Tung Mung Development Co., Ltd. v. U.S.

• Decision Date: 22 August 2002
• Docket Number: SLIP OP. 02-93.,No. 99-07-00457.,99-07-00457.
• Citation: 219 F.Supp.2d 1333
• Parties: TUNG MUNG DEVELOPMENT CO., LTD., Plaintiff, and YIEH UNITED STEEL CORP., Plaintiff-Intervenor, v. United States, Defendant, and Allegheny Ludlum Corp. et al., Defendant-Intervenors.
• Court: U.S. Court of International Trade

Page 1333

219 F.Supp.2d 1333

TUNG MUNG DEVELOPMENT CO., LTD., Plaintiff, and YIEH UNITED STEEL CORP., Plaintiff-Intervenor, v. United States, Defendant, and Allegheny Ludlum Corp. et al., Defendant-Intervenors.

SLIP OP. 02-93.

No. 99-07-00457.

United States Court of International Trade.

August 22, 2002.

Akin, Gump, Strauss, Hauer & Feld, LLP, Washington, DC (Patrick F.J. Macrory, Thomas J. McCarthy), for Plaintiff.

White & Case, Washington, DC (William J. Clinton, Adams Lee), for Plaintiff-Intervenor.

Robert D. McCallum, Jr., Assistant Attorney General; David M. Cohen, Director; Lucius B. Lau, Assistant Director; Scott D. McBride, Office of the Chief Counsel for Import Administration, United States Department of Commerce, for Defendant, of counsel.

Collier Shannon Scott, PLLC, Washington, DC (David A. Hartquist, Jeffrey S. Beckington, Adam H. Gordon), for Defendant-Intervenors.

OPINION

WALLACH, Judge.

I Preliminary Statement

Allegheny Ludlum Corporation, Armco, Inc., Butler Armco Independent Union, J & L Specialty Steel Inc., The United Steelworkers of America, AFL-CIO/CLC, and Zanesville Armco Independent Organization ("Defendant-Intervenors" or "Petitioners") dispute the United States Department of Commerce International Trade Administration's ("Commerce" or "the Department") finding in Commerce's Final Results of Redetermination Pursuant to Court Remand, Tung Mung Development Co. v. United States, 2001 WL 844484 (July 3, 2001) ("Remand Determination") that the imposition of combination rates in a middleman dumping situation in which the producer has no knowledge of the middleman's dumping comports with the provisions of the antidumping statute. Defendant-Intervenors' challenge follows the remand of Commerce's decision in Notice of Final Determination of Sales at Less Than Fair Value: Stainless Steel Sheet and Strip in Coils From Taiwan, 64 Fed.Reg. 30,592 (June 8, 1999) ("Final Determination").

The court finds that Commerce, by applying a combination rate consistent with its prior practice, has made its Remand Determination in accordance with the law.

II Background

On June 10, 1998, the domestic industry filed an antidumping petition alleging that imports from Taiwan of stainless steel sheet and strip in coils ("SSSS") were being injuriously dumped in the United States. The Department initiated an antidumping duty investigation on July 13, 1998. See Initiation of Antidumping Duty Investigations: Stainless Steel Sheet and Strip in Coils from France, et al., 63 Fed.Reg. 37,521 (July 13, 1998).

Yieh United Steel Corp. ("YUSCO") and Tung Mung Development Co., Ltd. ("Tung Mung"), Taiwanese producers of the subject merchandise, were selected as respondents in the Taiwan investigation. During the period covered by the Department's investigation, April 1, 1997, through March 31, 1998, YUSCO and Tung Mung made United States sales of subject SSSS through middleman Ta Chen Stainless Pipe Co., Ltd. ("Ta Chen").¹

On October 14, 1998, petitioners submitted allegations of middleman dumping by Ta Chen of subject merchandise produced by Tung Mung; on October 15, 1998, petitioners submitted allegations of middleman dumping by Ta Chen of subject merchandise produced by YUSCO. On December 3, 1998, the Department initiated a middleman dumping investigation with respect to sales by Ta Chen of YUSCO's and Tung Mung's subject merchandise. Notice of Amended Preliminary Determination of Sales at Less Than Fair Value: Stainless Steel Plate in Coils From Taiwan, 63 Fed. Reg. 66,785 (Dec. 3, 1998). On January 4, 1999, Commerce published its preliminary determination. Notice of Preliminary Determination of Sales at Less Than Fair Market Value and Postponement of Final Determination: Stainless Steel Sheet and Strip in Coils from Taiwan, 64 Fed.Reg. 101 (Jan. 4, 1999) ("Preliminary Determination"). In the Preliminary Determination, Commerce calculated a weighted-average dumping margin of 2.94 percent for YUSCO and a weighted-average dumping margin of .07 percent for Tung Mung, in each instance exclusive of any dumping by the middleman. Id. at 108. Commerce made no preliminary determination with regard to the middleman dumping investigation, which was incomplete. The parties to the investigation submitted briefs on May 3, 1999.

