United States Steel Corp. v. United States

Slip Op. 13-156
UNITED STATES COURT OF INTERNATIONAL TRADE
UNITED STATES STEEL CORPORATION,
Plaintiff,
and
NUCOR CORPORATION,
Plaintiff-Intervenor,
Before: Claire R. Kelly, Judge
Consol. Court No. 12-00071
v.
Public Version
UNITED STATES,
Defendant,
and
HYUNDAI HYSCO, POHANG IRON & STEEL
CO., LTD., and POHANG
COATED STEEL CO., LTD.,
Defendant-Intervenors.
OPINION
[Sustaining Commerce’s antidumping duty administrative review]
Dated: 12/27/2013
Ellen J. Schneider, Skadden Arps Slate Meagher & Flom, LLP of Washington, DC
argued for Plaintiff. With her on the brief were Robert E. Lighthizer and Jeffrey D. Gerrish.
Timothy C. Brightbill, Wiley Rein, LLP of Washington, DC argued for Plaintiff-
Intervenor. With him on the brief was Alan H. Price.
Tara K. Hogan, Senior Trial Counsel, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of Washington, DC, argued for Defendant. With her on the
Consol. Court No. 12-00071 Page 2
brief were Stuart F. Delery, Principal Deputy Assistant Attorney General, Jeanne E.
Davidson, Director, and Reginald T. Blades, Jr., Assistant Director. Of counsel on the
brief was Nathaniel J. Halvorson, Attorney, Office of the Chief Counsel for Import
Administration, United States Department of Commerce, of Washington, DC.
Jarrod M. Goldfeder, Akin, Gump, Strauss, Hauer & Feld, LLP, of Washington, DC,
argued for Defendant-Intervenors. With him on the briefs were J. David Park, and Sally
S. Laing.
Kelly, Judge: This matter is before the court on motions for judgment on the
agency record by Plaintiff, United States Steel Corporation (“U.S. Steel”), and by Plaintiff-
Intervenor, Nucor Corporation (“Nucor”), (collectively “Plaintiffs”), both members of the
domestic industry, pursuant to USCIT Rule 56.2. Plaintiffs’ action, brought pursuant to
section 516A of the Tariff Act of 1930 (“Tariff Act” or the “Act”), as amended, 19 U.S.C.
§ 1516a (2006),1 challenges the United States Department of Commerce’s (“Commerce”)
final determination in the administrative review issued in Certain Corrosion-Resistant
Carbon Steel Flat Products From the Republic of Korea, 77 Fed. Reg. 14,501 (Dep’t
Commerce Mar. 12, 2012) (“Final Results”) which found de minimis margins for two
respondents, Defendant-Intervenors herein. Defendant, United States, and Defendant-
Intervenors, Pohang Iron & Steel Co., Ltd. and Pohang Coated Steel Co., Ltd. (collectively
“POSCO”), and Hyundai HYSCO (“HYSCO”) oppose this action. The administrative
review arises from the antidumping duty order covering certain corrosion-resistant carbon
steel flat products (“CORE”) from Korea. See, e.g., Pl.’s Compl. at ¶ 1, Mar. 23, 2012,
ECF No. 6; see also Certain Cold-Rolled Carbon Steel Flat Products and Certain
1
Further citations to the Tariff Act of 1930, as amended, are to the relevant provisions of
Title 19 of the U.S. Code, 2006 edition, and all applicable supplements.
Consol. Court No. 12-00071 Page 3
Corrosion-Resistant Carbon Steel Flat Products From Korea, 58 Fed. Reg. 44,159 (Dep’t
Commerce Aug. 19, 1993) (antidumping duty order). Commerce initiated the 17th
administrative review on September 29, 2010, for, among others, POSCO and HYSCO.
See Initiation of Antidumping and Countervailing Duty Administrative Reviews and
Requests for Revocation in Part, 75 Fed. Reg. 60,076, 60,077 (Dep’t Commerce Sept.
29, 2010).
BACKGROUND
Both POSCO and HYSCO produce and sell several different product types
of CORE subject to the dumping order in question. Commerce based its review of the
subject merchandise on twelve different model-match criteria, one of which is temper
rolling.2 HYSCO produces and sells temper rolled (“TR”) and non-tempered rolled
(“NTR”) merchandise in both the United States and its home market. In its review,
Commerce chose the date of shipment as the date of sale for POSCO’s U.S. sales in
order to determine the dumping margin. Further, it considered HYSCO’s NTR home
market sales to be made within the ordinary course of trade. Finally, after it found a de
minimis margin for POSCO for the third consecutive review, Commerce revoked the order
with respect to POSCO. Final Results at 14,501; Issues and Decision Memorandum for
the Final Results of the 17th Administrative Review of the Antidumping Duty Order on
Certain Corrosion-Resistant Carbon Steel Flat Products from the Republic of Korea
(2009-2010) cmts 3, 5, 6, A-580-816, (Mar. 5, 2012) (“Issues and Decision
2
Temper rolling “refers to a finishing operation that smoothes [sic] the surface of the
steel.” Mem. Def.-Interv. HYSCO Opp’n to Pl.’s Rule 56.2 Mot. J. at 4, Feb. 25, 2013,
ECF No. 68.
Consol. Court No. 12-00071 Page 4
Memorandum”), available at http://enforcement.trade.gov/frn/summary/Korea-
south/2012-5937-1.pdf (last visited Dec. 4, 2013).
Plaintiffs challenge Commerce’s selection of the shipment date as the date
of sale for POSCO, see, e.g., Pl.’s Compl. at ¶ 10-11, and Commerce’s determination
that certain sales of NTR merchandise by HYSCO were within the ordinary course of
trade. Id. at ¶ 16-17. Further, Plaintiffs challenge Commerce’s revocation of the dumping
order with respect to POSCO. Id. at ¶ 12-13.
For the reasons set forth below, the court sustains Commerce’s selection
of the shipment date as the date of sale for POSCO’s U.S. sales, its findings that
HYSCO’s sales of NTR merchandise were within the ordinary course of trade, and its
decision to revoke the antidumping duty order with respect to POSCO.
JURISDICTION
The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (2006),3 and 19
U.S.C. § 1516a(a).
