Slip Op. 20-148

                UNITED STATES COURT OF INTERNATIONAL TRADE


 SAHA THAI STEEL PIPE PUBLIC
 COMPANY LIMITED,

        Plaintiff,

 v.

 UNITED STATES,
                                                 Before: Jennifer Choe-Groves, Judge
        Defendant,
                                                 Court No. 19-00208
 and

 WHEATLAND TUBE COMPANY,
 INDEPENDENCE TUBE
 CORPORATION, and SOUTHLAND
 TUBE, INCORPORATED,

        Defendant-Intervenors.


                                   OPINION AND ORDER

[Remanding the U.S. Department of Commerce’s remand redetermination in the 2017–2018
administrative review of the antidumping duty order covering circular welded carbon steel pipes
and tubes from Thailand.]

                                                                  Dated: October 19, 2020

Daniel L. Porter, Curtis, Mallet-Prevost, Colt & Mosle LLP, of Washington, D.C., for Plaintiff
Saha Thai Steel Pipe Public Company Limited. Tung A. Nguyen and James P. Durling also
appeared.

Elizabeth A. Speck, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, D.C., for Defendant United States. With her on the brief
were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and Franklin E.
White, Jr., Assistant Director. Of counsel on the brief was Brandon J. Custard, Attorney, Office
of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.

Roger B. Schagrin, Elizabeth J. Drake, and Paul W. Jameson, Schagrin Associates, of
Washington, D.C., for Defendant-Intervenor Wheatland Tube Company. Christopher T.
Court No. 19-00208                                                                         Page 2


Cloutier, Luke A. Meisner, Geert M. De Prest, Kelsey M. Rule, Nicholas J. Birch, and William
A. Fennell also appeared.

Alan H. Price, Robert E. DeFrancesco III, Cynthia C. Galvez, and Theodore P. Brackemyre,
Wiley Rein, LLP, of Washington, D.C., for Defendant-Intervenors Independence Tube
Corporation and Southland Tube, Incorporated. Adam M. Teslik, Christopher B. Weld, Derick
G. Holt, Elizabeth V. Baltzan, Elizabeth S. Lee, Jeffrey O. Frank, Laura El-Sabaawi, Maureen E.
Thorson, Stephanie M. Bell, Tessa V. Capeloto, and Timothy C. Brightbill also appeared.


       Choe-Groves, Judge: Plaintiff Saha Thai Steel Pipe Public Company Limited

(“Saha Thai” or “Plaintiff”) challenges the U.S. Department of Commerce’s (“Commerce”) final

results in the March 1, 2017 to February 28, 2018 administrative review of the antidumping duty

order on circular welded carbon steel pipes and tubes from Thailand. Before the court is

Plaintiff’s motion for judgment on the agency record. For the reasons discussed below, the court

remands Commerce’s Final Results for further consideration.

                                    ISSUES PRESENTED

       The court reviews the following issues:

   1. Whether Commerce’s particular market situation adjustment to the cost of production

       when conducting a sales-below-cost test is in accordance with the law; and

   2. Whether Commerce’s duty drawback adjustment is in accordance with the law.

                                       BACKGROUND

       Commerce entered the antidumping duty order on circular welded carbon steel pipes and

tubes from Thailand in 1986. Antidumping Duty Order; Circular Welded Carbon Steel Pipes

and Tubes from Thailand, 51 Fed. Reg. 8,341 (Dep’t Commerce Mar. 11, 1986). Commerce

initiated an administrative review of the antidumping duty order for the period of March 1, 2017

through February 28, 2018. Initiation of Antidumping and Countervailing Duty Administrative

Reviews, 83 Fed. Reg. 19,215, 19,217 (Dep’t Commerce May 2, 2018) (PR 104). Commerce
Court No. 19-00208                                                                            Page 3


selected Saha Thai, a Thai producer of subject merchandise, as the sole mandatory respondent.

Resp’t Selection Mem., PR 20 (June 25, 2018).

