ArcelorMittal USA LLC v. United States

• Decision Date: 25 April 2017
• Docket Number: Court No. 16–00168,Slip Op. 17–49
• Citation: 222 F.Supp.3d 1293
• Parties: ARCELORMITTAL USA LLC, Plaintiff, and AK Street Corporation, Nucor Corporation, and United States Steel Corporation, Plaintiff–Intervenors, v. UNITED STATES, Defendant, and PAO Severstal and Severstal Export GmbH, Defendant–Intervenors.
• Court: U.S. Court of International Trade

222 F.Supp.3d 1293

ARCELORMITTAL USA LLC, Plaintiff,

and

AK Street Corporation, Nucor Corporation, and United States Steel Corporation, Plaintiff–Intervenors,

v.UNITED STATES, Defendant,andPAO Severstal and Severstal Export GmbH, Defendant–Intervenors.

Slip Op. 17–49

Court No. 16–00168

United States Court of International Trade.

Dated: April 25, 2017

Brooke Ringel , Kelly Drye & Warren, LLP, of Washington, DC, argued for plaintiff.

Renee A. Burbank , Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for defendant. With her on the brief were Benjamin C. Mizer , Principal Deputy Assistant Attorney General, Jeanne E. Davidson , Director, and Patricia M. McCarthy , Assistant Director. Of counsel on the brief was Michael T. Gagain , Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, DC. Of counsel, Lydia Pardini , Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, DC, argued for defendant.

Daniel J. Cannistra and Benjamin Blase Caryl , Crowell & Moring LLP, of Washington, DC, argued for defendant-intervenors.

OPINION

Katzmann, Judge:

This case poses the question of whether a foreign exporter and producer, having obtained a de minimis subsidy rate in an investigation by the U.S. Department of Commerce ("Commerce"), and not being subject to a countervailing duty ("CVD") order, nonetheless has standing to challenge by cross-claim Commerce's application of Adverse Facts Available ("AFA") to calculate that subsidy rate. Put another way, where a party ultimately prevails at the administrative level in Commerce's investigation, must its challenge to that proceeding fail because there is no case or controversy and thus no jurisdiction lies?

This matter is before the court on defendant United States' ("the Government") Rule 12(b)(1) Motion to Dismiss for Lack of Jurisdiction defendant-intervenors PAO Severstal and Severstal Export GmbH's (collectively "Severstal") cross-claim. Def.'s Mot. Dismiss for Lack of Jurisdiction, Dec. 2, 2016, ECF No. 35 ("Def.'s Mot."); Def.–Inter.'s Cross-cl., Oct. 14, 2016, ECF No. 20 ("Cross-cl."). Severstal, a foreign exporter and producer of cold-rolled steel flat products from Russia, cross-claimed to challenge certain factual findings and legal conclusions upon which Commerce's final determination in the CVD investigation of certain cold-rolled steel flat products from the Russian Federation ("Russia") is based. Countervailing Duty investigation of Certain Cold–Rolled Steel Flat Products From the Russian Federation: Final Affirmative Countervailing Duty Determination and Final Negative Critical Circumstances Determination , 81 Fed. Reg. 49,935 (Dep't Commerce July 29, 2016) ("Final Determination ") and the accompanying July 20, 2016 Issues and Decision Memorandum, C–821–823 ("IDM "). Severstal claims jurisdiction over its cross-claim is proper pursuant to 28 U.S.C. §§ 1581(c) and 1583, and that it has standing to bring the cross-claim as an interested party within the meaning of 19 U.S.C. §§ 1677(9)(A) and 1516a(f)(3) (2012).¹ Cross-cl. ¶¶ 1–3. For the reasons set forth below, the court finds that it lacks subject matter jurisdiction to hear Severstal's cross-claim and grants defendant's motion to dismiss without prejudice.

BACKGROUND

On July 28, 2015, Commerce received CVD petitions concerning imports of certain cold-rolled steel flat products from Brazil, India, the People's Republic of China, the Republic of Korea, and the Russian Federation, filed on behalf of domestic industry by five United States producers of certain cold-rolled steel flat products—ArcelorMittal USA EEC ("ArcelorMittal"),² AK Steel Corporation, Nucor Corporation, United States Steel Corporation, and Steel Dynamics, Inc.—the first four of whom now appear as parties in this proceeding.³ Certain Cold–Rolled Steel Flat Products From Brazil, India, the People's Republic of China, the Republic of Korea, and the Russian Federation: Initiation of Countervailing Duty Investigations , 80 Fed. Reg. 51,206 (Dep't Commerce Aug. 24, 2015) (initiation of CVD investigation). The petition alleged that the Government of Russia "provid[ed] countervailable subsidies ... to imports of cold rolled steel from ... Russia ... and that such imports are materially injuring, or threatening material injury to, an industry in the United States." Id. Based on its review of the petition, Commerce found there was sufficient information to initiate a CVD investigation on 10 of the 14 alleged programs in the petition, including the "deduction of the R & D exploration costs from the company's taxable income." Id . at 51,209 ; August 17, 2015 Countervailing Duty Initiation Checklist at 11–12. Accordingly, Commerce published a notice of initiation of a countervailing duty investigation of certain cold-rolled steel flat products from Russia on August 24, 2015. 80 Fed. Reg. at 51,209 ; see 19 U.S.C. § 1671a(b). The period of investigation ("POI") was January 1, 2014, through December 31, 2014. 80 Fed. Reg. 51,206. On September 14, 2015, Commerce selected Severstal as one of two mandatory respondents in the investigation.⁴ Memorandum from Kristen Johnson, International Trade Compliance Analyst, Office III, Antidumping and Countervailing Duty Operations to Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, "Countervailing Duty Investigation on Certain Cold–Rolled Steel Flat Products from the Russian Federation: Selection of Mandatory Respondents" at 5 (Sept. 14, 2015).

