Court Opinion

ID: 4160055
Source: CourtListenerOpinion
Date Created: 2017-04-13 15:01:57.370713+00
Date Added: 2024-06-11T14:50:15.203485
License: Public Domain

Slip Op. 17- 42

                UNITED STATES COURT OF INTERNATIONAL TRADE

DAVIS WIRE CORP. AND INSTEEL WIRE
PRODUCTS COMPANY,

                      Plaintiffs,

              v.
                                                      Before: Timothy C. Stanceu, Chief Judge
UNITED STATES,
                                                      Court No. 14-00131
                      Defendant,

              and

THE SIAM INDUSTRIAL WIRE CO., LTD.,

                      Defendant-Intervenor.

                                           OPINION

[Sustaining a determination made on remand by the International Trade Administration]

                                                                Dated: April 13, 2017

        Kathleen W. Cannon of Kelley Drye & Warren LLP, of Washington DC, argued for
plaintiffs Davis Wire Corporation and Insteel Wire Products Company. With her on the brief
were David C. Smith, Jr., and R. Alan Luberda.

        Agatha Koprowski, Commercial Litigation Branch, Civil Division, U.S. Department of
Justice, of Washington, DC, argued for defendant United States. With her on the brief were
Joyce M. Branda, Acting Assistant Attorney General, Jeanne E. Davidson, Director, Reginald T.
Blades, Jr., Assistant Director.

       Edward M. Lebow of Haynes & Boone LLP, of Washington DC, argued for defendant-
intervenor The Siam Industrial Wire Co., Ltd.

       Stanceu, Chief Judge: In this action, plaintiffs Davis Wire Corporation and Insteel Wire

Products Company contested a negative less-than-fair-value determination (“Final

Determination”) issued by the International Trade Administration, U.S. Department of
Court No. 14-00131                                                                      Page 2

Commerce (“Commerce” or the “Department”) following an antidumping duty investigation of

prestressed concrete steel tie wire (“PC tie wire”) from Thailand. Final Determination of Sales

at Not Less than Fair Value: Prestressed Concrete Steel Rail Tie Wire from Thailand, 79 Fed.

Reg. 25,574 (Int’l Trade Admin. May 5, 2014) (“Final Determination”). In the Final

Determination, Commerce calculated a 0.00% weighted-average dumping margin for Siam

Industrial Wire Company, Ltd. (“SIW”). Because SIW was the sole exporter/producer

investigated, Commerce terminated the investigation without issuing an antidumping duty order.

       Before the court is the remand (“Remand Redetermination”) issued by Commerce in

response to the court’s order in Davis Wire Corp. v. United States, 40 C.I.T. __,

180 F. Supp. 3d 1187 (2016) (“Davis Wire I”). Final Results of Redetermination Pursuant to

Remand (Sept. 21, 2016), ECF No. 56 (confidential), ECF No. 57 (public) (“Remand

Redetermination”). In Davis Wire I, the court affirmed in part, and remanded in part, the

Department’s Final Determination. Davis Wire I, 40 C.I.T. at __, 180 F. Supp. 3d at 1201. In

the Remand Redetermination, Commerce modified its calculation of SIW’s weighted average

dumping margin, but the result again was a margin of 0.00%. Remand Redetermination at 9.

       Neither plaintiffs nor defendant-intervenor has filed comments with the court on the

Remand Redetermination. Because the Remand Redetermination complies with the order issued

in Davis Wire I and because no party has raised an objection, the court sustains the Remand

Redetermination.

                                        I. BACKGROUND

       The court’s prior opinion in Davis Wire I presents background information on this case,

familiarity with which is presumed.
Court No. 14-00131                                                                          Page 3

                                          II. DISCUSSION

       The court exercises jurisdiction according to section 201 of the Customs Courts Act

of 1980, 28 U.S.C. § 1581(c), under which the court may review an action brought under section

516A(a)(2) of the Tariff Act of 1930 (“Tariff Act”); see 19 U.S.C. § 1516a(a)(2)(A), (a)(2)(B)(ii).

Upon judicial review, the court “shall hold unlawful any determination, finding, or conclusion

found . . . to be unsupported by substantial evidence on the record, or otherwise not in

accordance with law . . . .” Id. § 1516a(b)(1)(B)(i).

