Nippon Steel & Sumitomo Metal Corp. v. United States

• Decision Date: 10 November 2020
• Docket Number: Slip Op. 20-161,Court No. 19-00131
• Citation: 483 F.Supp.3d 1214
• Parties: NIPPON STEEL & SUMITOMO METAL CORPORATION (Now Known as Nippon Steel Corporation), Plaintiff, v. UNITED STATES, Defendant, Nucor Corporation, Defendant-Intervenor, United States Steel Corporation, Defendant-Intervenor.
• Court: U.S. Court of International Trade

483 F.Supp.3d 1214

NIPPON STEEL & SUMITOMO METAL CORPORATION (Now Known as Nippon Steel Corporation), Plaintiff,

v. UNITED STATES, Defendant,Nucor Corporation, Defendant-Intervenor,United States Steel Corporation, Defendant-Intervenor.

Slip Op. 20-161

Court No. 19-00131

United States Court of International Trade.

November 10, 2020

Neil R. Ellis, Sidley Austin, LLP, of Washington, DC argued for plaintiff Nippon Steel & Sumitomo Metal Corporation. With him on the motion was Richard L.A. Weiner, Rajib Pal, Shawn M. Higgins, Justin R. Becker, and Alex L. Young.

Kelly Ann Krystyniak, Trial Attorney, Civil Division, Commercial Litigation Branch, U.S. Department of Justice of Washington, DC argued for defendant United States. With her on the brief was Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and Tara K. Hogan, Assistant Director. Of Counsel was Jesus N. Saenz, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, Washington, DC.

Enbar Toledano, Wiley Rein LLP, of Washington, DC argued for defendant-intervenor Nucor Corporation. With her on the brief was Alan H. Price, Christopher B. Weld and Cynthia C. Galvez.

OPINION

Reif, Judge:

This action involves the final determination of the first administrative review conducted by the U.S. Department of Commerce ("Commerce") of the antidumping order covering hot-rolled steel from Japan. See Certain Hot-Rolled Steel Flat Products From Japan: Final Results of Antidumping Duty Administrative Review and Final Determination of No Shipments ; 2016–2017, 84 Fed. Reg. 31025 (Dep't of Commerce June 28, 2019) ("Final Determination"), and the accompanying Issues and Decision Memorandum (Dep't of Commerce June 21, 2019) ("Decision Memorandum"). Before the court is a USCIT Rule 56.2 motion for judgment on the agency record filed by plaintiff Nippon Steel & Sumitomo Metal Corporation ("NSSMC" or "plaintiff"). See Pl.’s Mem. of Points and Authorities in Supp. of Mot. J. Agency R., ECF No. 34 ("Pl. Br."). Plaintiff argues that the Final Determination is not supported by substantial evidence and is not in accordance with law for two reasons. First, plaintiff maintains that the decision by Commerce to apply partial adverse facts available ("AFA") is not supported by substantial evidence because NSSMC acted to the best of its ability in supplying Commerce with the downstream sales of its affiliated resellers. Pl. Br. at 9. Second, plaintiff argues that, even if Commerce was justified in applying partial AFA, the particular AFA that Commerce chose to apply was unreasonable because Commerce "overreached reality" and did not consider properly plaintiff's "level of culpability." Pl. Br. at 24, 32. This court has jurisdiction pursuant to 19 U.S.C. § 1516a(a)(2)(B)(iii) and 28 U.S.C. § 1581(c). For the reasons set forth below, the court sustains the Final Determination as supported by substantial evidence and in accordance with law.

BACKGROUND

U.S. antidumping law directs Commerce to impose antidumping duties on imported goods when Commerce determines that those goods are sold in the United States at less than fair value and the U.S. International Trade Commission determines that the domestic industry manufacturing those goods is thereby "materially injured, or is threatened with material injury." See 19 U.S.C. § 1673(2)(A)(i)–(ii) (2018) ; Diamond Sawblades Mfrs. Coal. v. United States , 866 F.3d 1304, 1306 (Fed. Cir. 2017). "Sales at less than fair value are those sales for which the ‘normal value’ (the price a producer charges in its home market) exceeds the ‘export price’ (the price of the product in the United States)." Apex Frozen Foods Private Ltd. v. United States , 862 F.3d 1322, 1326 (Fed. Cir. 2017) (quoting Union Steel v. United States , 713 F.3d 1101, 1103 (Fed. Cir. 2013) ).

On October 3, 2016, Commerce published an antidumping order on imports of hot-rolled steel from Japan. See Certain Hot-Rolled Steel Flat Products from Australia, Brazil, Japan, the Republic of Korea, the Netherlands, the Republic of Turkey, and the United Kingdom: Amended Final Affirmative Antidumping Determinations for Australia, the Republic of Korea, and the Republic of Turkey and Antidumping Duty Orders , 81 Fed. Reg. 67,962 (Dep't. of Commerce Oct. 3, 2016) ("Order"). In the investigation's final determination preceding the Order, Commerce applied partial AFA as a consequence of plaintiff's failure to report downstream home market sales ("downstream sales") for certain affiliated home market resellers ("affiliated resellers") that resold hot-rolled steel in the home market. See Certain Hot-Rolled Steel Flat Products from Japan: Final Determination of Sales at Less Than Fair Value and Final Affirmative Determination of Critical Circumstances ; 81 Fed. Reg. 53,409 (Dep't of Commerce Aug. 12, 2016) ("Investigation Final Determination") and the accompanying Issues and Decision Memorandum (Dep't of Commerce Aug. 4, 2016) ("Investigation Decision Memorandum"). For purposes of constructing the dumping margin, Commerce used as AFA the highest NSSMC home market price of the commonly sold CONNUMS to the affiliated resellers’ downstream sales. Nucor Case Brief at 18, CD 162 (Dec. 14, 2018) (citing the Investigation Decision Memorandum).

