Allied Tube & Conduit Corp. v. United States

Slip Op. 07 – 107

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 final new shipper review determination is remanded
for further consideration and explanation of the commercial
reasonableness of Defendant-Intervenor’s single U.S. sale.]

Dated: July 9, 2007

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.

Peter D. Keisler, Assistant Attorney General; Jeanne E.
Davidson, Director, Patricia M. McCarthy, Assistant Director,
Commercial Litigation Branch, Civil Division, U.S. Department of
Justice (David S. Silverbrand); Office of the Chief Counsel for
Import Administration, U.S. Department of Commerce (Jennifer I.
Johnson), 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: On May 31, 2005, Tosçelik Profil ve Sac

Endustrisi A.S. and its affiliated trading company Tosyali Dis

Ticaret A.S. (collectively, “Tosçelik”) requested that the U.S.

Department of Commerce (“Commerce”) conduct a new shipper review

based on a single U.S. sale during the period of review from May

1, 2004 through April 30, 2005 (“POR”). Commerce found that the

single U.S. sale was bona fide, and subsequently determined that

a zero percent antidumping duty margin existed. Certain Welded

Carbon Steel Pipe and Tube from Turkey, 71 Fed. Reg. 43444,

43445 (Dep’t Commerce Aug. 1, 2006) (final results of new

shipper review). Allied Tube and Conduit Corporation, IPSCO

Tubulars, Inc., and Wheatland Tube Company (collectively,

“Allied Tube”) have brought this action to challenge Commerce’s

determination that Tosçelik’s single U.S. sale during the POR

was bona fide. For the reasons that follow, the Court remands

the issue of whether Tosçelik’s single U.S. shipment was a bona

fide transaction.

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
Court No. 06 – 00285 Page 3

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,

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). To

determine if substantial evidence exists, the Court reviews the

record as a whole, including evidence that supports as well as

evidence that “fairly detracts from the substantiality of the

evidence.” Atl. Sugar, Ltd. v. United States, 744 F.2d 1556,

1562 (Fed. Cir. 1984).

II. DISCUSSION

A. New Shipper Review and the Bona Fide Sale Test

On May 15, 1986, Commerce published an antidumping duty

order on imports of welded carbon steel pipe and tube from

Turkey. See Welded Carbon Steel Standard Pipe and Tube Products

from Turkey, 51 Fed. Reg. 17784 (Dep’t Commerce May 15, 1986)

(final determination). The order imposes an “all others”

antidumping duty rate of 14.74%, which applies to Turkish

producers and exporters that have not had their antidumping duty

rate determined in an investigation or review. Id. If a
Court No. 06 – 00285 Page 4

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. See

19 U.S.C. § 1675(a)(2)(B) (2000).1 During the course of a new

shipper review, Commerce endeavors to establish an individual

dumping margin and antidumping duty rate for the new shipper.

This process allows the new shipper to demonstrate that the “all

others” rate should not apply to its entries. On May 31, 2005,

Tosçelik timely requested a new shipper review based on a single

sale to the United States.

1
A new shipper review may be requested pursuant to the following
requirements:

If the administering authority receives a request from
an exporter or producer of the subject merchandise
establishing that—(I) such exporter or producer did
not export the merchandise that was the subject of an
antidumping duty or countervailing duty order to the
United States (or, in the case of a regional industry,
did not export the subject merchandise for sale in the
region concerned) during the period of investigation,
and (II) such exporter or producer is not affiliated
(within the meaning of section 1677(33) of this title)
with any exporter or producer who exported the subject
merchandise to the United States (or in the case of a
regional industry, who exported the subject
merchandise for sale in the region concerned) during
that period, the administering authority shall conduct
a review under this subsection to establish an
individual weighted average dumping margin or an
individual countervailing duty rate (as the case may
be) for such exporter or producer.

19 U.S.C. § 1675(a)(2)(B)(i) (2000); see also 19 C.F.R.
§ 351.214 (2006).
Court No. 06 – 00285 Page 5

When a new shipper review involves only a single U.S. sale,

it is Commerce’s practice to determine if that sale is a bona

fide transaction. See Freshwater Crawfish Tail Meat from the

People’s Republic of China, 68 Fed. Reg. 1439, 1440 (Dep’t

Commerce Jan. 10, 2003) (rescission of new shipper review);

Fresh Garlic from the People’s Republic of China, 67 Fed. Reg.

