Slip Op.
UNITED STATES COURT OF INTERNATIONAL TRADE
WHEATLAND TUBE,
Plaintiff,
v.
UNITED STATES, Before: Timothy M. Reif, Judge Defendant, Court No. 22-00160 and
HYUNDAI STEEL COMPANY; HUSTEEL CO., LTD.; SEAH STEEL CORPORATION; NEXTEEL CO., LTD.,
Defendant-Intervenors.
OPINION
[Sustaining Commerce’s final remand redetermination.]
Dated: January 15, 2025
Nicholas J. Birch, Schagrin Associates, of Washington, D.C., argued for plaintiff Wheatland Tube. With him on the briefs were Roger B. Schagrin and Elizabeth J. Drake.
Robert R. Kiepura, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for defendant United States. With him on the briefs were Brian M. Boynton, Principal Deputy Assistant Attorney General, Patricia M. McCarthy, Director and Franklin E. White, Jr., Assistant Director. Of counsel was JonZachary Forbes, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C.
Jarrod M. Goldfeder, Trade Pacific PLLC, of Washington, D.C., argued for defendant- intervenor Hyundai Steel Company. With him on the briefs was Robert G. Gosselink. Court No. 22-00160 Page 2
Kang Woo Lee, Arnold & Porter Kaye Scholer LLP, of Washington, D.C., argued for defendant-intervenor NEXTEEL Co., Ltd. With him on the briefs were J. David Park, Daniel R. Wilson and Henry D. Almond.
Eugene Degnan, Morris, Manning & Martin LLP, of Washington, D.C., argued for defendant-intervenor Husteel Co., Ltd. With him on the briefs were Donald B. Cameron, Julie C. Mendoza, R. Will Planert, Brady W. Mills, Mary S. Hodgins, Jordan L. Fleischer, Nicholas C. Duffey and Edward J. Thomas III.
***
Reif, Judge: Before the court are the remand results of the U.S. Department of
Commerce (“Commerce”) pursuant to the Court’s order in Wheatland Tube v. United
States (“Wheatland Tube I” or the “Remand Order”), 47 CIT __, __, 650 F. Supp. 3d
1379 (2023). See Final Results of Redetermination Pursuant to Court Remand
(“Remand Results”), ECF No. 61.
In Wheatland Tube I, the Court remanded for reconsideration Commerce’s
determination to grant a constructed export price (“CEP”) offset to Hyundai Steel
Company (“Hyundai”) and Husteel Co., Ltd. (“Husteel”) (collectively, the “mandatory
respondents”) in Commerce’s 2019-2020 administrative review of the antidumping duty
(“AD”) order on circular welded non-alloy steel pipe from the Republic of
Korea. Circular Welded Non-Alloy Steel Pipe from the Republic of Korea: Final Results
of Antidumping Duty Administrative Review and Final Determination of No Shipments;
2019-2020 (“Final Results”), 87 Fed. Reg. 26,343 (Dep’t of Commerce May 4, 2022)
and accompanying Issues and Decision Memorandum (“IDM”) (Dep’t of Commerce Apr.
26, 2022). Court No. 22-00160 Page 3
The Court ordered Commerce to comply with its “obligations set forth in 19
U.S.C. § 1677m(d) — namely, to provide the mandatory respondents with: (1) notice of
the ‘nature’ of any deficiencies that Commerce identified in their respective
submissions; and (2) ‘to the extent practicable . . . an opportunity to remedy or explain
the deficienc[ies].’” Wheatland Tube I, 47 CIT at __, 650 F. Supp. 3d at 1383.
On remand, Commerce found that neither mandatory respondent demonstrated
adequately that home market sales during the period of review (“POR”) were at a more
advanced level of trade (“LOT”) than the CEP LOT. Remand Results at 6. Therefore,
Commerce recalculated the weighted-average dumping margins for respondents
without a CEP offset. Id. at 15.
For the reasons discussed below, the court sustains the Remand Results.
BACKGROUND
The court presumes familiarity with the facts, as set out in Wheatland Tube I, and
recounts only those facts relevant to the issues before the court on remand. In its
decision of August 3, 2023, the Court addressed whether Commerce had complied with
its obligations set forth in 19 U.S.C. § 1677m(d) to notify the mandatory respondents of
deficiencies in their submissions and to provide respondents with an opportunity to
remedy any deficiency by submitting a supplemental questionnaire response. See
Wheatland Tube I, 47 CIT at __, 650 F. Supp. 3d at 1382-83.
