Kerr-McGee Chemical Corp. v. U.S., Slip Op. 97-2.

• Decision Date: 08 January 1997
• Docket Number: Slip Op. 97-2.,Court No. 96-02-00397.
• Citation: 955 F.Supp. 1466
• Parties: KERR-McGEE CHEMICAL CORP., et al.; Plaintiffs, v. UNITED STATES, Defendant, China Hunan International Economic Development (Group) Corporation, China Metallurgical Import & Export Hunan Corporation, and Minmetals Precious & Rare Minerals Import & Export Corporation, Defendant-Intervenors.
• Court: U.S. Court of International Trade

955 F.Supp. 1466

KERR-McGEE CHEMICAL CORP., et al.; Plaintiffs, v. UNITED STATES, Defendant China Hunan International Economic Development (Group) Corporation, China Metallurgical Import & Export Hunan Corporation, and Minmetals Precious & Rare Minerals Import & Export Corporation, Defendant-Intervenors.

Slip Op. 97-2.

Court No. 96-02-00397.

United States Court of International Trade.

January 8, 1997.

Gardner, Carton & Douglas (W.N. Harrell Smith IV, George N. Grammas), Washington, DC, for Plaintiffs Kerr-McGee Chemical Corporation and Elkem Metals Company.

Frank W. Hunger, Assistant Attorney General of the United States; David M. Cohen, Director, Jeanne E. Davidson, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Randi-Sue Rimerman), David J. Ross, Office of Chief Counsel for Import Administration, United States Department of Commerce, of Counsel, Washington, DC, for Defendant.

Dorsey & Whitney (Munford Page Hall, II, Philippe M. Bruno), Washington, DC, for Defendant-Intervenors China Hunan International Economic Development (Group) Corporation, China Metallurgical Import & Export Hunan Corporation, and Minmetals Precious & Rare Minerals Import & Export Corporation.

OPINION

CARMAN, Chief Judge:

Before this Court is plaintiffs' Motion to Settle the Record. Plaintiffs request this Court direct the Department of Commerce ("Department" or "Commerce") to restore to the administrative record plaintiffs' submissions of November 17, 1995, which consist of certain formulae and data related to the adjustment of the surrogate manganese ore chosen by Commerce for direct process chemical usage. Plaintiffs' submissions were redacted by Commerce because they allegedly contained new factual information and were not timely. Defendant and defendant-intervenors oppose plaintiffs' motion and claim ordering Commerce to include the contested documents in the administrative record would violate their due process rights. This Court has jurisdiction over the matter pursuant to 28 U.S.C. § 1581(c) (1988), and for the reasons set forth below, denies plaintiffs' Motion to Settle the Record.

BACKGROUND

Plaintiffs, Kerr-McGee Chemical Corporation and Elkem Metals Company ("Kerr-McGee"), produce manganese metal in the United States. Plaintiffs filed a petition on November 8, 1994 on behalf of the United States manganese metal industry arguing Chinese companies were dumping manganese metal. Defendant-intervenors, China Hunan International Economic Development (Group) Corporation, China Metallurgical Import & Export Hunan Corporation, and Minmetals Precious & Rare Minerals Import & Export Corporation, are located in the People's Republic of China ("PRC") and export the subject merchandise to the United States.

The PRC is a non-market economy country. In antidumping investigations involving non-market economies, the Department is required to calculate foreign market value based on information regarding the factors of production in a surrogate market economy. The statute states if the merchandise subject to an antidumping investigation is exported from a non-market economy, and "the administering authority finds that available information does not permit the normal value of the subject merchandise to be determined," 19 U.S.C. § 1677b(c)(1)(B) (1994), Commerce "shall determine the normal value of the subject merchandise on the basis of the value of the factors of production utilized in producing the merchandise." 19 U.S.C. § 1677b(c)(1) (1994). The statute requires Commerce, in valuing the factors of production, to "utilize to the extent possible, the prices or costs of factors of production in one or more market economy countries that are (A) at a level of economic development comparable to that of the nonmarket economy country, and (B) significant producers of comparable merchandise." 19 U.S.C. § 1677b(c)(4) (1994). The factors of production utilized in producing merchandise are defined to include hours of labor required, quantities of raw materials employed, amounts of energy and other utilities consumed and representative capital cost, including depreciation. See 19 U.S.C. § 1677b(c)(3) (1994). Plaintiffs proposed India be used as the surrogate country for valuing the factors of production for the antidumping investigation, because although no comparable market economy produces manganese metal, India is a country of comparable economic development to the PRC and is a significant producer of merchandise comparable to manganese metal.

