Deacero S.A. De C.V. v. United States

• Decision Date: 05 April 2016
• Docket Number: 2015–1363,2015–1367.,Nos. 2015–1362,s. 2015–1362
• Citation: 817 F.3d 1332
• Parties: DEACERO S.A. DE C.V., Deacero USA, Inc., Plaintiffs–Appellees v. UNITED STATES, ArcelorMittal USA, LLC, Gerdau Ameristeel U.S. Inc., Nucor Corporation, Defendants–Appellants Evraz Rocky Mountain Steel, Defendant.
• Court: U.S. Court of Appeals — Federal Circuit

817 F.3d 1332

DEACERO S.A. DE C.V., Deacero USA, Inc., Plaintiffs–Appellees

v. UNITED STATES, ArcelorMittal USA, LLC, Gerdau Ameristeel U.S. Inc., Nucor Corporation, Defendants–AppellantsEvraz Rocky Mountain Steel, Defendant.

Nos. 2015–1362

2015–1363

2015–1367.

United States Court of Appeals, Federal Circuit.

April 5, 2016.

Jay Charles Campbell, White & Case LLP, Washington, DC, argued for plaintiffs-appellees. Also represented by David Bond, Ting–Ting Kao.

Alexander V. Sverdlov, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for defendant-appellant United States. Also represented by Benjamin C. Mizer, Robert E. Kirschman, Jr., Reginald T. Blades, Jr. ; David W. Richardson, Office of the Chief Counsel for Trade Enforcement and Compliance, United States Department of Commerce, Washington, DC.

Kathleen Cannon, Kelley Drye & Warren LLP, Washington, DC, argued for defendants-appellants ArcelorMittal USA, LLC, Gerdau Ameristeel U.S. Inc. Also represented by Robert Alan Luberda, Paul C. Rosenthal, David C. Smith, Jr.

Daniel B. Pickard, Wiley Rein, LLP, Washington, DC, for defendant-appellant Nucor Corporation. Also represented by Derick Holt, Maureen E. Thorson.

Before REYNA, BRYSON, and CHEN, Circuit Judges.

REYNA, Circuit Judge.

Appellants appeal a judgment of the U.S. Court of International Trade ("Trade Court") affirming the U.S. Department of Commerce's ("Commerce") remand determination on certain small-diameter steel wire rod. Commerce initiated a minor alteration anti-circumvention inquiry and determined that certain small-diameter steel wire rod was included within the scope of the subject antidumping duty order. On appeal, the Trade Court concluded that Commerce erred in its minor alterations analysis and remanded to Commerce. On remand, Commerce changed its determination and found under protest the steel wire rod excluded from the scope of the antidumping duty order. The Trade Court affirmed, and Appellants appeal. We hold that Commerce's initial minor alteration anti-circumvention determination was in accordance with law and supported by substantial evidence. As such, the judgment of the Trade Court is reversed.

BACKGROUND

Antidumping Duty Order on Steel Wire Rod

On August 31, 2001, U.S. steel wire rod producers filed an antidumping petition against imports of steel wire rod from Mexico and several other countries. J.A. 225. Steel wire rod is a hot-rolled, intermediate steel product with a round cross-section. It is sold in wound coils and used to manufacture steel wire and downstream products made with steel wire. The standard specification for steel wire rod, ASTM A510, lists nominal sizes for steel wire rod ranging from 5.5 mm to 19 mm, each with a tolerance of plus or minus 0.40 mm. J.A. 234, 237.

The petition set 5.00 mm as the minimum diameter of the steel wire rod covered by the scope of the petition:

For purposes of this investigation, the merchandise covered by these investigations is certain hot-rolled, carbon steel and alloy steel products, in coils, of approximately round cross section, between 5.00 mm (0.20 inch) and 19.0 mm (0.75 inch), inclusive, in solid cross-sectional diameter.

J.A. 229. The petition noted that "[m]ost of the industrial quality wire rod is produced and sold in 7/32 inch (5.5 mm) diameter, which is also the smallest cross-sectional diameter that is hot-rolled in significant commercial quantities." J.A. 228.

On October 1, 2002, the International Trade Commission ("ITC") issued its final determination that a U.S. industry was materially injured by virtue of less-than-fair-value imports of certain steel wire rod from Brazil, Canada, Indonesia, Mexico, Moldova, Trinidad and Tobago, and Ukraine. The ITC reiterated that the "like product" subject to the investigation was "certain hot-rolled products of carbon steel and alloy steel, in coils, of approximately round cross section, 5.00 mm or more, but less than 19.00 mm, in solid cross-sectional diameter."¹ On October 15, 2002, the ITC notified Commerce of its final determination. J.A. 222, 3045.

