Slip Op. 16 - 16
UNITED STATES COURT OF INTERNATIONAL TRADE
: MAVERICK TUBE CORPORATION, : : Plaintiff, : : and : : UNITED STATES STEEL CORPORATION, : BOOMERANG TUBE LLC, ENERGEX TUBE : (a division of JMC STEEL GROUP), TEJAS : TUBULAR PRODUCTS, TMK IPSCO, : VALLOUREC STAR, L.P., and : WELDED TUBE USA INC., : : Plaintiff-Intervenors, : Before: R. Kenton Musgrave, Senior Judge : v. : Consol. Court No. 14-00229 : UNITED STATES, : : Defendant, : : and : : TOSCELIK PROFIL VE SAC ENDUSTRISI A.S., : CAYIROVA BORU SANAYI VE TICARET A.S., : BORUSAN MANNESMANN BORU SANAYI : VE TICARET A.S., and BORUSAN ISTIKBAL : TICARET, : : Defendant-Intervenors. : :
OPINION
[Sustaining results of remand of countervailing duty investigation into oil country tubular goods from Turkey.]
Dated: February 22, 2016 Consol. Court No. 14-00229 Page 2
Alan H. Price and Robert E. DeFrancesco, III, Wiley Rein, LLP, of Washington DC, for the plaintiff Maverick Tube Corporation.
Robert E. Lighthizer, Jeffrey D. Gerrish, and Nathaniel B. Bolin, Skadden Arps Slate Meagher & Flom, LLP, of Washington DC, for the plaintiff-intervenor United States Steel Corporation.
Hardeep K. Josan, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington DC, for the defendant. With him on the brief were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, and Claudia Burke, Assistant Director. Of Counsel on the brief was Scott D. McBride, Senior Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce.
David L. Simon, Law Office of David L. Simon, of Washington DC, for the defendant- intervenors Toscelik Profil ve Sac Endustrisi A.S. and Cayirova Boru Sanayi ve Ticaret A.S.
Donald B. Cameron, Julie C. Mendoza, R. Will Planert, Brady W. Mills, Mary S. Hodgins, and Sarah S. Sprinkle, Morris Manning & Martin, LLP , of Washington DC, for the defendant- intervenors Borusan Mannesmann Boru Sanayi ve Ticaret A.S. and Borusan Istikbal Ticaret.
Musgrave, Senior Judge: This opinion addresses the results of remand (“Remand
Results” or “RR”) filed by the International Trade Administration, U.S. Department of Commerce
(“Commerce”), on the underlying consolidated case, familiarity with which is presumed. As
discussed below, the Remand Results are supported by substantial evidence and in accordance with
law.
By way of brief background, the products that concerned the final affirmative
countervailing duty (“CVD”) investigation are oil country tubular goods (“OCTG”) from Turkey,
in particular the alleged state provision of hot-rolled steel for less than adequate remuneration
(“LTAR”) and other state benefits in the production thereof. See Certain Oil Country Tubular
Goods From the Republic of Turkey, 79 Fed. Reg. 41964 (July 18, 2014), PDoc 369, and
accompanying issues and decision memorandum (July 10, 2014) (“IDM”), PDoc 363, (collectively Consol. Court No. 14-00229 Page 3
“Final Determination”); see also 19 U.S.C. §1677(5). The period of investigation is January 1,
2012, through December 31, 2012 (“POI”).
Borusan Mannesmann Boru Sanayi ve Ticaret A.S. and Borusan Istikbal Ticaret
(together “Borusan”) filed the first appeal of the Final Determination. See Court No. 14-00214.
Opposing consolidation with the other lawsuits challenging the investigation filed thereafter,
Borusan also filed a “motion to expedite briefing and consideration.” Id., ECF No. 7 (Sep. 10, 2014).
The filing of a joint proposed scheduling order, to which the defendant had consented, mooted acting
on the motion to expedite briefing, see id., ECF No. 11 (Sep. 17, 2014), and motions to intervene
in that action were filed thereafter and duly acted upon in the order received, see id., ECF Nos. 30-33
(Sep. 29, 2014).