       After Saha Thai submitted questionnaire responses, but before Commerce issued

preliminary results, domestic producer Wheatland Tube Company (“Wheatland”) “allege[d] that

a particular market situation existed in Thailand during the period of review (“POR”) such that

the costs of production of circular welded pipe . . . are distorted and do not accurately reflect the

cost of production in the ordinary course of trade.” Wheatland Allegation 1, PR 47–51 (Nov. 1,

2018). Wheatland averred that: (1) the Royal Thai Government subsidized Thai producers of

hot-rolled coil, enabling its sale at below-market prices to downstream producers of circular

welded carbon steel pipes, and (2) the prices for imports of hot-rolled coil into Thailand were

distorted through dumping, subsidization, and global overcapacity.

       Commerce published the preliminary results of its review on May 17, 2019. Circular

Welded Carbon Steel Pipes and Tubes from Thailand, 84 Fed. Reg. 22,450 (Dep’t Commerce

May 17, 2019) (prelim. admin. review) and accompanying Prelim. Decision Mem., PR 81 (May

10, 2019) (“PDM”) (collectively, “Preliminary Results”). In the Preliminary Results, Commerce

calculated a weighted-average dumping margin of 5.32% for Saha Thai. 84 Fed. Reg. at 22,451.

Commerce determined in the Preliminary Results that a particular market situation in Thailand

distorted the cost of production of circular pipes and tubes. PDM at 6–7. Commerce determined

preliminarily that the record was sufficient to quantify the particular market situation’s impact

and to administer an alternative calculation methodology to address distortions in Saha Thai’s

production costs.

Commerce relied on the subsidy rate determined for hot-rolled

steel coil producers in the countervailing duty investigation of hot-rolled steel flat products from

Thailand.

Certain Hot-Rolled Carbon Steel Flat Products From Thailand, 66 Fed.
Court No. 19-00208                                                                           Page 4


Reg. 50,410 (Dep’t Commerce Oct. 3, 2001). In order to adjust the alleged distortions in hot-

rolled steel coil input prices, Commerce increased the input’s price by: (1) the United States

subsidization rate applicable to hot-rolled steel producers from Thailand; (2) the safeguard duty

rate imposed by the Government of Thailand on hot-rolled steel coil imports; and (3) the

applicable antidumping duty rates for hot-rolled steel coil imported from certain countries. See

PDM at 7–8.

       Commerce published the final results of its review on November 20, 2019. Circular

Welded Carbon Steel Pipes and Tubes from Thailand, 84 Fed. Reg. 64,041 (Dep’t Commerce

Nov. 20, 2019) (final results of antidumping duty administrative review and final determination

of no shipments; 2017–2018); see also Issues and Decision Mem. for the Final Results of

Antidumping Duty Administrative Review; 2017–2018), PR 121 (Nov. 13, 2019) (“IDM”)

(collectively, the “Final Results”). In the Final Results, Commerce calculated a weighted-

average dumping margin of 5.15% for Saha Thai. 84 Fed. Reg. at 64,042. Commerce

maintained its determination that a particular market situation distorted the cost of hot-rolled

steel coil, a key component of the subject merchandise. IDM at 4–13

       Saha Thai initiated this action challenging Commerce’s Final Results on November 27,

2019. Summons, Nov. 27, 2019, ECF No. 1; Compl., Nov. 27, 2019, ECF No. 6. The court

entered a statutory injunction on December 4, 2019, granted Wheatland’s motion to intervene on

December 19, 2019, and granted Independence Tube Corporation and Southland Tube,

Incorporated’s motion to intervene on December 26, 2019. Order for Statutory Inj. Upon

Consent, Dec. 4, 2019, ECF. No. 11; Order, Dec. 19, 2019, ECF No. 17; Order, Dec. 26, 2019,

ECF No. 24.
Court No. 19-00208                                                                          Page 5


       Saha Thai moved for judgment on the agency record. Pl. Saha Thai’s Mot. J. Agency R.

and Br. in Supp. (“Saha Thai Br.”), May 15, 2019, ECF Nos. 32, 33. Defendant United States

(“Defendant”) and Defendant-Intervenors Wheatland, Independence Tube Corporation, and

Southland Tube, Incorporated (collectively, “Defendant-Intervenors”) responded. Def.’s Resp.

to Pl. Mot. J. Agency R. (“Def. Resp.”), June 15, 2020, ECF No. 36; Def.-Intervenors’ Resp. Br.

