Krupp Stahl AG v. US

• Citation: 822 F. Supp. 789
• Decision Date: 26 May 1993
• Docket Number: Court No. 87-02-00199.
• Parties: KRUPP STAHL A.G. and Krupp Steel Products, Inc., Plaintiffs, v. UNITED STATES, et al., Defendants, and Allegheny Ludlum Steel Corp., et al., Defendant-Intervenors.
• Court: U.S. Court of International Trade

822 F. Supp. 789

KRUPP STAHL A.G. and Krupp Steel Products, Inc., Plaintiffs, v. UNITED STATES, et al., Defendants, and Allegheny Ludlum Steel Corp., et al., Defendant-Intervenors.

Court No. 87-02-00199.

United States Court of International Trade.

May 26, 1993.

Coudert Brothers, Milo G. Coerper, Robert A. Lipstein, Matthew P. Jaffe, Washington, DC, for plaintiffs.

Stuart E. Schiffer, Acting Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civ. Div., U.S. Dept. of Justice, Velta A. Melnbrencis, Robert E. Nielsen, of counsel, Washington, DC, for defendants.

Collier, Shannon, Rill & Scott, Paul C. Rosenthal and Robin H. Gilbert, Washington, DC, for defendant-intervenors.

DiCARLO, Chief Judge:

Plaintiffs, Krupp Stahl A.G. and its subsidiary (Krupp), challenge the final determination by the International Trade Administration, Department of Commerce (ITA or Commerce), of the first administrative review of the antidumping duty order regarding certain stainless steel sheet from the Federal Republic of Germany. The issue before the court is whether Commerce properly used the preliminary dumping margin from the less-than-fair-value (LTFV) investigation, which was based on petition information and superseded by the final margin in the LTFV investigation, as best information available (BIA) for the first administrative review period. The court has jurisdiction under 19 U.S.C. § 1516a(a)(2) (1988) and 28 U.S.C. § 1581(c) (1988). Under the special circumstances of the case, the court holds that Commerce's choice of BIA is proper.

Background

The history of this case goes back to Commerce's antidumping investigation of coldrolled stainless steel sheet and strip products from Germany in 1982. The investigation was conducted with respect to Krupp and two other German manufacturers. Commerce's preliminary determination of the investigation established an estimated dumping margin for Krupp's products at 27% ad valorem. Certain Stainless Steel Sheet and Strip Products From the Federal Republic of Germany, 47 Fed.Reg. 56,529 (Dep't Comm. 1982). The 27% margin was based on the simple average margins contained in the petition, as a result of Commerce's decision to resort to the BIA in the preliminary determination. Id. at 56,530.

Commerce subsequently verified Krupp's response and published a final determination of LTFV sales, establishing a final dumping margin of 7.76% ad valorem for Krupp. Certain Stainless Steel Sheet and Strip Products From the Federal Republic of Germany, 48 Fed.Reg. 20,459 (Dep't Comm.1983). An antidumping duty order was issued accordingly following the final affirmative injury determination of the International Trade Commission. Certain Stainless Steel Sheet and Strip Products From the Federal Republic of Germany, 48 Fed.Reg. 28,680 (Dep't Comm.1983).

In July 1983, Commerce commenced the first administrative review for the period of December 17, 1982 through May 31, 1983. Krupp submitted responses to Commerce's questionnaire and other requests for additional information. The administrative review, however, was terminated upon Krupp's withdrawal of its request for the continuation of the review following the voluntary restraint agreement between the United States and the European Community in July 1986. Pursuant to the regulations implementing the Trade and Tariff Act of 1984, which provide automatic assessment of entries at rates equal to the cash deposit of or bond for estimated antidumping duties required on the merchandise at the time of entry if no review is requested, Antidumping and Countervailing Duty; Administrative Reviews on Request; Transition Provisions, 50 Fed.Reg. 32,556 (Dep't Comm.1985), Commerce instructed the Customs Service to liquidate Krupp's entries of the first review period at the deposit rate of 27%, and of the succeeding period at the rate of 7.76%.

Krupp filed this action in 1987, contesting the 27% assessment rate and seeking a rate of 7.76% for the first review period. Alternatively, Krupp requested the court to remand the proceeding to Commerce with instructions to perform an administrative review of the entries at issue. In April 1991, the court remanded the proceeding with instructions for Commerce to conduct an administrative review for the first review period, holding that the 1984 Trade and Tariff Act does not retroactively affect investigations initiated before the effective date of the Act and that Commerce had obligations to conduct that review without Krupp's request. Krupp Stahl A.G. v. United States, 15 CIT ___, Slip Op. 91-31, 1991 WL 62139 (April 19, 1991).