Issuance of slip opinion 15-36 in due course remanded to Commerce and obviated
acting on the motion for expedited consideration.1 See Borusan Mannesmann Boru Sanayi ve
Ticaret A.S. v. United States, 39 CIT ___, 61 F. Supp. 3d 1306 (2015) (“Borusan”). In the court’s
opinion, substantial evidence of record appeared to support Commerce’s determination that HRS
suppliers Eregli Demir ve Celik Fabrikalari T.A.S. (“Erdemir”) and its subsidiary Iskenderun Demir
ve Celik A.S. (“Isdemir”) were government “authorities” for purposes of the CVD statute, but further
consideration of the finding that the Turkish HRS market was distorted as well as the application of
adverse facts available (“AFA”) with respect to reported HRS purchases by Borusan was remanded
as necessary. See generally 39 CIT at ___, 61 F. Supp. 3d at 1324-49; see also 19 U.S.C. §§
1 In particular, issuance of that opinion also obviated that motion’s proposed order’s peculiarity, i.e., having the court order itself to consider the case on an expedited basis, whereas the timing of today’s opinion reflects the consideration associated with the knottiness of certain issues after remand. Consol. Court No. 14-00229 Page 4
1677e(a) and (b). Also remanded were several other issues related to benefit measurements under
19 C.F.R. §351.511(a)(2)(iv), the further consideration of which depended upon the Turkish HRS
market’s level of distortion. See 61 F. Supp. 3d at 1337.
Subsequently, Maverick Tube Corp. v. United States, 39 CIT ___, Slip Op. 15-59
(June 15, 2015) (“Maverick”), addressed the similar claims of the domestic industry litigants and the
respondent Toscelik Profil ve Sac Endustrisi A.S. ( together with Cayirova Boru Sanayi ve Ticaret
A.S., “Toscelik”) separately filed here against the HRS-for-LTAR aspect of the investigation into
OCTG from Turkey as well as Toscelik’s claim against the agency’s benchmark for valuing a parcel
of land that the Government of Turkey (“GOT”) had granted to Toscelik in 2008 for LTAR (the
“Osmaniye Parcel”). See generally Slip Op. 15-59. Maverick adopted Borusan in remanding the
same or similar issues, and the two cases were consolidated during remand.2
In the Remand Results before the court, Commerce reversed its prior position
regarding market distortion under protest and used tier-one (i.e., actual) transaction prices in Turkey
as a benchmark to calculate the benefit from the provision of HRS for LTAR to Borusan and
Toscelik during the POI. RR at 18, 46. As a result, Commerce deemed the remaining benefit-related
matters that had been remanded no longer relevant and did not address them further in the Remand
Results.3 See RR at 3. Commerce again insisted that applying partial AFA to Borusan was proper.
See id. at 7-8, 19-28. Lastly, Commerce adjusted the Osmaniye Parcel benchmark. Id. at 3. The
parties argue for further remand, as follows.
2 See, e.g., Court No. 14-00214, ECF No. 85 (June 22, 2015). 3 As an aside, Commerce confirmed on remand that Borusan’s “interpretation is an accurate statement of Commerce’s meaningful control standard,” which no party challenges. See RR at 12. Consol. Court No. 14-00229 Page 5
I
The domestic industry representatives, Maverick Tube Corporation (“Maverick”) and
United States Steel Corporation (“U.S. Steel”), argue that the Remand Results’ analysis of market
distortion is not adequately explained. Their arguments may be summarized as putting the onus on
the Government of Turkey (“GOT”) for the state of the record, which “precluded” Commerce from
finding the Turkish HRS market distorted, because the GOT did not provide data on Erdemir’s and
Isdemir’s share of HRS production and consumption in Turkey. The domestic industry thus argues
Commerce erred in not applying AFA.
Restating parts of the Remand Results, U.S. Steel argues “there is no question that
the GOT failed to cooperate to the best of its ability by failing to provide the information requested
by Commerce regarding the HRS market in Turkey.” U.S. Steel Cmts at 5-6. Maverick also
criticizes Commerce for accepting “without scrutiny or explanation” the GOT’s statement that
“confidentiality requirements” related to Turkey’s European Union relationship and businesses
precluded submitting documentation underlying the GOT’s National Restructuring Plan, and
Maverick insinuates that the GOT did not treat that documentation as confidential “when they
formed the basis of [the GOT’s] position paper”or distinguish information in these documents from
the types of information regularly submitted as confidential under the protection of an administrative
protective order in Commerce’s investigations. Maverick Cmts at 8.
Regarding the averment that Commerce was not “direct[ed] to reassess the GOT’s
failure to provide HRS production data[ ] and on that basis presume as adverse facts available that
the HRS market is distorted”, Maverick Cmts at 4, quoting RR at 31, Maverick first notes that this Consol. Court No. 14-00229 Page 6
is true only insofar as the remand orders did not direct Commerce to reconsider the record in any
particular manner or to reach any particular conclusion, which is correct,4 and that Commerce was
also requested “to explain those circumstances where ‘substantial portion of the market’ results in
minimal distortion and where it results in substantial or significant distortion and explain its
reasoning on its categorization of the matter at bar and the record evidence that supports it”, id.,
quoting Borusan, 61 F. Supp. 3d at 1330. Maverick argues the Remand Results attempt this exercise
“but fail for the explicit reason that the GOT did not provide necessary information despite
Commerce’s repeated requests.” Id., referencing RR at 14.
