Stupp Corporation v. United States ( 2019 )

Slip Op. 19-30
UNITED STATES COURT OF INTERNATIONAL TRADE
STUPP CORPORATION ET AL.,
Plaintiffs and Consolidated
Plaintiffs,
and
MAVERICK TUBE CORPORATION ET AL.,
Plaintiff-Intervenor and
Consolidated Plaintiff-
Intervenors, Before: Claire R. Kelly, Judge
v. Consol. Court No. 15-00334
UNITED STATES,
Defendant,
and
SEAH STEEL CORPORATION ET AL.,
Defendant-Intervenors and
Consolidated Defendant-
Intervenors.
OPINION AND ORDER
[Denying SeAH Steel Corporation’s motion for reconsideration.]
Dated: March 7, 2019
Jeffrey Michael Winton, Law Office of Jeffrey M. Winton PLLC, of Washington, DC, for
defendant-intervenor, consolidated plaintiff, and consolidated defendant-intervenor SeAH
Steel Corporation.
Elizabeth Anne Speck, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, DC, for defendant. With her on the brief were
Consol. Court No. 15-00334 Page 2
Claudia Burke, Assistant Director, Jeanne E. Davidson, Director, and Joseph H. Hunt,
Assistant Attorney General. Of Counsel on the brief was Reza Karamloo, Attorney, Office
of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of
Commerce, of Washington, DC.
Kelly, Judge: Before the court is a motion for reconsideration filed by SeAH Steel
Corporation (“SeAH”)1 pursuant to Rule 59(e) of the Rules of the U.S. Court of
International Trade (“USCIT”).2 See [SeAH’s] Mot. [ ] Reconsideration Ct.’s Jan. 8, 2019
Order, Jan. 28, 2019, ECF No. 127 (“SeAH’s Mot.”). SeAH requests that the court
reconsider its decision sustaining the U.S. Department of Commerce’s (“Department” or
“Commerce”) application of its differential pricing analysis and revise Slip Opinion 19-2,
dated January 8, 2019, accordingly. See Stupp Corp. v. United States, 43 CIT __, __,
Slip Op. 19-2 at 7–11, 20–23, 34 (Jan. 8, 2019) (“Stupp I”). In Stupp I, the court addressed
various challenges to the final determination in the less than fair value (“LTFV”)
investigation of imports of welded line pipe from the Republic of Korea (“Korea”) for the
period October 1, 2013, through September 30, 2014, which resulted in an antidumping
duty order (“ADD”). See Welded Line Pipe From [Korea], 80 Fed. Reg. 61,366 (Dep’t
Commerce Oct. 13, 2015) (final determination of sales at [LTFV]), as amended by Welded
Line Pipe From [Korea], 80 Fed. Reg. 69,637 (Dep’t Commerce Nov. 10, 2015) (amended
final determination of sales at [LTFV]) and accompanying Issues & Decision Mem. for the
1 SeAH is the defendant-intervenor, consolidated plaintiff, and consolidated defendant-intervenor
in this consolidated action.
2Pursuant to USCIT R. 59(e), a party may file motion for reconsideration after judgment is
entered. No judgment has been entered in this action. However, the court did, in Stupp I, sustain
Commerce’s application of its differential pricing analysis and its decision is final as to that issue.
See Stupp I, 43 CIT at __, Slip Op. 19-2 at 12–20, 34. The court will therefore rule on SeAH’s
motion.
Consol. Court No. 15-00334 Page 3
Final Affirmative Determination in the [LTFV] Investigation of Welded Line Pipe from
[Korea], A-580-876, (Oct. 5, 2015), ECF No. 30-3 (“Final Decision Memo”); Welded Line
Pipe From [Korea] and the Republic of Turkey, 80 Fed. Reg. 75,056, 75,057 (Dep’t
Commerce Dec. 1, 2015) ([ADD] orders). Specifically, in Stupp I, the court denied SeAH’s
three challenges to Commerce’s final determination. See Stupp I, 43 CIT at __, Slip Op.
19-2 at 7–23, 34; see generally Br. SeAH [ ] Supp. Rule 56.2 Mot. J. Agency R. at 26–50,
July 5, 2016, ECF No. 40 (“SeAH’s Moving Br.”). Relevant here, in Stupp I, the court held
that Commerce’s application of its differential pricing analysis was in accordance with law
and supported by substantial evidence. See Stupp I, 43 CIT at __, Slip Op. 19-2 at 12–
20, 34.3 SeAH contends that Commerce’s differential pricing analysis is merely a policy,
necessitating Commerce to, on a case-by-case basis, justify and support with substantial
evidence, “any factual findings embodied in the ‘Differential Pricing Analysis.’” SeAH’s
Mot. at 4. Defendant contends that SeAH failed to demonstrate that the court’s
determination was the result of “manifest error” and should be denied. See Def.’s Resp.
