Slip Op. 08 – 41
UNITED STATES COURT OF INTERNATIONAL TRADE
ALLIED TUBE & CONDUIT CORP.,
IPSCO TUBULARS, INC., AND
WHEATLAND TUBE COMPANY,
Before: Richard W. Goldberg,
Plaintiffs, Senior Judge
v. Court No. 06-00285
UNITED STATES, PUBLIC VERSION
Defendant,
and
TOSÇELIK PROFIL VE SAC
ENDUSTRISI A.S.,
Defendant-
Intervenor.
OPINION
[Commerce’s remand determination is sustained.]
Dated: April 14, 2008
Schagrin Associates (Roger B. Schagrin, Brian E. McGill, and
Michael James Brown) for Plaintiffs Allied Tube & Conduit Corp.,
IPSCO Tubulars, Inc., and Wheatland Tube Company.
Jeffrey S. Bucholtz, Acting Assistant Attorney General; Jeanne
E. Davidson, Director, Patricia M. McCarthy, Assistant Director,
Commercial Litigation Branch, Civil Division, U.S. Department of
Justice (Maame A.F. Ewusi-Mensah and David S. Silverbrand);
Office of the Chief Counsel for Import Administration, U.S.
Department of Commerce (Jennifer I. Johnson and Sapna Sharma),
Of Counsel, for Defendant United States.
Law Offices of David L. Simon (David L. Simon) for Defendant-
Intervenor Tosçelik Profil ve Sac Endustrisi A.S.
Court No. 06 – 00285 Page 2
GOLDBERG, Senior Judge: This case is before the Court
following remand to the U.S. Department of Commerce
(“Commerce”). In Allied Tube & Conduit Corp. v. United States,
31 CIT __, Slip Op. 07-107 (July 9, 2007), familiarity with
which is presumed, the Court remanded Commerce’s determination
that Tosçelik Profil ve Sac Endustrisi A.S. (“Tosçelik”)’s
single U.S. sale was a bona fide transaction. The Court ordered
Commerce to explain the reasoning behind the methodology it used
to determine commercial reasonableness. The domestic parties,
Allied Tube & Conduit Corp., IPSCO Tubulars, Inc., and Wheatland
Tube Company (collectively “Allied Tube”) urge the Court to
again remand the matter with instructions to rescind Tosçelik’s
new shipper review. For the reasons that follow, Commerce’s
remand determination is sustained in its entirety.
I. STANDARD OF REVIEW
A court shall hold unlawful Commerce’s final determination
in an antidumping administrative review if it is “unsupported by
substantial evidence on the record, or otherwise not in
accordance with the law . . . .” 19 U.S.C. § 1516a(b)(1)(B)(i)
(2000). Substantial evidence is “‘such relevant evidence as a
reasonable mind might accept as adequate to support a
conclusion.’” Nippon Steel Corp. v. United States, 337 F.3d
1373, 1379 (Fed. Cir. 2003) (quoting Consol. Edison Co. v. NLRB,
Court No. 06 – 00285 Page 3
305 U.S. 197, 229 (1938). “Even if it is possible to draw two
inconsistent conclusions from evidence in the record, such a
possibility does not prevent Commerce’s determination from being
supported by substantial evidence.” Am. Silicon Techs. v.
United States, 261 F.3d 1371, 1376 (Fed. Cir. 2001).
II. DISCUSSION
A. Commercial Reasonableness of the Price of Tosçelik’s Sale
In its first new shipper review determination,1 Commerce
employed a “range” methodology to assess the commercial
reasonableness of the price of Tosçelik’s sale. See Allied
Tube, 31 CIT at __, Slip Op. 07-107 at *8. The “range”
