JBF Rak LLC v. United States

• Decision Date: 08 January 2014
• Docket Number: Slip Op. 14–2.,Court No. 11–00141.
• Parties: JBF RAK LLC, Plaintiff, v. UNITED STATES, Defendant, and Mitsubishi Polyester Film, Inc. and SKC, Inc., Defendant–Intervenors.
• Court: U.S. Court of International Trade

961 F.Supp.2d 1274

JBF RAK LLC, Plaintiff,

v.UNITED STATES, Defendant,andMitsubishi Polyester Film, Inc. and SKC, Inc., Defendant–Intervenors.

Slip Op. 14–2.

Court No. 11–00141.

United States Court of

International Trade.

Jan. 8, 2014.

Jack D. Mlawski, Galvin & Mlawski, New York, NY, for Plaintiff.

Stuart F. Delery, Assistant Attorney General; Jeanne E. Davidson, Director; Patricia M. McCarthy, Assistant Director, Washington, DC, (Stephen C. Tosini), Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of counsel, George H. Kivork, Attorney, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, for Defendant.

Ronald I. Meltzer, Patrick J. McLain, David M. Horn, and Jeffrey I. Kessler, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC, for Defendant–Intervenors.

OPINION

BARZILAY, Senior Judge:

Before the court is Plaintiff JBF RAK LLC's (“JBF RAK”) motion for judgment on the agency record under USCIT Rule 56.2, challenging Defendant U.S. Department of Commerce's (“Commerce”) final results of the first administrative review covering polyethylene terephthalate film (“PET Film”) from the United Arab Emirates. See Polyethylene Terephthalate Film, Sheet, and Strip From the United Arab Emirates, 76 Fed.Reg. 22,867 (Dep't Commerce Apr. 25, 2011) (final results) (“ Final Results ”); Issues and Decision Memorandum for Polyethylene Terephthalate Film, Sheet, and Strip from the United Arab Emirates, A–520–803 (Apr. 18, 2011) (“ Issues and Decision Memorandum ”), available at http:// enforcement. trade. gov/ frn/ summary/ UAE/ 2011– 9967– 1. pdf (last visited Jan. 2, 2014). Specifically, JBF RAK challenges (1) Commerce's use of zeroing in its antidumping duty calculation; (2) Commerce's 15–Day Rule for issuing liquidation instructions; and (3) Commerce's home market sales determination. This case was stayed pending resolution of the zeroing issue presented in Union Steel v. United States, 713 F.3d 1101 (Fed.Cir.2013) (“Union Steel ”). Although the Federal Circuit concluded that Commerce's zeroing practice is lawful, JBF RAK continues to challenge Commerce's use of zeroing. The court has jurisdiction pursuant to 28 U.S.C. § 1581(c). For the reasons set forth below, the court sustains Commerce's Final Results.

I. STANDARD OF REVIEW

When reviewing Commerce's antidumping determinations under 19 U.S.C. § 1516a(a)(2)(B)(iii) and 28 U.S.C. § 1581(c), the U.S. Court of International Trade sustains Commerce's determinations, findings, or conclusions unless they are “unsupported by substantial evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i). More specifically, when reviewing agency determinations, findings, or conclusions for substantial evidence, the court assesses whether the agency action is “reasonable and supported by the record as a whole.” Nippon Steel Corp. v. United States, 458 F.3d 1345, 1352 (Fed.Cir.2006) (internal quotations and citation omitted). Substantial evidence has been described as “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Dupont Teijin Films USA v. United States, 407 F.3d 1211, 1215 (Fed.Cir.2005) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938)). Substantial evidence has also been described as “something less than the weight of the evidence, and the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence.” Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966).

Separately, the two-step framework provided in Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842–45, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), governs judicial review of Commerce's interpretation of the antidumping statute. See United States v. Eurodif S.A., 555 U.S. 305, 316, 129 S.Ct. 878, 172 L.Ed.2d 679 (2009) (Commerce's “interpretation governs in the absence of unambiguous statutory language to the contrary or unreasonable resolution of language that is ambiguous.”).

II. BACKGROUND

JBF RAK is a manufacturer and exporter of PET Film from the United Arab Emirates. JBF RAK and other interested parties requested that Commerce conduct an administrative review of the antidumping duty order on PET Film. On December 23, 2009, Commerce initiated an administrative review of the antidumping duty order on PET Film from the United Arab Emirates for the period of November 6, 2008, through October 31, 2009. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 74 Fed.Reg. 68,229 (Dep't Commerce Dec. 23, 2009). Commerce published its preliminary results and assigned JBF RAK a preliminary weighted average dumping margin of 4.76% ad valorem. See Polyethylene Terephthalate Film, Sheet, and Strip From the United Arab Emirates, 75 Fed.Reg. 78,968 (Dep't Commerce Dec. 17, 2010) (preliminary results). In the Final Results, Commerce revised the preliminary rate and assigned JBF RAK a weighted average dumping margin of 4.88% ad valorem. See Final Results, 76 Fed.Reg. 22,867.