(“Def.-Intervenor Br.”), June 15, 2020, ECF No. 35. Plaintiff replied. Saha Thai’s Reply Br.,

July 13, 2020, ECF No. 37. Defendant filed the joint appendix on July 27, 2020. J.A., July 27,

2020, ECF Nos. 38, 39.

                      JURISDICTION AND STANDARD OF REVIEW

       The court has jurisdiction under 19 U.S.C. § 1516a(a)(2)(B)(iii) and 28 U.S.C. § 1581(c),

which grant the court authority to review actions contesting the final results of an administrative

review of an antidumping duty order. The court will uphold Commerce’s determinations unless

they are unsupported by substantial record evidence, or otherwise not in accordance with the law.

19 U.S.C. § 1516a(b)(1)(B)(i).

                                          DISCUSSION

       I.      Particular Market Situation

                     A.        Governing Law

       Commerce determines antidumping duties by calculating the amount by which the

normal value of subject merchandise exceeds the export price or the constructed export price for

the merchandise. 19 U.S.C. § 1673. When reviewing antidumping duties in an administrative

review, Commerce must determine: (1) the normal value and export price or constructed export

price of each entry of the subject merchandise, and (2) the dumping margin for each such entry.

The statute dictates the steps by which Commerce may calculate
Court No. 19-00208                                                                              Page 6


normal value “to achieve a fair comparison” with export price or constructed export price.

the statute specifies the methodology for Commerce to determine which sales

should be considered and disregarded in calculating normal value. Normal value is “the price at

which the foreign like product is first sold . . . in the exporting country . . . in the ordinary course

of trade.”

outside the ordinary course of trade are excluded from

normal value. “Ordinary course of trade” is defined in Section 1677(15) as excluding: (1) sales

made at less than the cost of production, and (2) sales that cannot be compared properly with the

export price or constructed export price due to a particular market situation.

To determine whether “sales . . . have been made at prices that represent less than the cost

of production,” the statute directs Commerce to conduct the sales-below-cost test.

cost of production is defined by statute to include the cost of materials and

processing, amounts for selling, general, and administrative expenses, and the cost of all

containers and expenses incidental for shipment.

that Commerce

determines, by application of the sales-below-cost test, were made at prices below the cost of

production or that Commerce determines were made in a particular market situation, are outside

the ordinary course of trade and are disregarded from the calculation of normal value. See

“Whenever such sales are disregarded, normal value shall be

based on the remaining sales of the foreign like product in the ordinary course of trade.” See

1677(15)(A), (C).

        Second, when using market prices to determine normal value, Commerce may make

certain adjustments to the remaining home market prices. The statute lists authorized

adjustments for incidental shipping, delivery expenses, and direct taxes; and for differences
Court No. 19-00208                                                                           Page 7


between the subject merchandise and foreign like products in quantity, circumstances of sale, or

level of trade.

       Third, when using home market sales for normal value, if Commerce cannot determine

the normal value of the subject merchandise based on home market sales, then Commerce may

use qualifying third-country sales or a constructed value as a basis for normal value.

(b)(1). Constructed value represents: (1) the cost of materials

and fabrication or other processing of any kind used in producing the merchandise; (2) the actual

amounts incurred and realized for selling, general, and administrative expenses, and for profits,

in connection with the production and sales of a foreign like product, in the ordinary course of

trade, for consumption in the foreign country; and (3) the cost of packing the subject

merchandise.

calculating constructed value, if Commerce determines that

a particular market situation exists “such that the cost of materials and fabrication or other

processing of any kind does not accurately reflect the cost of production in the ordinary course of

trade, [then] [Commerce] may use . . . any other calculation methodology.”

to the Cost of Production for the
                               Sales-Below-Cost Test

       For purposes of determining whether sales were made at less than cost, in this case

Commerce made an adjustment to Saha Thai’s reported cost of production to account for the

particular market situation Commerce determined existed during the period of review in the Thai

domestic market prices for the input of hot-rolled coil. IDM at 4. Saha Thai argues that

Commerce has no legal authority to make a particular market situation adjustment to Saha Thai’s

costs of production for sales-below-cost test purposes. Saha Thai Br. at 5–15.

