Slip Op. 25-148
UNITED STATES COURT OF INTERNATIONAL TRADE
WIND TOWER TRADE COALITION,
Plaintiff,
v.
UNITED STATES, Before: Leo M. Gordon, Judge
Defendant, Court No. 24-00070
and
DONGKUK S&C CO., LTD.,
Defendant-Intervenor.
OPINION and ORDER
[U.S. Department of Commerce’s final results sustained in part and remanded in part.]
Dated: December 2, 2025
Maureen E. Thorson, Wiley Rein LLP, of Washington, D.C., argued for Plaintiff Wind Tower Trade Coalition. With her on the brief were Alan H. Price, Derick G. Holt, Jeffrey O. Frank, John A. Riggins, Laura El-Sabaawi, Robert E. DeFrancesco, III, and Tatiana Sainati.
Sosun Bae, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for Defendant United States. On the brief were Brian M. Boynton, Principal Deputy Assistant Attorney General, Patricia M. McCarthy, Director, Reginald T. Blades, Jr., Assistant Director, and Stephen C. Tosini, Senior Trial Counsel, Civil Division, U.S. Department of Justice. Of counsel were Jesus Nieves Saenz and Charlie Chung, Attorneys, Office of 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 Dongkuk S&C Co., Ltd. With him on the brief were MacKensie R. Sugama and Robert G. Gosselink. Court No. 24-00070 Page 2
Gordon, Judge: This action involves the U.S. Department of Commerce’s
(“Commerce”) final results in the Section 751 administrative review of utility scale
wind towers from the Republic of Korea. See Utility Scale Wind Towers from the Republic
of Korea, 89 Fed. Reg. 16,544 (Dep’t of Commerce Mar. 7, 2024), as corrected in Utility
Scale Wind Towers from the Republic of Korea: Final Results of Antidumping Duty
Administrative Review; 2021-2022; Correction, 89 Fed. Reg. 22,372 (Dep’t of Commerce
Apr. 1, 2024), and accompanying Issues and Decision Memorandum (“Decision
Memorandum”).
Before the court is Plaintiff Wind Tower Trade Coalition’s USCIT Rule 56.2 motion
for judgment on the agency record. See Revised Confidential Wind Tower
Trade Coalition Rule 56.2 Mot. for J. on Agency R. (“Pl.’s Br.”), ECF No. 25 1; see also
Confidential Def.’s Resp. in Opp’n to Pl.’s Mot. for J. upon the Agency R. (“Def.’s Resp.”),
ECF No. 31; Confidential Resp. of Dongkuk S&C Co., Ltd. (“Dongkuk”) in Opp’n to
Pl.’s Rule 56.2 Mot. for J. on Agency R. (“Def.-Intervenor’s Resp.”), ECF No. 33;
Confidential Pl. Wind Tower Trade Coalition’s Reply (“Pl.’s Reply”), ECF No. 35.
The court has jurisdiction pursuant to Section 516A(a)(2)(B)(i) of the Tariff Act of 1930,
as amended, 19 U.S.C. § 1516a(a)(2)(B)(i), and 28 U.S.C. § 1581(c). For the reasons
set forth below, the court sustains Commerce’s determination in part and remands in part.
1 All citations to the parties’ briefs and the agency record are to their confidential versions unless otherwise noted. Court No. 24-00070 Page 3
I. Standard of Review
The court sustains Commerce’s “determination[s], finding[s], or conclusion[s]”
unless they are “unsupported by substantial evidence on the record, or otherwise not in
accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i). More specifically, when reviewing
agency determinations, findings, or conclusions for substantial evidence, the court
assesses whether the agency action is reasonable given the record as a whole.
Nippon Steel Corp. v. United States, 458 F.3d 1345, 1350–51 (Fed. Cir. 2006); see also
Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951) (“The substantiality of
evidence must take into account whatever in the record fairly detracts from its weight.”).
Substantial evidence has been described as “such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion.” DuPont Teijin Films USA v.
United States, 407 F.3d 1211, 1215 (Fed. Cir. 2005) (quoting Consol. Edison Co. v.
NLRB, 305 U.S. 197, 229 (1938)).
Substantial evidence also has been described as “something less than the weight
of the evidence, and the possibility of drawing two inconsistent conclusions from the
evidence does not prevent an administrative agency’s finding from being supported by
substantial evidence.” Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 620 (1966).
