Ak Steel Corp. v. U.S.

• Decision Date: 12 September 2000
• Citation: 226 F.3d 1361
• Parties: (Fed. Cir. 2000) AK STEEL CORPORATION, INLAND STEEL INDUSTRIES, INC.(now Ispat Inland, Inc.), BETHLEHEM STEEL CORPORATION, LTV STEEL COMPANY, INC., NATIONAL STEEL CORPORATION, and U.S. STEEL GROUP, a Unit of USX Corporation, Plaintiffs-Appellants, v. UNITED STATES, Defendant- Appellee, and DONGBU STEEL CO., LTD. and UNION STEEL MANUFACTURING CO., LTD., Defendants-Appellees, and POHANG IRON & STEEL CO., LTD., POHANG COATED STEEL CO., LTD.and POHANG STEEL INDUSTRIES CO., LTD., Defendants-Appellees. 99-1296 REVISED OPINION ISSUED:
• Court: U.S. Court of Appeals — Federal Circuit

Page 1361

226 F.3d 1361 (Fed. Cir. 2000)

AK STEEL CORPORATION, INLAND STEEL INDUSTRIES, INC.(now Ispat Inland, Inc.), BETHLEHEM STEEL CORPORATION, LTV STEEL COMPANY, INC., NATIONAL STEEL CORPORATION, and U.S. STEEL GROUP, a Unit of USX Corporation, Plaintiffs-Appellants, v. UNITED STATES, Defendant- Appellee, and DONGBU STEEL CO., LTD. and UNION STEEL MANUFACTURING CO., LTD., Defendants-Appellees, and POHANG IRON & STEEL CO., LTD., POHANG COATED STEEL CO., LTD.and POHANG STEEL INDUSTRIES CO., LTD., Defendants-Appellees.

99-1296

United States Court of Appeals for the Federal Circuit

REVISED OPINION ISSUED: September 12, 2000

Appealed from: United States Court of International Trade Judge Jane A. Restani

Donald B. Cameron, Kaye, Scholer, Fierman, Hays & Handler, LLP, of Washington, DC, filed a combined petition for panel rehearing and rehearing en banc for defendants-appellees, Dongbu Steel Co., Ltd., et al. With him on the brief representing Dongbu Steel Co., Ltd., were Julie C. Mendoza and Dean C. Garfield. Spencer S. Griffith, Akin, Gump, Strauss, Hauer & Feld, L.L.P., of Washington, DC, represented defendants-appellees, Pohang Coated Steel Co., Ltd., et al. on the brief. With him on the brief representing Pohang Coated Steel Co., Ltd., were Sukhan Kim and Sydney H. Mintzer.

Michael H. Stein, Dewey Ballantine LLP, of Washington, DC, filed a response for plaintiffs-appellants, AK Steel Corporation, et al. With him on the response wereBradford L. Ward, Jennifer Danner Riccardi, and Paul A. Christodoulou. Of counsel were Joon Peter Kim and Andrew John Conrad.

Lucius B. Lau, Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, of Washington, DC, filed a response for defendant-appellee, United States. With him on the response were David W. Ogden, Assistant Attorney General; and David M. Cohen, Director. Of counsel on the response were John D. McInerney, Acting Chief Counsel; Elizabeth C. Seastrum, Senior Counsel; and William G. Isasi, Attorney, Office of Chief Counsel for Import Administration, U.S. Department of Commerce, of Washington, DC.

Before MICHEL, PLAGER, and LOURIE, Circuit Judges.

ORDER

A combined petition for rehearing and suggestion for rehearing en banc having been filed by appellees Dongbu Steel Co., Ltd., et al., and Pohang Iron & Steel Co., Ltd. et al., and responses thereto having been invited by the court and filed by appellants and the United States ¹

Upon consideration thereof, it is

ORDERED that the petition for rehearing be granted for the limited purpose of clarifying this court's opinion.

IT IS FURTHER ORDERED that the previous opinion of the court in this appeal is withdrawn. The new opinion accompanies this order.

IT IS FURTHER ORDERED that the suggestion for rehearing en banc is declined.

The mandate of the court will issue on September 19, 2000.

MICHEL, Circuit Judge.

AK Steel Corporation, Inland Steel Industries, Inc., Bethlehem Steel Corporation, LTV Steel Company, Inc., National Steel Corporation, and U.S. Steel Group (collectively "domestic producers" or "appellants") appealed to this court the judgment of the United States Court of International Trade in this anti-dumping duties case. The International Trade Administration, United States Department of Commerce ("Commerce") issued a decision: (1) using a three-part test it adopted informally in 1987 to determine whether certain sales to U.S. buyers of Korean steel by U.S. affiliates of the Korean producers² were properly classified as Export Price ("EP") sales rather than Constructed Export Price ("CEP") sales, as defined in 19 U.S.C. § 1677a(a)-(b) (1994) and (2) declining to apply the "fair-value" and "major-input" provisions of 19 U.S.C. § 1677b(f)(2)-(3) (1994) to transfers among affiliated steel producers in Korea that it had treated as one entity for purposes of the anti-dumping determination. As a consequence of these methods and their application, the duty rates were minimal. The domestic producers then filed suit challenging these methods as contrary to the anti-dumping statute. The trial court, however, upheld Commerce's decision and its methods as consistent with the statute. See AK Steel Corp. v. United States, 34 F. Supp. 2d 756 (Ct. Int'l Trade 1998). This court, in an opinion issued February 23, 2000, held that the three-part test employed by Commerce is contrary to the express terms defining EP and CEP in the anti-dumping statute as amended in 1994 and therefore reversed-in-part and remanded for a redetermination of the anti-dumping duties. See AK Steel Corp. v. United States, 203 F.3d 1330 (Fed. Cir. 2000). As to the fair-value and major-input provisions we held that Commerce's decision not to apply those provisions to the transactions in suit was reasonable and within its discretion, and its method consistent with the statute, and therefore we affirmed-in-part. Id. The Korean producers then filed a petition for rehearing and suggestion for rehearing en banc. Because the Korean producers raised statutory questions that were not raised in the briefs or at oral argument, the panel took the case on reconsideration to address the statutory arguments. This opinion addresses the Korean producers' statutory arguments; however, the outcome of the case is unchanged.

