Allied Tube & Conduit Corp. v. United States

31 Ct. Int'l Trade 1090
United States Court of International Trade·Decided July 9, 2007·No. Court No. 06-00285·Published

Opinion

OPINION

GOLDBERG, Senior Judge:

On May 31, 2005, Tosgelik Profil ve Sac Endustrisi A.S. and its affiliated trading company Tosyali Dis Ticaret A.S. (collectively, “Tosgelik”) requested that the U.S. Department of Commerce (“Commerce”) conduct a new shipper review based on a single U.S. sale during the period of review from May 1, 2004 through April 30, 2005 (“POR”). Commerce found that the single U.S. sale was bona fide, and subsequently determined that a zero percent antidumping duty margin existed. Certain Welded Carbon Steel Pipe and Tube from Turkey, 71 Fed. Reg. 43444, 43445 (Dep’t Commerce Aug. 1, 2006) (final results of new shipper review). Allied Tube and Conduit Corporation, IPSCO Tubulars, Inc., and Wheatland Tube Company (collectively, “Allied Tube”) have brought this action to challenge Commerce’s determination that Tosgelik’s single U.S. sale during the POR was bona fide. For the reasons that follow, the Court remands the issue of whether Tosgelik’s single U.S. shipment was a bona fide transaction.

[1091] I. Standard of Review

A court shall hold unlawful Commerce’s final determination in an antidumping administrative review if it is “unsupported by substantial evidence on the record, or otherwise not in accordance with the law....” 19 U.S.C. § 1516a(b)(l)(B)(i) (2000). Substantial evidence is “ ‘such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.’ ” Nippon Steel Corp. v. United States, 337 F.3d 1373, 1379 (Fed. Cir. 2003) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)). “Even if it is possible to draw two inconsistent conclusions from evidence in the record, such a possibility does not prevent Commerce’s determination from being supported by substantial evidence.” Am. Silicon Techs. v. United States, 261 F.3d 1371, 1376 (Fed. Cir. 2001). To determine if substantial evidence exists, the Court reviews the record as a whole, including evidence that supports as well as evidence that “fairly detracts from the substantiality of the evidence.” Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1562 (Fed. Cir. 1984).

II. Discussion

A. New Shipper Review and the Bona Fide Sale Test

On May 15, 1986, Commerce published an antidumping duty order on imports of welded carbon steel pipe and tube from Turkey. See Welded Carbon Steel Standard Pipe and Tube Products from Turkey, 51 Fed. Reg. 17784 (Dep’t Commerce May 15, 1986) (final determination). The order imposes an “all others” antidumping duty rate of 14.74%, which applies to Turkish producers and exporters that have not had their antidumping duty rate determined in an investigation or review. Id. If a producer or exporter did not export merchandise that was the subject of an antidumping duty order during a previous investigation period, it may request a new shipper review. See 19 U.S.C. § 1675(a)(2)(B) (2000).1 During the course of a new shipper review, Commerce endeavors to establish an individual dumping [1092] margin and antidumping duty rate for the new shipper. This process allows the new shipper to demonstrate that the “all others” rate should not apply to its entries. On May 31, 2005, Tosgelik timely requested a new shipper review based on a single sale to the United States.

When a new shipper review involves only a single U.S. sale, it is Commerce’s practice to determine if that sale is a bona fide transaction. See Freshwater Crawfish Tail Meat from the People’s Republic of China, 68 Fed. Reg. 1439, 1440 (Dep’t Commerce Jan. 10, 2Ó03) (rescission of new shipper review); Fresh Garlic from the People’s Republic of China, 67 Fed. Reg. 11283, 11284 (Dep’t Commerce Mar. 13, 2002) (rescission of new shipper review). A sale is not bona fide when it is “commercially unreasonable” or “atypical of normal business practices.” Tianjin Tiancheng Pharmaceutical Co. v. United States, 29 CIT _, _, 366 F. Supp. 2d 1246, 1249-50 (2005); see also Windmill Int’l Pte., Ltd. v. United States, 26 CIT 221, 230, 193 F. Supp. 2d 1303, 1313 (2002). Commerce makes this determination so that a producer does not “unfairly benefit from an atypical sale to obtain a lower dumping margin than the producer’s usual commercial practice would dictate.” Tianjin, 29 CIT at _, 366 F. Supp. 2d at 1250. A single sale is not inherently commercially unreasonable, but “it will be carefully scrutinized to ensure that new shippers do not unfairly benefit from unrepresentative sales.” Id. at _, 366 F. Supp. 2d at 1263.

Commerce looks at the totality of the circumstances to determine whether a particular sale is bona fide. See Hebei New Donghua Amino Acid Co. v. United States, 29 CIT _, _, 374 F. Supp. 2d 1333, 1338 (2005). In the present case, Commerce initially issued a Commercial Reasonableness Memorandum (“CRM”) which set forth its basis for finding that Tosgelik’s U.S. sale was commercially reasonable under the totality of the circumstances. See CRM, A-489-501, NSR 5/1/04-4/30/05 (Apr. 24, 2006); Pl.’s App. 5A-B. In the CRM, Commerce considered three factors: (1) the price and quantity of the U.S. sale; (2) the sales process; and (3) freight expenses. Commerce subsequently issued the preliminary results of the new shipper review on May 3, 2006, and found that Tosgelik’s sale had no dumping margin. Certain Welded Carbon Steel Pipe and Tube from Turkey, 71 Fed. Reg. 26043, 26047 (Dep’t Commerce May 3, 2006) (preliminary results). Commerce subsequently adopted the same position in its final determination. Certain Welded Carbon Steel Pipe and Tube from Turkey, 71 Fed. Reg. at 43445. In that determination, Commerce referred to its Issues and Decision Memorandum (“IDM”), which found Tosgelik’s single U.S. sale to be commercially reasonable, and therefore bona fide. IDM, A-489-501, POR 5/1/04-4/30/05 (Aug. 1, 2006), available at http://ia.ita.doc.gov/frn/summary/turkey/ E6-12372-l.pdf.

Allied Tube challenges Commerce’s determination that Tosgelik’s transaction is bona fide. Specifically, it claims that the price, quan[1093] tity and freight expense of the sale indicate that the transaction is not commercially reasonable.

B. Commerce’s Determination That the Price of Tosgelik’s U.S. Sale Is Commercially Reasonable Is Not Supported by Substantial Evidence

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