CAFC Questions Use of Sales Price as COP in AD Investigation
Judges at the U.S. Court of Appeals for the Federal Circuit on May 7 questioned both exporter AG der Dillinger Huttenwerke and the U.S. regarding the exporter's proposed quality code for sour service pressure vessel plate and the Commerce Department's use of Dillinger's sales price as the cost of production for non-prime steel plate. Judges Jimmie Reyna, Timothy Dyk and Alan Lourie's questions regarding the non-prime plate centered on whether the issue was foreclosed by the CAFC's previous holding in Dillinger France v. U.S. (AG der Dillinger Huttenwerke v. United States, Fed. Cir. # 24-1498).
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The Dillinger France court said Commerce couldn't use sales price to value the cost of production for non-prime plate, since a product's costs have to be based on a party's actual costs. The court said using sales prices for calculating production costs led to circular reasoning.
Marc Montalbine, counsel for Dillinger, said the Dillinger France court "made it clear" that the statute says "costs have to be based on costs, because they're supposed to be an independent marker or standard to judge whether the sales are below cost or not." As a result, Montalbine urged the court to remand Commerce's final determination in the antidumping duty investigation on carbon and alloy steel cut-to-length plate from Germany.
DOJ attorney Kara Westercamp said Commerce can properly use sales price for the cost of production of non-prime plate in the investigation, since it's relying on a different statute than the one at issue in Dillinger France and using the sales prices as facts otherwise available. She also noted that the Court of International Trade upheld the use of sales prices as FA in the Dillinger France case itself after the issue was remanded to the trade court following the appellate court's decision.
Judges Dyk and Reyna repeatedly pressed Westercamp on this point, with Reyna noting that the Statement of Administrative Action says that Commerce "should base its decisions on that which is most probative of the issue under consideration." He added that he has a "difficulty in seeing how adopting selling prices in the cost of production analysis leads you to the most probative consideration." The judge said it's "contrary to most of dumping law." Westercamp said it's a different consideration when Commerce is invoking the statute for filling gaps on the record as opposed to the statute governing calculating costs of production.
Montalbine spent the bulk of his argument on the model match issue. During the investigation, Commerce rejected Dillinger's proposed quality code for sour service petroleum transport plate. The code was submitted for the first time in Dillinger's supplemental questionnaire response as part of the agency's model match criteria. The code was used to account for physical differences between sour service petroleum transport plate and other steels designated for the transport of petroleum products.
Reyna questioned why it took so long for Dillinger to request the separate product code. In response, Montalbine said Commerce told the company it can add new quality codes and that the agency never said the submitted information was untimely.
Westercamp argued that Dillinger submitted the code too late, since it came just 45 days before the investigation's preliminary determination. Stephanie Bell, counsel for petitioner Nucor, echoed this point. Reyna asked Bell what is the point of supplemental questionnaires if Commerce is just going to disregard the information submitted in response to them. In response, Bell said Dillinger's proposed code wasn't responsive to a question in the supplemental questionnaire but was responding to an earlier question.