Nec Corp. v. U.S. Dept. of Commerce

• Decision Date: 20 August 1997
• Docket Number: Court No. 96-10-02360.,Slip Op. 97-117.
• Citation: 978 F.Supp. 314
• Parties: NEC CORPORATION and HNSX Supercomputers, Inc., Plaintiffs, v. UNITED STATES DEPARTMENT OF COMMERCE, et al., Defendants, Cray Research, Inc., Defendant-Intervenor.
• Court: U.S. Court of International Trade

978 F.Supp. 314

NEC CORPORATION and HNSX Supercomputers, Inc., Plaintiffs, v. UNITED STATES DEPARTMENT OF COMMERCE, et al., Defendants Cray Research, Inc., Defendant-Intervenor.

Slip Op. 97-117.

Court No. 96-10-02360.

United States Court of International Trade.

August 20, 1997.

Paul, Weiss, Rifkind, Wharton & Garrison, Washington, DC (Robert E. Montgomery, Jr., Terence J. Fortune, Robert P. Parker, David J. Weiler, Swati Agrawal), for Plaintiffs.

Frank W. Hunger, Assistant Attorney General; David M. Cohen, Director; Sharon

Y. Eubanks, Deputy Director, A. David Lafer, Attorney, Jeffrey M. Telep, Attorney, U.S. Department of Justice, Civil Division, Commercial Litigation Branch; Patrick V. Gallagher, Attorney-Advisor, Lucius B. Lau, Attorney-Advisor, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of counsel, Washington, DC, for Defendant.

Wilmer, Cutler & Pickering, Washington, DC (John D. Greenwald, Michael L. Burack, Charles S. Levy, Brigida Benitez, Stuart M. Weiser), for Defendant-Intervenor.

OPINION

POGUE, Judge.

Plaintiffs NEC Corp. and HNSX Supercomputers, Inc. (collectively, "NEC") commenced this action to enjoin the United States Department of Commerce ("Commerce") from conducting an antidumping investigation of Vector Supercomputers from Japan. NEC claims that Commerce prejudged the investigation.

Defendant moved to dismiss NEC's complaint for lack of jurisdiction and for failure to state a claim. See USCIT Rs. 12(b)(1) and (5). The Court denied Defendant's motion and entered an expedited trial schedule, with the intent to consolidate the preliminary injunction hearing with the trial on the merits. See NEC Corp. v. United States, 967 F.Supp. 1305 (CIT 1996).

Subsequently, the Court defined the scope of discovery and scheduled document production and depositions. See NEC Corp. v. United States, 21 CIT ___, 958 F.Supp. 624 (1997).¹ On March 4, 1997, the Court issued a protective order for documents produced by Defendant that were covered by certain statutory privileges, the attorney-client privilege, the "state secrets privilege," and the "official information" (or "deliberative process") privilege. See NEC Corp. v. United States, Court No. 96-10-02360 (Order, Mar. 4, 1997). The impending issuance of a preliminary determination in the underlying antidumping investigation prevented consolidation of the preliminary injunction hearing with the trial on the merits. The preliminary injunction hearing was held on March 14, 1997. On March 21, 1997, the Court denied NEC's application for a preliminary injunction. See NEC Corp. v. United States, Court No. 96-10-02360, (Mem. Op. and Order on Pls.' Mot. for Prelim. Inj., Mar. 21, 1997).

On April 7, 1997, Commerce issued its preliminary determination. See Vector Supercomputers from Japan, 62 Fed.Reg. 16,544, 16,547 (Dep't Commerce 1997) (prelim.determ.). NEC did not respond to the investigation questionnaire, citing the instant action as the reason for nonparticipation. Id. at 16,545. Without NEC's price information and cost data, Commerce used the "facts otherwise available"² to calculate a 454 percent dumping margin for NEC. Id.

The Court conducted a three-day trial on April 14, 15, and 21, 1997, to determine whether Commerce had prejudged the supercomputer investigation.³

STRUCTURE AND ADMINISTRATION OF THE ANTIDUMPING STATUTE

The United States antidumping statute bifurcates investigations between two different federal agencies: the Department of Commerce, which makes less than fair value determinations for a class or kind of foreign merchandise; and the International Trade Commission ("ITC"),⁴ which makes injury determinations.⁵ If Commerce determines that a class or kind of foreign merchandise is being, or is likely to be sold in the United States at less than its fair value ("LTFV," i.e., at a price which is lower than the price at which the merchandise is sold in the country of exportation or to a third country), and the ITC determines that an industry in the United States is materially injured or is threatened with material injury, or the establishment of an industry in the United States is materially retarded, by reason of imports of the subject merchandise, Commerce issues an antidumping order directing the United States Customs Service to collect antidumping duties equal to the amount by which the normal value (i.e., the price in the foreign market) exceeds the export price (i.e., the U.S. price) for the merchandise. 19 U.S.C. § 1673 (1994). That amount is the dumping margin. 19 U.S.C. § 1677(35)(A) (1994).