BACKGROUND

In 1993 Commerce issued an order imposing anti-dumping duties on certain steel products from Korea. See Certain Cold Rolled Steel Flat Products from Korea, 58 Fed. Reg. 44,159 (Dep't of Commerce 1993) (hereinafter "Certain Steel Products from Korea"). In August of 1995 both the domestic producers and the Korean producers requested an administrative review of that anti-dumping duty order. In its second administrative review of the anti-dumping duty order, Commerce classified all of the sales of the subject merchandise at issue in this appeal ³ as EP sales rather than CEP sales pursuant to 19 U.S.C. § 1677a(a)-(b) (1994). See Certain Cold-Rolled and Corrosion-Resistant Carbon Steel Flat Products from Korea, 62 Fed. Reg. 18,404, 18,434 (Dep't of Commerce 1997) (hereinafter "Final Results"). In addition, because Commerce had collapsed POSCO and its affiliates, POCOS and PSI, into one entity for purposes of assigning dumping margins, Commerce opted not to apply the so-called "fair-value" and "major-input" provisions to transactions among those companies. Id. at 18,430.

I.

In calculating dumping margins, Commerce compares the "U.S. Price" to the "normal value" of the subject merchandise and imposes anti-dumping duties if, and to the extent, the former is lower than the latter. The U.S. Price is calculated using either the EP or CEP methodology. In general, Commerce applies the EP methodology to a sale when the foreign producer or exporter sells merchandise directly to an unrelated purchaser located in the United States. Commerce applies the CEP methodology when the foreign producer's or exporter's steel is sold to an unaffiliated U.S. buyer by a producer-affiliated company located in the United States. If the sale is classified as a CEP sale, additional deductions are taken from the sales price to arrive at the U.S. Price. ⁴ The statute defines EP and CEP as follows:

(a) Export Price The term "export price" means the price at which the subject merchandise is first sold (or agreed to be sold) before the date of importation by the producer or exporter of the subject merchandise outside of the United States to an unaffiliated purchaser in the United States or to an unaffiliated purchaser for exportation to the United States . . . .

(b) Constructed Export Price

The term "constructed export price" means the price at which the subject merchandise is first sold (or agreed to be sold) in the United States before or after the date of importation by or for the account of the producer or exporter of such merchandise or by a seller affiliated with the producer or exporter, to a purchaser not affiliated with the producer or exporter . . . .

19 U.S.C. § 1677a(a)-(b). ⁵

For the sales of steel produced by each of the appellees challenged here, Commerce calculated the U.S. Price based on an EP classification. In determining whether to classify the sales here as EP or CEP, Commerce applied a three-part test (the "PQ Test") that it developed on a remand from an unrelated 1987 case, PQ Corp. v. United States, 652 F. Supp. 724, 733-35 (Ct. Int'l Trade 1987). An agency interpretation of 19 U.S.C § 1677a(a)-(b), the test has been applied when a foreign manufacturer's affiliated entity in the United States makes a sale to an unaffiliated U.S. purchaser prior to import, as in the case of the sales at issue here. Using the PQ Test, Commerce classifies sales made by U.S. affiliates as EP sales if the following criteria are met:

(1) the subject merchandise was shipped directly from the manufacturer to the unrelated buyer, without being introduced into the inventory of the related shipping agent;

(2) direct shipment from the manufacturer to the unrelated buyer was the customary channel for sales of this merchandise between the parties involved; and

(3) the related selling agent in the United States acted only as a processor of sales-related documentation and a communication link with the unrelated U.S. buyer.

See, e.g., Certain Stainless Steel Wire Rods from France, Final Determination of Sales at Less than Fair Value, 58 Fed. Reg. 68,865, 68,868-69 (Dep't of Commerce 1993).

All of the sales at issue in the present case were "back-to-back" sales: the Korean producer sold the steel to an affiliated Korean exporter; the exporter sold it to its U.S. affiliate; and finally, the U.S. affiliate sold it to the unaffiliated U.S. purchaser. In most cases, however, the steel was shipped directly to the unaffiliated purchaser without entering the inventory of the U.S. affiliate. In the second administrative review, whether the sales of steel manufactured by the Korean producers satisfied the third prong of the PQ Test was one of the...