11283, 11284 (Dep’t Commerce Mar. 13, 2002) (rescission of new

shipper review). A sale is not bona fide when it is

“commercially unreasonable” or “atypical of normal business

practices.” Tianjin Tiancheng Pharmaceutical Co. v. United

States, 29 CIT __, __, 366 F. Supp. 2d 1246, 1249-50 (2005); see

also Windmill Int’l Pte., Ltd. v. United States, 26 CIT 221,

230, 193 F. Supp. 2d 1303, 1313 (2002). Commerce makes this

determination so that a producer does not “unfairly benefit from

an atypical sale to obtain a lower dumping margin than the

producer’s usual commercial practice would dictate.” Tianjin,

29 CIT at __, 366 F. Supp. 2d at 1250. A single sale is not

inherently commercially unreasonable, but “it will be carefully

scrutinized to ensure that new shippers do not unfairly benefit

from unrepresentative sales.” Id. at __, 366 F. Supp. 2d at

1263.

Commerce looks at the totality of the circumstances to

determine whether a particular sale is bona fide. See Hebei New
Court No. 06 – 00285 Page 6

Donghua Amino Acid Co. v. United States, 29 CIT __, __, 374 F.

Supp. 2d 1333, 1338 (2005). In the present case, Commerce

initially issued a Commercial Reasonableness Memorandum (“CRM”)

which set forth its basis for finding that Tosçelik’s U.S. sale

was commercially reasonable under the totality of the

circumstances. See CRM, A-489-501, NSR 5/1/04-4/30/05 (Apr. 24,

2006); Pl.’s App. 5A-B. In the CRM, Commerce considered three

factors: (1) the price and quantity of the U.S. sale; (2) the

sales process; and (3) freight expenses. Commerce subsequently

issued the preliminary results of the new shipper review on May

3, 2006, and found that Tosçelik’s sale had no dumping margin.

Certain Welded Carbon Steel Pipe and Tube from Turkey, 71 Fed.

Reg. 26043, 26047 (Dep’t Commerce May 3, 2006) (preliminary

results). Commerce subsequently adopted the same position in

its final determination. Certain Welded Carbon Steel Pipe and

Tube from Turkey, 71 Fed. Reg. at 43445. In that determination,

Commerce referred to its Issues and Decision Memorandum (“IDM”),

which found Tosçelik’s single U.S. sale to be commercially

reasonable, and therefore bona fide. IDM, A-489-501, POR

5/1/04-4/30/05 (Aug. 1, 2006), available at

http://ia.ita.doc.gov/frn/summary/turkey/E6-12372-1.pdf.

Allied Tube challenges Commerce’s determination that

Tosçelik’s transaction is bona fide. Specifically, it claims
Court No. 06 – 00285 Page 7

that the price, quantity and freight expense of the sale

indicate that the transaction is not commercially reasonable.

B. Commerce’s Determination That the Price of Tosçelik’s U.S.
Sale Is Commercially Reasonable Is Not Supported by
Substantial Evidence

i. Overview of Commerce’s Methodology Comparing the Unit
Value of Tosçelik’s Sale to the Average Unit Value of
Other Turkish Exporters

Commerce calculated the average unit value (“AUV”) per

metric ton (“MT”) for all U.S. imports of welded steel pipe and

tube from Turkey during the POR, and found that the unit value

of Tosçelik’s sale is about [ ] the AUV of all imports from

Turkey.2 Commerce did not primarily rely on a comparison between

the AUV of all imports from Turkey and the unit value of

Tosçelik’s sale. Instead, Commerce obtained data from U.S.

