Nucor Fastener Div. v. United States
| Decision Date | 22 October 2010 |
| Docket Number | Slip Op. 10–121.Court No. 09–00534. |
| Citation | 751 F.Supp.2d 1327 |
| Parties | NUCOR FASTENER DIVISION, Plaintiff,v.UNITED STATES, Defendant,andXL Screw Corporation, et al., Defendant–Intervenors. |
| Court | U.S. Court of International Trade |
OPINION TEXT STARTS HERE
Wiley Rein LLP, Washington, DC (Alan H. Price, Daniel B. Pickard, and Maureen E. Thorson) for Plaintiff Nucor Fastener Division.Tony West, Assistant Attorney General; Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Joshua E. Kurland); and Ahran Kang McCloskey, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, Of Counsel, for Defendant United States.Barnes, Richardson & Colburn, Washington, DC (Matthew T. McGrath, Jeffrey S. Neely, Stephen W. Brophy, Cortney O. Morgan, Michael S. Holton) for Defendant–Intervenors XL Screw Corporation, The Hillman Group, Bossard North America, Inc., and Heads and Threads International, LLC.
Plaintiff Nucor Fastener Division (“Nucor” or “Plaintiff”) challenges the U.S. Department of Commerce's (“Commerce” or the “Department”) decision not to investigate an alleged subsidization by the People's Republic of China (“PRC” or “China”) of the Chinese standard steel fastener industry through currency manipulation. Because Nucor's challenge is unripe, the Motions to Dismiss filed by Defendant United States (“Defendant”) and Defendant–Intervenors XL Screw Corporation, The Hillman Group, Bossard North America, Inc., and Heads and Threads International, LLC (collectively, “Defendant–Intervenors”) are GRANTED, and this action is dismissed in its entirety, but without prejudice.
Before either antidumping or countervailing duties (“CVD”) can be imposed, Commerce and the U.S. International Trade Commission (“ITC”) must each render affirmative determinations after conducting separate investigations. See 19 U.S.C. §§ 1671, 1673. “The central aim of the antidumping laws is to protect domestic industries from foreign manufactured goods that are sold injuriously in the United States at prices below the fair market value of those goods in their home market.” U.S. Steel v. United States, 637 F.Supp.2d 1199, 1204 (CIT 2009).
[CVDs] are imposed on foreign products that are imported, sold, or likely to be sold in the United States, where the foreign government is directly or indirectly subsidizing the manufacture, production, or export of that merchandise. The purpose of CVDs is to level the playing field in international trade by offsetting the unfair advantage that a foreign exporter receives through subsidies.
Royal Thai Gov't v. United States, 31 CIT 1213, 1217–18, 502 F.Supp.2d 1334 (2007) (citations omitted).
In its antidumping and CVD investigations, Commerce respectively determines whether the subject imports are, or are “likely to be, sold in the United States at less than its fair value,” 19 U.S.C. § 1673(1), and whether “the subject imports are in fact being subsidized,” Wolff Shoe Co. v. United States, 141 F.3d 1116, 1117 (Fed.Cir.1998). Commerce in its CVD investigation determines, inter alia, whether the alleged subsidy “is a specific subsidy, in law or in fact, to an enterprise or industry within the jurisdiction of the authority providing the subsidy.” 19 U.S.C. § 1677(5A)(D). “The specificity test was intended to function as a rule of reason and to avoid the imposition of [CVDs] in situations where, because of the widespread availability and use of a subsidy, the benefit of the subsidy is spread throughout an economy.” The Uruguay Round Agreements Act Statement of Administrative Action, H.R. Doc. 103–316 (1994),1 at 222, reprinted in 1994 U.S.C.C.A.N. 4040, 4242 (emphasis omitted).
ITC undertakes a related inquiry in investigating allegations of dumping or subsidization. Antidumping duties and CVDs can be imposed if ITC “determines that—(A) an industry in the United States—(i) is materially injured; or (ii) is threatened with material injury.” 19 U.S.C. §§ 1671(a)(2), 1673(2). In its investigation, ITC “cumulatively assess[es] the volume and effects of imports of the subject merchandise” from countries that are subject to the review. Id. § 1677(7)(G). Whether petitioners allege dumping or subsidization, in its investigations ITC renders a preliminary determination, “based on the information available to it at the time of the determination, whether there is a reasonable indication” of injury or threat thereof. Id. §§ 1671b; 1673b. If ITC at this preliminary stage “makes a negative determination ... the investigation shall be terminated.” Id. § 1671b(a)(1); see also 19 C.F.R. § 351.207(d) ().
