118 F.Supp.2d 1366 (CIT. 2000), 99-08-00466, Nippon Steel Corp. v. United States

Docket Nº:Court No. 99-08-00466.
Citation:118 F.Supp.2d 1366
Party Name:NIPPON STEEL CORPORATION, Plaintiff, v. The UNITED STATES, Defendant, and Bethlehem Steel Corporation, U.S. Steel Group, A Unit of USX Corporation, Ispat Inland Inc., LTV Steel Company, Inc.; Gallatin Steel, Ipsco Steel, Inc., Steel Dynamics, Inc., and Weirton Steel Corporation, Defendant-Intervenors. Bethlehem Steel Corporation, U.S. Steel Group,
Case Date:October 26, 2000
Court:Court of International Trade
 
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Page 1366

118 F.Supp.2d 1366 (CIT. 2000)

NIPPON STEEL CORPORATION, Plaintiff,

v.

The UNITED STATES, Defendant,

and

Bethlehem Steel Corporation, U.S. Steel Group, A Unit of USX Corporation, Ispat Inland Inc., LTV Steel Company, Inc.; Gallatin Steel, Ipsco Steel, Inc., Steel Dynamics, Inc., and Weirton Steel Corporation, Defendant-Intervenors.

Bethlehem Steel Corporation, U.S. Steel Group, A Unit of USX Corporation, Ispat Inland Inc., and LTV Steel Company, Inc. Plaintiffs,

v.

The United States, Defendant,

and

Nippon Steel Corporation, Defendant-Intervenor.

Slip Op. 00-137.

Court No. 99-08-00466.

United States Court of International Trade.

Oct. 26, 2000

Page 1367

[Copyrighted Material Omitted]

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Gibson, Dunn & Crutcher LLP (Daniel J. Plaine, Gracia M. Berg, Merritt R. Blakeslee, Seth M.M. Stodder, J. Christopher Wood, Albert Kim and Gregory S. Menegaz) for plaintiff Nippon Steel Corporation.

Skadden, Arps, Slate, Meagher & Flom LLP (Robert E. Lighthizer, John J. Mangan, Ellen J. Schneider, Hans F. Bader and Scott B. Nardi) for plaintiffs Bethlehem Steel Corporation, U.S. Steel Group, a unit of USX Corporation, Ispat Inland Inc. and LTV Steel Company, Inc.

David W. Ogden, Assistant Attorney General, David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Kyle E. Chadwick), John D. McInerney, Elizabeth C. Seastrum, and Linda S. Chang, Office of the Chief Counsel for Import Administration, United States Department of Commerce, of counsel, for defendant.

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Schagrin Associates (Roger B. Schagrin) for defendant-intervenors Gallatin Steel, IPSCO Steel, Inc., Steel Dynamics, Inc. and Weirton Steel Corp.

OPINION

RESTANI, Judge.

This matter is before the court on motions for judgment on the administrative record filed by both Nippon Steel Corporation ("NSC"), Japanese respondent in an antidumping duty investigation, and Bethlehem Steel Corporation, U.S. Steel Group, Ispat Inland, Inc., and LTV Steel Company, Inc. ("U.S. Companies" or "Petitioners"), domestic petitioners before the United States Department of Commerce ("Commerce" or "the Department"). At issue is Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Japan, 64 Fed.Reg. 24,329 (Dep't Comm.1999) [hereinafter " Final Results "].

Because of Commerce's failure to make timely memoranda of its ex parte meetings with Petitioners and other alleged procedural flaws, NSC seeks vacation of the outstanding antidumping order and reinvestigation ab initio. Alternatively, NSC seeks the following: discovery as to the ex parte meetings; declaration that preliminary critical circumstances determinations may not be based on mere allegations; and remand for explanation by Commerce as to its deviations from past procedural practices, for use of electricity costs based on sales from affiliated cooperatives, and for use of NSC's weight conversion factor data. The U.S. companies seek remand for Commerce to use the dollar denominated price for NSC's U.S. sales.

STATEMENT OF FACTS

On September 30, 1998, a group of domestic steel producers filed a petition with the Department pursuant to section 732(b) of the Tariff Act of 1930 (the "Act"), 19 U.S.C. § 1671a(b) (1994), alleging that hot-rolled, flat-rolled, carbon-quality steel ("hot-rolled steel") from Japan and other countries was being dumped in the United States, injuring a domestic industry. See P.R. Doc. 2, DOC App. Tab 1. 1 In addition to alleging injurious dumping, the petition provided evidence--including official United States import and tariff data, an expert affidavit, and results of foreign market research--intended to support the proposition that Japanese producers made sales in Japan at prices below their fully allocated costs of production. See id. at 22-24; C.R. Doc. 1, DOC App. Tab 2; C.R. Doc. 3, DOC App. Tab 3. The petition further alleged that critical circumstances existed as to imports from Japan within the meaning of the Act. See P.R. Doc 2, DOC App. Tab 1, Fi. 14. In support of their critical circumstances allegation, the petitioners cited estimated dumping margins exceeding Commerce's normal threshold of 25 percent (to demonstrate importers' knowledge of dumping), trade data and press reports indicating massive imports over a short period of time, and evidence of harm to the domestic industry. See id. at 3-12 and Exhs. 1-3.