Customs and Border Protection (“Customs”) that listed the AUV of

2
In the chart provided by Commerce, Tosçelik’s unit value is [ ]
per MT. CRM Attach. 1 (Confidential). Commerce reached this
value by dividing the “entered value” of Tosçelik’s single U.S.
sale [ ] by the “theoretical quantity” of the shipment [ ].
Whereas the chart lists the [ ] per MT figure, the analysis in
the CRM refers to the AUV of Tosçelik’s sale as [ ] per MT. The
[ ] per MT figure is reached by dividing the “total value” of
the sale [ ] by the “actual quantity” [ ]. Presumably, this
includes the transportation costs associated with the sale. It
is unclear why Commerce includes the [ ] figure in the chart,
but discusses the [ ] figure in its analysis. The Court’s
determination that Tosçelik’s sale is [ ] than the AUV of all
Turkish imports is based on the [ ] figure. The discrepancy
rises to [ ] when the [ ] figure is used. The precise
calculation does not affect the disposition of this case at this
stage in the proceedings, but may be highly relevant on remand.
Court No. 06 – 00285 Page 8

each Turkish exporter during the POR. The unit value of

Tosçelik’s single sale fell within the range of the other

Turkish exporters’ AUVs ([ ] per MT). Commerce concluded that

because Tosçelik’s sale is “comfortably within the range of

other commercial transactions . . . [there is] no reason to

suspect that [it] is not a bona fide commercial transaction.”

CRM 4.

The “range” Commerce refers to is derived from a chart

attached to the CRM. The chart is reproduced here:3

[ REDACTED ]

CRM Attach. 1 (Confidential). Each row represents data from a

specific Turkish exporter. The far left column lists the total

quantity of welded steel pipe and tube shipped from each

exporter.4 The next column lists the total value of the

shipments, followed by the AUV for each exporter. Tosçelik’s

shipment is represented by the company name “Tosyali Dis Ticaret

A.S.,” which is Tosçelik’s affiliated trading company. The unit

value of Tosçelik’s sale, [ ] per MT, does indeed fall within

the range of AUVs listed by exporter.

3
The names of some exporters have been shortened for formatting
purposes.
4
The chart encompasses steel pipe and tube classified under the
same Harmonized Tariff Schedule of the United States (“HTSUS”)
classification as Tosçelik’s U.S. shipment.
Court No. 06 – 00285 Page 9

Allied Tube believes that the range of AUVs used by

Commerce in the above chart includes highly aberrational data.

Specifically, the range of data used by Commerce includes a

small quantity of sales [ ] imported at relatively high prices.5

Allied Tube argues that a single sale with a unit value in the [

] percentile is atypical of normal business practices and

commercially unreasonable. If the top [ ] of sales by quantity

is excluded, the remaining [ ] of all imports by quantity fall

within an AUV range between [ ] per MT. Tosçelik’s sale, at [ ]

per MT, does not fall within this range. Thus, Allied Tube

claims the price of Tosçelik’s sale is commercially

unreasonable.

ii. Commerce’s “Range” Methodology Including Allegedly
Distortive Entries Does Not Reasonably Support Its
Determination That Tosçelik’s Sale Is Commercially
Reasonable

The Court must now determine whether Commerce’s “range”

methodology, which includes the allegedly distortive entries, is

reasonable and supported by substantial evidence. 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 Federal-Mogul Corp. v.

5
The [ ] of imports by quantity that Allied Tube argues should
be excluded from Commerce’s analysis are those imported by [ ].
Pl.’s Mot. J. Agency R. 12 n.7. These exporters each have an
AUV of [ ] per MT or higher.
Court No. 06 – 00285 Page 10

United States, 18 CIT 785, 807-08, 862 F. Supp. 384, 405 (1994);

see also Windmill, 26 CIT at 230, 193 F. Supp. 2d at 1312

(“Given Commerce's discretion in employing a methodology to

exclude sales from the United States price that are

unrepresentative or distortive . . . the Court must determine

whether Commerce’s actions in this case were reasonable.”).

Allied Tube believes that Commerce acted contrary to its

own established practice “of using AUVs derived only after

excluding aberrant data for its analysis” to determine the

commercial reasonableness of U.S. sales in new shipper reviews.

Pl.’s Mot. J. Agency R. 13. Commerce does frequently choose to

exclude aberrational data in its antidumping duty

determinations. See, e.g., Hebei, 29 CIT at __, 374 F. Supp. 2d

at 1340 (approving Commerce’s exclusion of “clearly

aberrational” data in a new shipper review); Luoyang Bearing

Corp. (Group) v. United States, 29 CIT __, __, 358 F. Supp. 2d

1296, 1299 (2005) (in determining a surrogate value for China,

Commerce excluded price data from countries with steel imports

of less than seven MTs); Shanghai Foreign Trade Enters. Co. v.