DISCUSSION
Standard of Review
“The court shall hold unlawful any determination, finding or conclusion found
. . . to be unsupported by substantial evidence on the record, or otherwise not in
accordance with law . . . .” 19 U.S.C. § 1516a(b)(1)(B)(i). To be in accordance with law,
a decision must not be arbitrary and capricious, contrary to regulations, statutes or the
3
Further citations to Title 28 of the U.S. Code are made to the 2006 edition, and all
applicable supplements.
Consol. Court No. 12-00071 Page 5
Constitution, and must be supported by substantial evidence and reasoned explanations.
See Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto Ins. Co., 463 U.S. 29,
41-43, 103 S.Ct. 2856, 2866-67 (1983); SKF USA Inc. v. United States, 630 F.3d 1365,
1373-74 (Fed. Cir. 2011). Substantial evidence exists on the record when there is “such
relevant evidence as a 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, 59 S.Ct. 206, 217, 83 L.Ed.
126, 140 (1938)). However, the “substantiality of evidence must take into account
whatever in the record fairly detracts from its weight.” Universal Camera Corp. v. NLRB,
340 U.S. 474, 488, 71 S.Ct. 456, 464, 95 L.Ed. 456, 467 (1951). Nevertheless, “the
possibility of drawing two inconsistent conclusions from the evidence does not invalidate
Commerce's conclusion as long as it remains supported by substantial evidence on the
record.” Zhaoqing New Zhongya Aluminum Co. v. United States, 36 CIT __, __, 887 F.
Supp. 2d 1301, 1305 (2012) (citing Universal Camera Corp., 340 U.S. at 488, 71 S.Ct. at
465, 95 L.Ed. at 467-68).
Date of Sale
Commerce’s determination that POSCO’s date of sale should be based on
the date of shipment is supported by substantial evidence and in accordance with law.
Commerce calculated dumping margins in this case on a constructed export price (“CEP”)
basis, so the date of sale for purposes of determining the U.S. price of the subject
merchandise was the date the merchandise was first sold to a party not affiliated with
Consol. Court No. 12-00071 Page 6
POSCO. See 19 U.S.C. § 1677a(b). The regulation instructs Commerce how to identify
the date of sale generally. It provides:
Date of sale. In identifying the date of sale of the subject merchandise or
foreign like product, the Secretary normally will use the date of invoice, as
recorded in the exporter or producer’s records kept in the ordinary course
of business. However, the Secretary may use a date other than the date of
invoice if the Secretary is satisfied that a different date better reflects the
date on which the exporter or producer establishes the material terms of
sale.
19 C.F.R. § 351.401(i)(2013). Thus, the regulation sets forth a presumption that “the
Secretary normally will use the date of invoice” for the date of sale but “may use a date
other than the date of invoice if the Secretary is satisfied that a different date better reflects
the date on which the exporter or producer establishes the material terms.” 19 C.F.R.
§ 351.401(i)(2013). See Sahaviriya Steel Indus. Pub. Co. v. United States, 34 CIT __,
__, 714 F. Supp. 2d 1263, 1279 (2010) (“Thus, Commerce’s date of sale regulation
provides for a ‘rebuttable presumption’ that invoice date will normally be identified as the
date of sale.” (citation omitted)), aff’d, 649 F.3d 1371 (Fed. Cir. 2011). Although
Commerce’s regulation provides that the date of sale will normally be the invoice date,
Congress has “expressed its intent that, for antidumping purposes, the date of sale be
flexible so as to accurately reflect the true date on which the material elements of sale
were established.” Allied Tube and Conduit Corp. v. United States, 24 CIT 1357, 1370,
127 F. Supp. 2d 207, 219 (2000).
Implicated in this case is what discretion the Secretary has to be “satisfied”
that a date other than the invoice date is more appropriate as the date of sale. In other
words, the question is whether record evidence supports a conclusion by the Secretary
Consol. Court No. 12-00071 Page 7
that the shipment date better reflects the date on which the exporter or producer
established the material terms of sale. Material terms include price and quantity among
others. See Sahaviriya Steel, 34 CIT at __, 714 F. Supp. 2d at 1280.
Commerce found that “the material terms of sale were set at the time of
shipment.” Issues and Decisions Memorandum at cmt 6. Commerce relied on POSCO’s
questionnaire response regarding the date of sale, record documentation regarding when
the material terms of sale were set, a long-standing business practice in the Korean steel
industry, and the U.S. sales process for all four respondents. Issues and Decision
Memorandum at cmt 6 nn.95-99. Further, it noted “HYSCO has reported ship date as
date of sale consistently in previous reviews which the Department has accepted.” Id. at
nn.99.
POSCO’s questionnaire responses and supporting documentation in the
record establish POSCO’s sales process. POSCO’s U.S. affiliate, POSCO America
Corporation (“POSAM”), negotiates and executes purchase orders with United States
customers.4 Def.’s Opp’n. Pl.’s Mot.’s J. at 19, Feb. 27, 2013, ECF No. 72; see also Mem.
POSCO POHANG Coated Steel Co., Ltd., Opp’n Pl.’s and Pl.-Interv.’s 56.2 Mots.’ J. at
25-27, Feb. 25, 2013, ECF No. 70; POSCO’s Dec. 20, 2010 Sect. A Resp. at A-18, A-24,
PD I 52, CD I 8 (Dec. 20, 2010), ECF No. 32 (May 7, 2012). Then, on a monthly basis
the U.S. customer sends an email to POSAM outlining the quantities and types of
products it would like to order. Def.’s Opp’n. Pl.’s Mot.’s J. at 19. Next, POSAM enters
4
Although POSAM is the importer of record for the goods shipped by POSCO, POSAM
does not take possession of the goods.
Consol. Court No. 12-00071 Page 8
the order into POSCO’s computer system, “which is the basis for generating an order
sheet.” Id. POSCO then manufactures the products and, after shipping arrangements
are made, ships the products directly to the U.S. customer. Id.