The court does not discern where in the Remand Results that exercise is attempted.
Be that as it may, Commerce obviously casts doubt on the GOT’s responsiveness by calling into
question whether the GOT was actually in possession of the kind of production and consumption
data requested or could mandate its procurement, and Maverick and U.S. Steel go further, arguing
that the GOT actually was in possession. However, the assumption that underlies their arguments
is that the GOT in fact maintained, or had access to, the level of such data that would be meaningful
to this investigation. Speculation is not substantial evidence. See, e.g., Asociacion Columbiana
Exportadores de Flores v. United States, 23 CIT 148, 153-54, 40 F. Supp. 2d 466, 472 (1999). Cf.
Olympic Adhesives, Inc. v. United States, 899 F.2d 1565, 1572 (Fed. Cir. 1990) (Commerce may not
“characterize a party’s failure to list and give details of sales as a ‘refusal’ or ‘inability’ to give an
answer where, in fact, there are no sales”).
4 As stated in PPG Industries on a similar contention, “it is equally true that that order did not restrict the agency from doing so. Indeed, the intent of the remand was to permit maximum administrative flexibility.” PPG Indusries v. United States, 15 CIT 632, 637 (1991). Consol. Court No. 14-00229 Page 7
In the final analysis, Commerce did not find dispositive evidence of market distortion
on the record, and the parties do not point to anything of record to indicate that the GOT was not
being truthful in stating that it could not provide production and consumption data for HRS.
Maverick insists, however, that the record belies the GOT’s claim of “confidentiality requirements.”
Maverick Cmts at 8, referencing PDocs 272-79 at 3-4. The argument is underdeveloped, and
examination of that portion of the record does not reveal contradiction. In particular, Maverick does
not explain why either the GOT’s claim could not have been construed as comporting with 19 C.F.R.
§351.304 or may have been improperly considered privileged information pursuant to 19 C.F.R.
§351.105(d). Furthermore, whether the parties’ aspersions accurately characterize what transpired
during the investigation, they do not lead to the conclusion that the application of AFA against the
GOT is the proper remedy at this point, given Commerce’s treatment thereof at that time and since.
Cf., e.g., Essar Steel Ltd. v. United States, 34 CIT 1057, 1070, 721 F. Supp. 2d 1285, 1297 (2010)
(“[w]here the foreign government fails to act to the best of its ability, Commerce will usually find
that the government has provided a financial contribution to a specific industry”) (citation omitted).5
Hence, notwithstanding the Remand Results’ narrative regarding the GOT’s responsibility for the
state of the record, substantial evidence of record supports the Remand Results on the issue of
market distortion.
5 The court also notes Borusan opposing the implication in the Remand Results that Borusan affirmatively supports use of a per se market distortion rule in any case in which the government supplier accounts for a majority of the market, Borusan’s Cmts at 14-17, but any comment here on that, at this stage, would amount to an advisory opinion. Consol. Court No. 14-00229 Page 8
II
Regarding the application of partial AFA to Borusan’s questionnaire responses on its
HRS purchase information, the relevant regulation, 19 C.F.R. §351.525(b)(5), provided during the
POI that “[i]f a subsidy is tied to production or sale of a particular product, the Secretary will
attribute the subsidy only to that product”, but “[i]f a subsidy is tied to production of an input
product” such as HRS, “then the Secretary will attribute the subsidy to both the input and
downstream products produced by a corporation.” In retrospect, it is apparent that remand of the
issue engendered interpretive difficulty.
A
The Remand Results elaborate somewhat on Commerce’s attribution practice,
beginning with restatement that Commerce’s regulatory practice is to regard the provision of an input
for LTAR as benefitting a company’s overall production absent a requirement explicitly made at the
time of “bestowal,” i.e., when the terms for the provision are set, that the input may only be used for
a certain subset of a company’s production. Commerce’s “tying rules are an attempt at a simple,
rational set of guidelines” for addressing the kind of “attribution-related issues” that arise when
considering fungible inputs. See 19 C.F.R. §351.525(b)(5). Cf. RR at 20, quoting Countervailing
Duties, 63 Fed. Reg. 65348, 65403 (1998) (“CVD Preamble”).