       As this Court has held repeatedly, the statute does not authorize a particular market

situation adjustment to the cost of production when Commerce applies the sales-below-cost test
Court No. 19-00208                                                                           Page 8


to determine which home market sales to exclude from the calculation of normal value. See

Saha Thai Steel Pipe Pub. Co. v. United States, 43 CIT __, __, 

, 1368–70

(2019); Husteel Co. v. United States, 44 CIT __, __, 

, 1383–89 (2020);

Borusan Mannesmann Boru Sanayi Ve Ticaret A.Ş. v. United States (“Borusan”), 44 CIT __, __,

, 1411–12 (2020). Defendant recognizes the existence of this line of cases

in which the Court has repeatedly rejected Commerce’s attempts to apply the particular market

situation cost adjustment for purposes of the sales-below-cost test, yet Defendant characterizes

Commerce’s unlawful adjustments as a disagreement between the Court and Commerce. Def.

Resp. at 23. Defendant argues that these cases, including this court’s review of the prior

administrative review of the related antidumping duty order, Saha Thai Steel Pipe Public Co. v.

United States, 43 CIT __, 

(2019), “are not final and remain subject to

appeal. Thus, they are not binding on the Court (or Commerce) in this case.” Def. Resp. at 23.

       Here, Commerce applied an adjustment to the cost of production calculation set forth in

Section 1677b(b)(3) for purposes of the sales-below-cost test pursuant to Section 1677b(b)(1).

See IDM at 4–7. Commerce relies mistakenly on Section 504 of the Trade Preferences

Extension Act of 2015 (“TPEA”), Pub. L. No. 114-27, 129 Stat. 362, for the authority to adjust

the cost of production for the sales-below-cost test. Commerce explains that:

       [T]he term “ordinary course of trade,” defined in section 771(15) of the Act,
       includes “situations in which the administering authority determines that the
       particular market situation prevents a proper comparison {of normal value} with
       the export price (EP) or constructed export price (CEP).” Thus, where a [particular
       market situation] affects the [cost of production] of the foreign like product, such
       as through distortions to the cost of inputs, it is reasonable to conclude that such a
       situation may prevent a proper comparison of normal value with the U.S. price,
       irrespective of whether normal value is based on comparison market prices or
       constructed value. Saha Thai’s claim that an examination of a cost-based
       [particular market situation] for purposes of the [cost of production] goes beyond
       the plain language of the Act fails to consider that the provision at issue, section
       773(e) of the Act, specifically includes the term “ordinary course of trade.” Thus,
Court No. 19-00208                                                                             Page 9


       the definition of that term, again, found in section 771(15) of the Act, is integral to
       that cost-based [particular market situation] provision as well as the sales-based
       [particular market situation] provision. Accordingly, we disagree with Saha Thai
       that Commerce cannot analyze a cost-based [particular market situation] claim in
       determining whether a company’s comparison market sale prices were below cost,
       and, therefore, are outside the “ordinary course of trade.”

IDM at 6–7. Commerce exercised “discretion to use ‘any other calculation methodology’ if

costs are distorted by a cost-based [particular market situation], including for the purposes of

determining the [cost of production] under section 773(b)(3) of the Act.”

Commerce

made a particular market situation adjustment to costs based on Section 1677b(e). Commerce

asserts that the cost-based particular market situation analysis and alternative calculation

methodology set forth in Section 1677b(e) are available whether Commerce bases normal value

on home market sales or constructed value. Def. Resp. at 20; IDM at 5–7. Defendant also

asserts that the sales-below-cost test set forth in Section 1677b(b)(1), by relying on the phrase

“ordinary course of trade” defined in Section 1677(15)(C) as excluding sales made in a particular

market situation, authorizes Commerce to conduct the particular market situation analysis and

adjust costs based on Sections 1677b(b)(1) and 1677(15)(C).

the TPEA amended the statutory provisions governing constructed value.