United States, 28 CIT __, __, 318 F. Supp. 2d 1339, 1350 (2004)

(explaining that when calculating surrogate values for non-

market economies, it is Commerce’s practice to exclude

aberrational data); FAG U.K. Ltd. v. United States, 20 CIT 1277,
Court No. 06 – 00285 Page 11

1282, 945 F. Supp. 260, 265 (1996) (permitting Commerce to

exclude “certain sales which are clearly atypical” in an

antidumping administrative review). Commerce excludes aberrant

data because a “[f]air (apples to apples) comparison is the goal

of the price comparisons required by the antidumping laws . . .

.” Am. Permac, Inc. v. United States, 16 CIT 41, 42, 783 F.

Supp. 1421, 1423 (1992).

While Commerce often excludes potentially aberrational data

in its antidumping determinations, it is not always required to

do so. In Corus Staal BV v. United States, the plaintiff, a

domestic party, challenged Commerce’s decision to include sales

of defective merchandise in its calculation of the U.S. price.

27 CIT 388, 404-05, 259 F. Supp. 2d 1253, 1267-68 (2003). The

plaintiff argued that because transactions involving defective

merchandise are not in the “ordinary course of trade,” they must

be excluded from the analysis. The Court disagreed, and stated

that unlike the definition of normal value,6 the definition of

U.S. price contains no requirement that Commerce exclude sales

that are arguably outside of the ordinary course of trade. Id.

at 406, 259 F. Supp. 2d at 1269.

6
The definition of “normal value” is “the price at which the
foreign like product is first sold . . . for consumption in the
exporting country, in the usual commercial quantities and in the
ordinary course of trade . . . .” 19 U.S.C. § 1677b(a)(1)(B)(i)
(2000) (emphasis added).
Court No. 06 – 00285 Page 12

Corus Staal is easily distinguishable from the present case

because the commercial reasonableness test for new shipper

reviews necessarily implies that the analysis should only

include prices “in the ordinary course of trade.” Commerce

cannot reasonably conclude that the price of a new shipper’s

single sale is commercially reasonable if it is only similar to

prices that are atypical of the industry. In the present case,

the “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.

Commerce has not only failed to explain why its “range”

methodology is reasonable, but it even suggests that its own

dataset might be overinclusive and therefore inaccurate.

Commerce states:

Given that the [HTSUS] numbers covered by the scope
include more than subject merchandise, [and] that
actual products included within any given shipment may
be different from each other[,] [a] direct comparison
between shipments should not be viewed as accurate
price to price comparison. Rather, such data are
generally reflective of commercial transactions.
Court No. 06 – 00285 Page 13

CRM 5 n.3. In other words, the high-priced, small-quantity

sales included in Commerce’s analysis might be different types

of merchandise than the standard pipe imported by Tosçelik even

though they are encompassed in the same HTSUS classification.

The potential inaccuracy of the dataset further undermines the

reasonableness of Commerce’s “range” methodology.

In previous investigations, Commerce stressed the

importance of comparing the total AUV of all imports to the new

shipper sale. In Hebei, where Commerce determined that a new

shipper sale was not bona fide, Commerce viewed the large price

differential between the new shipper sale and the AUV of all the

entries of the subject merchandise as significant. See 29 CIT

at __, 374 F. Supp. 2d at 1336. Specifically, Commerce compared

the Chinese manufacturer’s U.S. sale price to:

(1) the weighted AUV of all Chinese entries of the
subject merchandise during the POR that were
covered by the antidumping duty order and not
clearly aberrational based on proprietary data in
the Customs database;

(2) the weighted AUV of all Chinese imports of the
subject merchandise during the POR based on
public import statistics; and

(3) the weighted AUV of U.S. imports of the subject
merchandise from all countries during the POR
based on publicly available U.S. import data.

See id. at __, 374 F. Supp. 2d at 1336; see also Tianjin, 29 CIT

at __, 366 F. Supp. 2d at 1255 (stating that the prices listed
Court No. 06 – 00285 Page 14

in four invoices from a single company “do not go as far as the

AUV data in showing the typical price for Plaintiff’s product”).

By contrast, in this case, Commerce relied primarily on a

comparison of Tosçelik’s sale to small import quantities with

comparatively high per-unit values. Commerce has not persuaded

the Court that this methodology is reasonable. See Shanghai, 28

CIT at __, 318 F. Supp. 2d at 1351 (“A Commerce decision to rely

on potentially aberrational data without explanation and

contrary to its own practice is not based on substantial

evidence and cannot be sustained.”).

