Court Opinion

ID: 4704860
Source: CourtListenerOpinion
Date Created: 2021-07-20 15:02:49.755149+00
Date Added: 2024-06-11T08:05:54.097805
License: Public Domain

Case: 20-2014   Document: 40     Page: 1   Filed: 07/20/2021

   United States Court of Appeals
       for the Federal Circuit
                 ______________________

    BORUSAN MANNESMANN BORU SANAYI VE
               TICARET A.S.,
              Plaintiff-Appellee

                   UNITED STATES,
                      Defendant

                            v.

   AMERICAN CAST IRON PIPE COMPANY, BERG
  STEEL PIPE CORP., BERG SPIRAL PIPE CORP.,
        DURA-BOND INDUSTRIES, STUPP
      CORPORATION, INDIVIDUALLY AND AS
     MEMBERS OF THE AMERICAN LINE PIPE
   PRODUCERS ASSOCIATION, GREENS BAYOU
  PIPE MILL, LP, JSW STEEL (USA) INC., SKYLINE
    STEEL, TRINITY PRODUCTS LLC, WELSPUN
               TUBULAR LLC USA,
                Defendants-Appellants
               ______________________

                       2020-2014
                 ______________________

     Appeal from the United States Court of International
 Trade in Nos. 1:19-cv-00056-JAR, 1:19-cv-00080-JAR, Sen-
 ior Judge Jane A. Restani.
                  ______________________

                 Decided: July 20, 2021
                 ______________________
Case: 20-2014      Document: 40    Page: 2   Filed: 07/20/2021

2                        BORUSAN MANNESMANN BORU SANAYI v.
                                 AMERICAN CAST IRON PIPE CO.

     JULIE MENDOZA, Morris, Manning & Martin, LLP,
 Washington, DC, argued for plaintiff-appellee. Also repre-
 sented by DONALD CAMERON, JR., SABAHAT CHAUDHARY,
 EUGENE DEGNAN, MARY HODGINS, BRADY MILLS, R. WILL
 PLANERT, EDWARD JOHN THOMAS, III.

    TIMOTHY C. BRIGHTBILL, Wiley Rein LLP, Washington,
 DC, argued for defendants-appellants. Also represented by
 TESSA V. CAPELOTO, LAURA EL-SABAAWI, MAUREEN E.
 THORSON, ENBAR TOLEDANO.
                  ______________________

    Before MOORE, Chief Judge ∗, DYK, and REYNA, Circuit
                         Judges.
     Opinion for the court filed by Circuit Judge REYNA.
         Dissenting opinion filed by Circuit Judge DYK.
 REYNA, Circuit Judge.
     The American Cast Iron Pipe Company and other do-
 mestic producers of large diameter welded pipe appeal a
 judgment by the Court of International Trade involving
 certain price adjustments that were made in the course of
 an antidumping duty investigation. Appellee Borusan
 Mannesmann Boru Sanayi Ve Ticaret A.S. claims that it is
 entitled to a post-sale price adjustment based on the total
 value of penalties it paid for late delivery of product to a
 customer. The Court of International Trade agreed and re-
 manded to the U.S. Department of Commerce with instruc-
 tions to grant the claimed post-sale price adjustment and
 recalculate the resulting antidumping duty margins. On
 remand, the Department of Commerce granted the post-
 sale price adjustment, which produced a de minimis anti-
 dumping duty rate. This appeal followed. Because we

     ∗    Chief Judge Kimberly A. Moore assumed the posi-
 tion of Chief Judge on May 22, 2021.
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 BORUSAN MANNESMANN BORU SANAYI      v.                      3
 AMERICAN CAST IRON PIPE CO.

 conclude that the Department of Commerce’s original post-
 sale price adjustment was supported by substantial evi-
 dence and in accordance with law, we reverse.
                        BACKGROUND
     Generally, antidumping duty rates are determined by
 price comparison. The U.S. Department of Commerce
 (“Commerce”) compares the price of sales of the product un-
 der investigation that were made during the period of in-
 vestigation in both the home (foreign) market and in the
 U.S. market. The difference in the prices is referred to as
 the less than fair value margin. 19 U.S.C. § 1677f-1(d).
 The less than fair value margin is the basis for the estab-
 lishment of antidumping duty rates.
     Differences in circumstances of sale can affect the level
 of prices respectively in both the U.S. market and the (for-
 eign) home market, such as rebates, taxes, shipping, and
 fuel. Because of these differences in circumstances, prices
 must be adjusted to ensure an apples-to-apples compari-
 son. Torrington Co. v. United States, 68 F.3d 1347, 1352
 (Fed. Cir. 1995). Specifically, prices must be net of any
 “price adjustment.” 19 C.F.R. § 351.401(c). Because post-
 sale price adjustments 1 may significantly affect the level of
 antidumping duty margins, post-sale price adjustments
 are not permitted unless a party can show that it is entitled
 to the adjustment.
     This appeal involves whether Borusan Mannesmann
 Boru Sanayi Ve Ticaret A.S (“Borusan”) is entitled to a
 post-sale price adjustment. We start with the observation
 that the record indicates that if the post-sale price adjust-
 ment here is permitted, the antidumping duty margin falls

     1   A post-sale price adjustment is an “adjust[ment]
 due to differences in the circumstances of sales” made after
 a sale. NTN Bearing Corp. of Am. v. United States,
 295 F.3d 1263, 1267 (Fed. Cir. 2002).
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4                       BORUSAN MANNESMANN BORU SANAYI v.
                                AMERICAN CAST IRON PIPE CO.

