Dongbu Steel Co. v. United States

Decision Date31 March 2011
Docket NumberNo. 2010–1271.,2010–1271.
PartiesDONGBU STEEL CO., LTD., Plaintiff,andUnion Steel Manufacturing Co., Ltd., Plaintiff–Appellant,v.UNITED STATES, Defendant–Appellee,andArcelormittal USA, Inc., Defendant,andUnited States Steel Corporation, Defendant–Appellee.
CourtU.S. Court of Appeals — Federal Circuit

OPINION TEXT STARTS HERE

Donald B. Cameron, Troutman Sanders LLP, of Washington, DC, argued for plaintiff-appellant. With him on the brief were Julie C. Mendoza, R. Will Planert, Brady W. Mills and Mary S. Hodgins.Claude Burke, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, United Stated 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 Jonathan Zielinski, Office of Chief Counsel for Import Administration, United States Department of Commerce, of Washington, DC.Ellen J. Schneider, Skadden, Arps, Slate, Meagher & Flom LLP, of Washington, DC, argued for defendant-appellee United States Steel Corporation. On the brief were Robert E. Lighthizer and Jeffrey D. Gerrish. Of counsel was James C. Hecht.Before LINN, PLAGER, and PROST, Circuit Judges.PROST, Circuit Judge.

This is a trade case involving the Department of Commerce's (“Commerce's”) practice of “zeroing” certain negative values when calculating duties in antidumping investigations and administrative reviews. Specifically, this case concerns Commerce's use of zeroing in administrative reviews. Commerce has previously argued that the relevant statutory provision compels zeroing. This court has opined that the statutory text applicable to both investigations and administrative reviews—namely the term “exceeds” in 19 U.S.C. § 1677(35)(A)—is sufficiently ambiguous to defer to Commerce's decision of whether or not to use zeroing in both stages of its antidumping procedures. Corus Staal BV v. Dep't of Commerce, 395 F.3d 1343 (Fed.Cir.2005) (“ Corus I ”); Timken Co. v. United States, 354 F.3d 1334 (Fed.Cir.2004). We have upheld Commerce's use of zeroing as reasonable no fewer than seven times over the past decade.1

Under the facts of this case, we have come full circle as Commerce has now decided to stop using zeroing in investigations to comply with international treaty obligations while continuing to use it in administrative reviews. Surely, under appropriate circumstances, Commerce may change its position as to whether to apply zeroing. See, e.g., SKF USA Inc. v. United States, 630 F.3d 1365, 1373–74 (Fed.Cir.2011) (“ SKF III ”). Indeed, we have recently affirmed Commerce's change in its zeroing policy affecting investigations. U.S. Steel Corp. v. United States, 621 F.3d 1351 (Fed.Cir.2010). The circumstances here, however, present a unique twist because Commerce's compliance with international treaty obligations has lead it to interpret a single ambiguous statutory term inconsistently during different phases of an antidumping duty assessment, i.e., using zeroing for administrative reviews but no longer using zeroing for investigations. The issue presented in this case is whether Commerce is entitled to deference when it interprets 19 U.S.C. § 1677(35) inconsistently. We conclude that Commerce has failed to adequately explain why it has interpreted this statutory provision inconsistently. Accordingly, we vacate the decision of the Court of International Trade and remand for further proceedings.

Background
I

Dumping occurs when a foreign producer sells a product in the United States at a price that is below that producer's sales price in the country of origin. If a United States industry believes that it is being injured by unfair competition through dumping, it may request the imposition of antidumping duties. Commerce conducts an investigation to determine whether and to what extent dumping is occurring. If the final determination is affirmative and the U.S. International Trade Commission determines that the domestic industry is being injured, an antidumping order is issued and antidumping duties are assessed. Foreign producers subject to antidumping orders may request a subsequent administrative review to determine (1) whether the extent of dumping has changed since the order went into effect or since the prior review period, and (2) the actual amount of antidumping to be assessed on the imports of subject merchandise from each producer being reviewed.

In antidumping proceedings, Commerce determines antidumping duties for a particular product by comparing the product's “normal value” (the price a producer charges in its home market) with the export price of comparable merchandise. 19 U.S.C. § 1677(35)(A). We have previously recognized that Commerce uses different comparisons at the investigation stage than at the administrative review stage. Corus I, 395 F.3d at 1347; compare 19 U.S.C. § 1677f–1(d)(1) (investigations), with 19 U.S.C. § 1675(a)(2)(A) (administrative reviews). Regardless of the stage, Commerce first calculates a “dumping margin” equal to “the amount by which the normal value exceeds the export price or constructed export price.” 19 U.S.C. § 1677(35)(A). Next, Commerce calculates a weighted-average dumping margin “by dividing the aggregate dumping margins determined for a specific exporter or producer by the aggregate ... constructed export prices of such exporter or producer.” Id. § 1677(35)(B). In this second step, Commerce has historically used a controversial methodology called “zeroing” whereby only positive dumping margins (i.e., margins for sales of merchandise sold at dumped prices) are aggregated and negative margins (i.e., margins for sales of merchandise sold at non-dumped prices) are given a value of zero. Alternatively, Commerce can use “offsetting” methodology whereby the positive and negative dumping margins are all aggregated to reduce the final margin.

