In Oral Argument, Steel Exporters and DOJ Clash Over Ambiguity of Questionnaire Questions

Deficiency notices are only required when the Commerce Department has decided to reject a submission and apply adverse facts available, the government said in oral argument in a case regarding the department’s alleged erroneous failure to apply a constructed export price (CEP) offset to two South Korean steel manufacturers (Wheatland Tube v. U.S., CIT # 22-00160).

Antidumping duty respondents Husteel and Hyundai argued that Commerce still hadn’t provided them adequate notice of deficiency, instead refusing to tell them what it hadn’t liked about their earlier decisions. The court initially remanded the results for that reason (see 2308030038), but it seemed to have changed its position during oral argument.

This is an issue of the respondents not liking the conclusion Commerce reached -- not a situation that required a deficiency notice, DOJ attorney Robert Kiepura said. Specifically, the respondents disagree with Commerce’s determination that not enough evidence had been provided for it to determine a CEP offset existed, he said.

If Commerce was required to notify a respondent every time it determined that not enough evidence had been provided by them to support a particular conclusion, the department would never be able to find against the exporter, he said, and Judge Timothy Reif echoed this in his own questioning of Hyundai’s attorney. Instead, the department would have to keep providing notices in an “endless loop,” Kiepura said.

Hyundai’s attorney, John Goldfeder, argued that Commerce’s questionnaire question had been vague.

The question, which Commerce asked in an original questionnaire and repeated in a supplemental one, “essentially” only asked Hyundai to provide Commerce a quantitative analysis justifying use of a CEP offset that didn’t include direct expenses, Goldfeder said. He said that Hyundai complied with the request the first time around.

“We gave a quantitative analysis,” he said. “It only considered indirect, not direct, expenses.”

In response, Kiepura said that the questionnaire question had been “very clear.”

“Instead of providing the analysis that Commerce was looking for, the respondents compared their employee labor data for the home market to the U.S. market, but neither respondent provided an analysis showing how expenses assigned to sales at different claimed levels of trade impacted the price comparability,” Kiepura said.

“Did you tell them what you just said to us?” Reif asked.

Kiepura said that Commerce had.

“I think the court might say the parties, apparently, are going to have to agree to disagree over this point,” Reif said.