Mittal Canada, Inc. v. U.S., Slip Op. 06-143. No. 05-00689.

Citation461 F.Supp.2d 1325
Decision Date22 September 2006
Docket NumberSlip Op. 06-143. No. 05-00689.
PartiesMITTAL CANADA, INC., Plaintiff, v. UNITED STATES, Defendant, and Gerdau Ameristeel Corp., and Keystone Consolidated Industries, Inc., Defendant-Intervenors.
CourtU.S. Court of International Trade

Cameron & Hornbostel LLP (Dennis James, Jr. and Alexandra E.A. Minoff), Washington, DC, for Plaintiff Mittal Canada, Inc.

Peter D. Keisler, Assistant Attorney General; Marisa Beth Goldstein, U.S. Department of Commerce, Office of Chief Counsel for Import Administration; Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Michael D. Panzera), for Defendant United States.

Kelley Drye Collier Shannon (Mary Tuck Staley, Paul Charles Rosenthal, and Robin H. Gilbert), Washington, DC, for Defendant-Intervenors Gerdau Ameristeel Corp. and Keystone Consolidated Industries, Inc.

OPINION

GOLDBERG, Senior Judge.

This case presents the Court with plaintiff Mittal Canada, Inc.'s ("Mittal") challenge to liquidation instructions that the United States Department of Commerce ("Commerce") issued to United States Customs and Border Protection ("Customs") on December 15, 2005. The events leading to this dispute are described in the Court's opinion of February 10, 2006 that denied Mittal's request for preliminary injunctive relief enjoining Customs from liquidating the entries at issue. See Mittal Can., Inc. v. United States, 30 CIT ____, ___ - ___, 414 F.Supp.2d 1347, 1348-50 (2006) ("Mittal-PI").

Since the denial of the preliminary injunction motion, Customs has liquidated the entries at issue consistent with the liquidation instructions that Mittal's case calls into question. Mittal has moved for summary judgment on its underlying claim, requesting that the Court enter judgment in its favor and remand to Commerce with instructions to order Customs to reliquidate the entries at 3.86 percent and refund the difference between that amount and the 8.11 percent at which they were already liquidated. See Pl.'s Br. at 36. For the reasons stated in Mittal-PI, and because in this case liquidation does not operate to divest the United States Court of International Trade ("CIT") of jurisdiction, see Shinyei Corp. of Am. v. United States, 355 F.3d 1297, 1312 (Fed. Cir.2004), the Court has jurisdiction over this case under 28 U.S.C. § 1581(i).

I. BACKGROUND

Because the parties are familiar with the background of this case, and because all relevant facts have already been recited at Mittal-PI, 30 CIT at ___, 414 F.Supp.2d at 1348-50, a lengthy description of the facts is not necessary at this stage. It suffices for the moment to note that Mittal requested and received a changed circumstances review1 of Carbon and Certain Alloy Steel Wire Rod from Canada, 67 Fed.Reg. 65944 (Dep't Commerce Oct. 29, 2002) (notice of amended final determination and antidumping duty order). That antidumping duty order had provided for a weighted average dumping margin of 3.86 percent for Ispat Sidbec Inc. ("Ispat"). The "all others" rate was 8.11 percent. The final results of the changed circumstances review acknowledged that Mittal was the successor-in-interest to Ispat, and directed Customs to require a cash deposit rate of 3.86 percent for Mittal entries occurring in the future. Commerce then instructed Customs to assess duties at the cash deposit rate in effect at the time of entry for all merchandise that had entered between October 1, 2004 and September 30, 2005 — a period that included the pendency of the changed circumstances review. Mittal's entries were accordingly liquidated at the 8.11 percent "all others" rate that was in effect at the time of those entries.

At the preliminary injunction stage in the proceedings, Mittal's argument could be characterized as broadly alleging that Commerce's instructions, by failing to order assessment at the lower rate of 3.86 percent, were contrary to the legal conclusion, articulated in the final results of the changed circumstances review, that Mittal was the successor-in-interest of Ispat. Since then, Mittal has refined its argument.

On June 19, 2006, Mittal filed a motion for judgment upon the agency record. In its motion, Mittal made two arguments: (1) that in this case the "automatic liquidation" regulation under which Commerce ordered liquidation, 19 C.F.R. § 351.212, does not require that duties be automatically liquidated at the deposit rate in effect at the time of entry; and (2) that the regulation, if it is construed to contain such a requirement, is itself arbitrary and capricious.

II. STANDARD OF REVIEW

Mittal has filed a motion for judgment on the agency record under USCIT Rule 56.1. Rule 56.1 outlines the procedures for adjudicating a motion for judgment on an agency record in "an action other than that described in 28 U.S.C. § 1581(c)." USCIT. R. 56.1. Since this case invokes the CIT's residual jurisdiction under 28 U.S.C § 1581(i), a Rule 56.1 motion is the appropriate vehicle under which to proceed.

