Slip Op. 17- 42
UNITED STATES COURT OF INTERNATIONAL TRADE
DAVIS WIRE CORP. AND INSTEEL WIRE PRODUCTS COMPANY,
Plaintiffs,
v. Before: Timothy C. Stanceu, Chief Judge UNITED STATES, Court No. 14-00131 Defendant,
and
THE SIAM INDUSTRIAL WIRE CO., LTD.,
Defendant-Intervenor.
OPINION
[Sustaining a determination made on remand by the International Trade Administration]
Dated: April 13, 2017
Kathleen W. Cannon of Kelley Drye & Warren LLP, of Washington DC, argued for plaintiffs Davis Wire Corporation and Insteel Wire Products Company. With her on the brief were David C. Smith, Jr., and R. Alan Luberda.
Agatha Koprowski, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for defendant United States. With her on the brief were Joyce M. Branda, Acting Assistant Attorney General, Jeanne E. Davidson, Director, Reginald T. Blades, Jr., Assistant Director.
Edward M. Lebow of Haynes & Boone LLP, of Washington DC, argued for defendant- intervenor The Siam Industrial Wire Co., Ltd.
Stanceu, Chief Judge: In this action, plaintiffs Davis Wire Corporation and Insteel Wire
Products Company contested a negative less-than-fair-value determination (“Final
Determination”) issued by the International Trade Administration, U.S. Department of Court No. 14-00131 Page 2
Commerce (“Commerce” or the “Department”) following an antidumping duty investigation of
prestressed concrete steel tie wire (“PC tie wire”) from Thailand. Final Determination of Sales
at Not Less than Fair Value: Prestressed Concrete Steel Rail Tie Wire from Thailand, 79 Fed.
Reg. 25,574 (Int’l Trade Admin. May 5, 2014) (“Final Determination”). In the Final
Determination, Commerce calculated a 0.00% weighted-average dumping margin for Siam
Industrial Wire Company, Ltd. (“SIW”). Because SIW was the sole exporter/producer
investigated, Commerce terminated the investigation without issuing an antidumping duty order.
Before the court is the remand (“Remand Redetermination”) issued by Commerce in
response to the court’s order in Davis Wire Corp. v. United States, 40 C.I.T. __,
180 F. Supp. 3d 1187 (2016) (“Davis Wire I”). Final Results of Redetermination Pursuant to
Remand (Sept. 21, 2016), ECF No. 56 (confidential), ECF No. 57 (public) (“Remand
Redetermination”). In Davis Wire I, the court affirmed in part, and remanded in part, the
Department’s Final Determination. Davis Wire I, 40 C.I.T. at __, 180 F. Supp. 3d at 1201. In
the Remand Redetermination, Commerce modified its calculation of SIW’s weighted average
dumping margin, but the result again was a margin of 0.00%. Remand Redetermination at 9.
Neither plaintiffs nor defendant-intervenor has filed comments with the court on the
Remand Redetermination. Because the Remand Redetermination complies with the order issued
in Davis Wire I and because no party has raised an objection, the court sustains the Remand
Redetermination.
I. BACKGROUND
The court’s prior opinion in Davis Wire I presents background information on this case,
familiarity with which is presumed. Court No. 14-00131 Page 3
II. DISCUSSION
The court exercises jurisdiction according to section 201 of the Customs Courts Act
of 1980, 28 U.S.C. § 1581(c), under which the court may review an action brought under section
516A(a)(2) of the Tariff Act of 1930 (“Tariff Act”); see 19 U.S.C. § 1516a(a)(2)(A), (a)(2)(B)(ii).
Upon judicial review, 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. § 1516a(b)(1)(B)(i).
In responding to the court’s order in Davis Wire I, the Remand Redetermination
addresses two issues, both of which pertain to the exclusion of below-cost sales from the
determination of normal value. These issues were the calculation of the cost of certain wire rod
SIW used as a production input and the calculation of SIW’s general and administrative
expenses.
In contesting the Final Determination, plaintiffs argued that Commerce improperly
calculated SIW’s cost of production with respect to certain Grade 82B 13 mm wire rod that SIW
used in the production of PC tie wire. Specifically, plaintiffs alleged that Commerce, when
averaging the cost of this production input over the period of investigation, erroneously included
only the wire rod from the inventory of SIW’s “PC Wire” division, which produced PC tie wire,
and failed to include in the average the cost of the 13 mm wire rod in the inventory of SIW’s
“PC Strand” division, which produced “PC strand,” prestressed concrete steel reinforcing bar.
