Mittal Steel Galati S.A. v. U.S.

• Decision Date: 18 July 2007
• Docket Number: Court No. 05-00311.,Slip Op. 07-110.
• Citation: 502 F.Supp.2d 1295
• Parties: MITTAL STEEL GALATI S.A., Formerly Known as Ispat Sidex S.A., Plaintiff, v. UNITED STATES, Defendant, IPSCO Steel., Inc., Defendant-Intervenor.
• Court: U.S. Court of International Trade

502 F.Supp.2d 1295

MITTAL STEEL GALATI S.A., Formerly Known as Ispat Sidex S.A., Plaintiff, v. UNITED STATES, Defendant, IPSCO Steel., Inc., Defendant-Intervenor.

Slip Op. 07-110.

Court No. 05-00311.

United States Court of International Trade.

July 18, 2007.

Arent Fox Kintner Plotkin & Kahn (John M. Gurley, Nancy A. Noonan), Washington, DC, for Plaintiff.

Peter D. Keisler, Assistant Attorney General; Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (David F. D'Allessandris, Trial Attorney), for Defendant.

Schagrin Associates (Roger B. Schagrin), Washington, DC, for Defendant-Intervenor.

OPINION

POGUE, Judge.

In this action, Plaintiff Mittal Steel Galati, S.A. ("Mittal" or "Plaintiff") seeks judicial review of the final results of the 2002-2003 administrative review, conducted by the United States Commerce Department ("the Department" or "Commerce"), of the antidumping duty order on cut-to-length carbon steel plate from Romania. See Certain Cut-to-Length Carbon Steel Plate from Romania, 70 Fed.Reg. 12,651 (Dep't Commerce March 15, 2005) (final results and final partial rescission) ("Final Results").

Mittal challenges three of Commerce's data selection decisions, all contained in the Final Results. Specifically, Mittal protests: (1) Commerce's decision to value Plaintiff's recycled iron scrap factor as a material input, instead of assigning it a value of zero or providing an appropriate offset to the assigned value; (2) Commerce's choice of a surrogate value for limestone; and (3) Commerce's rejection of data — to be used in deriving surrogate financial ratios — from the financial statements for Mittal's Algerian affiliate, Ispat Annaba. Mittal also asks the court to order the re-liquidation of subject merchandise entries that were liquidated prior to the expiration of the statutory time limit for appeal, and prior to Mittal's application for a preliminary injunction.

Pending before the court is Plaintiff's USCIT R. 56.2 motion for judgment on the agency record. For the reasons stated herein, the court remands for reconsideration Commerce's decision to value Plaintiff's recycled iron scrap factor and its choice of a surrogate value for limestone. The court affirms Commerce's rejection of the financial statement from Ispat Annaba. Further, the court declines to exercise its authority to order re-liquidation.

Background

Mittal Steel Galati, S.A., formerly known as Ispat Sidex S.A., is the producer of certain cut-to-length carbon steel plates in Romania. These products are covered by an antidumping duty order that was issued in 1993. See Certain Cut-to-Length Carbon Steel Plate from Romania, 58 Fed. Reg. 44,167 (Dep't Commerce Aug. 19, 1993) (antidumping duty order). Commerce conducted an administrative review of this antidumping duty order for entries during the period from August 1, 2002 to July 31, 2003 (the "period of review" or "POR"). See Certain Cut-to-Length Carbon Steel Plate from Romania, 69 Fed. Reg. 54,108 (Dep't Commerce Sept. 7, 2004)(preliminary results and notice of intent to rescind in part)("Preliminary Results"); see also Final Results, 70 Fed. Reg. 12,651.¹

It is a fundamental premise of antidumping law that, in establishing an antidumping duty rate (whether prospectively, as the initial cash deposit rate set during an initial antidumping investigation, or as a result of the retrospective assessment conducted during the administrative review), Commerce is charged by Section 731 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1673 (2000)² with determining the difference between the "normal value" of the subject merchandise and the "export price" or the "constructed export price," which is the price at which the subject merchandise is sold in the United States market. See Dorbest Ltd. v. United States, 30 CIT ___, ___, 462 F.Supp.2d 1262, 1265 n. 1 (2006).