Fundamentally, though, “substantial evidence” is best understood as a word formula
connoting reasonableness review. 3 Charles H. Koch, Jr. & Richard Murphy,
Admin. L. and Prac. § 9.24[1] (3d ed. 2025). Therefore, when addressing a substantial
evidence issue, the court analyzes whether the challenged agency action is “reasonable Court No. 24-00070 Page 4
given the circumstances presented by the whole record.” 8A West’s Fed. Forms, Nat’l
Cts. § 3.6 (5th ed. 2025).
II. Discussion
This action continues the sparring between Plaintiff and Commerce about the
proper method of calculating: (1) adjustments for differences in merchandise in sales
comparisons and (2) the difference in the cost of production between the merchandise
sold to the U.S. market and that sold in the home market based on their respective
physical characteristics.
At the beginning of the underlying investigation, Commerce identified 11 physical
characteristics 2 that are the most significant in differentiating costs between
2 Those characteristics are:
Physical Characteristic Description 1. Type Whether the product is a complete tower or section 2. Weight Weight of tower/section 3. Height Height of tower/section 4. Tower Sections Number of tower sections for the particular sale 5. Type of Paint The top paint coat for the tower/section 6. Metalizing The degree of metalizing of the tower/section 7. Elec. Conduit-Bus Bars Whether the tower/section contains bus bars 8. Elec. Conduit-Power Whether the tower/section contains power cables (footnote continued) Court No. 24-00070 Page 5
those products. These physical characteristics, i.e., CONNUMs, 3 define: (1) the unique
products for sales comparison purposes and (2) the level of detail within each physical
characteristic, thereby enabling Commerce to make the most similar price-to-price
comparisons.
In certain circumstances in an antidumping duty investigation, Commerce is to
determine whether the sales of the foreign like product were made at less than the cost
of production. Commerce calculates production costs “based on the records of the
exporter or producer of the merchandise, if such records . . . reasonably reflect the costs
associated with the production and sale of the merchandise.” 19 U.S.C. § 1677b(f)(1)(A).
A respondent’s reported production costs “reasonably reflect the costs associated with
the production of the merchandise” if they reflect meaningful cost differences attributable
to the finished product’s different physical characteristics. See Thai Plastic Bags
9. Lift Whether an elevator is attached to the tower/section 10. Platform The number of platforms in the tower/section 11. Internal Components Whether there were other internal components. Commerce Memorandum, re: Administrative Review of the Antidumping Duty Order on Utility Scale Wind Towers from the Republic of Korea (Korea): Request for Information (Nov. 4, 2022), C.R. Tab 3.
3 A “CONNUM” is a contraction of the term “control number” and is Commerce jargon for a unique product (defined in terms of a hierarchy of specified physical characteristics determined in each antidumping proceeding). All products whose product hierarchy characteristics are identical are deemed to be part of the same CONNUM and are regarded as “identical” merchandise for purposes of price comparison. The hierarchy of product characteristics defining a unique CONNUM varies from case to case depending on the nature of the subject merchandise. Court No. 24-00070 Page 6
Indus. Co. v. United States, 746 F.3d 1358, 1368 (Fed. Cir. 2014) (explaining that
“physical differences in products ‘generally account’ for major differences in costs” and
“[r]eliance on physical characteristics, because of its ability to promote consistency, is a
predictable methodology that is administrable across all investigations and administrative
reviews”). If a respondent’s reported production costs are not reasonable, “Commerce
has the authority to ‘adjust costs appropriately to ensure that [the costs] are not artificially
reduced.’” Id. at 1366–67 (internal citations omitted).
Here, included in production costs reported to Commerce are conversion costs,
which are the total incurred costs necessary to convert steel plates into the subject wind
towers. Conversion costs are the sum of: (1) direct labor costs, (2) variable overhead
costs, and (3) fixed overhead costs. Letter from Trade Pacific PLLC to Sec’y Commerce,
re: Utility Scale Wind Towers from the Republic of Korea – DKSC’s Supplemental Section
D Questionnaire Response (June 8, 2023), C.R. Tab 8 at SD-25–SD-27. In reporting
conversion costs to Commerce, Dongkuk subdivided the variable overhead costs by
reporting them in two categories: (1) direct variable costs that were linked to specific
projects or (2) indirect variable costs that were “not impacted by differences in product
characteristics.” Id. Commerce found Dongkuk’s reported conversion costs to be
appropriate based on Commerce’s calculation methodologies and did not adjust those
costs in the final results. Decision Memorandum at 20–21.
