Ellwood City Forge Co. v. United States
| Decision Date | 14 June 2022 |
| Docket Number | Slip Op. No. 22-66,Court No. 1:21-00073 |
| Citation | 582 F.Supp.3d 1259 |
| Parties | ELLWOOD CITY FORGE COMPANY, Ellwood National Steel Company, Ellwood Quality Steels Company, and A. Finkl & Sons, Plaintiffs, v. UNITED STATES, Defendant, Metalcam S.p.A., Defendant-Intervenor. |
| Court | U.S. Court of International Trade |
Thomas M. Beline, Cassidy Levy Kent LLP, of Washington, D.C., for Plaintiffs. With him on the brief were Jack A. Levy, Myles S. Getlan, Jeffery B. Denning, James E. Ransdell, and Nicole Brunda.
Sarah E. Kramer, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for Defendant United States. With her on the brief were Brian M. Boynton, Acting Assistant Attorney General, Jeanne E. Davidson, Director, Commercial Litigation Branch, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, and Hendricks Valenzuela, Office of Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.
Douglas J. Heffner, Faegre Drinker Biddle & Reath, LLP, of Washington, D.C., for Defendant-Intervenor. With him on the brief was Richard P. Ferrin.
Ellwood City Forge Company, Ellwood National Steel Company, Ellwood Quality Steels Company, and A. Finkl and Sons (collectively Ellwood City and Plaintiffs) filed this case under Section 516A of the Tariff Act of 1930, as amended. Plaintiffs challenge certain aspects of the final determination in the less-than-fair-value investigation of forged steel fluid end blocks from Italy issued by the U.S. Department of Commerce (Commerce). Specifically, Plaintiffs challenge Commerce's decision to issue verification questionnaires in lieu of conducting on-site verification and Commerce's subsequent determination of a 7.33% dumping margin for Lucchini and a de minimis dumping margin for Metalcam S.p.A., both Italian producers of FEBs and mandatory respondents in this investigation. See Compl., ECF No. 6. Before the Court is the Plaintiffs’ Rule 56.2 Motion for Judgment on the Agency Record. Pls.’ Mot. J. Agency R. , ECF No. 21. For the reasons set forth below, the Court finds that Ellwood City failed to exhaust its administrative remedies with regard to its verification claim and that substantial evidence otherwise supports the agency's determination. Plaintiffs’ Motion is DENIED .
The products at issue in this case are forged steel fluid end blocks (FEBs) produced in Italy for import into the United States. The International Trade Commission described the types of FEBs included in the scope of its corresponding material injury investigation:
Forged Steel Fluid End Blocks from Italy: Final Affirmative Determination of Sales at Less Than Fair Value , 85 Fed. Reg. 79,998, Appendix I (Dec. 11, 2020) (Final Determination), J.A. at 83,315, ECF No. 29 ().
The investigation at issue began on December 19, 2019, when Plaintiffs filed a petition alleging that FEBs from Italy were being sold at less than fair market value in the United States. Forged Steel Fluid End Blocks from the Federal Republic of Germany, India, and Italy: Initiation of Less-Than-Fair-Value Investigations , 85 Fed. Reg. 2,394 (Jan. 15, 2020). Commerce initiated an investigation on January 15, 2020, and published its Respondent Selection Memorandum that identified Lucchini Mamé Forge S.p.A. (Lucchini) and Metalcam S.p.A. (Metalcam) as mandatory respondents on February 4, 2020. Decision Memorandum for the Preliminary Affirmative Determination in the Less-Than-Fair-Value Investigation of Forged Steel Fluid End Blocks from Italy (PDM) at 2, J.A. at 82,838, ECF No. 29. Commerce sent Lucchini and Metalcam a standard initial questionnaire on February 6, 2020, requesting information about the Italian producers’ sales in the United States and costs of production. J.A. at 80,012, 80,165, ECF No. 29. Between March 3, 2020, and April 6, 2020, Metalcam and Lucchini submitted responses to each section of the initial questionnaire. J.A. at 80,318, 81,180, 81,838, 81,873, 82,081, 82,215, 82,377, ECF No. 29.