Thus, pursuant to practice, Commerce seeks purchase information for all procured
input being investigated for LTAR regardless of whether the input is for incorporation into subject
or non-subject merchandise. RR at 20-22, referencing, inter alia, Certain Kitchen Shelving and
Racks from the People’s Republic of China (“PRC”), 74 Fed. Reg. 37012 (July 27, 2009) (final Consol. Court No. 14-00229 Page 9
affirmative CVD determ.) (“Kitchen Racks from the PRC”) and accompanying issues and decisions
memorandum (such memoranda hereinafter “I&D Memo”) at cmt. 10 (“[g]iven the breadth of
product line . . . and the wide variance of Wire King’s use of wire rod in its products, we do not find
that the GOC intended to benefit specific . . . products”). “Absent a determination that a subsidy is
tied to a specific product under 19 CFR 351.525(b)(5), Commerce does not limit the attribution of
a benefit from a subsidy program to a specific product.” RR at 23, quoting IDM at 53 (internal
quotations and bracketing omitted). More precisely, Commerce will only consider a subsidy tied to
a particular product when it is specifically earmarked to that product by the foreign government. See
id. at 20.
The Remand Results also restate Commerce’s position on the administrative record
of Borusan’s responses to the two administrative requests for information on Borusan’s HRS input
procurement. By way of brief background, Commerce first requested Borusan’s HRS input
information pursuant to its general practice. Borusan’s first response did not provide all the
information Commerce requested; instead, Borusan provided the information that Borusan believed
would suffice for purposes of calculating the CVD margin for its subject merchandise. Commerce’s
supplemental questionnaire repeated its request for all HRS purchase information and also requested
that if Borusan is unable to provide this information then Borusan should explain in detail why it
cannot do so and explain the efforts made to obtain the information. Borsuan responded by
providing a more elaborate explanation of the difficulties it had encountered in obtaining the Gemlik
mill information, in particular the fact the information was in disparate systems and had to be
extracted manually, that the Gemlik plant information alone, which was the only plant dedicated to Consol. Court No. 14-00229 Page 10
production of subject merchandise, had amounted to over 300 pages of detail, and had taken over
two weeks involving numerous personnel. By “provid[ing] in the alternative”6 the full reporting of
HRS purchase information for the Gemlik plant, Borusan asked Commerce to relieve it of the burden
of having to produce the HRS purchase information for the other two plants pursuant to 19 U.S.C.
§1677m(c). Borusan also stated that if Commerce truly needed the information for the non-subject
merchandise producing plants, Borusan stood ready to provide it but that it would take several weeks
to provide. See generally CDocs 136-37 at 8-11. For the remainder of the administrative review,
Commerce was silent on the matter, and for its Final Determination it applied partial AFA to
Borusan’s responses.
B
Given Commerce’s silence, and since it was unclear to the court why Commerce still
considered that information necessary to its Final Determination, cf. CVD Preamble, 63 Fed. Reg.
at 65403 (explicitly rejecting “fungibility” as “the guiding principle for attributing subsidies”), the
matter was remanded with the intention of clarifying whether insistence upon adherence to
administrative practice was only an excuse for resorting to facts available pursuant to 19 U.S.C.
§1677e in order to impose an adverse inference in the selection thereof at the time the Final
Determination was made. Unfortunately, given the timeline of the relevant events, the opinion’s
commentary may have clouded the issue.
For example, defense of the Remand Results veers into argument that 19 U.S.C. §
1677e(a) does not require that information be “necessary,” only “reasonable,” in order for Commerce
6 CDocs 136-37 at 10. Consol. Court No. 14-00229 Page 11
to “act[ ] well within its discretion” when seeking information, and that “an interpretation of the
statute to require that Commerce establish that all information that it requests is ‘necessary’
effectively reads subsection (2) out of the statute entirely.” See, e.g., Def’s Resp. to Cmts at 12-13,
referencing RR at 30, TRW Inc. v. Andrews, 534 U.S. 19, 31 (2001), Loughrin v. United States, 134
S. Ct. 2384, 2390 (2014), Olympic Adhesives, Inc. v. United States, 899 F.2d 1565, 1572 (Fed. Cir.
1990), Ningbo Dafa Chem. Fiber Co. v. United States, 580 F.3d 1247, 1254 (Fed. Cir. 2009) and Ad
Hoc Shrimp Trade Action Comm. v. United States, 802 F.3d 1339, 1353 (Fed. Cir. 2015)
(recognizing a distinction between subsections (a)(1) and (2)). Borusan, however, did not impose
such an interpretation of the statute; it was the Final Determination’s own statement (i.e., that the
application of AFA to Borusan rested on the absence of “necessary” information and the purported
“withholding” of that information) that prompted the expressed opinion.
