Court Opinion

ID: 4183044
Source: CourtListenerOpinion
Date Created: 2017-07-03 15:01:33.321412+00
Date Added: 2024-06-11T09:21:19.928878
License: Public Domain

United States Court of Appeals
      for the Federal Circuit
                ______________________

MAVERICK TUBE CORPORATION, BOOMERANG
 TUBE LLC, ENERGEX TUBE, TEJAS TUBULAR
PRODUCTS, TMK IPSCO, VALLOUREC STAR, L.P.,
         WELDED TUBE USA INC.,
                 Plaintiffs

     UNITED STATES STEEL CORPORATION,
               Plaintiff-Appellee

                           v.

  TOSCELIK PROFIL VE SAC ENDUSTRISI A.S.,
   CAYIROVA BORU SANAYI VE TICARET A.S.,
             Plaintiffs-Appellants

                           v.

                  UNITED STATES,
                  Defendant-Appellee

   BORUSAN ISTIKBAL TICARET, BORUSAN
 MANNESMANN BORU SANAYI VE TICARET A.S.,
                 Defendants
           ______________________

                      2016-2330
                ______________________

    Appeal from the United States Court of International
Trade in Nos. 1:14-cv-00234-JAR, 1:14-cv-00244-JAR,
1:14-cv-00262-JAR, Senior Judge Jane A. Restani.
                ______________________
2              MAVERICK TUBE CORPORATION   v. UNITED STATES

                   Decided: July 3, 2017
                  ______________________

    JONATHAN GORDON COOPER, Quinn Emanuel Ur-
quhart & Sullivan, LLP, Washington, DC, argued for
plaintiff-appellee. Also represented by DEBBIE LEILANI
SHON, JON DAVID COREY, KELSEY RULE, PHILIP CHARLES
STERNHELL.

    DAVID L. SIMON, Law Offices of David L. Simon,
Washington, DC, argued for plaintiffs-appellants. Also
represented by MARK B. LEHNARDT, Antidumping Defense
Group, LLC, Washington, DC.

     HARDEEP KAUR JOSAN, International Trade Field Of-
fice, United States Department of Justice, New York, NY,
argued for defendant-appellee United States. Also repre-
sented by BENJAMIN C. MIZER, JEANNE E. DAVIDSON,
CLAUDIA BURKE; JESSICA M. LINK, Office of Chief Counsel
for Trade Enforcement and Compliance, United States
Department of Commerce, Washington, DC.
                  ______________________

    Before PROST, Chief Judge, LOURIE and STOLL, Circuit
                          Judges.
PROST, Chief Judge.
    Appellants, Toscelik Profil ve Sac Endüstrisi A.S., and
Çayirova Boru Sanayi ve Ticaret A.S. (collectively,
“Çayirova”), appeal from the final judgment of the United
States Court of International Trade (“Trade Court”)
sustaining Commerce’s decision that Çayirova is not
entitled to a duty drawback adjustment for its exports of
MAVERICK TUBE CORPORATION     v. UNITED STATES                3

oil country tubular goods 1. See Maverick Tube Corp. v.
United States, 163 F. Supp. 3d 1345 (Ct. Int’l Trade 2016).
Because Commerce properly interpreted and applied the
Tariff Act to deny Çayirova’s duty drawback adjustment,
we affirm.
                               I
                               A
      This case involves an antidumping investigation by
Commerce into Turkish oil country tubular goods. 2
“Dumping occurs when a foreign firm sells goods in the
United States at an export price . . . that is lower than the
product’s normal value.” Saha Thai Steel Pipe (Public)
Co. v. United States, 635 F.3d 1335, 1338 (Fed. Cir. 2011).
For exporters in non-distorted market economies, the
normal value is generally the “price at which the foreign
. . . product is first sold . . . for consumption in the export-
ing country.”        19 U.S.C. § 1677b(a)(1)(B)(i).       “[T]he
amount by which the [normal value] exceeds [export
price] is the dumping margin.” Id. A higher export price
thus yields a lower dumping margin.
    When calculating the dumping margin,
    if a foreign country would normally impose an im-
    port duty on an input used to manufacture the