Plaintiff raises the following challenges: (1) that Commerce’s interpretation of
19 U.S.C. § 1677b(f)(1)(A) was “not in accordance with law” because the agency
“misinterpreted the statutory language”; (2) that Commerce departed from an established Court No. 24-00070 Page 7
practice in refusing to adjust Dongkuk’s conversion costs 4; and (3) that Commerce failed
to adequately explain its finding that CONNUMs vary in complexity with regard to internal
components. Pl.’s Br. at 1–2.
A. Misinterpretation of the Statute
Initially, Plaintiff argues that Commerce’s determination was not in accordance with
law because it misinterpreted the 19 U.S.C. § 1677b(f)(1)(A) requirement that “[c]osts
shall normally be calculated based on the records of the exporter or producer . . . if such
records . . . reasonably reflect the costs associated with the production and sale.” Pl.’s Br.
at 3–5. Plaintiff contends that the statute’s “if” clause requirement–records that
“reasonably reflect the costs associated with production and sale”–is best interpreted as
records that “reflect costs attributable to the physical characteristics of the merchandise.”
Id. at 4. Defendant argues that “[r]ather than raise a statutory question, [Plaintiff] merely
takes issue with the factual record” as to Commerce’s acceptance of Dongkuk’s reported
conversion costs. Def.’s Resp. at 12. At oral argument, Plaintiff conceded that there is
no dispute as to the meaning of the statute, a legal challenge. Oral Arg. at 15:02–18:48
(June 13, 2025), https://www.cit.uscourts.gov/sites/cit/files/20250613-24-00070-
4 Plaintiff invokes Utility Scale Wind Towers From Indonesia: Final Determination of Sales at Less Than Fair Value and Final Negative Determination of Critical Circumstances, 85 Fed. Reg. 40,231 (Dep’t of Commerce July 6, 2020) (“Wind Towers from Indonesia”), and accompanying Issues and Decision Memorandum at cmt. 5 to demonstrate an established practice. Court No. 24-00070 Page 8
LMG.mp3. 5 Rather, they diverge on the application of the statute in this proceeding,
which is a substantial evidence challenge. Id.
Given this concession, the court deems this challenge withdrawn and will turn its
attention to the remaining issues. See e.g., Jiangsu Dingsheng New Materials Joint-
Stock Co. v. United States, 49 CIT ___, ___, Ct. No. 23-00264, 2025 WL 2092386, at *4
(July 21, 2025) (“Although the meaning of a statutory term is a legal question, see
Loper Bright Enters. v. Raimondo, 603 U.S. 369, 391–92 (2024), the application of that
term to the record is a factual determination for the agency.”).
5 At oral argument, the following exchange occurred with Plaintiff’s counsel:
The court: So, I guess my question to you is: [misinterpretation and misapplication] are two different things, right? A misinterpretation is a legal question driven by Loper Bright, and a misapplication is [that] there is no dispute as to what the statute means, but looking at the facts and the circumstances of this case, the agency erred in applying the statute, right? So, my question to you is: It can’t be both. It’s got to be one or the other, right? . . . What am I dealing with here?
Plaintiff: Yes, Your Honor. I think we’re in the second case here where it’s a misapplication rather than misinterpretation. . . .
...
The court: So, we don’t have a Loper Bright issue?
Plaintiff: No. I don’t believe we have a Loper Bright issue. I think we are in fact–now granted the way the Commerce Department framed its explanation gave us some pause about whether the agency was reading the statute correctly, but the way the government has responded does not take on any argument that there is in fact some distinct way that is different from the way [Plaintiff] reads the statute, that the Commerce Department is interpreting the statute here. So, this to my mind, after the briefing from the parties, is squarely a misapplication case, including substantial evidence and whether the agency explained and supported its viewpoint. Court No. 24-00070 Page 9
B. Departure from Commerce’s Established Practice
Plaintiff argues that Commerce departed from an established practice of adjusting
a producer’s costs that do not reasonably reflect the costs associated with the
merchandise’s physical characteristics and failed to provide a satisfactory explanation for
that departure. Pl.’s Br. at 5–9 (citing Wind Towers from Indonesia; BlueScope Steel,
Ltd. v. United States, 48 CIT ___, ___, 719 F. Supp. 3d 1357, 1367 (2024); Thai Plastic
Bags, 746 F.3d at 1366). Plaintiff further argues that Dongkuk allocated conversion costs
by production quality on a monthly basis that resulted in deviations of more than 10
percent of CONNUM-specific conversion costs per metric ton and the overall average.
