Neenah Foundry Co. v. U.S.
| Decision Date | 02 April 2001 |
| Docket Number | Slip Op. 01-37.,Court No. 99-07-00441. |
| Citation | 142 F.Supp.2d 1008 |
| Parties | NEENAH FOUNDRY CO.; Alhambra Foundry Inc.; Allegheny Foundry Co.; Deeter Foundry Inc.; East Jordan Iron Works, Inc.; Lebaron Foundry Inc.; Municipal Castings, Inc.; and U.S. Foundry & Manufacturing Co., Plaintiffs, v. The United States, Defendant. |
| Court | U.S. Court of International Trade |
Collier Shannon Scott, PLLC, Washington, DC (Paul C. Rosenthal, Robin H. Gilbert and Mary T. Staley) for the plaintiffs.
Stuart E. Schiffer, Acting Assistant Attorney General; David M. Cohen, Director, and Velta A. Melnbrencis, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice; and Office of Chief Counsel for Import Administration, U.S. Department of Commerce, Washington, DC (Robert E. Nielsen), of counsel, for the defendant.
As pointed out in the slip opinion 00-7 (Jan. 20, 2000) filed in this case and reported at 24 CIT ___, 86 F.Supp.2d 1308, and in the 24 CIT ___, 2000 WL 364171 (March 31, 2000), filed in the related case numbered 99-11-00716, the plaintiffs contest not only the Amended Final Results of Expedited Sunset Review: Iron Metal Castings From India, 64 Fed.Reg. 37,509 (July 12, 1999), which were published by the International Trade Administration, U.S. Department of Commerce ("ITA"), but also the "sunset review" determination of the International Trade Commission ("ITC") pursuant to 19 U.S.C. § 1675(c)(1) (1995) that revocation of the countervailing duty order on iron metal castings from India would not be likely to lead to continuation or recurrence of material injury to an industry in the United States within a reasonably foreseeable time.
Iron Metal Castings From India; Heavy Iron Construction Castings From Brazil; and Iron Construction Castings From Brazil, Canada, and China, 64 Fed.Reg. 58,442 (Oct. 29, 1999). That determination led the ITA to publish its notice of Revocation of Countervailing Duty Order: Iron Metal Castings From India, 64 Fed.Reg. 61,602 (Nov. 12, 1999).
Plaintiffs' complaint against the ITA focuses on the agency's July 1999 Amended Final Results, supra, averring in one count that they are not supported by substantial evidence on the record or otherwise in accordance with law and in a second count that the ITA's determination of countervailable subsidy rates is "erroneous, being significantly understated." Plaintiffs' motion for judgment upon the agency record, subsequently filed pursuant to CIT Rule 56.2, specifies the following grounds for its complaint, to wit: (a) The Engineering Export Promotion Council of India ("EEPC") was not entitled to comment on the ITA's Final Results of Expedited Sunset Review: Iron Metal Castings From India, 64 Fed.Reg. 30,316 (June 7, 1999), because it had waived participation in the underlying administrative proceeding; (b) to the extent the domestic industry [plaintiffs herein] pointed to ministerial errors in that review, the EEPC's attempted reply thereto was untimely; (c) even if the ITA had been at liberty to take the EEPC's views into account, the agency could not have concluded from the record developed that India's International Price Reimbursement Scheme ("IPRS") and Cash Compensatory Support ("CCS") program had been completely discontinued; and (d) the ITA erred in its method of calculating subsidy rates for programs countervailed subsequent to the original investigation.
The ITA commenced its review of the countervailing-duty order1 at issue in accordance with 19 U.S.C. § 1675(c) (1995)2 to determine whether revocation of that order would be likely to lead to continuation or recurrence of a countervailable subsidy. Notice of Initiation of Five-Year ("Sunset") Reviews, 63 Fed.Reg. 58,709 (Nov. 2, 1998). The agency received a timely-filed notice of intent to participate, as well as a complete substantive response, on behalf of the Municipal Castings Fair Trade Council and its individual members, the plaintiffs now at bar. The EEPC filed a waiver on behalf of the Indian exporters subject to the order, while their government did not respond to the notice of initiation.
