Shakeproof Assembly Components Div. V. U.S., 97-12-02066.

• Decision Date: 09 June 2000
• Docket Number: Slip Op. 00-67.,No. 97-12-02066.,97-12-02066.
• Citation: 102 F.Supp.2d 486
• Parties: SHAKEPROOF ASSEMBLY COMPONENTS DIVISION OF ILLINOIS TOOL WORKS, INC., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

102 F.Supp.2d 486

SHAKEPROOF ASSEMBLY COMPONENTS DIVISION OF ILLINOIS TOOL WORKS, INC., Plaintiff, v. UNITED STATES, Defendant.

No. 97-12-02066.

Slip Op. 00-67.

United States Court of International Trade.

June 9, 2000.

Creskoff & Doram, L.L.P., Washington, DC, (Stephen M. Creskoff, Robert T. Hume, Lisa E. Smilan) for Plaintiff.

David W. Ogden, Acting Assistant Attorney General, David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Lucius B. Lau), Robert E. Nielsen, Senior Attorney, Office of the Chief Counsel for Import Administration, United States Department of Commerce, of counsel, for Defendant.

OPINION

BARZILAY, Judge.

I. Background

This case provides another chapter in the evolution of methods for determining normal value in cases where dumping has been alleged for products manufactured in nonmarket economies.¹ Before the Court is Commerce's Final Results of Redetermination On Remand Pursuant to Shakeproof Assembly Components Division of Illinois Tool Works, Inc. v. United States, Court No. 97-12-02066 ("Remand Determination"). Shakeproof Assembly Components ("Shakeproof") originally brought this case challenging certain aspects of the Department of Commerce, International Trade Administration's ("Commerce" or "ITA") final determination in Certain Helical Spring Lock Washers from the People's Republic of China; Final Results of Antidumping Duty Administrative Review, 62 Fed.Reg. 61794-801 (Nov. 19, 1997) ("Final Determination"). Commerce assigned Hangzhou Spring Washer Plant, subsequently known as Zhejian Wanxin Group, Co. ("ZWG"), a respondent in the original investigation, an individual dumping margin. On November 15, 1996, Commerce initiated the third annual review covering the period October 1, 1995—September 30, 1996.² Commerce published its preliminary determination on July 11, 1997³ and its Final Determination on November 19, 1997.⁴

Commerce's designation of China as a nonmarket economy went unchallenged; therefore, Commerce used a factors of production analysis, pursuant to 19 U.S.C. § 1677b(c) (1994), to determine the normal value for the helical spring lock washers ("washers") produced by ZWG. Commerce, without objection, chose India as the appropriate surrogate country pursuant to 19 U.S.C. § 1677b(c)(4). Plaintiff did challenge Commerce's use of the price paid for steel wire rod imported from the United Kingdom by ZWG, accounting for 34.7 percent of ZWG's total purchases of steel wire rod during the period of review ("POR"), to value all steel wire rod. Additionally, Plaintiff argued that Commerce failed to verify the price information ZWG submitted and miscalculated the final dumping margin by using duplicative and aberrational data. Defendant agreed that a remand was required to enable Commerce to recalculate the value for steel scrap by eliminating duplicate total quantity and value figures for the period April 1995— August 1995.

For the reasons discussed in Shakeproof Assembly Components Division of Illinois Tool Works, Inc. v. United States, 23 CIT ___, 59 F.Supp.2d 1354 (1999) ("Shakeproof I"), the Court remanded the case to the agency to explain with reference to the record how the use of import price data for steel wire rod to value all steel wire rod, including domestically sourced rod, promoted accuracy in this case, to recalculate the steel scrap factor by eliminating duplicative data and certain import data which were aberrational, and to explain why good cause did not exist to verify the steel wire rod import price information submitted by the respondent.

In its Remand Determination, Commerce asserted that it complied with the Court's instructions. In its Comments Respecting the Final Results of Redetermination on Remand, Submitted on Behalf of Shakeproof Assembly Components Division of Illinois Tool Works Inc. ("Pl.'s Comments"), Plaintiff challenges Commerce's Remand Determination on several bases. Plaintiff first disputes Commerce's methodology, contending that Commerce unlawfully applied a rule not effective during the POR to the facts of this case. Hence, Shakeproof claims, Commerce did not apply relevant administrative and judicial precedent in its Remand Determination. Plaintiff further asserts that Commerce did not follow the Court's instruction to explain how its use of import prices to value the entire factor of production for steel wire rod promotes accuracy, with reference to the record. Finally, Plaintiff states that verification of ZWG's steel import prices was required.

