Hoogovens Staal Bv v. U.S.

Decision Date12 April 2000
Docket NumberCourt No. 96-10-02394.,Slip Op. 00-38.
PartiesHOOGOVENS STAAL BV and Hoogovens Steel USA, Inc., Plaintiffs, v. UNITED STATES, Defendant. AK Steel Corp., Bethlehem Steel Corp., Inland Steel Indus., Inc., LTV Steel Co., Inc., National Steel Corp., and U.S. Steel Group, Plaintiffs, v. United States, Defendant.
CourtU.S. Court of International Trade

Powell, Goldstein, Frazer & Murphy LLP (Peter O. Suchman and Niall P. Meagher) for plaintiffs Hoogovens.

Skadden, Arps, Slate, Meagher & Flom LLP (Robert E. Lighthizer and John J. Mangan) for plaintiffs A.K. Steel, et al.

David W. Ogden, Acting Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Lucius B. Lau, Attorney); David R. Mason, Attorney, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of counsel, for defendant.

OPINION AND ORDER

WATSON, Senior Judge.

I. Introduction

In these consolidated antidumping duty actions, plaintiffs, foreign and domestic steel companies, move for judgment on the agency record under USCIT Rule 56.2 contesting certain aspects of the United States Department of Commerce's ("Commerce") Final Results of the first administrative review in Certain Cold-Rolled Carbon Steel Flat Products from the Netherland; Final Results of Antidumping Duty Administrative Review, 61 Fed. Reg. 48,465 (Dep't of Commerce Sept. 13, 1996) ("Final Results"). The first administrative review of the antidumping duty order1 was requested by Hoogovens and covered the period of August 18, 1993 through July 31, 1994.

In its Final Results Commerce, inter alia, invoked its "reimbursement regulation," 19 C.F.R. § 353.26 (1994), after finding that Hoogovens Staal BV, a Netherlands steel producer and exporter ("Hoogovens"), had reimbursed N.V.W. (USA), Inc. ("NVW"), the exporter's wholly-owned U.S. sales office and the importer of record, for payment of antidumping duties. The application of the regulation by Commerce in its Final Results significantly increased its finding of the margin of dumping, and hence, Hoogovens' antidumping duty liability.

On March 13, 1998, Senior Judge Dominick L. DiCarlo sustained the Final Results in certain respects, including the validity of the regulation and Commerce's authority to apply it to related parties, both of which were vigorously contested by Hoogovens,2 and remanded this case to Commerce solely "to reconsider whether reimbursement [of antidumping duties] occurred ... and [if so] cite to evidence in the record that supports its decision." Hoogovens Staal BV v. United States, 4 F.Supp.2d 1213, 1221 (CIT March 13, 1998).

On January 27, 1999, Commerce's Final Results of Redetermination Pursuant to Court Remand, dated January 25, 1999 ("Remand Results"), were filed with the court. Thereafter, in accordance with an order dated February 26, 1999 establishing a schedule for filing comments on the Remand Results, the parties in this action submitted comments. Familiarity with the court's previous decision of Judge DiCarlo is presumed.3

Briefly, in the previous decision, the court found that aside from conclusory statements in the Final Results regarding reimbursement of antidumping duties, Commerce failed to identify the evidence of record upon which its conclusions were based, and failed "to articulate a reasoned basis for its decision." Hoogovens, 4 F.Supp.2d at 1219. Specifically, the court observed: "The HoogovenNVW agreement includes no mention of antidumping duties or reimbursement. Although other documents on the record suggest that reimbursement was occurring, Commerce does not identify which evidence supports its finding of reimbursement." Id.

In its Remand Results, at 1, Commerce "continues to find that reimbursement of antidumping duties within the meaning of 19 C.F.R. § 353.26 has occurred in this case." Upon reconsideration of the evidence of record, including Hoogovens' submissions, Commerce "concludes that the actions taken by Hoogovens with respect to the payment of duties on entries during the period of review constitute reimbursement within the meaning of section 353.26 of the Department's regulations." Id. Thus, Commerce points out that Hoogovens conceded that it transferred funds to NVW for the payment of antidumping duty cash deposits, and that neither the agency agreement between Hoogovens and NVW nor any other evidence establishes any obligation on the part of NVW to repay Hoogovens any portion of those funds (which covered, indeed exceeded, the amount of antidumping duties actually calculated by the Department for final assessment). Id. at 15. As found by Commerce, "[t]o the contrary, Hoogovens' statements on the record demonstrate that NVW was under no obligation to repay the funds provided by Hoogovens for the payment of antidumping duties, i.e., Hoogovens assumed responsibility for the payment of antidumping duties." Id. Continuing, Commerce stresses in its Remand Results that its reading of the agency agreement "is supported by Hoogovens' repeated statements that NVW served `merely as a sales agent and document processor and by Hoogovens' transfer of funds to NVW to pay antidumping duty cash deposits without a reciprocal obligation for NVW to repay such funds.'" Id. Accordingly, Commerce also found that the "plain meaning" of the agency agreement between Hoogovens and NVW created an obligation on the part of Hoogovens to reimburse the importer for antidumping duties.

