Allied Tube & Conduit Corp. v. United States , 2007 CIT 107 ( 2007 )

Slip Op. 07 – 107
UNITED STATES COURT OF INTERNATIONAL TRADE
ALLIED TUBE & CONDUIT CORP.,
IPSCO TUBULARS INC., AND
WHEATLAND TUBE COMPANY,
Before: Richard W. Goldberg,
Plaintiffs, Senior Judge
v. Court No. 06-00285
UNITED STATES, PUBLIC VERSION
Defendant,
and
TOSÇELIK PROFIL VE SAC
ENDUSTRISI A.S.,
Defendant-
Intervenor.
OPINION
[Commerce’s final new shipper review determination is remanded
for further consideration and explanation of the commercial
reasonableness of Defendant-Intervenor’s single U.S. sale.]
Dated: July 9, 2007
Schagrin Associates (Roger B. Schagrin, Brian E. McGill, and
Michael James Brown) for Plaintiffs Allied Tube & Conduit Corp.,
IPSCO Tubulars Inc., and Wheatland Tube Company.
Peter D. Keisler, Assistant Attorney General; Jeanne E.
Davidson, Director, Patricia M. McCarthy, Assistant Director,
Commercial Litigation Branch, Civil Division, U.S. Department of
Justice (David S. Silverbrand); Office of the Chief Counsel for
Import Administration, U.S. Department of Commerce (Jennifer I.
Johnson), Of Counsel, for Defendant United States.
Law Offices of David L. Simon (David L. Simon) for Defendant-
Intervenor Tosçelik Profil ve Sac Endustrisi A.S.
Court No. 06 – 00285 Page 2
GOLDBERG, Senior Judge: On May 31, 2005, Tosçelik Profil ve Sac
Endustrisi A.S. and its affiliated trading company Tosyali Dis
Ticaret A.S. (collectively, “Tosçelik”) requested that the U.S.
Department of Commerce (“Commerce”) conduct a new shipper review
based on a single U.S. sale during the period of review from May
1, 2004 through April 30, 2005 (“POR”). Commerce found that the
single U.S. sale was bona fide, and subsequently determined that
a zero percent antidumping duty margin existed. Certain Welded
Carbon Steel Pipe and Tube from Turkey, 71 Fed. Reg. 43444,
43445 (Dep’t Commerce Aug. 1, 2006) (final results of new
shipper review). Allied Tube and Conduit Corporation, IPSCO
Tubulars, Inc., and Wheatland Tube Company (collectively,
“Allied Tube”) have brought this action to challenge Commerce’s
determination that Tosçelik’s single U.S. sale during the POR
was bona fide. For the reasons that follow, the Court remands
the issue of whether Tosçelik’s single U.S. shipment was a bona
fide transaction.
I. STANDARD OF REVIEW
A court shall hold unlawful Commerce’s final determination
in an antidumping administrative review if it is “unsupported by
substantial evidence on the record, or otherwise not in
accordance with the law . . . .” 19 U.S.C. § 1516a(b)(1)(B)(i)
(2000). Substantial evidence is “‘such relevant evidence as a
Court No. 06 – 00285 Page 3
reasonable mind might accept as adequate to support a
conclusion.’” Nippon Steel Corp. v. United States, 337 F.3d
1373, 1379 (Fed. Cir. 2003) (quoting Consol. Edison Co. v. NLRB,
305 U.S. 197, 229 (1938)). “Even if it is possible to draw two
inconsistent conclusions from evidence in the record, such a
possibility does not prevent Commerce’s determination from being
supported by substantial evidence.” Am. Silicon Techs. v.
United States, 261 F.3d 1371, 1376 (Fed. Cir. 2001). To
determine if substantial evidence exists, the Court reviews the
record as a whole, including evidence that supports as well as
evidence that “fairly detracts from the substantiality of the
evidence.” Atl. Sugar, Ltd. v. United States, 744 F.2d 1556,
1562 (Fed. Cir. 1984).
II. DISCUSSION
A. New Shipper Review and the Bona Fide Sale Test
On May 15, 1986, Commerce published an antidumping duty
order on imports of welded carbon steel pipe and tube from
Turkey. See Welded Carbon Steel Standard Pipe and Tube Products
from Turkey, 51 Fed. Reg. 17784 (Dep’t Commerce May 15, 1986)
(final determination). The order imposes an “all others”
antidumping duty rate of 14.74%, which applies to Turkish
producers and exporters that have not had their antidumping duty
rate determined in an investigation or review. Id. If a
Court No. 06 – 00285 Page 4
producer or exporter did not export merchandise that was the
subject of an antidumping duty order during a previous
investigation period, it may request a new shipper review. See
19 U.S.C. § 1675(a)(2)(B) (2000).1 During the course of a new
shipper review, Commerce endeavors to establish an individual
dumping margin and antidumping duty rate for the new shipper.
