Court Opinion

ID: 817826
Source: CourtListenerOpinion
Date Created: 2013-02-01 01:58:30.750323+00
Date Added: 2024-06-11T15:26:33.306805
License: Public Domain

Slip Op. 10-15

                   UNITED STATES COURT OF INTERNATIONAL TRADE

------------------------------------------------------x
                                                      :
ALLOY PIPING PRODUCTS, INC., et al., :
                                                      :
                  Plaintiffs,                         :
                                                      :
         v.                                           :
                                                      :    Before: Judith M. Barzilay, Judge
UNITED STATES,                                        :    Consol. Court No. 08-00027
                                                      :
                  Defendant,                          :
                                                      :
                  and                                 :
                                                      :
TA CHEN STAINLESS STEEL PIPE                          :
CO., LTD.,                                            :
                                                      :
                  Defendant-Intervenor.               :
                                                      :
------------------------------------------------------x

                                                   OPINION

[Defendant’s Second Remand Determination is sustained.]

                                                                            Dated: February 8, 2010

Kelley Drye & Warren, LLP (Jeffrey S. Beckington, David A. Hartquist), for Plaintiffs.

Tony West, Assistant Attorney General; Jeanne E. Davidson, Director, Reginald T. Blades, Jr.,
Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice
(Stephen C. Tosini); Daniel J. Calhoun, Attorney-International, Of Counsel, Office of the Chief
Counsel for Import Administration, U.S. Department of Commerce, for Defendant.

Squire, Sanders & Dempsey LLP (Peter J. Koenig), for Defendant-Intervenor.
Consol. Court No. 08-00027                                                                Page 2

       Barzilay, Judge: This case returns to the court following the second U.S. Department of

Commerce (“Commerce”) remand determination on the thirteenth administrative review of an

antidumping duty order covering stainless steel butt-weld pipe fittings from Taiwan. Final

Results of Redetermination Pursuant to Remand, A-583-816 (Dep’t Commerce Dec. 18, 2009)

(“Second Remand Determination”). In early 2009, the court affirmed in part and remanded in

part Commerce’s review of the subject antidumping duty order.1 Alloy Piping Prods., Inc. v.

United States, Slip Op. 09-29, 2009 WL 983078 (CIT Apr. 14, 2009). The remand order to

Commerce concerned the calculation of the profit adjustment to the Constructed Export Price

(“CEP”),2 a component of the dumping margin equation. In October 2009, the court reviewed

Commerce’s first remand determination and found that the agency did not support its conclusion

that the record did not warrant a profit adjustment to the CEP with substantial evidence. Alloy

Piping Prods., Inc. v. United States, Slip Op. 09-119, 2009 WL 3367498 (CIT Oct. 20, 2009);

Final Results of Redetermination Pursuant to Remand, A-583-816 (Dep’t Commerce June 16,

2009), Admin. R. Pub. Doc. 1928. The court directed the agency to “provide a more rigorous

analysis of the record facts in its examination of whether the standard methodology adequately

reflects the imputed costs incurred by Ta Chen during the subject review.” Alloy Piping Prods.,

Inc., 2009 WL 3367498, at *3. In the latest determination, Commerce has found anew that the

record does not support a profit adjustment to the CEP. Second Remand Determination at 1.

       1
           The court presumes familiarity with the procedural history of this case.
       2
        Commerce uses the following formula to calculate CEP Profit:
Total Actual Profit x (Total U.S. Expenses / Total Expenses). 19 U.S.C. § 1677a(d)(3), (f).
Consol. Court No. 08-00027                                                                  Page 3

Defendant-Intervenor Ta Chen3 contests this finding and argues that the agency based its

conclusion in the Second Remand Determination on conjecture.4 5 Ta Chen Br. 5-13. The court

affirms Commerce’s Second Remand Determination for the reasons explained below.