Id. at 8. Plaintiff likens this to another proceeding where Commerce adjusted a
respondent’s reported conversion costs after Commerce’s analysis found deviations of
more than 10% and concluded that the costs were “solely influenced by production
timing.” Id. (citing Wind Towers from Indonesia at cmt. 5). Therefore, in Plaintiff’s view,
Commerce should have followed this practice.
Defendant contends that Plaintiff has not shown a departure from an established
practice. Def.’s Resp. at 18. Defendant agrees with Plaintiff that in the Indonesian
proceeding, Commerce found that the reported conversion cost differences related solely
to the production timing. Nevertheless, it maintains that, here, the conversion cost
differences were related to the physical characteristics. Id. Defendant-Intervenor
similarly argues that Plaintiff’s reliance on the Indonesian proceeding is misplaced
because that determination did not focus on the allocation of direct and indirect variable
costs, but instead focused solely on the reallocation of direct material costs when cost Court No. 24-00070 Page 10
variances were unrelated to the physical characteristics. Def.-Intervenor’s Resp. at 6–8.
Defendant-Intervenor disputes Plaintiff’s contention that an established practice exists.
To the contrary, Defendant-Intervenor points to the underlying investigation, the prior
Section 751 review, and other administrative determinations as examples where
Commerce accepted and used the same conversion cost methodology as it did in this
proceeding. Id. (citing Carbon and Alloy Steel Threaded Rod from India: Final Results of
Antidumping Duty Administrative Review, 2021-2022: 88 Fed. Reg. 75,265 (Dep’t of
Commerce Nov. 2, 2023), and accompanying Issues and Decision Memorandum,
at cmts. 2, 3; Certain Steel Nails from Malaysia: Final Determination of Sales at Less
Than Fair Value, 80 Fed. Reg. 28,969 (Dep’t of Commerce May 20, 2015), and
accompanying Issues and Decision Memorandum, at cmt. 3).
The court notes that an established practice does not preclude an agency from
departing from its practice, “at least where [the agency] explains the reason for its
departure.” Allegheny Ludlum Corp. v. United States, 346 F.3d 1368, 1373
(Fed. Cir. 2003). However, before the court can determine whether an unlawful departure
occurred, the party seeking relief must first “show the existence of a uniform and
established procedure that would lead a party, in the absence of a notification of a change,
reasonably to expect adherence to the established practice or procedure.”
Goodluck India Ltd. v. United States, 47 CIT ___, ___, 670 F. Supp. 1353, 1374 (2023)
(internal citations and quotations omitted); BlueScope Steel, 48 CIT at ___,
719 F. Supp. 3d at 1367. Against this required showing is the strong presumption that
each determination rests on its own unique facts and that “an agency’s exercise of Court No. 24-00070 Page 11
discretion on a case-by-case and fact specific basis complicates any efforts to divine rules
from past agency practice.” Id. (internal citations and quotations omitted).
Fatally, Plaintiff makes no showing of its alleged established practice. In its reply,
Plaintiff raises three additional examples of Commerce adjusting conversion costs (per-
unit direct labor, variable overhead, and fixed overhead) due to differences in production
time or quantities, where the costs did not correspond to physical characteristics. Pl.’s
Reply at 2–3 (internal citations omitted). These additional examples are unpersuasive,
however, as “[p]rior determinations by the [agency] with regard to one industry typically
provide little guidance for later determinations with regard to different industries.”
Cleo Inc. v. United States, 501 F.3d 1291, 1299 (Fed. Cir. 2007); BlueScope Steel, 48 CIT
at ___, 719 F. Supp. 3d at 1368. Commerce has previously used the conversion cost
calculation in issue in other administrative determinations, as well as in the underlying
investigation, the first Section 751 review, and now the second review. Further,
Commerce reasonably explained that the facts of this case are distinguishable from Wind
Towers from Indonesia because there, “the primary factor driving the conversion cost
differences was production timing,” not physical characteristics. Decision Memorandum
at cmt. 3. Therefore, Plaintiff has failed to demonstrate that Wind Towers from Indonesia
constituted an established practice from which Commerce departed. BlueScope Steel,
48 CIT at ___, 719 F. Supp. 3d at 1368. Court No. 24-00070 Page 12
C. Impact of Internal Components on CONNUMs and Reported Conversion Costs
Finally, Plaintiff challenges that, by accepting Dongkuk’s reported conversion
costs, Commerce “failed to establish a ‘connection between the facts found’ . . . and the
choice the Department made.” Pl.’s Br. at 11. Plaintiff contends that its proffered
conversion costs analysis “‘reasonably reflect[ed] the costs associated with the
production and sale of the merchandise’” because it relied on the first enumerated
CONNUM characteristic, i.e., tower sections. Pl.’s Reply at 9
(citing 19 U.S.C. § 1677(f)(1)(A)). In Plaintiff’s view, Commerce’s explanation to not
accept its conversion costs based on tower sections was deficient because Commerce:
(1) did not address Plaintiff’s reliance on tower sections, no less the other two significant
CONNUM characteristics, i.e., weight and height, and (2) only criticized Plaintiff’s failure
to analyze the impact of certain internal components. Id. at 7. Therefore, Plaintiff
maintains that “Commerce failed to articulate a rationale for its decision to ignore the
conversion cos[t] variances in [Plaintiff’s] analysis,” and that Government’s counsel now
attempts to impermissibly articulate a rational regarding material differences in direct and
indirect variable costs that Commerce did not articulate. Id. at 10.