During the period that Metalcam and Lucchini submitted their questionnaire responses, the World Health Organization officially classified COVID-19 as a pandemic. WHO Director-General's opening remarks at the media briefing on COVID-19 - 11 March 2020 , WORLD HEALTH ORGANIZATION (Mar. 11, 2020) https://www.who.int/director-general/speeches/detail/who-director-general-s-opening-remarks-at-the-media-briefing-on-covid-19---11-march-2020. On March 15, 2020, the Department of Commerce issued an agency-wide memo prohibiting all travel not "mission-critical and pre-approved by senior bureau leadership." DEP'T OF COMMERCE , All Hands: Coronavirus Update (3-16-20) https://bit.ly/commercecoronavirus. The CDC issued a Level 4 travel advisory, urging all U.S. citizens to avoid international travel on March 31, 2020. CENTERS FOR DISEASE CONTROL AND PREVENTION , Global Level 4 Health Advisory: Do Not Travel (Mar. 31, 2020).
On March 26, 2020, Commerce postponed the preliminary determination in the investigation by fifty days to July 16, 2020. Forged Steel Fluid End Blocks from the Federal Republic of Germany, India and Italy: Postponement of Preliminary Determinations in the Less-Than-Fair-Value Investigations , 85 Fed. Reg. 17,042 (March 26, 2020). Commerce continued its investigation of Italian FEBs during that period, issuing supplemental questionnaires to Metalcam and Lucchini between April 9, 2020, and June 17, 2020. PDM at 4, J.A. at 82,840, ECF No. 29. Metalcam and Lucchini responded to those questionnaires between April 29, 2020, and June 29, 2020. Id. Based on the initial information gathered from Metalcam and Lucchini, Commerce issued a Preliminary Affirmative Determination of Sales at Less Than Fair Value (SLTFV), with preliminary results of a zero percent dumping margin for Metalcam and 4.84% for Lucchini. Forged Steel Fluid End Blocks from Italy: Preliminary Affirmative Determination of Sales at Less Than Fair Value, Postponement of Final Determination, and Extension of Provisional Measures (Prelim. Determination), 85 Fed. Reg. 44,500 –01 (July 23, 2020), J.A. at 82,872, ECF No. 29.
The parties submitted multiple comments after Commerce issued its Preliminary Determination and before Commerce explained its intended verification method. In Ellwood City's August 4, 2020 comments, it directly addressed concerns about the verification procedures Commerce would undertake and gave specific suggestions. Ellwood City argued: "Insofar as Commerce conducts verification or issues a verification outline for prompt response from the respondents, Commerce should instruct that the respondents must provide source accounting records and not Excel worksheets as part of an answer and, in so doing, must not change any reported data ...." J.A. at 82,911, ECF No. 29. Ellwood City continued:
As discussed, the reported costs are incomplete, distorted, and unreliable. And with Commerce's ability to conduct a traditional verification in doubt, the integrity of these proceedings is in jeopardy .... [I]f Commerce determines that further verification is warranted, we urge Commerce not to give respondents authorization to once again correct erroneous sales and cost submissions. To that end, Commerce should ask respondents to finally support the record that they have provided. To date, gaps exist and reported costs have not been supported with anything other than respondents’ say so. A decision to do otherwise would only invite further abuse of process by the respondents, particularly when they know that COVID-19 will likely prevent Commerce from conducting a robust on-site verification, as contemplated under the statute.
J.A. at 82,917–18, ECF No. 29.
On September 2, 2020, Commerce determined that "the global COVID-19 pandemic had made conducting on-site verification impossible" and thus issued questionnaires "in lieu of performing an on-site verification." Def.’s Resp. Opp'n Mot. J. Agency R. (Def.’s Resp.) at 5, ECF No. 23; Letter to Metalcam, J.A. at 3,027, ECF No. 30....
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