This determination of dumping margins as provided in 19 U.S.C. § 1677(35)(A) is at the heart of the zeroing debate. Domestic industries and the government have previously argued that the use of the word “exceeds” in 19 U.S.C. § 1677(35)(A) limits the definition of “dumping margin” to positive numbers. In other words, they read the statute to require zeroing. Timken, 354 F.3d at 1340–41. Foreign producers have argued that Commerce's use of zeroing is an unreasonable interpretation of the antidumping statute. Id. at 1340. This court has repeatedly addressed zeroing as it pertains to both investigations and administrative reviews. We have held that 19 U.S.C. § 1677(35)(A) is ambiguous with respect to zeroing, and we have deferred to Commerce's reasonable interpretation of that statute to allow its use of zeroing in both investigations and administrative reviews.

We first considered Commerce's zeroing policy in the context of administrative reviews in Timken. Applying 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), we examined the language of 19 U.S.C. § 1677(35)(A) and held that it “does not directly speak to the issue of negative-value dumping margins.” Timken, 354 F.3d at 1342. We concluded that Congress's use of the word ‘exceeds' does not unambiguously require that dumping margins be positive numbers.” Id. Having found the statute ambiguous, we evaluated whether Commerce's use of zeroing in administrative reviews was based on a permissible statutory construction, and concluded that the zeroing policy was based on a reasonable interpretation of 19 U.S.C. § 1677(35)(A).

In Corus I, an appeal involving Commerce's use of zeroing in investigations, the question posed by appellants was whether investigations were sufficiently different from administrative reviews to draw a distinction between these proceedings. Corus argued that zeroing is inconsistent with the statutory scheme for investigations and that Timken should not apply to investigations. Commerce acknowledged that the proceeding at issue in Timken was an administrative review rather than an investigation, but it argued that this distinction is not dispositive because both proceedings implicate Commerce's interpretation of 19 U.S.C. § 1677(35)(A). Brief for Defendant–Appellee, Department of Commerce at 18, 23–24, Corus I, 395 F.3d 1343 (Fed.Cir.2005) (No. 04–1107), available at 2004 WL 3768287 at *18, *23–24. Commerce argued that [t]here is no provision in the statute for applying the definitions of ‘dumping margin’ and ‘weighted average dumping margin’ differently in an investigation and a review.” Id. at *18. We agreed with Commerce that the differences between investigations and administrative reviews are subsumed by 19 U.S.C. § 1677(35), which is applicable to both proceedings. Corus I, 395 F.3d at 1347. Accordingly, we concluded that Timken governed and that the Court of International Trade was correct to find Commerce's zeroing methodology permissible in investigations. Id.

Although Commerce's practice of zeroing was upheld by this court, Commerce's use of zeroing in investigations was challenged by the European Communities before the World Trade Organization's (“WTO's”) Dispute Settlement Body. See U.S. Steel, 621 F.3d at 1354. Both the Dispute Settlement Body and the WTO Appellate Body concluded that the United States' use of zeroing was inconsistent with Article 9.3 of the Antidumping Agreement and Article VI:2 of the General Agreement on Tariffs and Trade 1994. See id. Commerce responded to the adverse WTO ruling according to the two administrative procedures laid out in the Uruguay Round Agreements Act. See 19 U.S.C. § 3533 (Section 123); 19 U.S.C. § 3538 (Section 129). 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...

To continue reading

Request your trial
98 cases
  • Dillinger Fr. S.A. v. United States
    • United States
    • U.S. Court of International Trade
    • October 31, 2018
    ...of any existing U.S. court decisions upholding Commerce's prior practice. Pl.'s Br. at 21 (citing Dongbu Steel Co. v. United States, 635 F.3d 1363, 1371–73 (Fed. Cir. 2011) ). Dillinger further suggests that, because the Charming Betsy Doctrine indicates that U.S. statutes should never be i......
  • Jacobi Carbons AB v. United States
    • United States
    • U.S. Court of International Trade
    • April 7, 2017
    ...of Commerce's ultimate conclusion" to rely on import data as the surrogate value for chlorine) (quoting Dongbu Steel Co., Ltd. v. United States, 635 F.3d 1363, 1371 (Fed. Cir. 2011) ).15 To that end, the court will uphold Commerce's determination when the path to that determination is reaso......
  • United States v. Am. Home Assurance Co.
    • United States
    • United States Courts of Appeals. United States Court of Appeals for the Federal Circuit
    • June 17, 2015
    ...goods are sold in the United States at a price below the sales price in the country of origin. E.g., Dongbu Steel Co. v. United States, 635 F.3d 1363, 1365 (Fed.Cir.2011). If domestic companies believe they are being injured by dumping activity, they can lodge complaints with Commerce reque......
  • Zhaoqing Tifo New Fibre Co. v. United States
    • United States
    • U.S. Court of International Trade
    • April 9, 2015
    ...were not required to exhaust their remedies before the agency, because there was nothing to exhaust”), vacated on other grounds, 635 F.3d 1363 (Fed.Cir.2011) ; Zhengzhou Harmoni Spice Co. v. United States, 33 CIT 453, 495 n. 49, 617 F.Supp.2d 1281, 1318 n. 49 (2009) (explaining that “the Ch......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT