942 F.Supp.2d 1321 (CIT. 2013), 12-00345, Deacero S.A. de C.V. v. United States
|Citation:||942 F.Supp.2d 1321|
|Opinion Judge:||Richard W. Goldberg, Senior Judge.|
|Party Name:||DEACERO S.A. DE C.V. and DEACERO USA, INC., Plaintiffs, v. UNITED STATES, Defendant, and ARCELORMITTAL USA LLC, GERDAU AMERISTEEL U.S. INC., EVRAZ ROCKY MOUNTAIN STEEL, and NUCOR CORPORATION, Defendant-Intervenors|
|Attorney:||No. 12-00345 David E. Bond and Jay C. Campbell, White & Case LLP, of Washington, DC, for plaintiffs. Jane C. Dempsey, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for defendant. With her on the brief were Stuart F. Delery, Acting Ass...|
|Case Date:||September 30, 2013|
|Court:||Court of International Trade|
OPINION AND ORDER
Plaintiffs Deacero S.A. de C.V. and Deacero USA, Inc. (collectively, " Deacero" ) contest the Department of Commerce's (" Commerce" or the " Department" ) affirmative final determination of circumvention of the antidumping duty order on certain wire rod from Mexico. See Carbon and Certain Alloy Steel Wire Rod from Mexico, 77 Fed. Reg. 59,892 (Dep't Commerce Oct. 1, 2012) (affirmative final
determination of circumvention) (" Final Determination " ). In that determination, Commerce found that wire rod with an actual diameter of 4.75 millimeter (" mm" ) to 5.00 mm constituted a minor alteration of subject merchandise under 19 U.S.C. § 1677j(c) (2006), and that it was, accordingly, subject to the antidumping duty order. 77 Fed. Reg. at 59,893.
In the instant action, Deacero contends, inter alia, that 4.75 mm steel wire rod was not a circumventing minor alteration of subject merchandise because it was both in existence during the original investigation and specifically excluded from the scope of the subject merchandise as defined during the investigation. For the following reasons, the court agrees and remands to Commerce for reconsideration of its affirmative circumvention finding.
On August 31, 2001, U.S. wire rod producers petitioned for the imposition of antidumping duties on carbon and certain steel wire rod from Brazil, Indonesia, Mexico, Moldova, Trinidad and Tobago, and Ukraine at less than fair value. Admin. R. Pub. (" P.R." ) Pt. 1, Doc. 10, Ex. 2; Admin. R. Conf. (" C.R." ) Pt. 3, Doc. 4, Ex. 2. Following the International Trade Commission's (" ITC" ) and Commerce's investigations, Commerce published notice of an antidumping duty order on October 29, 2002 (the " Order" ). Carbon and Certain Alloy Steel Wire Rod from Brazil, Indonesia, Mexico, Moldova, Trinidad and Tobago, and Ukraine, 67 Fed. Reg. 65,945 (Dep't Commerce Oct. 29, 2002) (notice of antidumping duty orders). Adopting petitioners' scope recommendation, Commerce defined the Order's scope as follows:
The merchandise subject to these orders is 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.
Specifically excluded are steel products possessing the above-noted physical characteristics and meeting the Harmonized Tariff Schedule of the United States (HTSUS) definitions for (a) stainless steel; (b) tool steel; (c) high nickel steel; (d) ball bearing steel; and (e) concrete reinforcing bars and rods. Also excluded are (f) free machining steel products ( i.e., products that contain by weight one or more of the following elements: 0.03 percent or more of lead, 0.05 percent or more of bismuth, 0.08 percent or more of sulfur, more than 0.04 percent of phosphorus, more than 0.05 percent of selenium, or more than 0.01 percent of tellurium). Also excluded from the scope are 1080 grade tire cord quality wire rod and 1080 grade tire bead quality wire rod. . . . All products meeting the physical description of subject merchandise that are not specifically excluded are included in this scope.
Id. at 65,946. The ITC found a single like product " consisting of all carbon and certain alloy steel wire rod included within Commerce's scope, and including the grade 1080 tire bead and tire cord quality wire rod that has been excluded from Commerce's scope." P.R. Pt. 2, Doc. 14, Attach. at 7; C.R. Pt. 4, Doc. 15, Attach. at 7.
Several years later, Deacero--a Mexican steel wire rod manufacturer--began producing and selling 4.75 mm wire rod. On February 11, 2011, U.S. wire rod producers requested that the Department initiate either a scope inquiry or an anti-circumvention inquiry1 to determine whether imports
of Deacero's 4.75 mm wire rod should be subject to antidumping duties. P.R. Pt. 1, Docs. 1-2; C.R. Pt. 3, Docs. 1-2.