The amendment authorized Commerce to use alternative cost methodologies when computing

constructed value after making a particular market situation determination. The amended

language provides:

       For purposes of paragraph (1) [in reference to calculating constructed value] if a
       particular market situation exists such that the cost of materials and fabrication or
       other processing of any kind does not accurately reflect the cost of production in
       the ordinary course of trade, the administering authority [Commerce] may use
       another calculation methodology under this part or any other calculation
       methodology.
Court No. 19-00208                                                                         Page 10


19 U.S.C. § 1677b(e). In other words, the amended statute gives Commerce discretion to adjust

the cost of production calculation methodology when determining constructed value if

Commerce determines that a particular market situation exists. See

on Section 1677b(e) when, as here, Commerce bases normal value on home market sales. No

part of the statute allows Commerce to use any other methodology when market sales are used

for normal value. See Saha Thai Steel Pipe Pub. Co., 43 CIT at __, 422 F. Supp. 3d at 1368–70;

Husteel Co., 44 CIT at __, 426 F. Supp. 3d at 1383–89; Borusan, 44 CIT at __, 426 F. Supp. 3d

at 1411–12. The “any other methodology” language is reserved solely for when normal value is

determined by constructed value. Husteel Co., 44 CIT at __, 426 F. Supp. 3d at 1388.

       As to Sections 1677b(b)(1) and 1677(15)(C), Defendant argues that Section

1677b(b)(1)’s reference to the phrase “ordinary course of trade” authorizes Commerce to

conduct a cost-based particular market situation analysis and adjustment in the course of the

sales-below-cost test. Def. Resp. at 19. Section 1677b(b)(1) provides:

       (b) Sales at less than cost of production.

               (1) Determination; sales disregarded. Whenever the administering
       authority has reasonable grounds to believe or suspect that sales of the foreign like
       product under consideration for the determination of normal value have been made
       at prices which represent less than the cost of production of that product, the
       administering authority shall determine whether, in fact, such sales were made at
       less than the cost of production. If the administering authority determines that sales
       made at less than the cost of production--

                      (A) have been made within an extended period of time in substantial
                          quantities, and

                      (B) were not at prices which permit recovery of all costs within a
                          reasonable period of time,

       such sales may be disregarded in the determination of normal value. Whenever
       such sales are disregarded, normal value shall be based on the remaining sales of
       the foreign like product in the ordinary course of trade. If no sales made in the
Court No. 19-00208                                                                         Page 11


        ordinary course of trade remain, the normal value shall be based on the constructed
        value of the merchandise.

19 U.S.C. § 1677b(b)(1). Section 1677b(b)(1) sets forth the sales-below-cost test based on the

calculation specified in Section 1677b(b)(3) to confirm that sales were made at less than the cost

of production. Within Section 1677b(b) for “Sales at less than cost of production,” the sub-

section 1677b(b)(1) for “Determination; sales disregarded” authorizes Commerce to disregard

those below-cost sales as outside the ordinary course of trade.

plain

language of the reference to “ordinary course of trade” provides that sales on which normal value

are based must be in the ordinary course of trade.

Sales made at

less than cost, between affiliates, and in a particular market situation are excluded from the

definition of “ordinary course of trade” in Section 1677(15). Thus, sales in those three

categories are disregarded for purposes of calculating normal value based on market sales.

Nothing in the statute grants Commerce the authority to modify the sales-below-cost test to

permit a particular market situation analysis or adjustment, and the specificity of the sales-below-

cost test leaves no ambiguity. See Conn. Nat’l Bank v. Germain, 

, 253–54 (1992)

(“[C]ourts must presume that a legislature says in a statute what it means and means in a statute

what it says there.”).