In the Final Results, Commerce conceded that it had failed to comply with 19
U.S.C. § 1677m(d) and therefore granted each respondent a requested CEP offset,
despite finding that neither respondent had provided an adequate quantitative analysis Court No. 22-00160 Page 4
supporting an offset. Id. at __, 650 F. Supp. 3d at 1380-81. The Court remanded
Commerce’s decision in the Final Results to grant a CEP offset to the mandatory
respondents and ordered Commerce on remand to comply with 19 U.S.C. § 1677m(d),
“namely, to provide the mandatory respondents with: (1) notice of the ‘nature’ of any
deficiencies that Commerce identified in their respective submissions; and (2) ‘to the
extent practicable . . . an opportunity to remedy or explain the deficienc[ies].’” Id. at __,
650 F. Supp. 3d at 1383.
On August 24, 2023, Commerce issued a supplemental questionnaire to each
mandatory respondent, identifying deficiencies in their respective original questionnaires
and requesting further information regarding their respective LOT analyses. See
Commerce Supplemental Questionnaire to Husteel (Aug. 24, 2023) (“Husteel Supp.
Quest.”), REM-PR 1; Commerce Supplemental Questionnaire to Hyundai Steel (Aug.
24, 2023) (“Hyundai Supp. Quest.”), REM-PR 2.
Respondents then submitted timely supplemental responses to Commerce. See
Hyundai Steel’s Remand Supplemental Questionnaire Response (Sept. 7, 2023)
(“Hyundai SQR”), REM-CR 2, REM-PR 7; Husteel’s Remand Supplemental
Questionnaire Response (Sept. 8, 2023) (“Husteel SQR”), REM-CR 4, REM-PR 8.
On October 31, 2023, Commerce issued its Remand Results, denying CEP
offsets to both respondents. Remand Results at 15.
On December 11, 2023, the mandatory respondents filed comments in
opposition to the Remand Results. See Husteel Comments on Commerce’s Final Court No. 22-00160 Page 5
Remand Results (“Husteel Br.”), ECF Nos. 68-69; Hyundai Comments on Commerce’s
Final Remand Results (“Hyundai Br.”), ECF Nos. 70-71.
On January 22, 2024, defendant United States (the “Government”) and plaintiff
Wheatland Tube filed comments in support of the Remand Results. See Def.
Comments Supporting Remand Results (“Def. Br.”), ECF No. 73; Pl. Comments
Supporting Remand Results (“Pl. Br.”), ECF No. 74.
On November 14, 2024, the court heard oral argument. See Oral Arg. Tr., ECF
No. 82.
JURISDICTION AND STANDARD OF REVIEW
The court exercises subject matter jurisdiction pursuant to 28 U.S.C. § 1581(c).
On remand, the Court will sustain Commerce’s determinations “if they are in
accordance with the remand order, are supported by substantial evidence, and are
otherwise in accordance with law.” MacLean-Fogg Co. v. United States, 39 CIT __, __,
100 F. Supp. 3d 1349, 1355 (2015) (citing 19 U.S.C. § 1516a(b)(1)(B)(i)); see Prime
Time Com. LLC v. United States, 45 CIT __, __, 495 F. Supp. 3d 1308, 1313 (2021)
(“The results of a redetermination pursuant to court remand are also reviewed ‘for
compliance with the court’s remand order.’”) (quoting Xinjiamei Furniture (Zhangzhou)
Co. v. United States, 38 CIT 189, 190, 968 F. Supp. 2d 1255, 1259 (2014)), aff’d, 2022
WL 2313968 (Fed. Cir. June 28, 2022); see also Jiangsu Zhongji Lamination Materials
Co., (HK) v. United States, 44 CIT __, __, 435 F. Supp. 3d 1273, 1276 (2020) (quoting
Xinjiamei Furniture, 38 CIT at 190, 968 F. Supp. 2d at 1259). Court No. 22-00160 Page 6
Substantial evidence constitutes “such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion,” but it requires “more than a mere
scintilla.” Universal Camera Corp. v. NLRB, 340 U.S. 474, 477 (1951) (quoting Consol.
Edison Co. of N.Y. v. NLRB, 305 U.S. 197, 229 (1938)). Moreover, “[t]he substantiality
of evidence must take into account whatever in the record fairly detracts from its
weight.” Id. at 488.
For a reviewing court to “fulfill [its] obligation” to decide whether a determination
of Commerce is supported by substantial evidence and in accordance with law,
Commerce is required to “examine the record and articulate a satisfactory explanation
for its action.” CS Wind Viet. Co. v. United States, 832 F.3d 1367, 1376 (Fed. Cir.
2016) (emphasis supplied) (quoting Yangzhou Bestpak Gifts & Crafts Co. v. United
States, 716 F.3d 1370, 1378 (Fed. Cir. 2013)).
Further, “the Court will not disturb an agency determination if its factual findings
are reasonable and supported by the record as a whole, even if there is some evidence
that detracts from the agency’s conclusion.” Shandong Huarong Gen. Corp. v. United
States, 25 CIT 834, 837, 159 F. Supp. 2d 714, 718 (2001) (citing Heveafil Sdn. Bhd. v.
United States, 25 CIT 147, 149 (2001)), aff’d sub nom. Shandong Huarong Gen. Grp.
Corp. v. United States, 60 F. App’x 797 (Fed. Cir. 2003).
