502 F.3d 1370 (Fed. Cir. 2007), 2006-1652, Corus Staal BV v. United States

Docket Nº:2006-1652.
Citation:502 F.3d 1370
Party Name:CORUS STAAL BV, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee, and United States Steel Corporation, Defendant-Appellee.
Case Date:September 21, 2007
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit

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502 F.3d 1370 (Fed. Cir. 2007)

CORUS STAAL BV, Plaintiff-Appellant,


UNITED STATES, Defendant-Appellee,


United States Steel Corporation, Defendant-Appellee.

No. 2006-1652.

United States Court of Appeals, Federal Circuit.

September 21, 2007

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

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[Copyrighted Material Omitted]

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Richard O. Cunningham and Alice A. Kipel, Steptoe & Johnson LLP, of Washington, DC, argued for plaintiff-appellant. With them on the brief were Joel D. Kaufman, and Jamie B. Beaber.

Claudia Burke, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee, United States. With her on the brief were Peter D. Keisler, Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director.

Jeffrey D. Gerrish, Skadden, Arps, Slate, Meagher & Flom LLP, of Washington, DC, argued for defendant-appellee, United States Steel Corporation. With him on the brief were John J. Mangan and Robert E. Lighthizer.

Before RADER, BRYSON, and MOORE, Circuit Judges.

BRYSON, Circuit Judge.

This case concerns the Department of Commerce's second administrative review of an antidumping order covering hot-rolled steel from the Netherlands. The importer, Corus Staal BV, appealed Commerce's final determination to the Court of International Trade, challenging Commerce's use of the so-called zeroing methodology to calculate Corus's dumping margin, Commerce's unfavorable classification of certain of Corus's sales transactions, and Commerce's determination that Corus had absorbed antidumping duties rather than passing them on to its customers. The Court of International Trade upheld Commerce's use of zeroing and its classification of the disputed sales transactions. With regard to the absorption issue, the court held that Corus had failed to exhaust its administrative remedies and therefore had not preserved that issue for judicial review. We affirm.


"Zeroing" is a method of calculating weighted average dumping margins. It works as follows: Commerce first determines a dumping margin for U.S. sales of a particular product by comparing the transaction price with the monthly weighted average "normal value" of that product, i.e., the price charged for the product in its home market. See 19 U.S.C. § 1677b. Commerce then aggregates the dumping margins for all U.S. sales made below normal value. With respect to all U.S. sales made above normal value (i.e., non-dumped sales), Commerce assigns a dumping margin of zero. Thus, when Commerce calculates the weighted average dumping margin, the dumping margins for sales below normal value are not offset by "negative dumping margins" for those sales made above normal value.

In the second administrative review, which is at issue in this case, Commerce employed the zeroing methodology to calculate the weighted average dumping margins for Corus's hot-rolled steel products. This court has held that although the antidumping statutes do not require the use of zeroing in calculating dumping margins, Commerce's zeroing methodology is a permissible interpretation of the statutory provisions. See Corus Staal BV v. Dep't of Commerce, 395 F.3d 1343, 1347 (Fed. Cir. 2005); Timken Co. v. United States, 354 F.3d 1334, 1340-45 (Fed. Cir. 2004).

Corus does not directly challenge our decisions upholding Commerce's use of zeroing. Rather, Corus notes that Commerce issued its final determination for the second administrative review in April 2005, and it argues that subsequent events show that Commerce has adopted a new policy with regard to zeroing and that the new policy should be applied to the second administrative review.

