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American Tubular Products, LLC v. United States

United States Court of Appeals, Federal Circuit

February 13, 2017

AMERICAN TUBULAR PRODUCTS, LLC, JIANGSU CHENGDE STEEL TUBE SHARE CO., LTD., Plaintiffs-Appellants
v.
UNITED STATES, UNITED STATES STEEL CORPORATION, TMK IPSCO, WHEATLAND TUBE COMPANY, V & M STAR L.P., Defendants-Appellees

         Appeal from the United States Court of International Trade in No. 1:13-cv-00029-RWG, Senior Judge Richard W. Goldberg.

          Donald Cameron, Jr., Morris, Manning & Martin, LLP, Washington, DC, for plaintiffs-appellants. Also represented by Mary Hodgins, Julie Mendoza, Brady Mills, R. Will Planert, Sarah Suzanne Sprinkle.

          Loren Misha Preheim, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for defendant-appellee United States. Also represented by Benjamin C. Mizer, Jeanne E. Davidson, Claudia Burke; Whitney Marie Rolig, Office of the Chief Counsel for Trade Enforcement and Compliance, United States Department of Commerce, Washington, DC.

          Philip Charles Sternhell, Quinn Emanuel Ur-quhart & Sullivan, LLP, Washington, DC, argued for defendant-appellee United States Steel Corporation. Also represented by Debbie Leilani Shon, Jonathan Gordon Cooper, Jon David Corey, Kelsey Rule.

          Roger Brian Schagrin, Schagrin Associates, Washington, DC, for defendants-appellees TMK IPSCO, Wheat-land Tube Company, V & M Star L.P. Also represented by John W. Bohn, Jordan Charles Kahn.

          Before Newman, Mayer, and Lourie, Circuit Judges.

          Lourie, Circuit Judge.

         American Tubular Products, LLC ("ATP") and Jiang-su Chengde Steel Tube Share Co., Ltd. ("Chengde") (collectively, "the Appellants") appeal from the decisions of the United States Court of International Trade ("the Trade Court") affirming the Department of Commerce's ("Commerce") antidumping duty calculations in the first administrative review of an antidumping duty order directed to certain oil country tubular goods ("OCTG") from the People's Republic of China. See Am. Tubular Prods., LLC v. United States, No. 13-00029, 2015 WL 5236010 (Ct. Int'l Trade Aug. 28, 2015) ("ATP II") (affirming Commerce's remand results); Am. Tubular Prods., LLC v. United States, No. 13-00029, 2014 WL 4977626 (Ct. Int'l Trade Sept. 26, 2014) ("ATP I") (affirming in part and remanding in part Commerce's final results). In that administrative review, Commerce ultimately calculated a weighted average dumping margin of 137.62% for Cheng-de. See Am. Tubular Prods., LLC v. United States, No. 13-00029, ECF No. 102 (Ct. Int'l Trade Jan. 28, 2015) ("Remand Results"). Because we agree with the Trade Court that Commerce's antidumping duty calculations were supported by substantial evidence and otherwise in accordance with law, we affirm.

         Background

         OCTG are steel tubing products used in oil and gas drilling. Chengde is a Chinese producer and exporter of OCTG, and ATP is the importer of record during the relevant period. In June 2011, Commerce initiated the first administrative review of the antidumping duty order directed to OCTG from China. Initiation of Antidumping and Countervailing Duty Administrative Reviews, 76 Fed. Reg. 37, 781 (Dep't of Commerce June 28, 2011); Initiation of Antidumping and Countervailing Duty Administrative Reviews, 76 Fed. Reg. 53, 404 (Dep't of Commerce Aug. 26, 2011) (correcting the period of review). Commerce selected Chengde as a mandatory respondent.

         Because China is considered a nonmarket economy ("NME") country, Commerce selected Indonesia, a market economy ("ME") country, as the primary surrogate country from which it would use surrogate values to ascertain Chengde's factors of production. Certain Oil Country Tubular Goods from the People's Republic of China, 77 Fed. Reg. 34, 013 (Dep't of Commerce June 8, 2012) ("Preliminary Results"). In the Final Results, as later amended, Commerce assigned Chengde a dumping margin of 162.69%. Certain Oil Country Tubular Goods from the People's Republic of China, 77 Fed. Reg. 74, 644 (Dep't of Commerce Dec. 17, 2012) ("Final Results"), as amended by Certain Oil Country Tubular Goods from the People's Republic of China, 78 Fed. Reg. 9, 033 (Dep't of Commerce Feb. 7, 2013). The Appellants appealed to the Trade Court, raising three issues that are relevant in this appeal. We provide further factual and procedural background for each of those issues in turn.

         A. Steel Billets

         The first issue pertains to Commerce's valuation of steel billets used in the production of OCTG. Steel billets may be composed of carbon steel or the more expensive alloy steel. In its initial questionnaire, Commerce requested Chengde to "[d]escribe each type and grade of material used in the production process." J.A. 168. Chengde responded that it consumed steel billets, and its counsel listed a Harmonized Tariff Schedule ("HTS") subheading that covers products of alloy steel as the proper tariff subheading for its steel billets. J.A. 669.

         Commerce then issued supplemental questionnaires, requesting sample mill test certificates for various control numbers ("CONNUMs"). A CONNUM is a code used to identify distinct products within the class of subject merchandise under review. Chengde submitted the sample mill certificates. J.A. 1720-25, 3161-71. Those certificates contained information on the chemical composition of the sampled OCTG, which constituted a portion, but not all, of OCTG sold in sixteen of nineteen sales made by Chengde during the period of review. In addition, Commerce requested clarification of the technical descriptions of Chengde's raw material inputs. J.A. 886. Chengde again responded with a general description of its steel billet input. J.A. 950-51.

         In the Preliminary Results, Commerce valued steel billets using a surrogate value for alloy steel. Chengde then argued that Commerce should have used a surrogate value for carbon steel. Chengde explained that its counsel's prior reference to the HTS number for alloy steel was an inadvertent error, and that it in fact used carbon steel billets. Chengde called Commerce's attention to the mill certificates on the record, which showed that the tested OCTG were all made of carbon steel.

         In the Final Results, as amended, Commerce used a carbon-steel surrogate value, but only for the portion of OCTG directly shown to be made of carbon steel by the mill certificates. For the remaining OCTG, Commerce continued to value the steel billet input using an alloy-steel surrogate value.

         On appeal, the Trade Court remanded Commerce's selection of surrogate values for steel billets. For the sixteen sales partially supported by the mill certificates, the court directed Commerce to "explain whether Chengde's mill certificates prove the chemical properties of OCTG not specifically tested." ATP I, 2014 WL 4977626, at *7. Moreover, the court found that Commerce had failed to consider a Customs entry summary relating to an additional (seventeenth) transaction, [*] which classified the OCTG as carbon ...


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