ArcelorMittal Tubular Prods. v. United States

2025 CIT 121

• Court: United States Court of International Trade
• Decided: September 15, 2025
• Docket: 24-00039
• Status: Published

Opinion

Slip Op. 25-121

UNITED STATES COURT OF INTERNATIONAL TRADE

Court No. 24-00039

ARCELORMITTAL TUBULAR PRODUCTS; MICHIGAN SEAMLESS TUBE, LLC; WEBCO INDUSTRIES, INC.; and ZEKELMAN INDUSTRIES, INC., Plaintiffs, v. UNITED STATES, Defendant, and DALMINE S.p.A., Defendant-Intervenor.

Before: M. Miller Baker, Judge

OPINION

[The court sustains Commerce’s determination not to collapse two affiliated entities for purposes of 19 C.F.R. § 351.401(f)(1) (2016).]

Dated: September 15, 2025

R. Alan Luberda and Melissa M. Brewer, Kelley Drye & Warren LLP, Washington, DC, on the briefs for Plaintiffs. Ct. No. 24-00039 Page 2

Yaakov M. Roth, Acting Assistant Attorney General; Patricia M. McCarthy, Director; Claudia Burke, Dep- uty Director; and Geoffrey M. Long, Acting Assistant Director, Commercial Litigation Branch, Civil Divi- sion, U.S. Department of Justice, Washington, DC, on the brief for Defendant. Of counsel for Defendant was Danielle Cossey, Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Depart- ment of Commerce, Washington, DC.

Gregory J. Spak, Kristina Zissis, Luca Bertazzo, and Matthew W. Solomon, White & Case LLP, Washing- ton, DC, on the brief for Defendant-Intervenor.

Baker, Judge: This case involving an administra- tive review of an antidumping order on mechanical tubing from Italy returns after voluntary remand. The petitioners in the original investigation, a group of American manufacturers, challenge the Department of Commerce’s redetermination not to collapse a man- datory respondent with its Romanian affiliate for pur- poses of calculating the former’s dumping margin. Be- cause the law compelled that result, the court sustains it. 1

1 In so doing, the court declines to redact certain confiden-

tial record material that it finds does not qualify as “busi- ness proprietary information” under the applicable Com- merce regulation, 19 C.F.R. § 351.105(c). See 19 U.S.C. § 1516a(b)(2)(B) (providing that the court “shall . . . pre- serve[୻] in any action under this section” the “confidential or privileged status accorded to any documents, comments, or information,” except that it “may disclose such material under such terms and conditions as it may order”). Ct. No. 24-00039 Page 3

I

During an antidumping investigation or review, the Department may treat “affiliated companies” as “one entity” for purposes of calculating a single dumping margin, called “collapsing.” Koenig & Bauer-Albert AG v. United States, 90 F. Supp. 2d 1284, 1286 (CIT 2000); see also 19 U.S.C. § 1677(33) (defining “affiliated per- sons”). The purpose of this exercise is to ensure Com- merce reviews the activities of the entire producer or exporter and to prevent connected entities from cir- cumventing duties “by channeling production of sub- ject merchandise through the affiliate with the lowest potential dumping margin.” Coal. of Am. Millwork Producers v. United States, 581 F. Supp. 3d 1295, 1303 (CIT 2022).

Under the regulation in effect during the period of review here, 2 Commerce collapses “two or more affili- ated producers” when it finds that two conditions are satisfied. 19 C.F.R. § 351.401(f)(1) (2016). First, the relevant entities must “have production facilities for similar or identical products that would not require substantial retooling of either facility in order to re- structure manufacturing priorities.” Id. Second, there must be “a significant potential for the manipulation of price or production.” Id. 3

2 The Department has since amended the regulation. See

19 C.F.R. § 351.401(f)(1) (2025). 3 To determine whether there is such a potential, the agency “may” consider several non-exhaustive factors. See id. § 351.401(f)(2)(i)–(iii); see also 62 Fed. Reg. 27,296, 27,345. Ct. No. 24-00039 Page 4

II

This case stems from an order imposing antidump- ing duties on cold-drawn mechanical tubing from Italy. See 83 Fed. Reg. 26,962. In 2022, Commerce opened its fourth administrative review of this decree covering June 1, 2021, to May 31, 2022. 87 Fed. Reg. 48,459, 48,462. It selected Dalmine, S.p.A., an Italian pro- ducer, as the sole mandatory respondent. See Appx1000.

In its initial questionnaire response, the company reported that it manufactured subject merchandise us- ing inputs made by Silcotub, its Romanian affiliate. Appx1030. It noted that both entities are subsidiaries of the same parent, Tenaris, and that they operate “like an integrated company using consolidated soft- ware . . . and procedures.” Appx1035. Dalmine further stated that it sold its products in the United States di- rectly and through Silcotub, which would purchase the product from the former, cut the tubing to length, then resell it to American customers. Appx1024–1025.

