Nucor Corp. v. United States

• Decision Date: 06 February 2018
• Docket Number: Court No. 16–00164,Slip Op. 18–7
• Citation: 286 F.Supp.3d 1364
• Parties: NUCOR CORPORATION, Plaintiff, and ArcelorMittal USA LLC, et al., Plaintiff–Intervenors, v. UNITED STATES, Defendant, and Dongkuk Steel Mill Co., Ltd., et al., Defendant–Intervenors.
• Court: U.S. Court of International Trade

286 F.Supp.3d 1364

NUCOR CORPORATION, Plaintiff,andArcelorMittal USA LLC, et al., Plaintiff–Intervenors,

v. UNITED STATES, Defendant,andDongkuk Steel Mill Co., Ltd., et al., Defendant–Intervenors.

Slip Op. 18–7

Court No. 16–00164

United States Court of International Trade.

Dated: February 6, 2018

Timothy C. Brightbill, Wiley Rein, LLP, of Washington, DC, argued for plaintiff Nucor Corporation. With him on the brief were Alan Hayden Price, Tessa Victoria Capeloto, and Adam Milan Teslik.

Melissa Marie Brewer, Kelley Drye & Warren, LLP, of Washington, DC, for plaintiff-intervenor ArcelorMittal USA LLC.

Stephen Andrew Jones and Daniel Lawrence Schneiderman, King & Spalding, LLP, of Washington, DC, for plaintiff-intervenor AK Steel Corporation.

Jeffrey David Gerrish, Skadden Arps Slate Meagher & Flom, LLP, of Washington, DC, for plaintiff-intervenor United States Steel Corporation.

Loren Misha Preheim, Assistant Director, U.S. Department of Justice, Commercial Litigation Branch, Civil Division, of Washington, DC, argued for defendant. On the brief were Elizabeth Anne Speck, Senior Trial Counsel, Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Claudia Burke, Assistant Director. Of counsel on the brief was Catherine Dong Soon Miller, Attorney, U.S. Department of Commerce, Office of the Chief Counsel for Trade Enforcement & Compliance, of Washington, DC.

Brady Warfield Mills, Morris, Manning & Martin, LLP, of Washington, DC, argued, for defendant-intervenors Dongkuk Steel Mill Co., Ltd., Union Steel Manufacturing Co. Ltd., and the Government of Korea. With him on the brief were Donald Bertrand Cameron, Julie Clark Mendoza, Rudi Will Planert, Mary Shannon Hodgins, Eugene Degnan, Sarah Suzanne Sprinkle, and Henry Nelson La Salle Smith.

OPINION

Kelly, Judge:

This action is before the court on a United States Court of International Trade Rule 56.2 motion for judgment on the agency record challenging certain aspects of the U.S. Department of Commerce's ("Department" or "Commerce") final determination in the countervailing duty ("CVD") investigation of certain corrosion-resistant steel ("CORE") products from the Republic of Korea ("Korea"), which resulted in a CVD order. See Pl. Nucor Corp. & Pl.–Intervenors ArcelorMittal USA LLC, AK Steel Corp., & United States Steel Corp. Rule 56.2 Mot. J. Agency R. at 1, Feb. 16, 2017, ECF No. 57 ("Pl. & Pl.–Intervenors' Mot."); see also [CVD] Investigation of Certain Corrosion–Resistant Steel Products From the Republic of Korea, 81 Fed. Reg. 35,310 (Dep't Commerce June 2, 2016) (final affirmative determination, and final affirmative critical circumstances determination, in part) ("Final Results"), and accompanying Issues and Decision Memorandum for the Final Determination in the [CVD] Investigation of Certain Corrosion–Resistant Steel Products from the Republic of Korea, C–580–879, (May 24, 2016), ECF No. 31–5 ("Final Decision Memo"); see also Certain Corrosion–Resistant Steel Products From India, Italy, Republic of Korea and the People's Republic of China, 81 Fed. Reg. 48,387 (Dep't Commerce July 25, 2016) ( [CVD] order). Plaintiff, Nucor Corporation ("Nucor" or "Plaintiff"), commenced this action pursuant to section 516A of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a (2012).¹ See Summons, Aug. 24, 2016, ECF No. 1; Compl. at ¶¶ 2, 14–21, Sept. 8, 2016, ECF No. 8. Plaintiff–Intervenors ArcelorMittal USA LLC, AK Steel Corporation, and United States Steel Corporation (collectively "Plaintiff–Intervenors") join in Plaintiff's motion for judgment on the agency record. See Pl. & Pl.–Intervenors' Mot. at 1. Nucor and Plaintiff–Intervenors challenge as contrary to law, arbitrary and capricious, and unsupported by substantial evidence Commerce's determinations: (1) that the Government of Korea's ("GOK") price-setting method or standard pricing mechanism for electricity did not confer a benefit; and (2) not to apply an adverse inference that state intervention by the GOK results in electricity prices that are inconsistent with market principles.² See Mem. Pl. Nucor Corp. & Pl.–Intervenors ArcelorMittal USA LLC, AK Steel Corp., & United States Steel Corp. Supp. Mot. J. Agency R. at 2–3, Feb. 17, 2017, ECF No. 60 ("Pl. & Pl.–Intervenors' Br."); Pl. & Pl.–Intervenors' Mot at 2. Further, in the event the court concludes that Commerce's determination is contrary to law, arbitrary and capricious, or unsupported by substantial evidence, Nucor and Plaintiff–Intervenors request that the court remand this action for Commerce to consider whether the provision of electricity for less than adequate remuneration ("LTAR") provides a specific benefit to the CORE industry in Korea. See Pl. & Pl.–Intervenors' Br. at 3, 39; see also Pl. & Pl.–Intervenors' Mot. at 2.³

The court sustains Commerce's determinations that the GOK's standard pricing mechanism for electricity does not confer a benefit and that an adverse inference is not warranted concerning government intervention in electricity pricing. Accordingly, the court denies Plaintiff's request for a remand and need not reach the issue of whether the GOK's standard pricing mechanism provides a specific benefit.