On June 8, 1999, Commerce published the Final Determination, in which it assigned YUSCO a single weighted average rate of 34.95 percent, and Tung Mung a single weighted-average rate of 14.95, based largely on the rate assigned for the middleman Ta Chen. Final Determination, 64 Fed.Reg. at 30,624. This decision was subsequently challenged by Tung Mung and YUSCO in the parties' USCIT Rule 56.2 Motion For Judgment On The Agency Record, where both parties disputed Commerce's decision to assign a single, weighted-average cash deposit dumping rate to their merchandise, regardless of the channel of distribution through which that merchandise is sold. Tung Mung and YUSCO argued that imposition of a single rate is contrary to congressional intent, and would impose an excessive cash deposit rate on merchandise that is not "tainted" by the middleman dumping found by the Department.

In Tung Mung Dev. Co. v. United States, ___ CIT ___, Slip op. 01-83, 2001 WL 844484, 2001 Ct. Intl. Trade LEXIS 94, at *1 (July 3, 2001) ("Tung Mung I"), this court remanded the Department's determination on the issue of the single, weighted-average rate, noting that Commerce's application of a single weighted-average rate constituted a significant departure from its usual practice. Id. at **7-8, 2001 Ct. Intl. Trade LEXIS 94 *54. In analyzing the appropriateness of this rate in a middleman dumping situation, the court examined the plain language of the dumping statute, id. at *5, 2001 Ct. Intl. Trade LEXIS 94 *15, as well as Commerce's relevant regulations, id. at *7, 2001 Ct. Intl. Trade LEXIS 94 *28, and concluded that none of the statutory and regulatory provisions cited by the parties either supported or explicitly foreclosed Commerce's use of the single, weightedaverage cash deposit rate.² Id. at **13-14, 2001 Ct. Intl. Trade LEXIS 94 *49. In addition, the court examined Commerce's prior practice in the area of middleman dumping, noting that the present case was the first instance in which the Department was imposing a single weighted-average rate in a middleman dumping investigation.³ The court further remarked that there were only three occasions on which the Department had rendered a final affirmative middleman dumping investigation: Notice of Final Determination of Sales at Less Than Fair Value: Stainless Steel Plate in Coils From Taiwan, 64 Fed.Reg. 15,493 (March 31, 1999) ("SSPC From Taiwan"); Antidumping; Fuel Ethanol from Brazil; Final Determination of Sales at Less Than Fair Value, 51 Fed.Reg. 5,572 (Feb. 14, 1986) ("Fuel Ethanol from Brazil"); and the instant case. The court therefore instructed Commerce to "either provide a reasonable explanation and substantial evidence for its change in practice, or ... apply a combination rate, consistent with its prior practice." Id. at *16, 2001 Ct. Intl. Trade LEXIS 94 *59.

In its Remand Determination, Commerce determined "that it is appropriate in this instance to apply a middleman dumping computation using combination rates." Remand Determination at 2. Commerce first noted that "[f]indings of middleman dumping are rare" and that "Congress provided no statutory guidance for the means by which the Department would determine its methodology for capturing those sales." Id. at 2-3. After explaining the inherent difficulties associated with middleman dumping,⁴ Commerce examined the various cash deposit methodologies available to it in such situations. Commerce could either apply the methodology offered by the Department in the Final Determination, or resort to the application of a combination rate. Commerce explained that the latter was appropriate here since "as noted by the Court in its holding and during the hearing, use of combination rates may be appropriate when a producer uses a middleman for some of its commercial transactions and, while aware that the merchandise is destined for the United States, is unaware that the middleman is dumping that merchandise." Id. at 7. Consequently, Commerce concluded that "because the Department has no basis to believe or suspect that the producer was aware or should have been aware that the middleman would be likely to dump subject merchandise into the United States, the Department is inclined to calculate a combination rate for the producer and middleman." Id. at 8.⁵

III Jurisdiction and Standard of Review

The court has jurisdiction pursuant to 28 U.S.C. 1581(c) (1999).

This court will sustain Commerce's Remand Determination unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B) (1999). Substantial evidence is something more than a "mere scintilla," and must be enough evidence to reasonably support a conclusion. Primary Steel, Inc. v. United States, 17 C.I.T. 1080, 1085, 834 F.Supp. 1374, 1380 (1993); Ceramica Regiomontana, S.A. v. United States, 10 C.I.T. 399, 405, 636 F.Supp. 961, 966 (1986), aff'd, 810 F.2d 1137 (Fed.Cir.1987). A determination as to whether the agency's interpretation of the statute is in accordance with law requires of the court to "carefully investigate the matter to determine whether Congress's purpose and intent on the question at issue is judicially ascertainable." Timex V.I. Inc. v. United States, 157 F.3d 879, 881 (Fed.Cir.1998). Congress's expressed will or intent on a specific issue is dispositive. See Japan Whaling Ass'n v. American Cetacean Soc'y, 478 U.S. 221, 233-237, 106 S.Ct. 2860, 92 L.Ed.2d 166 (1986). If the statute is silent or ambiguous, the court must determine whether the agency's construction of the statute is permissible. See Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 843, 104 S.Ct....