 to a de minimis level, a zero margin. If the post-sale ad-
 justment is not permitted, Borusan could be subject to 5.11
 percent antidumping duty margin. Whether the post-sale
 price adjustment should be permitted in this case turns on
 the question of whether the circumstances underlying the
 adjustment were established and known to Borusan’s cus-
 tomer at the time the sale was made to the customer.
      Borusan is a Turkish producer of large diameter
 welded pipe (“LD WP”), a type of welded pipe used in the
 construction of oil and gas pipeline projects. J.A. 5092–94.
 On September 10, 2013, Borusan and two other Turkish
 LD WP producers (collectively, the “JVA members”) en-
 tered into a Joint Venture Agreement (“JVA”). J.A. 17,
 2277–80. Specifically, the JVA members entered into the
 JVA for the purpose of bidding on a pipeline project 2 in Tur-
 key, which would span hundreds of miles and required
 multiple sizes of LD WP. J.A. 2915–19. The three JVA
 members agreed to be jointly and severally liable for fail-
 ures to perform under the contract. J.A. 17, 22–23. Each
 member agreed to reimburse the other two for any dam-
 ages resulting from that specific member’s failure to fulfill
 its obligations. J.A. 2278.
     On March 3, 2014, the JVA members entered into a
 Consortium Agreement which, like the JVA, stated that
 the parties would be jointly and severally responsible and
 liable towards the client. J.A. 2286, 2903. The Consortium
 Agreement also provided that the parties would share
 equally in the award, if obtained, and would take equal
 shares of responsibility for fulfilling the requirements.
 J.A. 17. A copy of the original Consortium Agreement was
 sent to the client. J.A. 2904.

     2  The JVA referred to the pipeline project as the “cli-
 ent.” See J.A. 17.
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 AMERICAN CAST IRON PIPE CO.

     The JVA members were successful and won the bid on
 the gas pipeline project. On October 14, 2014, the JVA
 members and the client entered into a sales contract titled
 “Procurement Contract relating to the Supply of Line Pipes
 and Hot Bends” (“Sales Contract”). J.A. 2781. The Sales
 Contract incorporated the Consortium Agreement as Ap-
 pendix L. J.A. 2903–04. It did not, however, incorporate
 the JVA. Like the JVA and the Consortium Agreement,
 the Sales Contract provided that the three JVA members
 were jointly and severally liable to the client for damages
 resulting from the members’ failure to fulfill their obliga-
 tions. J.A. 2867–68.
     Under the Sales Contract, the JVA members agreed to
 provide 56” and 48” LD WP to the client per a set schedule.
 The parties subsequently amended the Sales Contract to
 change the amount of 56” LD WP required and to revise
 the delivery and completion schedule and pricing schedule.
 J.A. 4359. Due to delay, the JVA members incurred late
 delivery penalties for both 56” and 48” LD WP. See, e.g.,
 J.A. 4360.
     On June 9, 2017, after the JVA members delivered all
 the ordered 56” LD WP, the client notified the members
 that it sought an amount of money as a penalty for late de-
 liveries of 56” pipe. Id. The JVA members responded with
 a letter requesting that the client withdraw its damages
 demand, arguing that factors beyond the JVA members’
 control, including the client’s own procedural changes,
 caused the delivery delays. J.A. 4361.
     On September 6, 2017, after all ordered 48” pipe was
 delivered, the client notified the JVA members that it
 sought an additional amount as a penalty for late deliveries
 of the 48” pipe. Id. The members again responded the fol-
 lowing month in a letter asking the client to cancel its dam-
 ages demand, reiterating substantially the same
 arguments they had made with respect to the late delivery
 penalties for the 56” pipe. Id. Negotiations between the
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6                      BORUSAN MANNESMANN BORU SANAYI v.
                               AMERICAN CAST IRON PIPE CO.

 client and the JVA members regarding damages continued
 well into 2018.
      On January 17, 2018, the appellants, domestic produc-
 ers of LD WP, requested that Commerce and the U.S. In-
 ternational Trade Commission initiate antidumping duty
 investigations on U.S. imports of LD WP from Turkey. Pe-
 titioners alleged that the U.S. LD WP industry was mate-
 rially injured by sales of imports at less than fair value
 from six countries, including Turkey. 3 J.A. 85–92. Com-
 merce initiated an antidumping duty investigation in Feb-
 ruary 2018, covering a review period from January 1, 2017
 through December 31, 2017. J.A. 85–86 (Large Diameter
 Welded Pipe from Canada, Greece, India, the People’s Re-
 public of China, the Republic of Korea, and the Republic of
 Turkey: Initiation of Less-Than-Fair-Value Investigations,
 83 Fed. Reg. 7,154 (Feb. 20, 2018)).
     Commerce issued antidumping duty questionnaires to
 several Turkish producers of LD WP, including Borusan.
 In its initial questionnaire response dated April 23, 2018,
 Borusan claimed that it was entitled to a post-sale price
 adjustment to account for the late delivery penalties it had
 incurred in the pipeline project. J.A. 1216. Specifically,
 Borusan sought a post-sale price adjustment equal to the
 entire value of the penalty and represented that it had
 “agreed to pay its customer” that amount for a “disputed
 penalty for late delivery on sales.” Id. Borusan, however,
 had not yet made any penalty payment and, in fact, the
 JVA members including Borusan were still negotiating the
 penalty amount with the client. On May 28, 2018, the cli-
 ent responded to the JVA members’ July 2017 and October
 2017 letters stating that the client agreed that it had con-
 tributed to the delivery delays and accordingly lowered the

