Bethlehem Steel Corp. v. U.S., Slip Op. 02-97.

• Decision Date: 27 August 2002
• Docket Number: Court Nos. 00-03-00116.,Slip Op. 02-97.
• Citation: 223 F.Supp.2d 1372
• Parties: BETHLEHEM STEEL CORPORATION, et al., Plaintiffs, v. UNITED STATES, Defendant, and Pohang Iron and Steel Co., Ltd., Defendant-Intervenor.
• Court: U.S. Court of International Trade

223 F.Supp.2d 1372

BETHLEHEM STEEL CORPORATION, et al., Plaintiffs, v. UNITED STATES, Defendant, and Pohang Iron and Steel Co., Ltd., Defendant-Intervenor.

Slip Op. 02-97.

Court Nos. 00-03-00116.

United States Court of International Trade.

August 27, 2002.

Dewey Ballantine LLP (John A. Ragosta, Jennifer Danner Riccardi, Navin Joneja), Washington, D.C., for Plaintiffs.

Robert D. McCallum, Jr., Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice; A. David Lafer, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, United States Department of Justice; William L. Olsen, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice; Michele D. Lynch, Attorney, Office of the Chief Counsel for Import Administration, United States Department of Commerce, Washington, D.C., for Defendant, of counsel.

Kaye Scholer LLP (Donald B. Cameron, Julie C. Mendoza, Brady W. Mills), Washington, D.C., for Defendant-Intervenor.

OPINION

CARMAN, Chief Judge.

Bethlehem Steel Corporation and U.S. Steel Group, a Unit of USX Corporation ("Plaintiffs") and Pohang Iron and Steel Co., Ltd. ("POSCO" or "Defendant-Intervenor") challenge the Department of Commerce's ("Commerce") determination in Remand Determination Pursuant to Bethlehem Steel Corporation, et al. v. United States, Slip-Op. 01-95 (August 8, 2001) ("Remand Redetermination"). This Court has jurisdiction to hear this case pursuant to 28 U.S.C. 1581(c) (2000). For the reasons that follow, this Court sustains Commerce's Remand Redetermination in its entirety.

BACKGROUND

On August 8, 2001, this Court remanded this case for Commerce to further investigate and explain whether two programs by the Government of Korea ("GOK") provided countervailable subsidies to POSCO: 1) the direct provision of infrastructure at Asan Bay and 2) the reduction of import duties on steel slab by the GOK. See Bethlehem Steel Corp. v. United States, 162 F.Supp.2d 639, 645, 648 (CIT 2001). In the Remand Redetermination, Commerce determined that the infrastructure at Asan Bay does not provide a countervailable benefit to POSCO and that although the import duty reduction program is countervailable, POSCO received no measurable benefit from it. See Remand Redetermination at 4-5, 9.

I. Commerce's determination as to infrastructure benefits

This Court remanded the issue of whether POSCO received infrastructure subsidies at Asan Bay due to Commerce's failure to properly address this issue, focusing instead upon whether POSCO's lease terms constituted a countervailable subsidy. See Bethlehem Steel, 162 F.Supp.2d at 644. Commerce was instructed to investigate Plaintiffs' subsidy allegations as to roads, industrial water facilities, distribution depots and electric power stations at Asan Bay. See Bethlehem Steel, 162 F.Supp.2d at 645. Commerce accordingly solicited and verified additional information on this issue. See Remand Redetermination at 2. With regard to POSCO's presence in Asan Bay, Commerce had previously discovered that POSCO leased a port berth and maintained a warehouse at Asan Bay. See id. Commerce verified that 1) the port berth "is not part of the Poseung Industrial Complex, which is one of five industrial sites within Asan Bay"; and 2) the Inchon Port Authority, rather than the government agencies responsible for construction in the industrial site, was responsible for the port berths at Asan Bay. Id. at 3 (citing Remand Verification Report for the Government of Korea (GOK) in the Court of International Trade (CIT) Remand of the Countervailing Duty Investigation of Certain Cut-to-Length Carbon-Quality Steel Plate from the Republic of Korea (Nov. 26, 2001) at 5-6, Pub. Doc. 258, POSCO's Jan. 22, 2002 Pub. Attach. 4 at 4-5 ("GOK Verification Report")).

