Trade Court Upholds Use of Invoice Date, Not Contract Date, as Date of Sale for AD Respondents

The Court of International Trade on April 4 upheld the Commerce Department's use of the invoice date rather than the contract date for the date of sale for respondents Kaptan Demir and Colakoglu Metalurji in the 2020-21 review of the antidumping duty order on steel concrete reinforcing bar from Turkey.

Commerce supported its decision to use the invoice date, in part, by referring to information submitted by the respondents from the prior review on the date of sale. Kaptan and Colakoglu said this reliance was inappropriate, while the U.S. said that by putting their information on the record in the past review, that information is "considered part of the evidentiary record of this review."

Judge Jane Restani agreed with the government, finding that the exporters "have not cited any statute, regulation, or binding court precedent that prevents Commerce from adding information from a prior review to the administrative record of a new review." Here, the agency didn't use the information to make an "independent factual determination" but to "provide context" to the exporters' responses "stating that their sales process had not changed since the prior review."

Kaptan and Colakoglu said in their questionnaire responses that the material terms of sale can change between the contract date and invoice date, and Commerce used these concessions to bar a finding that "the material terms of the sale were fixed at the contract date." The exporters said that the "determinative factor is whether the material terms changed, not whether the terms could have changed."

Restani noted that the agency "has decided cases both ways" in the past and that, per the terms of the contracts at issue here, "a seller retains significant discretion to adjust the line-item quantities, resulting in a wide variety of product mixes to be shipped under the same contract." As a result, the judge said, "the court is hard-pressed to consider the material term of quantity to be 'firmly established' at this point regardless of whether the contract maintains a consistent aggregate quantity."

That doesn't bar a finding that the materials terms were fixed at the contract date, the judge noted, since there are "some scenarios" where the agency "found the presence" of "an unutilized tolerance" included in boilerplate language of which the parties were unaware or where the tolerance is "extremely small" to not impact the sale's material terms. "Here Commerce did not find those scenarios to be present," the opinion said. The exporters' reference to "post-contract amendments" does nothing to indicate "that the parties were unaware of the tolerances, nor information that the tolerances were de minimis," the judge said.

"Parties may take actions for a number of reasons, and the acceptance of a good that does not meet contract parameters could be entirely unrelated to whether that parameter is a material term," Restani said. As a result, it's "reasonable" for Commerce to presume that the existence of a tolerance in contract language "implies that changes to quantity regularly occur and that the material terms are not settled until the invoice date."

Kaptan and Colakoglu also argued that the "material terms of the contract did not change as the aggregate quantity remained stable." The judge said that the exporters "cite no binding precedent for the proposition that the material term of quantity only refers to aggregate quantity." In fact, the court noted that it has previously said that the agency was "reasonable in treating a change in a line-item quantity within a tolerance as a change in a material term."

And the exporters said Commerce failed to explain its decision to buck its established practice of setting the date of sale as the time when there was a "meeting of the minds." The court said that to rebut the agency's pick of the invoice date, the companies must show that the alternative date is the "only reasonable one" -- something the companies failed to do.

"Each of the grounds listed by Commerce reasonably support using the invoice date," the opinion said. "Respondents reference no additional factors, instead choosing to double down on their argument that the material terms did not change between the contract date and invoice date."

(Kaptan Demir Celik Endustrisi ve Ticaret v. United States, Slip Op. 24-39, CIT # 23-00059, dated 04/04/24; Judge: Jane Restani; Attorneys: Leah Scarpelli of ArentFox Schiff for plaintiffs led by Kaptan Demir; Sosun Bae for defendant U.S. government; Maureen Thorson of Wiley Rein for defendant-intervenor Rebar Trade Action Coalition)