The parties also argue over the “tying” exception in 19 C.F.R. §351.525(b)(5) rather
than focus on the point of the remand. Borusan, for example, argues that its purchases of HRS for
the Gemlik plant were indeed “tied,” and it distinguishes its circumstance from cases claimed in the
Remand Results as support for Commerce’s position, in particular Steel Wire Strand from the PRC.7
7 See Kitchen Racks from the PRC, I&D Memo at cmt. 10 (rejecting petitioner’s request “to tie the benefit from Wire King’s purchases of preferentially priced wire rod only to purchase made with wire rod”); Drill Pipe from the PRC, 76 Fed. Reg. 1971 (Jan. 11, 2011) (inter alia, final affirmative CVD determ.) (“Drill Pipe from the PRC”), and accompanying I&D Memo at cmt. 6 (rejecting petitioners’ request to tie benefit to particular products because “their position on a product classification [ ] simply groups together different products that use a common material input” and the input at issue was used in the production of various products); Circular Welded Austenitic Stainless Pressure Pipe From the PRC, 73 Fed. Reg. 39657, 39663-64 (July 10, 2008) (inter alia, prelim. affirmative CVD determ.) (“Pressure Pipe from the PRC’) at “Provision of Stainless Steel Coil for LTAR” (rejecting respondents’ argument that stainless steel coils should not be subject to LTAR subsidy analysis where the inputs are “not . . . incompatible with the production process”); (continued...) Consol. Court No. 14-00229 Page 12
However, there is no indication in the record that the HRS was “tied” to either subject or non-
subject-merchandise in the sense contemplated by 19 C.F.R. §351.525(b)(5) apart from the fact that
shipments of HRS to Gemlik from Erdemir and Isdemir were “destined for” Gemlik. For instance,
it does not appear that Erdemir and Isdemir “purposed” the HRS shipped to Gemlik for incorporation
only into particular merchandise. For that reason, the court must conclude the Remand Results
reasonably explain that provision of the HRS purchase information for the non-subject merchandise
producing plants was “necessary” in the sense contemplated by Commerce’s general regulatory
practice.
Nonetheless, Borsuan argues that the Remand Results do not explain how in the final
analysis of the facts of this case Commerce could lawfully determine that the HRS delivered to the
Halkali and Izmit mills constitutes a subsidy with respect to the manufacture, production, or export
of subject OCTGs in accordance with 19 U.S.C. §1671(a)(1). As previously explained, that position
7 (...continued) Pre-Stressed Concrete Steel Wire Strand from the PRC, 75 Fed. Reg. 28557 (May 21, 2010) (final affirmative CVD determ.) (“Steel Wire Strand from the PRC’), and accompanying I&D Memo at 10 (discovering at verification of unreported data and refusing to accept respondents’ justification that other factories “did not use the wire rod they purchased during the POI to produce PC strand,” therefore issue of whether respondents did not have the capability to produce the subject merchandise was not reached). Borusan argues that unlike Steel Wire Strand from the PRC, where Commerce discovered at verification that the respondents had not reported wire rod purchases for two factories, Borusan had explained to Commerce four and a half months before Commerce’s post- preliminary analysis of this case via its original and supplemental responses that the Halkali and Izmit plants do not produce the subject merchandise and were not at the time capable of producing the subject merchandise. PDoc 75 at 11; PDoc 218 at 8-11. Borusan also argues that it explained it did not transfer any HRS from these plants to the Gemlik plant that produces the subject merchandise, see PDoc 75 at 11 & PDoc 218 at 10, and that Commerce never contested these facts. Borusan’s Cmts at 6-7. Consol. Court No. 14-00229 Page 13
is not unreasonable even though it is at odds with Commerce’s interpretation of the statute in its
regulation.
