CAFC Continues 1 Case Over PMS Adjustment to Sales-Below-Cost Test Despite 'Hyundai' Decision

The U.S. Court of Appeals for the Federal Circuit in a July 12 order lifted a stay in an antidumping duty case concerning whether the Commerce Department can make a particular market situation adjustment to the sales-below-cost test, despite its recent decision in Hyundai Steel Co. v. U.S., which said that Commerce cannot make a PMS adjustment to the sales-below-cost test (see 2112100039) (Saha Thai Steel Pipe Public Co. v. United States, Fed. Cir. #22-1175).

After Hyundai Steel was decided by the Federal Circuit, AD petitioner Wheatland Tube had to decide whether or not to petition the Supreme Court to hear the case. After Wheatland failed to file a writ of certiorari with the nation's highest court, the petitioner moved to voluntarily dismiss a number of cases seeking to defend Commerce's ability to make a PMS adjustment to the sales-below-cost test. However, in this one case, Wheatland said that the Hyundai Steel decision does not fully settle the case's issues.

While the court said in Hyundai Steel that Commerce cannot make a PMS adjustment when conducting the sales-below-cost test, the court pointed out scenarios where a cost-based PMS could be addressed by Commerce, the petitioner said in a brief filed with the Federal Circuit (see 2206280063). During the first remand period at the Court of International Trade in this case, Commerce sought one of these exceptions.

In particular, the Hyundai Steel court said that Commerce cannot make a PMS adjustment where normal value was based on home market prices but that the statute gives Commerce the power to address home market sales affected by a PMS while still passing the sales-below-cost test by finding that those sales don't allow for a proper comparison with export price, Wheatland argued. In the present case, Commerce said that the home market sales were outside the ordinary course of trade, given the cost-based PMS, basing normal value on constructed value.