    3    The U.S. International Trade Commission’s partic-
 ipation in the ensuing underlying antidumping duty inves-
 tigation is not relevant to this appeal.
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 AMERICAN CAST IRON PIPE CO.

 penalties for both the 56” pipe and the 48” pipe. J.A. 4361.
 On June 11, 2018, after further discussions with the client,
 the JVA members agreed to the reduced penalty amounts.
 Id. That same day, the JVA members created a protocol
 that allocated the total penalty among the three members
 proportionally to each member’s responsibility for the de-
 lay. J.A. 3003. The JVA members further agreed Borusan
 would be responsible for the largest share of the total pen-
 alty (“final allocation”). J.A. 3004.
     On June 15, 2018, Borusan informed Commerce that it
 had reached an agreement with the client and the JVA
 members as to its final allocation of the penalty. J.A. 2230–
 31. Borusan further stated that the penalty was subject to
 an ongoing dispute among the JVA members, such that no
 final payment had been made, but the penalty was being
 allocated to the members proportionally to their share of
 responsibility, i.e., per the final allocation. J.A. 2230–32.
 Borusan explained:
     Under [the Sales Contract], the [JVA] members
     agreed to provide a designated quantity of various
     sizes and dimensions of LD pipe as a group. No
     individual agreements were made between [the cli-
     ent] and the [three] producers. The [JVA] members
     in the [Joint Venture Agreement] dated [Septem-
     ber 10, 2013] . . . agreed that each company would
     supply [one-third] of the total contracted quantity.
     [The client] was not a party to this agreement and
     considered the supply contract to be with [the JVA
     members as an entity]. The supply contract be-
     tween [the client and JVA members] includes a de-
     livery schedule with deadlines (guaranteed
     completion dates). Unfortunately, due to various
     reasons beyond their control, none of the members
     could fully comply with the contractual delivery
     schedule. The majority of the delay and the liqui-
     dated damages claim were due to delays by [Bo-
     rusan].
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8                       BORUSAN MANNESMANN BORU SANAYI v.
                                AMERICAN CAST IRON PIPE CO.

 J.A. 2231.
      On June 29, 2018, the JVA members and the client ex-
 ecuted a settlement agreement in which the members
 promised to pay the agreed-upon penalty amount. In ac-
 cordance with the Sales Contract, each JVA member was
 billed one-third of the penalty (“initial allocation”), but Bo-
 rusan assumed responsibility for its final allocation of the
 total penalty, a larger sum. J.A. 4362. The members
 signed a mutual release based on the settlement agree-
 ment. On July 6, 2018, Borusan filed the executed settle-
 ment agreement with Commerce. J.A. 5072–73. Of note,
 the original Sales Contract with the client was executed in
 October 2014, while this final allocation was established
 years after execution of the settlement agreement.
     On August 27, 2018, Commerce published a Prelimi-
 nary Determination, assigning Borusan an antidumping
 duty rate of 5.29 percent ad valorem. J.A. 3577 (Large Di-
 ameter Welded Pipe from the Republic of Turkey: Prelimi-
 nary Determination of Sales at Less Than Fair Value and
 Postponement of Final Determination, 83 Fed. Reg. 43,646,
 43,647 (Aug. 27, 2018)). In September 2018 in response to
 Commerce’s request, Borusan provided Commerce with
 sales verification documentation pertaining to Borusan’s
 payment of its share of the penalty to the client. J.A. 3580.
     On February 27, 2019, Commerce published its Final
 Determination in which Commerce rejected Borusan’s
 claimed post-sale price adjustment and assigned Borusan
 an antidumping duty rate of 5.11 percent ad valorem.
 J.A. 5092 (Large Diameter Welded Pipe from the Republic
 of Turkey: Final Determination of Sales at Less Than Fair
 Value, 84 Fed. Reg. 6,362 (Feb. 27, 2019)); J.A. 5101. Com-
 merce explained that, under its regulations, it “generally
 will not consider a price adjustment that reduces or elimi-
 nates dumping margins unless the party claiming such
 price adjustments demonstrates that the conditions of the
 adjustment were established and known to the customer at
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 AMERICAN CAST IRON PIPE CO.

 the time of sale.” J.A. 5071 (quoting Modification of Regu-
 lations Regarding Price Adjustments in Antidumping Duty
 Proceedings, 81 Fed. Reg. 15,641, 15,642 (Mar. 24, 2016)
 (“Modification”)). Commerce further explained that it con-
 siders a number of factors in determining whether a party
 has demonstrated entitlement to a post-sale price adjust-
 ment:
     (1) Whether the terms and conditions of the adjust-
         ment were established and/or known 4 to the
         customer at the time of sale, and whether this
         can be demonstrated through documentation;
     (2) How common such post-sale adjustments are
         for the company and/or industry;
     (3) The timing of the adjustment;
     (4) The number of such adjustments in the proceed-
         ing; and
     (5) Any other factors tending to reflect on the legit-
         imacy of the claimed adjustment.

     4   Although Commerce used the phrase “established
 and/or known” in other sections of the Modification, Com-
 merce requires that the terms and conditions be estab-
 lished and known. See Modification, 81 Fed. Reg. at 15,642
 (“Since enacting these regulations, the Department has
 consistently applied its practice of not granting [post-sale]
 price adjustments where the terms and conditions were not
 established and known to the customer at the time of sale.”
 (emphasis added)); id. (“[T]he Department generally will
 not consider a [post-sale] price adjustment that reduces or
 eliminates dumping margins unless the party claiming
 such [post-sale] price adjustment demonstrates that the
 terms and conditions of the adjustment were established
 and known to the customer at the time of sale.” (emphasis
 added)).
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                               AMERICAN CAST IRON PIPE CO.