On the one hand, most importantly, Commerce had the actual HRS purchase
information for the Gemlik plant that pertained to all of “Boruan’s” subject merchandise, which was
the main point of questioning why the non-subject-merchandise-producing plants’ information was
“necessary” for the Final Determination. Assuming it is reasonable to presume that a company as
a whole benefits from the fungibility of a monetary benefit, such as the purchase of an input-for-
LTAR, then if Commerce had received the “missing” HRS purchase information for the non-subject-
merchandise producing plants and had calculated a company-wide benefit that it then attributed
(back) across subject and non-subject merchandise that was produced at other plants, it was (and still
is) unclear to the court whether that result would be any more accurate than attributing to the subject
merchandise a calculated “company-wide benefit” consisting of the HRS purchases for the HRS that
was actually procured at identifiable prices and was actually incorporated into subject merchandise
that could be attributed to said subject merchandise.8
The only difference having the HRS purchase information for the non-subject
merchandise producing plants (which are geographically and conceptually distinct from the Gemlik
plant) would make is if there are measurable purchase price differences in HRS procurement. In
8 See Borusan, 39 CIT at ___, 61 F. Supp. 3d at 1347 (“[i]n other words, at that point, and assuming the truth of Borusan’s claims regarding subject merchandise and non-subject merchandise production survived verification, Commerce’s ‘attribution’ would wind up at exactly at the point that Borusan had been making all along to Commerce: that the HRS purchase information for the non-subject-merchandise-producing Halkali and Izmit mills is not relevant to the attributable HRS for LTAR in the countervailing duty investigation of oil country tubular goods from Turkey”) (italics in original). Consol. Court No. 14-00229 Page 14
such a circumstance, determining the average price of all “company-wide” input-for-LTAR
procurement and “attributing” the “benefit” across all production utilizing the input-for-LTAR
potentially produces a “fuzzier” result for the relevant subject merchandise than a record that can
account for the price of the HRS that is actually incorporated into (and therefore attributable to) the
subject merchandise.9 In other words, differently priced input-for-LTAR provide different levels of
benefit(s) to the company, so insistence upon application of a “company-wide” attribution average
would conceptually distort the record of the actual benefit of the actual cost of the input that
generally accepted cost accounting principles would attribute to account for the input’s actual
incorporation into subject merchandise -- either away from that merchandise, or vice versa in the
case of non-subject merchandise. Either instance would not appear to comport with 19 U.S.C.
§1671(a)(1). Cf. 19 C.F.R. §351.525(b)(5)(i) (“tied to the production or sale of a particular
product”). And that, in a nutshell, is Borusan’s argument.
On the other hand, the question before the court is whether Commerce’s
determination is supported by substantial evidence and in accordance with law. And on that
question, the court must defer to Commerce’s methodology if it is reasonable. See, e.g., GPX Int’l
Tire Corp. v. United States, 37 CIT ___, ___, 893 F. Supp. 2d 1296, 1329 (2013), aff’d, 780 F.3d
1136 (Fed. Cir. 2015). The Remand Results explain that Commerce’s tying inquiry is meant to
balance the fact that “money” is fungible with the congressional attempt to “attribute” subsidies to
9 Analogous to the physically distinct HRS shipped from Erdemir to the geographically separate Gemlik and non-subject merchandise producing plants is the fact that U.S. Customs and Border Protection explicitly lists the “specific identification method” as one of its recognized inventory management systems for the handling of fungible goods for identification of the good’s country of origin. See 19 C.F.R. §102.12(b) & Pt. 181, Appx. (NAFTA Rules of Origin), Sec. 7(16) & Sch. X. §13. Consol. Court No. 14-00229 Page 15
the products directly benefitting from the subsidy. RR at 40. The court must conclude the general
attribution practice not unreasonable per se, because aggregating a company’s discrete purchases of
a subsidized fungible input into one “company-wide” benefit is not inconsistent with the statute. The
statute is ambiguous on that point, and Commerce’s interpretation of ambiguity in the statute it is
charged with administering is entitled to Chevron deference. See United States v. Eurodif S.A., 555
U.S. 305, 316 (2009); Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-45
(1984). Cf. 19 U.S.C. §1671(a)(1) (“a countervailable subsidy with respect to the manufacture,
production, or export of a class or kind of merchandise”) (italics added).
Regardless, as the domestic industry correctly points out, the application of AFA is
the ultimate issue here, not Commerce’s input-attribution practice in general. On the AFA issue,
however, Commerce’s attribution practice is not irrelevant, because Commerce also has the
discretion to deviate from practice if circumstances warrant. Allegheny Ludlum Corp. v. United
States, 346 F.3d 1368, 1373 (Fed. Cir. 2003). Taking into consideration the entirety of the above,
thus, it was (and, again, still is) unclear what “attribution-related issue” remained after Borusan had
submitted its first and supplemental questionnaire responses providing all HRS purchase information
for the only plant that produced subject merchandise and explaining its circumstance and the
difficulty it had encountered in gathering the HRS information even for just that plant. Cf. Statement
of Administrative Action Accompanying the Uruguay Round Agreements Act, H.R. Doc. No. 103-
316, vol. 1, at 869 (1994) (“Section 776(a) makes it possible for Commerce . . . to make [its]
determination[ ] within the applicable deadlines if relevant information is missing from the record”)
(italics added), reprinted in 1994 U.S.C.C.A.N. 4040, 4198. Nonetheless, the Remand Results
necessarily imply that Commerce, when making its Final Determination, concluded that Borusan’s Consol. Court No. 14-00229 Page 16
circumstances did not compel deviation from Commerce’s company-wide input information demand
practice. Whether that was an afterthought, the court is precluded from “displac[ing] the [agency’s]
choice between two fairly conflicting views, even though the court would justifiably have made a
different choice had the matter been before it de novo.” Universal Camera Corp. v. NLRB, 340 U.S.