For market economy countries, the "normal value" is the "price of the foreign merchandise in its country of origin, in an appropriate third country, or the foreign product's cost of production." Id.; see 19 U.S.C. § 1677b(a). In the case of nonmarket economy countries ("NME's"), due to the fact that the market does not operate based on market-determined prices or the intersection of supply and demand, the cost of the goods cannot be based upon the prices attributed to them by the selling companies. Dorbest 30 CIT at ___, 462 F.Supp.2d at 1265 n. 1; see also Magnesium Corp. of Am. v. United States, 166 F.3d 1364, 1368 (Fed.Cir.1999) ("[T]he prices of the goods produced in an NME are subject to discrepancies which distort their value.")(quoting Magnesium Corp. of Am. v. United States, 20 CIT 1092, 1095, 938 F.Supp. 885, 890 (1996)). As a result, Commerce constructs the "normal value" of goods from an NME by assigning a value to the inputs of the goods, based on the "factors of production," and extrapolating the "normal" value based on that information.³ The value assigned to the inputs of the goods is known as a "surrogate value" and is generally determined by identifying the cost of inputs in a comparable market economy country. See 19 U.S.C. § 1677b(c); Dorbest, 30 CIT at ___, 462 F.Supp.2d at 1265 n. 1. In calculating these costs, the Statute generally requires that Commerce seek to determine an accurate dumping margin. See Dorbest, 30 CIT at ___, 462 F. Supp 2d. at 1268 ("The term `best available' is one of comparison, i.e., the statute requires Commerce to select, from the information before it, the best data for calculating an accurate dumping margin."); see also Lasko Metal Prods., Inc. v. United States, 43 F.3d 1442, 1443 (Fed.Cir.1994). To this end, in making its data choices, Commerce normally considers the quality, specificity and contemporaneity of the data and prefers to use public, country-wide data, where it is available. See Goldlink Indus. Co. v. United States, 30 CIT ___, ___, 431 F.Supp.2d 1323, 1337 (2006) Freshwater Crawfish Tail Meat from the People' Republic of China, 66 Fed.Reg. 20,634 (Dep' Commerce Apr. 24, 2001) (final results and final partial rescission), Issues and Decision Mem. (cmt. 2).

Halfway through the period of review, in the administrative review at issue here, Commerce changed Romania' status from a non-market to a market economy country, effective January 1, 2003. Def.' Mem. in Opp' to Pl.' Mot. for J. Upon, the Agency R. 3 ("Def.' Br.") As a result Commerce determined that, for the purposes of this administrative review, it would treat Romania as an NME for the period from August 1 to December 31, 2003, and as a market economy country from January 1 to July 31, 2003. Id.; see Preliminary Results, 69 Fed.Reg. at 54,108-109. Therefore, Commerce calculated a normal value using surrogate values, in addition to using the statutory market economy analysis. Mittal's challenges relate to Commerce's data choices in the calculation of the normal value for the portion of the POR for which Romania was considered by Commerce to be an NME. The court has jurisdiction over the action pursuant to 28 U.S.C. § 1581(c).

Standard of Review

When reviewing Commerce's final determination in an administrative review under 19 U.S.C. § 1516a, the court upholds Commerce's determinations, findings, or conclusions when they are supported by substantial evidence on the record, and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i). Specifically, the court reviews the agency's legal interpretation of the governing statutes — whether or not issued by formal notice-and-comment rule-making — to confirm that such interpretation is in accordance with law. See, e.g., Chevron U.S.A. Inc. v. Natural Resources Defense Council Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984); Zenith Elec. Corp. v. United States, 988 F.2d 1573, 1582 (Fed.Cir.1993); cf. Christensen v. Harris County, 529 U.S. 576, 587, 120 S.Ct. 1655, 146 L.Ed.2d 621(2000) (citing Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 89 L.Ed. 124 (1944)). The agency's factual determinations are reviewed to determine whether there is substantial evidence in the record supporting the agency's findings. Ta Chen Stainless Steel Pipe, Inc. v. United States, 298 F.3d 1330, 1335 (Fed.Cir.2002) Substantial evidence review requires weighing the totality of the evidence, id.,⁴ to determine whether the agency's factual findings are reasonable when viewed in light of that complete record. Nippon Steel Corp. v. United States, 458 F.3d 1345, 1351 (Fed.Cir.2006).

Analysis

1. Assignment of a Surrogate Value to Mittal's Recycled Iron Scrap Input

As noted above, in calculating a normal value for goods from an NME country, Commerce assigns a surrogate value to the various inputs that are used to manufacture the subject merchandise covered by the antidumping duty order. Dorbest, 30 CIT at ___, 462 F.Supp.2d at 1265 n. 1; 19 U.S.C. § 1677b(c). In order to ascertain the factors of production that were used for the subject merchandise, Commerce sends questionnaires to the exporters subject to the investigation. Def.'s Br. 3. After a verification process, Commerce then selects an appropriate surrogate value for the goods. Id. at 3-5.

In some investigations, the remnants or by-products of one part of the production process (the cost of which is already accounted for) are re-utilized in a secondary production process. To re-value these recycled inputs in evaluating the costs of the secondary production could result in counting the cost of that factor of production twice. Therefore, as a general rule, when Commerce can verify that scrap was produced from an earlier stage of the production process, and that it is utilized in a later stage of the production process, Commerce will value the scrap input at zero, and not assign a surrogate value to the scrap input. Def's Br. 10 ("Typically, Commerce does not assign a surrogate value, to recycled products because...