BACKGROUND

On June 23, 2015, Commerce initiated a CVD investigation of certain corrosion-resistant steel products from Korea. See Certain Corrosion–Resistant Steel Products From the People's Republic of China, India, Italy, the Republic of Korea, and Taiwan, 80 Fed. Reg. 37,223 (Dep't Commerce June 30, 2015) (initiation of CVD investigations). Commerce selected Union Steel Manufacturing Co. Ltd./Dongkuk Steel Mill Co., Ltd. ("Union") and Dongbu Steel Co., Ltd./ Dongbu Incheon Steel Co., Ltd. (collectively "Dongbu") as mandatory respondents. Final Decision Memo at 2; see Decision Memorandum for the Preliminary Affirmative Determination: [CVD] Investigation of Certain Corrosion–Resistant Steel Products from the Republic of Korea at 2, C–580–879, PD 413, bar code 3413232–01 (Nov. 2, 2015) ("Prelim. Decision Memo")⁴ (citing Respondent Selection Memo, PD 79, bar code 3293311–01 (July 23, 2015) ("Resp't Selection Mem.") );⁵ see also Resp't Selection Mem. at 4, 6–7, 9–10; Section 777A(e)(2) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1677f–1(e)(2) ; 19 C.F.R. § 351.204(c)(2) (2015).⁶

In its petition, Nucor alleged that the GOK, through the Korea Electric and Power Corporation ("KEPCO"), a state-owned electricity provider, provides CORE producers with electricity for LTAR.⁷ See Pl. & Pl.–Intervenors' Br. at 4 (citing Petitioners' Petition Part 3 at 4–15, PD 4, bar code 3280986–03 (June 3, 2015) ); see also Petitioners' Petition Parts 4–5, PD 2–3, bar codes 3280986–04–05 (June 3, 2015); Petitioners' Petition Parts 6–16, PD 6–14, bar codes 3280986–06–14 (June 3, 2015) (reproducing excerpts from petitioners' petitions to Commerce and the International Trade Commission alleging material injury to the domestic industry) ). To evaluate the adequacy of remuneration for the provision of electricity by KEPCO, Commerce preliminarily determined that a tier three benchmark⁸ (i.e., consistent with market principles) was appropriate because neither a tier one benchmark (i.e., in–country market determined price) nor a tier two benchmark (i.e., world market price) were available. See Prelim. Decision Memo at 19–20; see also 19 C.F.R § 351.511(a)(2)(i)–(iii) (providing how Commerce will measure the adequacy of remuneration). To determine whether KEPCO's prices were set in accordance with market principles, Commerce analyzed KEPCO's price-setting method. Prelim. Decision Memo at 21. Commerce preliminarily found that KEPCO's price-setting method was consistent with market principles because the electricity tariff schedules in effect during the period of investigation ("POI") were

calculated by (1) distributing the overall cost according to the stages of providing electricity (generation, transmission, distribution, and sales); (2) dividing each cost into a fixed cost, variable cost, and the consumer management fee; and (3) then calculating the cost by applying the electricity load level, peak level, and the patterns of consuming electricity. Each cost was then distributed into the fixed charge and the variable charge. KEPCO then divided each cost taking into consideration the electricity load level, the usage pattern of electricity, and the volume of the electricity consumed. Costs were then distributed according to the number of consumers of each classification of electricity.

Prelim. Decision Memo at 21 (citing Questionnaire for the [GOK], Section II at 13–14, CD 110, bar code 3304996–02 (Sept. 14, 2015) ("GOK Questionnaire Section II"); 2nd Suppl. Questionnaire for the [GOK] at 6–9, CD 498, bar code 3406269–02 (Oct. 15, 2015) ("GOK Second Suppl. Questionnaire") ). Commerce preliminarily determined that KEPCO applied the same price-setting mechanism throughout the POI, and that the prices charged to the respondents pursuant to the tariff scheduleapplicable to industry users, "were consistent with KEPCO's standard pricing mechanism." Id. at 22. Accordingly, Commerce concluded that KEPCO's electricity program did not constitute LTAR so did not confer a benefit and, thus, could not be considered a countervailable subsidy. See id.

Commerce preliminarily assigned Dongbu a CVD cash deposit rate of 1.37 percent and did not assign Union a CVD cash deposit rate, as only a de minimis rate had been calculated for that respondent. See [CVD] Investigation of Certain Corrosion–Resistant Steel Products From Korea, 80 Fed. Reg. 68,842 (Dep't Commerce Nov. 6, 2015) (preliminary affirmative determination); see also 19 C.F.R. § 351.205(d) (providing instructions for assignment of cash deposits); 19 U.S.C. § 1671b(b)(4)(A) (providing that the agency "shall disregard any de minimis countervailable subsidy"). Additionally, Commerce preliminarily assigned Dongbu's rate as the "all-others" rate because it was the only calculated non-de minimis rate. Id.; ...