Commerce declined to initiate a scope inquiry, finding that the Order referred to actual diameter and that wire rod with an actual diameter of less than 5.00 mm was outside the scope of the Order. P.R. Pt. 1, Doc. 24 at 13; C.R. Pt. 3, Doc. 7 at 13. Moreover, as Commerce found that wire rod less than 5.00 mm in diameter was commercially available prior to issuance of the Order, Commerce did not initiate a later-developed product inquiry. Id. at 14. Commerce did, however, initiate a minor alteration inquiry to determine whether wire rod between 4.75 mm and 5.00 mm was " altered in form or appearance in minor respects," and includable within the scope of the Order. See Carbon and Certain Alloy Steel Wire Rod from Mexico, 76 Fed. Reg. 33,218, 33,219 (Dep't Commerce June 8, 2011) (initiation of anti-circumvention inquiry).
Throughout the proceeding, Deacero argued that 4.75 mm wire rod was not a minor alteration of subject merchandise. In support, Deacero noted that 4.75 mm wire rod existed before the wire rod investigation, and petitioners chose to exclude it from the Order's scope. See, e.g., P.R. Pt. 2, Doc. 27 at 7-8; C.R. Pt. 4, Doc. 22 at 7-8. Commerce rejected Deacero's argument, finding that a product's existence before the investigation does not " preclude the Department from conducting a minor alterations analysis." P.R. Pt. 2, Doc. 47 at 4; C.R. Pt. 4, Doc. 26 at 4. As a result, Commerce proceeded with an analysis of the five analytical factors found in the legislative history accompanying the circumvention statute. Id. (citing S. Rep. No. 100-71, at 100 (1987)). The Department issued its final affirmative determination of circumvention on October 1, 2012. Final Determination, 77 Fed. Reg. at 59,893.
SUBJECT MATTER JURISDICTION AND STANDARD OF REVIEW
This Court has jurisdiction pursuant to 28 U.S.C. § 1581(c) and must sustain Commerce's final affirmative circumvention determination unless it is unsupported by substantial record evidence or otherwise not in accordance with law. See 19 U.S.C. § 1516a(b)(1)(B)(i). Substantial evidence is " such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S.Ct. 456, 95 L.Ed. 456 (1951). The Court reviews the substantiality of the evidence " by considering the record as a whole, including evidence that supports as well as evidence that 'fairly detracts from the substantiality of the evidence.'" Huaiyin Foreign Trade Corp. v. United States, 322 F.3d 1369, 1374 (Fed. Cir. 2003) (quoting Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1562 (Fed. Cir. 1984)).
The Court undertakes a two-part inquiry to assess whether Commerce's statutory interpretation is in accordance with law. See Chevron, U.S.A. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). First, the Court asks whether Congress has directly spoken to the question at issue. Id. at 842. If it has, this Court must defer to Congress's unambiguously expressed intent. Id. at 843. To ascertain congressional intent, the Court " employ[s] the traditional tools of statutory construction." Timex V.I., Inc. v. United States, 157 F.3d 879, 882 (Fed. Cir. 1998) (internal quotation marks omitted). Although the authoritative statement is the statute's text, resort to " the statute's structure, canons of statutory
construction, and legislative history" is appropriate if necessary. Id.
If, after consideration of the traditional tools of statutory interpretation, a statute remains " silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute." Chevron, 467 U.S. at 843. In deciding whether to defer to Commerce's statutory interpretation, this Court will not " substitut[e] its own construction of a statutory provision for" Commerce's own reasonable interpretation. IPSCO, Inc. v. United States, 965 F.2d 1056, 1061 (Fed. Cir. 1992) (internal quotation marks omitted); see also Entergy Corp. v. Riverkeeper, Inc., 556 U.S. 208, 218, 129 S.Ct. 1498, 173 L.Ed.2d 369 (2009) (providing that the agency's " view governs if it is a reasonable interpretation of the statute--not necessarily the only possible interpretation, nor even the interpretation deemed most reasonable by the courts" ).
I. Legal framework for anti-circumvention inquiries
The language of an antidumping duty order conclusively determines its scope. Polites v. United States, 465 F.Appx. 962, 965 (Fed. Cir. 2012). Accordingly, Commerce may not " impermissibly expand" an order by " chang[ing] the scope of that order" or by "...
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