Uttam Galva Steels Ltd. v. United States

• Decision Date: 18 April 2018
• Docket Number: Court No. 16–00162,Slip Op. 18–44
• Citation: 311 F.Supp.3d 1345
• Parties: UTTAM GALVA STEELS LIMITED, Plaintiff, v. UNITED STATES, Defendant, and ArcelorMittal USA LLC, AK Steel Corporation, Steel Dynamics, Inc., California Steel Industries, Inc., United States Steel Corporation, and Nucor Corporation, Defendant–Intervenors.
• Court: U.S. Court of International Trade

311 F.Supp.3d 1345

UTTAM GALVA STEELS LIMITED, Plaintiff,

v.UNITED STATES, Defendant,andArcelorMittal USA LLC, AK Steel Corporation, Steel Dynamics, Inc., California Steel Industries, Inc., United States Steel Corporation, and Nucor Corporation, Defendant–Intervenors.

Slip Op. 18–44

Court No. 16–00162

United States Court of International Trade.

April 18, 2018

Diana Dimitriuc–Quaia and Claudia D. Hartleben, Arent Fox LLP, of Washington, D.C., argued for Plaintiff Uttam Galva Steels Limited. With them on the brief was John M. Gurley. Of counsel were Matthew M. Nolan and Nancy A. Noonan.

Agatha Koprowski, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for Defendant United States. With her on the brief were Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson, Director, Claudia Burke, Assistant Director, and Elizabeth A. Speck, Senior Trial Counsel. Of counsel on the brief was Emma T. Hunter, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington D.C.

Paul W. Jameson, Schagrin Associates, of Washington D.C., argued for Defendant–Intervenors Steel Dynamics, Inc. and California Steel Industries, Inc. With him on the brief were Roger B. Schagrin and Jordan C. Kahn. Of counsel were Christopher T. Cloutier, Elizabeth J. Drake, and John W. Bohn.

R. Alan Luberda, Melissa M. Brewer, David C. Smith, Jr., Kathleen W. Cannon, and Paul C. Rosenthal, Kelley Drye & Warren, LLP, of Washington D.C., for Defendant–Intervenor ArcelorMittal USA LLC.

Stephen A. Jones and Daniel L. Schneiderman, King & Spalding, LLP, of Washington D.C., for Defendant–Intervenor AK Steel Corporation.

Timothy C. Brightbill, Tessa V. Capeloto, Alan H. Price, Adam M. Teslik, Christopher B. Weld, Cynthia C. Galvez, Derick G. Holt, Laura El–Sabaawi, Maureen E. Thorson, Stephanie M. Bell, and Usha Neelakantan, Wiley Rein, LLP, of Washington D.C., for Defendant–Intervenor Nucor Corporation.

Thomas M. Beline and Sarah E. Shulman, Cassidy Levy Kent (USA) LLP, of Washington, D.C., for Defendant–Intervenor United States Steel Corporation. Formerly on the brief were Jeffrey D. Gerrish and Luke A. Meisner, Skadden, Arps, Slate, Meagher & Flom LLP, of Washington D.C.

OPINION AND ORDER

Choe–Groves, Judge:

This case involves corrosion-resistant steel products from India. Plaintiff Uttam Galva Steels Limited ("Plaintiff" or "Uttam Galva") brings this action contesting the final determination in an antidumping duty investigation, in which the U.S. Department of Commerce ("Commerce" or "Department") found that certain corrosion-resistant steel products from India are being, or are likely to be, sold in the United States at less-than-fair value. See Certain Corrosion–Resistant Steel Products From India, 81 Fed. Reg. 35,329 (Dep't Commerce June 2, 2016) (final determination of sales at less-than-fair value), as amended, 81 Fed. Reg. 48,390 (Dep't Commerce July 25, 2016) (amended final affirmative determination and issuance of antidumping duty orders) (collectively, "Final Results"); see also Issues and Decision Memorandum for the Final Determination of the Antidumping Duty Investigation of Certain Corrosion–Resistant Steel Products from India, A–533–863, (May 24, 2016), available at https://enforcement.trade.gov/frn/summary/india/2016-12986-1.pdf (last visited Apr. 11, 2018) ("Final IDM"). This matter is before the court on Plaintiff's Rule 56.2 motion for judgment on the agency record challenging the Department's antidumping duty calculations. See Mot. J. Agency R., Mar. 16, 2017, ECF No. 47–1. This case presents one issue: whether Commerce erred in its determination of the amount of duty drawback adjustment for Uttam Galva when it calculated the exempted and rebated import duties over total cost of production. For the reasons discussed below, the court concludes that Commerce's methodology is not in accordance with the law.

