Wheatland Tube Co. v. U.S.

• Decision Date: 25 July 2007
• Docket Number: No. 2006-1525.,No. 2006-1524.,2006-1524.,2006-1525.
• Citation: 495 F.3d 1355
• Parties: WHEATLAND TUBE COMPANY and Allied Tube & Conduit Corporation, Plaintiffs-Appellees, v. UNITED STATES, Defendant-Appellant, and Saha Thai Steel Pipe Company, Ltd., Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

495 F.3d 1355

WHEATLAND TUBE COMPANY and Allied Tube & Conduit Corporation, Plaintiffs-Appellees, v. UNITED STATES, Defendant-Appellant, and Saha Thai Steel Pipe Company, Ltd., Defendant-Appellant.

No. 2006-1524.

No. 2006-1525.

United States Court of Appeals, Federal Circuit.

July 25, 2007.

Roger B. Schagrin, Schagrin Associates, of Washington, DC, argued for plaintiffs-appellees. Of counsel were Michael J. Brown and Brian E. McGill.

Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellant, United States. With her on the brief was Peter D. Keisler, Assistant Attorney General. Of counsel on the brief were John D. McInerney, Chief Counsel, and Irene H. Chen, Attorney

International, Office of General Counsel, Office of Chief Counsel for Import Administration, United States Department of Commerce, of Washington, DC. Of counsel was Ada E. Bosque.

David J.L. Mortlock, O'Melveny and Myers LLP, of Washington, DC, for defendant-appellant, Saha Thai Steel Pipe Company, Ltd. With him on the brief was Greyson Bryan, of Los Angeles, CA.

Donald B. Cameron, Kaye Scholer LLP, of Washington, DC, for amici curiae, Dongbu Steel Co., Ltd., et al. With him on the brief were Julie C. Mendoza, R. Will Planert, Jeffrey S. Grimson, Brady W. Mills, and Sarah M. Sharp.

Spencer S. Griffith, Akin Gump Strauss Hauer & Feld, LLP, of Washington DC, for amicus curiae, Posco and Pohang Coated Steel Co., Ltd. With him on the brief were J. David Park and Lisa W. Ross.

Before RADER, Circuit Judge, ARCHER, Senior Circuit Judge, and GAJARSA, Circuit Judge.

GAJARSA, Circuit Judge.

This is a statutory construction and agency deference case. The issue before us is whether Commerce's interpretation of "United States import duties" under 19 U.S.C. § 1677a(c)(2)(A) includes "safeguard duties" from § 201 of the Trade Act of 1974. The United States (the "government" or "Commerce") and Saha Thai Steel Pipe Company, LTC ("Saha Thai") appeal from the Court of International Trade's judgment on the administrative record in favor of Wheatland Tube Company and Allied Tube & Conduit Corporation (collectively "Wheatland Tube"). The trial court held that Commerce's interpretation of 19 U.S.C. § 1677a(c)(2)(A), namely that § 201 safeguard duties are not deducted from the export price in calculating the antidumping duty margin, was unreasonable and not in accordance with the law. See Wheatland Tube Co. v. United States, 414 F.Supp.2d 1271 (Ct. Int'l Trade 2006). We reverse the Court of International Trade because we find Commerce's interpretation of § 1677a(c)(2)(A) reasonable and therefore in accordance with law.

I. BACKGROUND

Saha Thai is an exporter of circular welded carbon steel pipes and tubes ("pipe") from Thailand. Wheatland Tube is a domestic producer of steel pipe. At the Court of International Trade, Wheatland Tube contested Commerce's treatment of § 201 safeguard duties in its determination of Saha Thai's antidumping margin.

Section 201 of the Trade Act of 1974, 19 U.S.C. § 2251, permits the President of the United States to impose safeguard duties on imported merchandise if the merchandise "is being imported into the United States in such increased quantities as to be a substantial cause of serious injury, or the threat thereof, to the domestic industry producing an article like or directly competitive with the imported article." On March 5, 2002, through Proclamation No. 7529, the President imposed § 201 safeguard duties on imports of certain steel products, including the pipe that is the subject of this appeal. See 67 Fed. Reg. 10,533 (Mar. 7, 2002). Proclamation 7529 mandated payment of an additional 15% duty on covered steel products entered between March 20, 2002 through March 19, 2003. See Proclamation 7529, 67 Fed.Reg. at 10,590.

On April 21, 2003, Commerce issued a notice of initiation of an antidumping duty administrative review for circular welded carbon steel pipes and tubes from Thailand.¹ The review involved a single producer of the subject pipe, Saha Thai. Wheatland Tube, a U.S. producer of pipe, was the petitioner in the administrative review of Saha Thai's entries. The period of review ("POR") covered merchandise entered by Saha Thai between March 1, 2002 and February 28, 2003. Thus, the POR covered almost the entire period of time in which the President's Proclamation 7529 was in effect.

