Aimcor, Alabama Silicon, Inc. v. U.S., CVG-V

• Decision Date: 09 September 1998
• Docket Number: No. 97-1266,CVG-V,97-1266
• Citation: 154 F.3d 1375
• Parties: AIMCOR, ALABAMA SILICON, INC. and American Alloys, Inc., Plaintiffs-Appellees, v. The UNITED STATES, Defendant, andenezolana de Ferrosilicio, C.A., Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1375

154 F.3d 1375

AIMCOR, ALABAMA SILICON, INC. and American Alloys, Inc., Plaintiffs-Appellees, v. The UNITED STATES, Defendant, and CVG-Venezolana de Ferrosilicio, C.A., Defendant-Appellant.

No. 97-1266.

United States Court of Appeals, Federal Circuit.

Sept. 9, 1998.

William D. Kramer, Baker & Botts, L.L.P., Washington, DC, argued for plaintiffs-appellees. With him on the brief was Clifford E. Stevens, Jr. Of counsel was Martin Schaefermeier.

Cynthia B. Schultz, Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, Washington, DC, for defendant. Of counsel were David M. Cohen, Director, and Velta A. Melnbrencis, Assistant Director.

Donald B. Cameron, Kaye, Scholer, Fierman, Hays & Handler, LLP, Washington, DC, argued for defendant-appellant. With him on the brief was Julie C. Mendoza.

Before RICH, PAULINE NEWMAN, and SCHALL, Circuit Judges.

RICH, Circuit Judge.

This appeal is from a judgment entered 31 December 1996 by the United States Court of International Trade in a countervailing duties case, No. 93-06-00322, involving ferrosilicon imported from Venezuela. The Court of International Trade sustained a Second Remand Determination of the International Trade Administration of the United States Department of Commerce ("Commerce"), which found a countervailable subsidy rate. For the reasons set forth below, we affirm-in-part, reverse-in-part, and remand.

BACKGROUND

Plaintiffs-Appellees, Aimcor, Alabama Silicon, Inc., and American Alloys, Inc. (collectively "Aimcor"), are domestic producers, manufacturers, or resellers of ferrosilicon that filed a countervailing duty petition with Commerce alleging that Defendant-Appellant, CVG-Venezolana de Ferrosilicio, C.A., ("FESILVEN"), the sole Venezuelan producer and exporter of ferrosilicon, received countervailable subsidies from the Venezuelan government in its production and exportation of ferrosilicon to the United States. Commerce undertook a countervailing duty investigation for the calendar year 1991, which resulted in a Final Affirmative Countervailing Duty Determination ("Final Determination") deciding that FESILVEN was receiving subsidies from the Government of Venezuela or companies owned by the Government of Venezuela (collectively, "GOV"). Final Affirmative Countervailing Duty Determination: Ferrosilicon From Venezuela; and Countervailing Duty Order for Certain Ferrosilicon From Venezuela, 58 Fed.Reg. 27,539 (May 10, 1993).

The particular subsidy at issue in this appeal stems from GOV's purchase of certain Class "E" shares of FESILVEN stock. ¹

FESILVEN is a closely-held company whose stock is owned by GOV and certain private shareholders from Venezuela and elsewhere.

Before 1989, FESILVEN had issued three classes of stock: Classes "A," "B," and "C." Classes A and B are preferred stock entitled to cumulative annual dividends of 10% of their par value. Class C shares are common stock issued as part of a debt-to-equity conversion during a restructuring of FESILVEN's corporate debt. In November of 1989, FESILVEN approved a new class of stock, Class "D," to increase capital. Class D was a preferred stock entitled to cumulative annual dividends of 20% of its par value. In December of that year, FESILVEN amended Clause Seven of its Articles of Incorporation/Bylaws to further address the relative rights to receive dividends and liquidation proceeds of the four classes of then-outstanding stock. It was FESILVEN's practice to amend its Articles of Incorporation/Bylaws each time it altered the number of outstanding shares of a class of stock or added a new class of stock.

In December of 1991, FESILVEN issued a new class of common stock, Class "E." Class E stock was issued at least in part because the fixed assets of the company had been re-valued at an increased amount; and part of the Class E stock was distributed proportionally to existing shareholders based on the number of shares owned. Class E shares were also issued to increase FESILVEN's capital. These additional shares were almost all purchased by GOV--the record indicates that only one other investor bought some of these shares. The Articles of Incorporation/Bylaws gave existing shareholders a right of preference (or first refusal) to purchase these shares in proportion to the amount of stock already owned. While Clause Four of the Articles of Incorporation/Bylaws was amended to include the Class E stock in the total stock issued, Clause Seven was not amended to clarify the rights of this stock, as had been done when Class D stock was issued.

