Hynix Semiconductor, Inc. v. U.S.

• Decision Date: 31 January 2003
• Docket Number: No. SLIP OP 03-13.,No. 01-00988.,01-00988.,SLIP OP 03-13.
• Parties: HYNIX SEMICONDUCTOR, INC., Hynix Semiconductor America, Inc., Plaintiffs, v. UNITED STATES, Defendant, and MICRON TECHNOLOGY, INC., Defendant-Intervenor.
• Court: U.S. Court of International Trade

248 F.Supp.2d 1297

HYNIX SEMICONDUCTOR, INC., Hynix Semiconductor America, Inc., Plaintiffs, v. UNITED STATES, Defendant, and MICRON TECHNOLOGY, INC., Defendant-Intervenor.

No. 01-00988.

No. SLIP OP 03-13.

United States Court of International Trade.

January 31, 2003.

Willkie Farr & Gallagher, Washington, DC (Carrie L. Owens, James P. Durling, Daniel L. Porter, Robert E. DeFrancesco, Julia K. Eppard), Washington, D.C., for Plaintiffs.

Robert D. McCallum, Jr., Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice Mark L. Josephs, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice; Patrick V. Gallagher, Jr., Senior Attorney, Office of Chief Counsel for Import Administration, U.S. Department of Commerce, for Defendant, of Counsel.

Hale & Dorr LLP, Washington, DC (Gilbert B. Kaplan, Michael D. Esch, Chris R. Revaz), Washington, D.C., for Defendant-Intervenor.

OPINION

CARMAN, Chief Judge.

This matter comes before the Court on motion for judgment upon the agency record filed by Plaintiffs Hynix Semiconductor, Inc. and Hynix Semiconductor America, Inc. ("Hynix"). Plaintiffs challenge the United States Department of Commerce's ("Commerce") final antidumping determination in the Seventh Administrative Review of certain dynamic random access memory semiconductors ("DRAMs") of one megabit or above from the Republic of Korea for the period of May 1, 1999 to December 31, 1999. See Dynamic Random Access Memory Semiconductors of One Megabit or Above From the Republic of Korea: Final Results of Antidumping Administrative Review, 66 Fed.Reg. 52,097 (Oct. 12, 2001) (`Final Results"). The Court has jurisdiction over this case pursuant to 28 U.S.C. § 1581(c) (2000).

BACKGROUND

On May 10, 1993, Commerce published the antidumping duty order on DRAMs from Korea. See Dynamic Random Access Memory Semiconductors of One Megabit or Above from the Republic of Korea, 58 Fed.Reg. 27,520 (May 10, 1993). Commerce published a notice of opportunity to request an administrative review of the antidumping duty order on DRAMs from Korea on May 16, 2000. Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review, 65 Fed. Reg. 31,141 (May 16, 2000). Micron Technology, Inc. ("Micron"), the Defendant-Intervenor in this case, requested an administrative review of Plaintiffs (two Korean DRAMs manufacturers)¹ and six Korean resellers of DRAMs for the period of May 1, 1999 to April 30, 2000. Micron also requested a cost of production ("COP") investigation of Plaintiffs pursuant to 19 U.S.C. § 1677b(b) for the period of review ("POR"). See Dynamic Random Access Memory Semiconductors of One Megabit or Above From the Republic of Korea: Preliminary Results of Antidumping Duty Administrative Review, 66 Fed.Reg. 30,688, 30,689 (June 7, 2001) ("Preliminary Results"). On May 31, 2000, Plaintiffs responded to Commerce's notice and requested that Commerce review their exports entered into the United States during the stated POR.

Commerce initiated the Seventh Administrative Review of the antidumping order on DRAMs from Korea on July 7, 2000. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocations in Part, 65 Fed.Reg. 41,942 (July 7, 2000). While the Seventh Administrative Review was pending, Commerce published the final results of a separate sunset review of the subject DRAMs from Korea. See Dynamic Random Access Memory Semiconductors ("DRAMs") of One Megabit and Above From the Republic of Korea; Final Results of Full Sunset Review and Revocation of Order, 65 Fed.Reg. 59,391 (Oct. 5, 2000) ("Final Sunset Results"). Commerce concluded that it would be unlikely that dumping of DRAMs from Korea would continue or resume. Id. at 59,391-92. Thus, the antidumping duty order was revoked effective December 31, 1999. Id. at 59,392. The revocation of the antidumping duty order shortened the POR of the Seventh Administrative Review to eight months, covering May 1, 1999 to December 31, 1999, rather than a full twelve month review period. See Preliminary Results, 66 Fed.Reg. at 30,689. DRAMs entering on or after January 1, 2000, were to be liquidated without regard to antidumping duties. Final Sunset Results, 65 Fed.Reg. at 59,392.