“[T]he possibility of drawing two inconsistent conclusions from the evidence does
not prevent an administrative agency’s finding from being supported by substantial
evidence.” Altx, Inc. v. United States, 370 F.3d 1108, 1116 (Fed. Cir. 2004) (quoting
Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927, 933 (Fed. Cir. 1984)). Court No. 22-00160 Page 7
LEGAL FRAMEWORK
Pursuant to 19 U.S.C. § 1673, Commerce is required to impose antidumping
duties on foreign merchandise if: (1) Commerce determines that such merchandise “is
being, or is likely to be, sold in the United States at less than its fair value” and (2) the
U.S. International Trade Commission determines that the sale of such merchandise at
less than fair value “materially injures, threatens, or impedes the establishment of an
industry in the United States.” Diamond Sawblades Mfrs. Coal. v. United States, 866
F.3d 1304, 1306 (Fed. Cir. 2017) (citing 19 U.S.C. § 1673).
The Federal Circuit has stated that merchandise is sold at “less than fair value” if
“the normal value (the price a producer charges in its home market)” of such
merchandise exceeds “the export price (the price of the product in the United States) or
constructed export price” for the merchandise. Union Steel v. United States, 713 F.3d
1101, 1103 (Fed. Cir. 2013) (emphasis supplied) (quoting U.S. Steel Corp. v. United
States, 621 F.3d 1351, 1353 (Fed. Cir. 2010)) (internal quotation marks omitted); see 19
U.S.C. § 1673.
19 U.S.C. § 1677a(b) provides that “[t]he term ‘constructed export price’ means
the price at which the subject merchandise is first sold (or agreed to be sold) in the
United States before or after the date of importation by or for the account of the
producer or exporter of such merchandise or by a seller affiliated with the producer or
exporter, to a purchaser not affiliated with the producer or exporter.” Further, “where a
sale is made by a foreign producer or exporter to an affiliated purchaser in the United
States, the statute provides for use of [the] CEP as the [U.S.] price for purposes of the Court No. 22-00160 Page 8
comparison” with normal value. Micron Tech., Inc. v. United States, 243 F.3d 1301,
1303 (Fed. Cir. 2001).
19 U.S.C. § 1677b(a) provides that “[i]n determining . . . whether subject
merchandise is being, or is likely to be, sold at less than fair value, a fair comparison
shall be made between the [CEP] and normal value.” (emphasis supplied). To conduct
a “fair comparison,” Commerce is required in its LOT analysis to determine whether to
apply one of “two types of adjustments to normal value based on differences in the level
of trade.” Dong-A Steel Co. v. United States, 42 CIT __, __, 337 F. Supp. 3d 1356,
1374 (2018). “The first type is a [LOT] adjustment . . . and the second type is a [CEP]
offset.” Id. (first citing 19 U.S.C. § 1677b(a)(7)(A); and then citing § 1677b(a)(7)(B)).
Commerce regulations provide that “[i]n comparing United States sales with
foreign market sales, [Commerce] may determine that sales in the two markets were not
made at the same level of trade, and that the difference has an effect on the
comparability of the prices. [Commerce] is authorized to adjust normal value to account
for such a difference.” 19 C.F.R. § 351.412(a). Further, “sales are made at different
levels of trade if they are made at different marketing stages (or their equivalent),” and
“[s]ubstantial differences in selling activities are a necessary, but not sufficient, condition
for determining that there is a difference in the stage of marketing.” Id. § 351.412(c)(2).
Pursuant to 19 U.S.C. § 1677b(a)(7)(A), Commerce is required to “make due
allowance for any difference (or lack thereof) between the [CEP] and [normal value] that
is shown to be wholly or partly due to a difference in level of trade between the [CEP]
and normal value, if the difference in level of trade — (i) involves the performance of Court No. 22-00160 Page 9
different selling activities; and (ii) 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.”
Pursuant to § 1677b(a)(7)(B), Commerce is required to grant a CEP offset
“[w]hen normal value is established at a level of trade which constitutes a more
advanced stage of distribution than the level of trade of the [CEP], but the data available
do not provide an appropriate basis” to grant a LOT adjustment. See Dong-A Steel Co.
v. United States, 44 CIT __, __, 475 F. Supp. 3d 1317, 1325 (2020). In granting a CEP
offset, Commerce reduces the normal value of the subject merchandise “by the amount
of indirect selling expenses [(“ISE”)] incurred in the country in which normal value is
determined on sales of the foreign like product but not more than the amount of such
expenses for which a deduction is made.” 19 U.S.C. § 1677b(a)(7)(B).
