Fagersta Stainless Ab v. U.S.

• Decision Date: 28 August 2008
• Docket Number: Court No. 07-00153.,Slip Op. 08-87.
• Citation: 577 F.Supp.2d 1270
• Parties: FAGERSTA STAINLESS AB, Plaintiff, v. UNITED STATES, Defendant, and Carpenter Technology Corp., and Universal Stainless & Alloy Products, Inc., Defendant-Intervenors.
• Court: U.S. Court of International Trade

577 F.Supp.2d 1270

FAGERSTA STAINLESS AB, Plaintiff, v. UNITED STATES, Defendant, and Carpenter Technology Corp., and Universal Stainless & Alloy Products, Inc., Defendant-Intervenors.

Slip Op. 08-87.

Court No. 07-00153.

United States Court of International Trade.

August 28, 2008.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Hunton & Williams LLP, Washington, DC (William Silverman, Richard P. Ferrin, and James R. Simoes), for Plaintiff Fagersta Stainless AB.

Gregory G. Katsas, Assistant Attorney General; Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Michael Dierberg); and Hardeep K. Josan, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of Counsel, for Defendant United States.

Kelley Drye Collier Shannon, Washington, DC (David A. Hartquist, Mary T. Staley, and Grace W. Kim), for Defendant-Intervenors Carpenter Technology Corp. and Universal Stainless & Alloy Products, Inc.

OPINION

WALLACH, Judge.

I INTRODUCTION

This action arises out of the administrative review of an antidumping duty order conducted by the United States Department of Commerce ("Commerce"). During the course of the review, Plaintiff Fagersta Stainless AB ("Fagersta") requested that Commerce modify its existing modelmatch methodology by adding an additional product criterion. Commerce rejected this request on the basis that Fagersta had not demonstrated that there were "compelling reasons" to do so. Plaintiff challenges this determination.

This court has jurisdiction pursuant to 28 U.S.C. § 1581(c). For the reasons set forth below, Commerce's determination is affirmed.

II BACKGROUND

On September 15, 1998, Commerce published an antidumping duty order on stainless steel wire rod ("SSWR") from Sweden. Notice of Antidumping Duty Order: Stainless Steel Wire Rod from Sweden, 63 Fed.Reg. 49,329 (September 15, 1998). The model-match criteria applied by Commerce consisted of four product characteristics: (1) grade, (2) diameter, (3) further processing, and (4) coating. See Memorandum in Support of Plaintiff's Motion for Judgment on the Agency Record ("Plaintiff's Motion") at 2; Defendant's Memorandum in Opposition to Plaintiff's Rule 56.2 Motion for Judgment Upon the Agency Record ("Defendant's Response") at 3.

On October 25, 2005, Commerce published a notice of initiation of the administrative review on SSWR from Sweden for the period September 1, 2004 through August 31, 2005. Initiation of Antidumping and Countervailing Duty Administrative Reviews, 70 Fed.Reg. 61,601 (October 25, 2005). As part of the administrative review, Commerce sent an antidumping duty questionnaire to Fagersta in November 2005. Defendant's Response at 2. Fagersta responded and requested that Commerce revise its model-match criteria to include electro-slag refining ("ESR") as a fifth product characteristic. Fagersta Section B Questionnaire Response, Confidential Record ("C.R.") Doc. No. 3, at B-2. In its questionnaire response, Fagersta defined electro-slag refining as a "separate and significant processing stage ... [that] imparts unique material qualities, primarily superior fatigue resistance, to the finished wire rod product." Id.

In October 2006, Commerce published the preliminary results of this review. Stainless Steel Wire Rod from Sweden: Preliminary Results of Antidumping Duty Administrative Review, 71 Fed.Reg. 59,082 (October 6, 2006). Commerce determined that compelling reasons did not exist to modify the model-match criteria by adding electro-slag refining as a product characteristic. Id. at 59,085. In the preliminary phase of the administrative review, Commerce therefore applied the same model-match criteria to determine the "foreign like product" as in the initial "less than fair value" investigation. Plaintiff's Motion at 2; Defendant's Response at 3. Fagersta subsequently renewed its request that Commerce modify the modelmatch criteria to include ESR as a product characteristic. See Fagersta Stainless AB Case Brief, United States Department of Commerce, International Trade Administration, Case No, A-401-806 (November 27, 2006), C.R. Doc. 33, at 3. Commerce again declined to modify its model-match criteria. See Issues and Decision Memorandum for the Final Results of the Administrative Review of Stainless Steel Wire Rod from Sweden ("Final Decision Memo") (April 4, 2007), Public Record ("P.R.") Doc. 102, at 9; Stainless Steel Wire Rod from Sweden: Final Results of Antidumping Duty Administrative Review, 72 Fed.Reg. 17,834, 17,835-37 (April 10, 2007).

