Steel Exporter Tells CAFC Commerce Erred in Picking Benchmark to Value Land Subsidy
The Court of International Trade erred in affirming the Commerce Department's use of a report from Colliers International rather than one from Cushman & Wakefield as the benchmark for valuing the rent-free use of land to respondent Kaptan's affiliate Nur, Kaptan argued in its opening brief at the U.S. Court of Appeals for the Federal Circuit (Kaptan Demir v. United States, Fed. Cir. 26-1229).
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Kaptan said Commerce elevated what was "effectively marketing material" in the Colliers report over the Cushman & Wakefield report, adding that the agency only has the discretion to choose between "land-value reports" when both of them are "reasonable" valuations of the land in question. However, here, the Cushman & Wakefield report bears on the land in question, while the Colliers report "values land 750 miles away, in an area bearing little relation to the land in question."
For instance, Commerce couldn't use a land-value report from "Midtown Manhattan to value a land subsidy near the port of Brunswick, Georgia -- located 14 hours drive down Interstate 95," Kaptan said. "That is precisely what Commerce did here, however, and the CIT ultimately affirmed it."
The case concerns the 2023 administrative review of the countervailing duty order on steel concrete reinforcing bar from Turkey in which Commerce used the Colliers report as the benchmark for valuing Nur's rent-free use of land in the Turkish province of Trabzon. Kaptan argued that the Colliers report used data from Cerkezkoy, which isn't representative of the land values in Trabzon.
The trade court disagreed, finding that Kaptan didn't place enough information in the record to "suggest that the factors it raised -- like GDP, industrial development, distance from Surmene, and value of foreign trade -- detracted from the validity of the Cerkezkoy benchmark" (see 2510060046).
The present appeal followed in which the respondent argued that CIT must be reversed "based solely on the Cushman & Wakefield Report for several reasons." The Colliers report is "only relevant to real estate trends in Greater Istanbul, not undeveloped land in a distant province 750 miles away," the brief said.
In addition, the Colliers report can't be considered reliable or "substantial evidence of rent values," since the review itself says that it's "not a valuation and cannot be used as a valuation," doesn't list any "underlying data from which its conclusions are drawn" and doesn't list any "methodology or methods of calculation," the brief said. In contrast, the Cushman & Wakefield report must be used, since it's the only valuation that provides actual evidence of land values, was prepared in line with "industry-standard methodology," lists all underlying data used, and details its conclusions and calculation methodology, Kaptan argued.
In rejecting Kaptan's challenge, the trade court noted that the Cushman & Wakefield report appeared to be created in anticipation of litigation. In response, Kaptan argued that the record has no evidence showing the report is a "litigation-inspired fabrication." The respondent said this is a "very serious accusation -- quite literally accusing the internationally respected company Cushman & Wakefield of lying about the rental value of land in Trabzon, Turkey[,] on behalf of a single client."
Kaptan wrote that the accusation, "which would border on perjury if true," is only supported by the fact that Kaptan commissioned the report. "The record does not contain any evidence that the Cushman & Wakefield Report misrepresented or minimized the land values in Trabzon, for litigation purposes or otherwise," the brief said.