As part of its investigation of roads at Asan Bay, Commerce verified that the bridge and major highway at Asan Bay are part of the West Coast Highway system connecting two cities, thus constituting part of Korea's general highway and road system. Remand Redetermination at 3. The government agency Ministry of Construction and Transportation ("MOCAT") is responsible for the road system. See id. (quoting GOK Verification Report at 4, POSCO's Jan. 22, 2002 Pub. Attach. 4 at 3). With respect to the roads within the industrial complex, Commerce verified they are public roads used by the general public. Furthermore, Commerce verified that "POSCO does not use most of the roads within the complex; rather, it uses the country's general road system." Remand Redetermination at 4. Commerce concluded POSCO did not receive a financial contribution from the GOK with regard to the highway and bridge at Asan Bay and did not receive a countervailable benefit as to the roads within the industrial complex. See id.

With regard to the electric power stations, Commerce verified that the electricity is supplied by the national utility company KEPCO and the power plant is located near Kia in Asan Bay. See GOK Verification Report at 6, POSCO's Jan. 22, 2002 Pub. Attach. 4 at 5. It found that POSCO pays for electricity services based upon the applicable general tariff schedule charged to all electricity customers. See Remand Redetermination at 5. The same is true as to telephone and water services, even though POSCO receives water from a treatment center within the industrial estate. See id. It also verified that there are no distribution depots constructed by the GOK at Asan Bay that could provide a benefit to POSCO. See Remand Redetermination at 5. Commerce therefore concluded POSCO did not receive a financial contribution or countervailable benefit from water facilities, distribution depots, and electric power stations at Asan Bay. See id.

II. Commerce's determination as to reduction of import duties on slab

The import duty reduction program at issue in this case works as follows: Interested parties request reductions in import duties generally in response to market conditions. If they meet the criteria established in Korea's statutes and regulations, the government may approve a tariff reduction upon import. See CTL Plate Remand Questionnaire Response of the Government of Korea (Sept. 7, 2001), at 11-13, Pub. Doc. 250, Def.'s Pub. Ex. 6 ("GOK Questionnaire Response"). In the case of slab, "the Korean government monitors the domestic supply of slab. When either the domestic supply drops below a certain threshold or the domestic industry so requests, the Korean government reduces the tariff rate on steel slab. This reduced tariff rate is available to the entire steel industry, irrespective of the manner in which the individual companies ultimately use the slab[.]" Bethlehem Steel, 162 F.Supp.2d at 647 (footnote omitted). Commerce had found in the final results and first remand redetermination that the program is not countervailable, but this Court remanded the issue a second time because Commerce had failed to investigate the program. See id. at 641, 646.

Upon solicitation and verification of additional information, Commerce found that the program could not be classified as an export subsidy because the applicability of the reduced rate was not conditioned upon the use of the slab in a product to be exported. See Remand Redetermination at 6. However, Commerce concluded that the program is specific under section 771(5A) of the Tariff Act of 1930. See id. at 7. It verified that the reduced rate of one percent had been applied to imports during the first part of 1998 but that the general tariff rate of three percent had been applied during the second half of 1998. See id. at 8. POSCO had imported slab during the first half of 1998 at the one percent tariff rate. See id. Based on this information, Commerce found POSCO received a financial contribution and countervailable benefit for the first half of 1998. See id. at 8-9. However, Commerce found "POSCO did not receive a measurable benefit from this program as the calculated benefit under this program was less than 0.005 percent" and therefore had "no impact on the ad valorem subsidy rate calculated in the final determination." Id. at 9.

STANDARD OF REVIEW

This Court will sustain a final determination of Commerce unless it is found to be "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i). The same standard of review applies to the review of a remand determination as to the review of the original determination. See Laclede Steel Co. v. United States, 125 F.Supp.2d 525, 530 (CIT 2000); see also Viraj Group, Ltd. v. United States, 193 F.Supp.2d 1331, 1335 (CIT 2002) (applying the substantial evidence standard to review a remand determination). "Substantial evidence is more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.... Moreover, [t]he court may not substitute its judgment for that of the [agency] when the choice is between two fairly conflicting views, even though the court would justifiably have made a different choice had the matter been before it de novo." Transcom, Inc. v. United States, 121 F.Supp.2d 690, 693 (CIT 2000) (internal quotations and citations omitted). In examining statutes, the Court applies the two-part analysis of Chevron U.S.A. Inc. v. National Res. Def. Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). See Fabrique de Fer de Charleroi, SA v. United States, 166 F.Supp.2d 593, 598 (CIT 2001). Under Chevron, the Court examines whether the relevant statute addresses the specific question at issue, and if not, whether the agency's statutory interpretation is reasonable in light of the overall statutory scheme. See Chevron U.S.A., Inc., 467 U.S. at 842-43, 104 S.Ct. 2778.

DISCUSSION

I. Contentions as to Countervailability of Infrastructure Benefits

A. Plaintiffs' Contentions

Plaintiffs argue...