Nakornthai Strip Mill Public Co. v. United States

Slip Op. 08-58
UNITED STATES COURT OF INTERNATIONAL TRADE

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NAKORNTHAI STRIP MILL PUBLIC :
COMPANY LIMITED, :
:
Plaintiff, :
: Before: Pogue, Judge
v. : Court No. 07-00180
:
UNITED STATES, :
: Public Version
Defendant, :
:
UNITED STATES STEEL :
CORPORATION, :
:
Defendant- :
Intervenor. :
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OPINION

[Plaintiff’s Motion for Judgment on the Agency Record granted-in-
part and denied-in-part.]
Dated: May 28, 2008

Vinson & Elkins (Kenneth J. Pierce, Robert L. LaFrankie, Victor S.
Mroczka) for the Plaintiff.

Gregory G. Katsas, Acting Assistant Attorney General; Jeanne E.
Davidson, Director, Patricia M. McCarthy, Assistant Director,
Commercial Litigation Branch, Civil Division, U.S. Department of
Justice (Claudia Burke); Matthew D. Walden, Attorney, Of Counsel,
Office of the Chief Counsel for Import Administration, U.S.
Department of Commerce, for the United States Department of
Commerce

Skadden, Arps, Slate, Meagher & Flom LLP (Robert E. Lighthizer,
John J. Mangan, Jeffrey Gerrish, Luke A. Meisner) for the
Defendant-Intervenor.

Pogue, Judge: In this action, Plaintiff Nakornthai Strip Mill

Public Company Limited (“Nakornthai”) challenges the final results

of the Department of Commerce’s (“Commerce”) administrative review
Court No. 07-00180 Page 2

of the antidumping order on Nakornthai’s imports. Certain Hot-

Rolled Carbon Steel Flat Products from Thailand, 72 Fed. Reg.

27,802 (Dep’t Commerce May 17, 2007)(final results and partial

recision of antidumping duty administrative review)(“Final

Results”). Specifically, Nakornthai challenges Commerce’s

selection of the invoice date as the date of sale in the United

States for Plaintiff’s merchandise.1 Because of Commerce’s

determination that the material terms of the contract for

Plaintiff’s sales were not final by the contract date, Commerce

utilized the invoice date as the date of sale.

The court finds that Commerce’s conclusion identifying the

potentially material terms of Plaintiff’s contract is based on the

agency’s reasonable interpretation of its own regulation; therefore,

the court affirms this legal conclusion. However, because

Commerce’s factual finding of finality of the terms of sale is

incomplete, the court remands this issue for further consideration.

The court also refrains from adjudicating Nakornthai’s request for

consideration of alternate dates--other than the contract date–- as

the date of sale because Nakornthai failed to exhaust its

administrative remedies on these claims.

1
“In general terms, an antidumping analysis involves a
comparison of export price or constructed export in the United
States with normal value in the foreign market.” 19 C.F.R.
§ 351.401(a) The identification of a “date of sale” for U.S.
price may affect its comparison with sales in the foreign or
“home” market, for example, if exchange rates are changing during
the period of review.
Court No. 07-00180 Page 3

Background

The original antidumping investigation, which gave rise to the

proceeding here, involved hot-rolled carbon steel products imported

from Thailand by Sahaviriya Steel Industries (“SSI”). In the

initial investigation, Commerce found that SSI was dumping the

subject merchandise and imposed a duty of 4.44 percent. Certain

Hot-Rolled Carbon Steel Flat Products From Thailand, 66 Fed. Reg.

59,562, 59,563 (Dep’t Commerce Nov. 29, 2001) (notice of

antidumping duty order).2 After Commerce published an opportunity

to request an administrative review of the order, see Antidumping

or Countervailing Duty Order, Finding, or Suspended Investigation,

70 Fed. Reg. 65,883 (Dep’t Commerce Nov. 1, 2005) (opportunity to

request administrative review); see also Section 751 of the Tariff

Act of 1930, 19 U.S.C. § 1675,3 Defendant-intervenor U.S. Steel,

and Nucor Corporation (“Nucor”), pursuant to 19 C.F.R.