Prior to the preliminary determination, Commerce considered five ores as possible surrogates for manganese ore produced in China. In evaluating the five surrogate ores, Commerce considered the Indian ores' export and domestic prices. The five potential surrogates were (1) a price submitted by plaintiffs for low ferruginous peroxide ore (82-84 percent MnO₂)¹ ("ore 1"); (2) a price submitted by defendant-intervenors for metallurgical grade manganese ore (30-35 percent Mn) from the 1993 Indian Minerals Yearbook ("ore 2"); (3) an export price obtained by the Department for low-grade manganese ore (26-28 percent Mn content) based on an actual transaction price from the July 7, 1992 issue of the TEX Report,² reporting the price agreed to in a contract between an Indian mine and two Japanese purchasers for 25,000 tons of manganese ore ("ore 3"); (4) a basket price based on grades of ore with a 30-35 percent manganese content obtained by the Department from the Indian Export Statistics ("ore 4"); and (5) an average price obtained by Commerce for total Indian production of manganese ore, not differentiated by grade, during 1991-92, from the 1993 Indian Minerals Yearbook ("ore 5") (Def.'s Chron. of Events ("Def.'s Chron.") at 1-2; Pls.' Chron. at 13.)³

In a letter to the Department dated March 20, 1995, defendant-intervenors suggested ore 2 as a possible surrogate for manganese ore produced in China. On April 12, 1995 and again on May 23, 1995, plaintiffs responded to and challenged defendant-intervenors' submissions advocating ore 2 as a surrogate. Plaintiffs argued "the price reported for the `metallurgical grade' ore cannot be used as a surrogate" because ore 2 "has an insufficient or inadequate manganese-to-iron ratio and is not comparable to ore used in manganese metal production in the PRC." (App. to Pls.' Mem. in Supp. of Mot. to Settle R. ("Pls.' App.") tab 9 at 3.) Plaintiffs cited to the affidavit of chemist and metallurgist Dr. J.C. Agarwal, who reviewed defendant-intervenors' March 17, 1995 submission to Commerce. Dr. Agarwal concluded "[b]ecause the reported `metallurgical grade' ore is used only in pig iron applications in India and priced as a premium iron ore, its price cannot be used as a surrogate for the price of manganese ore in China." (Pls.' App. tab 9, attach. 1; Agarwal Aff. at 10.) Plaintiffs did not notify Commerce ore 2 could be used if certain adjustments were made, but instead argued Commerce should use ore 1. On June 2, 1995, defendant-intervenors responded once again that ore 2 was the most suitable surrogate because it most closely resembled the Chinese manganese ore. Defendant-intervenors argued the manganese content of ore 2 more closely matched the Chinese ore than the ore proposed by the plaintiffs.

On June 14, 1995, Commerce published its preliminary determination, choosing as its surrogate the export price for ore 3 obtained by the Department for low-grade manganese ore (26-28 percent Mn content) based on an actual transaction price from the July 7, 1992 issue of the TEX Report. See Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Manganese Metal From the People's Republic of China, 60 Fed.Regs. 31,282, 31,285 (Dept.Comm.1995) (prelim.determ.) Following Commerce's publication of its preliminary determination, plaintiffs requested Commerce ascertain, during verification, the manganese-to-iron ratios of the manganese ore used by the Chinese producers in producing manganese metal. Commerce obtained the requested ratios and, on September 19, 1995, relayed them to Kerr-McGee.

On November 6, 1995, Commerce published the final determination which found imports of manganese metal from the People's Republic of China are being, or are likely to be, sold at less than fair value in the United States. See Notice of Final Determination of Sales at Less Than Fair Value: Manganese Metal From the People's Republic of China, 60 Fed.Reg. 56,045 (Dept.Comm.1995) (final determ.) In the final determination, as a surrogate for manganese ore used in China, Commerce chose ore 2, the price for metallurgical grade manganese ore (30-35 percent Mn) from the 1993 Indian Minerals Yearbook submitted by defendant-intervenors, instead of ore 3, which was used as the surrogate ore in the preliminary determination. Id. at 56,047. In the final determination, Commerce noted ore 2 "has a manganese content that is comparable to the ore used by the PRC producers and also represents a domestic price in India. We adjusted the value of the manganese ore to reflect a delivered price." Id.

On November 17, 1995, Kerr-McGee submitted to Commerce "corrections to the final dumping margin calculations," pursuant to 19 C.F.R. § 353.28 (1994), which allegedly identified "ministerial errors" made by Commerce in the final determination. (Pls.' App. tab 28.) Kerr-McGee argued it was "technically infeasible, as a matter of basic chemistry, to use the Department's surrogate ore" without "adding a reduction process and correcting for the direct process chemical usage," and it submitted adjustment formulae for Commerce to apply in making the alleged necessary adjustments. (Pls.' App. tab 28 at 2.) Plaintiffs argued Commerce erred when it adopted in its final determination an ore which is significantly less expensive than and chemically dissimilar to Chinese ore.

After publication of the final...