With respect to the decision to grant a CEP offset, “it is the responsibility of the
respondent requesting the CEP offset to procure and present the relevant evidence to
Commerce.” Ad Hoc Shrimp Trade Action Comm. v. United States, 33 CIT 533, 556,
616 F. Supp. 2d 1354, 1374 (2009); see Uruguay Round Agreements Act, Statement of
Administrative Action, H.R. Doc. No. 103-316, vol. 1, at 829-30 (1994), reprinted in 1994
U.S.C.C.A.N. 4040, 4167-68 (“[I]f a respondent claims an adjustment to decrease
normal value, as with all adjustments which benefit a responding firm, the respondent
must demonstrate the appropriateness of such adjustment.”).
Further, the decision to grant a CEP offset is not “automatic,” and the “burden of
proof is upon the claimant to prove entitlement” to such an offset. Corus Eng’g Steels Court No. 22-00160 Page 10
Ltd. v. United States, 27 CIT 1286, 1290 (2003) (citing Micron Tech., 243 F.3d at 1315-
16); see also 19 C.F.R. § 351.401(b)(1) (“The interested party that is in possession of
the relevant information has the burden of establishing to the satisfaction of the
Secretary the amount and nature of a particular adjustment . . . .”).
Commerce has stated previously that it requires “adequate documentation” that
includes both a “qualitative” and “quantitative” analysis to “find that a LOT adjustment
and/or CEP offset is [] warranted.” Certain Frozen Warmwater Shrimp from Thailand:
Final Results of Antidumping Duty Administrative Review; 2019-2020, 87 Fed. Reg. 69
(Dep’t of Commerce Jan. 3, 2022) and accompanying IDM (Dep’t of Commerce Dec.
23, 2021) at cmt. 2.
Commerce has explained that this requirement “enable[s] Commerce to
determine whether . . . sales were made at different LOTs” and, consequently, to decide
whether to provide a respondent with an adjustment to the normal value of its
merchandise. Id.
With respect to qualitative evidence, Commerce evaluates information that a
respondent may provide such as “narrative descriptions of differences in selling
functions, customer correspondence, sample sales records [and] meeting
presentations.” Id.
However, Commerce has stated that “[a]lthough [such] information . . . is helpful
and relevant to [Commerce’s] LOT analysis, reliance on this information alone limits
Commerce’s ability to analyze selling functions to determine if LOTs identified by a party
have meaningful differences and to evaluate whether a respondent’s [LOT] claims are Court No. 22-00160 Page 11
reasonable and accurate.” Id. Additionally, “reliance on purely qualitative information
may create the potential for manipulation (or inaccurate reporting) by permitting
respondents to create a narrative that is not linked in any way to its verifiable financial
data.” Id. Accordingly, “[s]ince 2018, Commerce has required respondents to provide
quantitative evidence in support of their LOT claims” to “present a complete
understanding of a respondent’s selling activities.” Id. (emphasis supplied).
Commerce has stated that “quantitative evidence in support of thorough
explanations of the differences in LOTs and the identified selling functions enhances
[Commerce’s] LOT analysis because such information allows [Commerce] to determine
whether differences in prices among various customer categories or differences in
levels of expenses in different claimed LOTs are, in fact, attributable to differences in
LOTs or to an unrelated factor, such as relative sales volumes.” Id. Further, such
quantitative evidence “reduces subjectivity and the likelihood of inconsistency in the
application of Commerce’s analytical framework that may result from the analysis of
purely qualitative information, which can be, by its nature, subject to different
interpretations.” Id.
DISCUSSION
I. Whether Commerce complied with the Remand Order and satisfied its obligations under 19 U.S.C. § 1677m(d)
The court addresses first whether Commerce complied with the Remand Order
and satisfied Commerce’s obligations under 19 U.S.C. § 1677m(d). For the below
reasons, the court concludes that Commerce’s supplemental questionnaires complied Court No. 22-00160 Page 12
with the Remand Order and satisfied Commerce’s obligations under 19 U.S.C. §
1677m(d).
A. Positions of the parties
Hyundai argues that Commerce did not satisfy its obligations under § 1677m(d)
and, therefore, failed to comply with the court’s Remand Order. 1 Hyundai Br. at 2.
Hyundai argues that Commerce’s supplemental questionnaire did not notify Hyundai of
the “nature” of any deficiencies in Hyundai’s original submissions made during the
course of the underlying administrative review. Id.
Hyundai argues further that Commerce “simply requested further information to
which Hyundai Steel provided a complete response.” Id. Hyundai claims that, as a
result, it was denied “a meaningful opportunity to ‘remedy or explain’ in its supplemental
questionnaire response.” Id.
Hyundai claims also that Commerce was required by 19 U.S.C. § 1677m(d) to
notify Hyundai of “any concerns in [Hyundai’s] quantitative analysis presented in
advance of issuing a draft of the remand redetermination,” something that Commerce
did not do. Id. at 7.
The Government argues that Commerce did comply with the Court’s Remand
Order when Commerce issued supplemental questionnaires to both respondents on
remand. Def. Br. at 5. The Government argues that the supplemental questionnaires
“specifically identified the nature of deficiencies of each respondents [sic] respective
1 Husteel does not make an equivalent argument with respect to the supplemental
questionnaire it received from Commerce. See Husteel Br. Court No. 22-00160 Page 13
prior submissions and provided an opportunity for both respondents to remedy or
explain such deficiencies.” Id.
