United States Court of International Trade

Affirmed Countervailing Duty Determination

In Hebei Jiheng Chemicals Co., Ltd. v. United States, Court No. 14-337, Slip Op. 16-15 (February 18, 2016), plaintiff Hebei Jiheng Chemicals Co., Ltd. (“Jiheng”) challenged the final determination of the U.S. Department of Commerce (“Commerce”) in the countervailing duty (“CVD”) investigation of chlorinated isocyanurates from the People’s Republic of China (“PRC”). Plaintiff challenged Commerce’s determination, claiming that Commerce misread the record regarding preferential electricity rates provided to the plaintiff by the Government of China (“GOC”), and thereby “vastly overstated the calculated net benefit” conferred on plaintiff and impermissibly applied adverse facts available (“AFA”) to plaintiff, a cooperating respondent. 

Commerce drew adverse inferences determining that GOC’s provision of electricity to the respondents was a financial contribution under the countervailing duty statute. Commerce applied the Zhejiang three-tiered rate schedule and provided substantial evidence for its application. Commerce also used adverse facts available when it selected the benchmark rates used to calculate the benefit conferred on the respondents. Specifically, for the benchmark Commerce selected the highest electricity rates on the record for the respondents’ rate and user categories, the large industry rate schedule for Zhejiang province.  Commerce’s determination was supported by substantial evidence. By using the highest electricity rates as drawn through adverse inferences, Commerce declined to use chloro-alkali preferred electricity rates.  Such application of the highest electricity rates was a reasonable deterrent to the GOC for non-compliance. For these reasons, Commerce’s decisions were affirmed.  

Motions to Stay Granted

In United States v. Lincoln General Insurance Company, Slip Op. 16-16 (Court Nos. 13-00084, 13-00085, 13-00086, 13-00087, 13-00088, 13-00089, 13-00090,13-00091,13-00092) (February 18, 2016), plaintiff United States moved to stay nine cases seeking recovery from defendant Lincoln General Insurance Company (“Lincoln”) of supplemental antidumping duties and interest secured by customs bonds.  This motion to stay was done in light of a recent liquidation order issued by the Commonwealth of Pennsylvania.   The entries at issue, which were made between May 1, 2002 and October 31, 2002, covered imports into the United States of garlic from the People’s Republic of China. In seeking the stays, plaintiff argued that LGIC’s estate may be partially or entirely depleted of funds before reaching plaintiff’s creditor class. Plaintiff argued that continuing litigation of the nine pending actions at this time could further diminish the estate’s limited assets, increasing the likelihood that plaintiff would be unable to collect on successful claims, and that denying the requested stays could encumber both parties with unnecessary litigation costs. The court agreed with plaintiff and further concluded that the benefits to judicial economy and efficiency occasioned by the requested stays outweigh any benefits that would result from continuing to litigate these actions.  Therefore, the court granted the motions to stay the litigation before the CIT.

Motion to Compel Denied

In Meyer Corporation, U.S. v. United States, Court No. 13-154, Slip Op. 16-18 (February 24, 2016), plaintiff Meyer Corporation, U.S., asked the court to compel the government to disclose certain documents sought in connection with discovery on this and several related actions filed to seek refund of alleged overpayment of customs duties to U.S. Customs and Border Protection (“Customs”).  The documents sought were protected under “deliberative process privilege.”  After an in camera review of the unredacted documents sought, the court concluded that the information was business proprietary, agency proprietary, or work product prepared in anticipation of agency “decisions”  and therefore held that Myles Harmon’s invocation of the privilege was proper. Because the disclosure of the documents may injure the quality of government agency decisions, the court denied the motion.

Results of Remand Sustained

In Maverick Tube Corporation and United States Steel Corporation, Boomerang Tube LLC, Energex Tube (a division of JMC Steel Group), Tejas Tubular Products, TMK IPSCO, Vallourec Star, L.P., and Welded Tube USA Inc., v. United States and Toscelik Profil Ve Sac Endustrisi A.S., Cayirova Boru Sanayi Ve Ticaret A.S., Borusan Mannesmann Boru Sanayi Ve Ticaret A.S., and Borusan Istikbal Ticaret, the Court sustained the Remand Results of the countervailing duty investigation into Certain Oil Country Tubular Goods from the People’s Republic of Turkey.  14-00229, Slip Op. No. 16-16 (February 22, 2016).  The Court held that the Remand Results were supported by substantial evidence and in accordance with law.

On remand, Commerce reversed its prior position and used the actual transaction prices in Turkey as a benchmark to calculate the state provision of hot-rolled steel for less than adequate remuneration.  Because, according to the agency, the remaining benefit-related matters were no longer relevant the agency did not address them further on remand.  

The Court rejected the domestic industry’s argument that Commerce’s determination that the Turkish market for hot-rolled steel was not distorted was not adequately explained.  Specifically, the domestic industry argued that Commerce erred by not applying adverse facts available to the Government of Turkey because, the industry speculated, the Government of Turkey could have provided Commerce with the requested production and consumption data. The Court held that the industry’s speculation was not substantial evidence and that substantial evidence on the record supported the Remand Results on the issue of market distortion.

The Court also upheld Commerce’s attribution practice pursuant to 19 C.F.R. § 351.525(b)(5) and its decision to apply partial adverse facts available to Borusan’s questionnaire responses for not exerting best efforts to provide the requested information.  The Court reasoned that the Remand Results adequately explained why certain hot-rolled steel purchase information was necessary for the Final Determination and Commerce’s methodology was not unreasonable.  Furthermore, the Court held, Commerce’s interpretation of the ambiguous statute as requiring certain information was due Chevron deference.

Finally, the Court sustained the Remand Results as they related to the corrected benchmark valuation for Osmaniye Parcel, which expanded the number of data points to build a robust data set for commercial land purchases in Turkey, since Commerce complied with the Court’s instructions.  

Motion for Voluntary Remand Granted

Golden Dragon Precise Copper Tube Group, Inc., Hong Kong GD Trading Co., Ltd., Golden Dragon Holding (Hong Kong) International, Ltd., and GD Copper (U.S.A.) Inc., v. United States and Cerro Flow Prods., LLC, Weiland Copper Products, LLC, Mueller Copper Tube Products, Inc., and Mueller Copper Tube Co., Inc., concerns a challenge to the Final Results of the second administrative review of Seamless Refined Copper Pipe and Tube from the People’s Republic of China.  Previously, the Final Results were remanded to Commerce with instructions to further explain the selection of Thailand as the surrogate value country.  Apparently, upon the previous remand order, the agency inadvertently neglected to notify parties of the remand proceedings and deadline for comment submission as per standard practice, and therefore Commerce did not receive any comments on the draft remand results.  Before the Court was the motion for voluntary remand due to this alleged oversight, so as to permit parties to comment on the draft remand redetermination and for the agency to address those comments.  Defendant-Intervenor Mueller opposed the motion.

The Court granted the motion for voluntary remand, finding that the request was appropriate under the Federal Circuit’s jurisprudence of allowing remand for the agency to consider procedures that were followed or certain decisions made.  Furthermore, the Court found, seeking remand to provide time for interested parties to comment and for the agency to review those comments would not be frivolous or in bad faith.  The request was supported by the substantial and legitimate concern that failure to follow a standard practice resulted in a lack of comments filed by interested parties.  Indeed, Golden Dragon stated its intent to file comments, and would have filed comments had Commerce followed its typical practice of notifying parties via email of the remand proceedings.  Finally, the scope of Commerce’s request to address was appropriate and would not cause unreasonable delay.