§ 351.213(b)(1), requested an administrative review for the period

2
The November 29, 2001 antidumping order originally
subjected SSI to a 4.44 percent antidumping duty, which was
subsequently lowered to 3.86 percent. Nakornthai was subject to
the same antidumping duty rate, under a separate “all others”
rate category, up until the time it received its own company-
specific rate in the proceeding challenged here. See, e.g., Final
Results, 72 Fed. Reg. 27,802 and accompanying Issues and Decision
Memorandum 2, available at
http://ia.ita.doc.gov/frn/summary/THAILAND/E7-9526-1.pdf (“Issues
and Decision Mem.”).
3
Further citation to the Tariff Act of 1930 are to the
relevant provisions of Title 19 of the U.S. Code, 2000 edition.
Court No. 07-00180 Page 4

of November 1, 2004, through October 31, 2005.4 Commerce granted

the request, see Initiation of Antidumping and Countervailing Duty

Administrative Reviews and Request for Revocation in Part, 70 Fed.

Reg. 76,024, 76,025 (Dep’t Commerce Dec. 22, 2005), and issued an

initial antidumping questionnaire (“Part A”) to Nakornthai on

January 3, 2006. Three other sets of questionnaires followed, Parts

B, C, and D, and by March 9, 2006, Nakornthai had also responded to

these supplemental questionnaires.

Nakornthai’s questionnaire responses indicated that, during

the period of review, Nakorthai contracted with one wholesaler of

metals and metal ores, to import its products. This contract was

the only U.S. sale of the subject merchandise that Nakornthai made

during the period of review. Pl.’s Mot. for J. on the Agency R. 2

(“Pl.’s Mot.”); Def.-Intervenor’s Mem. in Opp. to Pl.’s Mot. for J.

on the Agency R. 1 (“Def.-Intervenor’s Opp. Mem.”). Nakornthai’s

original contract, dated in a specific month in 2004, identified

4
19 C.F.R. § 351.213(b) states:

Request for administrative review. (1) Each year during
the anniversary month of the publication of an
antidumping or countervailing duty order, a domestic
interested party or an interested party described in
section 771(9)(B) of the Act (foreign government) may
request in writing that the Secretary conduct an
administrative review under section 751(a)(1) of the
Act of specified individual exporters or producers
covered by an order . . . if the requesting person
states why the person desires the Secretary to review
those particular exporters or producers.

19 C.F.R. § 351.213(b)(1).
Court No. 07-00180 Page 5

multiple line items designating products to be shipped to several

end users in the United States. The parties later made three

changes to the contract. The first amendment, made the next month

in 2004, removed the specification of the range of quantities to be

purchased for each item to be sold under the contract (the “per-

item tolerance level”),5 leaving only a total quantity tolerance

level. The second amendment, made in yet again the following month,

changed the payment terms, and the third amendment, made in yet

again the following month, changed both the expiration date on the

letter of credit and the last shipment date for the merchandise. In

other words, in each of the three months following the original

contract, the parties amended its terms.

Nakornthai shipped its products under this contract shortly

after the third contractual amendment. The day after the last date

of the shipments, Nakornthai issued a final invoice for its

products.

Nakornthai’s responses to Commerce’s questionnaires identified

its original contract date as the United States date of sale.

Attach. to Letter from Kenneth J. Pierce, Willkie Farr & Gallagher

LLP, on behalf of Nakornthai; to the Honorable Carlos M. Gutierrez,

Secretary of Commerce, Re: Antidumping Duty Administrative Review

of Certain Hot-Rolled Carbon Steel Flat Products from Thailand:

5
The “tolerance” level is expressed as a quantity, plus or
minus (+/-) a specified percentage.
Court No. 07-00180 Page 6

Resp. to Section A of the Department’s Questionnaire (Feb. 14,

2005), C.R. Doc. 3 at A-3 (“Nakornthai’s Resp. to Part A

Questionnaire”). Nakornthai also stated in its responses that it

considered the contract’s amendments to be minimal and not material

to the overall contract and sale. Id. at A-27; Pl.’s Resp. to the

Dep’t’s July 26, 2006, Third Supplemental Questionnaire Re: Section

C, Aug. 7, 2006, at 6.

Commerce made a preliminary determination that Nakornthai’s

products had been sold at less than fair value, i.e., a dumping

determination, for the period of review. Commerce’s preliminary

determination did not adopt the contract date as the date of sale

as Nakornthai had proposed in its questionnaire responses. Rather,

Commerce, in calculating the dumping margin, used the final invoice

date as the U.S. date of sale rather than the original contract

date. Certain Hot-Rolled Carbon Steel Flat Products from Thailand,

71 Fed. Reg. 65,458, 65,461-62 (Dep’t Commerce Oct. 31, 2006)

(preliminary results of antidumping duty administrative review and

rescission in part)(“Preliminary Results”). In addition, Commerce

determined that the amendments made material changes to the

contract. In coming to these conclusions, Commerce reasoned, first,

that department regulations created a presumption in favor of using

the invoice date as the date of sale. Furthermore, Commerce

reasoned, the fact that the parties had made three amendments to

the contract in the space of a few months meant that the terms of
Court No. 07-00180 Page 7

the contract were not settled until the commercial invoice actually

issued.