Specifically, the Government notes that its supplemental questionnaire to
Hyundai requested “documentation that Hyundai Steel and its affiliates performed the
reported selling functions, a quantitative analysis showing how the expenses assigned
to period of review sales made at different claimed levels of trade impact price
comparability, and a demonstration of how indirect selling expenses vary by the
different claimed levels of trade.” Id. at 6. Last, the Government argues that the court
should reject Hyundai’s argument that Commerce was required under § 1677m(d) to
provide Hyundai with an additional opportunity to correct its supplemental responses.
Id. at 7.
B. Analysis
The court concludes that Commerce’s supplemental questionnaires complied
with the Remand Order and satisfied Commerce’s obligations under § 1677m(d).
Section 1677m(d) provides that upon “determin[ing] that a response to a request for
information . . . does not comply with the request,” Commerce “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.” (emphases supplied).
Hyundai does not assert that Commerce’s supplemental questionnaire was not
timely, only that Commerce failed to specify the nature of the deficiencies in Hyundai’s Court No. 22-00160 Page 14
original submissions. See Hyundai Br. at 2. The court concludes that Commerce
adequately informed Hyundai of the deficiencies in Hyundai’s original submissions.
First, Hyundai cannot claim that it was not made aware of the deficiencies in its
original submissions. From Commerce’s discussion in the Final Results, and from this
Court’s discussion thereof in the Remand Order, Hyundai was alerted to the
deficiencies in its original submissions.
In the Final Results, Commerce found that “the quantitative analyses provided by
the respondents was inadequate in response to Commerce’s initial questionnaire.” IDM
at 13. Specifically, Commerce stated that neither mandatory respondent had provided
an adequate quantitative analysis “showing how the expenses assigned to the POR
sales made at different claimed LOTs impact[ed] price comparability [or] how the
quantitative analysis support[ed] the claimed levels of intensity for the selling activities
reported in the selling functions chart.” Id.
Notwithstanding these deficiencies, Commerce conceded that it had failed to
“inform the [mandatory] respondents that [Commerce] required more information” in
their respective submissions, which resulted in neither mandatory respondent “ha[ving]
an opportunity, pursuant to [§ 1677m(d)], to remedy any deficiency in their quantitative
analyses by providing additional information in a supplemental questionnaire
response.” 2 Id. at 13-14. In sum, Hyundai was alerted to the nature of the deficiencies
2 Commerce’s discussion of respondents’ deficient submissions is repeated and
summarized in the Remand Order. See Wheatland Tube I, 47 CIT __, __, 650 F. Supp. 3d 1379, 1381 (2023). Court No. 22-00160 Page 15
in its original submissions, even prior to receiving Commerce’s supplemental
questionnaire.
Second, Commerce’s supplemental questionnaire to Hyundai adequately
reiterated these deficiencies and specifically identified the information Hyundai needed
to submit to correct such deficiencies. In its cover letter to Hyundai’s supplemental
questionnaire, Commerce informed Hyundai that Commerce “identified several areas in
Hyundai Steel’s section A of its initial questionnaire response for which [Commerce]
require[d] further information as specified” in the supplemental questionnaire. Hyundai
Supp. Quest. at 1. In addition, Commerce noted that it would “not be issuing another
supplemental questionnaire after this one.” Id.
Commerce’s supplemental questionnaire to Hyundai explicitly referenced specific
exhibits from Hyundai’s original submissions and specified information that Commerce
deemed missing from those exhibits. See, e.g., id. at 2 (“Add a column to Exhibit A-13-
A which provides the citations to the relevant documentation demonstrating that
Hyundai Steel . . . performed the selling activities listed in the selling functions chart.”).
Further, Commerce’s supplemental requests plainly sought clarification of the
deficiencies identified by Commerce in the Final Results, deficiencies to which Hyundai
was already alerted. Compare, e.g., id. at 2 (“Please provide a quantitative analysis
showing how the expenses assigned to POR sales made at different claimed [LOTs]
impact price comparability.”), with IDM at 13 (“Neither respondent provided an analysis
showing how expenses assigned to sales at different claimed LOTs impacted price
comparability.”). Court No. 22-00160 Page 16
The Federal Circuit has held that Commerce “satisfie[s] its obligations under
section 1677m(d) when it issue[s] a supplemental questionnaire specifically pointing out
and requesting clarification of [a respondent’s] deficient responses.” NSK Ltd. v. United
States, 481 F.3d 1355, 1360 n.1 (Fed. Cir. 2007); see also Maverick Tube Corp. v.