On October 29, 2002, Commerce issued an antidumping duty order on steel wire rod from Brazil, Indonesia, Mexico, Moldova, Trinidad and Tobago, and Ukraine. The duty order defined the scope as steel wire rod with a cross-sectional diameter of "5.00 mm or more, but less than 19.00 mm." J.A. 222. Non-individually investigated Mexican exporters were assigned a weighted-average margin of 20.11%.²

Deacero S.A.P.I. de C.V. and Deacero USA, Inc. (together, "Deacero") are Mexican manufacturers of steel wire rod and other steel products. Deacero was not individually investigated in the underlying antidumping duty investigation. As such, its imports of subject merchandise were made subject to the 20.11% "all-others" rate. After the duty order issued, Deacero invested in, manufactured, and ultimately imported into the United States steel wire rod within a diameter of 4.75 mm, 0.25 mm smaller than the steel wire rod subject to the duty order.

Procedural History

On February 11, 2011, two groups of U.S. steel wire rod producers filed separate letters requesting that Commerce initiate a scope inquiry to determine whether steel wire rod with an actual diameter between 4.75 and 5.00 mm was within the scope of the antidumping duty order on steel wire rod from Mexico. Alternatively, they requested that Commerce initiate an anti-circumvention inquiry to determine whether 4.75 mm steel wire rod should be included within the scope of the antidumping duty order as either "minor alterations of merchandise" or "later-developed merchandise." 19 U.S.C. § 1677j(c)(1), (d)(1) (2006).

On May 31, 2011, Commerce instituted an anti-circumvention inquiry on steel wire rod between 4.75 and 5.00 mm. Commerce determined that 4.75 to 5.00 mm steel wire rod was a minor alteration of the subject merchandise and that its import into the United States constituted an affirmative circumvention of the duty order. J.A. 193. Commerce declined to initiate a circumvention inquiry as to whether 4.75 mm steel wire rod constituted a later-developed product because "such small diameter wire rod was commercially available prior to the issuance" of the duty order. J.A. 192. Deacero appealed. Commerce's later-developed product determination is not before us on appeal.

On September 30, 2013, the Trade Court remanded for reconsideration and redetermination. Deacero S.A. de C.V. v. United States, 942 F.Supp.2d 1321, 1332 (CIT 2013). The Trade Court found that Commerce's affirmative circumvention determination was not supported by substantial evidence because 4.75 mm steel wire rod fell outside the literal scope of the duty order and was "commercially available" at the time of the original investigation.

Id. at 1324. The Trade Court relied on Wheatland in determining that Commerce erred in expanding the duty order to cover more than "insignificantly changed" merchandise. Id. at 1328–32 (citing and quoting Wheatland Tube Co. v. United States, 161 F.3d 1365, 1370 (Fed.Cir.1998) ). The Trade Court remanded and instructed Commerce to reconsider its affirmative circumvention determination and to "thoroughly explain how the record and relevant law supports that determination." Id. at 1332.

On January 28, 2014, Commerce changed course and issued under protest a redetermination of negative circumvention, reasoning that it had "no alternative" to determine otherwise after the Trade Court's decision. J.A. 137, 142. After another appeal, the Trade Court remanded again, instructing Commerce to "consider whether it wishes to revisit or elaborate on its finding that small-diameter wire rod was commercially available prior to issuance of the [subject antidumping duty order]." Deacero S.A.P.I. de C.V. v. United States, No. 12–00345, 36 Int'l Trade Rep. (BNA) 861, 2014 WL 4244349, at *7, 2014 Ct. Intl. Trade LEXIS 99, at *21–22 (Ct. Int'l Trade Aug. 28, 2014). Commerce declined to revisit its findings. J.A. 172.

On December 22, 2014, the Trade Court affirmed the negative circumvention determination. Deacero S.A.P.I. de C.V. v. United States, No. 12–00345, 36 Int'l Trade Rep. (BNA) 1515, 2014 WL 7250688, at *1, 2014 Ct. Intl. Trade LEXIS 159, at *2 (Ct. Int'l Trade Dec. 22, 2014). Observing that Commerce declined to revisit its findings, the Trade Court found that substantial evidence supports the negative circumvention determination as to 4.75 mm steel wire rod. Id.

The government, along with U.S. industry participants ArcelorMittal USA LLC, Gerdau Ameristeel U.S. Inc., and Nucor Corporation, appeal. We have jurisdiction under 28 U.S.C. § 1295(a)(5) (2012).

STANDARD OF REVIEW

We review Trade Court decisions de novo, applying the same standard used by the Trade Court when reviewing Commerce decisions. Downhole Pipe & Equip., L.P. v. United States, 776 F.3d 1369, 1373 (Fed.Cir.2015) (citation omitted). Under that standard, we will uphold Commerce's determinations unless they are "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i).

Substantial evidence is "more than a mere scintilla" and amounts to what a "reasonable mind might accept as adequate to support a conclusion." Downhole, 776 F.3d at 1374 (quoting Consol. Edison Co. of N.Y. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938) ). Our review is limited to the record before Commerce in the particular administrative proceeding at issue and includes all "evidence that supports and detracts" from Commerce's conclusion. Sango Int'l L.P. v. United States, 567 F.3d 1356, 1362 (Fed.Cir.2009). An agency finding may still be supported by substantial evidence even if two inconsistent conclusions can be drawn from the evidence. Downhole, 776 F.3d at 1374 (citing Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966) ).

DISCUSSION

The government argues that Commerce's initial decision that Deacero's 4.75 mm steel wire rod...