This process allows the new shipper to demonstrate that the “all
others” rate should not apply to its entries. On May 31, 2005,
Tosçelik timely requested a new shipper review based on a single
sale to the United States.
1
A new shipper review may be requested pursuant to the following
requirements:
If the administering authority receives a request from
an exporter or producer of the subject merchandise
establishing that—(I) such exporter or producer did
not export the merchandise that was the subject of an
antidumping duty or countervailing duty order to the
United States (or, in the case of a regional industry,
did not export the subject merchandise for sale in the
region concerned) during the period of investigation,
and (II) such exporter or producer is not affiliated
(within the meaning of section 1677(33) of this title)
with any exporter or producer who exported the subject
merchandise to the United States (or in the case of a
regional industry, who exported the subject
merchandise for sale in the region concerned) during
that period, the administering authority shall conduct
a review under this subsection to establish an
individual weighted average dumping margin or an
individual countervailing duty rate (as the case may
be) for such exporter or producer.
19 U.S.C. § 1675(a)(2)(B)(i) (2000); see also 19 C.F.R.
§ 351.214 (2006).
Court No. 06 – 00285 Page 5
When a new shipper review involves only a single U.S. sale,
it is Commerce’s practice to determine if that sale is a bona
fide transaction. See Freshwater Crawfish Tail Meat from the
People’s Republic of China, 68 Fed. Reg. 1439, 1440 (Dep’t
Commerce Jan. 10, 2003) (rescission of new shipper review);
Fresh Garlic from the People’s Republic of China, 67 Fed. Reg.
11283, 11284 (Dep’t Commerce Mar. 13, 2002) (rescission of new
shipper review). A sale is not bona fide when it is
“commercially unreasonable” or “atypical of normal business
practices.” Tianjin Tiancheng Pharmaceutical Co. v. United
States, 29 CIT __, __, 366 F. Supp. 2d 1246, 1249-50 (2005); see
also Windmill Int’l Pte., Ltd. v. United States, 26 CIT 221,
230, 193 F. Supp. 2d 1303, 1313 (2002). Commerce makes this
determination so that a producer does not “unfairly benefit from
an atypical sale to obtain a lower dumping margin than the
producer’s usual commercial practice would dictate.” Tianjin,
29 CIT at __, 366 F. Supp. 2d at 1250. A single sale is not
inherently commercially unreasonable, but “it will be carefully
scrutinized to ensure that new shippers do not unfairly benefit
from unrepresentative sales.” Id. at __, 366 F. Supp. 2d at
1263.
Commerce looks at the totality of the circumstances to
determine whether a particular sale is bona fide. See Hebei New
Court No. 06 – 00285 Page 6
Donghua Amino Acid Co. v. United States, 29 CIT __, __, 374 F.
Supp. 2d 1333, 1338 (2005). In the present case, Commerce
initially issued a Commercial Reasonableness Memorandum (“CRM”)
which set forth its basis for finding that Tosçelik’s U.S. sale
was commercially reasonable under the totality of the
circumstances. See CRM, A-489-501, NSR 5/1/04-4/30/05 (Apr. 24,
2006); Pl.’s App. 5A-B. In the CRM, Commerce considered three
factors: (1) the price and quantity of the U.S. sale; (2) the
sales process; and (3) freight expenses. Commerce subsequently
issued the preliminary results of the new shipper review on May
3, 2006, and found that Tosçelik’s sale had no dumping margin.
Certain Welded Carbon Steel Pipe and Tube from Turkey, 71 Fed.
Reg. 26043, 26047 (Dep’t Commerce May 3, 2006) (preliminary
results). Commerce subsequently adopted the same position in
its final determination. Certain Welded Carbon Steel Pipe and
Tube from Turkey, 71 Fed. Reg. at 43445. In that determination,
Commerce referred to its Issues and Decision Memorandum (“IDM”),
which found Tosçelik’s single U.S. sale to be commercially
reasonable, and therefore bona fide. IDM, A-489-501, POR
5/1/04-4/30/05 (Aug. 1, 2006), available at
http://ia.ita.doc.gov/frn/summary/turkey/E6-12372-1.pdf.
Allied Tube challenges Commerce’s determination that
Tosçelik’s transaction is bona fide. Specifically, it claims
Court No. 06 – 00285 Page 7
that the price, quantity and freight expense of the sale
indicate that the transaction is not commercially reasonable.