Commerce published the Preliminary Results of the Seventh Administrative Review on June 7, 2001. See Preliminary Results, 66 Fed.Reg. 30,688. In the Preliminary Results, Commerce calculated the dumping margin by using the sales plus POR-entries approach suggested by Plaintiffs. Id. at 30,692. The sales plus POR-entries approach included the constructed export price sales of products completed during the POR and entries of the subject merchandise that entered within the POR with sales that concluded after the POR. Id. Using this hybrid approach, Commerce arrived at a 3.01 percent dumping margin. Id. at 30,694.

Commerce published the Final Results, accompanied by the Final Decision Memorandum of the Seventh Administrative Review on October 12, 2001. See Final Results, 66 Fed.Reg. 52,097; Issues and Decision Memorandum for the Administrative Review of Dynamic Random Access Memory Semiconductors from Korea—5/1/1999 through 12/31/1999; Final Results (Oct. 5, 2001) (Pub.Doc. No. 72) (Def.'s Pub.App. Ex. 7) ("Final Decision Memorandum").

The Final Results included four determinations that Plaintiffs challenge in the instant case. First, Commerce used a different methodology to calculate the dumping margin in the Final Results than it had used in the Preliminary Results to arrive at a 2.92 percent dumping margin in the Final Results. Final Results, 66 Fed. Reg. at 52,099; Final Decision Memorandum at cmt. 7 (Pub.Doc. No. 72) (Def.'s Pub.App. Ex. 7). Instead of using the sales plus POR-entries approach as the basis for calculating the dumping margin, Commerce only used sales completed during the POR. Id. Second, Commerce recalculated Plaintiffs' reported research and development ("R & D") costs. Final Decision Memorandum at cmts. 2 and 3. Third, Commerce rejected Plaintiffs' accounting adjustments for the average useful lives ("AULs") of Plaintiffs' semiconductor equipment. Id. at cmt. 5. Fourth, Commerce rejected Plaintiffs' use of offsets to foreign currency exchange losses for the revaluation of Plaintiffs' fixed assets. Id. at cmt. 1.

Plaintiffs commenced this action on December 10, 2001, to challenge the Final Results.

STANDARD OF REVIEW

The Court will sustain Commerce's determination unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B). Substantial evidence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938); Micron Tech., Inc. v. United States, 117 F.3d 1386, 1393 (Fed.Cir.1997). "The specific determination we make is whether the evidence and reasonable inferences from the record support" Commerce's findings. Daewoo Elecs. v. Int'l Union, 6 F.3d 1511, 1520 (Fed.Cir.1993) (quoting Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927, 933 (Fed.Cir.1984)).

In determining whether Commerce's interpretation and application of the dumping duty statute is in accordance with law, the Court must consider whether "Congress has directly spoken to the precise question at issue," and if not, whether the agency's interpretation of the statute is reasonable. Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 843^4, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). "[A] court must defer to an agency's reasonable interpretation of a statute even if the court might have preferred another." Koyo Seiko Co. v. United States, 36 F.3d 1565, 1570 (Fed.Cir.1994). Additionally, the Court recognizes that "Commerce's special expertise in administrating the antidumping law entitles its decisions to deference from the courts." Ta Chen Stainless Steel Pipe, Inc. v. United States, 298 F.3d 1330, 1335 (Fed.Cir. 2002).

DISCUSSION

I. Commerce's Decision to Calculate the Dumping Margin Based Solely on Sales Completed During the Period of Review is Supported by Substantial Evidence or Otherwise in Accordance with Law.

A. Plaintiffs' Contentions

Plaintiffs believe that Commerce erred in calculating the "ultimate antidumping duty liability" because Commerce only used constructed export price sales completed during the POR to arrive at the dumping duty published in the Final Results. (Plaintiffs' Motion for Judgment Upon the Agency Record ("Pls.' Br.") at 6.) Plaintiffs contend that Commerce's approach resulted in an inaccurate and incomplete "universe of U.S. sales" upon which Commerce based the dumping calculation. (Id.) According to Plaintiffs, the basis for the dumping calculation was incomplete because Commerce did not include sales of the subject merchandise that entered the United States during the POR, but which were not shipped to the customer prior to the end of the POR. (Id. at 7.) Thus, Plaintiffs explain, these entries did not have a "sale date" during the POR and were not used by Commerce in determining the final dumping margin. (Id.) Plaintiffs argue that the dumping margin calculation was inaccurate because all POR-entries of the subject merchandise were assessed a duty, but not all POR-entries were included in calculating that duty. (Id, at 13-14.)

Plaintiffs submit that Commerce should have calculated the dumping margin using Plaintiffs' suggested sales plus POR-entries approach. (Id at 10-12.) Plaintiffs' suggested approach is not a "pure entrybased approach" seen in previous administrative reviews. (Reply Brief of Plaintiffs Hynix Semiconductor, Inc. and Hynix Semiconductor America, Inc. ("Pls.' Reply Br.") at 8.) Rather, Plaintiffs' sales plus POR-entries approach uses "all sales during the POR...