CIT Sends Back Commerce's 'Inconsistent' Use of Time Periods in AD Review

The Court of International Trade on July 26 sent back the Commerce Department's consideration of alternative time periods in using the Cohen's d test to detect "masked" dumping in the 2020-21 review of the antidumping duty order on circular welded carbon-quality steel pipe from the United Arab Emirates.

In the review, Commerce deviated from its standard practice of calculating an annual weighted-average cost based on the average of the annual cost of production for the review period for respondent Universal Tube and Plastic Industries Ltd. Instead, the agency used an average of the cost of production within individual quarters of the review period.

Commerce separately decided to calculate Universal's dumping margin using annual U.S. and home market sales, but, despite this conclusion, the agency used quarterly U.S. sales prices in its differential pricing analysis to detect masked dumping. Commerce "compared sales prices made in different quarters of the period of review" in its Cohen's d test analysis.

Universal said the agency identified great fluctuations in the respondent's quarterly costs and selling prices, making the move "internally inconsistent" and "arbitrary." In fact, Commerce modified its margin calculation program to "prevent comparisons of sales in different quarters," the respondent said.

Judge Jennifer Choe-Groves agreed, rejecting the agency's use of quarterly sales prices in the Cohen's d analysis as "inconsistent" with its prior analysis. The judge said Commerce "must either make consistent determinations, or reasonably explain any inconsistency" in why it can calculate the respondent's cost of production using the same-quarter comparison but then the inter-quarter comparison for the differential pricing analysis.

The court said that "if Commerce’s comparison of costs and prices would lead to distortive results because of significant fluctuations from quarter to quarter, thus justifying the 'same-quarter comparison' examining sales prices only within specific quarters, it does not follow that costs and prices from sales in different quarters should be compared across quarters (the 'inter-quarter comparison') in a different segment of the administrative review."

Choe-Groves came to this conclusion only after finding that Universal didn't waive its right to argue the issue at the trade court. The government said that the respondent, in its case brief, argued that Commerce shouldn't include time periods in the differential pricing analysis, though it didn't raise the alternative claim that the agency should use a unit of time "other than quarters to assess differences in prices over time periods."

The court said "an exception to the exhaustion doctrine applies here because Commerce was on notice that Universal was challenging the issue of time periods" when the respondent argued that the law "neither mandates how Commerce evaluates whether a pattern of prices that significantly differ exists nor requires Commerce to consider time periods at all." The agency "was aware of Universal's challenge to the issue of time periods" and had the chance to fully consider the issue, the judge said.

(Universal Tube and Plastic Industries Ltd. v. United States, Slip Op. 24-85, CIT # 23-00113, dated 07/26/24; Judge: Jennifer Choe-Groves; Attorneys: Robert Gosselink of Trade Pacific for plaintiffs led by Universal Tube and Plastic Industries, Ltd.; Franklin White for defendant U.S. government; Roger Schagrin of Schagrin Associates for defendant-intervenor Wheatland Tube Co.)