Pursuant to 19 U.S.C. § 1677a(c)(2)(A) (emphasis added), which statute is the focus of this case, Commerce is required to decrease an exporter's export price² (the "EP") by the amount of "any additional costs, charges, or expenses, and United States import duties, which are incident to bringing the subject merchandise from the original place of shipment in the exporting country to the place of delivery in the United States." During Commerce's review of Saha Thai's entries, Commerce considered whether it should deduct from the EP the § 201 duties Saha Thai paid upon importation of the subject merchandise into the United States. Because Commerce had never before addressed this issue—whether § 201 duties are deducted from the EP in determining an antidumping margin—Commerce postponed deducting the § 201 duties pending public notice and comment on the issue of the treatment of § 201 duties in antidumping duty determinations.³

After considering the comments and responses received during the notice and comment period, Commerce ruled that § 201 safeguard duties are not "United States import duties" for the purposes of § 1677a(c)(2)(A) and should therefore not be deducted from the EP in calculating the antidumping margin.⁴ Commerce based its ruling on the legislative history of § 1677a(c)(2)(A), on its established practice to not deduct remedial duties from the EP, and on its obligation to avoid collecting double remedial remedies. SWR Korea, 69 Fed.Reg. at 19,157-59.

Commerce applied its ruling in SWR Korea to the review of Saha Thai's entries and determined that Saha Thai's § 201 safeguard duties were not "United States import duties" that were required to be deducted from Saha Thai's EP under 19 U.S.C. § 1677a(c)(2)(A).⁵ As a result, Commerce calculated Saha Thai's weighted average dumping margin to be a de minimis margin of 0.17% and found that Saha Thai's cash deposit rate for the POR was zero.

Wheatland Tube contested Commerce's treatment of § 201 safeguard duties in calculating Saha Thai's antidumping margin at the Court of International Trade, arguing that § 201 duties are "United States import duties" under 19 U.S.C. § 1677a(c)(2)(A) and must therefore be deducted from the EP and that Commerce's treatment of § 201 duties usurped the President's power and authority to impose § 201 duties.

The Court of International Trade agreed with Wheatland Tube and determined: "By failing to deduct § 201 duties from EP [the export price], Commerce improperly negates the § 201 duty imposed by the President, artificially decreases Respondent's AD margin, and upsets the balance between § 201 duties and AD duties." Wheatland, 414 F.Supp.2d at 1283. Based on its own statutory construction, the court found that Commerce's interpretation was "unreasonable and not in accordance with the law." Id. at 1279.

The court analyzed Commerce's interpretation of the statutory text "United States import duties" under 19 U.S.C. § 1677a(c)(2)(A) according to the two-step test set forth by the Supreme Court in Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Under the first step of Chevron, the court found that Congress had not "directly spoken to the precise question at issue," 467 U.S. at 842, 104 S.Ct. 2778, because Congress did not define "import duties." Wheatland Tube, 414 F.Supp.2d at 1280. Under the second step of Chevron, the court determined that it was not reasonable for Commerce to interpret the statute to exclude § 201 safeguard duties because such a construction conflicted with the trade remedy statutory scheme by nullifying antidumping relief.

The trial court entered final judgment on May 16, 2006. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(5).

II. ANALYSIS

This court reviews the judgment of the Court of International Trade regarding Commerce's interpretation of § 1677a(c)(2)(A) by reapplying the same statutory standard applied by the court. See Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1559 n. 10 (Fed.Cir.1984). Accordingly, this court will uphold Commerce's determinations, findings, and conclusions unless they are "unsupported by substantial evidence on the record, or otherwise not in accordance with the law." 19 U.S.C. § 1516a(b)(1)(B)(i).

A.

Because the issue before this court is Commerce's statutory interpretation of § 1677a(c)(2)(A), we determine whether Commerce's statutory interpretation is entitled to deference pursuant to Chevron. 467 U.S. at 842-43, 104 S.Ct. 2778. Under Chevron, this court must conduct a two-step analysis to determine whether Commerce's interpretation and application of the antidumping statute at issue "is in accordance with the law." The first step of Chevron is to determine "whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." Id. This court reaches step two of Chevron only "if the statute is silent or ambiguous with respect to the specific issue." Id. at 843, 104 S.Ct. 2778.

As applied to this case, under Chevron step one, it is clear that Congress has not defined or explained the meaning or scope of "United States import duties" as set forth in 19 U.S.C. § 1677a(c)(2)(A). More specifically, the Tariff Act, the Trade Act, and the legislative histories of those acts do not explain whether § 201 safeguard duties are to be considered ...