methodology is based on Customs and Border Patrol data of all
imports of certain welded carbon steel pipe and tube from Turkey
that fell within the scope of the antidumping duty order during
the relevant period of review (“CBP data”). Commerce ranked the
data by the weighted average unit values (“AUVs”) of each
manufacturer’s total imports. Because the AUV of Tosçelik’s
1
As discussed at length in Allied Tube, if a producer or
exporter did not export merchandise that was the subject of an
antidumping duty order during a previous investigation period,
it may request a new shipper review. A new shipper review can
be based on a single U.S. sale, as long as Commerce finds that
the sale was a bona fide transaction. A sale is bona fide when
it is “commercially reasonable.” Commerce looks at the totality
of the circumstances to determine whether a sale is
“commercially reasonable.” See generally Allied Tube, 31 CIT at
__, Slip Op. 07-107 at *3-6.
Court No. 06 – 00285 Page 4
single U.S. sale fell within this range of AUVs by manufacturer,2
Commerce determined that the price of the sale was commercially
reasonable.
Commerce has the discretion to choose whatever methodology
it deems appropriate, as long as it is reasonable and its
conclusions are supported by substantial evidence. See Fed.-
Mogul Corp. v. United States, 18 CIT 785, 807-08, 862 F. Supp.
384, 405 (1994). In the present matter, the Court remanded and
ordered Commerce to explain, if it is able, why its “range”
methodology is a reasonable approach. Specifically, the Court
stated:
[T]he “range” methodology can only be deemed
reasonable if Commerce can explain why the allegedly
distortive entries, some over [ ] the AUV for the
industry, should be included in the range of
reasonableness. When Commerce’s commercial
reasonableness determination hinges on comparing the
new shipper sale price to a range of values, it is
crucial to make sure the values at both ends of that
range are commercially reasonable.
Allied Tube, 31 CIT at __, Slip Op. 07-107 at *12. Commerce
complied with the Court’s order and issued a remand
determination. See Remand Determination Pursuant to Court
Remand in Allied Tube & Conduit Corp. v. United States, Court
No. 06-00285 (Dep’t Commerce Oct. 19, 2007) (“Remand
2
The AUV of Tosçelik’s sale ranked [ ] lowest out of [ ]
manufacturers.
Court No. 06 – 00285 Page 5
Determination”). Commerce explains that the “range” methodology
is reasonable because it best reflects the variation of the
types of merchandise included in the scope of the order. For
example, [ ], which has the lowest AUV in the range, might
manufacture only a high volume, low value-added mix of products.
On the other hand, [ ], which has the highest AUV, might
manufacture only low-volume, high value-added products. Despite
this variation, the products manufactured by both companies fall
within the scope of the order, and may be reflective of the
market conditions at the time of the sale. Even though these
two values are considerably different, Commerce believes it is
reasonable to include them both in a comprehensive analysis of
Tosçelik’s sale.
The Court in Allied Tube was concerned that the small-
quantity, high-value sales included in the “range” analysis
might reflect different types of merchandise than the standard
pipe imported by Tosçelik.3 If they are indeed different
products, it would be unreasonable to compare those figures to
Tosçelik’s sale. Commerce admits that there is some product
variation in the CBP dataset because it is based on the scope of
the antidumping duty order, which includes multiple Harmonized
3
The manufacturers with high-value sales that concern Allied
Tube are those imported by [ ]. See Allied Tube, 31 CIT at __,
Slip Op. 07-107 at *9 n.5. The AUVs of these manufacturers (not
including Tosçelik) range from [ ] to [ ] per MT.
Court No. 06 – 00285 Page 6
Tariff Schedule (“HTS”) numbers. Commerce believes it would be
arbitrary to exclude the small-quantity, high value entries that
Allied Tube challenges as “aberrational,” because it is possible
that those sales may, in fact, be the same type of merchandise
imported by Tosçelik.
Commerce is correct to conclude that it would be arbitrary
to simply disregard the manufacturers with high AUVs and
conclude that Tosçelik’s sale price was not commercially
reasonable. It would be equally arbitrary to assume that the
high AUV sales, some over [ ] the overall AUV of the CBP data,
are commercially reasonable, without further investigation. In
light of the requirement that Commerce must carefully scrutinize
new shipper reviews that are based on single sales, Tianjin
Tiancheng Pharmaceutical Co. v. United States, 29 CIT __, __,
366 F. Supp. 2d 1246, 1263 (2005), Commerce should take the
additional step of ensuring that it is reasonable to include the
disputed high-AUV data in the range.