III. DISCUSSION

A. Zeroing

JBF RAK maintains that Commerce's use of zeroing in this case is unlawful. JBF RAK advances the same argument raised in Union Steel,JTEKT Corp. v. United States, 642 F.3d 1378 (Fed.Cir.2011) (“JTEKT ”), and Dongbu Steel Co., Ltd. v. United States, 635 F.3d 1363 (Fed.Cir.2011) (“Dongbu ”), which questions whether Commerce may interpret 19 U.S.C. § 1677(35) one way in the context of an administrative review and another way in the context of an antidumping investigation. Pl. Br. 7. Even though Union Steel resolved this question, JBF RAK argues for the first time in its reply brief that the Federal Circuit's decision in Union Steel is contrary to its prior decisions in JTEKT and Dongbu. Pl. Reply Br. 4–5. JBF RAK has also indicated that it plans to appeal an adverse decision in this case and request en banc review on the issue of zeroing. See Pl. Mot. For Test Case Designation, Docket Entry No. 69 (Aug. 14, 2013).

Union Steel has resolved the zeroing issue presented here. In Union Steel, the Federal Circuit concluded that Commerce's explanation for interpreting § 1677(35) differently in administrative reviews versus investigations constitutes a reasonable interpretation of the statute under the second step of Chevron. See Union Steel, 713 F.3d at 1110. This case involves the very same issue. Pl. Br. 7.¹ Given that Union Steel is binding authority, the court must sustain Commerce's zeroing methodology in this case as a permissible interpretation of the statute. See id. at 1110.

B. 15–Day Liquidation Policy

JBF RAK also challenges Commerce's 15–day liquidation policy. It makes the following argument:

In Count five of JBF's Complaint, JBF states that [Commerce's] policy of issuing liquidation instructions fifteen days after the final results of administrative reviews ... is unlawful and contrary to this court's decision in SKF USA Inc. v. United States, Slip Op. 10–57 (CIT May 17, 2010).... See JBF Complaint 36–37. Most recently, this court awarded declaratory judgment finding Commerce's statement in the Final Results declaring its intention to issue liquidation instructions 15 days after publication of the final results is unlawful. SKF USA Inc. v. United States, Slip Op. 11–121 (CIT Oct. 4, 2011) (“ SKF VI ”). As in SKF VI, the Final Results here also stated Commerce's intention to issue assessment instructions 15 days after publication of the Final Results, necessitating Plaintiff's submission of, and the Courts [sic] issuing a Temporary Restraining Order before the expiration of the 15 day period. Thus, Plaintiff requests a declaratory judgment finding Commerce's 15 day rule is unlawful. However, Plaintiff also seeks costs as it has no confidence that Commerce will change its practice notwithstanding the declaratory judgment. Indeed, this court has held that Commerce ignored this court's decisions in analogous circumstances where it found Commerce's 15 day rule is unlawful....

Pl. Br. 18.

Defendant, however, claims that JBF RAK failed to raise this issue in the administrative proceeding before Commerce and therefore failed to exhaust its administrative remedies. Def. Br. 18. Defendant also argues (if the exhaustion requirement is waived) that Commerce's 15–day policy constitutes a reasonable interpretation of the statute. Def. Br. 19 (citing Mittal Steel Galati S.A. v. United States, 31 CIT 1121, 502 F.Supp.2d 1295 (2007)). JBF RAK, though, contends that it would have been futile to raise the issue below given that Commerce continues to apply its 15–day policy despite the SKF decisions declaring it unlawful. Pl. Reply Br. 9–10.

There is no dispute that JBF RAK failed to raise this issue before Commerce. JBF RAK amended its complaint to add this claim challenging Commerce's 15–day liquidation instruction policy. The Federal Circuit has explained that

section 2637(d) “indicates a congressional intent that, absent a strong contrary reason, the [trade] court should insist that parties exhaust their remedies before the pertinent administrative agencies.” Corus Staal BV v. United States, 502 F.3d 1370, 1379 (Fed.Cir.2007). The requirement that invocation of exhaustion be “appropriate,” however, requires that it serve some practical purpose when applied. Inquiry into the purposes served by requiring exhaustion in the particular case, and any harms caused by requiring such exhaustion, is needed to determine appropriateness.

Requiring exhaustion can protect administrative agency authority and promote judicial efficiency. McCarthy v. Madigan, 503 U.S. 140, 145, 112 S.Ct. 1081, 117 L.Ed.2d 291 (1992). The requirement can protect an agency's interest in being the initial decisionmaker in implementing the statutes defining its tasks. Id....