United States, 857 F.3d 1353, 1361 (Fed. Cir. 2017) (holding that Commerce satisfied
its obligation under section 1677m(d) when the respondent “failed to provide the
information requested in Commerce's original questionnaire, and the supplemental
questionnaire notified [the respondent] of that defect”). Following the Federal Circuit’s
guidance, the court concludes that Commerce’s supplemental questionnaire to Hyundai
satisfied its obligations under § 1677m(d). 3
Hyundai makes the additional argument that Commerce was obligated under §
1677m(d) to notify Hyundai of any flaws in the quantitative analysis Hyundai submitted
as part of its supplemental response. Hyundai Br. at 6-7. Hyundai notes that it
requested in its supplemental response that Commerce “notify and provide guidance”
should Commerce disagree with Hyundai’s quantitative analysis, “so that Hyundai Steel
has the opportunity to demonstrate that [Commerce] should continue to grant a CEP
offset, as required by 19 U.S.C. § 1677m(d).” Hyundai SQR at RS-11.
Hyundai’s argument misunderstands the requirements of § 1677m(d). In the
Remand Results, Commerce did not find that Hyundai failed to comply with
3 Husteel does not challenge Commerce’s compliance with 19 U.S.C. § 1677m(d), but
the court concludes that Commerce satisfied its obligations with respect to Husteel for the same foregoing reasons. Court No. 22-00160 Page 17
Commerce’s request, as is the definition of a deficient submission under the statute.
See 19 U.S.C. § 1677m(d) (stating that a submission is deficient if Commerce
“determines that a response to a request . . . does not comply with the request”).
Rather, Commerce determined merely that Hyundai’s quantitative analysis did not allow
Commerce to “find home market sales at a different LOT and more advanced stage of
distribution than the CEP LOT.” Remand Results at 6.
What Hyundai seeks is the opportunity to amend its quantitative analysis in a
manner more to Commerce’s liking, with the benefit of having Commerce’s reasoning in
the Remand Results before it. Section 1677m(d) provides for no such opportunity. See
ABB Inc. v. United States, 42 CIT __, __, 355 F. Supp. 3d 1206, 1222 (2018)
(“Commerce is not obligated to issue a supplemental questionnaire to the effect of, ‘Are
you sure?’”).
Further, the burden “falls to the party seeking the CEP offset to provide the
requisite evidence that would allow Commerce to determine that a CEP offset
adjustment is warranted.” Dong-A Steel, 44 CIT at __, 475 F. Supp. 3d at 1347 n.22.
“That Commerce did not request any additional information beyond what was provided
by [Hyundai] does not discredit the validity of the conclusion drawn from that evidence.”
Id. Commerce is not obligated under § 1677m(d) “to work with [Hyundai] to correct . . .
the record [where] the fundamental difference in conclusions reached by [Hyundai] and
Commerce derived . . . from differing yet equally reasonable interpretations of the
evidence.” Id. Court No. 22-00160 Page 18
In sum, the court concludes that Commerce fully met its obligations under §
II. Whether Commerce’s Remand Results are supported by substantial evidence
The court now turns to the mandatory respondents’ challenge to Commerce’s
denial of CEP offsets to both mandatory respondents. For the below reasons, the court
concludes that Commerce’s denial of a CEP offset to both mandatory respondents was
reasonable and supported by substantial evidence.
1. Commerce’s denial of a CEP offset to Hyundai
Hyundai argues that Commerce’s denial of a CEP offset is unreasonable and
unsupported by substantial evidence. Hyundai asserts that Commerce’s methodology
was “mathematically invalid” because Commerce “divided the specific reported level of
intensity by the quantity sold in the home market [(“HM”)] . . . and did the same for
Hyundai Steel’s U.S. sales.” Hyundai Br. at 8. Hyundai argues further that
“Commerce’s error in dividing intensity levels by particular market sales totals”
“disregards entirely that [Hyundai] reported its levels of intensity on a per-sale basis and
not cumulatively for all sales made in each market.” Id.
In response, the Government argues that “Commerce reasonably determined
that it [was] necessary to account for and eliminate the distortion created by the
differences in the sizes between the home market and U.S. market.” Def. Br. at 13.
According to the Government, “Commerce reasonably explained that . . . relying on Court No. 22-00160 Page 19
values for total expenses or number of employees without considering the relative sizes
of the two markets . . . does not reflect the fact that the home market is significantly
greater than the U.S. market, and is therefore distortive.” Id. (citing Remand Results at
10-11). Additionally, the Government argues that “Commerce reasonably found that
Hyundai Steel did not provide any evidence from its books and records that ties the
number of employees to specific individual selling functions in the different channels of
distribution.” Id. at 10.
Hyundai argues also that Commerce erred in using in its calculations “only U.S.
sales of subject merchandise to [Hyundai’s] U.S. affiliates where the levels of intensity
were based on company-wide exports that include exports to countries other than the
U.S. market.” Hyundai Br. at 9. According to Hyundai, this error resulted in Commerce
“vastly overstat[ing] the per-unit selling expense intensity for the CEP LOT for the
majority of the reported selling functions.” Id.