Davis Wire I, 40 C.I.T. at __, 180 F. Supp. 3d at 1197. Plaintiffs alleged that both inventories
were used in the production of the PC tie wire. Id. At defendant’s request, the court granted a
voluntary remand so that Commerce could reconsider the issue. In the Remand
Redetermination, Commerce found that “wire rod used in the production of PC tie wire was also Court No. 14-00131 Page 4
used to manufacture PC strand” and that “[b]ased on this evidence, the identical raw materials
(i.e., grade 82B 13 mm wire rod held in inventory in the PC Strand division) should also be
included as part of the weighted-average raw materials consumption cost in the cost of
production (COP) calculation, in accordance with the Department’s normal practice.” Remand
Redetermination 5. Using cost data for this input that Commerce considered representative,
Commerce made an upward adjustment in SIW’s wire rod costs. Id. at 5-6. By doing so,
Commerce responded to the court’s directive and reached a finding supported by substantial
record evidence.
The second issue on remand pertained to plaintiffs’ argument that the ratio the
Department calculated for SIW’s general and administrative (“G&A”) expenses failed to include
the value of certain information technology services provided to SIW by its parent company,
Tata Steel. See Davis Wire I, 40 C.I.T. at __, 180 F. Supp. 3d at 1199. Upon considering this
argument, the court stated that it “is unable to identify on the record substantial evidence to
support the Department’s finding that the value of IT services Tata Steel reportedly provided to
SIW was reflected in the G&A ratio.” Id., 40 C.I.T. at __, 180 F. Supp. 3d at 1200. The court
ordered Commerce to reconsider the issue and to modify or explain its decision, as appropriate.
Id., 40 C.I.T. at __, 180 F. Supp. 3d at 1201. In the Remand Redetermination, Commerce
expressly found that Tata Steel invoiced SIW monthly for the costs of the IT services.
Commerce explained that “it is reasonable to conclude that the invoices received from Tata Steel
were then entered into SIW’s accounting records, and further that these cost amounts were
ultimately reflected in the audited financial statements of the company that served as the starting
point in the Department’s reconciliation of total production costs and G&A expenses at
verification.” Remand Redetermination 6-7. Commerce further explained that the IT expenses Court No. 14-00131 Page 5
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Slip Op. 17- 42
UNITED STATES COURT OF INTERNATIONAL TRADE
DAVIS WIRE CORP. AND INSTEEL WIRE PRODUCTS COMPANY,
Plaintiffs,
v. Before: Timothy C. Stanceu, Chief Judge UNITED STATES, Court No. 14-00131 Defendant,
and
THE SIAM INDUSTRIAL WIRE CO., LTD.,
Defendant-Intervenor.
OPINION
[Sustaining a determination made on remand by the International Trade Administration]
Dated: April 13, 2017
Kathleen W. Cannon of Kelley Drye & Warren LLP, of Washington DC, argued for plaintiffs Davis Wire Corporation and Insteel Wire Products Company. With her on the brief were David C. Smith, Jr., and R. Alan Luberda.
Agatha Koprowski, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for defendant United States. With her on the brief were Joyce M. Branda, Acting Assistant Attorney General, Jeanne E. Davidson, Director, Reginald T. Blades, Jr., Assistant Director.
Edward M. Lebow of Haynes & Boone LLP, of Washington DC, argued for defendant- intervenor The Siam Industrial Wire Co., Ltd.
Stanceu, Chief Judge: In this action, plaintiffs Davis Wire Corporation and Insteel Wire
Products Company contested a negative less-than-fair-value determination (“Final
Determination”) issued by the International Trade Administration, U.S. Department of Court No. 14-00131 Page 2
Commerce (“Commerce” or the “Department”) following an antidumping duty investigation of
prestressed concrete steel tie wire (“PC tie wire”) from Thailand. Final Determination of Sales
at Not Less than Fair Value: Prestressed Concrete Steel Rail Tie Wire from Thailand, 79 Fed.
Reg. 25,574 (Int’l Trade Admin. May 5, 2014) (“Final Determination”). In the Final
Determination, Commerce calculated a 0.00% weighted-average dumping margin for Siam
Industrial Wire Company, Ltd. (“SIW”). Because SIW was the sole exporter/producer
investigated, Commerce terminated the investigation without issuing an antidumping duty order.
Before the court is the remand (“Remand Redetermination”) issued by Commerce in
response to the court’s order in Davis Wire Corp. v. United States, 40 C.I.T. __,
180 F. Supp. 3d 1187 (2016) (“Davis Wire I”). Final Results of Redetermination Pursuant to
Remand (Sept. 21, 2016), ECF No. 56 (confidential), ECF No. 57 (public) (“Remand
Redetermination”). In Davis Wire I, the court affirmed in part, and remanded in part, the
Department’s Final Determination. Davis Wire I, 40 C.I.T. at __, 180 F. Supp. 3d at 1201. In
the Remand Redetermination, Commerce modified its calculation of SIW’s weighted average
dumping margin, but the result again was a margin of 0.00%. Remand Redetermination at 9.
Neither plaintiffs nor defendant-intervenor has filed comments with the court on the
Remand Redetermination. Because the Remand Redetermination complies with the order issued
in Davis Wire I and because no party has raised an objection, the court sustains the Remand
Redetermination.
