United States Court of International Trade

Partial 55(b) Summary Judgement Entered

In United States v. Horizon International, Inc., Court No. 14-104, Slip Op. 15-96 (August 26, 2015), the court entered an immediate 54(b) partial summary judgment to allow plaintiff the United States to collect the unpaid duties and equitable prejudgment interest.  In United States v. Horizon Prods. Int’l, Inc., 39 CIT ___, Slip Op. 15-80 (July 24, 2015)  the court granted plaintiff United States (“the Government”) partial summary judgment with respect to unpaid duties resulting from the misclassification of imports of various types of plywood by Defendant Horizon Products International, Inc. (“Horizon”). Additionally, the court awarded the Government equitable prejudgment interest on those unpaid duties. Id. Lastly the court denied the Government summary judgment on its claim for a civil penalty based on negligence, determining that genuine issues of material fact remained regarding (1) whether Horizon exercised reasonable care in making its entries and (2) the amount of any penalty owed because of Horizon’s alleged negligent misclassification of the imported plywood. Because plaintiff conceded liability, the court found under the circumstances that such a judgment was beneficial to both parties.

Stay Granted in Scope Determination Case

In DuPont Teijin Films et al. v. United States, Court No. 15-48, Slip Op. 15-95 (August 27, 2015), plaintiffs, DuPont Teijin Films, Mitsubishi Polyester Film, Inc. (“Mitsubishi”), and SKC, Inc. (“SKC”), move the court to stay this case pending the outcome of the appeal of the Department of Commerce’s (“Commerce”) scope determination (the “Scope Ruling”) in Mitsubishi Polyester Film, Inc. v. United States, No. 13-00062 (filed Feb. 6, 2013) (“Mitsubishi litigation”). On November 10, 2008, Commerce issued an antidumping duty order on polyethylene terephthalate (PET) film from Brazil, China, and the UAE. Polyethylene Terephthalate Film, Sheet, and Strip from Brazil, the People’s Republic of China, and the United Arab Emirates, 73 Fed. Reg. 66,595 (Dep’t of Commerce Nov. 10, 2008) (antidumping duty order). On February 22, 2012, Defendant-Intevernors requested a scope ruling from Commerce concerning certain copolymer surface films. On January 7, 2013, Commerce issued the Scope Ruling and found that certain PET film coextruded products manufactured by Defendant-Intervenor Terphane, Ltda., a Brazilian firm, are outside of the scope of the antidumping duty order. Antidumping Duty Order on PET Film, Sheet, and Strip from Brazil, A-351-841 (Dep’t of Commerce Jan. 7, 2013) (final scope ruling). On February 6, 2013, Plaintiffs Mitsubishi and SKC, U.S. producers of PET film, appealed the determination to this court, initiating the Mitsubishi litigation.  Because, the Mitsubishi litigation deals with the same issues and merchandise as in this case, namely, “whether Telephane’s Products are properly within the scope of the antidumping duty order on PET film from Brazil,” plaintiffs asked for a stay pending the Mitsubishi litigation, and the court granted the stay.

Commerce’s Decision Remanded Regarding Oil Country Tubular Goods

In Husteel Co., Ltd. et al. v. United States et al., Consol. Court No. 14-215, Slip Op. 15-100 (Published September 2, 2015), the court considered motions for judgment on the agency record of Korean producers Husteel Co., Ltd. (“Husteel”), NEXTEEL Co., Ltd. (“NEXTEEL”), ILJIN Steel Corporation (“ILJIN”), AJU Besteel Co., Ltd. (“AJU Besteel”), and SeAH Steel Corp. (“SeAH”) (collectively, “plaintiffs”). This underlying action challenged the Department of Commerce’s (“Commerce”) final determination rendered in the antidumping (“AD”) duty investigation of certain oil country tubular goods (“OCTG”) from the Republic of Korea (“Korea”). See Certain Oil Country Tubular Goods From the Republic of Korea: Final Determination of Sales at Less Than Fair Value and Negative Final Determination of Critical Circumstances, 79 Fed. Reg. 41,983 (Dep’t Commerce July 18, 2014) (“Final Determination”).