474, 488 (1951).
C
Borusan also contends that even if the information was “necessary” in accordance
with Commerce’s practice, there was no basis to apply an adverse inference when selecting among
the facts otherwise available. Borusan’s Cmts at 4. In accordance with the foregoing, however, there
was a basis.
Although, and as previously indicated, the court has substantial doubts on whether
Commerce properly informed Borusan of the “nature” of the original questionnaire response’s
deficiency in the spirit of 19 U.S.C. §1677m(d),10 once again it is Commerce’s interpretation of
ambiguous portions of the statute it is tasked with administering that is entitled to Chevron
deference, see supra, not an independent de novo opinion on the subject, and the “nature of the
deficiency” would certainly encompass informing that a response to a questionnaire did not provide
10 Cf. PDoc 177 at 4-5 with American Tubular Products, LLC v. United States, 36 CIT ___, Slip Op. 14-116 at 20 (2014) (19 U.S.C. §1677m(d) “ensures that Commerce’s data collection does not morph into an administrative guessing game, where the agency punishes parties for giving incomplete answers to cryptic questions”), referencing Bowe-Passat v. United States, 17 CIT 335, 342 (1993). In that spirit, simply pointing to “practice” and stating the obvious (that Borusan’s original questionnaire response did not provide all the HRS information requested) and requesting Borusan to provide the missing information and explain its efforts to provide it, is hardly a “question” that fully addressed Borusan’s original response, as it does not indicate clear acknowledgment and rejection of Borusan’s request to be allowed to submit only the Gemlik plant HRS purchase information. Consol. Court No. 14-00229 Page 17
all requested information, even if it did not provide a straightforward answer on Borusan’s request
to be relieved of providing information that seemed unnecessary to the Final Determination on the
investigation of HRS-for-LTAR in the subject merchandise OCTGs. See 19 U.S.C. §1677m(d) (“If
the administering authority or the Commission determines that a response to a request for
information under this subtitle does not comply with the request, the administering authority or the
Commission (as the case may be) shall promptly inform the person submitting the response of the
nature of the deficiency and shall, to the extent practicable, provide that person with an opportunity
to remedy or explain the deficiency”). To require more, however, would intrude into Commerce’s
province.
It is true, as Borusan argues, that the observation in the prior opinion that the
application of an adverse inference does not appear warranted in this case did not hinge on the
“necessity” of the HRS purchase information for the Halkali and Izmit plants, as the opinion was
based on the record of Commerce’s and Borusan’s communications during the investigation.
Nonetheless, to the extent Borusan contends that the opinion’s observation amounts to a holding or
a conclusion of the issue as a matter of law,11 the argument is inconsistent with the court’s standard
11 See Borusan, 39 CIT at ___, 61 F. Supp. 3d at 1349 (“it does not appear that Borusan’s was the type of ‘willful’ non-compliance that would merit imposition of an adverse inference”) (italics added). The Remand Results also stress that a showing of “willfulness is not required” to draw an adverse inference. RR at 24-25, citing Nippon Steel Corp. v. United States, 337 F.3d 1373, 1382 (Fed. Cir. 2003) (“Nippon Steel”). However, Borusan did not hold that Commerce was required to find willfulness in order draw an adverse inference, the opinion merely drew attention to Commerce’s own argument in relief against the record in that regard, and Borusan highlights the prior opinion’s recognition that willfulness is not required by calling attention to that opinion’s albeit subtle reference, via Mukand, Ltd. v. United States, 767 F.3d 1300 (Fed. Cir. 2014), to Nippon Steel -- the very case relied upon by Commerce. Cf. Borusan, 39 CIT at ___, 61 F. Supp. 3d at 1346, citing, Def’s Resp. in Ct. No. 14-00214, ECF Doc. No. 52 (Jan. 15, 2015), at 45-46, with Nippon (continued...) Consol. Court No. 14-00229 Page 18
of review. In the final analysis, the question is solely whether the agency’s determination is
supported by substantial evidence on the record and is in accordance with law. 19 U.S.C.
§1516a(b)(1)(B)(i).
Notwithstanding that Borusan was left in limbo on its request for relief from
Commerce’s request for non-subject merchandise producing mills’ HRS purchase information,
Commerce’s request for that information was still outstanding by the time Commerce reached its
preliminary determination and Commerce implicitly refused to deviate from its general attribution
practice. Substantial evidence of record supports Commerce’s conclusion in its Final Determination
that Borusan had not exerted its best efforts to provide the requested information. See Nippon Steel,
337 F.3d at 1382-83. In other words, whether Commerce’s inaction upon Borusan’s request for
relief was arguably abusive, substantial evidence supports that Borusan at least shared if not bore
responsibility for the state of the record, see supra, and the state of the law does not, apparently,
require more of Commerce. Cf. Essar Steel Ltd. v. United States, 678 F.3d 1268, 1275-76 (Fed. Cir.