Based upon the foregoing description of the sales process as supported by
POSCO’s questionnaire responses, a reasonable mind could conclude the parties intend
the quantity and delivery terms to be fixed when POSCO ships the merchandise to the
U.S. customer. In Commerce’s Section A questionnaire dated October 29, 2010,
Commerce requested POSCO to report its date of sale for home market sales and U.S.
sales. See POSCO’s Dec. 20, 2010 Sect. A Resp. at A-22.5 POSCO responded on
December 20, 2010 and stated that “[f]or U.S. sales, POSCO has reported the date of
shipment from the mill in Korea as the date of sale. The invoice issued to the customer
by POSAM is issued long after the date of shipment.” Id. at A-23. POSCO’s response
supports its intention as to the date of sale. However, Commerce did not accept this
5
In particular Commerce’s question asks:
Sales Process: The date of sale for your sales to the United States and the
foreign market is important to the Department's analysis. It will determine
which sales are reported in response to sections B and C of this
questionnaire and the exchange rate used to convert normal value into US
dollars. Note, however, that the Department's criteria for determining date
of sale may differ from those that you apply in the normal course of
business. A description of the Department's criteria is included in the
Glossary of Terms at Appendix I; please use these criteria in preparing your
response to this questionnaire. If you have difficulty deciding which date to
use as the date of sale, please contact the official in charge by no later than
fourteen calendar days after the issuance of this questionnaire (the
issuance date of this questionnaire appears on the first page of the cover
letter). Describe the sales process for each method or channel of
distribution described in response to question 3 above. Include a
description of each step in the sales process.
POSCO’s Dec. 20, 2010 Sect. A Resp. at A-22.
Consol. Court No. 12-00071 Page 9
assertion at face value but followed up with a supplemental questionnaire on April 6, 2011.
In that questionnaire it asked POSCO for more information regarding its date of sale.
Commerce stated,
Please provide a copy of all sales documents which set the material terms
of sale, including quantity and price, agreed upon between POSCO America
Corporation (POSAM) and your unaffiliated U.S. customer for the top five
largest U.S. sales by quantity: SEQUs [[ ]].
Furthermore, please state if there were any changes to the material terms
of sale following shipment for any of your U.S. sales during the period of
review.
POSCO’s May 4, 2011 Supp. Sect. A-C QNR at 1, PD I 124, CD I 39 (May 4, 2011), ECF
No. 32 (May 7, 2012). POSCO responded that “POSAM and its unaffiliated customers
generally set price and quantity terms through e-mail correspondence.” Id. POSCO
further cites documents attached at Exhibit S-1. Each sequence at Exhibit S-1 contains
several documents including a purchase order, an order sheet, an invoice issued between
POSCO and POSAM, a packing list, a bill of lading, an entry summary, and finally a
commercial invoice between POSAM and the U.S. customer. See id. at Ex. 1.
POSCO also discusses possible changes to material terms including
quantity and delivery destination that can occur after the purchase order but before
shipment. Id. at 1. Finally, POSCO states that shipment date is the best date of sale:
because it reflects the date on which the material terms of sale become
firmly established. Indeed, the two changes noted above occur on or before
the date of shipment, which is subsequent to the date of the initial order.
Using shipment date as the date of sale is also consistent with the
Department's longstanding practice, including in this proceeding, that the
date of sale cannot be later than the date of shipment of the subject
merchandise to the unaffiliated U.S. customer.
Id. at 1-2.
Consol. Court No. 12-00071 Page 10
In this supplemental questionnaire, Commerce also noted [[
]] and asked for “calculation worksheets and source documentation
[[ ]].” Id. POSCO responded to this query by
stating “[t]he difference between POSCO’s price to POSAM and POSAM’s price to the
unaffiliated customer is attributable to [[
]].” Id.
POSCO provided a worksheet showing calculations at Exhibit S-3. The worksheet
provided by POSCO shows the values it placed on each of these expenses. After adding
them all together the total equals the price invoiced from POSAM to the U.S. customer.
Commerce probed further and on July 20, 2011 Commerce issued another
supplemental questionnaire. See Dept.’s July 20, 2011 Supp. Sect. A-C QN, PD I 167,
CD I 58 (Jul. 20, 2011), ECF No. 32 (May 7, 2012). It asked for more date of sale
information. Id. at 2.
1. You state that "there were no changes to the material terms of sale
following shipment for any of {your} U.S. sales during the POR" on page
1 of your May 2, 2011, supplemental questionnaire response (May QNR
Response). Please provide the documents that finalizes [sic] the
material terms of sale (i.e., price, quantity, delivery terms, and payment
terms) at the date of shipment and that shows that such terms did not
change after the shipment date for (i.e., SEQUs [[
]] your U.S. sales during the POR.
2. You stated in your May QNR Response that "POSAM and its unaffiliated
customers generally set price and quantity terms through email
correspondence." However, [[
]]. All of the
other sales documents which you submitted [[
Consol. Court No. 12-00071 Page 11
]]. Please provide sales documents which set the
material terms of sale between POSAM and the unaffiliated U.S.
customer for your top five largest U.S. sales by quantity (i.e., SEQUs
[[ ]]).
3. You stated that [[
]] For SEQUs [[
]], provide invoices or other source documentation clearly
showing the actual amounts paid for the following expenses:
[[
]] In addition, you only
provided a calculation worksheet for SEQU [[ ]]. Please provide
calculation worksheets for the other four sales, specifically SEQUs [[
]].
Id. POSCO responded to the July 20, 2011 questionnaire on August 3, 2011 providing
Commerce with documents and worksheets regarding international freight, U.S.
brokerage and handling, marine insurance, and U.S. duty. POSCO’s Aug. 3, 2011 Supp.
Sect. A-C QNR, PD I 171, CD I 62 (Aug. 3, 2011), ECF No. 32 (May 7, 2012).
The record taken as a whole contains substantial evidence for a finding by
Commerce that the shipment date reflected the date on which the parties established the
material terms. POSCO asserted that the shipment date was the date of sale in its
questionnaire. As discussed above, Commerce did not merely accept this assertion at
face value but probed further and elicited information and documentation concerning the
circumstances surrounding POSCO’s sales. Commerce reasonably made its date of sale
determination based upon the responses it received, Commerce’s knowledge of the
industry, and the lack of any evidence, that would undermine or contradict its findings.