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The new developments to which Corus refers are the following: In 2003 the European Communities ("EC") initiated a complaint before the World Trade Organization ("WTO") challenging the United States' use of zeroing in certain antidumping investigations and administrative reviews. A WTO panel initially found that the use of zeroing in antidumping investigations was inconsistent with the United States' obligations under the WTO Anti-Dumping Agreement, but it upheld the use of zeroing in administrative reviews, both "as such" and "as applied." See Panel Report, United States--Laws, Regulations and Methodology for Calculating Dumping Margins ("Zeroing"), ¶ 8.1(a), (c)-(g), WT/DS294/R, (Oct. 31, 2005). The WTO Appellate Body subsequently reversed the portion of the panel's decision that upheld the use of zeroing "as applied" to the administrative reviews challenged by the EC. See Appellate Body Report, United States--Laws, Regulations and Methodology for Calculating Dumping Margins ("Zeroing"), ¶ ¶ 135, 263(a)(i), WT/DS294/AB/R (Apr. 18, 2006). The panel report, as modified by the Appellate Body report, was then adopted by the WTO Dispute Settlement Body. United States--Laws, Regulations and Methodology for Calculating Dumping Margins ("Zeroing"), WT/DS294/17 (May 15, 2006).

Following the WTO panel decision, Commerce announced that it would abandon the use of zeroing in conjunction with average-to-average comparisons to calculate weighted average dumping margins in antidumping investigations, 1 and it sought comments on alternative approaches to be used in future investigations. Antidumping Proceedings: Calculation of the Weighted Average Dumping Margin During an Antidumping Duty Investigation, 71 Fed.Reg. 11189 (Mar. 6, 2006). After the panel report was adopted by the Dispute Settlement Body, the United States stated that it would implement the Dispute Settlement Body's recommendations and rulings. See Agreement under Article 21.3(b) of the DSU, United States--Laws, Regulations and Methodology for Calculating Dumping Margins ("Zeroing"), WT/DS294/19 (Aug. 1, 2006); see also Press Release, United States Mission to the United Nations in Geneva, U.S. Statements at the WTO Dispute Settlement Body Meeting (May 30, 2006). Those statements, Corus argues, demonstrate that Commerce has abandoned the policy of zeroing. Corus notes that Commerce has since recalculated Corus's dumping margin (without zeroing) and, based on a finding of no dumping under that methodology, has revoked its antidumping order effective April 23, 2007. Implementation of the Findings of the WTO Panel in US--Zeroing (EC): Notice of Determinations Under Section 129 of the Uruguay Round Agreements Act and Revocations and Partial Revocations of Certain Antidumping Duty Orders, 72 Fed.Reg. 25261, 25262 (May 4, 2007). Corus now asks us to remand this case so that Commerce can reconsider the final results of the second administrative review of the antidumping order in light of these recent developments.

We conclude that the events to which Corus points do not require a different result in this case and that Commerce has made amply clear that its new policy regarding zeroing would not apply to the

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administrative review at issue here. Subsequent to Corus's filing of this appeal, Commerce issued its final results in the fourth administrative review of the antidumping order. That ruling is particularly instructive, as there do not appear to be any relevant differences between that administrative review and the administrative review at issue in this case. In that decision, Commerce addressed the same issues that Corus now asserts need to be decided by Commerce in the first instance. Commerce's decision in that review makes clear that its policy has not changed with respect to the retrospective application of the zeroing methodology and that a remand to Commerce in this case would therefore serve no useful purpose.

It is clear that Commerce intends to apply its new policy on zeroing only prospectively. Section 129 of the Uruguay Round Agreements Act ("URAA") states that the implementation of adverse WTO decisions applies to unliquidated entries that enter or are withdrawn from the warehouse on or after the date that the U.S. Trade Representative directs implementation. 19 U.S.C. § 3538(c)(1)(B); see also Statement of Administrative Action for the URAA, H.R. Doc. No. 103-316, Vol. I at 1026 (1994), reprinted in 1994 U.S.C.C.A.N. 4040, 4313. Accordingly, Commerce stated in the fourth administrative review that it "is not altering its administrative review determination as a result of the post-POR prospective revocation of the order." Issues and Decision Memorandum for the 2004-2005 Administrative Review of Certain Hot-Rolled Carbon Steel Flat Products from the Netherlands; Final Results of Antidumping Duty Administrative Review, 72 ITADOC 28676 (May 15, 2007).

When Commerce announced the elimination of zeroing in conjunction with the use of average-to-average comparisons to calculate dumping margins in antidumping investigations, it stated that the new policy did not apply to any other type of proceeding, including administrative reviews. Antidumping Proceedings: Calculation of the...

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