Commerce’s preliminary results also reasoned that the

amendments to the contract constituted material changes to the

terms of sale because they “altered the payments terms and the

letter of credit.” Mem. From Stephen Bailey, Case Analyst, to File,

Preliminary Results Analysis for Nakornthai Strip Mill Public Co.

Ltd: Antidumping Duty Administrative Review of Certain Hot-Rolled

Carbon Steel Flat Products from Thailand, C.R. Doc. 39, 2 (Dep’t

Commerce Oct. 31, 2006)(“Preliminary Results Mem.”). In Commerce’s

view, the fact that material terms were being changed throughout

the period of review also supported its choice of the invoice date

as the date of sale; not only were the terms of the contract not

finalized until the invoice issued, but also, the changes being

made affected quantities at the heart of the contract. Def.’s Mem.

in Opp. to Pl.’s Mot. for J. Upon the Admin. R., 8-9 (“Def.’s Opp.

Mem.”).

After Commerce made its preliminary determination, Nakornthai

submitted a case brief, pursuant to 19 C.F.R. § 351.309(c).6 In

6
19 C.F.R. § 351.309(c)(2) specifies:

The case brief must present all arguments that continue
in the submitter’s view to be relevant to the
Secretary’s final determination or final results,
including any arguments presented before the date of
publication of the preliminary determination or
preliminary results. As part of the case brief, parties
(continued...)
Court No. 07-00180 Page 8

its case brief, Nakornthai objected to Commerce’s use of the

invoice date and argued generally for an alternative date of sale

to be used instead of the invoice date. Specifically, the company

again proposed that Commerce use the date on which the contract was

formed, i.e., the original contract date. Case Brief of Nakornthai

Strip Mill Public Company Limited, 6-7 (Jan. 8, 2007)(“Nakornthai

Case Br.”).

Nakornthai also objected to Commerce’s determination that the

amendments to the contract affected the material terms of the sale.

Nakornthai argued that “[n]one of [the changes] impacted the

material terms of sale (i.e., price and quantity).” Nakornthai Case

Br. 3. “In other words, there is no variance in the material terms

of sale from the contract to the invoice.” Id. at 4. The contract’s

first amendment “merely modified the tolerance level in the

contract from per item to per total.” Id. While the contract’s

second amendment changed the timing of the payment, and the third

amendment changed the letter of credit’s expiration date and the

last date of shipment, Nakornthai maintained that the contract’s

“material terms,” i.e., price and quantity, were not changed by any

of the three amendments. Id.

6
(...continued)
are encouraged to provide a summary of the arguments
not to exceed five pages and a table of statutes,
regulations, and cases cited.
Court No. 07-00180 Page 9

In its final determination, Commerce continued to use the

invoice date as the U.S. date of sale, based on its determination

that one of the contract’s amendments made a material change to the

contract. Final Results, 72 Fed. Reg. 27,802, and accompanying

Proprietary Arguments from the Issues and Decision Memorandum for

the Final Results of Certain Hot-Rolled Carbon Steel Flat Products

from Thailand 13-14 (“Proprietary Issues and Decision Mem.”)

Commerce reasoned that by eliminating the tolerance levels for

individual line items in the contract, Nakornthai could potentially

alter the mix of products ordered.7 The final dumping

determination issued on May 7, 2007. Final Results, 72 Fed. Reg.

27,802.

Nakornthai now seeks review of Commerce’s determination,

challenging it as contrary to law and unsupported by substantial

evidence. Specifically, as the court understands Plaintiff’s

complaint, pursuant to USCIT R. 56.2, Plaintiff seeks judgment on

the agency record, declaring contrary to law Commerce’s conclusion

that the specification of line-item quantities in Plaintiff’s

contract for the sale of merchandise imported into the United

States was a material term of that contract. Plaintiff also seeks

a judgment declaring unsupported by substantial evidence Commerce’s

7
Commerce also noted that it was moot whether changes to
the payment terms or the letter of credit constituted changes to
material sales terms. See Proprietary Issues and Decision Mem.
14.
Court No. 07-00180 Page 10

determination that, because said line-item quantities were subject

to change after the contract was signed, the material terms of

Plaintiff’s contract were not final or established by the contract

date.

