Thyssen Stahl AG v. US

• Citation: 19 CIT 605,886 F. Supp. 23
• Decision Date: 27 April 1995
• Docket Number: Slip Op. No. 95-78. Court No. 93-09-00586-AD.
• Parties: THYSSEN STAHL AG, Thyssen Steel Detroit Co., and Thyssen Inc., Plaintiffs, v. The UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

886 F. Supp. 23

19 CIT 605

THYSSEN STAHL AG, Thyssen Steel Detroit Co., and Thyssen Inc., Plaintiffs, v. The UNITED STATES, Defendant.

Slip Op. No. 95-78. Court No. 93-09-00586-AD.

United States Court of International Trade.

April 27, 1995.

Sharretts, Paley, Carter & Blauvelt, P.C., New York City (Gail T. Cumins, Ned H. Marshak and Beatrice A. Brickell), for Thyssen Stahl AG, Thyssen Steel Detroit Co. and Thyssen Inc.

Skadden, Arps, Slate, Meagher & Flom, Washington, DC (Robert E. Lighthizer and John J. Mangan) and Dewey Ballantine, Washington, DC (Alan Wm. Wolff, Michael H. Stein, Bradford L. Ward and Guy C. Smith), for AK Steel Corp., Bethlehem Steel Corp., Gulf States Steel Inc. of Alabama, Inland Steel Industries, Inc., LTV Steel Co., Inc., National Steel Corp., Sharon Steel Corp., U.S. Steel Group a Unit of USX Corp., WCI Steel, Inc. and Lukens Steel Co.

Frank W. Hunger, Asst. Atty. Gen., David M. Cohen, Director, and Velta A. Melnbrencis, Asst. Director, Commercial Litigation Branch, Civil Div., U.S. Dept. of Justice; and Office of the Chief Counsel for Import Admin., U.S. Dept. of Commerce (Jeffrey C. Lowe), Washington, DC, of counsel, for defendant.

AQUILINO, Judge:

This action consolidates CIT No. 93-09-00586 commenced by Thyssen Stahl AG, Thyssen Steel Detroit Co. and Thyssen Inc. and CIT Nos. 93-09-00609 and 93-09-00610 brought by AK Steel Corp., Bethlehem Steel Corporation, Gulf States Steel Inc. of Alabama, Inland Steel Industries, Inc., LTV Steel Co., Inc., National Steel Corporation, Sharon Steel Corporation, U.S. Steel Group, a Unit of USX Corporation and WCI Steel, Inc.¹ These firms have all interposed motions for judgment on the record compiled by the International Trade Administration, U.S. Department of Commerce ("ITA") sub nom. Notice of Final Determinations of Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat Products, Certain Corrosion-resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate From Germany, 58 Fed.Reg. 37,136 (July 9, 1993), amended, 58 Fed.Reg. 44,170 (Aug. 19, 1993).

Jurisdiction of this court is based on 28 U.S.C. § 1581(c), with the standard of judicial review of the issues raised whether the challenged agency determination is unsupported by substantial evidence on the record, or otherwise not in accordance with law. 19 U.S.C. § 1516a(b)(1)(B).

I

The motion of Thyssen Stahl et al., which will be referred to hereinafter as that of the "plaintiffs", seeks judgment on the ground that the ITA's reliance on best information otherwise available rather than on data submitted by Thyssen satisfies both prongs of that standard for judicial reversal. In addition, the plaintiffs assert that the methodology chosen to calculate that best information is unsupported by substantial evidence on the record.

A

Section 1677a(c)(2)(A) of Title 19, U.S.C. (1993) provided for a reduction to United States price ("USP") by

the amount, if any, included in such price, attributable to any additional costs, charges, and expenses, and United States import duties, incident to bringing the merchandise from the place of shipment in the country of exportation to the place of delivery in the United States.

See also 19 C.F.R. § 353.41(d)(2)(i) (1993). Requesting an adjustment under this section, Thyssen provided the ITA with "a computer tape and printout, in which an average ocean freight cost ... per metric ton ... was calculated based on the weight of steel shipped." Brief of Plaintiffs, p. 8. The agency sought more supporting documentation, whereupon Thyssen also submitted "a sample ocean freight invoice from an ocean carrier, ... along with worksheets which had been utilized to calculate the average ocean freight costs, previously submitted." Id. at 8-9. See Plaintiffs' Confidential Appendix ("ConfApp"), Exhibit 5.

For purposes of its preliminary determination², the ITA adjusted USP by deducting ocean-freight costs as reported by Thyssen. However, in its final determination the agency resorted to best information otherwise available upon the following rationale:

... Thyssen provided only one, self-selected, freight invoice to support its calculations. We therefore determine that Thyssen failed verification on this point and that as a result, resort to BIA is warranted. As BIA, we have used the highest non-aberrational ocean freight charge we calculated from Thyssen's ... worksheet.

