Arcelormittal U.S. LLC v. United States

• Decision Date: 03 April 2018
• Docket Number: Slip Op. 18–34,Court No. 16–00173
• Parties: ARCELORMITTAL USA LLC, Plaintiff, and AK Steel Corporation, Nucor Corporation, and United States Steel Corporation, Plaintiff–Intervenors, v. UNITED STATES, Defendant, and Novolipetsk Steel Public Joint Stock Company, Defendant–Intervenor.
• Court: U.S. Court of International Trade

302 F.Supp.3d 1366

ARCELORMITTAL USA LLC, Plaintiff,andAK Steel Corporation, Nucor Corporation, and United States Steel Corporation, Plaintiff–Intervenors,

v. UNITED STATES, Defendant,andNovolipetsk Steel Public Joint Stock Company, Defendant–Intervenor.

Court No. 16–00173

Slip Op. 18–34

United States Court of International Trade.

April 3, 2018

Paul Rosenthal and Melissa Brewer, Kelley Drye & Warren LLP, of Washington, DC, argued for plaintiff. With them on the brief were Kathleen W. Cannon, R. Alan Luberda, and John M. Herrmann.

Alan H. Price, Timothy C. Brightbill, and Christopher B. Weld, Wiley Rein LLP, of Washington, DC, for plaintiff-intervenor, Nucor Corporation.

Thomas M. Beline and Sarah E. Schulman, Cassidy Levy Kent LLP, of Washington, DC, for plaintiff-intervenor, United States Steel Corporation. On the brief were Jeffrey D. Gerrish and Luke A. Meisner, Skadden, Arps, Slate, Meagher & Flom LLP, of Washington, DC.

Daniel L. Schneiderman and Stephen A. Jones, King & Spalding LLP, of Washington, DC, for plaintiff-intervenor, AK Steel Corporation.

Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for defendant. With her on the brief were Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Renée A. Burbank, Senior Trial Counsel. Of counsel on the brief was Lydia C. Pardini, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, DC.

Valerie Ellis, Curtis, Mallet–Prevost, Colt & Mosle LLP, of Washington, DC, argued for defendant-intervenor Novolipetsk Steel Public Joint Stock Company. With her on the brief was William H. Barringer.

OPINION

Katzmann, Judge:

This case presents the confluence of agency determinations, principles of the law of contracts, and the interpretation of statute as applied to domestic and foreign generally accepted accounting principles. The following questions are posed: in an investigation into whether a foreign exporter is selling imported merchandise in the United States market at less than fair value, how should the United States Department of Commerce International Trade Administration ("Commerce") determine the date on which the imported merchandise is sold, and thus define the universe of sales that fall within Commerce's period of investigation? When a domestic party with a stake in the matter suggests a date of sale that differs from Commerce's selected date, what is, and who carries, the attendant burden of demonstrating the correct date? Further, which of the foreign exporter's financial statements should Commerce use in determining its financial expense ratio?

Plaintiff ArcelorMittal USA LLC ("ArcelorMittal"), on behalf of itself and plaintiff-intervenors AK Steel Corporation, Nucor Corporation, and United States Steel Corporation, challenges Commerce's final determination in the less than fair value investigation involving imports of certain cold-rolled steel flat products ("cold-rolled steel") from the Russian Federation ("Russia"). See Certain Cold–Rolled Steel Flat Products From the Russian Federation: Final Determination of Sales at Less Than Fair Value and Final Affirmative Determination of Critical Circumstances, in Part, 81 Fed. Reg. 49,950 (Dep't Commerce July 29, 2016) ("Final Determination") and accompanying Issues and Decisions Memorandum (Dep't Commerce July 20, 2016) ("IDM").

Specifically, ArcelorMittal argues that: (1) Commerce should have used the date of contract between Novex Trading (Swiss) SA ("Novex")—the exporting arm of mandatory respondent Novolipetsk Steel OJSC (known collectively with its affiliates as "NLMK")—and its U.S. customers, rather than the date of invoice, as the date of sale in determining the universe of transactions subject to investigation; and (2) Commerce should have relied on NLMK's 2014 unconsolidated financial statements prepared in accordance with Russian Accounting Standards ("RAS"), rather than its 2014 consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), to calculate NLMK's financial expense ratio. See R. 56.2 Mot. for J. on the Agency Record (June 7, 2017), ECF No. 51; Mem. in support of R. 56.2 Mot. of Pl. and Pl.–Inters. for J. on the Agency Record (June 7, 2017), ECF Nos. 52–53 ("Pl.'s Br."). Defendant the United States ("the Government") and defendant-intervenor NLMK oppose ArcelorMittal's motion. See Resp. to Mot. for J. on the Agency Record (Aug. 21, 2017), ECF Nos. 55, 58 ("Def.'s Br."); Resp. to Mot. for J. on the Agency Record (Aug. 21, 2017), ECF Nos. 56–57 ("Def.–Inter.'s Br.").

