German Steel Plate Exporter Brings Case to CAFC After Four CIT Remands

After four remands in the Court of International Trade (see 2312210054), a German exporter of steel used to transport corrosive materials filed its opening bid with the U.S. Court of Appeals for the Federal Circuit on June 21. The company, AG der Dillinger Huttenwerke, claimed the Commerce Department wrongly used one of its products’ selling prices as a substitute for its costs of production, which amounts to “circular reasoning" (AG Der Dillinger Huttenwerke v. U.S., Fed. Cir. # 24-1498).

Dillinger, which brought its initial case to CIT in 2017, identified two main issues it was bringing the appeal. First, it said Commerce wrongly adjusted the reported costs of production “by reducing the reported costs of non-prime plate to the average selling price of the non-prime plate and shifting the remaining costs to the costs of producing prime plate.” Second, it contested Commerce’s decision to not “account for commercially significant differences” between standard steel vessel plate and sour service pressure vessel plate, used to store sour, or corrosive, petroleum products.

The trade court initially sustained the department's decision not to consider the differences between separate product types (see 2108180046), the exporter said. And after two remands, CIT also let Commerce make the substitution for Dillinger’s non-prime plates’ costs of production (see 2306230054).

First, Commerce wrongly shifted production costs from one type of plate to another even though that is against the law, as has been shown in two other CAFC cases, the exporter argued. It said CAFC has previously found that “reducing a product’s cost of production to that product’s ultimate selling price amounts to ‘circular reasoning.’”

Non-prime plate is sold for less, but it costs just as much to make, Dillinger said.

Commerce explained that it made the change because that was how Dillinger tracked its production costs in its own accounting; but this was both “factually incorrect” and “legally deficient,” the exporter said.

“The most reasonable calculation of the actual production costs of non-prime plate is the calculation reported by Dillinger, which uses the average actual total cost of manufacture for all plate sold during the period of investigation,” it said.

Second, because sour steel plate is manufactured differently than standard steel plate, Dillinger used an additional quality code to differentiate the two when it was filling out its questionnaire. However, Commerce rejected the code and reassigned the products under only the general pressure vessel code, explaining that Dillinger "added quality codes not included in Commerce’s questionnaire," it said.