Tung Mung Development Co., Ltd. v. U.S., 03-1073.
| Decision Date | 15 January 2004 |
| Docket Number | No. 03-1095.,No. 03-1073.,03-1073.,03-1095. |
| Citation | 354 F.3d 1371 |
| Parties | TUNG MUNG DEVELOPMENT CO., LTD., Plaintiff-Appellee, and Yieh United Steel Corporation, Plaintiff, v. UNITED STATES, Defendant-Appellee, v. Allegheny Ludlum Corp., Ak Steel Corp., Butler Armco Independent Union, J&L Specialty Steel, Inc., United Steelworkers of America, AFL-CIO/ CLC, and Zanesville Armco Independent Organization, Defendants-Appellants. Allegheny Ludlum Corp., Ak Steel Corp., Butler Armco Independent Union, J & L Specialty Steel, Inc., United Steelworkers of America, AFL-CIO/CLC, and Zanesville Armco Independent Organization, Defendants-Appellants, v. United States, Defendant-Appellee, and Yieh United Steel Corp., Plaintiff. |
| Court | U.S. Court of Appeals — Federal Circuit |
Spencer G. Griffith, Akin, Gump, Strauss, Hauer & Feld LLP, of Washington, DC, argued for plaintiff-appellee Tung Mung Development Co., Ltd. and plaintiff Yieh United Steel Corporation in 03-1073. With him on the brief were Thomas J. McCarthy and Patrick F.J. Macrory.
Christina C. Ashworth, Trial Attorney, Commercial Litigation, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee the United States in 03-1073 and 03-1095. With her on the briefs was David M. Cohen, Director. Of counsel on the briefs were John D. McInerney, Chief Counsel; Berniece A. Browne, Senior Counsel; and Scott D. McBride, Attorney-Advisor; Office of the Chief Counsel for Import Administration, United States Department of Commerce, of Washington, DC.
Jeffrey S. Beckington, Collier Shannon Scott, PLLC, of Washington, DC, argued for defendants-appellants Allegheny Ludlum Corp., et al. in 03-1073 and plaintiffs-appellants in 03-1095. With him on the briefs were David A. Hartquist and Adam H. Gordon.
Before NEWMAN, Circuit Judge, FRIEDMAN, Senior Circuit Judge, and DYK, Circuit Judge.
Opinion for the court filed by Circuit Judge DYK. Opinion dissenting in part filed by Senior Circuit Judge FRIEDMAN.
This is a consolidated appeal by Allegheny Ludlum Corp., et al. (collectively, "Allegheny") from two United States Court of International Trade antidumping decisions upholding determinations by the Department of Commerce ("Commerce").1 We hold that alleged errors in earlier interim decisions by the Court of International Trade,2 setting aside Commerce's initial determination in each of these two cases and remanding for further proceedings, provide no ground for setting aside Commerce's most recent decisions because Commerce's most recent decisions were not compelled by the remand orders.
Another question presented by Commerce's recent decisions is whether Commerce must assess duties on all exported merchandise of a foreign producer at a single weighted average rate (calculated to include middleman dumping as well as the producer's own dumping). We uphold Commerce's decision not to use a single weighted average rate and affirm the Court of International Trade.
The procedural history of these consolidated cases is complex and is set forth in detail in the opinions of the Court of International Trade. Allegheny Ludlum Corp v. United States, 239 F.Supp.2d 1381, 1382-83 (Ct. Int'l Trade 2002) ("Allegheny 2002"); Tung Mung Dev. Co. v. United States, 219 F.Supp.2d 1333, 1334-37 (Ct. Int'l Trade 2002) ("Tung Mung 2002"). For present purposes the facts can be stated simply.
Commerce is charged with determining whether dumping has occurred, defined as "the sale or likely sale of goods at less than fair value." 19 U.S.C. § 1677(34) (2000). If Commerce finds that dumping has occurred to the detriment of the domestic industry, it is required by statute to impose antidumping duties on that merchandise. Id. § 1673 (2000). The United States Customs Service then collects a cash deposit from the importer of such merchandise in the amount of the antidumping duty assessed by Commerce. The final amount of these duties is later determined on administrative review. A foreign producer of goods may engage in dumping, but dumping may also occur as the result of below-cost sales by a middleman (i.e., reseller). Although the antidumping statute does not explicitly address middleman dumping, the language of the Act is broad enough to cover it, and the legislative history of the Trade Agreements Act of 1979, Pub.L. No. 96-39, § § 1-3, 93 Stat. 144, 144-50 (codified at 19 U.S.C. § § 2501-2504), indicates that Congress intended Commerce to address "below cost sales by middlemen" as well as direct dumping by foreign producers. S.Rep. No. 96-249, at 94 (1979); H.R.Rep. No. 96-317, at 75 (1979), reprinted in 1979 U.S.C.C.A.N. 381, 480.