Courts review 28 U.S.C. § 1581(i) actions as provided in 5 U.S.C. § 706. See 28 U.S.C. § 2640(e) (2000). Section 706 of Title 5 requires a reviewing court to "hold unlawful and set aside agency action, findings, and conclusions found to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law ...." 5 U.S.C. § 706(2)(A) (2000). In this case, the administrative action challenged by Mittal is the issuance of liquidation instructions directing Customs to assess antidumping duties at the deposit rate in effect at the time of entry, which was 8.11 percent for the entries at issue.

Normally, "[i]t is emphatically the province and duty of the judicial department to say what the law is," Marburg v. Madison, 5 U.S. (1 Cranch) 137, 177, 2 L.Ed. 60 (1803), but when Congress has cloaked an administrative agency with interpretive authority, the federal courts' authority is concomitantly reduced. The threshold question a court must answer is how much, if any, deference Congress has granted to the agency.

This case involves judicial review of two separate types of agency activity. First, Mittal challenges Commerce's promulgation of the automatic liquidation regulation, codified at 19 C.F.R. § 351.212. Second, Mittal challenges Commerce's interpretation of language in the automatic liquidation regulation. These questions present different problems, and merit distinct treatment by a reviewing court.

III. DISCUSSION
A. Commerce's Regulation 19 C.F.R. § 351.212 Is in Accordance with Law

Mittal contends that Commerce's automatic liquidation regulation 19 C.F.R. § 351.212 is not in accordance with law. Specifically, Mittal claims that the regulation is internally inconsistent and that the failure to provide an exemption from automatic liquidation for changed circumstances reviews is arbitrary and capricious.

1. Commerce's Promulgation of 19 C.F.R. § 351.212 Is Entitled to Chevron Deference

As noted above, the Court must determine how much, if any, deference is due to Commerce's automatic liquidation regulation. Congress delegates interpretive authority to agencies both expressly and impliedly. Where Congress has "explicitly left a gap for the agency to fill, there is an express delegation of authority to the agency to elucidate a specific provision of the statute by regulation." Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 843-44, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). In other circumstances, Congress may impliedly authorize an agency to pronounce its judgment on an issue with the force of law. See id. at 844, 104 S.Ct. 2778; see also Cathedral Candle Co. v. United States, 400 F.3d 1352, 1361 (Fed.Cir.2005). An agency has implicit authority when it is

apparent from the agency's generally conferred authority and other statutory circumstances that Congress would expect the agency to be able to speak with the force of law when it addresses ambiguity in the statute or fills a space in the enacted law, even one about which "Congress did not actually have an intent" as to a particular result.

United States v. Mead Corp., 533 U.S. 218, 229, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001) (quoting Chevron, 467 U.S. at 845, 104 S.Ct. 2778). Where Chevron deference is applicable, the court must give effect to the agency's statutory interpretation provided that the interpretation is reasonable and not arbitrary. See Lacavera v. Dudas, 441 F.3d 1380, 1383 (Fed.Cir.2006).

As a general matter, Commerce is the "master" of antidumping law, and where its rules and regulations implement a statutory provision or scheme, it is entitled to considerable deference. See Daewoo Elecs. Co. v. Int'l Union of Electronic, Electrical, Technical, Salaried & Mach. Workers, 6 F.3d 1511, 1516 (Fed.Cir.1993); Smith-Corona Group v. United States, 713 F.2d 1568, 1571 (Fed.Cir.1983). Therefore, the Court's inquiry must commence by examining the statutory provisions and scheme that purportedly authorized the regulation.

If an antidumping duty investigation determines that dumping is occurring, Commerce publishes an antidumping duty order which directs Customs to assess antidumping duties "equal to the amount by which the normal value [of the merchandise] exceeds the export price (or the constructed export price) for the merchandise...." 19 U.S.C. § 1673 (2000). The method by which Customs is to assess the duties, however, is not specified in section 1673.

Prior to 1984, Commerce conducted yearly administrative reviews for all antidumping duty orders.2 See 19 U.S.C. § 1675(a)(1) (1982); 19 C.F.R. § 353.53(a) (1983). Commerce promulgated regulations that governed the assessment of antidumping duties for merchandise subsequent to these administrative reviews. See 19 C.F.R. § 353.53(d) (1983) (requiring the publication of a revised antidumping duty order subsequent to each administrative review); id. § 353.48(a)(1) (requiring Commerce to instruct Customs to assess duties as soon as Commerce "has...

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