In response, plaintiff argues that Commerce was correct in using only U.S. sales
in its calculations because such sales are “the only export sales that matter in this
analysis.” Pl. Br. at 7.
Hyundai’s final argument is that Commerce failed to consider the qualitative
record information previously cited to in Commerce’s original preliminary determination.
Hyundai Br. at 10. Hyundai asserts that this qualitative evidence supports the
conclusion that Hyundai’s home market LOT was “at a more advanced distribution
stage than the CEP LOT.” Id. Court No. 22-00160 Page 20
In response, the Government argues that Commerce did examine the qualitative
record information but that, nevertheless, Commerce “reasonably explained that under
its current methodology [Commerce] requires a quantitative analysis supported by
demonstrative company records or other documentation to warrant the granting of an
offset.” Def. Br. at 14. Plaintiff adds that even if Hyundai’s qualitative evidence was
“sufficient,” Commerce still “properly rejected Hyundai Steel’s quantitative claims and so
properly found [that] Hyundai Steel failed to meet its burden to qualify for a CEP offset.”
Pl. Br. at 16-17.
2. Commerce’s denial of a CEP offset to Husteel
Husteel argues that Commerce’s denial of a CEP offset is contrary to the record.
Husteel claims that “Commerce’s multiple attempts to manipulate the data in
[Commerce’s] per-unit analysis . . . are results driven and mathematically incorrect.”
Husteel Br. at 3. Husteel insists that Commerce’s methodology “resulted in a double
adjustment for market size and a distorted quantitative analysis.” Id. at 6.
Husteel argues that its quantitative analysis already properly adjusted for market
size differences and demonstrated that Husteel’s home market selling expenses “are
much higher than [its] US sales expenses on a per-unit basis.” Id. at 7. Husteel asserts
that Commerce erred in “examin[ing] the intensities in each market in isolation” when
Commerce “compare[d] the selling activity ISE in the HM as a percent of its total ISE,
and those of the US market as a percentage of the total in that market, with no
adjustment to allow a comparison between the two markets.” Id. at 9. Husteel argues
further that the correct comparison is “the expense to Husteel to sell in each market Court No. 22-00160 Page 21
relative to the other market,” specifically “what the expense is to Husteel in the US
market, relative to the HM.” Id.
The Government argues that Commerce “was reasonable in finding Husteel’s
analysis insufficient” because “Husteel did not divide its U.S. indirect selling expense
accounts by its total U.S. indirect selling expense amount, but instead divided by a
derived figure from its home market indirect selling expense amount,” which “did not
reflect the actual levels of intensity for the U.S. market and understated the value.” Def.
Br. at 15-16. Plaintiff adds that “Commerce’s decision to apply the same calculation
methodology to both [Husteel’s home and U.S.] markets in order to compare consistent
figures was reasonable.” Pl. Br. at 18. Plaintiff argues that both respondents “seek to
have the Court substitute [their] preferred weighing of the evidence for how Commerce
weighted that evidence.” Id. at 17. Plaintiff argues further that respondents merely
“disagree[] about the methodology the agency found appropriate to apply.” Id. at 12.
Therefore, plaintiff asserts that respondents have failed to provide the court “with any
meaningful reason to disturb” Commerce’s Remand Results. Id. at 11.
The court concludes that Commerce’s denial of a CEP offset to both respondents
was reasonable and supported by substantial evidence.
As an initial matter, both the statute, 19 U.S.C. § 1677b(a)(7)(B), and
Commerce’s regulations, 19 C.F.R. § 351.412, provide limited direction as to the
methodology Commerce is to use to analyze whether to grant a CEP offset. Section
1677b(a)(7)(B) provides that Commerce will grant a CEP offset when “normal value is Court No. 22-00160 Page 22
established at a level of trade which constitutes a more advanced stage of distribution
than the level of trade of the constructed export price, but the data available do not
provide an appropriate basis to determine . . . a level of trade adjustment.” However,
the statute is silent as to how exactly Commerce should analyze whether the normal
value LOT is more advanced than the CEP LOT. 4
Commerce’s own regulations provide that Commerce “will determine that sales
are made at different levels of trade if they are made at different marketing stages.” 19
C.F.R. § 351.412(c)(2). Commerce’s regulations state also that “[s]ubstantial
differences in selling activities are a necessary, but not sufficient, condition for
determining that there is a difference in the stage of marketing.” Id. Beyond these
general requirements, Commerce’s regulations do not require Commerce to adhere to a
particular methodology when analyzing differences in marketing stages and selling
activities.
When analyzing whether to grant CEP offsets to the respondents, Commerce
found that neither respondent’s quantitative analysis demonstrated that home market
sales were at a different and more advanced stage of distribution than U.S. sales.
