Nucor Corp. v. United States

• Decision Date: 05 October 2022
• Docket Number: Slip Op. 22-116,Court No. 21-00182
• Citation: 600 F.Supp.3d 1225
• Parties: NUCOR CORPORATION, Plaintiff, v. UNITED STATES, Defendant, and POSCO, Defendant-Intervenor.
• Court: U.S. Court of International Trade

600 F.Supp.3d 1225

NUCOR CORPORATION, Plaintiff,

v. UNITED STATES, Defendant,andPOSCO, Defendant-Intervenor.

Slip Op. 22-116

Court No. 21-00182

United States Court of International Trade.

October 5, 2022

Maureen E. Thorson, Wiley Rein LLP, of Washington, DC, argued for Plaintiff. On the brief were Alan H. Price, Christopher B. Weld, Derick G. Holt, Adam M. Teslik, and Theodore P. Brackemyre.

Kelly A. Krystyniak, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for Defendant. With her on the brief were Brian M. Boynton, Principal Deputy Assistant Attorney General, Patricia M. McCarthy, Director, and Tara K. Hogan, Assistant Director. Of counsel on the brief was Reza Karamloo, Assistant Chief Counsel, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

Donald B. Cameron, Morris, Manning & Martin, LLP, of Washington, DC, argued for Defendant-Intervenor. With him on the brief were Brady W. Mills, Julie C. Mendoza, R. Will Planert, Mary S. Hodgins, Eugene Degnan, Edward J. Thomas III, Jordan L. Fleischer, and Nicholas C. Duffy.

OPINION AND ORDER

Mark A. Barnett, Chief Judge Plaintiff Nucor Corporation ("Nucor") challenges the U.S. Department of Commerce's ("Commerce" or "the agency") final results in the 2018 administrative review of the countervailing duty ("CVD") order on certain carbon and alloy steel cut-to-length plate ("CTL plate") from the Republic of Korea ("Korea"). Compl., ECF No. 5; Certain Carbon and Alloy Steel Cut-to-Length Plate From the Republic of Korea , 86 Fed. Reg. 15,184 (Dep't Commerce Mar. 22, 2021) (final results and partial rescission of [CVD] admin. review, 2018) (" Final Results "), ECF No. 18-4, and accompanying Issues and Decision Mem., C-580-888 (Mar. 16, 2021) ("I&D Mem."), ECF No. 18-5.¹

Nucor challenges Commerce's determination not to initiate an investigation into the alleged provision of off-peak electricity for less than adequate remuneration (sometimes referred to as "LTAR") and Commerce's determination that mandatory respondent POSCO and its affiliate POSCO Plantec ("Plantec") do not meet the requirements necessary to find a cross-owned input supplier relationship. Confid. [Nucor's] Rule 56.2 Mot. for J. on the Agency R. and accompanying Mem. in Supp. of its Rule 56.2 Mot. for J. on the Agency R. ("Nucor's Mem.") at 18–45, ECF No. 22; Confid. [Nucor's] Reply Br. ("Nucor's Reply") at 1–14, ECF No. 41. Defendant United States ("the Government") and Defendant-Intervenor POSCO urge the court to sustain the Final Results . Confid. Def.’s Resp. to Pl.’s Mot. for J. on the Agency R. ("Def.’s Resp.") at 6–25, ECF No. 31; Confid. Def.-Int. POSCO's Br. in Resp. to Pl.’s Mot. for J. on the Agency R. ("POSCO's Resp.") at 8–23, ECF No. 36.

For the following reasons, the court sustains in part and remands in part Commerce's Final Results.

BACKGROUND

I. CVD Overview

A countervailable subsidy "exists when ... a foreign government provides a financial contribution ... to a specific industry" that confers "a benefit" on "a recipient within the industry." Fine Furniture (Shanghai) Ltd. v. United States , 748 F.3d 1365, 1369 (Fed. Cir. 2014) (citing 19 U.S.C. § 1677(5)(B) ). A countervailable benefit includes the provision of goods or services "for less than adequate remuneration." 19 U.S.C. § 1677(5)(E)(iv) (2018).² The statute directs Commerce to determine the adequacy of remuneration "in relation to prevailing market conditions for the good or service being provided or the goods being purchased in the [subject] country" and explains that "[p]revailing market conditions include price, quality, availability, marketability, transportation, and other conditions of purchase or sale." Id.

Commerce's regulations prescribe a three-tiered approach for determining the adequacy of remuneration. See 19 C.F.R. § 351.511. When, as here, both an in-country market-based price and a world market price are unavailable, Commerce examines "whether the government price is consistent with market principles." Id. § 351.511(a)(2)(iii).³ Commerce's analysis considers "such factors as the government's price-setting philosophy, costs (including rates of return sufficient to ensure future operations), or possible price discrimination." Countervailing Duties , 63 Fed. Reg. 65,348, 65,378 (Dep't Commerce Nov. 25, 1998) ("CVD Preamble "). Those factors are not "in any hierarchy," and Commerce "may rely on one or more of these factors in any particular case." Id.

