United States Court of International Trade

Slip Op. 22-77

Before the Court in Productos Laminados de Monterrey S.A. de C.V. v. United States and Nucor Tubular Products Inc., Atlas Tube, A Division of Zekelman Industries, and Searing Industries, Court No. 20-166, Slip Op. 22-77 (July 6, 2022) was the motion for a judgment based on the agency record. Regarding a redetermination made by the U.S. Department of Commerce (“Commerce” or “Department”). Plaintiff filed the case to challenge the U.S. Department of Commerce’s determination on the antidumping duty order, which was initially “a weighted average dumping margin of 7.47%.” Id at 2. This case looks at the redetermination made by Commerce after the court remanded back to Commerce for a second review. The revised margin is 0.89% for Plaintiff. For the following reasons the Court sustained the agency’s final determination on the antidumping duty order.

When “reviewing an agency decision, the court ‘shall hold unlawful any determination, finding, or conclusion found … to be unsupported by substantial evidence on the record, or otherwise not in accordance with law’”. Id at 5. “Substantial evidence refers to ‘such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.’” Id at 5. Further, the court used the “guiding principle that ‘a fair comparison shall be made between the export price or constructed export price and normal value’” imposed by the Tariff Act. Id at 13. The “normal value is based on the price of the foreign like product in the home market, Commerce determines normal value beginning with the price ‘at which the foreign like product is first sold . . . for consumption in the exporting country, in the usual commercial quantities and in the ordinary course of trade and, to the extent practicable, at the same level of trade as the export price or constructed export price.’” Id at 13. “If it is not practicable to compare the export price with prices in home market sales made at the same level of trade, it may be necessary for Commerce to make adjustments to the home market price, i.e., to the ‘starting price’ Commerce uses in determining normal value, to ensure a fair comparison with export price or constructed export price.” Id at 13-14.

“One of the possible adjustments is a ‘level-of-trade’ adjustment, which Commerce must make according to 19 U.S.C. § 1677b(a)(7) under certain conditions.” Id at 14. “When calculating normal value, Commerce is required to make an upward or downward adjustment to the starting price ‘to make due allowance for any difference (or lack thereof) between the export price or constructed export price’ and the starting price ‘that is shown to be wholly or partly due to a difference in level of trade between the export price or constructed export price and normal value’ if two conditions are met.” Id at 14. “The first condition is met if the difference in the level of trade between the export price or constructed export price and normal value ‘involves the performance of different selling activities.’” Id at 14. “The second condition is met if the difference in the level of trade between the export price or the constructed export price and normal value ‘is demonstrated to affect price comparability, based on a pattern of consistent price differences between sales at different levels of trade in the country in which normal value is determined.’” Id at 14.

Here, “Prolamsa’s home market sales were of the ‘industrial’ sales made in HM Channel 4 and the ‘commercial’ sales of the other three home market channels.” Id at 15. “In the Final Results, these higher-priced Channel 4 sales were compared, along with the sales in the other three channels, to the U.S. sales, which did not include the type of custom-made products that characterized the sales in HM Channel 4.” Id at 15. “Substantial evidence supported the Department’s findings that additional, and unique, selling activities also characterized these sales and that the sales activities for Channel 4 sales were associated with expenses that were substantially higher as a proportion of revenue earned than those of the other three channels.” Id at 15. The evidence also supported the Department’s finding that both conditions for a level of trade adjustment were met. Id at 15-16. As such, the court sustained the Remand Redetermination.

Slip Op. 22-80

Before the Court in Guangdong Hongteo Technology Co., LTD., Court No. 20-03776, Slip Op. 22-80 (July 11, 2022) was the Consent Motion for Withdrawal of Attorneys (“Withdrawal Motion”). The Court denied the Withdrawal Motion and cited USCIT Rule 75(d), “[t]he appearance of an attorney of record may be withdrawn only by order of the court.” Id. at 2. “Except for an individual (not a corporation, partnership, organization [,] or other legal entity) appearing pro se … must appear through an attorney authorized to practice before the court.” Id. The Court noted that the Withdrawal Motion would leave the “party unrepresented and in violation of the Rules of the U.S. Court of International Trade.” Id. Plaintiff “is a company not an individual, and must be represented by counsel before this Court.” Id. at 3. The Court stated that the only basis to grant this motion, is if Plaintiff didn’t not pay legal fees. Id. However, there is no evidence to support that claim. Plaintiff was instructed “to notify the Court within 30 days of issuance of this Opinion of its new counsel.” Id. The Court suggested that Plaintiff’s new counsel may refile its Withdrawal Motion, but will dismiss it if Plaintiff does not find new counsel or resolve its issues with current counsel. Id.