In summary, Commerce’s “range” methodology is a shaky

foundation on which to rest its conclusion that the price of

Tosçelik’s sale is commercially reasonable. The methodology

merely shows that the unit value of Tosçelik’s sale is [ ] the

AUVs of certain other Turkish exporters’ aggregated entries

under the same HTSUS classification. Given that the unit value

of Tosçelik’s sale is [ ] the AUVs of the Turkish exporters that

comprise [ ] of the total U.S. imports of welded carbon steel

pipe and tube by quantity, Commerce has failed to demonstrate,

by substantial evidence, that Tosçelik’s price is commercially

reasonable. As such, this issue is remanded so that Commerce

may attempt to explain why its methodology is reasonable, or to

point to other grounds that support its ultimate conclusion that
Court No. 06 – 00285 Page 15

Tosçelik’s sale is commercially reasonable. Cf. Luoyang Bearing

Corp. (Group) v. United States, 28 CIT __, __, 347 F. Supp. 2d

1326, 1353 (2004) (remanding because Commerce failed to explain

why it did not address the aberrational import data that the

plaintiffs believed should be excluded).

iii. Commerce’s Analysis Excluding Allegedly Distortive
Entries Does Not Demonstrate That Tosçelik’s Sale Is
Commercially Reasonable

In response to Allied Tube’s concerns, Commerce explains in

its final determination that even if the allegedly distortive

data are excluded, Tosçelik’s sale would still be considered

commercially reasonable. IDM 5-6. To support this conclusion,

Commerce states that a disaggregation of import data from major

Turkish exporters indicates there are “a meaningful number of

shipments with comparable unit values and quantities.” Id. 6.

Commerce does not point to any useful shipment-level data to

demonstrate what it means by a “meaningful” number of shipments

or “comparable” unit values and quantities. Instead, Commerce

asserts that “while the average value of each shipment of welded

pipe and tube during the POR was [ ], the value of individual

shipments ranged from [ ] to [ ].” CRM 4. Commerce claims that

because the value of Tosçelik’s single shipment fits within this

range, it is commercially reasonable. However, this analysis is

problematic because Commerce only compares the value, but
Court No. 06 – 00285 Page 16

ignores the quantity, of each individual shipment. This range

of values is meaningless if the quantity of each shipment is

unknown. Instead, Commerce could have disaggregated the import

data, calculated the shipment unit values, and then compared

them to the unit value of Tosçelik’s shipment. At present,

Commerce has not demonstrated by substantial evidence that when

the allegedly distortive entries are excluded from the analysis,

Tosçelik’s sale is commercially reasonable.7

7
Commerce also suggests that Allied Tube did not include all
relevant figures in its analysis:

[W]e found [Allied Tube’s] analysis did not include
the AUV for a certain Turkish manufacturer, which was
within a reasonable range of Tosçelik’s AUV and higher
than the threshold AUV identified by petitioner.
Moreover, the entry for the exporter reported by
[Customs] was disregarded in petitioner’s analysis
altogether, despite the fact that the specific
exporter’s shipment was higher in volume than
Tosçelik’s U.S. sale. Furthermore, the entered value
of Tosçelik’s U.S. sale is only slightly higher than
the entered value of sales made by the specific
exporter not named by the petitioner, as reported by
[Customs].

IDM 5-6. This explanation is difficult to comprehend because
the Court is unable to identify the “certain Turkish
manufacturer” that Allied Tube failed to include in its
analysis. Allied Tube appears to have accounted for all of the
exporters listed in the chart accompanying the CRM. See Pl.’s
Mot. J. Agency R. 12 n.7. Additionally, the Court is unable to
find an entry that: (1) has an AUV that is higher than “the
threshold AUV identified by petitioner” (i.e., [ ] per MT), (2)
has a higher quantity than Tosçelik’s sale, and (3) has an
entered value that is only slightly lower than Tosçelik’s sale.

