Trade Court Upholds Use of Likely Selling Price to Value COP of Non-Prime Goods in CTL Plate AD Case

The Court of International Trade on June 23 upheld the Commerce Department's use of exporter Dillinger Huttenwerke's likely selling price, taken from its books, to value the cost of production of its non-prime merchandise in an antidumping investigation. Judge Leo Gordon said the company's failure to fill the record with actual COP data for the non-prime products in the AD case on steel cut-to-length plate from Germany justified the agency's decision to use the likely selling price as a fill-in.

Gordon also upheld Commerce's use of partial adverse facts available on exporter Salzgitter due to its failure to report around 28,000 downstream sales. However, Gordon sent back the agency's rejection of Dillinger's proposed quality code for sour transport plate as part of the agency's model-match methodology since the methodology was rejected by a previous court opinion.

In the case, Gordon previously remanded Commerce's use of likely selling price to value the COP of non-prime plate to bring it in line with Dillinger France v. U.S., in which the U.S. Court of Appeals for the Federal Circuit said Commerce must find the actual COP for prime and non-prime plate. However, Commerce stuck to its guns, and explained that using likely selling price as Dillinger does in its books and records is "not only the best available information on the record, but also ensures that the reported costs reasonably reflect the cost of producing both prime and non-prime products" (see 2212150081). Dillinger acknowledged that its method of using the actual COP for non-prime plate would involve the use of an "average," but continued to claim that its data is best since it relies on actual costs.

Gordon ruled that Dillinger's position fails to show that Commerce "acted unreasonably in finding that" the company values non-prime goods at their likely selling price. "In light of this finding based on Dillinger’s questionnaire response, coupled with Dillinger’s failure to put data corresponding to the actual cost of production of non-prime products on the record, the court sustains Commerce’s use of the likely selling price information to value the cost of production of non-prime products as a reasonable application of facts otherwise available," the opinion said.

Dillinger argued against the use of likely selling price by claiming that the agency is applying an adverse inference that illegally shifts costs from non-prime to prime plate, bumping the margin. "Dillinger’s naked assertion that Commerce is applying an adverse inference lacks any basis beyond the fact that Commerce’s selection of facts otherwise available ultimately resulted in an increase in Dillinger’s calculated dumping margin," Gordon replied.

Salzgitter, the exporter that received a 22.9% margin while Dillinger got 4.98%, took umbrage at Commerce's use of partial AFA on it in the investigation related to the company's non-disclosure of around 28,000 downstream sales. Salzgitter said Commerce compared the scope of its and Dillinger's non-disclosures inconsistently, claiming that if Commerce only looked at sales needed for home market comparisons, there would be little difference between the firms. The agency said that without this data, it could not approximate what the exporter's dumping margin would be.

Gordon ruled that the company Salzgitter to show that its three alternatives -- treating none of the sales as Salzgitter-made plate, treating all sales as Saltzgitter-made plate or treating a portion of each sale as Salzgitter-made plate -- gave a reliable read on what its margin would be if the company fully disclosed all requested information. "Since Salzgitter did not provide any additional information to show that one of these alternative methodologies constituted the only reasonable path forward on this record, the court again concludes that Commerce acted reasonably in rejecting those proposed alternatives," the judge said.

Salzgitter also claimed that Commerce violated the law by picking the highest non-aberrational net price. "Beyond generally decrying the unreasonableness of Commerce's selected AFA sale price, Salzgitter fails to suggest an alternative basis for an AFA sale price that would instead be the one and only reasonable option on the record," Gordon said, adding that the comapny did not show how Commerce "exceeded the bounds of reasonableness here."

The court lastly addressed the rejection of Dillinger's proposed quality code for sour transport plate as part of the model-match methodology. Gordon noted that this exact methodology was remanded by the trade court in Bohler Bleche v. U.S., where the trade court found that Commerce failed to adequately account for the alloy content of specialized high alloy steel goods, thus failing to account for serious differences in physical characteristics, costs and price. Gordon sent the case back so the opinion could be considered, given that it came out after the government readied its reply brief.

(AG der Dillinger Huttenwerke v. United States, Slip Op. 23-94, CIT Consol. # 17-00158, dated 06/23/23; Judge: Leo Gordon; Attorneys: Marc Montalbine of deKieffer & Horgan for plaintiff AG der Dillinger Hüttenwerke; Ron Kendler of White & Case for consolidated plaintiffs led by Ilsenburger Grobblech; Kara Westercamp for defendant U.S. government; Jeffrey Gerrish of Schagrin Associates for defendant-intervenor SSAB Enterprises; and Stephanie Bell of Wiley Rein for defendant-intervenor Nucor Corp.)