B. Commerce’s Determination That the Price of Tosçelik’s U.S.
Sale Is Commercially Reasonable Is Not Supported by
Substantial Evidence
i. Overview of Commerce’s Methodology Comparing the Unit
Value of Tosçelik’s Sale to the Average Unit Value of
Other Turkish Exporters
Commerce calculated the average unit value (“AUV”) per
metric ton (“MT”) for all U.S. imports of welded steel pipe and
tube from Turkey during the POR, and found that the unit value
of Tosçelik’s sale is about [ ] the AUV of all imports from
Turkey.2 Commerce did not primarily rely on a comparison between
the AUV of all imports from Turkey and the unit value of
Tosçelik’s sale. Instead, Commerce obtained data from U.S.
Customs and Border Protection (“Customs”) that listed the AUV of
2
In the chart provided by Commerce, Tosçelik’s unit value is [ ]
per MT. CRM Attach. 1 (Confidential). Commerce reached this
value by dividing the “entered value” of Tosçelik’s single U.S.
sale [ ] by the “theoretical quantity” of the shipment [ ].
Whereas the chart lists the [ ] per MT figure, the analysis in
the CRM refers to the AUV of Tosçelik’s sale as [ ] per MT. The
[ ] per MT figure is reached by dividing the “total value” of
the sale [ ] by the “actual quantity” [ ]. Presumably, this
includes the transportation costs associated with the sale. It
is unclear why Commerce includes the [ ] figure in the chart,
but discusses the [ ] figure in its analysis. The Court’s
determination that Tosçelik’s sale is [ ] than the AUV of all
Turkish imports is based on the [ ] figure. The discrepancy
rises to [ ] when the [ ] figure is used. The precise
calculation does not affect the disposition of this case at this
stage in the proceedings, but may be highly relevant on remand.
Court No. 06 – 00285 Page 8
each Turkish exporter during the POR. The unit value of
Tosçelik’s single sale fell within the range of the other
Turkish exporters’ AUVs ([ ] per MT). Commerce concluded that
because Tosçelik’s sale is “comfortably within the range of
other commercial transactions . . . [there is] no reason to
suspect that [it] is not a bona fide commercial transaction.”
CRM 4.
The “range” Commerce refers to is derived from a chart
attached to the CRM. The chart is reproduced here:3
[ REDACTED ]
CRM Attach. 1 (Confidential). Each row represents data from a
specific Turkish exporter. The far left column lists the total
quantity of welded steel pipe and tube shipped from each
exporter.4 The next column lists the total value of the
shipments, followed by the AUV for each exporter. Tosçelik’s
shipment is represented by the company name “Tosyali Dis Ticaret
A.S.,” which is Tosçelik’s affiliated trading company. The unit
value of Tosçelik’s sale, [ ] per MT, does indeed fall within
the range of AUVs listed by exporter.
3
The names of some exporters have been shortened for formatting
purposes.
4
The chart encompasses steel pipe and tube classified under the
same Harmonized Tariff Schedule of the United States (“HTSUS”)
classification as Tosçelik’s U.S. shipment.
Court No. 06 – 00285 Page 9
Allied Tube believes that the range of AUVs used by
Commerce in the above chart includes highly aberrational data.
Specifically, the range of data used by Commerce includes a
small quantity of sales [ ] imported at relatively high prices.5
Allied Tube argues that a single sale with a unit value in the [
] percentile is atypical of normal business practices and
commercially unreasonable. If the top [ ] of sales by quantity
is excluded, the remaining [ ] of all imports by quantity fall
within an AUV range between [ ] per MT. Tosçelik’s sale, at [ ]
per MT, does not fall within this range. Thus, Allied Tube
claims the price of Tosçelik’s sale is commercially
unreasonable.
ii. Commerce’s “Range” Methodology Including Allegedly
Distortive Entries Does Not Reasonably Support Its
Determination That Tosçelik’s Sale Is Commercially
Reasonable
The Court must now determine whether Commerce’s “range”
methodology, which includes the allegedly distortive entries, is
reasonable and supported by substantial evidence. Commerce has
the discretion to choose whatever methodology it deems
appropriate, as long as it is reasonable and its conclusions are
supported by substantial evidence. See Federal-Mogul Corp. v.
5
The [ ] of imports by quantity that Allied Tube argues should
be excluded from Commerce’s analysis are those imported by [ ].
Pl.’s Mot. J. Agency R. 12 n.7. These exporters each have an
AUV of [ ] per MT or higher.
Court No. 06 – 00285 Page 10
United States, 18 CIT 785, 807-08, 862 F. Supp. 384, 405 (1994);
see also Windmill, 26 CIT at 230, 193 F. Supp. 2d at 1312
(“Given Commerce's discretion in employing a methodology to
exclude sales from the United States price that are
unrepresentative or distortive . . . the Court must determine
whether Commerce’s actions in this case were reasonable.”).
