Ferrostaal Metals GMBH v. United States

• Decision Date: 04 May 2021
• Docket Number: Court No. 20-00018,Slip Op. 21-54
• Citation: 518 F.Supp.3d 1357
• Court: U.S. Court of International Trade
• Parties: FERROSTAAL METALS GMBH and Vnsteel-Phu My Flat Steel Co., Ltd., Plaintiffs, v. UNITED STATES, Defendant, and Nucor Corporation, United States Steel Corporation, Arcelor Mittal USA LLC, Steel Dynamics, Inc., California Steel Industries, Defendant-Intervenors.

518 F.Supp.3d 1357

FERROSTAAL METALS GMBH and Vnsteel-Phu My Flat Steel Co., Ltd., Plaintiffs,

v.UNITED STATES, Defendant,andNucor Corporation, United States Steel Corporation, Arcelor Mittal USA LLC, Steel Dynamics, Inc., California Steel Industries, Defendant-Intervenors.

Slip Op. 21-54

Court No. 20-00018

United States Court of International Trade.

May 4, 2021

Donald B. Cameron, Morris, Manning and Martin LLP, of Washington, DC, argued for plaintiffs. With him on the brief were Julie C. Mendoza, R. Will Planert, Brady W. Mills, Mary S. Hodgins, William H. Barringer, Eugene Degnan, Sabahat Chaudhary, Edward J. Thomas III and Jordan L. Fleischer.

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 Ethan P. Davis, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Elizabeth Speck, Senior Trial Counsel. Of counsel on the brief was Brendan Saslow, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

Theodore P. Brackemyre, Wiley Rein LLP, of Washington, DC, argued for defendant-intervenor Nucor Corporation. On the brief were Alan H. Price, Christopher B. Weld, and Tessa V. Capeloto, Wiley Rein LLP, of Washington, DC; Thomas M. Beline, Jeffrey B. Denning, Sarah E. Schulman, and Chase J. Dunn, Cassidy Levy Kent (USA) LLP, of Washington, DC, for defendant-intervenor United States Steel Corporation; Paul C. Rosenthal, R. Alan Luberda and Joshua Morey, Kelley Drye and Warren LLP, of Washington, DC, for defendant-intervenor Arcelor Mittal USA LLC; and Roger B. Schagrin and Christopher Cloutier, Schagrin Associates, of Washington, DC, for defendant-intervenor Steel Dynamics, Inc.

OPINION

Reif, Judge:

This action involves the final affirmative determination of circumvention by the U.S. Department of Commerce ("Commerce") of the antidumping duty and countervailing duty orders (collectively, "CRS Orders") covering certain cold-rolled steel flat products ("CRS") from the Republic of Korea ("Korea"). See Certain Cold-Rolled Steel Flat Products from the Republic of Korea: Affirmative Final Determinations of Circumvention of the Antidumping Duty and Countervailing Duty Orders , 84 Fed. Reg. 70,934 (Dep't Commerce Dec. 26, 2019) ("Final Determination"); see also the accompanying Issues and Decision Memorandum (Dep't Commerce Dec. 13, 2019) ("IDM").

Before the court is a USCIT Rule 56.2 motion for judgment on the agency record filed by plaintiffs Ferrostaal Metals Gmbh and Vnsteel-Phu My Flat Steel Co., Ltd. ("PMF").¹ Plaintiffs challenge the Final Determination and argue that: (1) the rejection of PMF's responses to the quantity and value ("Q&V") questionnaire was not in accordance with law and an abuse of discretion; and, (2) application of adverse facts available ("AFA") to determine that PMF was unable to trace its inputs was not supported by substantial evidence and was not in accordance with law. Pls.’ Br. in Supp. of Mot. J. Agency R., ECF No. 48 ("Pl. Br.") at 11-12.

This court has jurisdiction pursuant to sections 516A(a)(2)(A)(ii) and 516A(a)(2)(B)(vi) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(A)(ii) (2018) and 19 U.S.C. § 1516a(a)(2)(B)(vi) (2018),² and 28 U.S.C. § 1581(c) (2018). For the reasons set forth below, the court sustains the Final Determination.

BACKGROUND

I. Anti-Circumvention Inquiries

Dumping occurs when a foreign company sells a product in the United States for a price that is lower than the cost of production or lower than the price at which the company sells the product in its home market. See Sioux Honey Ass'n v. Hartford Fire Ins. Co. , 672 F.3d 1041, 1046 (Fed. Cir. 2012) ; see also 19 U.S.C. § 1677(34). A countervailable subsidy exists when "a foreign government provides a financial contribution, a benefit is thereby conferred, and the subsidy is specific."

POSCO v. United States , 42 CIT ––––, ––––, 353 F. Supp. 3d 1357, 1363 (2018) ; see also 19 U.S.C. § 1677(5).

Congress enacted the Tariff Act of 1930 ("Tariff Act") to empower Commerce and the U.S. International Trade Commission ("Commission") to address imports that are dumped or that benefit from countervailable subsidies and that cause injury to a domestic industry. Canadian Solar, Inc. v. United States , 918 F.3d 909, 913 (Fed. Cir. 2019). Commerce typically opens an antidumping or countervailing duty investigation in response to a petition filed by a domestic industry. Id. If Commerce determines that imports subject to investigation have been dumped or have received countervailable subsidies and the Commission determines that those imports have injured a domestic industry producing the like product, "Commerce must issue an order imposing countervailing or antidumping duties." Id.