The Plaintiffs claim that the lack of any one single document memorializing
the material terms being fixed at the time of shipment precludes shipment date as a viable
date of sale. See Mem. Supp. Pl. U.S. Steel Mot. J. at 15, Sept. 24, 2012, ECF No. 46;
Consol. Court No. 12-00071 Page 12
Br. Supp. Nucor 56.2 Mot. at 18-19, Sept. 24, 2012, ECF No. 45; Oral Arg. at 1:08:28-54,
Oct. 28, 2013, ECF No. 100. Nothing in the regulation requires Commerce to base its
decision upon such a single document. This argument ignores the language of the
regulation. Commerce may choose a date other than the date of invoice as the date of
sale if it satisfies itself that another date better represents when the parties established
the material terms. Here, it relied upon the questionnaire response, its knowledge of the
industry, and its understanding of how the transactions took place as supported by record
evidence.
Moreover, despite protestations to the contrary, no documents or evidence
relied upon by the Plaintiffs undercuts Commerce’s findings. Plaintiffs point to the offer
sheet, the purchase order, and the commercial invoice, note that the prices on each are
different, and argue that therefore the commercial invoice is the only possible evidence
establishing when the material terms are set. However, no one argues that the offer sheet
or the purchase order represented or showed the final price. Commerce determined
according to record evidence that the terms were fixed upon shipment. The existence of
these other documents, or the fact that they show different amounts, does not detract
from that finding. While it is conceivable that Commerce might have drawn another
conclusion from these documents, “the possibility of drawing two inconsistent conclusions
from the evidence does not invalidate Commerce's conclusion as long as it remains
supported by substantial evidence on the record.” Zhaoqing New Zhongya Aluminum, 36
CIT at __, 887 F. Supp. 2d at 1305 (citing Universal Camera Corp., 340 U.S. at 488, 71
S.Ct. at 465, 95 L.Ed. at 467-68).
Consol. Court No. 12-00071 Page 13
Plaintiffs argue strongly that Commerce’s practice of using the shipment
date as the date of sale when shipment date precedes invoice date is not in accordance
with law because it “contradicts Commerce’s own regulations.” Mem. Supp. Pl. U.S. Steel
Mot. J. at 20. This argument holds some weight. The regulation states that the Secretary
“normally will use the date of invoice” for the date of sale. 19 C.F.R. § 351.401(i)(2013).
A determination that relied solely on a practice to use shipment date when it precedes
invoice date would appear to contradict this language. See Mittal Steel Point Lisas Ltd.
v. United States, 31 CIT 638, 647, 491 F. Supp. 2d 1222, 1231 (2007) (stating that
Commerce’s practice “is in contradiction to Commerce’s statement in the [regulation’s]
preamble” but noting other courts have “implicitly approved” the practice), aff’d, 548 F.3d
1375 (Fed. Cir. 2008).
While the second sentence of the regulation allows Commerce to choose a
date other than the invoice date, it requires that Commerce be “satisfied that a different
date better reflects the date on which the exporter or producer establishes the material
terms of sale.” 19 C.F.R. § 351.401(i)(2013). The second sentence therefore clarifies
that while normally the invoice date will be the date of sale, another date can be chosen
if Commerce makes a determination in a particular case so as to “satisfy” itself. This
second sentence requires Commerce to make a fact-specific determination in a particular
case that another date better reflects the date on which the material terms were
established.6 It would seem that, by definition, a general practice cannot satisfy such a
6
One could argue that the second sentence does not exhaust the range of circumstances
in which Commerce could deviate from its “normal” practice. However, to the extent that
there could be any ambiguity in the regulation, Commerce foreclosed the possibility that
Consol. Court No. 12-00071 Page 14
fact-specific command. While Commerce’s knowledge of the industry, including how
business is done, is not irrelevant, any purported practice alone would seem not to be
enough to satisfy the standard that the regulation, written by Commerce, provides.7
However, here Commerce did not rely solely upon the practice. Commerce
made a specific finding that the shipment date better reflected the date on which the
material terms were set by the parties. It did so based upon evidence in the record and
the Plaintiffs have failed to point to any evidence which detracts from this finding. The
court sustains Commerce’s date of sale determination.
Ordinary Course of Trade
Antidumping duties should be “an amount equal to the amount by which the
normal value exceeds the export price (or the constructed export price) for the
merchandise.” 19 U.S.C. § 1673. Thus, Commerce must calculate both a CEP and a
normal value. The statute defines normal value as the price of the subject merchandise
“at a time reasonably corresponding to the time of the sale used to determine the export
it could develop a practice in which shipment date would be the preferred date. See
Antidumping Duties; Countervailing Duties, 62 Fed. Reg. 27,296, 27,348-49 (Dep’t
Commerce May 19, 1997) (final rule) (rejecting shipment date as the uniform date of sale).
7
In its Issues and Decision Memorandum Commerce said “[i]t is the Department’s normal
practice not to consider dates subsequent to the date of shipment from the factory to the
customer as appropriate for the date of sale because once merchandise is shipped, the
material terms of sale are established.” Issues and Decision Memorandum at 28. At oral
argument POSCO argued that while this practice appeared to contradict Commerce’s
regulation, “in the last 16 years they have modified their practice.” Oral Arg. at 12:21:30,
Oct. 28, 2013, ECF No. 100. Modifying a regulation in this manner would not be
permissible. If Commerce has determined through subsequent implementation of the
regulation that a date other than the invoice date normally will better reflect the date of
sale there are adequate procedures for changing the regulation. See, e.g., Administrative
Procedure Act, 5 U.S.C. § 553 (2006).
Consol. Court No. 12-00071 Page 15
price or constructed export price,” 19 U.S.C. § 1677b(a)(1)(A), where the price 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). Thus, for Commerce to include a particular sale in its
calculation of a respondent’s normal value, the sale must have been made in the ordinary
course of trade. Congress defines ordinary course of trade as:
the conditions and practices which, for a reasonable time prior to the
exportation of the subject merchandise, have been normal in the trade
under consideration with respect to merchandise of the same class or kind.
The administering authority shall consider the following sales and
transactions, among others, to be outside the ordinary course of trade:
(A) Sales disregarded under section 1677b(b)(1) of this title.