At the Court’s suggestion, Commerce disaggregated the CBP
data for the manufacturers to which Allied Tube had no
objection.4 Additionally, Commerce looked at only the data for
the HTS category that encompasses Tosçelik’s sale. Commerce
4
Commerce limited the disaggregated data analysis to the subset
of manufacturers comprising [ ] percent of entries by volume.
These manufacturers are: [ ]. See Remand Determination at 21.
Court No. 06 – 00285 Page 7
found that the AUV of Tosçelik’s sale fell well within the range
of disaggregated entry values.5 See Remand Determination at 22.
Because Commerce does not have access to shipment-specific
data,6 it is uncertain what different types of merchandise are
being compared in the disaggregated data analysis. However, the
disaggregated data analysis undercuts Allied Tube’s assertion
that the AUVs of certain manufacturers should be summarily
excluded as “aberrational.” The manufacturers which Allied Tube
implicitly accepts as non-aberrant have small-quantity entries
that are well above the AUV of Tosçelik’s sale. See Remand
Determination at 21-22. In response to Commerce’s comprehensive
Remand Determination, Allied Tube relies on the same argument it
made in Allied Tube: that the AUV of Tosçelik’s single sale was
higher than the AUVs of all but [ ] percent of all entries by
quantity during the period of review. While this may be true,
it does not mean that high-priced, low quantity sales are not
bona fide. Single sales should be “carefully scrutinized,” but
5
The disaggregated entry values range from [ ] to [ ] per MT.
Tosçelik’s sale has an AUV of [ ] per MT. See Remand
Determination at 22.
6
Commerce notes that during the course of a new shipper review,
“it is not within the Department’s practice to attempt to obtain
the detailed invoices and specific product codes for each and
every sale that is reported by CBP for the POR, given the
proprietary restrictions of such data.” Remand Determination at
10. The Court agrees that in the present case, it would be
overly burdensome and unnecessary to require Commerce to obtain
detailed invoices and shipment-specific data.
Court No. 06 – 00285 Page 8
they are not inherently commercially unreasonable. Tianjin
Tiancheng Pharm. Co., 29 CIT at __, 366 F. Supp. 2d at 1263.
Additionally, Allied Tube completely ignores Commerce’s
disaggregation analysis. Allied Tube fails to point to any
evidence, aside from unsupported assertions, that detracts from
Commerce’s conclusion.
In its Remand Determination, Commerce has sufficiently
scrutinized the price of Tosçelik’s single U.S. sale, and the
agency’s conclusion that the price is commercially reasonable is
supported by substantial evidence.7
7
In the Remand Determination, Commerce took issue with the
Court’s analysis of the “ordinary course of trade” requirement
discussed in Corus Staal BV v. United States, 27 CIT 388, 404-
05, 259 F. Supp. 2d 1253, 1268 (2003). See Allied Tube, 31 CIT
at __, Slip Op. 07-107 at *11-13. The Court does not intend to
suggest that the “commercial reasonableness” test for new
shipper reviews involves exactly the same analysis as the
“ordinary course of trade” concept defined in 19 U.S.C. §
1677(15). However, “[w]hen Commerce’s commercial reasonableness
determination hinges on comparing the new shipper sale price to
a range of values, it is crucial to make sure the values at both
ends of that range are commercially reasonable.” Id. at __,
Slip Op. 07-107 at *12; see Hebei New Donghua Amino Acid Co. v.
United States, 29 CIT __, __, 374 F. Supp. 2d 1333, 1338 (2005)
(holding that “[i]n accordance with the goal of ensuring a
realistic U.S. price figure, it is reasonable that Commerce uses
the bona fide sale test to exclude sales that are ‘not typical
of normal commercial transactions in the industry.’” (quoting
Tianjin Tiancheng Pharm. Co., 29 CIT at __, 366 F. Supp. 2d at
1249-50). Following this principle, Commerce has adequately
demonstrated that its range methodology, supported by the
disaggregated data analysis, is reasonable.