Remand Results at 6. With respect to Hyundai, Commerce explained that Hyundai’s
analysis, which calculated intensities of different selling functions based on the number
of employees, did not “consider differences in the sizes between the two markets.” Id.
at 10. Commerce explained also that Hyundai did not provide “any evidence from its
4 Hyundai concedes that “the statute provides no guidance about the methods by which
Commerce should evaluate whether to grant a CEP offset.” Hyundai Br. at 4. Court No. 22-00160 Page 23
books and records that tie[d] the number of employees to specific individual selling
functions in the different channels of distribution.” Id. at 11. Commerce explained
further that Hyundai “used the same cost category as the basis of intensity for a variety
of selling functions and provided no information on the actual selling activities or how
the intensity was determined, beyond overall wage cost.” Id.
With respect to Husteel, Commerce explained similarly that there were faults in
Husteel’s methodology, which analyzed “the amount spent on each selling activity
relative to the total domestic ISE and U.S. ISE (adjusted based on sales value in the
market) to determine intensities of the different selling functions,” and Husteel’s
supporting documentation. Id. at 13-14. Commerce explained that Husteel provided
“sales forecasting, and strategic and economic planning reports” that “neither link[ed] to
the reported ISE nor explain[ed] or support[ed] how Husteel determined which selling
functions corresponded to each selling activity category.” Id. at 14. Commerce
explained further that Husteel’s market size adjustment did not “properly calculate the
different levels of intensity across various selling functions” because “Husteel calculated
the ratio between domestic sales and U.S. sales and then applied that ratio to domestic
ISE to calculate U.S. ISE.” Id. Commerce explained that Husteel’s methodology did not
provide “the actual levels of intensity for the U.S. market and . . . understated the level.”
Id.
Commerce found that both mandatory respondents’ analyses were flawed.
Commerce concluded that it needed to “extend[] [those] analyses to also include a per-
unit analysis . . . based on . . . sales volume” to derive a valid comparison. Id. at 5. Court No. 22-00160 Page 24
Commerce’s per-unit analysis in turn “establishe[d] that the home market LOT is not at
a more advanced stage of distribution than the LOT of the CEP LOT of either
respondent.” Id. at 6.
The mandatory respondents argue that Commerce’s methodology was
unreasonable and unsupported by substantial evidence. Hyundai Br. at 8-9; Husteel Br.
at 6, 9. Respondents’ arguments are not persuasive. There is nothing in Commerce’s
choice of methodology for analyzing differences in selling activities that conflicts with the
statutory or regulatory requirements. Given the minimal statutory and regulatory
guidance, Commerce determined reasonably that a per-unit analysis was necessary to
adjust for market size differences to compare more accurately differences in levels of
trade between markets. Further, Commerce’s analysis is supported by substantial
evidence in the record.
This Court has previously held, in cases challenging antidumping determinations
by Commerce, “that where the relevant statute provides little direction, ‘Commerce
enjoys discretion in choosing its methodology.’” Al Ghurair Iron & Steel LLC v. United
States, 45 CIT __, __, 536 F. Supp. 3d 1357, 1374 (2021) (quoting NSK Ltd. v. United
States, 29 CIT 1, 17, 358 F. Supp. 2d 1276, 1291 (2005), aff’d, 162 F. App’x 982 (Fed.
Cir. 2006)), aff’d, 65 F.4th 1351 (Fed. Cir. 2023).
“Because [the statute] does not mandate the use of a particular formula,
Commerce has the ability to choose how to calculate [differences in levels of trade] as
long as its chosen methodology is reasonable and Commerce explains its choice.” Id.
Additionally, “Commerce is [not] required to use a party’s proffered and preferred Court No. 22-00160 Page 25
methodology” so long as “Commerce used a reasonable formula that satisfies the
statutory requirements.” Id. at __, 536 F. Supp. 3d at 1374-75; see also Dong-A Steel,
42 CIT at __, 337 F. Supp. 3d at 1375 (“Commerce is not bound to a specific formula to
determine whether to grant a constructed export price offset.”).
Moreover, the Federal Circuit has recognized that Commerce is entitled to
deference in administering the antidumping law. Fujitsu Gen. v. United States, 88 F.3d
1034, 1039 (Fed. Cir. 1996) (citing Smith-Corona Grp. v. United States, 713 F.2d 1568,
1571, 1582 (Fed. Cir. 1983)). This deference stems from the recognition that
“[a]ntidumping . . . duty determinations involve complex economic and accounting
decisions of a technical nature, for which agencies possess far greater expertise than
courts.” Id. (citing United States v. Zenith Radio Corp., 64 CCPA 130, 139, 562 F.2d
1209, 1216 (1977), aff'd, 437 U.S. 443 (1978)).
In sum, Commerce’s determination in the Remand Results to deny a CEP offset
to respondents was supported by substantial evidence and in accordance with law.
CONCLUSION
For the foregoing reasons, Commerce’s Remand Results are sustained.
Judgment will enter accordingly.
/s/ Timothy M. Reif Timothy M. Reif, Judge
Dated: January 15, 2025 New York, New York