Trade Court Tells Commerce to Consider Role of Pricing Formula in Date of Sale Analysis
The Commerce Department didn't properly support its decision to base antidumping duty respondent Toyo Kohan's date of sale for the company's U.S. sales on its shipment date in the 2022-23 review of the AD order on diffusion-annealed, nickel-plated flat-rolled steel products from Japan, the Court of International Trade held in a decision issued Oct. 23.
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Judge Jane Restani said that a "[c]areful reading of the record evidence shows that Toyo Kohan’s billing documentation at the time of shipping is virtually meaningless," since it doesn't necessarily show the quantity or price in the purchase order or final invoice. The judge told the agency to reconsider both the date of sale and the sales price for Toyo Kohan's U.S. sales, adding that the agency should recognize that "when there is an agreed-to pricing formula, there may be a disconnect in the record data for the two matters."
The judge also sent back Commerce's use of the Cohen's d test in the review to identify targeted dumping. While Toyo Kohan didn't raise the issue administratively, Restani agreed with the respondent that doing so would have been futile in light of the U.S. Court of Appeals for the Federal Circuit's recent decision in Marmen v. U.S. largely rejecting the agency's use of the test (see 2504220030). Restani previously addressed the futility point in letting Toyo Kohan add a claim against the use of the d test after Marmen was decided, noting that the Marmen decision "clarified the longstanding dispute about the proper application of the Cohen’s d test."
In the review, Commerce based Toyo Kohan's date of sale on the shipment date of the respondent's U.S. sales. Toyo Kohan said that the invoice date is the better date of sale, arguing that the record shows that more than half of its U.S. sales "changed price after shipment, meaning the material terms of sale are not set until the invoice date for most of its U.S. sales."
In finding for the respondent, Restani went through Toyo Kohan's sales process in detail. The company first negotiates sales terms with its customer, which in this review was an unaffiliated buyer. The respondent then offers its customer a price based on an "apparently agreed-upon pricing formula," the court said. The buyer then sends a purchase order to Toyo Kohan, and the respondent then generates an electronic order confirmation which contains the "estimated price, quantity, product specifications, shipment terms, and a sales contract."
Toyo Kohan then makes the merchandise and sends it to the U.S. The respondent's system issues a summary bill to the customer "based on the shipment date and the tentative price in the system at the time." A payment invoice with a final sales price is then generated. Any change in the price between the shipment date and the price found on the final invoice is "an internal difference between the most recent order confirmation and the actual sales price." The respondent provided two sample sales to use as an example of its process.
After reviewing this process, Restani held that the use of the shipment date as the date of sale was "unsupported by the record and a reasoned explanation." The record shows that "Toyo Kohan’s billing documentation at the time of shipping is virtually meaningless, as it does not necessarily reflect the quantity or price in the purchase order or the final invoice." Nothing in the record contradicts the respondent's explanation that "the final price of the goods is not reflected in the shipment documents" due to the agreed-upon pricing formula with the customer.
Toyo Kohan's reporting of a value adjustment field in its U.S. sales database suggests the documented sales price may change after shipment, the court noted. The sample sales submitted by the respondent also support that conclusion, the court said, noting that while the per unit price didn't change between the pre-shipment contract and final invoice in the samples, "no documentation at the time of shipment also demonstrates this per unit price."
(Toyo Kohan v. United States, Slip Op. 25-141, CIT # 24-00261, dated 10/23/25; Judge: Jane Restani; Attorneys: Daniel Porter of Pillsbury Winthrop for plaintiff Toyo Kohan; Emma Bond for defendant U.S. government; James Cannon of Cassidy Levy for defendant-intervenor Thomas Steel Strip Corporation)