(footnote continued)
Court No. 06 – 00285 Page 17

iv. Tosçelik’s U.S. Sale, in Comparison to Its Home Market
Prices, Does Not Demonstrate That the Sale Is
Commercially Reasonable

At the suggestion of Allied Tube, Commerce compared

Tosçelik’s U.S. sale price to its home market prices. Allied

Tube alleges that the price of Tosçelik’s single U.S. sale was [

] than Tosçelik’s average home market sales.8 If this were true,

it would support the claim that Tosçelik was artificially

inflating its U.S. price in order to obtain a favorable

antidumping duty margin. In response, Commerce states that it

“used the prices included in [Tosçelik’s home market database]

and calculated an average [home market price] that is very
9
comparable to the AUV of U.S. imports . . . .” IDM 5.

Notably, Commerce did not directly compare the price of

Tosçelik’s U.S. sale to its home market sales. Instead

Commerce found that Tosçelik’s home market sales were comparable

to the AUV for all U.S. imports. As a result, the usefulness of

Therefore, this explanation is insufficient to support
Commerce’s finding that the price of Tosçelik’s single U.S. sale
is commercially reasonable.
8
Allied Tube claims that Tosçelik’s U.S. sale ([ ] per MT) was
priced [ ] than that of the average of Tosçelik’s home market
sales. Pl.’s Mot. J. Agency R. 11. In fact, the U.S. sale is
only [ ] than the average home market sale.
9
The original language states “U.S. price” instead of “home
market price.” The Court assumes this is a clerical error,
because Commerce could not have used Tosçelik’s home market
price database in order to calculate an average U.S. price.
Court No. 06 – 00285 Page 18

this analysis is entirely dependent on how Tosçelik’s U.S. sale

compares to the AUV for all U.S. imports. Because, as discussed

above, Commerce’s analysis of the AUV of all U.S. imports does

not demonstrate that Tosçelik’s sale was commercially

reasonable, Commerce’s analysis of the home market sales

provides no independent support for its position.

C. Commerce’s Determination That the Quantity of Tosçelik’s
U.S. Sale Is Commercially Reasonable Is Supported by
Substantial Evidence

Allied Tube claims that there is not substantial evidence

to support Commerce’s conclusion that the quantity of Tosçelik’s

U.S. sale is commercially reasonable. In its final

determination, Commerce found that:

[The quantity of Tosçelik’s U.S. sale] is not atypical
of Tosçelik’s normal business practices.
Specifically, the majority of Tosçelik’s home market
sales are made with invoices that have a total
quantity that is less than the sale in question.
Therefore, we find the quantity of Tosçelik’s one sale
to the U.S. is comparable to the size of Tosçelik’s
sales in its home market, and consistent with
Tosçelik’s business practices in the home market.

IDM 5. 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. Cf. Windmill, 26 CIT at 231, 193 F. Supp. 2d at

1313 (“[S]ingle sales, even those involving small quantities,

are not inherently commercially unreasonable and do not
Court No. 06 – 00285 Page 19

necessarily involve selling practices atypical of the parties’

normal selling practices.”).10

D. Commerce’s Determination That the Freight Charges Included
in Tosçelik’s U.S. Sale Price Are Commercially Reasonable
Is Not Supported by Substantial Evidence

Tosçelik shipped its U.S. sale by container with an

international freight charge of [ ] per MT.11 Allied Tube points

out that this freight charge is [ ] the average international

freight charge for U.S. imports from Turkey that fall under the

same HTSUS classification category as Tosçelik’s entry. Pl.’s

Reply Br. 11. Commerce has considered extraordinarily high

10
Allied Tube points out that the average quantity per shipment
of welded carbon steel pipe and tube from Turkey during the POR
was more than [ ] the quantity of Tosçelik’s shipment. Pl.’s
Mot. J. Agency R. 17-18. However, Commerce has demonstrated
that the quantity of the sale is in line with Tosçelik’s selling
practices in its home market. The fact that Tosçelik’s sale is
smaller than the industry average does not render it
commercially unreasonable if the quantity is typical of
Tosçelik’s normal business practices.
11
Initially, Allied Tube claimed that the international freight
cost of Tosçelik’s sale was [ ] per MT. Pl.’s Mot. J. Agency R.
18. Allied Tube believed that this figure excluded domestic
shipping costs. Defendant-Intervenor Tosçelik responded that
this was a clear misstatement of fact, because the [ ] per MT
figure does in fact include domestic inland freight. Def.-
Int.’s Resp. Br. 32-33. In its Reply Brief, Allied Tube
explained that it believed [ ] per MT constituted only the
international freight cost Tosçelik reported in its
questionnaire response that “international freight” was [ ] per
MT. Pl.’s Reply Br. 10-11. Allied Tube corrected its initial
error, and states that the actual international freight charge
(excluding domestic inland freight) is [ ] per MT. Id. 11.
Court No. 06 – 00285 Page 20

freight costs to be evidence that a sale is not bona fide. See

Windmill, 26 CIT at 231, 193 F. Supp. 2d at 1313.