(B) Transactions disregarded under section 1677b(f)(2) of this title.
19 U.S.C. § 1677(15).8
Other than for the two statutory exclusions mentioned above, the Tariff Act
provides “little assistance in determining what is outside the scope of that definition.” NSK
Ltd. v. United States, 25 CIT 583, 599, 170 F. Supp. 2d 1280, 1296 (2001). The court
has held that Commerce has discretion to determine what sales are outside the ordinary
course of trade. See, e.g., Bergerac, N.C. v. United States, 24 CIT 525, 536-37, 102 F.
Supp. 2d 497, 507 (2000); Torrington Co. v. United States, 25 CIT 395, 402-03, 146 F.
Supp. 2d 845, 861 (2001), aff’d, 62 Fed. Appx. 950 (Fed. Cir. 2003); U.S. Steel Group v.
United States, 25 CIT 1293, 1300, 177 F. Supp. 2d 1325, 1333 (2001). Commerce’s
8
Although not relevant here, sales disregarded under § 1677b(b)(1) are sales made at
prices less than the cost of production, 19 U.S.C. § 1677b(b)(1), and transactions
disregarded under § 1677b(f)(2) are transactions between affiliated parties. 19 U.S.C.
§ 1677b(f)(2).
Consol. Court No. 12-00071 Page 16
regulations in 19 C.F.R. § 351.102(b)(35)(2013) establish Commerce’s methodology for
evaluating when sales are made outside the ordinary course of trade:
[t]he Secretary may consider sales or transactions to be outside the ordinary
course of trade if the Secretary determines, based on an evaluation of all of
the circumstances particular to the sales in question, that such sales or
transactions have characteristics that are extraordinary for the market in
question. Examples of sales that the Secretary might consider as being
outside the ordinary course of trade are sales or transactions involving off-
quality merchandise or merchandise produced according to unusual
product specifications, merchandise sold at aberrational prices or with
abnormally high profits, merchandise sold pursuant to unusual terms of
sale, or merchandise sold to an affiliated party at a non-arm's length price.
19 C.F.R. § 351.102(b)(35)(2013). Therefore, Commerce may find that sales are outside
the ordinary course of trade if it determines that sales “have characteristics that are
extraordinary,” based on a totality of the circumstances. Id. See also NSK Ltd., 25 CIT
at 599, 170 F. Supp. 2d at 1296 (“Commerce’s methodology allows it, on a case-by-case
basis, to examine all conditions and practices which may be considered ordinary in the
trade under consideration and to determine which sales or transactions are, therefore,
outside the ordinary course of trade.”).
In applying its totality of the circumstances test, Commerce does not give
particular weight to any single factor. Instead, Commerce determines which factor may
be more or less significant based on the case at hand. See, e.g., Murata, 17 CIT at 263,
820 F. Supp. at 606. In making its determination, Commerce looks “at market conditions,
practices, and other sales” in the home market, U.S. Steel Group, 25 CIT at 1300, 177 F.
Supp. 2d at 1333, and “it then compares the transactions in question to see if they exhibit
characteristics that are extraordinary for the market.” Id. See also Mantex, Inc. v. United
States, 17 CIT 1385, 1403, 841 F. Supp. 1290, 1306 (1993). Commerce has discretion
Consol. Court No. 12-00071 Page 17
to determine when an unusual circumstance will render sales outside the ordinary course
of trade. See 19 C.F.R. § 351.102(b)(35)(2013); see also Koenig & Bauer-Albert AG v.
United States, 22 CIT 574, 589, 15 F. Supp. 2d 834, 850 (1998) (finding that “Commerce
has the discretion to decide under what circumstances highly profitable sales would be
considered to be outside of the ordinary course of trade.”), vacated on other grounds, 259
F.3d 1341 (Fed. Cir. 2001); NTN Bearing Corp. of Am. v. United States, 27 CIT 129, 169-
71, 248 F. Supp. 2d 1256, 1289-91 (2003) (finding that Commerce’s inclusion of
respondent’s sample sales and sales with high profits in the normal value calculation was
properly within Commerce’s discretion because the mere existence of an extraordinary
factor does not negate the totality of the circumstances test for determining whether sales
are representative of the home market).
In addition to the regulations, the court has commonly looked to the
Statement of Administrative Action (“SAA”) to discern Congress’ intent regarding ordinary
course of trade. See, e.g., Monsanto Co. v. United States, 12 CIT 937, 940, 698 F.Supp.
275, 278 (1988) (stating that the “commonly understood purpose of the ordinary course
of trade provision is to prevent dumping margins from being based on sales which are not
representative, for example, sales of obsolete merchandise.”). The SAA states that
Commerce may consider other types of sales or transactions to be outside
the ordinary course of trade when such sales or transactions have
characteristics that are not ordinary as compared to sales or transactions
generally made in the same market. Examples of such sales or transactions
include merchandise produced according to unusual product specifications,
merchandise sold at aberrational prices, or merchandise sold pursuant to
unusual terms of sale. As under existing law, amended section 771(15)
does not establish an exhaustive list, but the Administration intends that
Commerce will interpret section 771(15) in a manner which will avoid basing
normal value on sales which are extraordinary for the market in question,
Consol. Court No. 12-00071 Page 18
particularly when the use of such sales would lead to irrational or
unrepresentative results.
Uruguay Round Agreements Act, Statement of Administrative Action, H.R. Doc. No. 103-
316, vol. 1, at 834 (1994), reprinted in 1994 U.S.C.C.A.N. 4040, 4171 (“SAA”). Thus,
although Commerce’s regulations reflect some of the language of the SAA, the SAA
demonstrates a particular concern with extraordinary sales that would lead to “irrational
or unrepresentative results.” Id.Finally, without “adequate evidence of extraordinary characteristics,” U.S.
