Court Opinion

ID: 9906521
Source: CourtListenerOpinion
Date Created: 2023-12-04 14:00:36.877396+00
Date Added: 2024-06-11T09:24:49.232519
License: Public Domain

Case: 22-1175   Document: 37     Page: 1    Filed: 12/04/2023

   United States Court of Appeals
       for the Federal Circuit
                 ______________________

    SAHA THAI STEEL PIPE PUBLIC COMPANY
  LIMITED, THAI PREMIUM PIPE COMPANY LTD.,
                Plaintiffs-Appellees

    PACIFIC PIPE PUBLIC COMPANY LIMITED,
                   Plaintiff

                            v.

                   UNITED STATES,
                      Defendant

           WHEATLAND TUBE COMPANY,
               Defendant-Appellant
              ______________________

                       2022-1175
                 ______________________

     Appeal from the United States Court of International
 Trade in Nos. 1:18-cv-00214-JCG, 1:18-cv-00219-JCG,
 1:18-cv-00231-JCG, Judge Jennifer Choe-Groves.
                 ______________________

                Decided: December 4, 2023
                 ______________________

     JAMES P. DURLING, Curtis, Mallet-Prevost, Colt &
 Mosle LLP, Washington, DC, argued for plaintiffs-appellee
 Saha Thai Steel Pipe Public Company Limited. Also repre-
 sented by JAMES BEATY, DANIEL L. PORTER.
Case: 22-1175    Document: 37     Page: 2   Filed: 12/04/2023

 2        SAHA THAI STEEL PIPE PUBLIC COMPANY LIMITED v. US

    ROBERT GOSSELINK, Trade Pacific PLLC, Washington,
 DC, for plaintiff-appellee Thai Premium Pipe Company
 Ltd.

     ELIZABETH DRAKE, Schagrin Associates, Washington,
 DC, argued for defendant-appellant. Also represented by
 MICHELLE ROSE AVRUTIN, CHRISTOPHER CLOUTIER,
 WILLIAM ALFRED FENNELL, JEFFREY DAVID GERRISH, LUKE
 A. MEISNER, ROGER BRIAN SCHAGRIN.
                 ______________________

     Before HUGHES, LINN, and STARK, Circuit Judges.
 HUGHES, Circuit Judge.
     Defendant-Appellant Wheatland Tube Company ap-
 peals a decision from the Court of International Trade af-
 firming a second remand determination by the Department
 of Commerce calculating certain anti-dumping margins for
 certain welded carbon steel pipes without any particular
 market situation adjustments. 1 Because the Court of Inter-
 national Trade properly determined that the agency was
 not allowed to make a particular market situation adjust-
 ment to the cost of production when determining anti-
 dumping margins, we affirm the trial court’s decision to
 sustain the agency’s second remand results.
                              I
                             A
       Under the Tariff Act of 1930, as amended, Com-
 merce conducts antidumping duty investigations to deter-
 mine whether goods are being sold at less-than-fair value.
 See 19 U.S.C. § 1673. For this analysis, the agency com-
 pares the price at which the merchandise is sold in the

     1    The Department of Commerce did not participate
 in this appeal.
Case: 22-1175     Document: 37      Page: 3     Filed: 12/04/2023