II.

Standard of review.

In reviewing Commerce's Remand Results, the court will uphold such determination unless it is found "unsupported by substantial evidence on the record, or otherwise not in accordance with law." The Thai Pineapple Public Co., Ltd. v. United States, 187 F.3d 1362, 1365 (Fed.Cir.1999)(citing Micron Technology, Inc. v. United States, 117 F.3d 1386, 1393 (Fed.Cir.1997)) (quoting 19 U.S.C. § 1516a(b)(1)(B)(i)). "`Substantial evidence' is more than a mere scintilla and [it is] such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, taking into account the entire record, including whatever fairly detracts from the substantiality of the evidence." Atlantic Sugar Ltd. v. United States, 744 F.2d 1556, 1562 (Fed.Cir.1984). "Substantial evidence: has been defined as evidence `which could reasonably lead to [Commerce's] conclusion,' so that the conclusion can be described as a `rational decision.'" Matsushita Elec. Indus., Ltd. v. United States, 750 F.2d 927, 933 (Fed.Cir.1984). See also Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S.Ct. 456, 95 L.Ed. 456 (1951) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938)). As the court's prior opinion points out, Commerce's determination must be reviewed by the court on the basis of rationale articulated and evidence relied on by the agency and not on post hoc rationalization of counsel. Hoogovens, 4 F.Supp.2d at 1219, citing Timken Co. v. United States, 937 F.Supp. 953, 955 (1996).

III.

Parties' contentions.

Hoogovens asserts that the Remand Results are unsupported by substantial evidence and are otherwise contrary to law. Specifically, Hoogovens contends that Commerce misinterpreted the agency agreement between Hoogovens and NVW so as to place an obligation on the former to reimburse the latter for antidumping duties; that contrary to its existing practice, for its reimbursement determination, Commerce unlawfully relied solely on the transfer of funds to pay cash deposits for such duties (and credit memos evidencing the fund transfers); that Commerce ignored certain submissions by Hoogovens that demonstrate there was no reimbursement of antidumping duties; and that Commerce's determination reimbursement occurred was premature because it was made prior to the assessment of antidumping duties.

Defendant and the domestic steel producers posit that Commerce's Remand Results are supported by substantial evidence, viz., that the plain language of the agency agreement required Hoogovens to pay (or reimburse the importer) for antidumping duties; that Hoogovens concededly transferred funds to the importer for payment of antidumping duty deposits without a reciprocal obligation to repay the funds; and that Hoogovens' own statements show that the role of its U.S. affiliate was solely that of a sales agent and document processor. Further, defendant and the domestic steel producers dispute that the determination is premature and that Commerce ignored any evidence submitted by Hoogovens.

IV. Discussion
A.

The agency agreement.

While the court held in its prior decision that the agreement includes no mention of antidumping duties or reimbursement, Hoogovens, 4 F.Supp.2d at 1219, the court did not point to any language of the agreement expressly precluding an obligation on the part of Hoogovens to reimburse antidumping duties. Commerce finds in its Remand Results that Hoogovens' transfer of funds to NVW for payment of cash deposits without a reciprocal obligation to repay the funds is consistent with a reading of the agreement to require Hoogovens to pay or reimburse the importer for antidumping duties.

Commerce considered, and properly rejected, Hoogovens' arguments that the agreement must be interpreted in light of the fact that it was executed some ten years prior to the antidumping duty order, it makes no reference to antidumping duties, and there is an article of the agreement that would make the importer, not Hoogovens, responsible for paying any antidumping duties. The court agrees that Commerce's interpretation of the agreement in light of Hoogovens' actions and all the facts and circumstances was reasonable.

B.

Other evidence of reimbursement relied on by Commerce.

Significantly, in this case, Commerce's reimbursement determination does not purport to rest solely on the agency agreement, that undisputedly makes no specific reference to reimbursement or...

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