Allied Tube believes that Commerce acted contrary to its
own established practice “of using AUVs derived only after
excluding aberrant data for its analysis” to determine the
commercial reasonableness of U.S. sales in new shipper reviews.
Pl.’s Mot. J. Agency R. 13. Commerce does frequently choose to
exclude aberrational data in its antidumping duty
determinations. See, e.g., Hebei, 29 CIT at __, 374 F. Supp. 2d
at 1340 (approving Commerce’s exclusion of “clearly
aberrational” data in a new shipper review); Luoyang Bearing
Corp. (Group) v. United States, 29 CIT __, __, 358 F. Supp. 2d
1296, 1299 (2005) (in determining a surrogate value for China,
Commerce excluded price data from countries with steel imports
of less than seven MTs); Shanghai Foreign Trade Enters. Co. v.
United States, 28 CIT __, __, 318 F. Supp. 2d 1339, 1350 (2004)
(explaining that when calculating surrogate values for non-
market economies, it is Commerce’s practice to exclude
aberrational data); FAG U.K. Ltd. v. United States, 20 CIT 1277,
Court No. 06 – 00285 Page 11
1282, 945 F. Supp. 260, 265 (1996) (permitting Commerce to
exclude “certain sales which are clearly atypical” in an
antidumping administrative review). Commerce excludes aberrant
data because a “[f]air (apples to apples) comparison is the goal
of the price comparisons required by the antidumping laws . . .
.” Am. Permac, Inc. v. United States, 16 CIT 41, 42, 783 F.
Supp. 1421, 1423 (1992).
While Commerce often excludes potentially aberrational data
in its antidumping determinations, it is not always required to
do so. In Corus Staal BV v. United States, the plaintiff, a
domestic party, challenged Commerce’s decision to include sales
of defective merchandise in its calculation of the U.S. price.
27 CIT 388, 404-05, 259 F. Supp. 2d 1253, 1267-68 (2003). The
plaintiff argued that because transactions involving defective
merchandise are not in the “ordinary course of trade,” they must
be excluded from the analysis. The Court disagreed, and stated
that unlike the definition of normal value,6 the definition of
U.S. price contains no requirement that Commerce exclude sales
that are arguably outside of the ordinary course of trade. Id.
at 406, 259 F. Supp. 2d at 1269.
6
The definition of “normal value” is “the price at which the
foreign like product is first sold . . . for consumption in the
exporting country, in the usual commercial quantities and in the
ordinary course of trade . . . .” 19 U.S.C. § 1677b(a)(1)(B)(i)
(2000) (emphasis added).
Court No. 06 – 00285 Page 12
Corus Staal is easily distinguishable from the present case
because the commercial reasonableness test for new shipper
reviews necessarily implies that the analysis should only
include prices “in the ordinary course of trade.” Commerce
cannot reasonably conclude that the price of a new shipper’s
single sale is commercially reasonable if it is only similar to
prices that are atypical of the industry. In the present case,
the “range” methodology can only be deemed reasonable if
Commerce can explain why the allegedly distortive entries, some
over [ ] the AUV for the industry, should be included in the
range of reasonableness. When Commerce’s commercial
reasonableness determination hinges on comparing the new shipper
sale price to a range of values, it is crucial to make sure the
values at both ends of that range are commercially reasonable.
Commerce has not only failed to explain why its “range”
methodology is reasonable, but it even suggests that its own
dataset might be overinclusive and therefore inaccurate.
Commerce states:
Given that the [HTSUS] numbers covered by the scope
include more than subject merchandise, [and] that
actual products included within any given shipment may
be different from each other[,] [a] direct comparison
between shipments should not be viewed as accurate
price to price comparison. Rather, such data are
generally reflective of commercial transactions.
Court No. 06 – 00285 Page 13
CRM 5 n.3. In other words, the high-priced, small-quantity
sales included in Commerce’s analysis might be different types
of merchandise than the standard pipe imported by Tosçelik even
though they are encompassed in the same HTSUS classification.
The potential inaccuracy of the dataset further undermines the
reasonableness of Commerce’s “range” methodology.
In previous investigations, Commerce stressed the
importance of comparing the total AUV of all imports to the new
shipper sale. In Hebei, where Commerce determined that a new
shipper sale was not bona fide, Commerce viewed the large price
differential between the new shipper sale and the AUV of all the
entries of the subject merchandise as significant. See 29 CIT
at __, 374 F. Supp. 2d at 1336. Specifically, Commerce compared
the Chinese manufacturer’s U.S. sale price to:
(1) the weighted AUV of all Chinese entries of the
subject merchandise during the POR that were
covered by the antidumping duty order and not
clearly aberrational based on proprietary data in
the Customs database;
(2) the weighted AUV of all Chinese imports of the
subject merchandise during the POR based on
public import statistics; and
(3) the weighted AUV of U.S. imports of the subject
merchandise from all countries during the POR
based on publicly available U.S. import data.
