Allegheny Ludlum Corp. v. U.S.

• Decision Date: 15 October 2003
• Docket Number: No. 03-1096.,03-1096.
• Citation: 346 F.3d 1368
• Parties: ALLEGHENY LUDLUM CORP., AK Steel Corp., Butler Armco Independent Union, J&L Specialty Steel, Inc., United Steelworkers of America, AFL-CIO/CLC, and Zanesville Armco Independent Organization, Plaintiffs-Appellants, v. UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

346 F.3d 1368

ALLEGHENY LUDLUM CORP., AK Steel Corp., Butler Armco Independent Union, J&L Specialty Steel, Inc., United Steelworkers of America, AFL-CIO/CLC, and Zanesville Armco Independent Organization, Plaintiffs-Appellants, v. UNITED STATES, Defendant-Appellee.

No. 03-1096.

United States Court of Appeals, Federal Circuit.

DECIDED: October 15, 2003.

Jeffrey S. Beckington, Collier Shannon Scott, PLLC, of Washington, DC, argued for plaintiffs-appellants. With him on the brief were David A. Hartquist and Adam H. Gordon.

Stephen C. Tosini, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee. With him on the brief were David M. Cohen, Director; and Lucius B. Lau, Assistant Director. Of counsel were Scott D. McBride, Berniece A. Browne, and John D. McInerney, Attorneys, United States Department of Commerce, of Washington, DC.

Before MICHEL, LOURIE, and DYK, Circuit Judges.

MICHEL, Circuit Judge.

Allegheny Ludlum Corp. et al. (collectively, "Allegheny") appeal from a decision of the United States Court of International Trade dismissing their case and upholding the United States Department of Commerce's ("Commerce's") rescission of the first administrative review of its antidumping order against stainless steel plate in coils ("SSPC") from Taiwan. Allegheny Ludlum Corp. v. United States, 240 F.Supp.2d 1262 (Ct. Int'l Trade 2002). Because we agree with the Court of International Trade's holdings that Commerce's policy in determining when to rescind an administrative review is lawful and that Commerce's application of that policy in this case was reasonable and in accordance with law, we affirm.

BACKGROUND

On March 31, 1999, Commerce issued an antidumping order and assigned dumping margins (and cash deposit rates) on SSPC exported to the United States by Yieh United Steel Corporation ("YUSCO") and its "middleman," Ta Chen Stainless Pipe Co., Ltd. ("Ta Chen") (and its wholly owned U.S. subsidiary, Ta Chen International Corp.). In 2000, Commerce initiated an administrative review, at the behest of YUSCO and Allegheny, of YUSCO's and Ta Chen's SSPC activities for a given period ("the period of review").¹ In response to Commerce's inquiries YUSCO and Ta Chen both claimed they had not exported any SSPC to the United States during the period of review; rather, any SSPC that had been sold during that period had entered the United States prior to the start of the period of review.

Subsequent to those statements, Commerce reviewed Customs' databases and found that they showed no entries of SSPC from YUSCO or Ta Chen during the period of review. Commerce also reviewed Customs' documentation of a large, random sample of Ta Chen's and YUSCO's entries during the period of review and found that none of them was of SSPC. Commerce then rescinded its administrative review pursuant to 19 C.F.R. § 351.213(d),² because it determined that there had been no entries of SSPC during the period of review, and because of its policy that sales of merchandise that can be demonstrably linked with entries prior to the suspension of liquidation are not "subject merchandise" under 19 U.S.C. § 1677(25) and are therefore not subject to review. Stainless Steel Plate in Coils From Taiwan: Final Rescission of Antidumping Duty Administrative Review, 66 Fed. Reg. 18,610 (Apr. 10, 2001) ("Final Rescission").

Allegheny contested Commerce's rescission of the administrative review in the Court of International Trade. The trial court upheld Commerce's policy of considering sales linked with pre-period-of-review entries as not subject merchandise because it "results in a more accurate administration of the antidumping statute because it properly excludes irrelevant sales from the dumping determination." Allegheny, 240 F.Supp.2d at 1266 (citing STC Corp. v. United States, 990 F.Supp. 829, 832 n. 2 (Ct. Int'l Trade 1997)). The trial court determined that "Commerce's regulations are not contrary to law" because the agency had properly applied the statutory requirement to analyze "data for imports into the United States for a discrete period of time." Id. The trial court also rejected Allegheny's argument that Commerce erred by not forcing Ta Chen to document that its sales of SSPC during the period of review were linked to earlier entries. Id. at 1267.