 J.A. 5071 (quoting Modification, 81 Fed. Reg. at 15,644–
 45).
     Applying these factors, Commerce determined that Bo-
 rusan was entitled to a post-sale price adjustment for the
 penalties paid to the client. J.A. 5073. Commerce, how-
 ever, calculated the post-sale price adjustment on the basis
 of one-third of the full penalty amount (the initial alloca-
 tion) and not Borusan’s final allocation of the penalty. Id.
 Commerce used the one-third figure because it determined
 that the one-third allocation method was the allocation es-
 tablished and known to the client at the time of the sale.
 Commerce noted that the JVA members did not begin to
 negotiate the final allocation until after the date of sale,
 and the final allocation was not agreed upon until June
 2018. J.A. 5071–74, 5053. For these reasons, Commerce
 concluded, final allocation of the penalty among the JVA
 members could not have been established and known to the
 client at the time of sale. J.A. 5071–72.
     Commerce further explained that using the JVA mem-
 bers’ final allocation of the penalty would give Borusan an
 opportunity to manipulate the post-sale price adjustment
 “because the terms of the amount and allocation were not
 fixed at the time of sale and the consortium did not deter-
 mine the final apportionment until after the initiation of
 the investigation.” J.A. 5074. Commerce expressed con-
 cern about the legitimacy of the claimed adjustment be-
 cause Borusan, for example, “changed the amount of this
 adjustment, at times significantly, in its home market
 sales database, with little or no explanation”; had “pro-
 vided no exhibits, supporting documentation, or calcula-
 tion worksheets” for these modifications; and did not report
 the final amount of late delivery damages owed until a “lit-
 tle over a month before the Preliminary Determination.”
 J.A. 5072–73. Thus, consistent with the “terms and condi-
 tions of the adjustment [that] were established and known
 to the customer at the time of sale,” Modification, 81 Fed.
 Reg. at 15,644–45, Commerce determined a post-sale price
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 AMERICAN CAST IRON PIPE CO.

 adjustment based on the initial allocation (one-third of the
 total penalty), which it considered a “reasonable way to ad-
 dress” its concerns regarding any potential manipulation
 by Borusan, J.A. 5073–74.
      Borusan filed suit in the U.S. Court of International
 Trade (“CIT”) on May 2, 2019, pursuant to 19 U.S.C.
 § 1516a(a)(2)(A)(i)(II).   Borusan alleged, among other
 things, that Commerce had erroneously determined Bo-
 rusan’s post-sale price adjustment based on the one-third
 initial allocation rather than Borusan’s final allocation of
 the penalty. J.A. 8. Defendants-appellants also filed suit
 in the CIT, alleging that Commerce erred in its determina-
 tion that Borusan was entitled to any post-sale price ad-
 justment. J.A. 8, 16. Specifically, the appellants argued
 that Commerce should have applied an adverse inference
 based on “facts otherwise available” under 19 U.S.C.
 § 1677e to determine Borusan’s entitlement to an adjust-
 ment because Borusan was not forthcoming during the in-
 vestigation about circumstances involving the post-sale
 adjustment. J.A. 16. The CIT consolidated the two cases
 and both parties subsequently moved for judgment on the
 agency record. J.A. 8.
                          *   *   *
     On January 7, 2019, the CIT issued its decision sus-
 taining Commerce’s determination to grant Borusan a
 post-sale price adjustment. See J.A. 20. The CIT, however,
 concluded that Commerce erred by basing the post-sale
 price adjustment on the initial one-third allocation of the
 total penalty assumed by the three JVA members. J.A. 26–
 27, 35. The CIT noted that, prior to the sales in question,
 the JVA established that penalties for the JVA members’
 failure to perform under the contract would be apportioned
 among the JVA members based on their responsibility.
 J.A. 21–23. The CIT stated that the JVA was incorporated
 by reference into the Sales Contract, and therefore the cli-
 ent should be deemed aware of the JVA’s provisions
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                                AMERICAN CAST IRON PIPE CO.