        In sum, although Section 504 of the TPEA amended Section 1677b(e) for “Constructed

Value” to grant Commerce discretion to use an alternative calculation methodology, and Section

1677(15) for “Ordinary course of trade” to grant Commerce an additional ground on which it

may disregard sales from the normal value calculation when using home market sales, the

Section 504 amendment did not amend Section 1677b(b), which sets out the calculation of the

cost of production for the sales-below-cost test to determine whether and which sales should be

disregarded as outside the ordinary course of trade when normal value is based on home market
Court No. 19-00208                                                                        Page 12


sales. “[W]here ‘Congress includes particular language in one section of a statute but omits it in

another section of the same Act, it is generally presumed that Congress acts intentionally and

purposely in the disparate inclusion or exclusion.’” Thomas v. Nicholson, 

, 1284

(Fed. Cir. 2005) (quoting Russello v. United States, 

, 23 (1983)). Thus, the statute

authorizes Commerce to disregard certain sales when basing normal value on home market sales,

or to use an alternative calculation methodology upon a cost-based particular market situation

determination when basing normal value on constructed value.

       Here, however, Commerce applied a cost-based particular market situation adjustment for

purposes of the sales-below-cost test of Section 1677b(b)(1), while basing normal value on home

market sales. The statute does not authorize Commerce to adjust the cost of production as an

alternative calculation methodology when using normal value based on home market sales under

Section 1677b(e) as claimed by Commerce. The statute also does not authorize Commerce to

adjust the cost of production for purposes of the sales-below-cost test under Sections 1677b(b)(1)

and 1677(15)(C) as claimed by Commerce. Section 1677b(e) applies only when Commerce

bases normal value on constructed value. Because Commerce based normal value on home

market sales here, not constructed value, Section 1677b(e) is inapplicable. Nothing in Sections

1677b(b)(1) and 1677(15)(C) authorizes Commerce to adjust the cost of production for the sales-

below-cost test.

       Based on the foregoing, the court concludes that Commerce’s particular market situation

adjustment for purposes of the sales-below-cost test while basing normal value on home market

sales is not in accordance with the law. The court does not reach the question of whether

Commerce’s particular market situation determination is supported by substantial evidence.
Court No. 19-00208                                                                           Page 13


       II.     Duty Drawback Adjustment

       Saha Thai argues that Commerce should have made a duty drawback adjustment for

“imputed Thai AD and safeguard duties that [Commerce] calculated on Saha Thai’s purchased

[hot-rolled coil] pursuant to its [particular market situation] adjustment methodology.” Saha

Thai Br. at 34. Defendant responds that Commerce’s adjustment of Saha Thai’s acquisition costs

was based on a particular market situation that led to distortions in hot-rolled steel coil prices,

and that this adjustment was based on amendments to the TPEA, not the duty drawback statute.

Def. Resp. at 37. Defendant argues further that Saha Thai did not develop the record to establish

that Saha Thai was exempt from paying antidumping and safeguard duties.

for these reasons, Commerce did not include antidumping or safeguard duties when

calculating the duty drawback adjustment.

“no additional

duty drawback adjustment to U.S. price is warranted for the completely unrelated [particular

market situation] adjustment Commerce applied.” Def.-Intervenor Br. at 19.

       The court remands for Commerce to eliminate the particular market situation adjustment

because Commerce may not adjust the cost of production when using normal value based on

home market sales, and thus the court need not consider whether Commerce should have made a

duty drawback adjustment.

                                              CONCLUSION

       The court concludes that Commerce’s cost-based particular market situation adjustment

is not in accordance with the law. The court does not opine on whether Commerce should have

made a duty drawback adjustment.

       Accordingly, it is hereby
Court No. 19-00208                                                                     Page 14


         ORDERED that the Final Results are remanded for Commerce to remove its cost-based

particular market situation adjustment and recalculate the respondents’ weighted-average

dumping margins without a particular market situation adjustment; and it is further

         ORDERED that this action will proceed per the following schedule:

         1. Commerce must file the remand redetermination on or before November 23, 2020;

         2. Commerce must file the administrative record on or before December 11, 2020;

         3. Comments in opposition to the remand redetermination must be filed on or before

            January 11, 2021;

         4. Comments in support of the remand redetermination must be filed on or before

            February 11, 2021; and

         5. The Joint Appendix must be filed on or before February 25, 2021.


                                                                  /s/ Jennifer Choe-Groves
                                                                Jennifer Choe-Groves, Judge
Dated:    October 19, 2020
         New York, New York