 SAHA THAI STEEL PIPE PUBLIC COMPANY LIMITED v. US             3

 United States (export price) to a “normal value” bench-
 mark. Export price is defined as the price at which the mer-
 chandise is first sold in the United States. See id.
 § 1677a(a).
     The objective when calculating normal value is to find
 a value that provides a fair comparison to the export price.
 Id. § 1677b(a). By default, the agency uses the price at
 which the merchandise is sold for consumption in the ex-
 porting country. See id. § 1677b(a)(1)(B)(i). The price used
 is the price “in the ordinary course of trade.” Id. Section
 1677(15), as amended by the Trade Preferences Extension
 Act of 2015 (TPEA), defines the “ordinary course of trade”
 as excluding (A) sales in the exporting country that are
 made at prices below the cost of production (“sales below
 cost”), (B) certain sales between affiliates, and (C) “[s]itua-
 tions in which . . . the particular market situation prevents
 a proper comparison with the export price or constructed
 export price.” Id. § 1677(15).
      Sales below cost are excluded from the normal value,
 and only “the remaining sales of the foreign like product in
 the ordinary course of trade” are used. § 1677b(b)(1)(B). To
 determine whether a sale is below cost, the cost of produc-
 tion is calculated according to § 1677b(b)(3) and includes
 “the cost of [materials, fabrication, and processing of] the
 foreign like product, during a period which would ordinar-
 ily permit the production of that foreign like product in the
 ordinary course of business.” § 1677b(b)(3)(A). Sec-
 tion 1677b(f) also governs the calculation of the cost of pro-
 duction, requiring that “[c]osts shall normally be calculated
 based on the records of the exporter or producer of the mer-
 chandise, if such records . . . reasonably reflect the costs as-
 sociated with the production and sale of the merchandise.”
 § 1677b(f)(1)(A).
     If the agency cannot determine the normal value of the
 subject merchandise based on price, then § 1677b(e) au-
 thorizes the agency to calculate a constructed value based
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 4        SAHA THAI STEEL PIPE PUBLIC COMPANY LIMITED v. US

 on costs. TPEA amendments allow the agency to consider
 a particular market situation (PMS) affecting costs when
 doing so:
       [I]f a particular market situation exists such
       that the cost of materials and fabrication or
       other processing of any kind does not accu-
       rately reflect the cost of production in the or-
       dinary course of trade, the administering
       authority may use another calculation meth-
       odology under this part or any other calcula-
       tion methodology.

 § 1677b(e)(3). However, as we held in Hyundai Steel Co. v.
 United States, 19 F.4th 1346, 1352–55 (Fed. Cir. 2021), the
 TPEA amendment to § 1677b(e), which deals with calculat-
 ing constructed value, does not automatically carry over to
 § 1677b(b), which deals with calculating the cost of produc-
 tion. Thus, our binding case law establishes that the
 agency cannot use PMS adjustments for cost of production
 calculations under the statutory framework.

                              B
     Wheatland Tube Company is a domestic producer of
 various steel pipes. During the 2018 administrative review
 of imports of circular welded carbon steel pipes (CWPs)
 from Thailand, Wheatland intervened and alleged that
 there was a PMS in Thailand that distorted the costs of hot
 rolled steel coil. Hot rolled steel coil accounts for roughly
 80% of the cost of production of CWPs, since the coils are
 used to make the pipes.
     In the underlying antidumping review of CWPs, the
 agency initially found that respondents Saha Thai Steel
 and Thai Premium Pipe’s costs of production were dis-
 torted by the PMS caused by the hot rolled steel coil costs,
 which prevented the proper comparison of the normal
 value with export price or constructed value. Then, the
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 SAHA THAI STEEL PIPE PUBLIC COMPANY LIMITED v. US          5

 agency determined that it had the authority under the
 TPEA to account for the PMS in its cost analysis and made
 upward adjustments to the costs of production for each of
 the Thai steel companies in this review. This later im-
 pacted the antidumping duty rates assigned to each com-
 pany. The trial court disagreed, finding that Congress
 intended for PMS adjustments to be available only for cal-
 culations of constructed value and not for calculations of
 costs of production. In so finding, the trial court relied on
 our decision in Hyundai Steel, where we held that the
 agency could not use PMS adjustments in calculating costs
 of production. The trial court remanded to the agency to
 revise its calculations and analysis in accordance with the
 relevant statutes.
     In its first remand determination, the agency contin-
 ued to find that “a PMS exist[ed] in Thailand that dis-
 tort[ed] the price of hot rolled coil.” J.A. 13. The agency
 then disagreed with the trial court’s finding and continued
 to use a PMS adjustment when calculating the cost of pro-
 duction, determining that the PMS caused home market
 sale prices to be outside the ordinary course of trade. J.A.
 20. The agency also concluded that the existence of a PMS
 prevented the proper comparison of normal value based on
 home market prices with export prices or constructed ex-
 port prices, and then based the normal value on con-
 structed value. J.A. 20–21.
     After the first remand determination, the trial court
 again found that “Commerce did not follow the statutory
 framework in this case,” and again remanded to the agency
 to remove the cost-based PMS determination and recalcu-
 late the weighted-average dumping margins without a
 PMS adjustment. J.A. 51. Under protest, in its second re-
 mand determination, the agency recalculated the dumping
 margins without making any PMS adjustments. The CIT
 upheld this second remand determination.
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 6        SAHA THAI STEEL PIPE PUBLIC COMPANY LIMITED v. US