II. Proceedings Before Commerce

On May 25, 2017, Commerce published the CVD order on CTL plate from Korea. Certain Carbon and Alloy Steel Cut-to-Length Plate From the Republic of Korea , 82 Fed. Reg. 24,103 (Dep't Commerce May 25, 2017) ([CVD] order) ("Korea CTL Order "). On July 15, 2019, Commerce initiated the second administrative review of the Korea CTL Order for the 2018 period of review ("POR"). Initiation of Antidumping and Countervailing Duty Admin. Reviews , 84 Fed. Reg. 33,739, 33,749 (Dep't Commerce July 15, 2019), PR 4, CJA Tab 3. Commerce selected POSCO as the sole mandatory respondent for the review. Respondent Selection Mem. (Aug. 2, 2019) at 4, CR 3, PR 14, CJA Tab 4.

On November 4, 2019, Nucor submitted new subsidy allegations asking Commerce to initiate investigations into the debt restructuring program of Plantec, an alleged cross-owned input supplier to POSCO, and the Korean government's sale of off-peak electricity to POSCO for less than adequate remuneration. See New Subsidy Allegations (Nov. 4, 2019) ("Nucor's Allegation"), CR 182–84, PR 76–78, CJA Tab 7. On April 1, 2020, Commerce declined to initiate either investigation. Decision Mem. on New Subsidy Allegations (Apr. 1, 2020) ("New Subsidy Mem."), PR 144, CJA Tab 12. Commerce explained that, with respect to Plantec, it was unnecessary "to separately initiate an investigation of this allegation" because Commerce was "examining this alleged subsidy as a self-reported program in this review." Id. at 4. Commerce also declined to initiate an investigation into the sale of electricity, finding that Nucor failed to "adequately support[ ] its allegation with respect to the existence of a benefit." Id. at 7. On April 9, 2020, Nucor asked Commerce to reconsider its decision. Req. for Recons. of New Subsidy Allegation (Apr. 9, 2020) ("Req. for Recons."), CR 254, PR 148, CJA Tab 13.

Commerce issued its preliminary results on July 27, 2020. Certain Carbon and Alloy Steel Cut-to-Length Plate From the Republic of Korea , 85 Fed. Reg. 45,185 (Dep't Commerce July 27, 2020) (prelim. results of [CVD] admin. review, and intent to rescind review, in part; 2018) ("Prelim. Results "), PR 170, CJA Tab 16, and accompanying Prelim. Decision Mem. ("Prelim. Mem."), PR 161, CJA Tab 15. Commerce preliminarily found that "the production of [Plantec's] input is not primarily dedicated to the production of the downstream product, including the subject merchandise." Prelim. Mem. at 12. Commerce also found that "POSCO's purchases of fixed assets and services from [Plantec] during the POR were for maintenance, repair and operation of pre-existing machinery" and the services were not "a part of steel production that is dedicated primarily to the production of a higher value-added product." Id. at 12–13. Commerce did not address Nucor's allegation regarding the off-peak sale of electricity. Commerce preliminarily calculated a net subsidy rate of 0.5 percent ad valorem for POSCO. Prelim. Results , 85 Fed. Reg. at 45,186.

Commerce published the Final Results on March 22, 2021. 86 Fed. Reg. at 15,184. For the Final Results , Commerce calculated a de minimis net subsidy rate of 0.49 percent ad valorem for POSCO. 86 Fed. Reg. at 15,185. Additional background regarding Commerce's findings for the Final Results is set forth in the sections below.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to section 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii), and 28 U.S.C. § 1581(c).

The court will uphold an agency determination that is supported by substantial evidence and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i).

DISCUSSION

I. Commerce's Determination Not to Investigate the Alleged Sale of Off-Peak Electricity for Less Than Adequate Remuneration

A. Standard for Initiation

Commerce "shall" initiate a CVD investigation "whenever an interested party" files a petition⁴ "on behalf of an industry" that "alleges the elements necessary for the imposition of the duty imposed by section 1671(a) of this title" and provides "information reasonably available to the petitioner supporting those allegations." 19 U.S.C. § 1671a(b)(1). Commerce "examine[s] the accuracy and adequacy of the evidence provided in the petition" and, "on the basis of sources readily available to the [agency],"⁵ decides "whether to initiate an investigation." 19 C.F.R. § 351.203(b)(1) ; see also 19 U.S.C. § 1671a(c)(1)(A). While these provisions are directed to the initial allegations of subsidization, Commerce applies these standards to any additional subsidy allegations brought after a CVD order is imposed, such as during an administrative review. See 19 C.F.R. § 351.301(c)(2)(iv)(B) (providing for the submission of new subsidy allegations in an administrative review); I&D Mem. at 25 (citing 19 U.S.C. § 1671a(b)(1) ).

A petition or subsequent subsidy allegation functions "like a civil complaint" and is intended "to alert the agency to the possibility of a subsidy." RZBC Grp. Shareholding Co. v. United States , 39 CIT ––––, ––––, 100 F. Supp. 3d 1288, 1292 (2015). Thus, "most subsidy petitions are granted unless the allegations are clearly frivolous, not reasonably supported by the facts alleged or omit important facts which are reasonably available to the petitioner." Id. at 1295 (citation and ellipsis omitted); see also SolarWorld Ams., Inc. v. United States , 39 CIT ––––,...