 because that provision was established and known to the
 client at the time of sale. Id. The CIT further reasoned
 that it was only necessary that the “terms and conditions”
 be established at the time of sale, not the final amount ac-
 tually allocated to Borusan. J.A. 23.
     The CIT acknowledged Commerce’s concern about the
 potential for Borusan to manipulate the post-sale price ad-
 justment, but it rejected Commerce’s concern because
 “Commerce point[ed] to nothing that suggests an improper
 manipulation of the adjustment.” J.A. 26. The CIT con-
 cluded that Commerce “would have accepted the full pen-
 alty adjustment” had Borusan not been a party to the JVA.
 Id. The CIT remanded for Commerce to review the record
 and recalculate the post-sale price adjustment “for what-
 ever amount [Borusan] established it was liable for and ac-
 tually paid or was credited, as authorized by the pre-
 investigation contract obligations, unless Commerce has
 evidence not previously cited that shows” manipulation by
 Borusan. J.A. 26–27 (emphasis added).
     On March 9, 2020, Commerce issued its remand deter-
 mination. J.A. 5413. “Consistent with the [CIT’s] remand,
 and under protest,” Commerce granted Borusan a post-sale
 price adjustment based on Borusan’s final allocated share
 of the penalty. J.A. 5418–19. As a result, Borusan’s
 weighted-average dumping margin was reduced to a de
 minimis amount. J.A. 5413. As a result, Borusan’s anti-
 dumping duty margin dropped from 5.11 percent to zero.
 The CIT affirmed Commerce’s redetermination on May 22,
 2020. J.A. 36–49. This appeal followed. We have jurisdic-
 tion under 28 U.S.C. § 1295(a)(5).
                         DISCUSSION
                     Standard of Review
     This court reviews decisions of the CIT de novo and ap-
 plies the standard of review the CIT applies in its review of
 appeals of Commerce’s antidumping duty determinations.
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 See, e.g., PPG Indus., Inc. v. United States, 978 F.2d 1232,
 1236 (Fed. Cir. 1992). Under the applicable standard, we
 affirm a decision by Commerce where it is supported by
 substantial evidence and in accordance with the law.
 19 U.S.C. § 1516a(b)(1)(B)(i); Micron Tech., Inc. v. United
 States, 243 F.3d 1301, 1307–08 (Fed. Cir. 2001). “Substan-
 tial evidence” is “more than a mere scintilla” and is “such
 relevant evidence as a reasonable mind might accept as ad-
 equate to support a conclusion.” Ta Chen Stainless Steel
 Pipe, Inc. v. United States, 298 F.3d 1330, 1335 (Fed. Cir.
 2002). Reasonable minds may differ on the outcome, but
 “a determination does not fail for lack of substantial evi-
 dence on that account.” See, e.g., Pastificio Lucio Garofalo,
 S.p.A. v. United States, 783 F. Supp. 2d 1230, 1233 (Ct. Int’l
 Trade 2011) (citation and quotation omitted). To deter-
 mine if substantial evidence supports a decision by the
 CIT, we review the record as a whole, including evidence
 that adds to, and evidence that detracts from, the “substan-
 tiality of the evidence.” Ta Chen, 298 F.3d at 1335 (citation
 and quotation omitted).
     That highly deferential review standard recognizes
 Commerce’s special expertise in antidumping duty investi-
 gations. Heveafil Sdn. Bhd. v. United States, 58 F. App’x
 843, 847 (Fed. Cir. 2003). Commerce has “broad discretion
 in executing” antidumping law, Smith-Corona Grp. v.
 United States, 713 F.2d 1568, 1571 (Fed. Cir. 1983), and we
 afford “tremendous deference” to Commerce’s administra-
 tion of those laws, id. at 1582. As we explained in Fujitsu
 Gen. Ltd. v. United States:
     Antidumping and countervailing duty determina-
     tions involve complex economic and accounting de-
     cisions of a technical nature, for which agencies
     possess far greater expertise than courts. This def-
     erence is both greater than and distinct from that
     accorded the agency in interpreting the statutes it
     administers, because it is based on Commerce’s
     technical expertise in identifying, selecting and
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                                 AMERICAN CAST IRON PIPE CO.

      applying methodologies to implement the dictates
      set forth in the governing statute, as opposed to in-
      terpreting the meaning of the statue itself where
      ambiguous.
 88 F.3d 1034, 1039 (Fed. Cir. 1996) (citations omitted).
 Factual determinations supporting antidumping margins
 are thus “best left to the agency’s expertise,” F.lli De Cecco
 Di Filippo Fara S. Martino S.p.A. v. United States, 216
 F.3d 1027, 1032 (Fed. Cir. 2000), so we review those deter-
 minations for substantial           evidence,    19 U.S.C.
 § 1516a(b)(1)(B)(i).
                           *   *    *
     Commerce determines sales price in antidumping duty
 calculations net of any post-sale price adjustment that is
 reasonably attributable to sale of the subject merchandise
 made during the applicable period of investigation.
 19 U.S.C. § 351.401(c). The CIT has recognized that post-
 sale price adjustments, as in this case, present opportunity
 for manipulation by investigated parties, which arises from
 “the possibility that companies would grant rebates after it
 became known that certain sales would be subject to [anti-
 dumping duty] review, thus decreasing an already estab-
 lished sales price, and thus decreasing margins.” China
 Steel Corp. v. United States, 393 F. Supp. 3d 1322, 1347
 (Ct. Int’l Trade 2019). To avoid such manipulation, Com-
 merce’s regulations provide that an investigated party
 seeking a post-sale price adjustment must prove that “buy-
 ers were aware of the conditions to be fulfilled and the ap-
 proximate amount of the rebates at the time of sale.” Id.
 (internal citation and quotation omitted).
      We hold that Commerce’s original Final Determination
 that Borusan was entitled to a post-sale price adjustment
 based on the one-third initial allocation agreed to by the
 JVA members because the one-third allocation was known
 and established at the time of sale is supported by substan-
 tial evidence and in accordance with the law.
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     Commerce determined that the circumstances sur-
 rounding the timing of the agreement allocating the total
 penalty fee weighed against valuing the post-sale price ad-
 justment based on the full amount of Borusan’s final pen-
 alty allocation. We agree. In its Final Determination,
 Commerce specifically analyzed whether the JVA mem-
 bers’ allocation of the total penalty fee was established and
 known to the client at the time of sale. J.A. 5071–72; see
 also Large Diameter Welded Pipe from the Republic of Tur-
 key: Final Determination of Sales at Less Than Fair Value,
 84 Fed. Reg. 6,362 (Feb. 27, 2019). Commerce determined
 that the final allocation method was not established or
 known to the client “because the parties negotiated their
 shares of the fee after the fee was imposed.” J.A. 5072.
 Although the client was aware that the three members
 would eventually evenly split responsibility for any dam-
 ages, the client was not aware of the method the JVA mem-
 bers actually adopted. Commerce reached this conclusion
 based not only on the timeline of the contracts, but also be-
 cause Borusan repeatedly changed its claimed post-sale
 price adjustment amount during the investigation without
 providing “exhibits, supporting documentation, or calcula-
 tion worksheets,” instead relying “only [on] vague state-
 ments.” Id. Commerce stated that the changing terms
 after the initiation of the investigation cast “significant
 doubt on the legitimacy of the allocation.” Id.
     Borusan admitted that the JVA members’ agreement
 on the penalty allocation did not materialize until June
 2018, “well after the initiation of this investigation.” Id.
 (noting that the investigation was initiated on January 17,
 2018, and the penalty was not finalized until June 2018).
 Commerce found that only after the final penalty amount
 was determined “did the [JVA] members apportion among
 themselves the penalties for which each [JVA] member was
 responsible.” Id. Indeed, the JVA members “negotiated
 their shares of the fee after the fee was imposed.”
 J.A. 5071–72.
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 16                     BORUSAN MANNESMANN BORU SANAYI v.
                                AMERICAN CAST IRON PIPE CO.