Jurisdiction and Standard of Review

28 U.S.C. § 1581(c) provides jurisdiction for the court’s

review of civil actions brought under Section 516A of the Tariff

Act of 1930. 19 U.S.C. § 1516a. Under 19 U.S.C. § 1516a(a), the

Court reviews determinations made, pursuant to 19 U.S.C. § 1675, by

the Department of Commerce during its administrative review. See 19

U.S.C. § 1516a(a)(2)(A)(i)(I) and (B)(iii).

In such a review, the court will uphold “any determination,

finding or conclusion” which the agency has made unless it is

“unsupported by substantial evidence on the record, or otherwise

not in accordance with law.” 19. U.S.C. § 1516a(b)(1)(B). Fujitsu

Gen. Ltd. v. United States, 88 F.3d 1034, 1038 (Fed. Cir.

1996)(quoting 19 U.S.C. § 1516a(b)(1)(B)).

Discussion

To apply the standard of review to Nakornthai’s claim, the

court will divide its discussion into four parts. First, the court

will summarize the statutory and regulatory provisions relevant to

Commerce’s determination. Second, the court will explain its
Court No. 07-00180 Page 11

conclusion that Commerce’s interpretation of the materiality

provision in the relevant regulation is reasonable and therefore in

accordance with law. Third, the court will consider Commerce’s

factual finding of finality of the terms of Nakornthai’s sale and

whether that finding is supported by substantial evidence in the

record. Fourth, the court will discuss its decision not to further

adjudicate Nakornthai’s request for consideration of alternate

dates--other than the contract date–- as the date of sale because

Nakornthai has failed to exhaust its administrative remedies on

these claims.

A. Relevant Statuory and Regulatory Provisions

The statutory provisions relevant to Nakornthai’s challenge to

Commerce’s determination of a date of sale are 19 U.S.C. §§ 1673

and 1677a. These provisions leave the precise definition of “date

of sale” to the agency. Section 1677a(a), for example, reads,

“[t]he term ‘export price’ means the price at which the subject

merchandise is first sold (or agreed to be sold) before the date of

importation by the producer or exporter of the subject merchandise

. . . .” 19. U.S.C. § 1677a(a). This provision does not determine

whether the date of sale is the contract date or invoice date; it

could be either, if, as in the present case, both the date of sale

and the date of invoice occurred before the merchandise was

actually brought into the U.S. Because the statute is ambiguous,
Court No. 07-00180 Page 12

the court will defer to Commerce’s reasonable interpretation of the

statute. Chevron U.S.A. Inc. v. Natural Resources Defense Council,

Inc., 467 U.S. 837 (1984).

Commerce’s interpretation is contained in its regulations

which state a presumption in favor of the use of the invoice date

as the date of sale. 19 C.F.R. § 351.401(i)(2007).8 See Hornos

Electricos de Venezuela, S.A. v. United States, 27 CIT 1522, 1535-

36, 285 F. Supp. 2d 1353, 1366-67 (2003). Consequently, unless the

party seeking to establish a date of sale other than the invoice

date produces sufficient evidence to establish, to Commerce’s

satisfaction, that “a different date better reflects the date on

which the exporter or producer establishes the material terms of

sale,” Commerce will use the invoice date as the date of sale. 19

C.F.R. § 351.401(i)(2007); Accord Hornos Electricos de Venezuela,

27 CIT at 1537, 285 F. Supp. 2d at 1367.

In Nakornthai’s case, Commerce determined that the quantity

tolerance level specified in the contract was a “material term[] of

8
That section reads:

in identifying the date of sale of the subject
merchandise or foreign like product, the Secretary
normally will use the date of invoice, as recorded in
the exporter or producer’s records kept in the ordinary
course of business. However, the Secretary may use a
date other than the date of invoice if the Secretary is
satisfied that a different date better reflects the
date on which the exporter or producer establishes the
material terms of sale.

19 C.F.R. § 351.401(i).
Court No. 07-00180 Page 13

[the] sale.” Therefore, the next issue is whether Commerce’s

determination that the quantity tolerance level constituted a

material term of Nakornthai’s contract is a reasonable

interpretation of Commerce’s regulation and is therefore in

accordance with law.

B. Commerce’s Determination of Potential Materiality is Reasonable

From the beginning of the administrative process, Nakornthai

has argued that the changes it had made to the contract were

minimal and therefore immaterial. In response to the first

questionnaire it received from Commerce, Nakornthai stated, “during

[the fourth period of review], for U.S. sales, there were only two

minor changes, (i.e., tolerance applicability and payment terms)

after the terms of the contract were agreed upon . . . .”