BACKGROUND

A. Legal Background

Pursuant to United States antidumping laws, Commerce investigates whether there exists, and imposes duties on, subject merchandise that "is being, or is likely to be, sold in the United States at less than fair value," i.e. dumped, and that causes material injury or threat of material injury to a domestic industry. 19 U.S.C. § 1673 (2012).¹ "The term ‘subject merchandise’ means the class or kind of merchandise that is within the scope of an investigation." 19 U.S.C. § 1677(25). "[A]n antidumping analysis involves a comparison of export price or constructed export price in the United States with normal value in the foreign market." 19 C.F.R. § 351.401 (2016). "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). Normal value is defined as "the price at which the foreign like product is first sold ... in the exporting country [i.e., the home market]." 19 U.S.C. § 1677b(a)(l)(B)(i). Export price, or constructed export price, means the price at which the subject merchandise is first sold to an unaffiliated purchaser in the United States. 19 U.S.C. § 1677a(a) – (b).

The date on which the subject merchandise is sold in the U.S. market, known in this context as the date of sale, factors into the calculation of the export price, which is then compared to normal value. See Yieh Phui Enter. Co. v. United States, 35 CIT ––––, ––––, 791 F.Supp.2d 1319, 1322 (2011). The date of sale therefore defines the universe of sales that fall within Commerce's period of investigation ("POI"), and that are subject to Commerce's less than fair value determination.

Commerce's regulation 19 C.F.R. § 351.401(i) directs its date of sale determination:

In identifying the date of sale of the subject merchandise or foreign like product, [Commerce] normally will use the date of invoice, as recorded in the exporter or producer's records kept in the ordinary course of business. However, [Commerce] may use a date other than the date of invoice if [Commerce] is satisfied that a different date better reflects the date on which the exporter or producer establishes the material terms of sale.

Commerce thus possesses discretion to select an alternate date of sale; however, an interested party proposing a date of sale other than the presumptive invoice date must demonstrate that the material terms of sale were "firmly" and "finally" established on its proposed date of sale. Toscelik Profil v. Sac Endustrisi A.S., 41 CIT ––––, ––––, 256 F.Supp.3d 1260, 1263 (2017) (citing Antidumping Duties; Countervailing Duties: Final Rule, 62 Fed. Reg. 27,296, 27,348–49 (Dep't Commerce May 19, 1997) ("Preamble") ). To successfully rebut Commerce's presumptive selection of the invoice date, an interested party must also demonstrate "that a reasonable mind has one, and only one, date of sale choice." Id. (citing Allied Tube and Conduit Corp. v. United States, 24 CIT 1357, 1371–72, 127 F.Supp.2d 207, 220 (2000) ( "Plaintiff ... must demonstrate that it presented Commerce with evidence of sufficient weight and authority as to justify its [date of sale] as the only reasonable outcome. If, however, the record indicates that Commerce's decision to use the invoice date as the date of sale was reasonable and was supported by substantial evidence, Plaintiff's arguments must fail.") ).

B. Factual Background

On July 28, 2015, domestic producers of cold-rolled steel² filed petitions with Commerce and the U.S. International Trade Commission seeking the issuance of antidumping duty and countervailing duty orders on imported cold-rolled steel from Russia and other countries. See Petitions for the Imposition of Antidumping and Countervailing Duties: Certain Cold–Rolled Steel Flat Products from Brazil, the People's Republic of China, India, Japan, the Republic of Korea, the Netherlands, Russia, and the United Kingdom (July 28, 2015), CR 1–11, PR 1–9. Commerce initiated the less than fair value investigation on imports of cold-rolled steel from Russia on August 17, 2015. See Certain Cold–Rolled Steel Flat Products From Brazil, the People's Republic of China, India, Japan, the Republic of Korea, the Netherlands, the Russian Federation, and the United Kingdom: Initiation of Less–Than–Fair–Value Investigations, 80 Fed. Reg. 51,198 (Dep't Commerce Aug. 24, 2015), PR 41. The POI for Russia was July 1, 2014 to June 30, 2015. Id.; see 19 C.F.R. § 351.204(b)(1) (2016).

Pursuant to 19 U.S.C. § 1677f–1(c)(2),³ Commerce selected two respondents for individual examination: Severstal Export GmbH and PAO Severstal (collectively "Severstal") and NLMK. See Selection of Respondents for the Antidumping Duty Investigation on Certain Cold–Rolled Steel Flat Products from the Russian Federation, at 5 & n. 15 (Sept. 14, 2015), CR 31, PR 72.

Commerce issued an antidumping duty questionnaire to NLMK in September 2015. See Section A Questionnaire (Sept. 17, 2015), PR 78; Section B–E Questionnaire (Sept. 18, 2015), PR 82. NLMK responded over the subsequent months. See NLMK's Section A Questionnaire Resp. (Oct. 16, 2015), CR 47–80, PR 108–10 ("Sec. A ...