2012) (quoting Nippon Steel, 337 F.3d at 1382: “[c]ompliance with the ‘best of its ability’ standard
is determined by assessing whether respondent has put forth its maximum effort to provide
Commerce with full and complete answers to all inquiries in an investigation”), with Ansalado
Componenti, S.p.A. v. United States, 10 CIT 28, 37, 628 F. Supp. 198, 205 (1986) (“[i]t is
Commerce, not the respondent, that determines what information is to be provided” et cetera).
11 (...continued) Steel Corp. 337 F.3d at 1383 (holding that while there is no requirement to find motivation or intent in order to draw an adverse inference, “[a]n adverse inference may not be drawn merely from a failure to respond, but only under circumstances in which it is reasonable for Commerce to expect that more forthcoming responses should have been made”). Precisely so. Consol. Court No. 14-00229 Page 19
III
Toscelik previously persuaded that in order to value its Osmaniye Parcel, for its Final
Determination on the investigation of OCTG from Turkey Commerce had “merely adopted” the
2011 administrative review results of the CVD order on circular welded carbon steel pipes and tubes
from Turkey (“CWP from Turkey”). Maverick, Slip Op. 15-59 at 12. The court concluded that the
post-Toscelik12 final results of those reviews implicated the benchmark valuation of the Osimanye
Parcel and remanded for correction thereof. Id. Commerce complied in the Remand Results. RR
at 28.
U.S. Steel contends the revision of the benchmark should be overturned, arguing that
establishing the amortization schedule for the Osmaniye Parcel during the 2010 administrative
review of CWP from Turkey may have had binding consequences on the subsequent 2011 review of
that product but is not binding and has “no application” in this separate OCTG from Turkey
investigation. U.S. Steel emphasizes that for OCTG from Turkey, Commerce revised its valuation
by expanding the number of data points for the benchmark in order to “build the most robust data
set possible” as “the more commercial transactions within Turkey that [Commerce] uses as part of
its benchmark analysis, the greater the likelihood that the benchmark will accurately reflect the
experience of commercial land purchasers in Turkey.” U.S. Steel Cmts at 18, quoting IDM at 58,
PDoc 363. U.S. Steel contends this makes the benchmark “more accurate” and “there is no reason
not to make the calculation more accurate in a completely separate CVD proceeding. Indeed, failing
12 See Toscelik Profil ve Sac Endustrisi A.S. v. United States, 38 CIT ___, Slip Op. 14-126 (Oct. 29, 2014) (“Toscelik”). Consol. Court No. 14-00229 Page 20
to recalculate the benefit in this case simply perpetuates the inaccuracy of the calculation in a
separate case based on a principle that has no application.” Id. at 18-19.
In other words, U.S. Steel argues that the 2010 and 2011 land benefit calculations in
CWP from Turkey are properly characterized as “inaccurate” and it thereby impugns the validity of
the 2010 and 2011 (post-Toscelik) administrative reviews of CWP from Turkey. After re-reading the
prior opinion and the relevant potion of the IDM for the original determination of this proceeding
in accordance with U.S. Steel’s arguments, the court continues to conclude that a consistent
Osmaniye Parcel benchmark value across proceedings is necessary. Cf., e.g., PDoc 140 with RR at
57 (“[o]ur calculation of a simple average is consistent with the Department’s calculation of the land
benchmark in CWP from Turkey 2011 AR”) (italics added; footnote omitted). U.S. Steel does not
persuade that error is manifest in Commerce’s benchmark valuation of the Osmaniye Parcel and/or
the amortization schedule thereof as established in CWP from Turkey through appeal thereof, and
in the absence of such a showing a disparate valuation of that same parcel of land as a final result
of this proceeding would be odd indeed.
Conclusion
In accordance with the foregoing, the Remand Results must be sustained, and
judgment to that effect will be entered.
/s/ R. Kenton Musgrave R. Kenton Musgrave, Senior Judge
Dated: February 22, 2016 New York, New York Errata
Maverick Tube Corp. v. United States, Consol. Court No. 14-00229, Slip Op. 16-16, dated February 22, 2016:
Page 2, replace “Hardeep K. Josan” with “Melissa M. Devine” and replace “him” with “her” on the next line.
Dated: February 22, 2016.