See id. at __, 374 F. Supp. 2d at 1336; see also Tianjin, 29 CIT
at __, 366 F. Supp. 2d at 1255 (stating that the prices listed
Court No. 06 – 00285 Page 14
in four invoices from a single company “do not go as far as the
AUV data in showing the typical price for Plaintiff’s product”).
By contrast, in this case, Commerce relied primarily on a
comparison of Tosçelik’s sale to small import quantities with
comparatively high per-unit values. Commerce has not persuaded
the Court that this methodology is reasonable. See Shanghai, 28
CIT at __, 318 F. Supp. 2d at 1351 (“A Commerce decision to rely
on potentially aberrational data without explanation and
contrary to its own practice is not based on substantial
evidence and cannot be sustained.”).
In summary, Commerce’s “range” methodology is a shaky
foundation on which to rest its conclusion that the price of
Tosçelik’s sale is commercially reasonable. The methodology
merely shows that the unit value of Tosçelik’s sale is [ ] the
AUVs of certain other Turkish exporters’ aggregated entries
under the same HTSUS classification. Given that the unit value
of Tosçelik’s sale is [ ] the AUVs of the Turkish exporters that
comprise [ ] of the total U.S. imports of welded carbon steel
pipe and tube by quantity, Commerce has failed to demonstrate,
by substantial evidence, that Tosçelik’s price is commercially
reasonable. As such, this issue is remanded so that Commerce
may attempt to explain why its methodology is reasonable, or to
point to other grounds that support its ultimate conclusion that
Court No. 06 – 00285 Page 15
Tosçelik’s sale is commercially reasonable. Cf. Luoyang Bearing
Corp. (Group) v. United States, 28 CIT __, __, 347 F. Supp. 2d
1326, 1353 (2004) (remanding because Commerce failed to explain
why it did not address the aberrational import data that the
plaintiffs believed should be excluded).
iii. Commerce’s Analysis Excluding Allegedly Distortive
Entries Does Not Demonstrate That Tosçelik’s Sale Is
Commercially Reasonable
In response to Allied Tube’s concerns, Commerce explains in
its final determination that even if the allegedly distortive
data are excluded, Tosçelik’s sale would still be considered
commercially reasonable. IDM 5-6. To support this conclusion,
Commerce states that a disaggregation of import data from major
Turkish exporters indicates there are “a meaningful number of
shipments with comparable unit values and quantities.” Id. 6.
Commerce does not point to any useful shipment-level data to
demonstrate what it means by a “meaningful” number of shipments
or “comparable” unit values and quantities. Instead, Commerce
asserts that “while the average value of each shipment of welded
pipe and tube during the POR was [ ], the value of individual
shipments ranged from [ ] to [ ].” CRM 4. Commerce claims that
because the value of Tosçelik’s single shipment fits within this
range, it is commercially reasonable. However, this analysis is
problematic because Commerce only compares the value, but
Court No. 06 – 00285 Page 16
ignores the quantity, of each individual shipment. This range
of values is meaningless if the quantity of each shipment is
unknown. Instead, Commerce could have disaggregated the import
data, calculated the shipment unit values, and then compared
them to the unit value of Tosçelik’s shipment. At present,
Commerce has not demonstrated by substantial evidence that when
the allegedly distortive entries are excluded from the analysis,
Tosçelik’s sale is commercially reasonable.7
7
Commerce also suggests that Allied Tube did not include all
relevant figures in its analysis:
[W]e found [Allied Tube’s] analysis did not include
the AUV for a certain Turkish manufacturer, which was
within a reasonable range of Tosçelik’s AUV and higher
than the threshold AUV identified by petitioner.
Moreover, the entry for the exporter reported by
[Customs] was disregarded in petitioner’s analysis
altogether, despite the fact that the specific
exporter’s shipment was higher in volume than
Tosçelik’s U.S. sale. Furthermore, the entered value
of Tosçelik’s U.S. sale is only slightly higher than
the entered value of sales made by the specific
exporter not named by the petitioner, as reported by
[Customs].
IDM 5-6. This explanation is difficult to comprehend because
the Court is unable to identify the “certain Turkish
manufacturer” that Allied Tube failed to include in its
analysis. Allied Tube appears to have accounted for all of the
exporters listed in the chart accompanying the CRM. See Pl.’s
Mot. J. Agency R. 12 n.7. Additionally, the Court is unable to
find an entry that: (1) has an AUV that is higher than “the
threshold AUV identified by petitioner” (i.e., [ ] per MT), (2)
has a higher quantity than Tosçelik’s sale, and (3) has an
entered value that is only slightly lower than Tosçelik’s sale.