    1    Oil country tubular goods are “hollow steel prod-
ucts of circular cross-section, including oil well casing and
tubing” used in the recovery of oil and gas from the
ground. 78 Fed. Reg. 45505-01.
    2    See Certain Oil Country Tubular Goods From In-
dia, The Republic Of Korea, The Republic Of The Philip-
pines, Saudi Arabia, Taiwan, Thailand, The Republic Of
Turkey, Ukraine, And The Socialist Republic Of Vietnam:
Initiation Of Antidumping Duty Investigations, 78 Fed.
Reg. 45,506 (Dep’t Commerce July 29, 2013).
4             MAVERICK TUBE CORPORATION    v. UNITED STATES

    subject merchandise, but offers a rebate or exemp-
    tion from the duty if the input is exported to the
    United States, then Commerce will increase [the
    export price] to account for the rebated or unpaid
    import duty (the ‘duty drawback’).
Saha Thai, 635 F.3d at 1338; see 19 U.S.C.
§ 1677a(c)(1)(B) (providing that the export price “shall be
. . . increased by . . . the amount of any import duties
imposed by the country of exportation which have been
rebated, or which have not been collected, by reason of the
exportation of the subject merchandise to the United
States”). This adjustment of the export price is called a
“duty drawback adjustment.” “The purpose of the duty
drawback adjustment is to account for the fact that the
producers remain subject to the import duty when they
sell the subject merchandise domestically, which increas-
es home market sales prices and thereby increases [the
normal value].” Saha Thai, 635 F.3d at 1338. Thus, by
increasing the export price, a duty drawback adjustment
reduces the dumping margin.
                             B
    Here, Appellant Çayirova produces various types of
steel pipes from different grades of hot-rolled steel coils.
The particular pipes at issue here, oil country tubular
goods, may only be produced from a grade of coil known as
J55. During Commerce’s period of investigation, Çayirova
imported various grades of coils but did not import any
J55 coils. Instead, Çayirova sourced all its J55 coils from
a domestic Turkish producer.
    Normally, Çayirova would have to pay an import duty
on its imported non-J55 coils. Turkey, however, has a
duty drawback regime that relieves importers of import
duties if their imported goods are incorporated into ex-
ports of finished products. This drawback regime includes
a provision for “equivalent goods,” whereby similar prod-
ucts may be substituted for each other for drawback
MAVERICK TUBE CORPORATION   v. UNITED STATES              5

purposes. J.A. 1405–24. Under this regime, a Turkish
importer may import goods into Turkey duty-free so long
as the importer exports a sufficient volume of finished
goods incorporating either the imported or equivalent
goods. Id. The Government of Turkey considers Çayiro-
va’s imported coils to be “equivalent” to Çayirova’s domes-
tically-acquired J55 coils. During Commerce’s period of
investigation, Çayirova exported oil country tubular goods
that were made using domestic J55 coils to the United
States. Çayirova then used all of its exports of oil country
tubular goods to the United States to receive duty draw-
backs on its imported non-J55 coils from the Government
of Turkey.
     On appeal, Çayirova argues that because it received
the duty drawbacks on its non-J55 coils solely “by reason
of the exportation of the [oil country tubular goods] to the
United States,” 19 U.S.C. § 1677a(c)(1)(B), Commerce
should have offset Çayirova’s export price by the duty
drawback. Commerce, however, determined that Çayiro-
va was not entitled to a duty drawback adjustment be-
cause none of the goods for which duties were exempted,
i.e., the non-J55 coils, were capable of being used to
produce Çayirova’s oil country tubular goods. The Trade
Court affirmed Commerce’s decision and Çayirova ap-
pealed. On appeal, Çayirova argues that Commerce
misconstrued § 1677a(c)(1)(B) of the Tariff Act and that
under the provision’s correct interpretation, Çayirova is
entitled to a duty drawback adjustment. We have juris-
diction under 28 U.S.C. § 1295(a)(5).
                             II
    In reviewing the Trade Court’s decision to affirm
Commerce’s final determination, we “uphold Commerce’s
determination unless it is ‘unsupported by substantial
evidence on the record, or otherwise not in accordance
with law.’” Micron Tech., Inc. v. United States, 117 F.3d
1386, 1393 (Fed. Cir. 1997) (quoting 19 U.S.C.
6             MAVERICK TUBE CORPORATION   v. UNITED STATES