      On appeal, Wheatland seeks to reinstate the agency’s
 first remand determination, where the agency used a PMS
 adjustment to calculate the cost of production. We have ju-
 risdiction under 28 U.S.C. § 1295(a)(5).

                              II

     “We review a decision of the Court of International
 Trade evaluating an antidumping determination by Com-
 merce by reapplying the statutory standard of review that
 the Court of International Trade applied in reviewing the
 administrative record. We will uphold Commerce’s deter-
 mination unless it is unsupported by substantial evidence
 on the record or otherwise not in accordance with the law.”
 Peer Bearing Co.-Changshan v. United States, 766 F.3d
 1396, 1399 (Fed. Cir. 2014) (citation omitted); 19 U.S.C.
 § 1516a(b)(1)(B)(i).

                             III

     Wheatland argues that this case can be distinguished
 from Hyundai Steel because in that case, we said that 19
 U.S.C. § 1677b(a)(1) “specifically gives Commerce the tools
 to ensure a proper comparison with the export price.” 19
 F.4th at 1355 (internal quotations omitted). Wheatland
 further argues that the agency relied on one of the sub-sec-
 tions of § 1677b(a)(1) to adjust the cost of production up-
 ward to account for a PMS by framing it as a constructed
 value calculation. Appellant’s Br. 26. We are not per-
 suaded.

     Wheatland ignores the actual holding of Hyundai Steel,
 where we explicitly stated that the amendment authoriz-
 ing PMS adjustments for constructed value calculations
 was not added to the section of the statute addressing cost
 of production calculations. 19 F.4th at 1352–53. We thus
 found that Congress did not intend to authorize the agency
 to incorporate PMS adjustments for cost of production
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 SAHA THAI STEEL PIPE PUBLIC COMPANY LIMITED v. US          7

 calculations. We also explained that “[i]n enacting the
 TPEA, Congress did not leave a gap for Commerce to fill
 with regard to adjusting the costs of production. Rather,
 Congress simply and unambiguously allowed for a PMS ad-
 justment to constructed value but not to the costs of pro-
 duction for purposes of the sales-below-cost test.” Id. at
 1354.

      Hyundai Steel is indistinguishable from this case and
 is controlling. That the agency presented its cost of produc-
 tion calculation as a constructed value calculation—by us-
 ing the phrase “ordinary course of trade” to explain why it
 incorporated a PMS adjustment—does not change the fact
 that the statute simply does not authorize PMS adjust-
 ments to cost of production calculations. The agency cannot
 use constructed value language found in § 1677b(e) as a
 backdoor to slip in a PMS adjustment for cost of production
 calculations. The trial court correctly found that the
 agency’s second remand determination—removing all PMS
 adjustments from the cost of production calculation—was
 consistent with the statutory framework. We thus affirm.

                              IV

     We have considered the rest of Wheatland’s arguments
 and find them unpersuasive. We therefore affirm the Court
 of International Trade’s decision sustaining the agency’s
 second remand determination, which calculated cost of pro-
 duction without any PMS adjustments.

                        AFFIRMED