(footnote continued)
Court No. 06 – 00285 Page 17
iv. Tosçelik’s U.S. Sale, in Comparison to Its Home Market
Prices, Does Not Demonstrate That the Sale Is
Commercially Reasonable
At the suggestion of Allied Tube, Commerce compared
Tosçelik’s U.S. sale price to its home market prices. Allied
Tube alleges that the price of Tosçelik’s single U.S. sale was [
] than Tosçelik’s average home market sales.8 If this were true,
it would support the claim that Tosçelik was artificially
inflating its U.S. price in order to obtain a favorable
antidumping duty margin. In response, Commerce states that it
“used the prices included in [Tosçelik’s home market database]
and calculated an average [home market price] that is very
9
comparable to the AUV of U.S. imports . . . .” IDM 5.
Notably, Commerce did not directly compare the price of
Tosçelik’s U.S. sale to its home market sales. Instead
Commerce found that Tosçelik’s home market sales were comparable
to the AUV for all U.S. imports. As a result, the usefulness of
Therefore, this explanation is insufficient to support
Commerce’s finding that the price of Tosçelik’s single U.S. sale
is commercially reasonable.
8
Allied Tube claims that Tosçelik’s U.S. sale ([ ] per MT) was
priced [ ] than that of the average of Tosçelik’s home market
sales. Pl.’s Mot. J. Agency R. 11. In fact, the U.S. sale is
only [ ] than the average home market sale.
9
The original language states “U.S. price” instead of “home
market price.” The Court assumes this is a clerical error,
because Commerce could not have used Tosçelik’s home market
price database in order to calculate an average U.S. price.
Court No. 06 – 00285 Page 18
this analysis is entirely dependent on how Tosçelik’s U.S. sale
compares to the AUV for all U.S. imports. Because, as discussed
above, Commerce’s analysis of the AUV of all U.S. imports does
not demonstrate that Tosçelik’s sale was commercially
reasonable, Commerce’s analysis of the home market sales
provides no independent support for its position.
C. Commerce’s Determination That the Quantity of Tosçelik’s
U.S. Sale Is Commercially Reasonable Is Supported by
Substantial Evidence
Allied Tube claims that there is not substantial evidence
to support Commerce’s conclusion that the quantity of Tosçelik’s
U.S. sale is commercially reasonable. In its final
determination, Commerce found that:
[The quantity of Tosçelik’s U.S. sale] is not atypical
of Tosçelik’s normal business practices.
Specifically, the majority of Tosçelik’s home market
sales are made with invoices that have a total
quantity that is less than the sale in question.
Therefore, we find the quantity of Tosçelik’s one sale
to the U.S. is comparable to the size of Tosçelik’s
sales in its home market, and consistent with
Tosçelik’s business practices in the home market.
IDM 5. The fact that Tosçelik’s single U.S. sale is of a larger
quantity than a majority of its home market sales is adequate to
support the conclusion that the quantity is commercially
reasonable. Cf. Windmill, 26 CIT at 231, 193 F. Supp. 2d at
1313 (“[S]ingle sales, even those involving small quantities,
are not inherently commercially unreasonable and do not
Court No. 06 – 00285 Page 19
necessarily involve selling practices atypical of the parties’
normal selling practices.”).10
D. Commerce’s Determination That the Freight Charges Included
in Tosçelik’s U.S. Sale Price Are Commercially Reasonable
Is Not Supported by Substantial Evidence
Tosçelik shipped its U.S. sale by container with an
international freight charge of [ ] per MT.11 Allied Tube points
out that this freight charge is [ ] the average international
freight charge for U.S. imports from Turkey that fall under the
same HTSUS classification category as Tosçelik’s entry. Pl.’s
Reply Br. 11. Commerce has considered extraordinarily high
10
Allied Tube points out that the average quantity per shipment
of welded carbon steel pipe and tube from Turkey during the POR
was more than [ ] the quantity of Tosçelik’s shipment. Pl.’s
Mot. J. Agency R. 17-18. However, Commerce has demonstrated
that the quantity of the sale is in line with Tosçelik’s selling
practices in its home market. The fact that Tosçelik’s sale is
smaller than the industry average does not render it
commercially unreasonable if the quantity is typical of
Tosçelik’s normal business practices.
11
Initially, Allied Tube claimed that the international freight
cost of Tosçelik’s sale was [ ] per MT. Pl.’s Mot. J. Agency R.