Allegheny filed a timely notice of appeal to this court. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(5) (2000).

DISCUSSION

I

Allegheny argues that Commerce's policy of not conducting administrative reviews of sales linked with pre-period-of-review entries is not in accordance with law. Specifically, Allegheny argues that by not conducting administrative reviews when there are sales but no customs entries Commerce contravenes congressional intent that middleman dumping be examined and that cash deposit rates be calculated as accurately and currently as possible.

A.

19 U.S.C. § 1675(a)(2)(A) provides for annual review of antidumping duties with respect to entries: "the administering authority shall determine — (i) the normal value and export price (or constructed export price) of each entry of the subject merchandise, and (ii) the dumping margin for each such entry." (Emphases added).

Notwithstanding the plain language of the statute, Allegheny argues that Congress intended examination of middleman dumping using sales rather than entries. As support, Allegheny recites the following legislative history:

Regulations should be issued, consistent with present practice, under which sales from the foreign producer to middlemen and any sales between middlemen before sale to the first unrelated U.S. purchaser are examined to avoid below cost sales by middlemen.

Trade Agreements Act of 1979, S.Rep. No. 96-249, at 75, 1979 U.S.C.C.A.N. 381, 480 (1979). The cited legislative history supports the proposition that non-affiliated middlemen are to be examined by Commerce. We do not, however, think congressional intent requires Commerce to continue an annual review in cases such as this.

Allegheny does not demonstrate that Commerce's policy, based on its regulations, of not reviewing an antidumping order where no new entries have occurred contravenes Congress' intent that middleman sales be reviewed. It is true that in this case, the middleman sales based upon the pre-period-of-review entries were not reviewed and the cash deposit rates were not updated. But this does not mean that Commerce's policy and regulations contravene congressional intent — indeed, Commerce originally investigated Ta Chen's middleman sales and imposed an antidumping order and cash deposit rates on Ta Chen's sales. Commerce's policy relates only to its method of conducting annual reviews of antidumping orders — where sales can be linked to customs entries, it is only entries within the period of review that are examined and used to calculate the cash deposit rates. Preamble to Antidumping Duties; Countervailing Duties; Final Rule, 62 Fed. Reg. 27,296, 27,314 (May 19, 1997) ("Merchandise that entered the United States prior to the suspension of liquidation [i.e., the beginning of the period of review] (and in the absence of an affirmative critical circumstances finding) is not subject merchandise within the meaning of [19 U.S.C. § 1677(25)]."); Certain Stainless Wire Rods From France: Final Results of Antidumping Duty Administrative Review ("French Wire Rod"), 61 Fed. Reg. 47,874, 47,875 (Sept. 11, 1996) (stating that "[s]ales of merchandise that can be demonstrably linked with entries prior to the suspension of liquidation are not subject merchandise and therefore are not subject to review by the Department"); cf. Hynix Semiconductor, Inc. v. United States, 248 F.Supp.2d 1297, 1304 (Ct. Int'l Trade 2003) (approving of Commerce's examination of sales of semiconductors during the period of review where entries could not be tied to sales, based upon the "importance of consistency across reviews"). Indeed, as stated by the Court of International Trade in Hynix, "nothing in Commerce's regulations supports the use of a hybrid sales plus [entries] approach for calculating dumping margins." 248 F.Supp.2d at 1304.

In short, Commerce's policy has nothing to do with whether or not it scrutinizes middleman sales, but only with its methodology for reviewing all antidumping duty orders. Where, as here, Commerce has imposed an antidumping duty order based on entries, Commerce's practice of conducting an administrative review of that order is to look at entries rather than sales where those sales can be linked to entries. Commerce's policy, then, does not conflict with congressional intent and merely implements its lawful regulations. See 19 C.F.R. § 351.213(e)(1)(ii) ("For requests received ... an administrative review will cover, as appropriate, entries, exports, or sales during the [period of review].") (emphasis added); id. § 351.213(d)(3) ("[Commerce] may rescind an administrative review... if the Secretary concludes that during the period covered by the review, there were no entries, exports, or sales of the subject merchandise, as the case may be.") (emphasis added).

B.

Allegheny also argues that Commerce's regulatory policy contravenes congressional intent that cash deposit rates be calculated as accurately and currently as possible. Allegheny cites two primary sources for such congressional intent. First, Allegheny notes that 19 U.S.C. § 1675(a)(1)-(2) call for annual administrative reviews to update...