German Exporter Says CAFC Already Ruled for Affiliate in Near-Identical Issue

A German exporter of steel used to transport corrosive materials responded Sept. 20 at the U.S. Court of Appeals for the Federal Circuit to a U.S. claim that the Commerce Department's decision to calculate certain of the exporter’s production costs for a review using the items' sales values was rational because the figures “came from Dillinger’s own books and records” (AG der Dillinger Huttenwerke v. U.S., Fed. Cir. # 24-1498).

CAFC has previously found doing so amounts to circular reasoning, the exporter argued.

The company's appeal was filed after its four-times-remanded case concluded in favor of the government at the Court of International Trade.

German steel plate exporter AG der Dillinger Huttenwerke brought its case to CAFC this year claiming that Commerce’s choice to use sales prices to calculate production costs for non-prime steel plates amounted to “circular reasoning” (see 2406250053). The government argued in turn that when, for example, “Dillinger cannot produce 98 perfect plates without producing two imperfect plates, the lost value of the two imperfect plates is actually a cost of producing the 98 perfect ones and should be accounted for as such” (see 2408210044).

But Commerce’s decision is wrong, the exporter argued in its Sept. 20 brief; production costs are available for the non-prime plate. The production costs for non-prime plate are the same as the production costs for all plate, it said.

“It is undisputed that non-prime plate cannot be identified until the end of production and therefore undergoes the exact same production steps as prime plate, employing the same materials, fabrication and other processing,” it said.

To find otherwise runs contrary to CAFC’s decision in the case Dillinger France, Dillinger argued. In that case, CAFC held that calculating production costs for non-prime material results in circular reasoning “because it ‘'contravened the express requirements of the statute which set forth the cost of production as an independent standard for fair value.’”

The exporter also argued that its own books and records didn’t actually substitute sales prices for the production costs of non-prime plate. Defendants-appellees have no evidence to contradict this, it said.

Dillinger’s “audited financial statements and records kept in accordance with German generally accepted accounting principles (GAAP) assign the same manufacturing costs to both prime and non-prime products,” it said.

And the exporter also claimed that “it was not until nearly six years later, in Commerce’s second remand determination, that Commerce claimed there was a gap in the record” regarding the production costs of non-prime plate.

Dilllinger’s second claim on appeal is that Commerce unreasonably rejected Dillinger’s submission of a product characteristic code for a particular product, sour vessel plate. The government argued that the new quality code had been submitted four months late, after the codes had already been finalized.

Dillinger argued that it had not been untimely. It claimed that Commerce “accepted all of the factual information provided by Dillinger as timely,” placing all of it on the administrative record, and that “Defendants-Appellees do not dispute this fact.”

It said the U.S. based its entire argument on the fact that Dillinger submitted its proposed comment code after “the initial model-match comment period.” But this fails to consider that Commerce issued instructions after that period that “permitted, even directed, respondents to ‘[u]se additional number codes for each additional Quality you propose.’”