18. Allied Tube believed that this figure excluded domestic
shipping costs. Defendant-Intervenor Tosçelik responded that
this was a clear misstatement of fact, because the [ ] per MT
figure does in fact include domestic inland freight. Def.-
Int.’s Resp. Br. 32-33. In its Reply Brief, Allied Tube
explained that it believed [ ] per MT constituted only the
international freight cost Tosçelik reported in its
questionnaire response that “international freight” was [ ] per
MT. Pl.’s Reply Br. 10-11. Allied Tube corrected its initial
error, and states that the actual international freight charge
(excluding domestic inland freight) is [ ] per MT. Id. 11.
Court No. 06 – 00285 Page 20
freight costs to be evidence that a sale is not bona fide. See
Windmill, 26 CIT at 231, 193 F. Supp. 2d at 1313.
To support its finding that Tosçelik’s freight cost is not
unreasonably high, Commerce states that it “verified Tosçelik’s
reported freight expenses and found the container shipment to be
consistent with Tosçelik’s typical business practices.” IDM 6.
Commerce cites to a Sales Verification Exhibit that shows how
much Tosçelik paid for the freight cost. See id. n.14.
Commerce has not adequately explained how this information
supports the conclusion that Tosçelik’s freight charge in this
case was consistent with its typical business practices.
Commerce also suggests that Tosçelik’s freight expenses are
so high because “Tosçelik’s U.S. sale was shipped by container
rather than full vessel load and included inland freight
expenses from the port of Mersin, Turkey.” Id. 6. The fact
that the shipment was made by container is irrelevant because
Commerce did not demonstrate that it is commercially reasonable
to use this method of shipment. Additionally, the [ ] figure
does not include domestic inland freight in Turkey. Pl.’s Reply
Br. 11. Even without the additional cost of domestic inland
freight, the international freight cost of Tosçelik’s sale is [
] the industry average.
Court No. 06 – 00285 Page 21
Commerce claims that although Tosçelik’s freight charges
may be higher than average, this fact alone does not render the
sale commercially unreasonable. In American Silicon
Technologies v. United States, the Court held that a high
shipping price or unusual mode of shipment does not alone render
a sale commercially unreasonable. 24 CIT 612, 617-18, 110 F.
Supp. 2d 992, 997 (2000). In that investigation, Commerce had
found that although the shipping costs were high, the timing and
mode of shipment did not indicate the sale was commercially
unreasonable because the merchandise entered the United States
“fully six months” prior to the POR and the exporter did not
request a new shipper review. Silicon Metal from Brazil, 64
Fed. Reg. 6305, 6317 (Dep’t Commerce Feb. 9, 1999) (final
results of new shipper review). The Court sanctioned that
approach. Am. Silicon Techs., 24 CIT at 618, 110 F. Supp. 2d at
997. By contrast, Tosçelik’s single shipment entered the United
States on April 28, 2005, only two days before the end of the
POR. Additionally, Tosçelik requested the new shipper review.
This record evidence seems to undercut Commerce’s claim that
“there was no evidence that the freight charge was incurred for
any reason related to the new shipper review.” Def.’s Resp. 17.
Both the timing of the sale and Tosçelik’s request for the new
shipper review indicate otherwise.
Court No. 06 – 00285 Page 22
In summary, there is ample record evidence that Tosçelik’s
freight charges are too high to be commercially reasonable.
Commerce has failed to present any contradictory evidence that
amounts to more than unsupported assertions. As a result,
Commerce’s finding that Tosçelik’s freight charge does not
indicate that the sale is commercially unreasonable is not
supported by substantial evidence.
E. Commerce’s Ultimate Determination That Tosçelik’s Single
U.S. Sale Is Bona Fide Is Not Supported by Substantial
Evidence
The Court must aggregate Commerce’s findings to ultimately
determine whether there is substantial evidence to support its
decision that under the totality of the circumstances,
Tosçelik’s single U.S. sale is bona fide. See Tianjin, 29 CIT
at __, 366 F. Supp. 2d at 1249-50. As discussed above,
Commerce has failed to show that substantial evidence supports
its findings that the price and freight cost of Tosçelik’s sale
are commercially reasonable. On the other hand, there is
substantial evidence to support Commerce’s finding that the
quantity of Tosçelik’s sale is commercially reasonable. The
only remaining factor Commerce considered is Tosçelik’s “sales
process.” CRM 5. Commerce reviewed Tosçelik’s home market and
export selling practices, and found that the U.S. sale “followed
the same sales process as their other export sales.” CRM 5.