      Commerce’s determination that the final allocation
 was not established and known to the client at the time of
 sale is supported by substantial evidence. Only the JVA—
 not the Consortium Agreement or the Sales Contract—pro-
 vided that any penalties the JVA members incurred would
 be reimbursed by the party failing to fulfill its obligations.
 J.A. 2278. The client was not a party to the JVA, J.A. 2231
 (Borusan admitting that the client “was not a party to [the
 joint venture] agreement”); the client did not receive the
 full JVA, J.A 2776, 2903–04; Opening Br. 17–19; and the
 client was not informed of the final allocation method prior
 to the investigation, Response Br. at 14 (“[N]either the
 Sales Contract nor the Consortium Agreement documents
 addressed at all the issue of allocation.”). The CIT incor-
 rectly concluded that “[t]he Sales Contract expressly incor-
 porates the [JVA] by reference,” J.A. 21–23, when in fact it
 was the Consortium Agreement, Appendix L, not the JVA,
 that was incorporated by reference into the Sales Contract.
 J.A. 2903–04 (the Consortium Agreement, Appendix L to
 the Sales Contract). The Consortium Agreement does not
 provide that the parties would apportion the penalties
 among themselves according to blame or reimburse one an-
 other. Rather, the Consortium Agreement incorporated
 into the Sales Contract assigns each JVA member a one-
 third share of responsibility and provides that the JVA
 members shall be jointly and severally liable towards the
 client. Id.; Response Br. 14. Thus, the client did not have
 before it the provisions in the JVA regarding apportion-
 ment by blame and therefore could not have known at the
 time of sale of those provisions. That the client understood
 that allocation among the JVA members would be in equal
 shares is supported by the record evidence that the client
 billed all three JVA members an equal share of the total
 penalty. J.A. 5173.
     Commerce’s determination of the post-sale price ad-
 justment was also in accordance with law. See Modifica-
 tion, 81 Fed. Reg. at 15,645. We disagree that there must
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 BORUSAN MANNESMANN BORU SANAYI      v.                    17
 AMERICAN CAST IRON PIPE CO.

 be actual manipulation of post-sale price adjustment data
 in order for Commerce to reject a proposed post-sale price
 adjustment. Commerce’s regulation speaks to potential,
 not actual, manipulation of data. To be clear, this does not
 mean that Commerce can or must reject a proposed post-
 sale price adjustment solely upon a showing of potential
 manipulation. Whether or not to accept a proposed post-
 sale price adjustment must be based, as it is in this case,
 on the circumstances surrounding the proposed post-sale
 price adjustments. Here, Commerce determined, in the
 course of applying the proper factors provided in its regu-
 lations, that a potential existed for manipulating the post-
 sale price adjustment because the claimed adjustment was
 not tethered to what was established and known to the cli-
 ent at the time of sale. Consistent with its legitimate goal
 of avoiding such manipulation, Commerce correctly set the
 post-sale price adjustment in a reasonable manner, based
 on evidence that existed at the time of sale, that addressed
 its manipulation concerns. J.A. 5073–54. Commerce’s de-
 termination is supported by substantial evidence, and we
 find no reason to disturb that determination.
                        CONCLUSION
     We hold that Commerce’s Final Determination assign-
 ing Borusan one-third the full penalty in the post-sale price
 adjustment calculation and a 5.11 percent antidumping
 duty rate was supported by substantial evidence and in ac-
 cordance with the law. Accordingly, we reverse the CIT’s
 judgment to the contrary. The court has considered the
 parties’ remaining arguments and does not find them per-
 suasive.
                        REVERSED
                            COSTS
 No costs.
Case: 20-2014   Document: 40       Page: 18   Filed: 07/20/2021

    United States Court of Appeals
        for the Federal Circuit
                  ______________________

     BORUSAN MANNESMANN BORU SANAYI VE
                TICARET A.S.,
               Plaintiff-Appellee

                    UNITED STATES,
                       Defendant

                             v.