Steel Group, 25 CIT at 1300, 177 F. Supp. 2d at 1333, Commerce presumes the
contested sales were made in the ordinary course and includes them in its margin
calculations. See, e.g., U.S. Steel Group, 25 CIT at 1300, 177 F. Supp. 2d at 1333;
Bergerac, 24 CIT at 538, 102 F. Supp. 2d at 509; NTN Bearing Corp. of Am. v. United
States, 19 CIT 1165, 1172, 903 F.Supp. 62, 68–69 (1995). The court has characterized
the burden imposed on the party challenging this presumption as requiring “a complete
explanation of the facts which establish the extraordinary circumstances rendering
particular sales outside the ordinary course of trade . . . .” NTN Bearing Corp. of Am v.
United States, 19 CIT 1221, 1229, 905 F.Supp. 1083, 1091 (1995). See also Bergerac,
24 CIT at 538, 102 F. Supp. 2d at 509; Koyo Seiko Co. v. United States, 20 CIT 772, 783,
932 F.Supp. 1488, 1497-98 (1996).
The court sustains Commerce’s determination that HYSCO’s NTR sales
were made within the ordinary course of trade as made in accordance with law and as
supported by substantial evidence. Commerce properly considered the totality of the
circumstances, including the number and types of customers that purchased NTR
Consol. Court No. 12-00071 Page 19
merchandise, the circumstances surrounding those sales, the average quantities
purchased, the channels of distribution, and terms of sale. Issues and Decision
Memorandum at cmt 3. It found that the number of customers was significant. Id. (citing
to HYSCO’s Rebuttal Brief at 17, CD II EXT_051205 (Jan. 17, 2012), ECF No. 32 (May
7, 2012)). It found “none of those customers were otherwise unique in their purchases,”
Issues and Decision Memorandum at cmt 3 (citing to HYSCO’s Rebuttal Brief at 17), and
found no evidence that the categories of customers for NTR sales were different from TR
sales. Issues and Decision Memorandum at cmt 3. Neither did Commerce find anything
unusual about the average purchase quantities. Id. It found no evidence that the terms
of sale or channels of distribution were different for NTR sales than for TR sales. Id. U.S.
Steel points to no evidence in the record that refutes any of these findings. See Mem.
Supp. Pl. U.S. Steel Mot. J. at 24-30. Commerce’s decision, based upon the totality of
the circumstances, that HYSCO’s NTR sales were not outside the ordinary course of
trade is therefore reasonable and made in accordance with law.
Instead of directly challenging Commerce’s factual findings on appeal, U.S.
Steel contends that Commerce’s inclusion of HYSCO’s NTR sales in the normal value
calculations was not in accordance with law. Id. at 25. U.S. Steel claims the SAA
standard is controlling, and that it requires Commerce to exclude extraordinary sales
when those sales produce irrational or unrepresentative results on the dumping margin.9
9
U.S. Steel argues the SAA “establishes that Commerce must not base its margin
calculations on sales that are ‘extraordinary for the market in question’ and cannot use
non-ordinary sales that lead to ‘irrational or unrepresentative results.’” Mem. Supp. Pl.
U.S. Steel Mot. J. at 26. As such, plaintiff argues “Commerce does not have any
discretion in the matter,” because when there exists “a class of extraordinary sales that
Consol. Court No. 12-00071 Page 20
See id. at 25-26. See also SAA at 834. U.S. Steel asserts that Commerce acted contrary
to law by “ignor[ing] the straightforward directive of the SAA,” Mem. Supp. Pl. U.S. Steel
Mot. J. at 25, because HYSCO’s home market NTR sales were “plainly extraordinary for
the market in question.” Id. at 26. In support of its argument that Commerce was required
to exclude HYSCO’s NTR sales, U.S. Steel makes two arguments. First, U.S. Steel
argues that [[ ]] between HYSCO’s home market TR and NTR sales
renders the NTR sales extraordinary. Id. at 26. Second, U.S. Steel argues that HYSCO’s
NTR “sales are extraordinary because they took place without leaving any paper (or
email) trail.” Id. at 27. Further, U.S. Steel asserts that HYSCO’s NTR sales have an
irrational effect on the dumping margin and, therefore, the SAA requires Commerce to
exclude them.10 Id. at 28.
U.S. Steel’s argument relies partly on the fact that [[ ]] of the time
HYSCO’s home market sales are TR. However, neither Commerce’s regulations nor the
by themselves produce an irrational result,” the SAA requires those sales to be excluded
from NV calculations. Id. at 26.
10
U.S. Steel contends
if the [[ ]] of sales that were designated as non-temper rolled were
classified as temper rolled, the dumping margin would have been over
[[ ]]. And if the [[ ]] of non-temper rolled sales had been excluded
from the margin calculation as outside the ordinary course of trade (i.e., so
that HYSCO’s dumping margin would be based on [[ ]] of its home
market sales that were not unusual), HYSCO’s dumping margin would have
been [[ ]].
Mem. Supp. Pl. U.S. Steel Mot. J. at 28. HYSCO questions U.S. Steel’s conclusion
regarding the impact these sales have on the margin. See Mem. Def.-Interv. HYSCO
Opp’n to Pl.’s Rule 56.2 Mot. J. at 28. HYSCO argues that “U.S. Steel's claimed result is
unsubstantiated in the record by a single computer program or calculation. Correctly
implementing the change that U.S. Steel suggests would require multiple changes
throughout the Department's programs, given the complexity of the Department's
calculations, and thus is highly prone to clerical error.” Id. at 29 n.5.
Consol. Court No. 12-00071 Page 21
SAA requires sales to be excluded because they are comparatively [[ ]] in volume, but
only if, for some reason, those sales are not representative of the market in question.
See NTN Bearing Corp. of Am., 27 CIT at 171, 248 F. Supp. 2d at 1291 (upholding
Commerce’s determination that respondent’s sample sales and high profit sales were in
the ordinary course of trade because there was no evidence that “the transactions at issue
possessed some unique and unusual characteristic that make them unrepresentative of
the home market. . . ”), appeal dismissed on motion to withdraw, 81 Fed. Appx. 318 (Fed.
Cir. 2003).11 Indeed, the court has explicitly held that a [[ ]] on its own,
is not enough to warrant a finding that the contested sales were made outside the ordinary
course of trade. See Murata, 17 CIT at 263-64, 820 F.Supp. at 606-07. See also Koyo
Seiko Co., 20 CIT at 783, 932 F.Supp. at 1498.