I. BACKGROUND
The court’s prior opinion in Davis Wire I presents background information on this case,
familiarity with which is presumed. Court No. 14-00131 Page 3
II. DISCUSSION
The court exercises jurisdiction according to section 201 of the Customs Courts Act
of 1980, 28 U.S.C. § 1581(c), under which the court may review an action brought under section
516A(a)(2) of the Tariff Act of 1930 (“Tariff Act”); see 19 U.S.C. § 1516a(a)(2)(A), (a)(2)(B)(ii).
Upon judicial review, 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. § 1516a(b)(1)(B)(i).
In responding to the court’s order in Davis Wire I, the Remand Redetermination
addresses two issues, both of which pertain to the exclusion of below-cost sales from the
determination of normal value. These issues were the calculation of the cost of certain wire rod
SIW used as a production input and the calculation of SIW’s general and administrative
expenses.
In contesting the Final Determination, plaintiffs argued that Commerce improperly
calculated SIW’s cost of production with respect to certain Grade 82B 13 mm wire rod that SIW
used in the production of PC tie wire. Specifically, plaintiffs alleged that Commerce, when
averaging the cost of this production input over the period of investigation, erroneously included
only the wire rod from the inventory of SIW’s “PC Wire” division, which produced PC tie wire,
and failed to include in the average the cost of the 13 mm wire rod in the inventory of SIW’s
“PC Strand” division, which produced “PC strand,” prestressed concrete steel reinforcing bar.
Davis Wire I, 40 C.I.T. at __, 180 F. Supp. 3d at 1197. Plaintiffs alleged that both inventories
were used in the production of the PC tie wire. Id. At defendant’s request, the court granted a
voluntary remand so that Commerce could reconsider the issue. In the Remand
Redetermination, Commerce found that “wire rod used in the production of PC tie wire was also Court No. 14-00131 Page 4
used to manufacture PC strand” and that “[b]ased on this evidence, the identical raw materials
(i.e., grade 82B 13 mm wire rod held in inventory in the PC Strand division) should also be
included as part of the weighted-average raw materials consumption cost in the cost of
production (COP) calculation, in accordance with the Department’s normal practice.” Remand
Redetermination 5. Using cost data for this input that Commerce considered representative,
Commerce made an upward adjustment in SIW’s wire rod costs. Id. at 5-6. By doing so,
Commerce responded to the court’s directive and reached a finding supported by substantial
record evidence.
The second issue on remand pertained to plaintiffs’ argument that the ratio the
Department calculated for SIW’s general and administrative (“G&A”) expenses failed to include
the value of certain information technology services provided to SIW by its parent company,
Tata Steel. See Davis Wire I, 40 C.I.T. at __, 180 F. Supp. 3d at 1199. Upon considering this
argument, the court stated that it “is unable to identify on the record substantial evidence to
support the Department’s finding that the value of IT services Tata Steel reportedly provided to
SIW was reflected in the G&A ratio.” Id., 40 C.I.T. at __, 180 F. Supp. 3d at 1200. The court
ordered Commerce to reconsider the issue and to modify or explain its decision, as appropriate.
Id., 40 C.I.T. at __, 180 F. Supp. 3d at 1201. In the Remand Redetermination, Commerce
expressly found that Tata Steel invoiced SIW monthly for the costs of the IT services.
Commerce explained that “it is reasonable to conclude that the invoices received from Tata Steel
were then entered into SIW’s accounting records, and further that these cost amounts were
ultimately reflected in the audited financial statements of the company that served as the starting
point in the Department’s reconciliation of total production costs and G&A expenses at
verification.” Remand Redetermination 6-7. Commerce further explained that the IT expenses Court No. 14-00131 Page 5
were not individually itemized and that Commerce did not select these expenses for individual
examination at verification. Id. at 7. Commerce added that its “conclusion is supported by the
results of its verification testing procedures, which did not identify any unreported G&A expense
items” and that “[t]he absence on the record of detailed information on SIW’s IT service
expenses cannot serve as evidence that SIW has therefore not accounted for its payments to Tata
Steel.” Id. at 8. The court considers this explanation reasonable. An agency is permitted to
draw reasonable inferences from the record evidence. Campbell v. Merit Sys. Prot. Bd.,
27 F.3d 1560, 1564 (Fed. Cir. 1994) (stating that courts are required to defer to an agency “as
long as the record contains evidence from which one reasonably could draw the challenged
inference”). Here, the inference that the IT expenses were included within the G&A expenses
SIW reported is reasonable given the limitations of the company’s business records, the positive
results of the verification, which found based on sampling that in general costs were properly
accounted for, and the Department’s practical need to conduct sampling during verification as
opposed to detailed examination of every individual cost item.
III. CONCLUSION AND ORDER
For the foregoing reasons, the court sustains the Remand Redetermination. Judgment
will enter accordingly.
/s/ Timothy C. Stanceu Timothy C. Stanceu Chief Judge Dated: April 13, 2017 New York, New York