CC Metals & Alloys, LLC v. United States

• Decision Date: 12 January 2016
• Docket Number: Court No. 14–00202,Slip Op. 16–3
• Citation: 145 F.Supp.3d 1299
• Parties: CC Metals and Alloys, LLC, and Globe Specialty Metals, Inc., Plaintiffs, v. United States, Defendant.
• Court: U.S. Court of International Trade

145 F.Supp.3d 1299

CC Metals and Alloys, LLC, and Globe Specialty Metals, Inc., Plaintiffs,

v.United States, Defendant.

Slip Op. 16–3

Court No. 14–00202

United States Court of International Trade.

January 12, 2016

William D. Kramer and Martin Schaefermeier, DLA Piper LLP (US), of Washington, DC for Plaintiff CC Metals and Alloys, LLC and Globe Specialty Metals, Inc.

Peter A. Gwynne,Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendant United States. With him on the brief were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, Reginald T. Blades, Jr., Assistant Director. Of counsel on the brief was Devin S. Sikes, Senior Attorney, U.S. Department of Commerce, Office of the Chief Counsel for Trade Enforcement and Compliance of Washington, DC.

Sydney H. Mintzer and Jing Zhang, Mayer Brown LLP, of Washington, DC for Defendant–Intervenors Kuznetsk Ferroalloys OAO, Chelyabinsk Electro–Metallurgical Plant OAO and RFA International LP, Calgary (Kanada) Schaffausen.

OPINION and ORDER

Gordon

, Judge:

This action involves the U.S. Department of Commerce's (“Commerce”) final negative determination in the less than fair value investigation of ferrosilicon from the Russian Federation. See Ferrosilicon from the Russian Federation, 79 Fed.Reg. 44,393 (Dep't of Commerce July 31, 2014)

(final LTFV determ.) (“Final Determina tion ”); see also Issues and Decision Memorandum for the Final Determination of the Antidumping Duty Investigation of Ferrosilicon from the Russian Federation, A–821–820 (Dep't of Commerce July 24, 2014), available at http://enforcement.trade.gov/frn/summary/russia/2014–18059–1.pdf (last visited this date) (“Decision Memorandum ”).

Before the court is the USCIT Rule 56.2

motion for judgment on the agency record of Plaintiffs CC Metals and Alloys, LLC, and Globe Specialty Metals, Inc. (“Plaintiffs”). Pls.' Br. in Supp. of Mot. for J. upon the Agency R. (Jan. 22, 2015), ECF No. 23 (“Pls.' Br.”); see also Def.'s Resp. to Pl.'s Mot. for J. upon the Agency R. (Apr. 14, 2015), ECF No. 38 (“Def.'s Resp.”); Br. of Def.–Intervenors in Opp. to Pls.' Mot. for J. upon the Agency R. (May 7, 2015) (“Def–Int.'s Resp.”); Pls.' Reply Br. (May 29, 2015), ECF No. 49 (“Pls.' Reply”). The court has jurisdiction pursuant to Section 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2012),¹ and 28 U.S.C. § 1581(c) (2012).

Plaintiffs challenge Commerce's date of sale selection and model matching analysis, as well as Commerce's treatment of certain revenue and expenses. For the reasons that follow, the court sustains Commerce's determination in part and remands to Commerce the warehousing and imputed credit expense issues for further consideration.

I. Standard of Review

The court sustains Commerce's “determinations, findings, or conclusions” 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)

. More specifically, when reviewing agency determinations, findings, or conclusions for substantial evidence, the court assesses whether the agency action is reasonable given the record as a whole. Nippon Steel Corp. v. United States, 458 F.3d 1345, 1350–51 (Fed.Cir.2006). Substantial evidence has been described as “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” DuPont Teijin Films USA v. United States, 407 F.3d 1211, 1215 (Fed.Cir.2005) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938) ). Substantial evidence has also been described as “something less than the weight of the evidence, and the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence.” Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966). Fundamentally, though, “substantial evidence” is best understood as a word formula connoting reasonableness review. 3 Charles H. Koch, Jr., Administrative Law and Practice § 9.24[1] (3d ed. 2015). Therefore, when addressing a substantial evidence issue raised by a party, the court analyzes whether the challenged agency action “was reasonable given the circumstances presented by the whole record.” 8A West's Fed. Forms, National Courts § 3:6 (5th ed. 2015).