Nakornthai’s Resp. to Part A Questionnaire C.R. Doc. 3 at A-27.9

The problem with this argument is that it conflates a factual

issue, i.e., the extent of the actual change in contract terms,

9
In response to a question in Commerce’s third
questionnaire, Nakornthai also stated that all the copies of the
final invoices that it had provided to its wholesaler “support a
finding of contract date as the date of sale because all material
terms of sale were set in the contract (i.e., there is no
variance in material terms between the contract and the
invoices.)” Attach. to Letter from Kenneth J. Pierce, Willkie
Farr & Gallagher LLP, on behalf of Nakornthai; to the Honorable
Carlos M. Gutierrez, Secretary of Commerce, Re: Antidumping Duty
Administrative Review of Certain Hot-Rolled Carbon Steel Flat
Products from Thailand: Resp. to the Department’s Third
Supplemental Questionnaire Re: Section C (Aug. 7, 2006), C.R.
Doc. 30 at 6.
Court No. 07-00180 Page 14

with a legal issue, i.e., whether a particular contractual term is

a “material” term of sale.

Commerce’s preliminary results acknowledged Nakornthai’s

argument that the changes contained in the contract’s amendments

were minimal, but noted that one of these amendments changed the

tolerance level for the products at issue. Preliminary Results

Mem., C.R. Doc. 39, 2. On the strength of this change, Commerce

determined that “material” changes to the contract had occurred as

a result of the contract’s amendments. Id. Nakornthai challenged

this finding in its case brief before Commerce, arguing that the

only material terms of a contract were price and quantity, to which

there had been no changes. Attach. to Letter from Kenneth J.

Pierce, Willkie Farr & Gallagher LLP, on behalf of Nakornthai; to

the Honorable Carlos M. Gutierrez, Secretary of Commerce, Re:

Certain Hot-Rolled Carbon Steel Flat Products from Thailand: Case

Brief of Nakornthai Strip Mill Public Co. Ltd. (Jan. 8, 2007), C.R.

Doc. 45 at 3.

In its rebuttal brief, U.S. Steel cited precedent to argue

that Commerce had a long history of considering tolerance to be a

material term. Attach. to Letter from Robert E. Lighthizer,

Skadden, Arps, Slate, Meagher & Flom, LLP, on behalf of U.S. Steel;

to the Honorable Carlos M. Gutierrez, Secretary of Commerce, Re:

Fourth Administrative Review of Certain Hot-Rolled Carbon Steel

Flat Products from Thailand (Jan. 16, 2007), C.R. Doc 48 at 5, n.
Court No. 07-00180 Page 15

16 (“U.S. Steel Case Br.”)(citing Certain Hot-Rolled Steel Flat

Products from Thailand, 66 Fed. Reg. 49,622 (Dep’t Commerce Sept.

28, 2001)(notice of final determination of sales at less than fair

value)(“Final Results of Original Investigation”), and accompanying

Issues and Decisions Mem. (Comment 9)(where the contract has a

built in tolerance of +/- 10 percent and quantity changes occurred

within such delivery tolerances, “we agree with petitioners that

any differences between the quantity ordered and the quantity

shipped which fall within the tolerance specified by the entire

contract do not constitute changes in the material terms of

sale.”)); see also Certain Hot-Rolled Flat-Rolled Carbon Quality

Steel Products from Brazil, 64 Fed. Reg. 38,756, 38,768 (Dep’t

Commerce July 19, 1999)(notice of final determination of sales at

less than fair value)(“[t]he Department considers the date of sale

to be the date on which all substantive terms of sale are agreed

upon by the parties. This normally includes the price, quantity,

delivery terms and payment terms.”). U.S. Steel also argued that

the elimination of the per item tolerance in the contract’s

amendments affected the product mix, a term which Commerce also

considers to be material. U.S. Steel Case Br. 5. Commerce agreed

with U.S. Steel’s logic and precedent and determined that changes

in tolerance could lead to changes in quantity, and therefore

constitute material changes.
Court No. 07-00180 Page 16

As noted above, the determination of whether a change in line-

item quantities is “material” for purposes of Commerce’s date of

sale regulation is a legal issue, i.e., it involves Commerce’s

interpretation of its own regulation. Here, Commerce has

interpreted “material terms of sale” to include the specification

of a quantity tolerance level. Such a determination is reviewed to

determine whether it is in accordance with law. To the court,

Commerce’s legal determination is reasonable because quantity

tolerance level may reasonably be viewed as specifying the amount

or quantity of the merchandise to be shipped. Accordingly, the

quantity tolerance may reasonably be considered material to the

terms of sale. See SeAH Steel Corp. v. United States, 25 CIT 133,

135 (2001)(finding line-item quantity data necessary to a

determination of material terms of sale). Considered in this

light, Commerce’s adherence to its precedent, in its regulatory

interpretation here, is reasonable. See Royal Thai Government v.