Opp’n Def.-Intervenor [SeAH’s] Mot. Reconsideration at 4–5, Feb. 15, 2019, ECF No.
130. For the reasons that follow, SeAH’s motion is denied.
3The court also sustained Commerce’s decision to reject portions of SeAH’s case brief to the
agency and calculation of credit expenses on SeAH’s back-to-back sales. See Stupp I, 43 CIT at
__, Slip Op. 19-2 at 7–11, 20–23, 34. SeAH’s motion for reconsideration does not request the
court reconsider and revise its determinations as to those two challenges.
Consol. Court No. 15-00334 Page 4
JURISDICTION AND STANDARD OF REVIEW
The Court has jurisdiction pursuant to section 516A(a)(2)(B)(i) of the Tariff Act of
1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(i) (2012)4 and 28 U.S.C. § 1581(c) (2012),
which grant the Court authority to review actions contesting the final determination in an
investigation of an antidumping duty order.
A motion for reconsideration rests within the sound discretion of the court. Yuba
Natural Res., Inc. v. United States, 904 F.2d 1577, 1583 (Fed. Cir. 1990). The court will
grant such a motion “to address a fundamental or significant flaw in the original
proceeding.” USEC, Inc. v. United States, 25 CIT 229, 230, 138 F. Supp. 2d 1335, 1336–
37 (2001) (citations omitted).
DISCUSSION
“[A] motion for reconsideration serves as ‘a mechanism to correct a significant flaw
in the original judgment’ by directing the court to review material points of law or fact
previously overlooked[.]” RHI Refractories Liaoning Co. v. United States, 35 CIT __, __,
752 F. Supp. 2d 1377, 1380 (2011) (quoting United States v. UPS Customhouse
Brokerage, Inc., 34 CIT 745, 748, 714 F. Supp. 2d 1296, 1301 (2010)). Although a court
may exercise its “discretion ‘to rectify a significant flaw in the conduct of the original
proceeding, a court should not disturb its prior decision unless it is manifestly erroneous.’”
Marvin Furniture (Shanghai) Co. v. United States, 37 CIT __, __, 899 F. Supp. 2d 1352,
1353 (2013) (quoting Dorsey v. U.S. Dep’t Agric., 32 CIT 270, 270 (2008)). Grounds for
4Further 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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finding a prior decision to be “manifestly erroneous” include “an intervening change in the
controlling law, the availability of new evidence, the need to correct a clear factual or legal
error, or the need to prevent manifest injustice.” Ford Motor Co. v. United States, 30 CIT
1587, 1588 (2006). A motion for reconsideration, however, is not an opportunity for the
losing party “to re-litigate the case or present arguments it previously raised.” Totes–
Isotoner Corp. v. United States, 32 CIT 1172, 1173, 580 F. Supp. 2d 1371, 1374 (2008).
At the root of SeAH’s motion is its belief that the court transgressed the principles
of administrative law by allowing Commerce to apply its differential pricing analysis
without necessitating that Commerce support, with substantial evidence, the “factual
findings” that underlay the analysis. See SeAH’s Mot. at 1–2. SeAH contends that the
court abandoned the substantial evidence standard when evaluating whether the
individual components of Commerce’s differential pricing analysis can establish the
existence of significant price differences constituting a pattern.5 SeAH’s motion for
5 In arguing that Stupp I applied the incorrect standard of review, SeAH reiterates the rationale it
relied upon in its moving brief and which the court addressed in Stupp I. Specifically, that
Commerce must support with substantial evidence its reliance on the “factual findings” imbedded
within Commerce’s differential pricing analysis. These “factual findings,” SeAH contends, include
the differential pricing analysis’ use of effect size, Cohen’s d, and various numerical thresholds.