Some potentially extraordinary sales characteristics that Commerce might
consider in administering this test include sales where the merchandise is “off-quality,”
made with “unusual product specifications,” or “sold pursuant to unusual terms of sale.”
19 C.F.R. § 351.102(b)(2013). See also SAA at 834. All of these examples may involve
11
In NTN Corp. v. United States, plaintiff and respondent, NTN, argued Commerce
incorrectly treated its sample sales as made in the ordinary course of trade. 28 CIT 108,
136, 306 F. Supp. 2d 1319, 1344 (2004) aff’d, 125 Fed. Appx. 1011 (Fed. Cir. 2005).
NTN claimed “Commerce acknowledged that these sales were relatively few in number,
but then found that NTN's sample sales were not rare or uncommon.” NTN Corp., 28 CIT
at 136, 306 F. Supp. 2d at 1344. In rebutting Commerce’s rationale, NTN argued the
same thing as plaintiff herein. Specifically, NTN argued that a determination of whether
a particular sales’ factor is unusual should be based on a comparison of the contested
sales with overall sales. See NTN Corp., 28 CIT at 136, 306 F. Supp. 2d at 1344. The
court found that “Commerce reasonably exercised its discretion in requiring NTN to
provide evidence that its sample . . . sales were outside the ordinary course of trade.”
NTN Corp., 28 CIT at 139, 306 F. Supp. 2d at 1347.
Consol. Court No. 12-00071 Page 22
a relatively [[ ]] comparative volume of sales in the home market, but merely declaring
that there is a [[ ]] volume is not sufficient to show that the sales were extraordinary.
Commerce must consider the totality of circumstances in each case to determine whether
the sales or transactions at issue would not be representative of the market. See U.S.
Steel Group, 25 CIT at 1299, 177 F. Supp. 2d at 1332.
U.S. Steel argues that the NTR sales do have unusual physical and
production characteristics because they represent [[ ]] of HYSCO’s subject home
market sales and therefore they are, by definition, different from [[ ]] of HYSCO’s
subject home market sales both in terms of their physical characteristics and how they
are produced. Mem. Supp. Pl. U.S. Steel Mot. J. at 26. This argument, if accepted, would
inappropriately convert an inquiry concerning physical characteristics or production
process into a question of numbers. U.S. Steel makes no argument that the sales
themselves have unusual attributes, such as sales of off-quality merchandise, or of
merchandise made pursuant to unusual specifications. See id. at 26-29.
Second, U.S. Steel points to the lack of paper documentation for HYSCO’s
NTR sales to argue that they are “inherently unverifiable” and, as such, extraordinary. Id.
at 27-28. This contention fairs no better. Commerce found that the way in which the NTR
sales were made was not unusual. Issues and Decision Memorandum at cmt 3. In the
Issues and Decision Memorandum, Commerce found that “the number of customers that
purchase non-temper rolled merchandise is significant, and that none of those customers
were otherwise unique in their purchases of home market sales of subject merchandise
from HYSCO.” Issues and Decision Memorandum at cmt 3. U.S. Steel says nothing
Consol. Court No. 12-00071 Page 23
about whether the lack of a paper trail is unusual either for HYSCO or sales of NTR
merchandise in the home market generally. Mem. Supp. Pl. U.S. Steel Mot. J. at 27-28.
U.S. Steel then argues that, per the SAA standard, these sales should be
excluded because of their unrepresentative impact on the dumping margin. Id. at 28.
U.S. Steel contends that it would be irrational to allow [[ ]] of sales “to control the
outcome of a case . . . .” Id. at 28. U.S. Steel relies upon the language of the SAA which
provides that Commerce is to “avoid basing normal value on sales which are
extraordinary . . . particularly when the use of such sales would lead to irrational or
unrepresentative results.” SAA at 834. For Commerce to consider the impact of the sales
on the dumping margin, the language of the SAA first requires that the sales exhibit
extraordinary characteristics. However, if based on the totality of the circumstances,
Commerce, as it did here, appropriately finds that the contested sales were not
extraordinary then the impact of those sales on the margin is irrelevant.
Based on the foregoing, Commerce’s decision to reject U.S. Steel’s
argument that HYSCO’s NTR home market sales were outside the ordinary course of
trade was made in accordance with law and supported by substantial evidence.
Revocation
Congress provided for the revocation of an antidumping order in 19 U.S.C.
§ 1675(d). The statute provides in relevant part:
(d) Revocation of order or finding; termination of suspended investigation
(1) In general
The administering authority may revoke, in whole or in part, a
countervailing duty order or an antidumping duty order or finding, or
terminate a suspended investigation, after review under subsection
(a) or (b) of this section. . . .
Consol. Court No. 12-00071 Page 24
19 U.S.C. § 1675(d). Commerce’s regulations set forth the requirements for a request
for revocation.
(e) Request for revocation or termination—
(1) Antidumping proceeding. During the third and subsequent
annual anniversary months of the publication of an antidumping
order or suspension of an antidumping investigation, an exporter or
producer may request in writing that the Secretary revoke an order
or terminate a suspended investigation under paragraph (b) of this
section with regard to that person if the person submits with the
request:
(i) The person’s certification that the person sold the subject
merchandise at not less than normal value during the period of
review described in §351.213(e)(i), and that in the future the person
will not sell the merchandise at less than normal value;
(ii) The person’s certification that, during each of the consecutive
years referred to in paragraph (b) of this section, the person sold the
subject merchandise to the United States in commercial quantities;
and
(iii) If applicable, the agreement regarding reinstatement in the order
or suspended investigation described in paragraph (b)(2)(iii) of this
section.
19 C.F.R. § 351.222(e)(1)(2013). Commerce’s regulations discuss Commerce’s
determination when to revoke in part:
(2)(i) In determining whether to revoke, an antidumping duty order in part,
the Secretary will consider:
(A) Whether one or more exporters or producers covered by the
order have sold the merchandise at not less than normal value for a
period of at least three consecutive years;
(B) Whether, for any exporter or producer that the Secretary
previously has determined to have sold the subject merchandise at
less than normal value, the exporter or producer agrees in writing to
its immediate reinstatement in the order, as long as any exporter or
producer is subject to the order, if the Secretary concludes that the
exporter or producer, subsequent to the revocation, sold the subject
merchandise at less than normal value; and
(C) Whether the continued application of the antidumping order is
otherwise necessary to offset dumping.
