SeAH Urges CIT to Reconsider Use of 'd' Test After Appeals Court Decision

The Court of International Trade should reconsider its decision upholding the Commerce Department's differential pricing analysis in an antidumping duty review given the U.S. Court of Appeals for the Federal Circuit's decision calling the use of a statistical test underpinning the analysis into question, plaintiff SeAH Steel Corp. argued in a Sept. 26 motion. SeAH said the opinion also should be revisited over its move to uphold Commerce's inclusion of SeAH's inventory valuation losses as general and administrative (G&A) expenses (SeAH Steel Corp. v. United States, CIT Consol. #19-00086).

The case concerns the 2016-17 administrative review of the antidumping duty order on oil country tubular goods from South Korea. In April 2021, CIT found in Stupp Corp. v. U.S. that Commerce's DPA was lawful. But in July 2021, the Federal Circuit raised questions over the use of the Cohen's d statistical test relied upon in the DPA. The appellate court said that evidence called into question the use of the test since it violated the key statistical assumption of normality, observation size and roughly equal variances (see 2107150032). Litigation over whether these assumptions need to be upheld in Commerce's use of the Cohen's d test continues in various CIT cases.

In its reconsideration motion, SeAH said that given this opinion, the trade court should reconsider its decision because, despite the fact that the Stupp decision concerned a different product, the reasoning is the same. "While the factual record of this case may differ from that of the proceeding that gave rise to the Stupp decision, it is Commerce’s DPA methodology, which was applied in both proceedings, that was called into question by the CAFC," the brief said. "Because this Court is bound by precedents set forth by the Court of Appeals for the Federal Circuit, it must reconsider its April 2021 decision sustaining Commerce’s DPA and rescind that aspect of its April 2021 decision and remand the case for Commerce to further explain or reconsider its application of DPA."

SeAH said the court should also reconsider its decision to uphold the inclusion of inventory valuation loss allowances in SeAH's cost calculations. The respondent said that it is undisputed that its cost calculations reflected the full cost of the raw-materials and work-in-process inventories used in making the subject goods. Given this, Commerce double counted SeAH's actual cost of materials by including the inventory-valuation losses, the exporter said.

"In sustaining Commerce’s decision on this issue, the Court relied on Commerce’s flawed explanation of SeAH’s account of how SeAH’s cost of materials was reported," the brief said. "... Because SeAH reported full historical cost of the raw-materials and work-in-process inventories used in production which necessarily reflected the full cost of the inventories used in production, including any inventory-valuation adjustments and inventory-valuation losses recorded for those inventories before the inventories were used, Commerce’s inclusion of inventory valuation loss in SeAH’s cost resulted in impermissible double-counting. This Court, therefore, should reconsider and reverse its affirmance of Commerce’s decision."