§ 1516a(b)(1)(B)(i)). “We review de novo whether Com-
merce’s interpretation of a governing statutory provision
is in accordance with law, but we do so within the frame-
work established by Chevron, U.S.A., Inc. v. Natural
Resources Defense Council, Inc., 467 U.S. 837 (1984).”
Agro Dutch Indus., Ltd. v. United States, 508 F.3d 1024,
1029–30 (Fed. Cir. 2007).

    Under 19 U.S.C. § 1677a(c)(1)(B),
    The price used to establish export price and con-
    structed export price shall be--
    (1) increased by--
        ...
        (B) the amount of any import duties imposed
        by the country of exportation which have been
        rebated, or which have not been collected, by
        reason of the exportation of the subject mer-
        chandise to the United States.
Commerce determined that as a threshold matter,
§ 1677a(c)(1)(B) did not apply to this investigation be-
cause none of Çayirova’s exempted coils were capable of
being used as inputs for the oil country tubular goods.
According to Commerce, a duty drawback adjustment is
not available when the exempted goods could not be used
as inputs to produce the subject merchandise. See J.A. 50
(“[W]e find that the duty drawback provision is not in-
tended to account for such situations in which the input
for which a company claims duty drawback could not have
been used in the production of the subject merchandise.”).
     Çayirova argues that Commerce’s “threshold test” has
no basis in law and that this court should reject it. Ac-
cording to Çayirova, the plain and unambiguous language
of § 1677a(c)(1)(B) precludes the imposition of a threshold
test. Çayirova contends that this provision is “straight-
forward” and that under the statute, if a respondent
MAVERICK TUBE CORPORATION    v. UNITED STATES              7

exports subject merchandise to the United States and
receives a rebate or remission of duties by reason of that
exportation, then it is entitled to a drawback adjustment.
See Appellant’s Br. 20 (citing Chevron, 467 U.S. at 842–
43). Here, because it is uncontested that Çayirova re-
ceived duty drawbacks solely because of its exportation of
the subject merchandise, Çayirova argues that it is enti-
tled to duty drawbacks for its oil country tubular goods.
     In determining if Commerce’s threshold test is fore-
closed by § 1677a(c)(1)(B), the court must first determine
if the statute unambiguously addresses whether the duty
drawback adjustment is only available to offset duties on
potential inputs for the subject merchandise. “If the
intent of Congress is clear, that is the end of the matter;
for the court, as well as the agency, must give effect to the
unambiguously expressed intent of Congress.” Chevron,
467 U.S. at 842–43. If, however, “the statute is silent or
ambiguous with respect to the specific issue, the question
for the court is whether [Commerce’s interpretation] is
based on a permissible construction of the statute.” Id. at
843; see also Pesquera Mares Australes Ltda. v. United
States, 266 F.3d 1372, 1380 (Fed. Cir. 2001) (“[We] afford
Chevron deference to Commerce’s interpretations of
ambiguous statutory terms articulated in the course of
Commerce’s antidumping determinations.”).

