CAYIROVA BORU ---
SANAYI VE TICARET A.S./YUCEL BORU
ITHALAT-IHRACAT VE PAZARLAMA
A.S.,
Plaintiffs, Before: Leo M. Gordon, Judge
Consol. Court No. 15-00339
v.
UNITED STATES,
Defendant.
OPINION AND ORDER
[Final determination remanded.]
Dated: August 22, 2017
David L. Simon, Law Offices of David L. Simon of Washington, DC, argued for
Plaintiffs Tosçelik Profil ve Sac Endüstrisi A.ù. and Tosyali Dis Ticaret A.ù.; and Cayirova
Boru Sanayi ve Ticaret A.S./Yucel Boru Ithalat-Ihracat ve Pazarlama A.S. With him on
the briefs was Mark B. Lehnardt, Law Offices of Mark B. Lehnardt, of Washington, DC.
Elizabeth A. Speck, Senior Trial Counsel, Commercial Litigation Branch, U.S.
Department of Justice of Washington, DC, for Defendant United States, argued for
Defendant. With her on the brief were Chad A. Readler, Acting Assistant Attorney
General, Jeanne E. Davidson, Director, Claudia Burke, Assistant Director. Of counsel
was Lydia C. Pardini, on the brief, and James H. Ahrens II, Attorneys, Office of Chief
Counsel for Trade Enforcement and Compliance of Washington, DC.
Roger B. Schagrin, Paul W. Jameson, and Jordan C. Kahn, Schagrin Associates
of Washington, DC, for Defendant-Intervenor’s Stupp Corp., TMK IPSCO, and Welspun
Tubular LLC USA.
Alan H. Price and Robert E. DeFrancesco, III, Wiley Rein, LLP of Washington, DC
for Defendant-Intervenor Maverick Tube Corp.
Consol. Court No. 15-00339 Page 2
Gordon, Judge: This action involves the U.S. Department of Commerce
(“Commerce”) antidumping duty investigation covering Welded Line Pipe from the
Republic of Korea and the Republic of Turkey. See Welded Line Pipe From the Republic
of Turkey, 80 Fed. Reg. 61,362 (Dep’t of Commerce Oct. 13, 2015) (final determination
of sales at less than fair value) (Final Determination); see also Issues and Decisions
Memorandum for Welded Line Pipe from the Republic of Turkey, A-489-822 (Dep’t of
Commerce Oct. 13, 2015), available at
http://enforcement.trade.gov/frn/summary/turkey/2015-25990-01.pdf (last visited this
date) (“Decision Memorandum”).
Before the court is the USCIT Rule 56.2 motion for judgment on the agency record
filed by Plaintiffs Cayirova Boru Sanayi ve Ticaret A.S./Yucel Boru Ithalat-Ihracat ve
Pazarlama A.S. (collectively, “Yucel”) and Toscelik Profil ve Sac Endustrisi A.S./Tosyali
Dis Ticaret A.S. (collectively, “Toscelik”). Plaintiffs Yucel and Toscelick challenge
(1) Commerce’s treatment of Plaintiffs’ duty drawback claims; and Yucel also challenges
(2) Commerce’s date of sale determination. For the reasons that follow, the court
remands the duty drawback determination for further consideration, and sustains
Commerce’s date of sale determination.
I. Standard of Review
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
Consol. Court No. 15-00339 Page 3
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). 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 presented by the whole record.” 8A West’s Fed.
Forms, National Courts § 3.6 (5th ed. 2017).
II. Discussion
A. Duty Drawback
Commerce requests an unopposed remand to address the issue of duty drawback.
Def.’s Resp.in Opp’n to Pl.s’ Mot. for J. Upon the Agency R., 14-17, ECF No. 43. As it is
unopposed, the court will grant the request. Accord SKF USA Inc. v. United States,
254 F.3d 1022, 1029-30 (Fed. Cir. 2001) (reviewing contested voluntary remand request)
Consol. Court No. 15-00339 Page 4
(“Where there is no step one Chevron issue, we believe a remand to the agency is
required, absent the most unusual circumstances verging on bad faith”) (emphasis
added).