   AMERICAN CAST IRON PIPE COMPANY, BERG
  STEEL PIPE CORP., BERG SPIRAL PIPE CORP.,
        DURA-BOND INDUSTRIES, STUPP
      CORPORATION, INDIVIDUALLY AND AS
     MEMBERS OF THE AMERICAN LINE PIPE
   PRODUCERS ASSOCIATION, GREENS BAYOU
  PIPE MILL, LP, JSW STEEL (USA) INC., SKYLINE
    STEEL, TRINITY PRODUCTS LLC, WELSPUN
               TUBULAR LLC USA,
                Defendants-Appellants
               ______________________

                        2020-2014
                  ______________________

     Appeal from the United States Court of International
 Trade in Nos. 1:19-cv-00056-JAR, 1:19-cv-00080-JAR, Sen-
 ior Judge Jane A. Restani.
                  ______________________

 DYK, Circuit Judge, dissenting.
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 2                      BORUSAN MANNESMANN BORU SANAYI v.
                                AMERICAN CAST IRON PIPE CO.

     As the United States Court of International Trade
 (Trade Court) held, I think that the Department of Com-
 merce’s decision here was not supported by substantial ev-
 idence and, on its face, was arbitrary and capricious. I
 respectfully dissent.
                               I
      In antidumping proceedings, the prices used by Com-
 merce to calculate normal value are subject to several ad-
 justments.      See 19 C.F.R. § 351.401(b).       One such
 adjustment is a price adjustment, which is defined as “a
 change in the price charged for subject merchandise or the
 foreign like product, such as a discount, rebate, or other
 adjustment, including, under certain circumstances, a
 change that is made after the time of sale . . . , that is re-
 flected in the purchasers net outlay.” Id. § 351.102(b)(38)
 (citing id. § 351.401(c)). When determining normal value
 on the basis of home-market sales prices, Commerce “nor-
 mally will use a price that is net of price adjustments . . .
 that are reasonably attributable to the subject merchan-
 dise or the foreign like product (whichever is applicable).”
 Id. § 351.401(c). However, Commerce “will not accept a
 price adjustment that is made after the time of sale unless
 the interested party demonstrates, to the satisfaction of
 [Commerce], its entitlement to such an adjustment.” Id.
      Commerce adopted “a non-exhaustive list of factors
 that it may consider in determining whether to accept a
 price adjustment that is made after the time of sale.” Mod-
 ification of Regulations Regarding Price Adjustments in
 Antidumping Duty Proceedings, 81 Fed. Reg. 15,641,
 15,641 (Mar. 24, 2016). Commerce concluded that,
     [i]n determining whether a party has demon-
     strated its entitlement to such an adjustment, the
     Department may consider: (1) Whether the terms
     and conditions of the adjustment were established
     and/or known to the customer at the time of sale,
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 BORUSAN MANNESMANN BORU SANAYI        v.                      3
 AMERICAN CAST IRON PIPE CO.

     and whether this can be demonstrated through
     documentation; (2) how common such post-sale
     price adjustments are for the company and/or in-
     dustry; (3) the timing of the adjustment; (4) the
     number of such adjustments in the proceeding; and
     (5) any other factors tending to reflect on the legit-
     imacy of the claimed adjustment. The Department
     may consider any one or a combination of these fac-
     tors in making its determination, which will be
     made on a case-by-case basis and in light of the ev-
     idence and arguments on each record.
 Id. at 15,644–45. The purpose of the rule, as applied here,
 is to avoid manipulation. Id. at 15,644 (“These final modi-
 fications continue to . . . prevent the potential manipula-
 tion of dumping margins through certain post-sale price
 adjustments.”). The concern with manipulation arises be-
 cause decreases in the home-market price (normal value)
 as a result of a downward price adjustment reduce the
 magnitude of dumping.
                                II
      To understand the arbitrary nature of Commerce’s de-
 cision in this case, it is necessary to briefly describe the un-
 derlying facts. This case centers around the sale of
 large-diameter pipe to construct a pipeline in Turkey. On
 September 10, 2013, almost four-and-a-half years prior to
 the filing of the petition for the antidumping investigation,
 Borusan Mannesmann Boru Sanayi Ve Ticaret A.S. and
 two other suppliers signed a joint venture agreement form-
 ing a consortium to bid on a solicitation for large-diameter
 pipe. In this agreement, each of the consortium members
 agreed to be responsible for any damages payments to the
 customer stemming from the pipeline project contract that
 was caused by that individual member’s failure to perform
 its obligations. Each party was responsible for about one-
 third of the deliverables.
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 4                      BORUSAN MANNESMANN BORU SANAYI v.
                                AMERICAN CAST IRON PIPE CO.

     Shortly thereafter, on October 14, 2014, over three
 years prior to the filing of the petition for antidumping in-
 vestigation, the consortium members entered into the sales
 agreement with the customer for the pipes. This agree-
 ment included a liquidated damages clause (governing the
 delayed delivery of goods), a joint and several liability
 clause, and a summary of the consortium’s 2013 joint ven-
 ture agreement (titled, “Consortium Agreement”), among
 other provisions. The summary did not address how the
 consortium members planned to split any damages flowing
 from breach of the customer agreement. The liquidated
 damages clause required the consortium to pay the cus-
 tomer an established penalty rate for each day that the de-
 livery of goods was delayed. The joint and several liability
 clause stated that the consortium members were jointly
 and severally responsible for the obligations under the
 sales agreement.
      On June 9, 2017, and September 6, 2017, prior to the
 initiation of the antidumping investigation, the customer
 informed the consortium that, based on delayed deliveries,
 it calculated that the consortium owed it millions of dollars
 in damages stemming from the sales agreement’s liqui-
 dated damages clause. Commerce initiated the present in-
 vestigation on February 9, 2018. On May 28, 2018, the
 customer adjusted its demand downward by about 50% of
 the original total. Following receipt of the lowered de-
 mand, the customer and the consortium reached an agree-
 ment to settle the liquidated damages claim for an even
 lesser amount on or around June 11, 2018, and on that
 same day, the consortium members agreed to a protocol di-
 viding the customer’s damages claim based on the delay
 caused by each consortium member as they had agreed in
 their joint venture agreement. Borusan was responsible
 for more than one-third of the liquidated damages because
 it was responsible for more than one-third of the late deliv-
 eries. The required payments to the customer were made
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 BORUSAN MANNESMANN BORU SANAYI       v.                     5
 AMERICAN CAST IRON PIPE CO.