The two Taiwanese steel companies that are appellees in these consolidated cases, Tung Mung Development Co. ("Tung Mung") and Yieh United Steel Corp. ("Yieh Steel"), sold some of their merchandise directly to the United States and other merchandise to a middleman — an independent Taiwanese company, Ta Chen Stainless Pipe Co. ("Ta Chen"). Ta Chen then resold Tung Mung's and Yieh Steel's merchandise to its own customers in the United States. There are, therefore, three types of sales involved here: (1) direct sales by the producers to United States customers; (2) sales by the producers to the middleman; and (3) sales by the middleman to United States customers.
In 1998, Commerce initiated simultaneous dumping investigations of Tung Mung's and Yieh Steel's merchandise, including alleged dumping in the producers' direct sales to United States customers, the producers' alleged dumping in sales to Ta Chen, and Ta Chen's alleged dumping in sales to United States customers (so-called middleman dumping). One of these investigations involved dumping of both Yieh Steel's and Tung Mung's stainless steel sheet and strip in coils ("SSSS") and led to the appeal from Tung Mung Dev. Co. v. United States, 219 F.Supp.2d 1333 (Ct. Int'l Trade 2002). The other investigation involved dumping of Yieh Steel's stainless steel plate in coils ("SSPC") and led to the appeal of Allegheny Ludlum Corp. v. United States, 239 F.Supp.2d 1381 (Ct. Int'l Trade 2002).
In June of 1999, Commerce completed its investigation of Yieh Steel's and Tung Mung's SSSS exports and found that Yieh Steel engaged in dumping in its direct sales to United States customers as well as in its sales to Ta Chen; that Tung Mung did not engage in dumping in either its direct sales to United States customers or in its sales to Ta Chen;3 and that Ta Chen engaged in middleman dumping in its sales to United States customers of both Yieh Steel's and Tung Mung's merchandise. Commerce's next step was to assess antidumping duties on these SSSS exports.
Commerce used a single weighted average rate to compute antidumping duties on Yieh Steel's and Tung Mung's SSSS exports. This approach calculated the dumping margins of the producer's direct sales of SSSS to United States customers; the dumping margin of the producer's sales of SSSS to the middleman, Ta Chen; and the dumping margin of Ta Chen's sales of SSSS to United States customers. These three dumping margins were then weight averaged to apply a single rate to all of the producer's SSSS merchandise exported to the United States, whether exported by the producer or by the middleman.4 The use of a single weighted average method of calculation applied the same antidumping duty rate to SSSS exported directly by the producer and SSSS exported by the middleman Ta Chen, despite the fact that the SSSS exported through these different channels involved different dumping margins. For Tung Mung, whose direct exports were assessed a de minimis dumping margin, the single weighted average rate effectively denied it an antidumping exemption for its direct sales to United States customers.
In July of 2001, Yieh Steel and Tung Mung appealed Commerce's decision, contending that Commerce should have used a so-called combination rate. A combination rate approach calculates antidumping duties based only on the dumping that occurred in the merchandise's specific channel of exportation.5 Thus, merchandise that is sold directly by a producer to United States customers is assessed an antidumping duty that reflects only the producer's dumping margin on such sales. Merchandise sold by a middleman to United States customers is assessed an antidumping duty that accounts for the producer's dumping margin on its sale to the middleman and the middleman's dumping margin on its sale to United States customers.
The practical difference between the combination rate approach and the single weighted average rate approach is that the producer is held responsible only for its own dumping to United States customers under the former approach, but the producer is effectively accountable for middleman dumping as well under the latter approach.
The Court of International Trade found that the relevant antidumping statutory and regulatory provisions neither "support[ed] nor explicitly foreclose[d] Commerce's use of the single, weighted average cash deposit rate." Tung Mung 2002, 219 F.Supp.2d at 1335-36.6 However, the court concluded that Commerce's decision to use a single weighted average rate was not entitled to Chevron deference, see Chevron U.S.A. Inc. v. Natural Res. Def. Council, 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), because it was an "agency interpretation [that] lack[ed] the force of law" and instead was only due Skidmore deference, which "entitled [it] to respect ... to the extent that [it] ha[d] the `power to persuade.'" Tung Mung Remand, No. 99-07-00457, slip op. at 16-17.
The court also concluded that the use of a single weighted average was a "change[] [from Commerce's] prior practice with regard to the imposition of combination rates where there is a finding of middleman dumping and the producer is a named respondent." Id. at 32. The court found that in the only prior...
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