Slip Op. 10-15 UNITED STAT ES COURT OF INTERNATIONAL TRADE

--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- x : AL L OY PI PI

NG PRODUCTS, I

NC., e t al

. , :

: Pla int if fs , :

: v . : : Before: Judith M. Barzilay, Jud ge UN I TE D ST AT ES, : Consol. Court No. 08-00027 : De fe nd ant, : : an d : : TACH ENSTA I

NL ESS S TE EL

PI PE : CO., L TD., : : Def endant- I nterve nor. : :

--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- x
OP IN ION [Defenda nt’s Second Remand D eter mination is sus tained.]
Dated: F ebrua ry 8, 2010 Kelley Dry e &W

arren, LLP (

J e ffr e yS. Be c k ing ton , D av id A . H

ar tqu ist ), fo r P la int if

fs
. Ton yW est , As sis tant A tto rn e y

Ge ne ra l; JeanneE. Davidson , Direc tor, Re gin ald T. B lad es, J r. , Assistant Director , Commercial L itigation B ranc h, Civil Division, U.S. Department of Justi ce ( Stephen C. Tosini ); Daniel J. Calhoun , Attorney -Interna tional, Of Counsel, Off

ice of the Chief Couns e l f or I mpo rt Ad min istratio n, U. S. D e pa

rtme nt o f C omm e rc e , f

or De fe nd ant. Squire, Sanders &Dempse y LLP ( Pe te r J . Ko e nig ), for Def endant- Interve nor.Consol. Court No. 08-00027 P age 2

The c ourt presume s familiarity with the proce dural history of this case
. 1 Com me rc e us e s th e fo llo wi ngfo rm ula to c a lc ulate CEP Pr of

it: 2 Total Actua l Profit x (Total U.S. Expenses / Total Ex penses) . 19 U.S.C. § 1677a(d)(3) , (f)
. Ba rzilay , J udg e: This case returns to the c ourt following the sec ond U.S. Depar tment of Commerce ( “Commerce ”) r emand de termination on the thirteenth a dminist rative r eview of an antidumping duty

order cover ing sta inless steel butt-weld pipe f ittings from Ta iwan. Final Results of Redeterm ination Pursuant to Remand , A-583-816 ( Dep’ t Comm erc e De c. 18, 2009) (“ Second R emand De termination ” ). I n e arl y 20 09 , th e c ourt

a ff ir me d in pa rt and re mand e d in part Commerc e’s r eview of the subject a

ntidumping duty

order
. Alloy Piping Prods., Inc. v.

1 United States , Sl ip O p. 09 -2 9, 20 09 WL98 30 78 (C I T A pr . 1 4, 20 09 ). Th e re mand or de r t o Commerce c oncer

ned the c alculation of the profit adjustment to the Constructed Export Price (“CEP”), a compone nt of the dumping marg in equation. In October 2009, the cour

t review ed 2 Commerce’ s first rema

nd deter mination and found that the a g ency did not support its conclusion that the re cord did not wa rra nt a profit adjustment to the CEP with subst antial evidenc e. Alloy Piping Prods., Inc. v. U

nited States , Slip Op. 09-119, 2009 W L3367498 (CI T Oct. 20, 2009); Final Results of Redetermination Pursuant to Remand , A-583-816 ( Dep’ t Comm erc e June 16, 2009), Admin. R. Pub. Doc. 1928. The c ourt direc ted the ag ency to “provide a

more rig orous
ana ly sis of

the re c or d f

a c ts i n it s e xami natio n o f whe the r t he sta nd ard me tho do logy

a de qu a te ly ref lects the imputed costs incurr ed by Ta Chen dur ing the subject re view.” Alloy Piping Prods., Inc. , 2009 WL 3367498, at *3. In the latest dete rmination, Commerce ha s found ane w that the
rec ord does not support a pr ofit adjustment to the CEP. Second R emand De termination at 1.Consol. Court No. 08-00027 P age 3

