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 defendantintervenors 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 defendantintervenors 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 nonsubject-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 postpreliminary 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-forLTAR, then if Commerce had received the “missing” HRS purchase information for the non-subjectmerchandise 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.