       3
          On June 18, 2009, Plaintiffs Alloy Piping Products, Inc., Flowline Division of
Markovitz Enterprises, Inc., Gerlin, Inc., and Taylor Forge Stainless, Inc. informed the court by
letter that they support Commerce’s analysis of the remanded issue and that they would no longer
actively participate in the case. Pls.’ Letter at 1, Alloy Piping Prods., Inc. v. United States, No.
08-cv-00027 (CIT June 18, 2009).
       4
          Ta Chen also avers that the standard methodology Commerce used to calculate the profit
adjustment does not account adequately for certain imputed costs. Ta Chen Br. 4-5. In its April
and October opinions, the court affirmed the legal validity of Commerce’s standard methodology
for calculating the profit adjustment to CEP absent certain conditions. Alloy Piping Prods., Inc.,
2009 WL 3367498, at *1 n.3; Alloy Piping Prods., Inc., 2009 WL 983078, at *9. Ta Chen argues
that a condition exists in this review that renders the standard methodology inapplicable. Ta
Chen Br. 11 (citing Thai Pineapple Canning Indus. Corp. v. United States, 24 CIT 107, 115
(2000) (not reported in F. Supp.) (“Thai Pineapple”)). In Thai Pineapple, the Court stated that
the standard methodology might not apply in a situation where the record contained no actual
expenses but only imputed costs, though it did not “address whether th[is is] a truly distortive
situation[].” 24 CIT at 115 & n.13. Even assuming that the absence of actual costs creates a
truly distortive situation, the record of this review evinces the presence of both actual and
imputed expenses, see generally Second Remand Determination, and thus discredits Ta Chen’s
argument.
       5
         Ta Chen also alleges that Commerce erroneously rejected Ta Chen’s three alternate and
allegedly more accurate methodologies to calculate CEP profit. Ta Chen Br. 14-17. The Federal
Circuit has found that the standard methodology used by Commerce sufficiently comports with
the agency’s statutory duty under 19 U.S.C. § 1677a to ensure the fairness of the price
comparison between foreign and domestic produced goods, so long as “Commerce affords a
respondent who so desires the opportunity to make a showing that the amount of imputed
expenses is not accurately reflected or embedded in its actual expenses.” SNR Roulements v.
United States, 402 F.3d 1358, 1361 (Fed. Cir. 2005). Because Commerce has given Ta Chen the
required opportunity, the court “must accord deference to the agency in its selection and
development of proper methodologies.” Fla. Citrus Mut. v. Unites States, 550 F.3d 1105, 1111
(Fed. Cir. 2008) (quotation marks & citation omitted).
Consol. Court No. 08-00027                                                                    Page 4

                     I. Subject Matter Jurisdiction & Standard of Review

       A civil action commenced under 19 U.S.C. § 1516a falls within the exclusive ambit of

the Court’s subject matter jurisdiction pursuant to 28 U.S.C. § 1581(c). The Court must hold

unlawful any antidumping duty determination “unsupported by substantial evidence on the

record, or otherwise not in accordance with law.” § 1516a(b)(1)(B)(i). An agency supports its

factual findings with substantial evidence when it explains the standards that it applied and

demonstrates a rational connection between the facts on the record and the conclusions drawn.

See Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927, 933 (Fed. Cir. 1984). “[W]hile

[the] explanations do not have to be perfect, the path of [the agency]’s decision must be

reasonably discernible to a reviewing court.” NMB Sing. Ltd. v. United States, 557 F.3d 1316,

1319 (Fed. Cir. 2009) (citation omitted).

                                            II. Discussion

       Commerce supports with substantial evidence its conclusion in the Second Remand

Determination that the standard methodology accounted for Ta Chen’s imputed costs during the

subject review. The agency explains that where a respondent foreign company has an affiliate in

the United States that receives a loan, “it is reasonable to assume that a portion of those

borrowings may [cover] the U.S. selling activities associated with sales of subject merchandise.”

Second Remand Determination at 5. Commerce further notes that imputed expenses in the

United States represent an estimated amount of the borrowing cost attributable to those U.S.

selling activities. Id. Commerce points to record evidence of several loans by Ta Chen and its

U.S. subsidiary, Ta Chen International, that demonstrates that the two entities likely used a
Consol. Court No. 08-00027                                                                   Page 5

portion of the funds from those loans to finance selling activities related to the subject

merchandise within the United States. See id. at 6-7 (citing Ta Chen Section A Questionnaire

Resp. (Sept. 11, 2006), P.R. Doc. 16 at Exs. A-9, A-15, A-16)). Commerce’s assumption is

reasonable, given that (1) Ta Chen did not provide the agency with any evidence to show that the

loans were not used to support U.S. selling expenses, including an itemization of the credit and

inventory carrying costs associated with each of Ta Chen’s goods and the subject merchandise,

and (2) it was reasonably foreseeable that such information would be pertinent to the agency’s

determination. See id. at 11. Finally, Commerce reasons that Ta Chen’s imputed costs belong in

the Total U.S. Expenses numerator and not in the Total Actual Profit multiplier or Total

Expenses denominator, since the latter two components contain only actual costs, and to include

both the actual costs and an estimate of those expenses, i.e., imputed costs, would by definition

result in double counting. See id. at 6-7. In reaching these findings, Commerce provides a

justification absent from its previous determinations that shows the requisite rational connection

between the facts on the record and the conclusion reached. See Matsushita Elec. Indus. Co., 750

F.2d at 933.

                                          III. Conclusion

        For the foregoing reasons, the court finds that Commerce supported the Second Remand

Determination with substantial evidence.

Date:    February 8, 2010                                       /s / Judith M. Barzilay
        New York, New York                                    Judith M. Barzilay, Judge