       In responding to the court’s order in Davis Wire I, the Remand Redetermination

addresses two issues, both of which pertain to the exclusion of below-cost sales from the

determination of normal value. These issues were the calculation of the cost of certain wire rod

SIW used as a production input and the calculation of SIW’s general and administrative

expenses.

       In contesting the Final Determination, plaintiffs argued that Commerce improperly

calculated SIW’s cost of production with respect to certain Grade 82B 13 mm wire rod that SIW

used in the production of PC tie wire. Specifically, plaintiffs alleged that Commerce, when

averaging the cost of this production input over the period of investigation, erroneously included

only the wire rod from the inventory of SIW’s “PC Wire” division, which produced PC tie wire,

and failed to include in the average the cost of the 13 mm wire rod in the inventory of SIW’s

“PC Strand” division, which produced “PC strand,” prestressed concrete steel reinforcing bar.

Davis Wire I, 40 C.I.T. at __, 180 F. Supp. 3d at 1197. Plaintiffs alleged that both inventories

were used in the production of the PC tie wire. Id. At defendant’s request, the court granted a

voluntary remand so that Commerce could reconsider the issue. In the Remand

Redetermination, Commerce found that “wire rod used in the production of PC tie wire was also
Court No. 14-00131                                                                          Page 4

used to manufacture PC strand” and that “[b]ased on this evidence, the identical raw materials

(i.e., grade 82B 13 mm wire rod held in inventory in the PC Strand division) should also be

included as part of the weighted-average raw materials consumption cost in the cost of

production (COP) calculation, in accordance with the Department’s normal practice.” Remand

Redetermination 5. Using cost data for this input that Commerce considered representative,

Commerce made an upward adjustment in SIW’s wire rod costs. Id. at 5-6. By doing so,

Commerce responded to the court’s directive and reached a finding supported by substantial

record evidence.

       The second issue on remand pertained to plaintiffs’ argument that the ratio the

Department calculated for SIW’s general and administrative (“G&A”) expenses failed to include

the value of certain information technology services provided to SIW by its parent company,

Tata Steel. See Davis Wire I, 40 C.I.T. at __, 180 F. Supp. 3d at 1199. Upon considering this

argument, the court stated that it “is unable to identify on the record substantial evidence to

support the Department’s finding that the value of IT services Tata Steel reportedly provided to

SIW was reflected in the G&A ratio.” Id., 40 C.I.T. at __, 180 F. Supp. 3d at 1200. The court

ordered Commerce to reconsider the issue and to modify or explain its decision, as appropriate.

Id., 40 C.I.T. at __, 180 F. Supp. 3d at 1201. In the Remand Redetermination, Commerce

expressly found that Tata Steel invoiced SIW monthly for the costs of the IT services.

Commerce explained that “it is reasonable to conclude that the invoices received from Tata Steel

were then entered into SIW’s accounting records, and further that these cost amounts were

ultimately reflected in the audited financial statements of the company that served as the starting

point in the Department’s reconciliation of total production costs and G&A expenses at

verification.” Remand Redetermination 6-7. Commerce further explained that the IT expenses
Court No. 14-00131                                                                         Page 5

were not individually itemized and that Commerce did not select these expenses for individual

examination at verification. Id. at 7. Commerce added that its “conclusion is supported by the

results of its verification testing procedures, which did not identify any unreported G&A expense

items” and that “[t]he absence on the record of detailed information on SIW’s IT service

expenses cannot serve as evidence that SIW has therefore not accounted for its payments to Tata

Steel.” Id. at 8. The court considers this explanation reasonable. An agency is permitted to

draw reasonable inferences from the record evidence. Campbell v. Merit Sys. Prot. Bd.,

27 F.3d 1560, 1564 (Fed. Cir. 1994) (stating that courts are required to defer to an agency “as

long as the record contains evidence from which one reasonably could draw the challenged

inference”). Here, the inference that the IT expenses were included within the G&A expenses

SIW reported is reasonable given the limitations of the company’s business records, the positive

results of the verification, which found based on sampling that in general costs were properly

accounted for, and the Department’s practical need to conduct sampling during verification as

opposed to detailed examination of every individual cost item.

                                 III. CONCLUSION AND ORDER

       For the foregoing reasons, the court sustains the Remand Redetermination. Judgment

will enter accordingly.

                                                                    /s/ Timothy C. Stanceu
                                                                    Timothy C. Stanceu
                                                                    Chief Judge
Dated: April 13, 2017
       New York, New York