Court No. 06 – 00285 Page 9
B. Shipping Costs
In Allied Tube, the Court was concerned with the
reasonableness of the high shipping costs associated with
Tosçelik’s sale. Specifically, as understood from Commerce’s
original new shipper review determination, Tosçelik’s shipment
was made by container instead of full vessel load, which
contributed to the higher freight charge. Commerce had not
adequately explained why it was commercially reasonable for
Tosçelik to make the shipment by container. On remand, Commerce
explains that a U.S. customer is unlikely to order a full vessel
load from a new shipper that does not have a “proven track
record for producing to ASTM standards for the U.S. market or
have a history of performance and quality in the U.S. market.”
Remand Determination at 26. Furthermore, a container is a
reasonable and appropriate means for transporting a quantity the
size of Tosçelik’s sale. Tosçelik pre-sold the shipment to an
unaffiliated U.S. customer who wished to test its suitability
for the marketplace, even with the higher expense of
containerized shipping. Id. at 25-26. All of these factors
support Commerce’s conclusion that the shipping costs were
commercially reasonable.8
8
In Allied Tube I, the Court was concerned that the timing of
(footnote continued)
Court No. 06 – 00285 Page 10
Allied Tube does not directly address the shipping cost
issue, other than pointing out that the shipping costs were
high. Instead, Allied Tube focuses on the small quantity of the
sale. If the sale were a reasonable (i.e., larger) quantity,
Allied Tube argues, the higher-cost containerized shipment would
not have been necessary. In Allied Tube, the Court already
determined that substantial evidence supports Commerce’s
conclusion that the quantity of Tosçelik’s sale is commercially
reasonable.9 Allied Tube fails to call into question the
reasonableness of the shipping cost.
C. Commerce’s Ultimate Determination That Tosçelik’s Single
U.S. Sale Was a Bona Fide Transaction is Supported by
Substantial Evidence
The Court must consider together all of Commerce’s findings
to ultimately determine whether there is substantial evidence to
support its decision that under the totality of the
Tosçelik’s U.S. entry indicated that it may be commercially
unreasonable. Commerce explains that the timing of the sale is
irrelevant because given the “lack of predictability in the
exact timing of when a waterborne shipment would enter the
United States, it is unreasonable to assume that Tosçelik was
specifically attempting to time the entry at a date so close to
the end of the POR.” Remand Determination at 28. The Court
agrees.
9
In its original determination, Commerce compared Tosçelik’s
sale to the size of Tosçelik’s sales in its home market. “The
fact that Tosçelik’s single U.S. sale is of a larger quantity
than a majority of its home market sales is adequate to support
the conclusion that the quantity is commercially reasonable.”
Allied Tube I, 31 CIT at __, Slip Op. 07-107 at *18.
Court No. 06 – 00285 Page 11
circumstances, Tosçelik’s single U.S. sale is a bona fide
transaction. See Tianjin, 29 CIT at __, 366 F. Supp. 2d at
1249-50. As discussed above, the price of Tosçelik’s U.S. sale
and the associated shipping costs were commercially reasonable.
There is also substantial evidence to support Commerce’s
conclusion that the quantity of the sale was reasonable, and
that Tosçelik followed normal business practices in executing
the sale. See Allied Tube, 31 CIT at __, Slip Op. 07-107 at
*18, 22-23. Viewed under the totality of the circumstances,
there is substantial evidence to support Commerce’s conclusion
that Tosçelik’s sale was bona fide.
III. CONCLUSION
In light of the foregoing, Commerce’s remand determination
is sustained in its entirety. A separate judgment will be
entered accordingly.
/s/ Richard W. Goldberg
Richard W. Goldberg
Senior Judge
Date: April 14, 2008
New York, New York