Compare SeAH’s Mot. at 6–7, with SeAH’s Moving Br. at 27. The court addressed this argument
in Stupp I:
SeAH argues that because Commerce’s differential pricing analysis is not the
result of formal rule making, Commerce must justify its use on a case-by-case
basis. See SeAH’s [Moving] Br. at 26–32. Commerce has explained the
reasonableness of the specific thresholds it employs in its differential pricing
analysis. See Final Decision Memo at 22–25. The reasonableness of the steps
underlying the analysis, as applied by Commerce, has been addressed by this
Court and upheld by the U.S. Court of Appeals for the Federal Circuit. See Apex
(footnote continued)
Consol. Court No. 15-00334 Page 6
reconsideration demonstrates both a misreading of Stupp I and a misunderstanding of
how this Court reviews methodologies Commerce develops in response to meeting its
statutory obligations.
The relevant statute provides that Commerce may rely on the Average-to-
Transaction (“A-to-T”) methodology if
(i) there is a pattern of export prices (or constructed export prices) for
comparable merchandise that differ significantly among purchasers,
regions, or periods of time, and
(ii) [Commerce] explains why such differences cannot be taken into account
using a method described in paragraph (1)(A)(i) [(Average-to-Average)] or
[(1)(A)(i)](ii) [(Transaction-to-Transaction)].
19 U.S.C. § 1677f-1(d)(1)(B)(i)–(ii). As the court explained in Tri Union, neither the statute
nor Commerce’s regulations direct Commerce on how it is to determine whether the two
statutory preconditions have been met. Tri Union Frozen Prods., Inc. v. United States,
40 CIT __, __, 163 F. Supp. 3d 1255, 1297–98 (2016), aff’d, 741 F. App’x 801 (Fed. Cir.
2018) (per curiam). As a result, Commerce developed a methodology, which it calls the
differential pricing analysis, to “evaluate whether the conditions for the A-T exception are
met[.]” Apex Frozen Foods Private Ltd. v. United States, 40 CIT __, __, 144 F. Supp. 3d
1308, 1316 (2016) (citation omitted), aff’d, 862 F.3d 1337 (Fed. Cir. 2017). “As long as
the agency’s methodology and procedures are reasonable means of effectuating the
[Frozen Foods Private Ltd. v. United States], 862 F.3d [1337,] 1345–51 [(Fed. Cir.
2017)]; Apex [Frozen Foods Private Ltd. v. United States], 41 CIT [ __ ,] __, 208
F. Supp. 3d [1398,] 1410–17 [(2017)]; Tri Union, 40 CIT at __, 163 F. Supp. 3d at
1297–1310, aff’d, 741 F. App’x 801 (Fed. Cir. 2018) (per curiam).
Stupp I, 43 CIT at __, Slip Op. 19-2 at 17 n.18. A motion for reconsideration is not an opportunity
for SeAH to relitigate a previously addressed issue.
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statutory purpose, and there is substantial evidence in the record supporting the agency’s
conclusions, the court will not impose its own views as to the sufficiency of the agency’s
investigation or question the agency’s methodology.” Ceramica Regiomontana, S.A. v.
United States, 10 CIT 399, 404–05, 636 F. Supp. 961, 966 (1986) (citing Chevron U.S.A.
Inc. v. Natural Resources Defense Council, 467 U.S. 837, 843 (1984); Abbott v. Donovan,
6 CIT 92, 570 F. Supp. 41, 46–47 (1983), aff’d, 810 F.2d 1137, 1139 (Fed. Cir. 1987)).
Further, “complex economic and accounting decisions of a technical nature” that
Commerce makes are afforded discretion, the differential pricing analysis constitutes
“precisely” that kind of decision, and in reviewing such decisions, this court inquires
“whether Commerce’s methodological choice in carrying out its directive is reasonable.”
Tri Union, 40 CIT at __, 163 F. Supp. 3d at 1300.
Commerce’s differential pricing analysis occurs in two stages. The first stage is
bifurcated to address two separate questions posed by 19 U.S.C. § 1677f-1(d)(1)(B),
namely, whether (i) there are significant price differences and (ii) there is a pattern to the
price differences. See Final Decision Memo at 11; Decision Mem. for the Prelim.
Determination in the [ADD] Investigation of Welded Line Pipe from [Korea] at 7–8, A-580-
876, PD 305, bar code 3277027-01 (May 14, 2015) (“Prelim. Decision Memo”). It is these
two determinations—whether price differences are significant and whether those
differences form a pattern—that SeAH argues are factual findings embedded in
Commerce’s differential pricing analysis and for which substantial evidence must be
proffered on every record. However, what SeAH refers to as factual findings embedded
in the differential pricing analysis are actually interpretative choices Commerce made to
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implement 19 U.S.C. § 1677f-1(d)(1)(B) because the statutory terms “significant” and
“pattern” are undefined and are ambiguous.6 Congress delegates discretion to the
agency to make such interpretive choices when the terms of the statute are ambiguous.