On J une 18, 2009, Plaintiffs Alloy Piping Products, Inc., F lowline Division of 3 Markovitz Enterprises, Inc., Ge rlin, I nc., and T aylor For g e Stainless, Inc. informe d the cour t by letter that they

support Commerce’ s analy sis of the rema nded issue and that they

would no longe r actively participate in the ca se. Pls.’ L etter at 1, Alloy Piping Prods., Inc. v. U nited States , No. 08-cv- 00027 (CI T J une 18, 2009). Ta Che n a lso ave rs that th e sta nd ard me tho do logy

Com me rc e us e d to c a lc ulate the pr of it 4 a dju stm e nt d oe s n ot a c c ount a de qu a te ly fo r c e rt a in i mpute d c os ts. Ta Che n B r. 4- 5. In it s Apr il an d Oc t o b er o p i n i o n s , t h e c o u rt af

fi rm edth e l ega l v al i d i ty

o f C o m m er ce ’s s t an d ar d m et h o d o l o gy for c alculatingthe profit adjustment to CEP absent cer tain conditions. Alloy Piping Prods., Inc. , 20 09 WL33 67 49 8, a t *1 n. 3; Alloy Piping Prods., Inc. , 2009 WL 983078, at *9. Ta Chen a rgues that a condition exist s in this review that re nders the sta ndard me thodology

inapplicable. T a C h en Br
. 1 1 (c i t i n g Thai Pineapple Canning Indus. Corp. v. United States , 24 CI T 107, 115 (2000) ( not reporte d in F. Supp.) (“ Tha i P ine ap ple ”)) . In Tha i P ine ap

ple , the Court stated that the standar d methodology might not apply

in a situation where the re cord c ontained no ac tual expenses but only

imputed costs, though it did not “addr ess whethe r th[is is] a truly distortive sit ua tio n[].” 24 CI T at 11 5 & n. 13 . E ve n a ssumin g that th e a bs e nc e of a c tua l c os ts c re a te s a truly distortive situation, t he re cord of this review e vinces the pr esenc e of both a ctual and imputed expenses, see ge nerally Sec ond Remand D etermination , and thus discre dits Ta Chen’s argument. Ta Chen a lso alleg es that Commerce err oneously reje cted Ta

Chen’s three alternate and 5 alleg edly more a ccur ate methodolog ies to calc ulate CEP profit. Ta Chen B r. 14-17. The Fe dera l Cir c uit ha s f ound that th e sta

nd ard me tho do logy

us e d b y Com me rc e su ff

ic ie ntl y c omp or ts w ith the ag ency ’s statutory

duty under 19 U .S.C. § 1677a to ensure the f airne ss of the price c omp ari so n b e tw e e n f

or e ig n a nd do me sti c pr od

uc e d g oo ds , s o lo nga s “ Com me rc e a ff or ds a responde nt who so desires the oppor tunity to make a show ing that the amount of imputed expenses is not accur ately ref lected or embedde d in its actual expenses.” SNR Roulements v. United States , 402 F.3d 1358, 1361 ( Fe d. Cir. 2005). Be cause Commerce ha s g iven Ta Chen the require d opportunity , the cour t “must acc ord def

ere nce to the a g ency

in its selection and development of

proper methodologie s.” Fla. Citr us Mut. v. Unites States , 550 F.3d 1105, 1111 (F ed. Cir. 2008) (quotation marks & c itation omit ted). De fe nd ant- I nte rv e no r T a

