United States Court of International Trade

Remand Determination Sustained on Nails Case

In Itochu Bldg. Prods. Co et. al. v. United States et. al. Slip Op. 18-03, Court No. 13-00132 (January 18, 2018) the Court reviewed remand redeterminations made by Commerce in regards to an annual administrative review of antidumping duties on steel nails from China. Previously in the case, the Court had remanded the case to Commerce for reconsideration of the selection of Thai GTA data as a surrogate value. The Court specifically asked Commerce to weigh the Thai GTA data against Ukrainian metal expert data, and to determine if carbon content or diameter were more important input in the the nails imported by plaintiffs. For the following reasons the Court upheld Commerce’s remand findings in full.

The first issue was whether Thai GTA data was more product specific then Ukrainian metal expert data.  Plaintiffs argued the Thai data was not product specific because it included data about nails created from steel bars and wires rods, while the nails at issue were solely created from wire rods. Commerce reviewed Thai HTS data and determined the data was “unlikely to contain unrelated products.” Id. at 9. The Court said that “Commerce’s determination on remand … is supported by substantial evidence.” Id. at 10. The Court also said that “Ukrainian metal expert data are only specific to one of the respondents, whereas GTA data covered” both respondents. Id. at 10. The Thai GTA data was the more appropriate surrogate value. The next issue was Commerce’s determination that carbon content, not diameter, was the primary factor in assessing steel nails. Plaintiffs argued that Commerce did not base its determination on substantial evidence. Commerce explained “the diameter of the wire rod may change throughout the production process, rendering the initial diameter less important.” The Court said there was adequate evidence of this on the record to support Commerce’s determination. As such, the determinations were upheld in full. 

Commerce Determination Remanded Regarding Corrosion-Resistant Steel Products

In Prosperity Tieh Enterprise Co., Ltd. and Yieh Phui Enterprise Co., Ltd., v. United States, Court No. 16-138, Slip Op. 18-5 (January 23, 2018), the Court remanded the determination by the U.S. Department of Commerce (“Commerce”).  Plaintiffs Prosperity Tieh Enterprise Co., Ltd. (“Prosperity”) and Yieh Phui Enterprise Co. Ltd. (“Yieh Phui”) are Taiwanese producers and exporters of corrosion-resistant steel products (“CORE”).  The determination at issue is Certain Corrosion-Resistant Steel Products From India, Italy, the People’s Republic of China, the Republic of Korea and Taiwan: Amended Final Affirmative Antidumping Determination for India and Taiwan, and Antidumping Duty Order, 81 Fed. Reg. 48,390 (Int’l Trade Admin. July 25, 2016) (“Amended Final Determination”). The period of investigation (“POI”) was April 1, 2014 through March 31, 2015. Id. at 35,313. 

Yieh Phui claims that Commerce violated 19 C.F.R. § 351.401(c) when it failed to make corresponding downward adjustments in the starting prices Commerce used in determining normal value, i.e., the prices at which Yieh Phui and Synn sold the foreign like product in its home market. The regulations require Commerce to recognize a reduction in the purchaser’s net outlay for the foreign like product that satisfies the definition of a “price adjustment” in section 351.102(b)(38). First the Court held that Commerce must make downward adjustments to Yieh Phui’s and Synn’s home market sales prices to account for rebates granted to their home customers.  Further, the Court determined that there was no substantial evidence to support collapsing Prosperity and Yieh Phui into one entity and that the case be remanded to further investigate and review this decision. Finally, there was no evidence to support the use of adverse facts available in calculating certain CORE sales, when there was an interpretation issue with yield strength reporting specifications.

United States Court of Appeals for the Federal Circuit

Commerce Cannot Use “Guideline” to Change Scope of Regulation

Once a regulation has been published, a government agency may  not change its scope or range of operation through issuance of an informal “guidance” document which has not been adopted using Administrative Procedure Act (APA) rulemaking procedures, according to a recent Federal Circuit opinion.

In Glycine & More v. United States, No. 2017-1312 (January 23, 2018), the Federal Circuit upheld a Court of International Trade determination that Commerce lacked the power to limit the circumstances where a regulation applied. . 

The case involved a Commerce Department regulation concerning when a request for review of an antidumping or countervailing duty order could be filed after the 90-day regulatory deadline for same. As enacted, the regulation said a party could file a tardy withdrawal request “for good cause shown”. But Commerce, in a 2011 “Guidance” document, said that it would henceforth only honor tardy withdrawal requests if the party concerned showed “extraordinary circumstances” which prevented it from making its request within the 90 day period.  Glycine & More filed a tardy withdrawal request, and had good cause for doing so, But Commerce, applying the stricter standard from its “guidance” document, rejected the withdrawal, conducted an antidumping review no party wanted, and when Glycine & More did not respond to questionnaires, assigned that company a 457% antidumping rate based on “facts available”.

Affirming the CIT decision, the Federal Circuit held that once a regulation has been enacted which defines its scope of operation, an agency may not thereafter change that scope of operation using a “guidance” document or anything less than formal APA rulemaking. The Commerce Department had rescinded its review determination “under protest”, but oddly did not make an appearance in the appeal.