B. Date of Sale
Yucel challenges Commerce’s use of its regulatory presumptive invoice date for
the date of sale. The date of sale issue is one with which the court is familiar. See Yieh
Phui Enter. Co. v. United States, 35 CIT ___, ___, 791 F. Supp. 2d 1319, 1322-24 (2011)
(describing in detail Commerce’s date of sale regulation); CC Metals and Alloys, LLC v.
United States, 40 CIT ___, ___, 145 F. Supp. 3d 1299, 1305 (2016).
Commerce “normally” uses invoice date as the date of sale. 19 C.F.R. § 351.401(i).
Commerce “may,” however, “use a date other than the date of invoice if [Commerce] is
satisfied that a different date better reflects the date on which the exporter or producer
establishes the material terms of sale.” Id. An interested party proposing something other
than invoice date must demonstrate that the material terms of sale were “firmly” and
“finally” established on its proposed date of sale. Antidumping Duties; Countervailing
Duties: Final Rule, 62 Fed. Reg. 27,296, 27,348–49 (Dep't of Commerce May 19, 1997)
(“Preamble”); see generally Yieh Phui Enter. Co. v. United States, 35 C.I.T. ___, ___,
791 F. Supp. 2d 1319, 1322–24 (2011).
Yucel seems to believe that an interested party need only create some doubt about
when material terms are set, or raise the issue of the proper date of sale, which then
triggers some sort of burden on Commerce to then independently review each and every
sale to determine when material terms are set. See Yucel Br. at 12-13 (citing Nucor Corp.
Consol. Court No. 15-00339 Page 5
v. United States, 33 CIT 207, 612 F. Supp. 2d 1264 (2009) (“Nucor”)).1 On a practical
level, this strikes the court as naïve. One wonders how Commerce could accomplish that
across all reviews or even during an individual review covering hundreds or thousands of
sales. And date of sale is just one small component in an otherwise complicated
proceeding. Here, for example, Commerce penned a 50-page Decision Memorandum
addressing 20 issues. Commerce’s date of sale regulation has efficiently avoided the
impracticality of Yucel’s approach for 20 years by squarely placing the burden on
interested parties challenging the presumptive invoice date, to remove any doubt about
when material terms are firmly and finally set, so that a reasonable mind has one, and
only one, date of sale choice. See Allied Tube & Conduit Corp. v. United States, 24 CIT
1357, 1371–72, 127 F. Supp. 2d 207, 220 (2000) (“Plaintiff, therefore, must demonstrate
that it presented Commerce with evidence of sufficient weight and authority as to justify
its [date of sale] as the only reasonable outcome.”); Yieh Phui Enter. Co. v. United States,
35 CIT ___, ___, 791 F. Supp. 2d 1319, 1322-24 (2011); CC Metals and Alloys, LLC v.
United States, 40 CIT ___, ___, 145 F. Supp. 3d 1299, 1305 (2016).
Suffice it to say, Yucel did not do that here. During the administrative proceeding
Yucel argued that contract date was the date of sale for its two U.S. sales. Decision
Memorandum at 21-22. Problematically, one of those sales had terms (involving the
timing of the letter of credit and delivery date) that varied after contract date. Id. at 24.
1
The court notes that Yucel fails to cite or discuss Nucor’s subsequent history, which the
court in Yieh Phui explained leaves Nucor with no persuasive weight. Yieh Phui, 35 CIT
at ___, 791 F. Supp. 2d at 1324–25 (2011).
Consol. Court No. 15-00339 Page 6
Petitioners highlighted these differences, and using Yucel’s own arguments touting the
importance of the opening of the letter of credit, explained to Commerce that material
terms varied after contract date. Id. at 22-23. By emphasizing the opening of the letter of
credit as the moment at which both parties are bound to perform, Yucel unwittingly
undermined its argument that the earlier contract date was the effective date of sale.
Petitioners seized on this narrative, highlighting the variance in the letter of credit opening
date specified in the contract with when it actually occurred. Commerce reasonably
concurred with petitioners’ argument that Yucel had failed to establish contract date as
the date on which material terms were firmly and finally fixed. Id. at 24-25. Despite the
apparent reasonableness of this determination, Yucel nevertheless argues that
Commerce erred and should have conducted further analyses as to whether contract date
might have been the date of sale, Conf. Br. in Supp. of Mot. for J. on Agency Rec., ECF.