Defendant maintains that Plaintiff’s analysis incorrectly asserted extreme
variances in conversion costs because Plaintiff: (1) failed to recognize how Dongkuk
reported its conversion costs, and (2) erroneously combined Dongkuk’s direct and indirect
variable costs. Def.’s Resp. at 13. Defendant argues that, here, direct variable costs are
project-specific, thus directly linked to each CONNUM, whereas indirect variable costs Court No. 24-00070 Page 13
are common costs not directly linked to a specific project, are akin to fixed costs, and are
insignificant. Id. at 13.
The court concurs that Defendant’s offered explanation to accept Dongkuk’s
reported conversion costs, rather than Plaintiff’s, is inadequate for the court to determine
whether the record reasonably supports Commerce’s determination.
See Decision Memorandum at cmt. 3 Commerce failed to explain why Dongkuk’s
reported conversion costs were appropriate, save for circular reasoning that “Dongkuk
reported its conversion costs based on its normal books and records.” Id. (“In this case,
we have considered the arguments and evaluated the appropriateness of such an
adjustment as it related to Dongkuk’s reported data, its reporting methodologies, and its
own cost accounting system. As a result, we continue to find that Dongkuk’s reporting of
its conversion costs in this review is appropriate and we have made no changes to these
costs for the final results.”). Additionally, Commerce did not explain why Plaintiff’s
conversion costs analysis utilizing the first CONNUM characteristic (tower sections) is
inappropriate, save for a conclusory statement that “[Plaintiff] does not consider that the
CONNUMs vary in complexity with regard to bus bars, conduits, elevators, platforms, and
other internal components.” Id. In its Decision Memorandum, Commerce did not address
the first three enumerated CONNUM characteristics (tower sections, weight, and height),
nor did it explain why internal components’ complexities are appropriately reflected in
Dongkuk’s reported conversion costs. Id.
Defendant argues that Commerce’s determination that CONNUMs vary in
complexity with regard to internal components “is supported by [Dongkuk’s] reporting of Court No. 24-00070 Page 14
its direct conversion costs and the linkage to specific wind tower projects.” Def.’s Resp.
at 14. However, Defendant’s explanation as to the significance in differences between
direct and indirect variable conversion costs is not reflected within Commerce’s
Decision Memorandum. This presents a post hoc rationalization by agency counsel, and
not the reasoning of the agency itself. See Motor Vehicle Mfrs. Ass’n v. State Farm Ins.,
463 U.S. 29, 50 (1983) (citing Burlington Truck Lines, Inc. v. United States, 371 U.S.
156, 168 (1962) (“The courts may not accept appellate counsel’s post hoc rationalizations
for agency action.”)).
Consequently, the Decision Memorandum fails to set forth how Commerce’s
explanation alone could lead a reasonable mind to conclude that Dongkuk’s reported
conversion costs were appropriate because CONNUMs vary in complexity with regard to
internal components, despite evidence to the contrary. The court therefore remands to
Commerce.
III. Conclusion
For the foregoing reasons, it is hereby:
ORDERED that Commerce’s final results as to its treatment of conversion costs is
remanded to Commerce for further explanation, and if appropriate, reconsideration of its
cost analysis under 19 U.S.C. § 1677b(f)(1)(A); it is further
ORDERED that Commerce shall file its remand results on or before Wednesday,
January 28, 2026; and it is further Court No. 24-00070 Page 15
ORDERED that, if applicable, the parties shall file a proposed scheduling order
with page limits for comments on the remand results no later than seven days after
Commerce files its remand results with the court.
/s/ Leo M. Gordon Judge Leo M. Gordon
Dated: December 2, 2025 New York, New York