 in late June 2018, and Borusan reimbursed its joint-ven-
 ture partners in early July 2018. On August 20, 2018,
 Commerce issued its preliminary determination decision
 memorandum.
                              III
     Commerce determined that, while Borusan was enti-
 tled to a post-sale price adjustment equal to one-third of
 the amount paid to the customer, Borusan was not entitled
 to the amount that it actually paid (over twice the one-third
 amount) by virtue of its agreement with its joint venture
 partners. If Commerce had granted the post-sale adjust-
 ment as claimed by Borusan in the first instance, Borusan
 would have had a de minimis dumping margin (as evi-
 denced by Commerce’s decision on remand).
      Commerce did not rely on factors (2), (3), and (4) of the
 rule in rejecting the claimed adjustment. There is no sug-
 gestion that that the type of liquidated damages penalty at
 issue here (delay damages) would be uncommon in this in-
 dustry (factor (2)); the timing the adjustment itself was not
 suspect (factor (3)); and this was the only adjustment (fac-
 tor (4)). Commerce’s decision relying on the other two fac-
 tors is without a reasonable basis for at least three reasons.
     First, Commerce denied Borusan’s claimed post-sale
 price adjustment as inappropriate because the adjustment
 was not determined in the customer agreement (factor (1)).
 But Commerce failed to explain why there was any rele-
 vant difference between a sales agreement with a customer
 and a consortium agreement among suppliers. In anti-
 dumping investigations, like all other areas of agency ac-
 tion, “it is well-established that ‘an agency action is
 arbitrary when the agency offer[s] insufficient reasons for
 treating similar situations differently.’” SKF USA Inc. v.
 United States, 263 F.3d 1369, 1382 (Fed. Cir. 2001) (alter-
 ation in original) (quoting Transactive Corp. v. United
 States, 91 F.3d 232, 237 (D.C. Cir. 1996)). Commerce’s
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 6                      BORUSAN MANNESMANN BORU SANAYI v.
                                AMERICAN CAST IRON PIPE CO.

 rationale for distinguishing between the two agreements
 here was completely unexplained.
     In particular, Commerce provided no rationale as to
 why the consortium agreement between suppliers, as com-
 pared to the agreement between the suppliers and the cus-
 tomer, was more susceptible to manipulation and thus
 should be discounted. Much like the sales agreement with
 the customer, which was signed over three years prior to
 the antidumping investigation, Borusan and the other two
 suppliers signed the consortium agreement over four years
 before the antidumping investigation. The terms of the
 consortium agreement as signed could not be, and were
 not, changed as a result of the investigation.
     Second, Commerce’s suggestion that the amount paid
 by Borusan was suspect (factor (5))—because it was not cal-
 culated until the investigation began—is inconsistent with
 Commerce’s willingness to accept a post-investigation cal-
 culation of the amount paid to the customer as “legitimate,”
 J.A. 5073, even though calculated after the proceeding be-
 gan. In each case, the principle governing the calculation
 was established before the proceeding began.
      Third, contrary to the majority’s conclusion, the record
 does not support Commerce’s characterization that the
 changing terms of Borusan’s requested price adjustment
 was somehow suspicious (factor (5)). Commerce concluded
 that “[t]he changing terms of the late penalty fee after the
 initiation of the investigation cast[] significant doubt on
 the legitimacy of the allocation of this expense among the
 consortium members.” Id. at 5072. The timeline, however,
 simply shows that Borusan was negotiating the liquidated
 damages penalty that led to the requested adjustment with
 its customer in an attempt to reduce the penalty as the in-
 vestigation was ongoing and periodically reported this to
 Commerce. This reduction resulted in a higher normal
 value, which would have been unfavorable to Borusan in
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 BORUSAN MANNESMANN BORU SANAYI    v.                    7
 AMERICAN CAST IRON PIPE CO.

 the antidumping proceeding. The amount of Borusan’s re-
 quested adjustment changed because the customer’s de-
 mand changed and because Borusan did not reach a
 settlement agreement with the customer until on or around
 June 11, 2018.
     Commerce also faults Borusan because it “did not file
 the final settlement agreement until July 6, 2018, which
 was little over a month before the Preliminary Determina-
 tion.” Id. at 5072–73. This ignores that Borusan did not
 reach a final settlement agreement with the customer until
 around mid-June and did not make the payment required
 by the settlement to the customer until late June 2018.
 There was no delay in providing Commerce with the rele-
 vant information. And, as emphasized by the Trade Court,
 Commerce “independently verified [Borusan’s] post-sale
 price adjustment based upon information that [Borusan]
 placed on the record.” Id. at 25.
                       CONCLUSION
    In my view, Commerce’s determination that Borusan
 was not entitled to a post-sale price adjustment in the
 amount claimed was not supported by substantial evidence
 and was arbitrary and capricious. I respectfully dissent.