ILJIN, Husteel, and SeAH argued that Commerce unjustly limited the number of mandatory respondents to two, HYSCO and NEXTEEL (largest exporters of OCTG).  Commerce apparently took account of its limited resources and the workload caused by other proceedings in deciding to limit the number of mandatory respondents. In a previous case, Commerce determined that a large number of potential respondents was involved in the investigation and then limited its examination to two respondents.   According to Commerce, the statutory deadlines for completing an investigation are shorter than the deadlines for completing a review, and Commerce is required to conduct a verification of respondents’ submissions. Thus in an investigation there is more work and less time to complete it.  Pursuant, Commerce’s reasoning to limit the number of respondents in an investigation, the court sustained this decision.

However, according to ILJIN Commerce failed to take account of information it submitted showing that the other potential respondents in the investigation, including the two respondents that were selected for individual examination, were not representative of ILJIN. ILJIN noted that it produces only seamless OCTG, whereas each of the other Korean companies produce only welded OCTG. Seamless OCTG requires different manufacturing processes. As explained, ILJIN submitted information to Commerce showing that it was the sole producer of seamless OCTG, which for a number of reasons markedly differs from welded OCTG.    Because Commerce has a duty to appoint accurate duty margins and address questions posed regarding its decision, the court found that Commerce did not account for ILJIN’s seamless OCTG, nor did Commerce show how the two respondents selected for individual examination were representative of ILJIN.  Court remanded this issue reconsideration. 

As for voluntary respondents, the court sustained Commerce’s decision. Because of the concurrent investigations into the same product and the fact that Commerce is required to do more work in less time when conducting such investigations, Commerce has shown that the burden of reviewing a voluntary respondent in this case would exceed the typical burden Commerce faces in other administrative proceedings.  On the facts of this case, Commerce’s determination that it would be unduly burdensome to examine any additional respondents was supported by substantial evidence and was otherwise in accordance with law.

As for constructed profit, plaintiffs argued that Commerce committed a multitude of errors regarding Commerce’s calculation of CV profit. First, Commerce should not have used the financial statement of Tenaris S.A. (“Tenaris”), a multinational corporation, to calculate CV profit. By doing so, it prejudiced the respondents because the information was untimely, and Commerce should have used either the profit earned by the mandatory respondents’ on their home market sales of OCTG and/or non-OCTG pipe products or the average profit earned by the Korean OCTG producers. They assert that Commerce’s reasoning for declining to use this data, namely that the line pipe and standard pipe sold by the Korean producers in the Korean market were not in the same general category of products as OCTG, was unsupported by substantial evidence and contrary to prior Commerce decisions. The court agreed and remanded the decision for Commerce to explain the appropriate factors to consider in determining what products fall within the same general category of products as OCTG.

Second, assuming that Commerce could use Tenaris’s financial statement for the purposes of CV profit, Commerce erred in failing to apply a profit cap. According to the court, Commerce failed to provide an adequate explanation as to why it dispensed with the profit cap.  The court remanded these issues to Commerce for further consideration.

As for the NEXTEEL- POSCO findings, Commerce determined that plaintiff NEXTEEL was affiliated with POSCO, one of its hot-rolled coil suppliers, due to a “close supplier relationship.”  Commerce claimed that POSCO’s involvement in the production and sales sides of business put POSCO in a position to potentially exercise restraint or direction over NEXTEEL.  As a result of the affiliation finding, Commerce applied the major input rule and adjusted NEXTEEL’s purchase prices for hot-rolled coil sourced from POSCO. The court upheld this finding as there was evidence on the record of the affiliation.

As for Maverick and U.S. Steel’s arguments regarding warranty expenses, warehousing expenses, and AFA claims, the court upheld Commerce’s decisions.  Moreover, the exclusion of a miscellaneous loss from NEXTEEL’s G&A calculation was supported by substantial evidence and in accordance with law and Commerce acted reasonably in adjusting the cost of production data to exclude costs HYSCO’s affiliates recorded as both revenue and expenses once Commercelearned that these costs actually were paid by HYSCO.

.