BACKGROUND

Commerce received petitions requesting the imposition of antidumping duties on imports of corrosion-resistant steel products from multiple countries, including India, filed on June 3, 2015 on behalf of a group of domestic producers: United States Steel Corporation, Nucor Corporation, ArcelorMittal USA, AK Steel Corporation, Steel Dynamics, Inc., and California Steel Industries, Inc. See Certain Corrosion–Resistant Steel Products From Italy, India, the People's Republic of China, the Republic of Korea, and Taiwan: Initiation of Less–Than–Fair–Value Investigations, 80 Fed. Reg. 37,228 (Dep't Commerce June 30, 2015) (initiation of less-than-fair value investigation). The Department initiated an investigation for the period of April 1, 2014 through March 31, 2015. Id. at 37,229. Commerce found that it would be impractical to examine all exporters and producers, and therefore opted to examine two companies accounting for the largest volume of U.S. imports of the subject merchandise during the investigation period. See Antidumping Duty Investigation of Certain Corrosion–Resistant Steel Products from India: Respondent Selection, PD 63, bar code 3292985–01 (July 22, 2015). Commerce selected two companies, JSW Steel Limited and Uttam Galva, for examination. See id.

Commerce published its preliminary results on January 4, 2016. See Certain Corrosion–Resistant Steel Products From India, 81 Fed. Reg. 63 (Dep't Commerce Jan. 4, 2016) (affirmative preliminary determination of sales at less-than-fair value and postponement of final determination) ("Preliminary Results"); see also Decision Memorandum for the Preliminary Determination in the Less–Than–Fair–Value Investigation of Certain Corrosion–Resistant Steel Products from India at 1, A–533–863, (Dec. 21, 2015), available at https://enforcement.trade.gov/frn/summary/india/2015-32758-1.pdf (last visited Apr. 11, 2018) ("Prelim. IDM"). Pursuant to the Department's differential pricing analysis, Commerce used the average-to-average methodology to calculate dumping margins for both mandatory respondents. See Prelim. IDM at 9–11. It assigned a preliminary weighted-average dumping margin of 6.64% for JSW and a weighted-average dumping margin of 6.92% for Uttam Galva. Preliminary Results, 81 Fed. Reg. at 65.

The Department granted a preliminary duty drawback adjustment to Uttam Galva based on the company's participation in three duty programs: the Duty Drawback Scheme, Advance Authorization Program, and Duty Free Import Authorization Program. See Prelim. IDM at 16. The Duty Drawback Scheme is a rebate program in which Uttam Galva "pays duties at the time of purchase based on a company-specific rate," and the duties are later refunded. Verification of the Cost Response of Uttam Galva Steels Limited in the Antidumping Duty Investigation of Certain Corrosion–Resistant Steel Flat Products from India 17, PD 379, bar code 3452604–01 (Mar. 23, 2016). The Advance Authorization Program and Duty Free Import Authorization Program are exemption schemes in which Uttam Galva obtains a license and "is allowed to import specified quantities of [inputs] duty free as per Standard Input Output Norm ('SION') of the finished good."Id. at 16.

Following the preliminary determination, Uttam Galva submitted revised statistics and a case brief in response. Final Results, 81 Fed. Reg. at 35,329. Commerce held a hearing on May 4, 2016. Id.

Commerce issued its final determination on June 2, 2016. See id. Commerce calculated a final weighted-average dumping margin of 4.44% for JSW, 3.05% for Uttam Galva, and 3.86% for all others. See id. at 35,330. Following an affirmative final material injury determination from the International Trade Commission, Commerce published the antidumping duty order on July 25, 2016. See id. at 35,329.

Uttam Galva commenced this action contesting Commerce's Final Determination on August 23, 2016, ECF No. 1, and filed its complaint on September 22, 2016, ECF No. 9. Plaintiff filed a Rule 56.2 motion for judgment on the agency record and supporting memorandum. See Mot. J. Agency R., Mar. 16, 2017, ECF No. 47–1; Pl.'s Mem. Supp. Mot. J. Agency R., Mar. 16. 2017, ECF No. 47 ("Pl.'s Mem."). Defendant and Defendant–Intervenors submitted responses to Plaintiff's motion. See Def.'s Resp. Opp'n Pl.'s Mot. J. Agency R., June 29, 2017, ECF No. 51 ("Def.'s Resp."); Def.–Intervenors' Resp. Opp'n Pl.'s Mot. J. Agency R., July 13, 2017, ECF No. 53 ("Def.–Intervenors' Resp."). Plaintiff filed a timely reply. See Reply Br. Pl. Uttam Galva Steels Limited, Aug. 11, 2017, ECF No. 56 ("Pl.'s Reply"). This court held oral argument on January 18, 2018. See Oral Argument, Jan. 18, 2018, ECF No. 70.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction over this matter pursuant to 19 U.S.C. § 1516a(a)(2)(B)(i) and 28 U.S.C. § 1581(c), which grant the court authority to review actions contesting the final determination in an antidumping duty investigation.¹ The court "shall hold unlawful any determination, finding or conclusion found ... to be unsupported by substantial evidence on the record or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i). "Substantial evidence.... means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." A.L. Patterson, Inc. v. United States, 585 Fed.Appx. 778, 781–82 (Fed. Cir. 2014) (quoting Consol. Edison Co. of N.Y. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938) ).

DISCUSSION

I. Legal Framework for Determining a Duty Drawback Adjustment

Under the Tariff Act of 1930, as amended, Commerce conducts antidumping duty investigations and determines whether goods are being sold at less-than-fair value. See 19 U.S.C. § 1973. If the Department finds that subject merchandise is being sold at less-than-fair value, and if the U.S. International Trade Commission finds that these less-than-fair value imports materially injure a domestic industry, the Department issues an antidumping duty order imposing...