United States, 436 F.3d 1330, 1340 (Fed. Cir. 2006)(deferring to

Commerce’s reasonable interpretation of its regulation.)

Nakornthai asserts that Commerce has not adhered to the use of

the invoice date in every case that has come before it, and has

used initial contract date even in cases where amendments to the

contract have been made after the initial contract date. Pl.’s

Reply Br. 5 (citing Final Results of Original Investigation, and

accompanying Issues and Decision Mem. (Comment 9); Steel Concrete
Court No. 07-00180 Page 17

Reinforcing Bars from Latvia, 71 Fed. Reg. 7,016 (Dep’t Commerce

Feb. 10, 2006) (notice of final results of antidumping duty

administrative review), and accompanying Issues and Decision Mem.,

11; Steel Concrete Reinforcing Bars from Latvia, 71 Fed. Reg.

74,900 (Dep’t Commerce Dec. 13, 2006)(notice of final results of

antidumping duty administrative review), and accompanying Decision

Mem. (Cmt. 2).

The court notes that although the cases to which Nakornthai

cites are indeed cases where Commerce used the contract date rather

than the invoice date, they are also cases in which Commerce

considered a number of factors before arriving at the use of the

contract date. These factors, such as whether there were changes to

material terms such as price and quantity, and how significant

these changes were, are the same factors that Commerce used in

coming to its conclusion to use the invoice date in the present

case. Here, Commerce examined these factors and determined that the

first amendment to the contract changed the quantity tolerance

level, a term which Commerce has a history of considering to be a

material term; as a result, Commerce reasonably determined that the

amendments had the potential to change the material terms of the

contract. This much of Commerce’s determination is therefore in

accordance with law.

Commerce’s determination, however, must also be supported by

substantial evidence. Accordingly, the court now considers whether
Court No. 07-00180 Page 18

Commerce’s choice to use the invoice date as the date of sale,

rather than the contract date, was, based on the record in this

administrative review, so supported.

C. Commerce’s Factual Finding Regarding the Date on which the

Material Terms of Nakornthai’s Sale were established is Incomplete.

In choosing a date of sale, Commerce weighs the evidence

presented and regularly determines the significance of any changes

to the terms of sales involved. See, e.g., Certain Cut-to-Length

Carbon Steel Plate from Romania, 72 Fed. Reg. 6,522 (Dep’t Commerce

Feb. 12, 2007)(notice of final results of antidumping duty

administrative review and final partial rescission), and

accompanying Issues and Decision Mem. (Comment 7) (recognizing as

not significant one sale of a small quantity outside the specified

quantity tolerance level). As Commerce noted in its issues and

decision memorandum here, such a determination involves Commerce’s

consideration of “which date best reflects the date on which the

exporter/producer establishes the material terms of sale (i.e.,

price and quantity).” Proprietary Issues and Decision Mem., 13

(emphasis added).

Commerce argues that the fact that the quantity tolerance

level was changed, in whatever amount, demonstrates that the

contract’s material terms were subject to change and therefore not

finally settled until the invoice date. The problem with this
Court No. 07-00180 Page 19

argument is that it begs the question of whether any such changes

were insignificant.

Nakornthai argues that the contract’s amendments made changes

that were minimal or insignificant. As a result, Nakornthai argues

that it is appropriate to use the original contract date as the

date of sale rather than the final invoice date.

As noted above, the record demonstrates that the original

contract specified both an overall quantity tolerance and an

individual, per item, tolerance level. One of the contract’s

amendments, however, removed the line-item quantity tolerance,

giving Nakornthai greater leeway with respect to the products it

shipped. Commerce examined Nakorthai’s invoices and found that

this leeway allowed Nakornthai to ship a larger amount of one item,

and that this increase was large enough to fall outside the

originally-specified line-item quantity tolerance level. Def.-

Intervenor’s Opp. Mem. 2. This increase appears to distinguish this

case from the Sept. 28, 2001 determination in the original

investigation, Final Results of Original Investigation, and

accompanying Issues and Decision Mem. (Comment 9).

