GILMORE STEEL CORP. OR. STEEL MILLS DIV. v. US

• Decision Date: 06 October 1987
• Docket Number: Court No. 86-05-00606.
• Parties: GILMORE STEEL CORPORATION, OREGON STEEL MILLS DIVISION, Plaintiff, v. UNITED STATES, Defendant, and Pohang Iron and Steel Company, Ltd., Intervenor.
• Court: U.S. Court of International Trade

672 F. Supp. 1459

11 CIT 684

GILMORE STEEL CORPORATION, OREGON STEEL MILLS DIVISION, Plaintiff, v. UNITED STATES, Defendant, and Pohang Iron and Steel Company, Ltd., Intervenor.

Court No. 86-05-00606.

United States Court of International Trade.

October 6, 1987.

Heller, Ehrman, White & McAuliffe, John H. Cutler, Rene P. Tatro and Eric J. Sinrod, San Francisco, Cal., for plaintiff.

Richard K. Willard, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civil Div., U.S. Dept. of Justice, Jeanne E. Davidson, for defendant; Lisa Koteen, Atty. Advisor, Dept. of Commerce, Washington, D.C., of counsel.

Mudge Rose Guthrie Alexander & Ferdon, N. David Palmeter, Donald B. Cameron, Jr. and Julie C. Mendoza, Washington, D.C., for intervenor.

OPINION

TSOUCALAS, Judge:

This action is before the Court, pursuant to USCIT R. 56.1, on cross-motions for judgment on an agency record. It raises a question of first impression regarding the Commerce Department's authority to revoke an outstanding antidumping duty order.

Background

On August 22, 1984 the International Trade Administration of the Department of Commerce (hereinafter "ITA" or "Commerce") issued an antidumping order covering steel plate from the Republic of Korea. 49 Fed.Reg. 33,298 (1984). Thereafter, on May 8, 1985, the governments of the United States and Korea entered into a voluntary restraint arrangement ("VRA") covering steel plate as well as other steel products. In return for quantitative restrictions on imports, the VRA contemplated that existing antidumping or countervailing duty orders on covered products be terminated.¹

After receiving "model letters" supplied by Commerce, a majority of U.S. steel producers wrote to the agency expressing their desire that the antidumping order at issue here be revoked.² Based upon the lack of interest of the domestic industry, Commerce proceeded to publish notice of its intention to review the order, pursuant to § 751(b) of the Tariff Act of 1930, 19 U.S.C. § 1675(b), and its tentative determination to revoke. 50 Fed.Reg. 50,648 (1985). Following a hearing, Commerce terminated a previously commenced administrative review³ of the antidumping order and issued final notice of revocation. 51 Fed.Reg. 13,042 (1986). At all times, plaintiff, Gilmore Steel Corp. ("Gilmore"), has opposed revocation of the order.

Issue

The issue presented is whether Commerce, over the opposition of the petitioner in the underlying antidumping investigation, may properly revoke an antidumping duty order solely on the basis of the expression of a lack of support by a majority of the domestic industry.

Discussion

The antidumping law, in relevant part, provides that Commerce:

may revoke, in whole or part, a countervailing duty order or an antidumping duty order, or terminate a suspended investigation, after review under this section.

Tariff Act of 1930, § 751(c), 19 U.S.C. § 1675(c) (1982 & Supp. III 1985). The Court in Manufacturas Industriales de Nogales, S.A. v. United States, 11 CIT ___, 666 F.Supp. 1562 (1987) has commented: "self-evidently, this provision permits the ITA to revoke an order once it has completed a review in accordance with subsection (a) of section 1675." Id. at ___, 666 F.Supp. 1562 (citing Matsushita Elec. Indus. Co. v. United States, 823 F.2d 505, 506 (Fed.Cir.1987)); see also Freeport Minerals Co. v. United States, 776 F.2d 1029, 1032 (Fed.Cir.1985) ("The `review' referred to in 19 U.S.C. § 1675(c) ... is mandated by 19 U.S.C. § 1675(a), `Periodic review of amount of duty.'").

Commerce's implementing regulation, 19 C.F.R. § 353.54 (1987), provides in part:

(a) In general. Whenever the Secretary determines that sales of merchandise subject to an Antidumping Finding or Order or a suspended investigation are no longer being made at less than fair value within the meaning of section 731 of the Act and is satisfied that there is no likelihood of resumption of sales at less than fair value, he may act to revoke or terminate, in whole or in part, such Order or Finding or suspended investigation. Ordinarily, consideration of such revocation or termination will be made only subsequent to a review as described in § 353.53 of this part.