Consol. Court No. 12-00071 Page 25
(ii) If the Secretary determines, based upon the criteria in paragraphs
(b)(2)(i)(A) through (C) of this section, that the antidumping duty order as to
those producers or exporters is no longer warranted, the Secretary will
revoke the order as to those producers or exporters.
19 C.F.R. § 351.222(b)(2)(i)-(ii) (language effective until June 20, 2012).
The statute “provides minimal guidance” to Commerce and is “silent as to
the conditions that might warrant the revocation of an antidumping duty order or the
particular circumstances that would trigger such an action.” Sahaviriya Steel Indus. Pub.
Co. v. United States, 649 F.3d 1371, 1376 (Fed. Cir. 2011). Thus, Commerce has
discretion in making a revocation determination including whether the requesting party
satisfied the criteria for revocation. See, e.g., Feili Group (Fujian) Co., v. United States,
34 CIT __, __, 724 F. Supp. 2d 1358, 1369 (2010).
Commerce’s determination is supported by substantial evidence and in
accordance with law. Commerce explained that it was satisfied POSCO fulfilled the 19
C.F.R. § 351.222(e) certification requirements. Issues and Decision Memo at cmt 5, n.78
(citing POSCO Letter to the Dept., PD I 4 (Aug. 31, 2010), ECF No. 32 (May 7, 2010)).
Next, Commerce applied the criteria in 19 C.F.R. § 351.222(b)(2)(i) (language effective
until June 20, 2012). It was undisputed that POSCO had de minimis margins for three
consecutive years. Commerce found that POSCO had sold “at not less than normal value”
for those years. 19 C.F.R. § 351.222(b)(2)(i)(A) (language effective until June 20, 2012);
Issues and Decision Memorandum at cmt 5, nn.79-80. Commerce presumes continued
application of the order is unnecessary after three consecutive findings of an absence of
dumping unless the petitioner comes forward with information to rebut. Id. at n.82 (citing
Amended Regulation Concerning the Revocation of Antidumping and Countervailing Duty
Consol. Court No. 12-00071 Page 26
Orders, 64 FR 51236 (Sept. 22, 1999)). Commerce’s application of its standard is
reasonable.
Plaintiffs’ arguments that revocation was unsupported by substantial
evidence or otherwise not in accordance with law are unavailing. First, as discussed
above, Plaintiffs’ claim that the revocation was based in part on Commerce’s erroneous
date of sale determination lacks merit.
Second, Plaintiffs argue that Commerce failed to address record evidence
of specific market and economic factors which showed a likelihood of future dumping and
thus that the continued application of the dumping order was necessary. Without nuance,
U.S. Steel argues that POSCO’s increasing production capacity and other business
practices along with lost market share by domestic producers show a likelihood of future
dumping. Mem. Supp. Pl. U.S. Steel Mot. J. at 23-24. In greater detail, Nucor argues
that future dumping is likely because: (i) the economic downturn made the last three
reviews unrepresentative, (ii) POSCO’s shipment volumes and market share in Korea
have declined while its production has increased, and (iii) it has established a “strategic
partnership” with Union Steel Manufacturing Co. Ltd. (another respondent). Br. Supp.
Nucor 56.2 Mot. at 12-16. However, assertions of market conditions are not evidence
that the order is “otherwise necessary to offset dumping.” 19 C.F.R. § 351.222(b)(2)(i)
(language effective until June 20, 2012). Plaintiffs would have Commerce speculate that
these facts support the conclusion that POSCO is likely to sell at less than normal value
in the future. While Commerce must “address significant arguments and evidence which
seriously undermine its reasoning and conclusion” it does not need to address every
Consol. Court No. 12-00071 Page 27
assertion made by the petitioners. Altx, Inc. v. United States, 25 CIT 1100, 1117-1118,
167 F.Supp.2d 1353, 1374 (2001), aff’d, 370 F.3d 1108 (Fed. Cir. 2004); see also 19
U.S.C. § 1677f(i)(3)(A). Here, where the assertions do no more than ask Commerce to
speculate, it is reasonable to conclude that Commerce considered the assertions and did
not credit them.
Finally, Nucor argues that Commerce was unable to complete verification
with regard to POSCO and thus, its determination was unsupported by substantial
evidence and otherwise not in accordance with law. Commerce has discretion in how it
conducts its verification process. See Floral Trade Council v. United States, 17 CIT 392,
398-99, 822 F. Supp. 766, 771-72 (1993). In its Issues and Decision Memorandum,
Commerce correctly notes that it is “afforded [] a degree of latitude in implementing its
verification procedures, and that the Department is not required to verify each item
submitted in respondents’ questionnaire.” Id. at cmt 5, n.88; see also Floral Trade
Council, 17 CIT at 399, 822 F. Supp. 2d at 772 (internal citations omitted). Contrary to
Nucor’s assertion that Commerce must conduct a “completeness test,” Br. Supp. Nucor
56.2 Mot. at 11-12, “verification is an audit process that selectively tests accuracy and
completeness of a respondent’s submissions.” Issues and Decision Memorandum at cmt
5, n.89 (citing Bomont Indus. v. United States, 14 CIT 208, 209, 733 F.Supp 1507, 1508
(1990)); see also Floral Trade Council, 17 CIT at 398, 822 F. Supp. at 771. Although
verification was not completed, it did not need to be complete for this court to sustain
Commerce’s finding. See Floral Trade Council, 17 CIT at 399-400, 822 F. Supp. at 772;
Hercules, Inc. v. United States, 11 CIT 710, 726, 673 F.Supp. 454, 469-70 (1987)).
Consol. Court No. 12-00071 Page 28
Therefore, Commerce’s decision to revoke the order with respect to
POSCO is supported by substantial evidence and in accordance with law.
CONCLUSION
For the foregoing reasons, Plaintiffs’ motion for judgment on the agency
record is denied. Judgment will be entered accordingly.
___/s/ Claire R. Kelly
Claire R. Kelly, Judge
Dated: December 27, 2013
New York, New York