On the other hand, Nakornthai also argues that the contract

amendment affected less than .1% of the total quantity of goods

sold and shipped under the contract. Pl.’s Reply Br. 6. At the

same time, the quantity actually shipped of the one changed line-

item was 14.5% higher than the upper end of the originally-
Court No. 07-00180 Page 20

specified tolerance level, and more than 25% above the specific

line-item quantity for that product specified in the original

contract.10 Commerce did not discuss or make a finding with regard

to this evidence, either on its own or when considered in light of

the elimination of tolerance levels in the contract. Moreover, on

this record, the court cannot conclude that Nakornthai has

necessarily submitted sufficient evidence to establish that the

contract date “better reflects the date on which” Nakornthai and

its wholesaler set the material terms of sale. For example, it is

not apparent to the court whether the variation in the quantities

for one line-item is sufficient to affect “product mix” in any

significant way or to alter the dumping margin. It is of course

settled that the fact that the evidence could support two

inconsistent conclusions does not mean that an agency’s finding is

not supported by substantial evidence, Consolo v. Fed. Maritime

Comm’n, 383 U.S. 607, 620 (1966), and the court will not substitute

its own judgment for that of the agency. Here, however, the agency

has not made a factual finding with regard to the significance of

Nakorthai’s evidence or the date the terms of the contract were

essentially “established” in light of the evidence submitted. The

10
That is, the “total line-item quantity actually shipped
was [ ]MT, which exceeds the initial contract quantity
tolerance limit of [ ]MT by slightly more than [ ] MT.” Pl.’s
Mot. 4.
Court No. 07-00180 Page 21

agency’s determination of this issue is therefore incomplete and

must be remanded.

D. Nakornthai’s Failure to Exhaust is Administrative Remedies

Precludes Judicial Review of Alternative Dates of Sale.

In its briefs presented to the court, Nakornthai asks the

court to consider alternative dates as a date of sale, and not

limit its review to the contract date or the invoice date.

Specifically, Nakornthai argues that, should the court find the

contract date to be inappropriate as the date of sale, the court

should consider using either the date on which the contract was

last amended (“contract amendment date”) or the date on which the

goods shipped (“shipment date”), rather than uphold Commerce’s use

of the invoice date.

In rebuttal, both Commerce and U.S. Steel argue that, because

Nakornthai failed to raise its alternative sales dates before

Commerce, Nakornthai failed to exhaust its administrative remedies.

Defendants argue that Commerce decided on the invoice date as

between two choices: invoice date and contract date, and that the

record amply supports the choice. As a result, they argue,

alternative dates are not properly before the court.

As a judicially created doctrine, the requirement of

exhaustion reflects courts’ reluctance to usurp an agency’s power

by meddling in the agency’s affairs before the issue is ripe for
Court No. 07-00180 Page 22

judicial determination. See, e.g., Sandvik Steel Co. v. United

States, 164 F.3d 596 (Fed. Cir. 1998); Ta Chen Stainless Steel Pipe

v. United States, 28 CIT 627, 342 F. Supp. 2d 1191 (2004). Federal

courts therefore usually require parties to exhaust their

administrative remedies before appealing.

This Court has the benefit of specific statutory support for

the exhaustion doctrine. See, 28 U.S.C. § 2637(d)(“the Court of

International Trade shall, where appropriate, require the

exhaustion of administrative remedies.”).

In determining, case-by-case, when exhaustion is

“appropriate,” the Court has “generally taken a strict view of the

need for parties to exhaust their remedies by raising all arguments

in a timely fashion so that they may be appropriately addressed by

the agency.” Ta Chen, 28 CIT at 644, 342 F. Supp. 2d at 1205;

Pohang Iron and Steel Co. v. United States, 23 CIT 778, 792 (1999).

Here, the court begins its exhaustion analysis with Commerce’s

administrative procedures for challenging an antidumping

determination. This procedure requires parties to submit a case

brief that “must present all arguments that continue in the

submitter’s view to be relevant to the Secretary’s final

determination or final results, including any arguments presented

before the date of publication of the preliminary determination or

preliminary results.” 19 C.F.R. § 351.309(c)(2). The Court

recently noted that the requirement to present “all” relevant
Court No. 07-00180 Page 23

arguments means that arguments that are omitted before the agency

cannot be argued on appeal. Carpenter Tech. Corp. v. United States,

30 CIT ___, 452 F. Supp. 2d 1344 (2006).

Here, Nakornthai did submit a case brief to Commerce following

the preliminary results. The issue, therefore, is whether that

brief’s general argument in favor of using a date other than the

invoice date was sufficient to give Commerce notice of the specific

alternatives that Nakornthai now raises on appeal, where those

alternatives were not mentioned at the administrative level.

