United States Court of International Trade

Sustaining Remand Results

In United States Steel Corporation et al. v. United States, Court No. 14-263, Slip Op. 17-28 (Public Decision Issued March 23, 2017), the Court reviewed the U.S. Department of Commerce’s (“Department” or “Commerce”).  Final Results of Redetermination Pursuant to Remand filed pursuant to the court’s decision in United States Steel Corp. v. United States, 40 CIT __, 179 F. Supp. 3d 1114 (2016) (“U.S. Steel”). See Final Results of Redetermination Pursuant to Remand Confidential Version, Aug. 31, 2016, ECF No. 113 (“Remand Results”). The court remanded Commerce’s final determination in its investigation of the antidumping duty (“ADD”) order covering certain oil country tubular goods (“OCTG”) from India for the period July 1, 2012 through June 30, 2013.  The court asked Commerce to reconsider and provide further explanation regarding: (1) its application of the ratio test of its differential pricing analysis; (2) its determination that Jindal SAW, Limited (“Jindal SAW”) is not affiliated with certain of its suppliers of electricity and steel billets; (3) its determination that Jindal SAW’s yield loss data reasonably reflected its costs of production (“COP”); and (4) its assignment of the highest cost data from GVN Fuels, Ltd.’s (“GVN”) production cost database to GVN’s dual-grade OCTG products.

As for application of the ratio test of its differential price analysis, Commerce first explained that its differential pricing methodology proceeds on a presumption that prices do not differ significantly by purchaser, region, or time period; it does not seek to prove that significant price differences do not exist. It further explained that sales are not excluded from the Cohen’s d test.  Commerce reasonably justifies its inclusion of all sales in the denominator of the ratio generated by comparing the value of sales passing the Cohen’s d test to the value of all sales. Commerce clarifies that “the ratio test assesses the extent of the significant price differences for all sales.”

For review of findings that Jindal SAW was not affiliated with certain of its suppliers of electricity and steel billets, Commerce evaluated the indirect holdings of Jindal families further.  Commerce determined that the additional indirect ownership of the Jindal family members that might be added to insignificant direct ownership numbers would be unlikely to rise to the level of ownership necessary to create a potential for control. Nor do the board memberships, management positions, or supplier relationships create a potential for control to manipulate production, pricing, or cost of the subject merchandise.

For Jindal SAW’s yield loss data, Commerce determined that it was necessary to adjust the per-unit direct material costs to take into account varying processing costs for CONNUMs with different physical characteristics, including thickness and diameter.  No party challenged Commerce’s determinations that Jindal SAW’s yield loss data did not reasonably reflect its COP or its determination to apply partial AFA, thus the Court found substantial evidence for this determination.

Finally, as for assignment of highest cost data from GVN cost database to GVN’s OCTG products,  Commerce found on remand, that it had “unintentionally overlooked its standard ‘proxy cost’ methodology by selecting the highest cost of L-80 grade” merchandise, and revised the cost assigned to the L-80 grade CONNUMs to conform to its standard proxy cost methodology.  This methodology provides that Commerce determines cost values for products for which it lacks COP data by matching COP to the most similar products based on reported physical characteristics where no adverse inference is applied, and assigned costs associated with cost data most similar to L-80 grade products.  Based on this cost adjustment, Commerce calculated a de minimis AD 1.07 rate for GVN. 

For all the above reasons, the Court sustained the remand results.

U.S. Court of Appeals for the Federal Circuit

Scope Determination Reversed

In Meridian Products, LLC v. United States, Ct. No. 2016-1730 (March 28, 2017),  the Federal Circuit reversed the Court of International Trade (“CIT”)’s decision sustaining Commerce’s finding that the trim kits do not fall within the scope of antidumping and countervailing duty orders on aluminum extrusions from the People’s Republic of China (“the Orders”).  See Meridian Prods., LLC v. United States (Meridian V), 145 F. Supp. 3d 1329, 1331 (Ct. Int’l Trade 2016). Meridian described the trim kits as “an aesthetic frame around the perimeter of (though not attached to) a major home kitchen appliance,” such as a “freezer” or “refrigerator.” According to Meridian, the “[t]rim kits are sold as a package of finished parts” and “consist[] of extruded aluminum forms[] made from aluminum alloy,” and further stated that “[t]he trim kits also include a customer installation kit for the consumer to use during the final assembly in the residential kitchen,” with the installation kit consisting of “a hexagonal wrench,” “fasteners,” “[a] set of instructions,” and “hinge covers.” Slip Op., pg. 6.

There were three issues for the Federal Circuit. First, in the CIT’s view, the inquiry ended if a disputed product met the definition of a “finished goods kit,” which then resulted in the disputed product’s exclusion from the Orders. However, according to the Federal Circuit, that interpretation failed to consider all of the terms of the exclusion, especially any exception to the exclusion, that a product will not be considered a finished goods kits “merely by including fasteners,” and “elevates certain aspects of the exclusion over others.”   Second, the CIT would exclude a kit even if it consists entirely of unassembled aluminum extrusions and fasteners. Third, citing precedent, the Federal Circuit held that the CIT’s interpretation would “render[] the [O]rders internally inconsistent” because it would allow for kits containing only unassembled aluminum extrusions and fasteners to be excluded from the scope of the Orders, whereas aluminum extrusions imported individually or as parts would be explicitly included in the scope.

For these reasons, the Federal Circuit reversed the CIT’s decision.