Separately, the two-step framework provided in Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842–45, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984)

, governs judicial review of Commerce's interpretation of the antidumping statute. See

United States v. Eurodif S.A., 555 U.S. 305, 316, 129 S.Ct. 878, 172 L.Ed.2d 679 (2009) (Commerce's “interpretation

governs in the absence of unambiguous statutory language to the contrary or unreasonable resolution of language that is ambiguous.”). And when reviewing Commerce's interpretation of its regulations, the court must give substantial deference to Commerce's interpretation, Torrington Co. v. United States, 156 F.3d 1361, 1363–64 (Fed.Cir.1998)

, according it “ ‘controlling weight unless it is plainly erroneous or inconsistent with the regulation,’ ” Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512, 114 S.Ct. 2381, 129 L.Ed.2d 405 (1994) (citations omitted). See also

Am. Signature, Inc. v. United States, 598 F.3d 816, 827 (Fed.Cir.2010) (citing Reizenstein v. Shinseki, 583 F.3d 1331, 1335 (Fed.Cir.2009) ) (explaining standard of review for agency interpretations of its own regulations).

II. Discussion

A. Date of Sale

In general “an antidumping analysis involves a comparison of export price or constructed export price in the United States with normal value in the foreign market.” 19 C.F.R. § 351.401(a) (2015)

; see also 19 U.S.C. §§ 1677a, 1677b. The date of sale for a respondent's home market sales is part of the normal value calculation. See 19 C.F.R. § 351.401(a), (i).

During the proceeding, Commerce, consistent with its regulatory presumption, selected invoice date as the date of sale for RFA International LP's (“RFAI”) home market sales, including RFAI's “storage sales.” These “storage sales” are “bill-and-hold” type transactions where RFAI's affiliated producer Chelyabinsk Electrometallurgical Integrated Plant Joint Stock Company (“CHEMK”) stores customers' ferrosilicon after the invoice is issued for delivery at a later date. Plaintiffs argue that Commerce should not have selected the invoice date as the date of sale for these storage sales because of differences between the ferrosilicon described in the invoices and the ferrosilicon CHEMK delivered.

Commerce “normally” uses invoice date as the date of sale. 19 C.F.R. § 351.401(i)

. Commerce “may,” however, “use a date other than the date of invoice if [Commerce] is satisfied that a different date better reflects the date on which the exporter or producer establishes the material terms of sale.” Id. An interested party proposing something other than invoice date must demonstrate that the material terms of sale were “firmly” and “finally” established on its proposed date of sale. Antidumping Duties;

Countervailing Duties: Final Rule, 62 Fed.Reg. 27,296, 27,348–49 (Dep't of Commerce May 19, 1997) (“Preamble ”); see generally

Yieh Phui Enter. Co. v. United States, 35 C.I.T. ––––, ––––, 791 F.Supp.2d 1319, 1322–24 (2011) (describing in detail Commerce's date of sale regulation).

Plaintiffs' argument attacks the “virtual” nature of CHEMK's storage sales. See Pls.' Br. at 6–12. CHEMK does not set aside particular ferrosilicon from its ongoing production when it completes a storage sale. Instead, CHEMK virtually “reserves” orders so that ferrosilicon meeting the customer's specifications is available when the customer requests delivery. Some physical differences between the “as invoiced” and “as delivered” product can and do emerge because CHEMK and its customers specify only certain terms when the sale is invoiced. These are typically “base weight” (the weight of silicon contained within the ferrosilicon), grade (based on silicon content by percent), price, and size. Home Market Verification Report, 8–9 (Dep't of Commerce May 22, 2014), CD 151 (“Verification Report ”).²

Plaintiffs note that the CONNUMs for a significant number of the “as delivered” storage sales differ from their “as invoiced” counterparts. Pls.' Br. at 8–9. Plaintiffs also argue that using invoice date artificially reduces RFAI's normal value, thereby lowering its overall margin.

Problematically, Plaintiffs do not appear to understand the applicable standards governing Commerce's date of sale determinations. Plaintiffs never identify the date on which Plaintiffs believe the material terms of sale are firmly and finally established. See id. at 3–12. To prevail, Plaintiffs need to establish that Commerce erred by using invoice date because the administrative record supports one and only one other date of sale on which the material terms of sale are firmly and finally established. See Allied Tube & Conduit Corp. v. United States, 24 C.I.T. 1357, 1371–72, 127 F.Supp.2d 207, 220 (2000)

(“Plaintiff, therefore, must demonstrate that it presented Commerce with evidence of sufficient weight and authority as to justify its [date of sale] as the only reasonable outcome.”). Here, CHEMK's storage sales comprise numerous documents, addendums, and circumstances other than mere issuance of an invoice. Commerce's regulation defaults to the invoice date precisely because this sort of complexity is prevalent in most industries. Preamble, 62 Fed.Reg. at 27,348–49 (“[I]n most industries, the negotiation of a sale can be a complex process.... In fact, it is not uncommon for the buyer and seller themselves to disagree about the exact date on which the terms became final. However, for them, this theoretical date usually has little, if any, relevance. From their perspective, the relevant issue...