To support its finding that Tosçelik’s freight cost is not

unreasonably high, Commerce states that it “verified Tosçelik’s

reported freight expenses and found the container shipment to be

consistent with Tosçelik’s typical business practices.” IDM 6.

Commerce cites to a Sales Verification Exhibit that shows how

much Tosçelik paid for the freight cost. See id. n.14.

Commerce has not adequately explained how this information

supports the conclusion that Tosçelik’s freight charge in this

case was consistent with its typical business practices.

Commerce also suggests that Tosçelik’s freight expenses are

so high because “Tosçelik’s U.S. sale was shipped by container

rather than full vessel load and included inland freight

expenses from the port of Mersin, Turkey.” Id. 6. The fact

that the shipment was made by container is irrelevant because

Commerce did not demonstrate that it is commercially reasonable

to use this method of shipment. Additionally, the [ ] figure

does not include domestic inland freight in Turkey. Pl.’s Reply

Br. 11. Even without the additional cost of domestic inland

freight, the international freight cost of Tosçelik’s sale is [

] the industry average.
Court No. 06 – 00285 Page 21

Commerce claims that although Tosçelik’s freight charges

may be higher than average, this fact alone does not render the

sale commercially unreasonable. In American Silicon

Technologies v. United States, the Court held that a high

shipping price or unusual mode of shipment does not alone render

a sale commercially unreasonable. 24 CIT 612, 617-18, 110 F.

Supp. 2d 992, 997 (2000). In that investigation, Commerce had

found that although the shipping costs were high, the timing and

mode of shipment did not indicate the sale was commercially

unreasonable because the merchandise entered the United States

“fully six months” prior to the POR and the exporter did not

request a new shipper review. Silicon Metal from Brazil, 64

Fed. Reg. 6305, 6317 (Dep’t Commerce Feb. 9, 1999) (final

results of new shipper review). The Court sanctioned that

approach. Am. Silicon Techs., 24 CIT at 618, 110 F. Supp. 2d at

997. By contrast, Tosçelik’s single shipment entered the United

States on April 28, 2005, only two days before the end of the

POR. Additionally, Tosçelik requested the new shipper review.

This record evidence seems to undercut Commerce’s claim that

“there was no evidence that the freight charge was incurred for

any reason related to the new shipper review.” Def.’s Resp. 17.

Both the timing of the sale and Tosçelik’s request for the new

shipper review indicate otherwise.
Court No. 06 – 00285 Page 22

In summary, there is ample record evidence that Tosçelik’s

freight charges are too high to be commercially reasonable.

Commerce has failed to present any contradictory evidence that

amounts to more than unsupported assertions. As a result,

Commerce’s finding that Tosçelik’s freight charge does not

indicate that the sale is commercially unreasonable is not

supported by substantial evidence.

E. Commerce’s Ultimate Determination That Tosçelik’s Single
U.S. Sale Is Bona Fide Is Not Supported by Substantial
Evidence

The Court must aggregate Commerce’s findings to ultimately

determine whether there is substantial evidence to support its

decision that under the totality of the circumstances,

Tosçelik’s single U.S. sale is bona fide. See Tianjin, 29 CIT

at __, 366 F. Supp. 2d at 1249-50. As discussed above,

Commerce has failed to show that substantial evidence supports

its findings that the price and freight cost of Tosçelik’s sale

are commercially reasonable. On the other hand, there is

substantial evidence to support Commerce’s finding that the

quantity of Tosçelik’s sale is commercially reasonable. The

only remaining factor Commerce considered is Tosçelik’s “sales

process.” CRM 5. Commerce reviewed Tosçelik’s home market and

export selling practices, and found that the U.S. sale “followed

the same sales process as their other export sales.” CRM 5.
Court No. 06 – 00285 Page 23