Che n c on te sts thi s f

ind ingand

argue s th a t th e a g e nc y

ba se d it s 3 conclusion in the Second R emand De termination on conjec ture. Ta Chen B r. 5-13. The court 4 5
a ff ir ms C omm e rc e ’s Second R emand De termination for the r easons e x plained below.Consol. Court No. 08-00027 P age 4
I. Su bjectMatt er Jurisdiction & Standard of Review A civil action commenc ed under 19 U.S.C. § 1516a falls within the exclusive ambit of the Court ’s su

bje c t ma tte r j ur isd ic tio n p ur su ant t o 2 8 U .S. C. § 15 81 (c ). Th e Court mus t ho ld unlawful a

ny antidumping duty

deter mination “unsupported by substantial evidence on the
re c or d, or oth e rw ise no t in

a c c or da nc e wi th l aw. ” § 1 51 6a (b )( 1) (B )( i) . A n a g e nc y su pp or ts i ts fac tual finding s with substantial evidence when it explains the standards that it applied and demonstrates a

rational c onnection betwe en the f acts on the r ecor d and the c onclusions drawn. See M atsushita El ec. I

ndus. Co. v. United States , 7 50 F .2 d 9 27 , 9 33 (F e d. Cir . 1 98 4) . “ [W]hile [t he] ex planations do not have to be perf ect, the path of [the ag ency]’s decision must be
rea sonably

discernible to a

revie wing court.” NMB Sing. Ltd. v. United States , 557 F.3d 1316, 1319 (F ed. Cir. 2009) (c itation omit ted). II. Discussion Commerce suppor

ts with subst antial evidenc e its conclusion in the Second R emand Determ ination that the standar d methodology acc ounted for T a Chen’s imputed c osts during the
su bje c t r e vie w. Th e a g e nc y e xpla ins that w he re a

re sp on de nt f

or e ig n c omp a

ny ha s a n a ff ili a te in the Un ite d St a te s th a t r e c e ive s a loa n, “ it i s r e a so na

ble to a ssume that a

po rt ion of tho se borrowing s may

[cover] the U.S. selling ac tiviti es assoc iated with sales of subject merc handise.” Second R emand De termination at 5. Commerce further notes that imputed expenses in the Un ite d St a te s r e pr e se nt a

n e sti mate d amou

nt o f t he bo rr ow ingc os t attr ibuta ble to t ho se U. S. selling a ctivities. Id . Co mme rc e po int s to re c or d e vid e nc e of se ve ra l lo ans by

Ta Che n a nd its U.S. subsidiary , Ta Chen International, that demonstrates that the two e ntities li kely used aConsol. Court No. 08-00027 P age 5

portion of the funds f

rom those loans to financ e selling activities related to the subject
merc handise within the United States. Se e id . at 6-7 (c iting Ta Chen Section A Que stionnaire Re sp . ( Se pt. 11 , 2 00 6) , P. R. D oc . 1 6 at E xs. A -9 , A -1 5, A- 16 )) . Co mme rc e ’s a ssumpt ion is
rea sonable, g iven that (1) T a Chen did not provide the a g ency with any evidenc e to show that the loans wer e not used to support U.S. selling e x penses, includingan itemization of the cre dit and inventory car rying c osts associated with ea ch of Ta Chen’s g oods and the subjec t mercha ndise, and (2) it was rea sonably

fore seea ble that such infor

mation would be per

tinent to the ag ency ’s deter mination. See id . at 11 . F ina lly , Co mme rc e re a so ns that T a Che n’ s im

pute d c os ts b e lon g in the Total U.S. Expenses numerator a nd not in the Total Actual Profit multipli er or Total Ex penses de nominator, since the latter two compone nts contain only actua l costs, and to include both the actua l costs and an e stimate of those expenses, i.e., imputed costs, would by definition result in double counting
. Se eid . at 6- 7. In r e a c hin g the se fi nd ing s, Com me rc e pr ov ide s a justification absent fr om its previous determinations that shows the re quisite rational conne ction betwee n the fa cts on the re cord a nd the conc lusion reac hed. See M atsushita El ec. I

ndus. Co. , 750 F.2d at 933. III. Conclusi on For the fore g oing r easons, the c ourt finds that Commerce supported the Second R emand Determ ination with substantial evidence
.

D a t e : F e b r

u ar y 8 , 2 0 1 0 / s /J u d i thM
. B ar z i l ay Ne w Y o rk , Ne w Y o rk J u d i thM
. Ba rz i l ay , J u d ge