See Chevron, 467 U.S. at 843–45. Here, the agency’s choice is that a price difference is
significant if it passes what the agency refers to as Cohen’s d test and that there is a
pattern if the ratio test is satisfied. See Final Decision Memo at 7–13, 19–26; Prelim.
Decision Memo at 7–8. Commerce must, of course, still explain why these choices are
reasonable. Ceramica, 10 CIT at 404–05, 636 F. Supp. at 966. The Court of Appeals for
the Federal Circuit, per curiam, affirmed Tri Union’s holding that Commerce reasonably
explained why its Cohen’s d test is able to identify significant price differences and why
its ratio test is able to evaluate whether the extent of the identified significant price
differences constitutes a pattern. Tri Union, 741 F. App’x 801, aff’g, 40 CIT at __, 163 F.
Supp. 3d at 1297–1301, 1308–09. The second stage of the differential pricing analysis
interprets 19 U.S.C. § 1677f-1(d)(1)(B)(ii) and is called the meaningful difference test.
Although SeAH does not challenge Stupp I’s holding sustaining Commerce’s application
of this test, the Court of Appeals for the Federal Circuit has held that Commerce’s
rationale for applying the test was reasonable. Apex Frozen Foods Private Limited v.
United States, 862 F.3d 1337, 1346–49 (Fed. Cir. 2017). Accordingly, the Court of
6
SeAH mistakenly argues that the individual components of Commerce’s differential pricing
analysis, e.g., its use of effect size, Cohen’s d, and various numerical thresholds, are “factual
findings” that must be supported by substantial evidence in every case. A methodology is not a
factual finding; it is an approach to finding facts. The words of the relevant statute allow for the
approach chosen by Commerce.
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Appeals for the Federal Circuit has found that all components of the differential pricing
analysis are reasonable mechanisms for Commerce to satisfy the statute.
Finally, the court did not, as SeAH contends, “h[o]ld that the substantial evidence
requirement did not apply in this case because the ‘Differential Pricing Analysis’ is simply
an interpretation of a statutory provision, which must be upheld if the Court finds that it is
‘reasonable.’” SeAH’s Mot. at 5 (citing Stupp I, 43 CIT at __, Slip Op. 19-2 at 13–14).
SeAH’s characterization of the holding reveals its misunderstanding of when this Court
applies the substantial evidence standard. The Court reviews whether the outputs of
Commerce’s methodology are supported by substantial evidence on this record; as it did
in Stupp I. The Court does not review whether Commerce’s methodology, which is an
interpretation of a statute, is supported by substantial evidence. Instead, the court
evaluates whether the methodology reasonably implements a given statutory directive.
SeAH’s reading of the court’s holding is likely colored by its position, which is based on a
false premise, that the differential pricing analysis is merely a general policy statement
and as such, “must be reviewed as if the policy had never been adopted.” SeAH’s Mot.
at 2–3 (citing and quoting Pac. Gas & Elec. Co. v. Fed. Power Comm’n, 506 F.2d 33, 38
(D.C. Cir. 1974); Nat’l Mining Ass’n v. McCarthy, 758 F.3d 243 (D.C. Cir. 2014)). The
differential pricing analysis is not a policy; it is the result of Commerce interpreting 19
U.S.C. § 1677f-1(d)(1)(B) and devising a methodology to effectuate that interpretation.
The statute affords Commerce the ability to interpret the statutory terms absent rule
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making.7 Apex, 40 CIT at __, 144 F. Supp. 3d at 1320–21; see also Chevron, 467 U.S.
at 843–45. It would be inappropriate to review the methodology itself pursuant to the
substantial evidence standard. Accordingly, SeAH failed to demonstrate “manifest error”
with the court’s reasoning for sustaining Commerce’s application of the differential pricing
analysis in Stupp I.
CONCLUSION
For the foregoing reasons, it is
ORDERED that SeAH’s motion for reconsideration is denied.
/s/ Claire R. Kelly
Claire R. Kelly, Judge
Dated: March 7, 2019
New York, New York
7 Further, given that Commerce’s methodology continues to be developed, it may not be
appropriate for the court to rigidify it in this case. See SEC v. Chenery, 332 U.S. 194, 202–03
(1947); Apex, 40 CIT at __, 144 F. Supp. 3d at 1320–21.