On October 22, 1998, in response to the information presented in the petition, Commerce published its notice of initiation of the antidumping investigation underlying this litigation. Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From Brazil, Japan, and the Russian Federation, 63 Fed.Reg. 56607 (Dep't Commerce 1998) [hereinafter " Initiation of Antidumping Invest."]. At the same time, Commerce initiated below cost and critical circumstances investigations with respect to Japanese hot-rolled steel. Id. at 56,612-13. In accordance with a newly adopted policy, 2 Commerce stated that it

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would make a critical circumstances determination "as soon as practicable," as opposed to waiting for the preliminary determination to be issued. Id. at 56,613.

Commerce initially issued section A of its antidumping questionnaire to the six Japanese steel producers identified in the petition. 3 Because Commerce determined, however, that it feasibly could not examine all six, on October 30, 1998, it selected NSC and two other producers as respondents, based upon production volume, and advised the remaining companies that they need not respond. See Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Japan, 64 Fed.Reg. 8291, 8292 (Dep't Comm.1999) [hereinafter " Preliminary Results "]. On the same day, Commerce issued sections B through E of its antidumping questionnaire to the three respondents. Id.

On November 16, 1998, the United States International Trade Commission ("ITC") notified the Department of its affirmative preliminary finding of threat of material injury in this case. Certain Hot-Rolled Steel Products From Brazil, Japan and Russia, 63 Fed.Reg. 65,221 (ITC 1998) (prelim. injury determ.).

On November 30, 1998, Commerce issued a preliminary determination that critical circumstances existed. Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From Japan and the Russian Federation, 63 Fed.Reg. 65,750 (Dep't Comm.1998) (prelim. determ. of crit. circumstances) [hereinafter " Prelim. Determ. of Critical Circumstances "]. Commerce determined preliminarily that it should impute to the Japanese importers the critical circumstances factor of knowledge of dumping, see 19 U.S.C. § 1673b(e)(1)(A)(ii), because the petition supported margins greater than the Department's customary 25 percent threshold. Prelim. Determ of Critical Circumstances, 63 Fed.Reg. at 65,750. Further, Commerce found that the combination of the ITC's November 16 preliminary finding and press reports of rising imports, falling domestic prices, and market share gains by foreign suppliers provided a reasonable basis to believe or suspect preliminarily that the importers knew or should have known of "likely injury" from dumping. Id.

With respect to the critical circumstances factor of "massive" imports, 19 U.S.C. § 1673b(e)(1)(B), Commerce found, first, that press reports sufficiently established that by the end of April 1998, importers, exporters, or producers knew or should have known that an antidumping proceeding concerning hot-rolled products from Japan was likely. Prelim. Determ. of Critical Circumstances, 63 Fed.Reg. at 65,751. 4 Accordingly, pursuant to 19 C.F.R. § 351.206(i) (2000), Commerce compared import volumes from May through September 1998 to import volumes in the period December 1997 through April 1998 (the immediately preceding five months). See Prelim. Determ. of Critical Circumstances, 63 Fed.Reg. at 65,751. Because it found that imports of hot-rolled steel from Japan increased by more than 100 percent between the two periods, Commerce found preliminarily that there had been massive imports within a relatively short period of time. Id. In light of its findings with respect to knowledge of dumping, knowledge of likely injury, and massive imports, Commerce preliminarily found a reasonable basis to believe or suspect that critical circumstances existed with respect to Japanese hot-rolled steel imports. See id.

From November 16, 1998 through January 25, 1999, the Department received responses to initial and supplemental questionnaires. Questionnaire section B requested, among other things, figures that the Department could use to convert sales made at actual and theoretical

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weights, respectively, to a common basis ("conversion factor data"). See C.R. Doc. 40, DOC App., Tab 5, at B-22. NSC, in a response dated December 22, 1998, did not provide that data, asserting instead that Commerce did not need a "uniform quantity of measure" because "[a]ll NSC quantity types are consistent within the product type." Id. In its January 26, 1999 response to a supplemental request, NSC stated that steel coils sold at theoretical weight (i.e., estimated weight, based upon dimensions) "are never actually weighed" and, thus, NSC had "no way of calculating" the requested conversion factor. P.R. Doc 196, DOC App., Tab 6, at B-24. As discussed below, NSC now admits that its initial and supplemental responses were incorrect.

NSC timely reported its gross unit prices for U.S. sales in dollars. See C.R. Doc. 40, DOC App., Tab 5, at C-19. It also reported net prices in yen for each sale, which NSC and its customers derived by discounting the invoiced dollar amount by the standard discount rate, then converting to yen at the exchange rate applicable on the ninth day after shipment. See id. at C-22. NSC's invoices...

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