Ltd. v. United States

• Decision Date: 09 August 2010
• Docket Number: Slip Op. 10-87.,Court No. 09-00012.
• Citation: 722 F.Supp.2d 1322
• Parties: TIANJIN MAGNESIUM INTERNATIONAL CO., LTD., Plaintiff, v. UNITED STATES, Defendant, and US Magnesium LLC, Defendant-Intervenor.
• Court: U.S. Court of International Trade

722 F.Supp.2d 1322

TIANJIN MAGNESIUM INTERNATIONAL CO., LTD., Plaintiff,

v. UNITED STATES, Defendant,andUS Magnesium LLC, Defendant-Intervenor.

Slip Op. 10-87. Court No. 09-00012.

United States Court of International Trade.

Aug. 9, 2010.

COPYRIGHT MATERIAL OMITTED.

COPYRIGHT MATERIAL OMITTED.

Riggle & Craven (David A. Riggle, David J. Craven, Chicago, IL, and Shitao Zhu), for Plaintiff Tianjin Magnesium International Co., Ltd.

Tony West, Assistant Attorney General; Jeanne E. Davidson, Director; Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, United States Department of Justice (David S. Silverbrand and Patryk J. Drescher), for Defendant United States.

King & Spalding, LLP (Stephen A. Jones, Jeffrey B. Denning, and Jeffrey M. Telep), Washington, DC, for Defendant-Intervenor, U.S. Magnesium LLC.

Before: TSOUCALAS, Senior Judge.

OPINION

TSOUCALAS, Senior Judge.

Plaintiff Tianjin Magnesium International Co., Ltd., (“TMI”) and Defendant Intervenor U.S. Magnesium LLC (“USM”) each move for judgment on the agency record pursuant to USCIT R. 56.2, challenging the final determination of the Department of Commerce (the “Department” or “Commerce”) in Pure Magnesium from the People's Republic of China: Final Results of Antidumping Duty Administrative Review, 73 Fed.Reg. 76,336 (Dep't Commerce Dec. 16, 2008) (“ Final Results”).

Plaintiff asserts that Commerce acted arbitrarily, capriciously, and not in accordance with law when it revoked its previous decision to defer administrative review by one year and also caused TMI irreparable harm when it failed to provide notice of the rescission. Plaintiff further claims that the Department incorrectly calculated the surrogate financial ratios. See Mem. in Supp. of the Mot. for J. on the Agency R. Submitted by Pl. TMI (“TMI's Br.”); see also Def.'s Resp. in Opp'n to Pl.'s and Def. Intervenor's Mots. for J. Upon the Agency R. (“Def.'s Br.”); USM's Resp. to TMI's Br. in Supp. of Mot. for J. on the Agency R. (“USM's Resp.”); Reply of Pl. TMI (“TMI's Reply”). Defendant Intervenor moves that Commerce's actions were not supported by substantial evidence and in accordance with law when it (1) assessed the surrogate value for TMI's magnesium byproduct; (2) used Indian domestic data to assign a surrogate value for dolomite; (3) failed to select the best available financial statement to value the financial ratios; and (4) refused to apply a combination rate to TMI. See USM's R. 56.2 Confidential Br. in Supp. of Mot. for J. on the Agency R. (“USM's Br.”); see also Resp. Br. of TMI to the R. 56.2 Mot. of USM (“TMI's Resp.”); Reply Br. of USM (“USM's Reply”).

PROCEDURAL HISTORY

In accordance with Section 751 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1675 (2006) ¹ and 19 C.F.R. § 351.213(b), Commerce published notice of an opportunity to request administrative review for exporters or producers covered by the antidumping duty order for pure magnesium from the People's Republic of China (“PRC”) during the period of review from May 1, 2006, through April 30, 2007 (the “POR”). See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 72 Fed.Reg. 23,796 (Dep't Commerce May 1, 2007). Pursuant to that announcement, both TMI and Economic Consulting Services, LLC (“ECS”), an agent of USM, requested review of TMI's exports. See PR 2. ² Plaintiff also asked that the review be deferred for one year and consolidated with the next administrative review (“TMI's deferral request”). See PR 3.

On June 29, 2007, the Department initiated administrative review with respect to another respondent, Shanxi Datuhe Coke & Chemicals Co., Ltd., (“Datuhe”) and, in the same notice, granted TMI's deferral request. ³ See Initiation of Antidumping and Countervailing Duty Administrative Reviews, Request for Revocation in Part and Deferral of Administrative Review, 72 Fed.Reg. 35,690 (Dep't Commerce June 29, 2007). However, several months later, the Department proceeded to initiate administrative review with respect to TMI. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 73 Fed.Reg. 4,829 (Dep't Commerce Jan. 28, 2008). ⁴ On June 9, 2008, the Department published its preliminary determination. See Pure Magnesium from the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review, 73 Fed.Reg. 32,549 (Dep't Commerce June 9, 2008) (“ Preliminary Results”). Later that year, Commerce issued the Final Results, incorporating by reference an internal issues and decisions memorandum (“Decision Mem.”). See PR 119.