The petitioners then urged the Department to col- lapse the two Tenaris affiliates. Appx3237–3241. In its preliminary determination, Commerce declined to do so. Instead, for purposes of calculating Dalmine’s cost of production, it adjusted the cost of inputs purchased from Silcotub under the major-input rule. Appx7519. 4 This had the effect of reducing the Italian producer’s

4 Rather than take the asserted value of such inputs from

affiliated parties on faith, Commerce uses this rule to es- tablish a price. See 19 U.S.C. § 1677b(f)(3); see also 19 C.F.R. § 351.407(b). Ct. No. 24-00039 Page 5

preliminary margin over what it would have been had the agency granted petitioners’ request.

In its final determination, the Department again declined to collapse the Tenaris entities. 5 In so doing, it acknowledged that certain requirements for collaps- ing were “present” here, “including . . . that Dalmine and Silcotub are affiliated, and that [the latter] both sells a major input necessary to the production of sub- ject merchandise to [the former] and exports . . . the finished products to the United States.” Appx1008. But the agency found the petitioners did not establish two of the essential elements under 19 C.F.R. § 351.401(f)(1).

First, because “Silcotub is located in Romania” and the order applies to tubing from Italy, the company was “unable” to produce subject merchandise at all, let alone “through minor alterations to its facilities.” Appx1007. Second, there was no “significant potential for manipulation” of price or production. Appx1008. 6 Thus, the agency declined to collapse the two com-

5 Earlier, the agency rejected certain information proffered

by both the petitioners and Dalmine. See, e.g., Appx7550– 7552; Appx7576–7577. 6 As to this element, the Department gave several reasons,

including that was no evidence on the record indicating Dalmine and Silcotub have “any overlap in management” or “common members on their Boards of Directors,” or that they “share facilities or employees,” which “limit[s] their ability to manipulate the price or production” of the tubing. Id. Ct. No. 24-00039 Page 6

panies. Id. 7 For that and other reasons, it ultimately assigned Dalmine a dumping margin of two percent. Appx1012.

After the petitioners sued to challenge that deter- mination, the government moved for a voluntary re- mand. ECF 40. It explained that Commerce wished to reconsider both its rejection of the proffered materials as well as the merits. Id. at 7–8. The court granted the motion. ECF 41.

The Department reopened the record and accepted the material that it had previously rejected. See Appx7760. After considering that information, it reaf- firmed its original decision not to collapse Dalmine with Silcotub for purposes of the regulation. Id.

As to whether the companies could produce “similar or identical products . . . [without] substantial retool- ing,” 19 C.F.R. § 351.401(f)(1), the agency again found that the Romanian manufacturer could not “produce subject merchandise at all, much less . . . produce such merchandise ‘without substantial retooling.’୻” Appx7766. Commerce distinguished two prior agency decisions invoked by the petitioners, explaining that the entities in those proceedings made “products which were within the scope of the orders/inquiry.” Id.

7 In view of what it characterized as “the importance of this

issue,” however, the Department pledged to “revisit [its] decision in subsequent reviews if additional or new evi- dence is presented that would warrant reconsideration.” Id. Ct. No. 24-00039 Page 7

And regarding whether there was significant po- tential for manipulation of price or production, the De- partment again found none. Appx7767. Commerce quoted its initial decision for the proposition that “there is no evidence on the record” of management or board of directors overlap, or of any sharing of “facili- ties or employees.” Id.; cf. 19 C.F.R. § 351.401(f)(2)(ii), (f)(2)(iii).

III

Invoking jurisdiction conferred by 28 U.S.C. § 1581(c), petitioners sued under 19 U.S.C. §§ 1516a(a)(2)(A)(i)(I) and (a)(2)(B)(i). ECF 8, at 1. Dalmine intervened on the side of the United States. Upon return from voluntary remand, the parties fully briefed petitioners’ motion for judgment on the agency record, which is ripe for disposition.

In § 1516a(a)(2) actions, “[t]he court shall hold un- lawful any determination, finding, or conclusion found . . . to be unsupported by substantial evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i).

IV

The petitioners argue that “Commerce misreads the regulation by imposing a heightened standard for collapsing two entities that does not exist in the regu- latory language.” ECF 54, at 22. They contend that nothing in the version of 19 C.F.R. § 351.401(f)(1) in effect during the period of review requires that “both affiliated parties must be located in the subject coun- try or produce [covered] merchandise to be treated as Ct. No. 24-00039 Page 8

a collapsed entity.” Id. They further observe, correctly, that “the Department cite[d] no authority to support its claim that Silcotub’s location in Romania disquali- fies it from being collapsed with Dalmine.” Id. at 22– 23.