In September 2009, Nucor filed antidumping and CVD petitions with Commerce and ITC concerning imports of certain standard steel fasteners from PRC and Taiwan. See Certain Standard Steel Fasteners From [PRC]: Initiation of [CVD] Investigation, 74 Fed.Reg. 54,543, 54,543 (October 22, 2009) (“ Initiation Notice ”); Certain Standard Steel Fasteners From [PRC] and Taiwan: Initiation of Antidumping Duty Investigation, 74 Fed.Reg. 54,537, 54,538 (October 22, 2009); Certain Standard Steel Fasteners From China and Taiwan, 74 Fed.Reg. 49,889, 49,890 (September 29, 2009) (“ ITC Notice ”). ITC that month instituted a preliminary investigation “to determine whether there is a reasonable indication that an industry in the United States is materially injured or threatened with material injury ... by reason of imports from China and/or Taiwan.” ITC Notice, 74 Fed.Reg. at 49,889.
In October 2009, Commerce “initiat[ed] a CVD investigation to determine whether manufacturers, producers, or exporters of standard steel fasteners in the PRC receive countervailable subsidies.” Initiation Notice, 74 Fed.Reg. at 54,545. The period of investigation was calendar year 2008. Id. at 54,543. Commerce included in its CVD investigation twenty-six specific programs that Nucor alleged to have provided countervailable subsidies. Id. at 54,545–46. Commerce declined to investigate alleged currency manipulation, stating as follows:
[Nucor] alleges that the [government]-maintained exchange rate effectively prevents the appreciation of the Chinese currency ( [“RMB”] ) against the U.S. dollar. Therefore, when producers/exporters in the PRC sell their dollars at official foreign exchange banks, as required by law, the producers receive more RMB than they otherwise would if the value of the RMB were set by market mechanisms.... [Nucor] has failed to sufficiently allege that the receipt of the excess RMB is contingent on export or export performance because receipt of the excess RMB is independent of the type of transaction or commercial activity for which dollars are converted or of the particular company or individuals converting the dollars. Therefore, we do not plan on investigating this program because [Nucor] has failed to properly allege the specificity element.
Id. at 54,546 (emphasis added).
In November 2009, ITC rendered its preliminary determination. See Certain Standard Steel Fasteners From China and Taiwan; Determinations, 74 Fed.Reg. 58,978 (November 16, 2009). ITC found “that there is no reasonable indication that an industry in the United States is materially injured or threatened with material injury ... by reason of imports from China.” Id. In its report, ITC included the following bases for its determination:
• there was not a “reasonable indication that subject imports have had an adverse impact on the domestic industry during the period examined;”
• “[t]he domestic industry maintained substantial and increasing operating profits from 2006 to 2008;” and
• there was not a “significant correlation between subject imports and any declines in the industry's profitability.”
ITC further concluded that there was “no reasonable indication of a threat of material injury by reason of cumulated subject imports from China and Taiwan.” Id. at 31 (emphasis omitted). In its cumulation analysis, ITC found that, “by quantity, U.S. shipments of subject imports from China declined during the period examined.” Id. at 34. ITC thereafter noted as follows: “ Nor is there any indication on this record that any of the subsidies allegedly conferred by the Government of China on producers of subject merchandise would cause us to reach a different conclusion.” Id. at 34 n. 227 (emphasis added). Given the negative ITC Preliminary Determination, both Commerce and ITC “terminated” their investigations pursuant to statute. 19 U.S.C. § 1671b(a)(1); see 19 C.F.R. § 351.207(d).
In December 2009, Nucor initiated companion cases in this court challenging determinations of ITC and Commerce, respectively. See Complaint; Nucor v. United States, Court No. 09–531, Complaint (“ITC Complaint”). Nucor's ITC Complaint asserts jurisdiction based on 28 U.S.C. § 1581(c) and alleges that the ITC Preliminary Determination “was arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with law.” ITC Complaint ¶¶ 1, 6–11. Briefing on Nucor's ITC challenge is underway and is expected to be complete in December 2010. See Nucor, Court No. 09–531, September 20, 2010 Order.
In the instant action challenging Commerce, Nucor “seeks judicial review of the Department's decision not to initiate a [CVD] investigation into subsidies provided by the Government of China to its standard steel fastener industry by means of enforced undervaluation of the [RMB].” Complaint ¶ 1. Nucor asserts jurisdiction based on 28 U.S.C. §...
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