In the absence of any substantive response by a respondent interested party, the ITA proceeded with an expedited review of the order and determined that its revocation would be likely to lead to continuation or recurrence of a countervailable subsidy, at rates ranging from 0.84 to 1.82 percent. See Final Results, 64 Fed. Reg. at 30,320. The domestic petitioners commented that those Final Results reflected certain ministerial errors. Specifically, according to them, the ITA
failed to include the subsidy rate for ... IPRS ... in its final results .... The domestic industry, citing the Sunset Policy Bulletin, stated that the Department normally "will not make adjustments to the net countervailable subsidy rate for programs that still exist, but were modified subsequent to the order ... to eliminate exports to the United States (or subject merchandise) from eligibility." The domestic industry argued that Indian foundries that exported heavy castings ... to the United States were simply told not to make claims for IPRS benefits on those castings. Further, the domestic industry argued that there has never been any termination of the IPRS program overall, and the program continues today.
64 Fed.Reg. at 37,510. The agency thereupon accepted rebuttal from the EEPC, which
argued that the domestic industry was incorrect in stating that the IPRS program continues to exist [and] asserted that the Department has information on the record of the 1994 administrative review segment of this proceeding stating that the Indian Ministry of Commerce withdrew the IPRS, effective April 1, 1994. Further, the EEPC state[d] that this withdrawal applied to all exporters and all products.
Id. This caused the petitioners to retort
that the EEPC ha[d] waived its right to participate in this sunset review ... and the Department should, therefore, reject the EEPC's ... submission. Furthermore, the domestic industry state[d] that it knows of no finding that the IPRS has been terminated, with respect to all exporters and all products.
The ITA issued its Amended Final Results, conceding that it had committed a ministerial error but explaining that the necessary correction left the net subsidy rate unchanged:
... The Department's decision to consider the IPRS program terminated based upon the fact that the program had been modified to exclude exports of heavy castings to the United States was ... in error because reliance on modification as a basis for finding a program completely terminated is inconsistent with our Sunset Policy Bulletin.
However, based on the domestic industry's ministerial allegation and the EEPC's reply, the Department has reexamined all relevant information pertaining to the termination of the IPRS program. The Department located a submission from the Indian Ministry of Commerce, dated April 4, 1994, which demonstrates that the Government of India has fully and completely eliminated the IPRS program (see November 19, 1996 Verification Report ..., placed on the record of this sunset review on July 2, 1999). Specifically, the Indian Ministry of Commerce states that "it has been decided to withdraw the ... IPRS[] with effect from 01.4.1994, i.e. benefits under the scheme would be available for eligible engineering goods exports shipped up to ... 31.3.1994 only." (Id.) Consistent with our Sunset Policy Bulletin ..., this evidence of the complete and total withdrawal of the IPRS program is the appropriate basis for the Department's finding that the IPRS program is terminated. The Department's correction of its ministerial error ... does not change the net subsidy rate reported in the original final determination of this sunset review.
Id. (footnotes omitted). The agency also disagreed that the EEPC's comments should have been disregarded, reporting that its regulations
provide[ ] that if a respondent interested party waives participation in the sunset review ..., the Department will not accept or consider any unsolicited submissions from that party during the course of the review. The EEPC's submission, however, was not made during the course of the sunset review. Rather, the EEPC filed a reply to ministerial error comments made by the domestic industry after the Department had issued its final determination ....
Id. (emphasis in original).
(1)
In enacting URAA, Congress has mandated expedited procedures for five-year, sunset reviews whenever there is no or inadequate response by interested parties to a notice of initiation by the ITA.3 In an action such as this, contesting an expedited determination under 19 U.S.C. § 1675(c)(3), this court shall hold it unlawful if it is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(ii). See 19 U.S.C. § 1516a(a)(1)(D).
The defendant asserts herein that the substantial-evidence standard should apply, but the statute and its legislative history are clear that such standard does not govern an expedited sunset review. Specifically, URAA amended 19 U.S.C. § 1516a
to apply the arbitrary and capricious standard of review ... [to] final determinations by Commerce and the Commission under section 751(c)(3). Determinations under section 751(c)(3) will be based on limited information in the record resulting from no response or inadequate response to the notice of initiation. Therefore, such determinations should not be subject to the substantial evidence standard of review. The substantial evidence standard will apply to final determinations under section 752 which are made on the basis of a fully developed record. This is consistent with the legislative history of the 1979 [Trade Agreements] Act establishing two standards of review for certain antidumping and countervailing duty...
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