The antidumping law requires the Secretary of Commerce, or any other officer to whom the responsibility for carrying out the duties of the statute are transferred, to administer antidumping investigations. See 19 U.S.C. § 1677(1) (1994). Antidumping investigations may be commenced in two ways. An interested party may file a petition alleging the elements necessary for an antidumping duty, 19 U.S.C. § 1673a(b), or Commerce may self-initiate an investigation. 19 U.S.C. § 1673a(a); 19 C.F.R. § 353.11 (1996). Prior to self-initiation, Commerce prepares a "predecisional" analysis of the imports in question based on information available.⁶

Once commenced, the antidumping investigation proceeds through a preliminary and final determination, see 19 U.S.C. §§ 1673b(b), 1673d(a) (1994), unless the ITC issues a negative injury determination. See 19 U.S.C. § 1673d(c)(2),(3). The purpose of the preliminary determination is to determine whether there is a reasonable basis to believe or suspect that the merchandise which is the subject of the investigation is being sold, or is likely to be sold at LTFV. See 19 U.S.C. § 1673b(b) (1994); 19 C.F.R. § 353.15 (1996). The purpose of the final determination is to determine whether the merchandise which is the subject of the investigation is being or is likely to be sold at LTFV. See 19 U.S.C. § 1673d(a) (1994); 19 C.F.R. § 353.20. The preliminary and final determinations are based on information presented to or obtained by Commerce during the course of the proceeding. 19 U.S.C. § 1516a(b)(2) (1994) Information not placed on the record may not influence the outcome of the investigation, see id., or be considered for purposes of judicial review. See Beker Indus. Corp. v. United States, 7 CIT 313, 315-18, 1984 WL 3727 (1984).

The statute requires Commerce to hold a hearing upon the request of any interested party to the investigation prior to its final determination, see 19 U.S.C. § 1677c (1994); 19 C.F.R. § 353.38(b) (1996), and requires Commerce to address, in the final determination, arguments made at the hearing regarding the proper methodology for the dumping calculations at issue. See 19 U.S.C. § 1677f(i)(3)(A) (1994).

The statute also requires Commerce to consider information submitted by parties to an investigation, to inform a party if its submission in response to Commerce's request for information is deficient, and to provide the submitting party with an opportunity to remedy or explain its submission. See 19 U.S.C. § 1677m(d) (1994).

The statute further requires Commerce to consider information that is submitted by an interested party and is necessary to the preliminary or final determination if (1) the information is submitted within the deadline for its submission, (2) the information can be verified, (3) the information is not so incomplete that it cannot serve as a reliable basis for reaching the applicable determination, (4) the interested party has demonstrated that it acted to the best of its ability in providing the information and meeting Commerce's requirements, and (5) the information can be used without undue difficulties. See 19 U.S.C. § 1677m(e) (1994).

Additionally, the statute requires Commerce to "verify all information relied upon in making a final determination of an investigation." 19 U.S.C § 1677m(i)(1) (1994); 19 C.F.R. § 353.36(a)(1)(i) (1996).

Congress intended antidumping investigations to be "transparent." See S. Rep. No 96-249, at 38, 41 (1979), reprinted in 1979 U.S.C.C.A.N. 424, 427.⁷ Included in the record of the proceedings is a record of any ex parte meeting between interested parties, (or other persons providing factual information in connection with a proceeding), and the person charged with making the determination, (or any person charged with making a final recommendation to that person), in connection with that proceeding. See 19 U.S.C. § 1677f(3) (1994); 19 C.F.R. § 353.35 (1996). Interested parties have the opportunity to submit factual information to rebut, clarify, or correct the factual submissions of another interested party. See 19 C.F.R. § 353.31(a)(2) (1996). Interested parties also may submit case briefs that present their arguments on issues relevant to the final determination. See 19 C.F.R. § 353.38(c)(2) (1996).

Commerce addresses issues prior to and again following the preliminary determination.⁸ Commerce re-examines its analysis between the preliminary and the final determination.⁹ The investigation may produce a dumping margin in a preliminary determination that is different from the margin forecast in a self-initiated predecisional analysis (or alleged in a petition pursuant to which an investigation was initiated), and the dumping margin in the final determination may differ significantly from the dumping margin in the preliminary determination.¹⁰

Judicial review of Commerce's final determination is available in the U.S. Court of International Trade. See 28 U.S.C. § 1581(c);¹¹ 19 U.S.C. § 1516a(a)(2)(B)(i). The court reviews the determination to insure Commerce's action is in accordance with law and supported by substantial evidence. See 19 U.S.C. § 1516a(b)(1)(B)(i).

Subject to any policies and directives the Secretary may prescribe, the authority to conduct investigations and make all determinations in antidumping proceedings has been delegated to the Under Secretary for International Trade,...