    Section 1677a(c)(1)(B) neither endorses nor prohibits
Commerce’s view that duty drawback adjustments are
only available to offset duties on goods that are suitable
for use as inputs for the subject merchandise. The statu-
tory text emphasizes that duty drawback adjustments are
allowed only when import duties are rebated or not col-
lected “by reason of the exportation of the subject mer-
chandise to the United States.”               19 U.S.C.
§ 1677a(c)(1)(B). This language signals that Congress
intended Commerce to grant duty drawback adjustments
only when there is some kind of connection between the
nonpayment of import duties and the exportation of the
8             MAVERICK TUBE CORPORATION   v. UNITED STATES

subject merchandise to the United States. But the statute
does not specify whether Commerce should or should not
grant an adjustment for the nonpayment of import duties
on materials incapable of producing the merchandise
exported to the United States.
    Çayirova argues that this court already concluded, in
Saha Thai, that the statute is unambiguous and thus not
subject to Commerce’s interpretation. Appellant’s Br. 23.
In that case, we addressed whether “Commerce may only
increase [the export value] when import duties are im-
posed by the country of exportation and then later rebat-
ed” as opposed to when those “import duties have not
been collected” in the first place. Saha Thai, 635 F.3d at
1340 (internal quotation marks omitted). On that specific
issue, we explained that “the statute defines a plain and
simple rule: a duty drawback adjustment shall be grant-
ed when, but for the exportation of the subject merchan-
dise to the United States, the manufacturer would have
shouldered the cost of an import duty.” Id. at 1341. But
Saha Thai did not address the specific issue presented in
this case, i.e., whether duty drawback adjustments are
only available to offset duties on goods that are suitable
for use as inputs for the subject merchandise. The inquiry
under Chevron is whether the “the statute is silent or
ambiguous with respect to the specific issue . . . .” 467
U.S. at 843 (emphasis added). The court has never con-
cluded that the statute is unambiguous with respect to
this issue. Because § 1677a(c)(1)(B) is silent with respect
to this specific issue, we next consider whether Com-
merce’s interpretation of the statute is reasonable. We
conclude that it is.
    The antidumping statutes generally “seek to produce
a fair ‘apples-to-apples’ comparison between foreign
market value and United States price.” Torrington Co. v.
United States, 68 F.3d 1347, 1352 (Fed. Cir. 1995). “[T]o
achieve that end, the statutes and Commerce Department
regulations call for adjustments to the base value of both
MAVERICK TUBE CORPORATION   v. UNITED STATES             9

foreign market value and United States price to permit
comparison of the two prices at a similar point in the
chain of commerce.” Id. In Saha Thai, we explained that
to produce this apples-to-apples comparison, “if a foreign
country would normally impose an import duty on an
input used to manufacture the subject merchandise, but
offers a rebate or exemption from the duty if the input is
exported to the United States, then Commerce will in-
crease [the export price] to account for the rebated or
unpaid import duty (the ‘duty drawback’).” 635 F.3d at
1338 (emphases added). We thus explicitly endorsed
Commerce’s interpretation that duty drawbacks are only
available for potential inputs of the subject merchandise.
    Further, as Commerce recognized, “adjusting the ex-
port price . . . for an expense that is not associated with
the production of subject merchandise . . . is contrary to
statutory goal of accounting for subject merchandise-
related items.” J.A. 51. In other words, allowing for duty
drawbacks for goods unrelated to the subject merchandise
contravenes the statutory goal of making apples-to-apples
comparisons between foreign and United States prices.
Ultimately, Commerce’s interpretation was entirely
reasonable and its denial of Çayirova’s duty drawback
adjustment was proper.
    In sum, we conclude that 19 U.S.C. § 1677a(c)(1)(B) is
silent with respect to the specific issue of whether duty
drawback adjustments are only available to offset duties
on potential inputs for subject merchandise. We further
conclude      that     Commerce’s      interpretation   of
§ 1677a(c)(1)(B) was reasonable and that Commerce
properly concluded that Çayirova was not entitled to a
duty drawback for its oil country tubular goods. Accord-
ingly, the Trade Court’s decision sustaining Commerce’s
final results is affirmed.
                      AFFIRMED