CIT Upholds 0% AD Rate for Pipe Exporter Despite AD Evasion Finding
The Commerce Department properly decided not to use adverse facts available against antidumping duty respondent Saha Thai Steel Pipe Public Company on remand in a case on the 2018-19 administrative review of the AD order on circular welded carbon steel pipes and tubes from Thailand, the Court of International Trade held on Feb. 4. Judge Gary Katzmann rejected petitioner Wheatland Tube Company's argument that an intervening decision from the U.S. Court of Appeals for the Federal Circuit on the scope of the AD order impacts the court's previous decision rejecting the use of adverse facts available against Saha Thai.
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The judge held that a previous decision in the case, written by then-Judge Stephen Vaden, was made independent of the scope issue before the Federal Circuit, since Commerce failed to provide Saha Thai an opportunity to remedy its submission and improperly resorted to AFA.
While the review at issue was underway, Commerce opened a scope inquiry into whether line pipe or dual-stenciled pipe made by Saha Thai was within the scope of the AD order, and CBP initiated an Enforce and Protect Act investigation on whether importer Blue Pipe Steel Center Company evaded the AD order by misclassifying standard pipe made by Saha Thai as line pipe.
In the scope case, CAFC upheld Commerce's scope ruling that the language of the AD order covers dual-stenciled pipe even though the trade court rejected the scope ruling (see 2405150027). CIT then sustained CBP's finding that Blue Pipe evaded the AD order via its imports of Saha Thai's pipe.
In the AD review at issue, Commerce used AFA to calculate a 37.55% dumping margin, since Saha Thai made the goods at issue in the evasion proceeding. The agency concluded that Saha Thai was “aware that sales of dual-stenciled standard pipe and line pipe should be reported to Commerce for purposes of this administrative review.” The court previously remanded this conclusion on the basis that Commerce failed to both notify Saha Thai of the basis for the AFA finding and give the company a chance to "cure deficiencies in its submission."
On remand, the agency dropped its use of AFA and assigned Saha Thai a zero percent dumping margin. Despite not challenging this move on remand, Wheatland argued before the court that Commerce erred in not resorting to AFA, since the court erred in previously concluding that Saha Thai didn't "intentionally fail to report sales of dual-stenciled pipe." The petitioner added that Commerce doesn't need to provide notice of its decision to use AFA "when a respondent acts fraudulently."
Katzmann first held that Wheatland didn't fail to exhaust its administrative remedies by not first raising its issues with the agency on remand. The judge said "[a]t its core, Wheatland’s challenge to the Remand Results is a challenge to this court’s previous Remand Order," noting that the agency has "no discretion to grant the relief that Wheatland seeks." It would have been futile to raise the issues on remand, the court said.
On the merits, the judge said Commerce didn't err in deciding not to use AFA on remand. Wheatland argued that Katzmann's decision was predicated on CIT's prior decision rejecting Commerce's scope ruling, which was reversed by the Federal Circuit. However, Katzamann said that while the court discussed the scope issue at length in the previous remand order, the judge also said his consideration of the case was "wholly independent of the results" of the scope case.
And while Wheatland also claimed that the trade court incorrectly found that Saha Thai didn't act intentionally when it "concealed its sales of dual-stenciled pipe" based on the results of the evasion proceeding, Katzmann held that Commerce ultimately made "no finding of fraud in this case." Due to the lack of a finding of fraud, the agency violated the law by failing to provide notice and a chance to comment before applying AFA, the court said.
Luke Meisner, counsel for Wheatland, said it's "disappointing that this decision does not recognize that Saha Thai was committing fraud when it concealed its sales of subject pipe by calling them 'dual-stenciled' pipe and selling the through Blue Pipe to cover its tracks. Because Saha Thai's failure to report these U.S. sales involved fraud, it never should have been given a second chance to report them. Commerce's original application of adverse inferences was the right result."
(Saha Thai Steel Pipe Public Company v. United States, Slip Op. 26-9, CIT # 21-00049, dated 02/04/26; Judge: Gary Katzmann; Attorneys: Daniel Porter of Pillsbury for plaintiff Saha Thai Steel Pipe Public Company; Claudia Burke for defendant U.S. government; Luke Meisner of Schagrin Associates for defendant-intervenor Wheatland Tube Company)