Pursuant to the court decision, Commerce reinstated the review for the first review period and issued a new questionnaire to Krupp. In July 1991, Krupp informed Commerce that since German law does not require retention of business records for more than five years, its business records relevant to the review period were destroyed during 1989; as a result, it was unable to respond to the new questionnaire. Thus, Krupp conceded, Commerce would not be able to conduct the review in the manner contemplated by the court, and would be forced to use the best information available. Krupp claimed, however, that Commerce should use 7.76%, the final rate determined in the LTFV investigation, as the BIA rate for the first review period.

In November 1991, Commerce published the preliminary results of the administrative review, finding 27% as the assessment rate for the review period. Cold-Rolled Stainless Steel Sheet From Germany, 56 Fed.Reg. 56,976 (Dep't Comm.1991). The preliminary results stated that, because Krupp had failed to respond to the new questionnaire and destroyed the records needed to verify the adequacy of the information contained in the earlier response, Commerce used the BIA in the review, and that the BIA rate is 27% which was the rate provided in the petition as well as the rate assigned to Krupp in the preliminary determination. Id. at 56,977.

Commerce completed its review on May 21, 1992 and the final results of the review confirmed the BIA rate of 27% for the review period. Cold-Rolled Stainless Steel Sheet from Germany, Pub.R. 837 (Final Results). Commerce decided not to publish the final results until it receives permission from the court.

Discussion

This court shall sustain a final determination of Commerce in an administrative proceeding unless that determination is "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B) (1988).

Krupp asserts that Commerce's use of the petition-based preliminary LTFV rate as BIA in the administrative review is not supported by substantial evidence on the record and is not in accordance with law based on the following allegations: (1) the use of petition information as BIA in an administrative review is prohibited by the statute; (2) the use of petition information as BIA is unsupported by substantial evidence on the record because the petition itself is not included in the record for this administrative review; (3) the use of the petition-based preliminary LTFV margin as BIA in an administrative review is an unprecedented departure from Commerce's practice; and (4) the preliminary LTFV margin cannot be used to assess antidumping duties where it differs from the final LTFV margin.

1. Commerce's Selection of Best Information Available

Commerce is authorized by statute to use best information available to it as the basis for its action if it "is unable to verify the accuracy of the information submitted," 19 U.S.C. § 1677e(b) (1988), or if a party "refuses or is unable to produce information requested in a timely manner and in the form required, or otherwise significantly impedes an investigation." Id. § 1677e(c). Because of its destruction of the records, Krupp does not dispute Commerce's resort to BIA in this administrative review. What Krupp challenges is Commerce's selection of the BIA.

The BIA statute does not define what is the "best information available" to the agency. Commerce's implementing regulations provide:

What is best information available. The best information available may include the factual information submitted in support of the petition or subsequently submitted by interested parties.... If an interested party refuses to provide factual information requested by the Secretary or otherwise impedes the proceeding, the Secretary may take that into account in determining what is the best information available.

19 C.F.R. § 353.37(b) (1992).

Under the current statutory scheme, Commerce has broad discretion in determining what constitutes the BIA in a given situation. "Once Commerce has exercised its discretion to use the best information available rule against a respondent, it is for Commerce, not the respondent, to determine what is the best information." Rhone Poulenc, Inc. v. United States, 13 CIT 218, 224, 710 F.Supp. 341, 346 (1989), aff'd, 8 Fed.Cir. (T) ___, 899 F.2d 1185 (1990) (citation omitted). "The information the ITA may use as best information includes `all information that is accessible or may be obtained, whatever its source.'" N.A.R., S.p.A., v. United States, 14 CIT 409, 416, 741 F.Supp. 936, 942 (1990) (quoting Timken Co. v. United States, 11 CIT 786, 788, 673 F.Supp. 495, 500 (1987)). The best information "is not necessarily accurate information, it is information which becomes usable because a respondent has failed to provide accurate information." Asociacion Colombiana de Exportadores de Flores v. United States, 13 CIT 13, 28, 704 F.Supp. 1114, 1126 (1989), aff'd, 8 Fed.Cir. (T) ___, 901 F.2d 1089, cert. denied sub nom. Floramerica, S.A. v. United States, 498 U.S. 848, 111 S.Ct. 136, 112 L.Ed.2d 103 (1990). And the ITA is not required to equate "best information" with "most recent information" for computing the dumping margin. Rhone Poulenc, Inc. v. United States, 899 F.2d at 1190.

More importantly, in Rhone Poulenc,...