621 F.3d 1351 (Fed. Cir. 2010), 2009-1572, United States Steel Corp. v. United States

Docket Nº:2009-1572, 2009-1573.
Citation:621 F.3d 1351
Opinion Judge:LOURIE, Circuit Judge.
Party Name:UNITED STATES STEEL CORPORATION, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee, and Nucor Corporation, Plaintiff-Appellant, and Gallatin Steel Company, SSAB North American Division, Steel Dynamics, Inc., and Arcelormittal USA, Inc., Plaintiffs, and Corus Staal BV, Defendant-Appellee.
Attorney:Jeffrey D. Gerrish, Skadden, Arps, Slate, Meagher & Flom LLP, of Washington, DC, argued for plaintiff-appellant United States Steel Corporation. With him on the brief were Robert E. Lighthizer, Ellen J. Schneider and Luke A. Meisner. Of counsel was James C. Hecht. Timothy C. Brightbill, Wiley Rei...
Judge Panel:Before LOURIE, LINN, and DYK, Circuit Judges.
Case Date:October 04, 2010
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit

Page 1351

621 F.3d 1351 (Fed. Cir. 2010)

UNITED STATES STEEL CORPORATION, Plaintiff-Appellant,

and

Nucor Corporation, Plaintiff-Appellant,

and

Gallatin Steel Company, SSAB North American Division, Steel Dynamics, Inc., and Arcelormittal USA, Inc., Plaintiffs,

v.

UNITED STATES, Defendant-Appellee,

and

Corus Staal BV, Defendant-Appellee.

Nos. 2009-1572, 2009-1573.

United States Court of Appeals, Federal Circuit.

October 4, 2010

Page 1352

Jeffrey D. Gerrish, Skadden, Arps, Slate, Meagher & Flom LLP, of Washington, DC, argued for plaintiff-appellant United States Steel Corporation. With him on the brief were Robert E. Lighthizer, Ellen J. Schneider and Luke A. Meisner. Of counsel was James C. Hecht.

Timothy C. Brightbill, Wiley Rein LLP, of Washington, DC, argued for plaintiff-appellant Nucor Corporation. With him on the brief were Alan H. Price and Maureen E. Thorson.

Claudia Burke, Senior 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 Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Sapna Sharma, Office of the Chief Counsel for Import Administration, United States Department of Commerce, of Washington, DC.

Jamie B. Beaber, Steptoe & Johnson LLP, of Washington, DC, argued for defendant-appellee

Page 1353

Corus Staal BV. With him on the brief were Joel D. Kaufman and Alice A. Kipel. Of counsel was Richard O. Cunningham.

Before LOURIE, LINN, and DYK, Circuit Judges.

LOURIE, Circuit Judge.

United States Steel Corp. (" U.S. Steel" ) and Nucor Corp. (" Nucor" and collectively " Appellants" ) appeal from the decision of the United States Court of International Trade upholding the Department of Commerce's (" Commerce's" ) determination of antidumping duties against Corus Staal (" Corus" ) for imports of hot-rolled carbon steel flat products from the Netherlands. U.S. Steel Corp. v. United States, 637 F.Supp.2d 1199 (Ct. Int'l Trade 2009) (" U.S. Steel " ).

Because the Court of International Trade properly found that Commerce's interpretation of its governing statute is in accordance with law, we affirm.

BACKGROUND

Under the antidumping statute, Commerce imposes duties on imported merchandise that " is being, or is likely to be, sold in the United States at less than fair value" and harms domestic industry. 19 U.S.C. § 1673. Sales at less than fair value are those sales for which the " normal value" (the price a producer charges in its home market) exceeds the " export price" (the price of the product in the United States) or " constructed export price." Id. § 1677(35)(A).1 Commerce then calculates a " dumping margin" for a particular product subject to review, equal to " the amount by which the normal value exceeds the export price or constructed export price." Id.; see also Koyo Seiko Co. v. United States, 258 F.3d 1340, 1342 (Fed.Cir.2001). A " weighted average dumping margin" across the products is calculated by " dividing the aggregate dumping margins ... by the aggregate export prices ... of such exporter or producer." 19 U.S.C. § 1677(35)(B).