III STANDARD OF REVIEW

The court must uphold a determination by Commerce resulting from an administrative review of an antidumping duty order unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i); Carpenter Tech. Corp. v. United States, 510 F.3d 1370, 1372-73 (Fed.Cir.2007).

The substantial evidence test "requires only that there be evidence that a reasonable mind might accept as adequate to support a conclusion." Cleo Inc. v. United States, 501 F.3d 1291, 1296 (Fed. Cir.2007) (citing Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S.Ct. 456, 95 L.Ed. 456 (1951)). While the court must consider contradictory evidence, "the substantial evidence test does not require that there be an absence of evidence detracting from the agency's conclusion, nor is there an absence of substantial evidence simply because the reviewing court would have reached a different conclusion based on the same record." Id. (citing Universal Camera Corp., 340 U.S. at 487-88, 71 S.Ct. 456); see also Am. Silicon Techs. v. United States, 261 F.3d 1371, 1376 (Fed.Cir. 2001); U.S. Steel Group v. United States, 96 F.3d 1352, 1357 (Fed.Cir.1996).

To determine whether Commerce's interpretation and application of the antidumping statute at issue "is in accordance with the law," the court must conduct the two-step analysis articulated by the Supreme Court in Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Under the first step of the Chevron analysis, the court must ascertain "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." Wheatland Tube Co. v. United States, 495 F.3d 1355, 1359 (Fed.Cir.2007) (citing Chevron, 467 U.S. at 843, 104 S.Ct. 2778).

The court reaches the second step of the Chevron analysis only "if the statute is silent or ambiguous with respect to the specific issue." Id. Under this second step, the court must evaluate whether Commerce's interpretation "is based on a permissible construction of the statute." Chevron, 467 U.S. at 843, 104 S.Ct. 2778. The agency's construction need not be the only reasonable interpretation or even the most reasonable interpretation. Zenith Radio Corp. v. United States, 437 U.S. 443, 450, 98 S.Ct. 2441, 57 L.Ed.2d 337 (1978). The court must defer to Commerce's reasonable interpretation of a statute even if it might have preferred another. Id.

IV DISCUSSION

A

Legal Framework

Goods imported into the United States will be subject to an antidumping duty if Commerce determines that foreign merchandise is being sold in the United States at "less than its fair value."¹ 19 U.S.C. § 1673; see also Ad Hoc Shrimp Trade Action Comm. v. United States, 515 F.3d 1372, 1375 (Fed.Cir.2008). The amount of the antidumping duty reflects the amount by which the home-market price of the foreign like product (the "normal value") exceeds the price charged in the United States (the "export price"), 19 U.S.C. § 1677b(a)(1)(A)-(B); this difference is referred to as the "dumping margin," 19 U.S.C. § 1677(35)(A). After an antidumping duty order is issued, the amount of the antidumping duty may be revised in subsequent administrative reviews. 19 U.S.C. § 1675(a)(1)(B). In an administrative review, Commerce recalculates the normal value and export price to establish an updated dumping margin. 19 U.S.C. § 1675(a)(2)(A)(i)-(ii). In order to establish the dumping margin, whether in an initial investigation or in an administrative review, Commerce must first identify the "foreign like product" which will form the basis for comparison to merchandise exported to the United States. See Pesquera Mares Australes Ltda. v. United States, 266 F.3d 1372, 1375 (Fed.Cir.2001).

Commerce Has Considerable Discretion in Constructing a Model-Match Methodology for Identifying the "Foreign Like Product"

Because Congress has not precisely defined the methodology by which Commerce must identify the "foreign like product," it has implicitly delegated that authority to Commerce. New World Pasta Co. v. United States, 28 CIT 290, 305-06, 316 F.Supp.2d 1338, 1352 (2004) (citing Pesquera Mares, 266 F.3d at 1384; Koyo Seiko Co. v. United States, 66 F.3d 1204, 1209 (Fed.Cir.1995)). Commerce has "considerable discretion" to construct a methodology for identifying the "foreign like product" in antidumping proceedings. SKF USA, Inc. v. United States, 537 F.3d 1373, 1379 (Fed.Cir.2008); SKF USA Inc. v. United States, 263 F.3d 1369, 1381 (Fed. Cir.2001).² Commerce states that it does so by "devis[ing] a hierarchy of commercially significant characteristics suitable to each class or kind of merchandise." Defendant's Response at 10. This hierarchy of commercially significant characteristics is the "model-match methodology." According to Commerce, it then utilizes these characteristics to "compare[] United States sales to sales in the comparison market." Id.

Pursuant to the statutory scheme, Commerce must "first look for identical merchandise with which to match the United States model to the comparable home or third country market model."³ Viraj Forgings, Ltd. v. United...