Allied Tube does not dispute this finding. The fact that

Tosçelik appears to have followed its normal business practices

in executing its single U.S. sale is evidence that the sale is

bona fide. Cf. Windmill, 26 CIT at 231, 193 F. Supp. 2d at 1313

(holding that purchaser’s failure to follow normal business

practices is evidence that sale is not bona fide). However,

“the price factor has significant weight, and cannot necessarily

be offset by a recitation of other factors by which the sale

could be considered typical . . . .” Tianjin, 29 CIT at __, 366

F. Supp. 2d at 1263. Accordingly, under the totality of the

circumstances, the Court does not find substantial evidence to

support Commerce’s finding that Tosçelik’s U.S. sale is bona

fide.

III. CONCLUSIONS

For the foregoing reasons, the Court remands Commerce’s

final new shipper review determination. Specifically, Commerce

must explain, if it is able, why its “range” methodology

(ranking the AUVs of the aggregate imports, within the same

HTSUS classification, of each Turkish exporter) is a reasonable

approach to determining whether the price of Tosçelik’s U.S.

sale is commercially reasonable. In the course of this

explanation, Commerce must address why the seemingly distortive

entries identified by Allied Tube should not be excluded from
Court No. 06 – 00285 Page 24

the analysis concerning the price of Tosçelik’s U.S. sale. If

Commerce is unable to provide such an explanation, it must

either (1) point to other record evidence that shows whether

Tosçelik’s sale is a bona fide transaction under the totality of

the circumstances, or (2) conduct further investigations to

determine the same. A separate order will be issued

accordingly.

_/s/ Richard W. Goldberg
Richard W. Goldberg
Senior Judge

Date: July 9, 2007
New York, New York
 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.

ORDER

Upon consideration of Plaintiffs’ motion for judgment upon
the agency record and briefs in support thereof, Defendant’s and
Defendant-Intervenor’s briefs in opposition thereto, upon all
other papers and proceedings had herein, and upon due
deliberation, it is hereby

ORDERED that Commerce’s final antidumping duty new shipper
review determination in Certain Welded Carbon Steel Pipe and
Tube from Turkey, 71 Fed. Reg. 43444 (Aug. 1, 2006) is remanded;
and it is further

ORDERED that Commerce explain, if it is able, why its
“range” methodology (ranking the AUVs of the aggregate imports,
within the same HTSUS classification, of each Turkish exporter)
is a reasonable approach to determine whether the price of
Tosçelik’s U.S. sale is commercially reasonable; and it is
further

ORDERED that Commerce address in the course of that
explanation why the seemingly distortive entries identified by
Allied Tube should not be excluded from the analysis concerning
the price of Tosçelik’s U.S. sale; and it is further
 ORDERED that Commerce shall, if it is unable to provide
such an explanation, point to other record evidence or conduct
further investigations to determine whether the price of
Tosçelik’s single U.S. sale is commercially reasonable; and it
is further

ORDERED that Commerce shall explain why, in the course of
comparing the AUV of Tosçelik’s single U.S. sale to other AUV
data, it refers to a different value in its data chart [ ] than
in the text of its Commercial Reasonableness Memorandum [ ], and
it is further

ORDERED that Commerce shall, if it is able, point to record
evidence, or, if other record evidence is unavailable, conduct
further investigations to adequately explain why the freight
charge associated with Tosçelik’s sale is typical of Tosçelik’s
business practices, or otherwise commercially reasonable; and it
is further

ORDERED that if Commerce is unable to conclude that
Tosçelik’s sale is a bona fide transaction, the new shipper
review shall be rescinded; and it is further

ORDERED that Commerce shall, within sixty (60) days of the
date of this Order, issue a remand determination in accordance
with the instructions provided herein; and it is further

ORDERED that the parties may, within twenty (20) days of
the date on which Commerce issues its remand determination,
submit briefs addressing Commerce’s remand determination, not to
exceed twenty (20) pages in length; and it is further

ORDERED that the parties may, within fifteen (15) days of
the date on which briefs addressing Commerce’s remand
determination are filed, submit response briefs, not to exceed
fifteen (15) pages in length.

SO ORDERED.
_/s/ Richard W. Goldberg___
Richard W. Goldberg
Senior Judge

Date: July 9, 2007
New York, New York