In December 2017, Commerce initiated the first administrative review of the Order, identifying the period of review as March 22, 2016 to September 30, 2017. Pl. Br. at 5; Def.’s Resp. to Pl.’s Mot. J. Agency R., ECF No. 39 ("Def. Br.") at 2. Commerce selected as mandatory respondents NSSMC and Tokyo Steel Manufacturing Co., Ltd., the two exporters/producers accounting for the largest volume of imported subject merchandise at [[ ]] and [[ ]] percent respectively. Pl. Br. at 5; Def. Br. at 3; See Memorandum re: "Respondent Selection for the Administrative Review of the Antidumping Order of Certain Hot-Rolled Steel Flat Products from Japan" at 4, CD 11 (Jan. 16, 2018) ("Resp. Selection Memo"). On January 19, 2018, Commerce issued its standard questionnaire for antidumping administrative reviews to NSSMC. Pl. Br. at 5; Def. Br. at 3. The questionnaire asked respondents to report downstream sales by all affiliated resellers in the home market that fail the arm's-length test. See Letter re: "Request for Information" at 1, CD 1 (January 19, 2018) ("Questionnaire").

Plaintiff responded to the Questionnaire on March 15, 2018. NSSMC Section B Questionnaire Response at B-1, CD 21 (Mar. 15, 2018) ("Questionnaire Response"). Plaintiff determined that sales to [[ ]] of its affiliated resellers failed the arm's-length test but plaintiff did not report the downstream sales of these affiliated resellers. Questionnaire Response at B-6, Exhibit B-22. Instead, plaintiff provided incoming correspondence from the affiliated resellers, as an exhibit, to illustrate plaintiff's unsuccessful attempt to obtain the downstream sales from its affiliated resellers. Questionnaire Response at B-6, Exhibit B-23. Plaintiff's outgoing letter¹ to the affiliated resellers stated, in relevant part, that [[ ]]. NSSMC's Section A, B, and C Supplemental Questionnaire Response at Revised Exhibit B-23, CD 62 (Aug 10, 2018) ("Supp. Quest. Response"). However, plaintiff stated in its Questionnaire Response that its affiliated resellers were "unwilling or unable to provide these data in the detail and format required by the Department." Questionnaire Response at B-6. The reasons provided by the affiliated resellers for this unwillingness or inability may be summarized as: lack of existing records containing the information; concern over the financial and labor burden to produce the information; or, an inability to access or produce the information in the format requested by Commerce due to system limitations.² Questionnaire Response at Exhibit B-23; see also Pl. Br. at 14–15; Def. Br. at 12.

In July 2018, Commerce sent plaintiff a supplemental questionnaire asking plaintiff to update its arm's-length test as necessary and reiterating the need for plaintiff to report the downstream sales of all affiliated resellers that fail the test. Supp. Quest. Response at 3. The supplemental questionnaire asked plaintiff to

provide a narrative explanation that details the [[ ]] and the extent to which you have assisted your affiliates in compiling and preparing the downstream sales data.

Supp. Quest. Response at 3.³ Plaintiff determined that [[ ]] of its affiliated resellers fail the updated arm's-length test. Def. Br. at 11 (citing Supp. Quest. Response Exhibit SB-1). However, plaintiff failed to report the requested downstream sales for [[ ]] of those affiliated resellers.⁴ Id. See also Supp. Quest. Response at 3–5.

In its response, NSSMC directed Commerce to a revised exhibit from NSSMC's Questionnaire Response. The revised exhibit contained additional incoming correspondence from some of the affiliated resellers dated March or April 2018, which appears to respond to "< The reason why we cannot provide further information>".⁵ Supp. Quest. Response at Rev. Exhibit B-23.

Before the court, the United States ("Government" or "defendant") notes that "Nippon Steel included as an exhibit the same letter it had provided in its Questionnaire Response, setting forth its previous unsuccessful attempt to solicit the requested sales data." Def. Br. at 4 (citing Supp. Quest. Response at Rev. Exhibit B-23). Defendant argues, "The record thus indicated that Nippon Steel made only a single attempt to acquire the information, making no additional efforts after the issuance of the supplemental questionnaire."⁶ Id. In response, NSSMC contends that it contacted its affiliated resellers before Commerce initiated this review, and that NSSMC and its Japanese counsel, hired to manage the data collection efforts, "made repeated written requests, as well as numerous telephone calls, to each of the affiliated resellers." Pl. Br. at 11–12 (citing Supp. Quest. Response at 4). In the Supplemental Questionnaire...