Court No. 06 – 00285 Page 23
Allied Tube does not dispute this finding. The fact that
Tosçelik appears to have followed its normal business practices
in executing its single U.S. sale is evidence that the sale is
bona fide. Cf. Windmill, 26 CIT at 231, 193 F. Supp. 2d at 1313
(holding that purchaser’s failure to follow normal business
practices is evidence that sale is not bona fide). However,
“the price factor has significant weight, and cannot necessarily
be offset by a recitation of other factors by which the sale
could be considered typical . . . .” Tianjin, 29 CIT at __, 366
F. Supp. 2d at 1263. Accordingly, under the totality of the
circumstances, the Court does not find substantial evidence to
support Commerce’s finding that Tosçelik’s U.S. sale is bona
fide.
III. CONCLUSIONS
For the foregoing reasons, the Court remands Commerce’s
final new shipper review determination. Specifically, Commerce
must explain, if it is able, why its “range” methodology
(ranking the AUVs of the aggregate imports, within the same
HTSUS classification, of each Turkish exporter) is a reasonable
approach to determining whether the price of Tosçelik’s U.S.
sale is commercially reasonable. In the course of this
explanation, Commerce must address why the seemingly distortive
entries identified by Allied Tube should not be excluded from
Court No. 06 – 00285 Page 24
the analysis concerning the price of Tosçelik’s U.S. sale. If
Commerce is unable to provide such an explanation, it must
either (1) point to other record evidence that shows whether
Tosçelik’s sale is a bona fide transaction under the totality of
the circumstances, or (2) conduct further investigations to
determine the same. A separate order will be issued
accordingly.
_/s/ Richard W. Goldberg
Richard W. Goldberg
Senior Judge
Date: July 9, 2007
New York, New York
UNITED STATES COURT OF INTERNATIONAL TRADE
ALLIED TUBE & CONDUIT CORP.,
IPSCO TUBULARS INC., AND
WHEATLAND TUBE COMPANY,
Before: Richard W. Goldberg,
Plaintiffs, Senior Judge
v. Court No. 06-00285
UNITED STATES,
PUBLIC VERSION
Defendant,
and
TOSÇELIK PROFIL VE SAC ENDUSTRISI
A.S.,
Defendant-
Intervenor.
ORDER
Upon consideration of Plaintiffs’ motion for judgment upon
the agency record and briefs in support thereof, Defendant’s and
Defendant-Intervenor’s briefs in opposition thereto, upon all
other papers and proceedings had herein, and upon due
deliberation, it is hereby
ORDERED that Commerce’s final antidumping duty new shipper
review determination in Certain Welded Carbon Steel Pipe and
Tube from Turkey, 71 Fed. Reg. 43444 (Aug. 1, 2006) is remanded;
and it is further
ORDERED that Commerce explain, if it is able, why its
“range” methodology (ranking the AUVs of the aggregate imports,
within the same HTSUS classification, of each Turkish exporter)
is a reasonable approach to determine whether the price of
Tosçelik’s U.S. sale is commercially reasonable; and it is
further
ORDERED that Commerce address in the course of that
explanation why the seemingly distortive entries identified by
Allied Tube should not be excluded from the analysis concerning
the price of Tosçelik’s U.S. sale; and it is further
ORDERED that Commerce shall, if it is unable to provide
such an explanation, point to other record evidence or conduct
further investigations to determine whether the price of
Tosçelik’s single U.S. sale is commercially reasonable; and it
is further
ORDERED that Commerce shall explain why, in the course of
comparing the AUV of Tosçelik’s single U.S. sale to other AUV
data, it refers to a different value in its data chart [ ] than
in the text of its Commercial Reasonableness Memorandum [ ], and
it is further
ORDERED that Commerce shall, if it is able, point to record
evidence, or, if other record evidence is unavailable, conduct
further investigations to adequately explain why the freight
charge associated with Tosçelik’s sale is typical of Tosçelik’s
business practices, or otherwise commercially reasonable; and it
is further
ORDERED that if Commerce is unable to conclude that
Tosçelik’s sale is a bona fide transaction, the new shipper
review shall be rescinded; and it is further
ORDERED that Commerce shall, within sixty (60) days of the
date of this Order, issue a remand determination in accordance
with the instructions provided herein; and it is further
ORDERED that the parties may, within twenty (20) days of
the date on which Commerce issues its remand determination,
submit briefs addressing Commerce’s remand determination, not to
exceed twenty (20) pages in length; and it is further
ORDERED that the parties may, within fifteen (15) days of
the date on which briefs addressing Commerce’s remand
determination are filed, submit response briefs, not to exceed
fifteen (15) pages in length.
SO ORDERED.
_/s/ Richard W. Goldberg___
Richard W. Goldberg
Senior Judge
Date: July 9, 2007
New York, New York