Nippon Steel Corp. v. U.S.

• Decision Date: 20 April 2001
• Docket Number: SLIP OP. 01-52.,No. 99-08-00466.,99-08-00466.
• Citation: 146 F.Supp.2d 835
• Parties: NIPPON STEEL CORPORATION, Plaintiff, v. The UNITED STATES, Defendant, and Bethlehem Steel Corporation, U.S. Steel Group, a Unit of USX Corporation, Ispat Inland Inc., LTV Steel Company, Inc.; Gallatin Steel, Ipsco Steel, Inc., Steel Dynamics, Inc., and Weirton Steel Corporation, Defendant-Intervenors. Bethlehem Steel Corporation, U.S. Steel Group, a Unit of USX Corporation, Ispat Inland Inc., and LTV Steel Company, Inc. Plaintiffs, v. The United States, Defendant, and Nippon Steel Corporation, Defendant-Intervenor.
• Court: U.S. Court of International Trade

Page 835

146 F.Supp.2d 835

NIPPON STEEL CORPORATION, Plaintiff, v. The UNITED STATES, Defendant, and Bethlehem Steel Corporation, U.S. Steel Group, a Unit of USX Corporation, Ispat Inland Inc., LTV Steel Company, Inc.; Gallatin Steel, Ipsco Steel, Inc., Steel Dynamics, Inc., and Weirton Steel Corporation, Defendant-Intervenors.

Bethlehem Steel Corporation, U.S. Steel Group, a Unit of USX Corporation, Ispat Inland Inc., and LTV Steel Company, Inc. Plaintiffs, v. The United States, Defendant, and Nippon Steel Corporation, Defendant-Intervenor.

SLIP OP. 01-52.

No. 99-08-00466.

United States Court of International Trade.

April 20, 2001.

Gibson, Dunn & Crutcher LLP, Washington, DC (Daniel J. Plaine, Gracia M. Berg, Merritt R. Blakeslee, and Seth M.M. Stodder), for plaintiff Nippon Steel Corporation.

Skadden, Arps, Slate, Meagher & Flom LLP, Washington, DC (Robert E. Lighthizer and John J. Mangan), for plaintiffs Bethlehem Steel Corporation, U.S. Steel Group, a unit of USX Corporation, Ispat Inland, Inc. and LTV Steel Company, Inc.

Stuart E. Schiffer, Acting Assistant Attorney General, David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC (Kyle E. Chadwick), John D. McInerney, Elizabeth C. Seastrum, and Linda S. Chang, Office of the Chief Counsel, Washington, DC, for Import Administration, United States Department of Commerce, for defendant, of counsel.

Schagrin Associates (Roger B. Schagrin), for defendant-intervenors Gallatin Steel, IPSCO Steel, Inc., Steel Dynamics, Inc. and Weirton Steel Corp.

OPINION

RESTANI, Judge.

This challenge to Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Japan, 64 Fed.Reg. 24,329 (Dep't Comm.1999) (final admin. rev.) ["Final Results"] is before the court following a remand determination ("Remand Determ.") by the United States Department of Commerce ("Commerce" or "the Department"). Plaintiff Nippon Steel Corporation ("NSC"), one of the respondents in the underlying antidumping duty investigation, argues that (1) the Department has failed to implement properly this court's injunction regarding the placement on record of memoranda on ex parte meetings, and (2) the Department continues to rely impermissibly on adverse facts available without adequately supporting the requisite finding that NSC "failed to cooperate by not acting to the best of its ability." 19 U.S.C. § 1677e(b) (1994). Familiarity with the opinion ordering remand is presumed. See Nippon Steel Corp. v. United States, 118 F.Supp.2d 1366 (CIT 2000) ("Nippon I").

I. Ex Parte Meetings

In its earlier opinion, the court found that Commerce violated 19 U.S.C. § 1677f(a)(3) because the Department had failed to place in the administrative record any memoranda recording the agency's ex parte meetings with petitioners. See id. at 1372-74. The court therefore ordered the Department to

issue instructions that ex parte memoranda required by 19 U.S.C. § 1677f(a)(3) will be drafted expeditiously in all cases, reviewed by a person in attendance at the meeting, and placed in the record as soon as possible, so that parties may comment effectively on the factual matters presented. The memoranda are required whether or not the factual information received was received previously, is expected to be received later in the proceedings, or is expected to be used or relied on.

Id. at 1374. Commerce attempted to comply with this court's injunction by circulating a policy statement on ex parte memoranda to Import Administration staff. See Def.'s Reply Br. at 13 & Attach. Because that statement was not published and apparently failed to include all the stated elements of the court's instruction, NSC challenged the Department's policy statement as inconsistent with the court's injunction. The court subsequently issued an Order to Show Cause as to why the Assistant Secretary for Import Administration should not be held in contempt for not obeying in full the court's injunction. At the show cause hearing on February 15, 2001, while maintaining that the injunction had been obeyed, representatives from the Department agreed to comply more fully with the court's injunction and to take additional measures to ensure that all Commerce officials were aware of their statutory obligations under 19 U.S.C. § 1677f(a)(3).