In November 2001, Commerce issued an antidumping duty order against Corus imposing a dumping margin of 2.59%. Certain Hot-Rolled Carbon Steel Flat Products from the Netherlands, 66 Fed.Reg. 59,565 (Dep't Commerce Nov. 29, 2001) (amended final determination of sales at less than fair value). In determining the dumping margin, Commerce adhered to its existing practice at the time of " zeroing," by which Commerce assigns a value of zero to sales margins of merchandise sold at or above fair value prices. See Corus Staal BV v. Dep't of Commerce, 395 F.3d 1343, 1345-46 (Fed.Cir.2005). Thus, " dumping margins for sales below normal value are not offset by ‘ negative dumping margins' for those sales made above normal value." Corus Staal BV v. United States, 502 F.3d 1370, 1372 (Fed.Cir.2007). Commerce's zeroing methodology had earlier been challenged and upheld as a reasonable interpretation of the antidumping statute. See id. ; Timken Co. v. United States, 354 F.3d 1334, 1342 (Fed.Cir.2004) (upholding zeroing in the context of an administrative review); see also Serampore Indus. v. U.S. Dep't Commerce, 675 F.Supp. 1354, 1360-61 (Ct. Int'l Trade 1987); Bowe Passat Reinigungs-Und Waschereitechnik Gmbh v. United States, 926 F.Supp. 1138, 1150 (Ct. Int'l Trade 1996).

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However, the U.S. practice of zeroing-both as a general methodology and as applied in specific investigations, including the investigation underlying this appeal-was successfully challenged by the European Communities before the World Trade Organization's (" WTO's" ) Dispute Settlement Body. Panel Report, United States-Laws, Regulations and Methodology for Calculating Dumping Margins (" Zeroing" ), WT/DS294/R (October 31, 2005), and the challenge was subsequently upheld by that organization's Appellate Body, United States-Laws, Regulations and Methodology for Calculating Dumping Margins (" Zeroing" ), WT/DS294/R (May 15, 2006) (upholding the Dispute Settlement Panel's finding that the United States acted inconsistently with Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the General Agreement on Tariffs and Trade 1994). The investigation of hot-rolled steel from the Netherlands was one of the 15 investigations challenged.

Commerce responded to the adverse WTO ruling that zeroing is inconsistent with United States obligations under the Antidumping Duty Agreement according to two administrative procedures, laid out in the Uruguay Round Agreements Act (" URAA" ). See 19 U.S.C. § 3533 (" Section 123" ) and 19 U.S.C. § 3538 (" Section 129" ). Section 123 provides, in relevant part, that

Promptly after the circulation of a report of a panel or of the Appellate Body to WTO members in a proceeding described in subsection (d) of this section, the Trade Representative shall-

(1) notify the appropriate congressional committees of the report;

(2) in the case of a report of a panel, consult with the appropriate congressional committees concerning the nature of any appeal that may be taken of the report; and

(3) if the report is adverse to the United States, consult with the appropriate congressional committees concerning whether to implement the report's recommendation and, if so, the manner of such implementation and the period of time needed for such implementation.

19 U.S.C. § 3533(f). The statute continues by listing the requirements for agency action:

In any case in which a dispute settlement panel or the Appellate Body finds in its report that a regulation or practice of a department or agency of the United States is inconsistent with any of the Uruguay Round Agreements, that regulation or practice may not be amended, rescinded, or otherwise modified in the implementation of such report unless and until-

...

(D) the Trade Representative has submitted to the appropriate congressional committees a report describing the proposed modification, the reasons for the modification, and a summary of the advice obtained under subparagraph (B) with respect to the modification;

(E) the Trade Representative and the head of the relevant department or agency have consulted with the appropriate congressional committees on the proposed contents of the final rule or other modification....

19 U.S.C. § 3533(g).

Section 123 describes how Commerce and the United States Trade Representative are to implement an adverse report from the WTO. Pursuant to Section 123, the United States Trade Representative consulted with appropriate Congressional committees and private sector committees, and Commerce provided for public comment before determining whether and how to change its practice. Following those consultations, Commerce determined that

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it would cease its zeroing practice in new and pending investigations using average-to-average comparison methodology. See Antidumping Proceedings: Calculation of the Weighted Average Dumping Margin During an Antidumping Duty Investigation; Final Modification, 71 Fed.Reg. 77, 722 (Dec. 27, 2006) (" Section 123 Determination" ).2 Instead, Commerce determined to use a methodology of " offsetting," pursuant to which sales made at less than fair value are offset by those made above fair value. This means that some of the dumping margins used to calculate a weighted-average dumping margin will be negative.

The other relevant statutory section, section 129, provides in relevant part as follows:

Promptly after a report by a dispute settlement panel or the Appellate Body is issued that contains findings that an action by the administering authority in a proceeding under title VII of the Tariff Act of 1930 ... is not in conformity with the obligations of the United States under the Antidumping Agreement ..., the Trade Representative shall consult with the administering authority and the congressional committees on the matter.

(2) Determination by administering authority

Notwithstanding any provision of the Tariff Act of 1930 ..., the administering authority shall, within 180 days after receipt of a written request from the Trade Representative, issue a determination in connection with the particular proceeding that would render the administering authority's action described in paragraph (1) not inconsistent with the findings of the panel or the Appellate Body.

(3) Consultations before implementation

Before the administering authority implements any determination under paragraph (2), the Trade Representative shall consult with the administering authority and the congressional committees with respect to such determination.

(4) Implementation of determination

The Trade Representative may, after consulting with the administering...

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