In an anti-circumvention inquiry, Commerce determines "whether a product outside an order's literal scope should nevertheless be included within the scope to prevent circumvention of antidumping and countervailing duty orders pursuant to statutory criteria ... and regulatory criteria ...." U.K. Carbon & Graphite Co. v. United States , 37 C.I.T. 1295, 1300, 931 F. Supp. 2d 1322, 1328 (2013). When imported merchandise is completed or assembled in a third country other than the country named in the antidumping or countervailing duty order, Commerce may determine that the merchandise is circumventing the order if, "before importation into the United States, such imported merchandise is completed or assembled in another foreign country from merchandise which — (i) is subject to such order or finding, or (ii) is produced in the foreign country with respect to which such order or finding applies."³ 19 U.S.C. § 1677j(b)(1)(B). Commerce must further determine that the "process of assembly or completion in the foreign country ... is minor or insignificant" and that "the value of the merchandise produced in the foreign country ... is a significant portion of the total value of the merchandise exported to the United States." 19 U.S.C. § 1677j(b)(1)(C)-(D) ; see also Macao Commer. & Indus. Spring Mattress Mfr. v. United States , 44 CIT ––––, ––––, 437 F. Supp. 3d 1324, 1333 (2020).

II. Relevant Facts

On July 25, 2016, Commerce issued the CRS Orders on CRS from Korea. See Certain Cold-Rolled Steel Flat Products From the Republic of Korea: Affirmative Preliminary Determination of Circumvention Inquiries on the Antidumping Duty and Countervailing Duty Orders , 84 Fed. Reg. 32,875 (Dep't Commerce July 10, 2019) ("Preliminary Determination"); see also the accompanying Preliminary Decision Memorandum (Dep't Commerce June 28, 2019) ("PDM") at 1. On June 12, 2018, ArcelorMittal USA LLC, United States Steel Corporation, California Steel Industries, Nucor Corporation and Steel Dynamics, Inc. filed submissions alleging that CRS produced in Vietnam using Korean hot-rolled steel ("HRS") was circumventing the CRS Orders. PDM at 2, n.5. On August 2, 2018, Commerce initiated anti-circumvention inquiries of the CRS Orders "covering Korean-origin HRS exported to Vietnam for completion into CRS and subsequently exported to the United States." Id.

On October 5, 2018, Commerce issued Q&V questionnaires to 31 Vietnamese producers and exporters of CRS that Commerce identified as potential respondents. Id. at 3. The Q&V questionnaire asked for the total quantity of "cold-rolled coil purchased during the period November 1, 2016, through August 31, 2018, from all sources, and separately, from the Republic of Korea." Commerce's Q&V Questionnaire, PD 17 (Oct. 5, 2018). The Q&V questionnaire did not ask specifically about "the source of the substrate used in production or whether producers could trace substrates used in their production process." Pl. Br. at 3; see also Commerce's Q&V Questionnaire, PD 17 (Oct. 5, 2018). The Q&V questionnaire stated in bold that a "failure to provide accurate information or to cooperate to the best of your ability may result in [Commerce] resorting to the use of facts available and adverse inferences within the meaning of section 776 of the Tariff Act of 1930." Commerce's Q&V Questionnaire, PD 17 (Oct. 5, 2018).

On October 19, 2018, PMF submitted its response to the Q&V questionnaire ("original Q&V response"). IDM at 12; see also PMF's Rejected Q&V Questionnaire Response, PD 33 (Oct. 19, 2018). On December 14, 2018, Commerce rejected PMF's original Q&V response due to filing deficiencies. Commerce Request for Revised Q&V Questionnaire Response at 1, PD 58 (Dec. 14, 2018). Commerce explained in its notice to PMF that the original Q&V response was rejected, and, therefore, not placed on the record, because PMF failed to indicate appropriately and explain business proprietary information ("BPI") in accordance with 19 C.F.R. §§ 351.303(b)(4), 351.303(d)(2)(v) and 351.304(b)(1)(i). Id. Commerce provided PMF with an opportunity to revise its original Q&V response and set the deadline for December 19, 2018. Id. Commerce also provided instructions to PMF on how to request an extension of time, should PMF need more time to prepare the revised Q&V response. Id.

On December 28, 2018, PMF submitted its revised Q&V response ("revised Q&V response"), nine days after the deadline and without an explanation for the delay. IDM at 12. As plaintiffs note in their brief, "the underlying data was [sic] unchanged, but the [revised Q&V] response explained why [PMF's] specific quantity and value figures were business proprietary." Pl. Br. at 5. On March 4, 2019, Commerce rejected the revised Q&V response as "untimely filed" in accordance with 19 C.F.R. § 351.301(c)(1) and 19 C.F.R. § 351.104(a)(1)(iii). Commerce's Rejection of Revised Q&V Questionnaire Response at 1, PD 82 (Mar. 4, 2019); see also IDM at 15.

On March 26, 2019, Commerce selected China Steel Sumikin Vietnam Joint Stock Company and POSCO Vietnam Co., Ltd. as the mandatory respondents in the anti-circumvention...