The government responds that the regulation lim- its collapsing to “two or more affiliated producers.” ECF 59, at 22 (emphasis in original) (citing 19 C.F.R. § 351.401(f)(1) (2016)). It observes that the statute, in turn, defines “producer” as a “producer of subject mer- chandise,” meaning the “class or kind of merchandise that is within the scope” of an antidumping duty order. Id. (quoting 19 U.S.C. §§ 1677(28), (25)). It notes that “it is well-established that subject merchandise is de- termined by the product type as well as the country of origin.” Id. (citing Ugine & ALZ Belg., N.V. v. United States, 517 F. Supp. 2d 1333, 1345 (CIT 2007)); see also Canadian Solar, Inc. v. United States, 918 F.3d 909, 913 (Fed. Cir. 2019) (stating that Commerce’s practice is to describe a product “within the scope” of an order by reference to its “technical characteristics” and “country of origin”). Thus, according to the govern- ment, Romanian-based Silcotub cannot produce sub- ject merchandise “and is not a ‘producer’ within the meaning of 19 C.F.R. § 351.401(f)(1).” ECF 59, at 22– 23. 8

8 The government also observes that this understanding of

“producers” as only those entities making subject merchan- dise is harmonious with statutory definitions of key terms in antidumping law, including foreign like product, normal value, and the dumping margin. Id. at 23–24 (citing (footnote continues on next page) Ct. No. 24-00039 Page 9

On reply, the petitioners do not contest the govern- ment’s statutory argument, which is unimpeachable. Instead, invoking SEC v. Chenery Corp., 318 U.S. 80 (1943), they rail against the government for supplying a “rationale that the Department itself did not pro- vide.” ECF 63, at 3. Under this teaching, “courts may not accept . . . counsel’s post hoc rationalizations for agency action; Chenery requires that an agency’s dis- cretionary order be upheld, if at all, on the same basis articulated in the order by the agency itself.” Burling- ton Truck Lines, Inc. v. United States, 371 U.S. 156, 168–69 (1962).

But the Chenery doctrine does not apply when “the sole issue is one of statutory construction,” for that “is not ‘a determination or judgment which an adminis- trative agency alone is authorized to make.’୻” Koyo Seiko Co. v. United States, 95 F.3d 1094, 1101 (Fed. Cir. 1996) (quoting SEC v. Chenery Corp., 332 U.S. 194, 196 (1947)). Where “the plain language of the statute compels” agency action, that interpretation “does not require or implicate the exercise of . . . dis- cretion in applying subtle and complex statutory standards to particular facts.” Id. The court can rely on such a clear legal command to affirm on an “alter- native ground” not articulated by the agency. Id.; see also Morgan Stanley Cap. Grp. Inc. v. Pub. Util. Dist. No. 1 of Snohomish Cnty., 554 U.S. 527, 545 (2008) (where the law requires an agency to take a particular

19 U.S.C. §§ 1677(16), 1677b(a)(1)(B)(i), and 1677(29), re- spectively). Ct. No. 24-00039 Page 10

action, “[t]hat it provided a different rationale for the necessary result is no cause for upsetting its ruling”).

Here, the statute’s plain language precluded Com- merce from collapsing Silcotub with Dalmine because the former company, based in Romania, was not a “producer” of subject merchandise for purposes of 19 C.F.R. § 351.401(f)(1). See 19 U.S.C. §§ 1677(28), (25). This indisputable proposition renders Chenery in- applicable and provides an alternative ground to sus- tain the Department’s decision not to collapse these entities.

The petitioners complain that this alternative legal rationale is inconsistent with the Department’s argu- ably “fact-based” conclusion. See ECF 63, at 9–10 (cit- ing the agency’s statement that it would revisit its “de- cision in subsequent reviews if additional or new evi- dence is presented that would warrant reconsidera- tion,” Appx1008). But this “is no cause for upsetting its ruling,” as “remand would be an idle and useless for- mality.” Morgan Stanley, 554 U.S. at 545. And insofar as this rationale is incompatible with past agency practice as the petitioners also charge, see ECF 63, at 10–18, that is also no reason to remand. Commerce has no discretion to ignore a statute. Nor may it disre- gard its own regulations. See Wagner v. United States, 365 F.3d 1358, 1361 (Fed. Cir. 2004) (“[A]n agency is bound by its own regulations.”) (citing Service v. Dul- les, 354 U.S. 363, 388 (1957)). Inasmuch as its previous determinations suggest that it may collapse “two or more affiliated producers” where one of them does not Ct. No. 24-00039 Page 11

make subject merchandise, 9 19 C.F.R. § 351.401(f)(1) (emphasis added), the problem is with those rulings, not with the agency’s belated decision to follow the law.

The statute and regulation compelled the Depart- ment’s redetermination here. 10 The court accordingly sustains it and denies petitioners’ motion for judgment on the agency record (ECF 54). A separate judgment will enter. See USCIT R. 58(a).

Dated: September 15, 2025 /s/ M. Miller Baker New York, NY Judge

9 Although the government and Dalmine dispute the peti-

tioners’ characterization of those rulings, there is no need for the court to resolve that disagreement. 10 It is thus unnecessary to consider the petitioners’ chal-

lenge to the agency’s finding that there was no “significant potential for the manipulation of price or production.” 19 C.F.R. § 351.401(f)(1).