This consolidated action ensued. In the meantime, Defendant sought leave of the Court to purportedly correct ministerial errors affecting TMI's dumping margin, which was denied because of the Department's failure to adequately prove that the corrections it intended to effect were in fact “ministerial”. Notwithstanding USM's June 4, 2009, motion for the Court's reconsideration, the Court conclusively determined that the Department's acts the Final Results were intentional.

JURISDICTION & STANDARD OF REVIEW

The Court exercises jurisdiction under 28 U.S.C. § 1581(c) and 19 U.S.C. § 1516a(a)(2)(B)(iii). The Court will uphold Commerce's determination unless “unsupported by substantial evidence on the record, or otherwise not in accordance with law.” § 1516a (b)(1)(B)(i). This standard requires that Commerce thoroughly examine the record and “articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made.” Motor Vehicle Mfrs. Ass'n of the U.S., Inc., v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983) (internal quotation omitted). Substantial evidence is “more than a mere scintilla.” Consol. Edison Co. v. Nat'l Labor Relations Bd., 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938). It means “ ‘such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.’ ” Longkou Haimeng Mach. Co. v. United States, 33 CIT ----, 617 F.Supp.2d 1363, 1366 (2009) ( quoting Huaiyin Foreign Trade Corp. (30) v. United States, 322 F.3d 1369, 1374 (Fed.Cir.2003)).

DISCUSSION

A. Initiation of Administrative Review

In accordance with 19 C.F.R. § 351.213(c), ⁵ TMI requested a one year postponement of its administrative review, serving its deferral request on the Department and on USM's legal counsel of the previous review, King & Spalding, LLP. See PR 3. Commerce granted TMI's deferral request, noting that it received no timely objections. See 72 Fed.Reg. at 35,690, 92. However, shortly thereafter, ECS wrote a letter protesting the fact that it was not served with TMI's deferral request and asking Commerce to permit an objection out of time. See PR 6. Once the objection was filed, Commerce granted ECS the extension and initiated review of TMI, effectively rescinding its previous postponement of TMI's administrative review. See PR 17; Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request For Revocation in Part, 72 Fed.Reg. 4,829 (Dep't Commerce Jan. 28, 2008).

TMI urges that it satisfied the regulatory directive to serve the deferral request “on the petitioner” ⁶ when it completed service on King & Spalding. Plaintiff further maintains that serving ECS would have been improper since ECS engaged in the unauthorized practice of law by filing documents containing legal arguments before Commerce. See TMI's Br. at 15. Additionally, TMI was aware that King & Spalding was USM's counsel in the previous administrative review. Since communication through a party's attorney is mandated when a licensed attorney knows that the other party is represented by counsel, TMI claims that serving ECS would have risked an ethical breach. See id. at 14-19. TMI also stresses that Commerce's regulations do not require service on more than one representative of the petitioner, nor had the Department issued a service list at that time. See id. at 14. Further, Plaintiff avers that it had “no certain knowledge” that USM had any other representative. Id.

Lastly, TMI maintains that it was reasonably entitled to rely on Commerce's original determination, duly published in the Federal Register. Prior to revoking that deferral, claims Plaintiff, the Department was obligated to provide notice and an opportunity to comment, without which TMI was unduly burdened and deprived of its due process rights. See id. at 21. Considering the sheer volume of information that had to be processed within the constraints of the statute of limitations, TMI asserts that it was unprepared to participate in an administrative review, thus suffering substantial injury. See id. at 20-25.

While TMI's claims may be valid, they are rendered moot. 28 U.S.C. § 2637(d) provides that “the Court of International Trade shall, where appropriate, require the exhaustion of administrative remedies.” By failing to raise this issue at the administrative level TMI has foreclosed an avenue of possible relief and precluded review at this forum. Although the decision to apply exhaustion principles in trade cases is not mandatory, this Court “generally takes a strict view of the requirement that parties exhaust their administrative remedies before the Department of Commerce in trade cases.” Corus Staal BV v. United States, 502 F.3d 1370, 1379 (Fed.Cir.2007); See also Norsk Hydro Can., Inc. v. United States, 472 F.3d 1347, 1356 n. 17 (Fed.Cir.2006). Commerce's regulations augment the guidance of the pertinent statute and case law, unequivocally requiring TMI to raise these arguments administratively. See 19 C.F.R. § 351.309(c)(2) (“[t]he case brief must present all arguments that continue in the submitter's view to be relevant to the Secretary's final determination ... including any arguments presented before the date of publication of the...