No. 33 (May 27, 2016) (“Yucel Br.”) at 12-17, or at least determined date of sale per
transaction and used contract date for one of the sales (an argument Yucel failed to
exhaust before Commerce), id. at 17-18, or that Commerce should have considered
whether the opening of the letter of credit might have been the correct date of sale, id.
at 16 n.5. Yucel also makes an argument about fluctuating exchange rates that they failed
to exhaust before Commerce. Id. at 18-21; see also Def.’s Resp. in Opp’n to Pls.’ Mot. for
J. on Agency R., ECF. No. 43 (Sept. 23, 2016) at 11, 13-14; see also Scheduling Order
at 3, ECF No. 27 (Mar. 10, 2016) (“please make sure you have exhausted your
Consol. Court No. 15-00339 Page 7
administrative remedies by presenting your arguments to the agency in the first
instance.”).
Yucel itself is apparently uncertain about when material terms were firmly and
finally fixed, arguing to the court that Commerce should have considered whether the
opening of the letter of credit was a suitable date of sale (despite no interested party
arguing for that date of sale at the administrative level). Yucel Br. at 16 n.5. Conceding
that there may be multiple possible dates of sale is a curious stance given a regulatory
standard that requires Yucel to have established one, and only one, date of sale.
Suggesting multiple possibilities, as Yucel does, just confirms for the court the abiding
wisdom of a date of sale regulation that defaults to invoice date precisely because this
sort of uncertainty and complexity is prevalent in most industries. Preamble, 62 Fed. Reg.
at 27,348–49 (“[I]n most industries, the negotiation of a sale can be a complex
process. . . . In fact, it is not uncommon for the buyer and seller themselves to disagree
about the exact date on which the terms became final. However, for them, this theoretical
date usually has little, if any, relevance. From their perspective, the relevant issue is that
the terms be fixed when the seller demands payment. . . .”).
Yucel argues that even if Commerce correctly determined that Yucel failed to
establish that contract date was the date of sale for the transaction with changing terms,
Commerce nevertheless should have used contract date for the other transaction in which
all terms remained the same. Problematically for Yucel, during the proceeding Yucel
argued that Commerce should apply one date of sale (contract date) to both of its
transactions. Yucel did not argue or suggest that Commerce should assign date of sale
Consol. Court No. 15-00339 Page 8
for its U.S. sales on a per transaction basis. The time to do so was before Commerce,
and make whatever arguments supported Yucel’s proposed per transaction approach.
Commerce could then have addressed those arguments. Because Yucel did not raise the
issue, Commerce never considered it, and the issue is not in a posture that the court can
review. This is Yucel’s fault, having failed to exhaust its administrative remedies. See
28 U.S.C. 2637(d); Boomerang Tube LLC v. United States, Nos. 2016-1554, 2016-1561,
___ F.3d ___ (Fed. Cir. May 8, 2017); Corus Staal BV v. United States, 502 F.3d 1370,
1379 (Fed. Cir. 2007). Yucel also failed to present its arguments about the fluctuating
exchange rate to Commerce in the first instance, and failed to exhaust these arguments
as well. Id.
To prevail before the court, Yucel needed to demonstrate that it presented
Commerce with one and only one reasonable choice for date of sale—that the material
terms were firmly and finally fixed on its proposed contract date. Yucel failed to do that
here, accordingly, the court sustains Commerce’s date of sale determination.
III. Conclusion
In accordance with the foregoing, it is hereby
ORDERED that the Final Determination is sustained as to Commerce’s date of
sale determination; it is further
ORDERED that this action is remanded to Commerce to reconsider its treatment
of duty drawback; it is further
ORDERED that Commerce shall file its remand results on or before November 6,
2017; and it is further
Consol. Court No. 15-00339 Page 9
ORDERED that, if applicable, the parties shall file a proposed scheduling order
with page/word limits for comments on the remand results no later than seven days after
Commerce files its remand results with the court.
/s/ Leo M. Gordon
Judge Leo M. Gordon
Dated: August 22, 2017
New York, New York