Commerce reaffirms its contention that it complied with the Court's instructions in Def.'s Comments in Rebuttal to Comments Respecting the Final Results of Redetermination on Remand, Submitted on Behalf of Shakeproof Assembly Components Division of Illinois Tool Works Inc. ("Def.'s Comments"). Commerce states that it properly used import prices for domestically-purchased materials to promote accuracy, and that the agency properly determined that good cause did not exist to verify prices submitted by ZWG. Because the Court finds that Commerce's conclusions are both reasonable and supported by substantial evidence, the Court affirms the Remand Determination.

II. DISCUSSION

A. Standard of Review

In reviewing a challenge to Commerce's determination in an antidumping administrative review, the Court is to hold unlawful a determination, finding or conclusion by Commerce that is unsupported by substantial evidence or otherwise not in accordance with law. See 19 U.S.C. § 1516a(b)(1)(B)(i) (1994). Substantial evidence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938); accord Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927, 933 (Fed.Cir.1984). "In applying this standard, the court affirms Commerce's factual determinations so long as they are reasonable and supported by the record as a whole, even if there is some evidence that detracts from the agency's conclusions." Olympia Industrial, Inc. v. United States, 22 CIT ___, ___, 7 F.Supp.2d 997, 1000 (1998) ("Olympia II") (citing Atlantic Sugar, Ltd. v. United States, 2 Fed. Cir. (T) 130, 138, 744 F.2d 1556, 1563 (1984)).

To determine whether Commerce has acted in accordance with law the court must ask whether the agency's actions were reasonable under the terms of the relevant statute. In Shakeproof I, the Court noted that the relevant statute did not speak directly to the issue of any particular methodology Commerce must employ to value the factors of production, and that discretion was therefore vested in Commerce to develop the details of its methodology. 23 CIT at ___, 59 F.Supp.2d at 1357. Thereafter, the Court proceeded to examine whether Commerce acted reasonably pursuant to the second step of the Chevron analysis. See Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. 467 U.S. 837, 843, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). The Court reserved judgment on the reasonableness of Commerce's action, and now reviews Commerce's Remand Determination for that purpose.

In the interim, however, the Supreme Court has revisited the issue of how much deference, and in what circumstances, a reviewing court owes to the actions of an executive agency. In Christensen v. Harris County, ___ U.S. ___, 120 S.Ct. 1655, 146 L.Ed.2d 621 (2000), the Supreme Court refused to extend Chevron deference (courts must defer to an agency's interpretive regulation construing an ambiguous statute) to an opinion letter issued by the Department of Labor's Wage and Hour division because its interpretation of the statute at issue was "not one arrived at after, for example, a formal adjudication or notice-and-comment rulemaking." Id. Both the majority and dissenting opinions recognized that deference is accorded to agency interpretations embodied in formats other than formal adjudications and notice and comment rulemaking. Courts continue to apply deference based on how persuasive or authoritative the reviewing court finds the agency interpretations when compared to the statutory language.⁵

The preliminary question that the Court must answer is whether the Christensen opinion requires a change in the level of deference granted to such agency interpretations. Noting that only the majority opinion is binding, the Court finds that a brief analysis of the majority, concurring, and dissenting opinions is helpful in arriving at an accurate conclusion. The Christensen majority held that "interpretations contained in formats such as opinion letters are `entitled to respect' under our decision in Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 89 L.Ed. 124 (1944), but only to the extent that those interpretations have the `power to persuade.'" Id. at ___, 120 S.Ct. 1655 (citing EEOC v. Arabian American Oil Co., 499 U.S. 244, 256-258, 111 S.Ct. 1227, 113 L.Ed.2d 274 (1991)). Moreover, in response to the government's claim that the opinion letter should be given deference under Auer v. Robbins, 519 U.S. 452, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997), the majority stated, "In Auer, we held that an agency's interpretation of its own regulation is entitled to deference. Id. at 461, 117 S.Ct. 905.... But Auer deference is warranted only when the language of the regulation is ambiguous." Id. at ___, 120 S.Ct. 1655.

Justice Scalia concurred in the judgment, but disagreed with the majority that the Department of Labor's opinion letter was not entitled to Chevron deference, stating that an agency's position warrants Chevron deference if it represents the authoritative view of the agency. Id. at ___, 120 S.Ct. 1655. Justice Breyer's dissent seems to harmonize the apparent difference between the "respect" discussed in Skidmore and the "deference" referred to in Chevron:

Skidmore made clear that courts may pay particular attention to the views of an expert agency where they re...