Slip Op. 22-81

Before the Court in United States v. Chu-Chiang “Kevin” Ho, and Atria Corporation, Court No. 19-038, Slip Op. 22-81 (July 12, 2022) was the motion to dismiss “for lack of personal jurisdiction and failure to state a claim upon which relief can be granted.” Id at 2. Plaintiffs filed a complaint “alleg[ing] that the defendants are jointly and severally liable for penalties for attempting to enter, or cause to [] enter[], merchandise by fraud or in the alternative by gross negligence or negligence, in violation of 19 U.S.C. § 1592(a)(1)(A) and (B).” Id at 2. The court denied the defendants’ motion to dismiss for lack of personal jurisdiction and denied in part and granted in part defendants’ motion to dismiss for failure to state a claim and allowed 45 days to the plaintiff “to file an amended complaint pursuant to USCIT Rule 15(a)(2).” Id at 29. For the following reasons, the court denied the motion to dismiss for lack of personal jurisdiction and denied in part the motion to dismiss for the failure to state a claim and granted the motion in part. “A complaint must have more than … a formulaic recitation of the elements of a cause of action.” Id at 7. “ A complaint must meet also the ‘plausibility standard’ and include more than ‘mere conclusory statements.’” Id at 7. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id at 7. “For fraud allegations, USCIT Rule 9(b) states: ‘In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.’” Id at 7. “The court has held that ‘[t]he plaintiff must . . . plead[] in detail ‘the who, what, when, where, and how of the alleged fraud.’’” Additionally, “[a] Section 1592(a) claim must contain sufficient factual matter showing that a person entered, introduced[] or attempted to enter or introduce merchandise into the commerce of the United States through making either a material and false statement, document, or act, or a material omission.” Id at 10. “‘Material’ is defined as having ‘the natural tendency to influence or [being] capable of influencing agency action including . . . [d]etermination of the classification, appraisement, or admissibility of merchandise . . . .’” Id at 10.

The court has personal jurisdiction over the defendants because “[P]laintiff effected service of process on Mr. Ho’s counsel as of July 27, 2021… [and t]herefore, the procedural requirements of service has been satisfied.” Id at 9. The court finds that the complaint sufficiently alleges Mr. Ho’s personal liability because it included “the who, what, when, where and how” details. Id at 12. Mr. Ho and Atria are the “who”; the “HID headlight conversion kits … identified by entry number D53-141064604-0I” are the “what”; the “Area Port of San Francisco” is the “where”; and the “attempt to enter or attempt to cause to enter the kits and falsely declare or falsely cause to declare the kits to be classifiable under a specific HTSUS subheading” is the how. Not only does the complaint mention both Mr. Ho and Atria Corporation, but it also attributes specific actions to Mr. Ho or both Mr. Ho and Atria Corporation. Id at 16. Additionally, “Mr. Ho’s alleged declarations and statements regarding classification would be … a material introduction under § 1592(a)(1)(A)”. Id at 17. Therefore, Mr. Ho can be held liable based on his personal actions. Id at 17.

However, the court finds that “Mr. Ho’s declaration of the wrong classifications and submission of documents with a false description” are insufficient factual basis to reasonably infer that Mr. Ho made the misclassifications knowingly. Id at 26. Thus, the court allows Plaintiff leave to amend the complaint because “the information provided in the complaint makes it apparent that there may have been fraud.” Id at 27. As such, the court denied defendants’ motion to dismiss for lack of personal jurisdiction and denied in part and granted in part defendants’ motion to dismiss for failure to state a claim.