Against this background, the government urges that revocation is proper once a majority of the domestic industry, for whatever reason, no longer supports the continuation of an antidumping order, even in the absence of a review of the occurrence of dumping. Plaintiff, relying principally on the clear meaning of § 751(b), counters that revocation is improper here given the failure to complete a review of the affirmative determination regarding the existence of less-than-fair-value sales. See Plaintiff's Motion for Judgment Upon an Agency Record at 6-7. Gilmore contends that the revocation amounts to a substitution of the VRA for the antidumping order based on a preference for the former by a majority of the domestic industry. Plaintiff's Reply Memorandum at 6-8. Defendant, in the course of rejecting these arguments, asserts that:

the revocation was based not upon the VRA, but rather upon the domestic industry's lack of interest in the continuation of the antidumping duty order. While the domestic industry cited the VRA as an example of a `changed circumstance' warranting review of the order, the reason or reasons for the domestic industry's lack of interest are irrelevant from Commerce's point of view.

Defendant's Memorandum in Opposition to Plaintiff's Motion for Judgment on the Agency Record at 20 (citation to administrative record omitted) (hereinafter "Defendant's Memorandum at ___"). In support of its position, the defendant offers arguments based on the statute, Commerce's implementing regulations, and judicial precedent.

The government interprets the statutory language "after review under this section" contained in § 1675(c) as referring to either review under § 1675(a) or § 1675(b). Defendant's Memorandum at 9. Under the defendant's view, to avoid rendering § 1675(b) mere surplusage, that subsection must be construed as providing for something other than the determination of actual antidumping duties for a given time period pursuant to § 1675(a). To this end, the defendant argues that § 1675(b) provides for a review of "changed circumstances." Id. at 12. Defendant apparently concludes that upon ascertaining that majority support for the antidumping order had dissolved, its § 1675(b) review was complete and revocation was therefore proper.

As further authority for Commerce's determination, the defendant relies upon the following regulation:

(c) Revocation or termination by the Secretary. The Secretary may on his own initiative revoke a Finding or Order or terminate a suspended investigation after three years if he is satisfied that (1) there is no likelihood of resumption of imports of the merchandise to the United States the sale of which has been made at less than fair value, or (2) the sales at less than fair value have been eliminated, or (3) other changed circumstances warrant a revocation of the Finding or Order or the termination of a suspended investigation.

19 C.F.R. § 353.54(c) (1987).⁴ Although subsections (c)(1) and (c)(2) undeniably envision an inquiry into the occurrence of dumping, defendant suggests that subsection (c)(3) permits the agency to revoke solely upon the presence of other changed circumstances.

Additionally, defendant attempts to engraft the holding of Gilmore Steel Corp. v. United States, 7 CIT 219, 585 F.Supp. 670 (1984), onto the circumstances of this case. The Gilmore court held that a petitioner lacking the support of a majority of the domestic industry cannot offer an antidumping petition "on behalf of an industry" as required by the relevant statute. Gilmore, 7 CIT at 226, 585 F.Supp. at 676. Defendant reasons that if a petition may not properly be offered when a majority of the domestic industry does not support it, then "the Commerce Department should not be required to perpetuate an antidumping duty order when a substantial majority of the domestic industry requests revocation." Defendant's Memorandum at 16.

Section 1675(a) provides for periodic review of the basis and amount of duty to be assessed under an antidumping duty order. Matsushita, 823 F.2d at 506. Section 1675(b), entitled "Reviews upon information or request" provides in part:

(1) In general. — Whenever the administering authority or the Commission receives information concerning, or a request for the review of ... an affirmative determination made under section ... 1673d(a), 1673d(b) ... of this title, which shows changed circumstances sufficient to warrant a review of such determination, it shall conduct such a review after publishing notice of the review in the Federal Register.

Tariff Act of 1930, § 751(b), 19 U.S.C. § 1675(b) (1982 & Supp. III 1985).

It may be true — and plaintiff does not argue otherwise — that the lack of interest on the part of the domestic industry constitutes "changed circumstances" sufficient to warrant review. Nevertheless, the Court cannot conclude that the identification of that lack of interest ends Commerce's obligation under the statute. Section 1675(b) demands, by its plain language, that the agency conduct a review of its affirmative determination. As stated by the Court in American Permac, Inc. v. United States, 10 CIT ___, 656 F.Supp. 1228 (1986), appeal docketed, No. 87-1159 (Fed.Cir. Jan. 21, 1987): "the antidumping law reserves to the Commerce Department (the `administering authority') questions pertaining to whether and to what extent merchandise is being dumped, and — in 751(b) reviews — whether dumping is likely to continue or resume if a dumping order is revoked." American Permac, 10 CIT at ___, 656 F.Supp. at 1234.⁵ In this case, Commerce failed to complete an administrative review and, in essence, chose to revoke because of the change in circumstances. This approach has been condemned by our appellate...