United States Court of International Trade

Commerce’s Decision on Certain Steel Nails Remanded

In Itochu Buildings Co., Inc. et al. v. United States,  Court No. 12-65, Slip Op 17-73 (June 22, 2017), the Court reviewed the U.S. Department of Commerce (“Commerce”)’s final results of the second administrative review of the antidumping (“AD”) duty order on certain steel nails from the People’s Republic of China (“PRC”). Certain Steel Nails from the People’s Republic of China: Final Results and Final Partial Rescission of the Second Antidumping Duty Administrative Review, 77 Fed. Reg. 12,556, 12,556 (Dep’t Commerce Mar. 1, 2012) (“Final Results”).  Before the Court were motions for judgment on the agency record by several plaintiffs, including Tianjin Jinchi Metal Products Co., Ltd. (“Jinchi”), Tianjin Jinghai

County Hongli Industry & Business Co. (“Hongli”), consolidated plaintiffs The Stanley Works (Langfang) Fastening Systems Co., Ltd. (“Stanley Langfang”) and Stanley Black & Decker, Inc. (collectively, “Stanley”), and another set of consolidated plaintiffs which included Itochu Buildings Co., Inc. (collectively, “Itochu”).

While the Court found the limitation of review to three respondents reasonable, the Court did question the withdrawal of numerous respondents due to possible settlements with the petitioners. About 160 respondents withdrew their requests for reviews from the initial 222 respondents who had requested reviews. The Court is concerned with funds diverted to petitioners or domestic competitors as settlement payments, instead of such funds eventually paid as antidumping duties to the government.  The Court would like more transparency into the reasons for withdrawal, and the Court would like to determine if the integrity of the proceeding is being maintained. Thus, the Court remanded Commerce’s decision for responses to the Court’s inquiries.

Itochu opposed Commerce’s selection of GTA India import data, i.e., a surrogate value of $1.68 per kilogram, to value cut steel plate, arguing that Commerce should have relied on a combination of Steelworld India data and Joint Plant Committee (“JPC”) India data, both domestic sources. The court remanded the selection of GTA India import data because it rejected outright other surrogate data sources without explaining why.  For example, the other data appears to be relevant where they fall within the narrow range of $0.68 to $0.78 per kilogram, and therefore, corroborate the Steelworld India value of $0.68 per kilogram and the JPC India value of $0.78 per kilogram. It further calls into question the GTA Import value data at $1.68 per kilogram, which is considerably more than the data range mentioned.  Moreover, Commerce failed to address evidence that price does not correlate to plate thickness, which was Commerce’s reason for rejecting JPC and Steelworld data as not sufficiently specific.   Therefore, the Court remanded for Commerce to consider whether the other data sources render the GTA India import data unreliable, and to provide evidence that supports the decision to disregard surrogate data for varying thickness of steel plate.

Furthermore, Stanley and Itochu challenged Commerce’s reliance on Sundram’s financial statements when calculating surrogate financial ratios. The Court granted Commerce’s request for remand where it incorrectly concluded that the EU never reviewed Section 35(2AB) of the Income Tax Act, and therefore did not consider an EU decision, which found aforementioned section countervailable.

Finally, the Court affirmed Commerce’s selection of neutral facts available for both Jinchi and Stanley in regards to unaffiliated tollers for the tolled intermediate inputs.  Commerce acted within its discretion by refusing to apply facts available to Hongli because it provided all relevant FOP data.  Commerce erred though in applying an adverse inference to Jinchi for missing data of its unaffiliated supplier and asked for a remand to reconsider AFA to Jinchi, where it did not conduct a case-specific analysis to determine whether it was appropriate to apply AFA to Jinchi for its supplier’s failure to cooperate.

For all these reasons, Commerce’s final determination was remanded.

Case Dismissed Where No Relief Available

            In GEO Specialty Chemicals, Inc. v. United States, Slip Op. 17-74, Court No. 16-00247 (June 27, 2017), plaintiff sought to challenge the final results of an antidumping administrative review regarding glycine from China. Glycine from the People’s Republic of China: Final Results of Antidumping Duty Administrative Review; 2014– 2015, 81 Fed. Reg. 72,567 (Dep’t Commerce Oct. 20, 2016) (“Final Results”). Plaintiff was concerned with imports of Indian origin, which plaintiff believed to be from China. As a result of which, they should have been covered by the antidumping duty order. GEO argued that evidence of fraud was not properly considered in the review. The entries were liquidated without any antidumping duties collected. The government motioned to dismiss the action for lack of jurisdiction. The government believed that there is no relief the Court could order, where all the entries had been liquidated. For the following reasons the Court agreed with the government and dismissed the case.

Pursuant to Zenith Radio Corporation v. United States, 710 F.2d 806, 810 (Fed. Cir. 1983),  “it appears well settled that liquidation of entries moots an action challenging the final results of a periodic administrative review,” with two inapplicable exceptions. Id. at 2. The Court could not distinguish this case from Court precedent, and found that a case challenging the final results of a review under 28 U.S.C. § 1581(c) may not go forward after the entries liquidated. The Court found that there was no remedy available under 28 U.S.C. § 1581(c) jurisdiction.  However, “other potential avenues of relief may be available to domestic competitor(s)” like GEO.  Id. at 4. GEO may try to urge Customs and Border Protection (CBP) to recover duties under 19 U.S.C. § 1592(d) or collect penalties under 19 U.S.C. § 1592 (a)-(c).  GEO may also use new legislation to seek a decision from the Commissioner of CBP with respect to evasion of unfair trade duties.  The Court dismissed the case, as there was no available remedy under section 1581(c).