58 Fed.Reg. at 37,150 (Comment 15). In its concurrence memorandum accompanying the final determination, the ITA explained further that

Thyssen calculated a weighted average ocean freight charge for both cold-rolled and corrosion resistant ... based on all shipments during the period of investigation for its two predominant product codes.... We verified that the calculations included data from all relevant shipments. Thyssen provided one freight invoice which supported their calculations. This invoice covered about 14 percent of the shipments which went into the calculations.

Defendant's ConfApp, Exhibit 8 at 32.

The plaintiffs dispute both the factual allegations quoted above and the agency's conclusion that they failed to provide adequate documentation for their ocean-freight costs. First, they contend that the final determination "ignores the fact that the DOC had in its possession an additional freight invoice ... submitted ... on November 18, 1992", which by the ITA's own estimate represented a significant percentage of all subject merchandise shipped during the period of investigation. Brief of Plaintiffs, p. 16 n. 4. Second, the plaintiffs point to the agency verification report, which explains why additional ocean-freight invoices were not forthcoming:

... Since it was after normal business hours on the last day of verification in Germany when we addressed this topic and because the documents were kept in a different city, Thyssen was unable to provide more freight invoices.

Plaintiffs' ConfApp, Exhibit 7 at 44. According to them, this explanation was accepted; the ITA did not express any dissatisfaction with the information and documentation provided and did not request that Thyssen forward additional invoices to Detroit when verification resumed. Brief of Plaintiffs, pp. 14-15. Furthermore, they assert that the correspondence between the parties did not indicate that the agency intended to examine the ocean-freight invoices during that process. Id. at 19-20. Rather, the verification outline requested that Thyssen provide all source documents used in creating its worksheets. Id. at 20. The plaintiffs contend they fully complied with this request:

... Pursuant to Thyssen's duty calculation system, which the DOC acknowledges was verified as to accuracy and completeness, the source documents for ocean freight utilized by Thyssen in preparing its Anti-dumping Questionnaire responses were the Thyssen Stahlunion commercial invoices to Thyssen Inc. During verification the DOC examined 10 Thyssen Stahlunion invoices on a preselected basis and 8 such invoices on a surprise basis.... The ocean carrier invoices were merely secondary documents, providing additional corroboration of Thyssen's duty calculation system, which the DOC agreed was accurate and complete.

Id. The plaintiffs take the position that, if the ITA

deemed the missing ... invoices ... essential documents, the absence of which would result in BIA, the DOC should have either: (1) requested these invoices in the Sales Verification Outline ... or (2) requested that Thyssen provide these documents to the DOC casehandlers when they continued their verification of Thyssen's ocean freight costs in Detroit three weeks later.

Response Brief of Plaintiffs, pp. 3-4.

According to the agency, it is "not required to itemize beforehand every possible type of document" needed during verification, and its outline clearly indicated its list of items was "not necessarily all inclusive and we reserve the right to request any additional information or materials necessary for a full verification." Defendant's Memorandum, p. 19 and ConfApp, Exhibit 2 at 2. Similarly, the ITA is not required to request that missing information be provided at a future date. Defendant's Memorandum, p. 22. Rather, the defendant asserts that, if

Commerce's requests for information are reasonable, a party must comply with them in full in order to avoid failing verification. ...

In this case, it was reasonable and consistent with Commerce's general practice ... to require Thyssen to provide actual ocean carrier invoices to support its claimed average ocean freight adjustment.

Id. at 19-20.

The court is constrained to concur. Section 1677e of Title 19, U.S.C. (1993) required resort to the best information otherwise available whenever the ITA found itself "unable to verify the accuracy of the information submitted". See also 19 C.F.R. § 353.37 (1993). On its face, one ocean-freight invoice covering but 14 percent of the Thyssen shipments is minimal support for the accuracy of the claimed average. And the remaining invoices would have been the primary, not "secondary", means of verification by the ITA.

While it appears, as the plaintiffs assert, that the agency did not consider the first invoice submitted in response to a deficiency request in its final determination³, the court is unable to connect that invoice to the accompanying computer printout summarizing the ocean-freight costs for the period of investigation. Cf. Plaintiffs' ConfApp, Exhibit 5. In addition, it also appears from the invoice that the merchandise covered was hot-rolled "HR. COILS", which is not under review in this action. See id. The plaintiffs did not dispute this at oral argument, acknowledging that that invoice was "presented to confirm that ocean freight charges are billed in US dollars." Transcript of oral argument ("Tr.") at 7.

In sum, in the light of the record, the ITA's resort to best information otherwise...