In the Final Determination, Commerce decided that GOV's purchase of Class E shares was consistent with commercial considerations and, thus, not countervailable. 58 Fed.Reg. at 27,542. On 13 December 1994, the Court of International Trade remanded Commerce's Final Determination because "further consideration [was] required to determine whether the purchase of Class 'E' shares was inconsistent with commercial considerations." Aimcor v. United States, 871 F.Supp. 447, 454 (CIT 1994) ("Aimcor I "). On remand, Commerce again determined that GOV's purchase of Class E shares was consistent with commercial considerations. On 29 December 1995, the Court of International Trade found that Commerce's remand results were not supported by substantial evidence and remanded the case to Commerce "to determine the appropriate countervailing duty for GOV's equity infusion into FESILVEN in 1991." Aimcor v. United States, 912 F.Supp. 549, 555 (CIT 1995) ("Aimcor II "). The Court of International Trade instructed Commerce to determine the appropriate countervailing duty. Id. In an order dated 09 April 1996, the Court of International Trade further instructed Commerce to employ the standard grant methodology for calculating the duty rate. Aimcor v. Unted States, No. 93-06-00322, (Apr. 9, 1996 Order). In applying this standard methodology, Commerce treats the full amount of an equity infusion as a subsidy and allocates a portion of the subsidy to the period under investigation or review. See Countervailing Duties; Notice of Proposed Rulemaking and Request for Public Comments, 54 Fed.Reg. 23,366, 23,384 (May 31, 1989). Pursuant to the Court of International Trade's instructions, Commerce issued its second set of remand results, which were affirmed by the Court of International Trade on 31 December 1996, see Aimcor v. United States, 960 F.Supp. 305, ----, slip op. at 4 (CIT 1996) ("Aimcor III "), and which are now on appeal before us.

ANALYSIS

We review de novo a decision of the Court of International Trade reviewing the final results of an administrative review by Commerce. See Torrington Co. v. United States, 82 F.3d 1039, 1044 (Fed.Cir.1996). In so doing, we "apply anew" the Court of International The governing statutory provision in this case is 19 U.S.C. § 1677(5) (1988), which provides in pertinent part:

                Trade's statutorily-mandated standard of review.  See id.   We uphold Commerce's final results 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) (1994).  "Substantial evidence is more than a mere scintilla.  It means such relevant evidence as a reasonable mind might accept as adequate to support such a conclusion."  Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927, 933 (Fed.Cir.1984) (internal quotations and citations omitted).  We decide de novo the proper interpretation of governing statutory provisions.  See Koyo Seiko Co. v. United States, 36 F.3d 1565, 1570 (Fed.Cir.1994)
                

(A) The term "subsidy" has the same meaning as the term "bounty or grant" as that term is used in Section 1303 of this title, and includes, but is not limited to, the following:

...

(ii) The following domestic subsidies, if provided or required by government action to a specific enterprise or industry, or group of enterprises or industries, whether publicly or privately owned and whether paid or bestowed directly or indirectly on the manufacture, production, or export or any class or kind of merchandise:

(I) The provision of capital, loans, or loan guarantees on terms inconsistent with commercial considerations.

(emphasis added). ² The central question on appeal is whether GOV's purchase of FESILVEN Class E stock was a subsidy because it was inconsistent with commercial considerations.

Before reaching this central substantive issue, we must decide as a procedural matter which of the prior Aimcor decisions we may now review: Aimcor I, Aimcor II, Aimcor III, or all three. The final judgment rule requires that a party raise all claims of error after an order "ends the litigation on the merits and leaves nothing for the court to do but execute judgment." Cabot Corp. v. United States, 788 F.2d 1539, 1542 (Fed.Cir.1986) (quoting Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 373, 101 S.Ct. 669, 66 L.Ed.2d 571 (1981)). We have previously held that decisions remanding to an administrative agency are not appealable:

We conclude that the court's order is not a final appealable order. Where, as here, the trial court remands to the administrative agency for additional findings, determination, and redetermination, the remand order is not appealable even though the order resolves an important legal issue such as the applicable standard for countervailability.

Id. at 1543. FESILVEN could not have previously appealed the decisions in Aimcor I or Aimcor II because no final decision had issued. This is the first opportunity for FESILVEN to challenge those...