Several of the Court’s precedents are instructive. In Ta Chen,

for example, a Taiwanese producer and exporter of fittings

submitted a case brief challenging Commerce’s Constructed Export

Price (“CEP”). Ta Chen, 342 F.Supp. 2d at 1205. The brief argued

specifically that Commerce’s calculation of the CEP adjustment was

unsupported by substantial evidence. Id. Ta Chen also specifically

challenged Commerce’s decision to deny the company a CEP offset

adjustment to normal value to reflect asserted level of trade

differences between the home and U.S. markets. Id. at 1199, 1204.

After the submission of Ta Chen’s brief, Commerce reopened the

response period because there were specific issues to which Ta Chen

had not responded. Id. at 1196. When Ta Chen submitted a revised

brief to the agency, it had deleted its discussion of the CEP

offset issue and had omitted documents on the reimbursement issue.

Id. When Ta Chen raised these specific arguments on appeal before
Court No. 07-00180 Page 24

the court, the court held that Ta Chen, in omitting these arguments

from its revised brief, had failed to present them to Commerce

before making them before the court. Id. at 1205. “Whatever may

have been the merits” of these claims, the court said, they were

“doomed by the company’s failure to raise the issue before the

Commerce Department in a timely fashion.” Id. at 1205.

Paul Muller Industrie Gmbh & Co. v. United States is also

informative here. Paul Muller Industrie Gmbh & Co. v. United

States, 31 CIT __, 502 F. Supp. 2d 1271 (2007). In Paul Muller,

Timken U.S. Corporation, a defendant-intervenor, argued broadly in

its case brief that Commerce needed “to account for U.S. carrying

costs incurred on an ex-factory basis, as it did for the home

market side.” Id. at 1274. Timken also “suggested that the sum of

the time in inventory in the home market, the transit time, and the

time in inventory in the U.S. would be a more accurate approach for

the calculation.” Id. The company also suggested “that Commerce

consider the entered value as the cost of goods upon entry to the

U.S.” Id. On appeal before the court, however, Timken argued more

specifically that for U.S. inventory, “the estimate of inventory

cost must account for costs incident to the transaction between the

producer and the U.S. affiliate such as transportation costs,

duties, and brokerage fees.” Id.

The court refused to allow these more specific arguments on

appeal, finding that “Timken waived its right to raise the issue of
Court No. 07-00180 Page 25

freight, duties, and brokerage fees by failing to raise the issue

before Commerce in the course of its review.” Id. at 1275. The fact

that Timken “raised general issues regarding inventory carrying

costs is not adequate to apprise Commerce of what it would need to

specifically respond to regarding these additional issues,” the

court held, and dismissed Timken’s claims. Id.

To the court, the present case appears similar to that in Paul

Muller. Nakornthai raised broad arguments before Commerce regarding

the propriety of using the invoice date as the date of sale, but did

not raise the specific alternatives it now seeks to raise before the

court. Nakornthai did not properly raise these alternatives before

Commerce, and may not now raise them on appeal because it has not

exhausted its administrative remedies with respect to these

alternative dates.11 Despite Nakornthai’s failure to exhaust,

however, Commerce is still free on remand to determine, in

accordance with its regulations and based on the record, which date

“reflects the date on which the exporter or producer establish[ed]

the material terms of sale.”

11
Nakornthai also argues that even if it has failed in its
duty of exhaustion, such a requirement should be excused here
because the presentation of alternative dates involves a pure
matter of law. However, as the court analysis above has
demonstrated, the agency’s choice of the invoice date over any
other alternative involves both legal and factual components.
Accordingly, the presentation of alternative dates does not
involve a pure matter of law.
Court No. 07-00180 Page 26

Conclusion

Accordingly, Plaintiff’s Motion for Judgment on the Agency

Record is denied-in-part and granted-in-part. The matter is

remanded to the agency for further consideration in accordance with

this opinion. Remand results are due by July 28, 2008. Comments

on the remand results are due by August 18, 2008. Reply comments

are due by September 10, 2008.

SO ORDERED.

/s/Donald C. Pogue
Donald C. Pogue, Judge

Dated: May 28, 2008
New York, N.Y.