Federal Circuit Rejects Panel Rehearing Motion on Freight Revenue Cap for US Price in AD Reviews

The U.S. Court of Appeals for the Federal Circuit rejected South Korean steel exporter SeAH Steel Corp.'s bid for a panel rehearing on the appellate court's ruling that found that the Commerce Department's practice of capping freight revenue when calculating U.S. price was reasonable (Nexteel Co., Ltd. v. United States, CAFC # 21-1334).

The case concerns the second administrative review of the antidumping duty order on oil country tubular goods from South Korea in which SeAH served as a mandatory respondent. SeAH argued that in AD reviews, Commerce traditionally includes the full amount charged for transportation services in the starting price for U.S. price calculations, then deducts the actual cost incurred by the seller in providing those services when calculating the net U.S. price. Recently, though, Commerce tweaked the practice for separately invoiced transport services.

In the practice contested by SeAH, Commerce deducts the actual transport costs incurred by the seller from the U.S. price but now limits the upward adjustment to U.S. price for the separately charged transport services, capping this adjustment by the amount of the cost incurred by the seller. The agency deducts losses incurred on these services while ignoring profit. In a March opinion, the Federal Circuit found this practice reasonable (see 2203110044).

SeAH then moved for a panel rehearing, arguing that the court erred in only considering whether the issue was reasonable since the exporter argued that it directly violates the language of the statute. SeAH said that the statute only permits an adjustment for freight when the starting price itself includes freight. This argument fell short, though, with the Federal Circuit denying the petition for panel rehearing and rehearing en banc. The mandate in the case will be issued June 2.