CIT Upholds Commerce's Decision to Weight-Average Product-Specific Costs in AD Case

The Court of International Trade remanded parts and sustained parts of the Commerce Department's final determination in the antidumping investigation into utility scale wind towers from Canada in an Oct. 22 opinion. Judge Jennifer Choe-Groves sent back Commerce's decision to reject respondent Marmen's additional cost reconciliation information and use of the average-to-transaction methodology to discover masked dumping, while upholding the agency's weight-average of Marmen's plate costs, use of invoice dates as the date of sale, use of Marmen's reported sales of tower sections rather than complete towers, and decision not to apply facts otherwise available.

During the investigation, Commerce determined that there were no sales of identical merchandise -- that is, utility scale wind towers -- in Canada that could be compared to U.S. sales. So, the agency applied a "hierarchy of characteristics, matching foreign like products based on physical characteristics reported by Marmen." After reviewing the records, Commerce said that evidence revealed steel plate cost differences between control numbers, eventually deciding to weight-average the reported steel plate costs for all reported control numbers, except the control number for the thickest plate.

Marmen argued that differences in its reported costs were related to differences in physical characteristics. Commerce, instead, should have used the respondent's reported costs and should not have weight-averaged them, Marmen said. After reviewing the evidence, Choe-Groves found that Marmen's questionnaire responses and supplier agreements show that the plate costs "did not vary for plates of different thickness, length, width, and weight." Further, Commerce contended that the higher-priced control numbers were sold earlier in the period of investigation, the court said.

"Because record evidence cited by Commerce indicates that Marmen’s plate costs did not differ between plates of varying physical characteristics and that higher priced CONNUMs were sold earlier in the period of investigation, the Court concludes that Commerce’s determination that differences in plate prices were related to timing of production and factors other than differences in physical characteristics is supported by substantial evidence," the opinion said. "The Court concludes that Commerce followed statutory requirements and Commerce’s stated practices, and supported with substantial evidence its determination that Marmen’s records did not reasonably reflect the costs associated with the production and sale of Marmen’s merchandise."

Elsewhere in the opinion, Choe-Groves remanded Commerce's use of a statistical test to discover masked dumping consistent with a recent U.S. Court of Appeals for the Federal Circuit opinion (see 2107150032). In short, the test Commerce used did not adhere to conditions that had to be met before the test could be properly run.

In the investigation, Commerce also rejected Marmen's additional cost reconciliation information as untimely. Marmen, on the other hand, said that the information was merely corrective and not new factual information. The court sided with Marmen on this front, recognizing the corrective nature of the reconciliation data due to "Commerce's own characterization of the submission." Because Commerce itself called it corrective and the information was submitted five months before the final determination, the agency gave no good reason why it couldn't accept the corrective information.

The court also backed Commerce's decision to use Marmen's invoice dates as the date of sale for home market and U.S. sales. The Wind Tower Trade Coalition contested this move, pushing the idea that Commerce has backed off its standard practice of using invoice dates as the date of sale for cases involving large custom-made merchandise. However, Marmen in this instance gave examples of how the orders undergo material changes between the purchase order and the invoice dates. "Because record evidence cited by Commerce show changes to delivery terms, price, quantity, and payment terms, and these terms are considered material, the Court concludes that Commerce’s determination that there were changes to the material terms between the purchase order and invoice date is supported by substantial evidence," the opinion said.

Choe-Groves also addressed the issues of Marmen's reporting of home market sales of tower sections and Commerce's decision to not apply facts otherwise available -- both challenges from the WTTC. The judge held that Marmen's responses were consistent with Commerce's instructions in both instances, sustaining Commerce's holdings on these issues.

(Marmen Inc., et al. v. United States, Slip Op. 21-148, CIT Consol. #20-00169, dated 10/22/21, Judge Jennifer Choe-Groves. Attorneys: Jay Campbell of White & Case for plaintiff and defendant-intervenor Marmen; Alan Price for consolidated plaintiff and defendant-intervenor Wind Tower Trade Coalition; Joshua Kurland for defendant U.S. government)