Commerce issued its Preliminary Determination on December 22, 2015, finding that Severstal received countervailable subsidies from the Government of Russia in the form of the tax deduction for exploration expenses program under Article 261 of the Tax Code of the Russian Federation ("TCRF"), and calculating a 0.01 percent ad valorem (de minimis ) overall subsidy rate for Severstal. Countervailing Duty Investigation of Certain Cold–Rolled Steel Flat Products From the Russian Federation: Preliminary Affirmative Countervailing Duty Determination , 80 Fed. Reg. 79,564 (preliminary determination); Preliminary Issues and Decision Memorandum, C–821–823 (Dec. 15, 2015). Commerce found in the Preliminary Determination that Severstal "reported deducting exploration expenses defined in Article 261 in the 2013 income tax return, which was filed with the tax authorities during the POI." Preliminary Issues and Decision Memorandum at 20.

On July 29, 2016, Commerce issued its affirmative Final Determination , in which it continued to find that countervailable subsidies were being provided to producers and exporters of certain cold-rolled steel flat products from Russia during the POI. Commerce explained that during Severstal's verification, "verifiers discovered previously unreported deductions contained in line item 040 [of its 2013 tax return] that related to exploration activities" under Article 261 of the TCRF.⁵ IDM at 124. The agency accordingly found that "neither the Government of Russia nor [Severstal] acted to the best of their ability in responding to the Department's requests for certain information," and "drew an adverse inference where appropriate in selecting from among the facts otherwise available," pursuant to 19 U.S.C. § 1677e. Final Determination at 49,935. Thus Commerce assigned to Severstal an AFA rate of 0.03 percent ad valorem and calculated a final countervailable subsidy rate of 0.62 percent ad valorem (de minimis ) for Severstal.⁶ Final Determination at 49,936; IDM at 15, 21, 126.

Commerce noted that "[i]f the U.S. International Trade Commission (ITC) issues a final affirmative injury determination, we will issue a CVD order and will reinstate the suspension of liquidation ... and will require a cash deposit of estimated CVDs for such entries of subject merchandise in the amounts indicated above." Final Determination at 49,936. On the other hand, "[i]f the ITC determines that material injury, or threat of material injury, does not exist, this proceeding will be terminated and all estimated duties deposited as a result of the suspension of liquidation will be refunded or canceled." Id. Commerce notified the ITC of its determination in accordance with 19 U.S.C. § 1671d(d). Id.

ArcelorMittal filed suit on August 25, 2016, challenging Commerce's Final Determination as unsupported by substantial evidence and otherwise not in accordance with law as a result of the agency's assignment of a 0.03 percent ad valorem subsidy rate to Severstal, and seeking remand. Pl.'s Sum. ECF No. 1; Pl.'s Compl., ECF No. 8 (Sep. 23, 2016). On September 16, 2016, the ITC determined that "imports of cold-rolled steel flat products from Russia that are sold in the United States at [less than fair value] and subsidized by the government of Russia are negligible" and terminated the investigations. Cold–Rolled Steel Flat Products From Brazil, India, Korea, Russia, and the United Kingdom , 81 Fed. Reg. 63,806 (ITC Sep. 16, 2016) (final determination); Cold–Rolled Steel Flat Products From Brazil, India, Korea, Russia, and the United Kingdom , USITC Pub. 4637, USITC Inv. Nos. 701–TA–540, 542–544 and 731–TA–1283, 1285, 1287, and 1289–1290 (Sep. 2016); see 19 U.S.C. § 1671d(b)(1). As a result, no CVD order was issued as to Russian importers of cold-rolled steel flat products.

Severstal intervened as a defendant-intervenor on October 3, 2016, and cross-claimed on October 14, challenging as unsupported by substantial record evidence and otherwise not in accordance with law Commerce's application of AFA to calculate Severstal's benefit under the tax deduction for exploration expenses program. Def.–Inter.'s Consent Mot. to Intervene, ECF No. 10; Cross-cl. ¶¶ 19–24.⁷

The Government moved under Rule 12(b)(1) of this Court to dismiss Severstal's cross-claim for lack of jurisdiction. Def.'s Mot.; ...