On March 28, 2001, the Department published in the Federal Register a revised policy statement. See Policy Statement Regarding Issuance of Ex Parte Memoranda, 66 Fed.Reg. 16,906 (Dep't Comm.2001). This policy statement is also available on the Web site of the International Trade Administration, at http://ia.ita.doc.gov/policy/ex-parte-memo. htm. Upon reviewing the Department's statement, the court finds that the agency has complied with the court's injunction in Nippon I.

II. Use of Adverse Facts Available

A cooperating respondent's failure simply to respond completely or correctly to the Department's initial request for specific information does not warrant resort by the agency to facts otherwise available under 19 U.S.C. § 1677e(a)(2)(B). See 19 U.S.C. §§ 1677e(a); 1677m(d). See also Ta Chen Stainless Steel Pipe, Inc. v. United States, No. 97-08-01344, 1999 WL 1001194, at *17 (CIT 1999) ("Ta Chen I"). If a cooperating respondent fails to respond adequately to Commerce's supplemental request for information, the Department may then use facts otherwise available in lieu of missing or incomplete data. See 19 U.S.C. §§ 1677e(a); 1677m(d). See also NTN Bearing Corp. v. United States, 132 F.Supp.2d 1102, 1109 (CIT 2001); SKF USA Inc. v. United States, 116 F.Supp.2d 1257, 1268 (CIT 2000). "Once Commerce has determined under 19 U.S.C. § 1677e(a) that it may resort to facts available, it must make additional findings prior to applying 19 U.S.C. § 1677e(b) and drawing an adverse inference." Ferro Union, Inc. v. United States, 44 F.Supp.2d 1310, 1329 (CIT 1999) ("Ferro Union I").¹ Where, as here, a respondent gives an incorrect response to one of the Department's requests for information in an original and one supplemental questionnaire, such error may justify reliance on facts otherwise available under 19 U.S.C. § 1677e(a)(2)(B), but does not suffice, in the absence of further evidence, to permit an adverse inference to be drawn against the respondent. See Nippon I, 118 F.Supp.2d at 1377-79.

The Department, therefore, must cite factors beyond NSC's failure to respond correctly to the agency's two requests for the weight conversion factor. In its remand determination, Commerce attempts to support its application of adverse facts available against NSC with the following observations: (1) NSC has had significant experience with antidumping proceedings; (2) NSC provided "incorrect" responses when the Department asked repeatedly for the weight conversion factor because NSC failed to make the requisite internal inquiries to retrieve the requested information; and (3) the weight conversion factor was within NSC's control, and NSC was therefore fully capable of complying with the Department's requests. Because these observations still do not support a finding that NSC's actions rose above "a simple mistake," id. at 1379, the Department's determination is unsupported by substantial evidence.

A. Evidence Cited by Commerce to Support the Use of Adverse Facts Available

First, NSC's status as "one of the most successful and sophisticated steel companies in the world [with] significant prior experience with dumping proceedings," Remand Determ. at 3, is irrelevant to whether NSC acted to the best of its ability in this case. This is not a case where the Department points to the respondent's prior participation in dumping proceedings as a basis for rejecting data that fails to satisfy the Department's procedures or standards for the submission of data.² Nor is this a case where the Department highlights an error made by the respondent in a previous review and which the respondent continues to make in the current review, as evidence of the respondent's unwillingness to comply with the Department's requests for information.³ Rather, Commerce here seeks to base its evaluation of NSC's failure to submit a weight conversion factor, in part, on NSC's experience as a respondent in dumping proceedings. A generalized familiarity with antidumping proceedings, however, cannot support a finding that NSC did not cooperate to the best of its ability because it failed to provide the answer to one esoteric question posed by the Department.⁴ In this facts available context, generic experience as a respondent offers no insight into NSC's actions during the current proceeding. The department has not shown, for example, that the inadvertence claimed in this case also occurred in another review, or that the specific element focused on in a previous review (e.g., weight conversion factor, major input valuation) is also at issue in this case. To allow the Department to draw detailed conclusions about respondent because of its generalized knowledge would improperly penalize now those firms that had been the subject of antidumping actions previously.

Second, in reiterating NSC's failure to provide the weight conversion factor, the Department conflates the prerequisites for use of facts available with the additional findings necessary to warrant an adverse inference. See Remand Determ. at 4-5 (citing respondent's inaccurate responses to original and supplemental questionnaire as support for adverse inference); Def.'s Reply Br. at 6 (same). Commerce's reasoning in this regard is encapsulated in the following paragraph from the Remand Determination:

A "reasonable respondent," acting to the "best of its ability" to comply with the Department's request for [weight conversion factors], would minimally have contacted the factory, where the steel coils were produced and where weighing was most likely to take place, to determine whether they were weighed and the weight data maintained. A "reasonable r...