Parkdale Intern., Ltd. v. U.S.

• Citation: 508 F.Supp.2d 1338
• Decision Date: 08 August 2007
• Docket Number: Court No. 06-00289.,Slip Op. 07-122.
• Parties: PARKDALE INTERNATIONAL, LTD., Riverview Steel Co., Ltd., and Samuel, Son & Co., Ltd., Plaintiffs, and Russel Metals Export, Plaintiff-Intervenor, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

508 F.Supp.2d 1338

PARKDALE INTERNATIONAL, LTD., Riverview Steel Co., Ltd., and Samuel, Son & Co., Ltd., Plaintiffs, and Russel Metals Export, Plaintiff-Intervenor, v. UNITED STATES, Defendant.

Slip Op. 07-122.

Court No. 06-00289.

United States Court of International Trade.

August 8, 2007.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Hunton & Williams, LLP (Richard P. Ferrin and William Silverman), for the plaintiffs.

Sharretts, Paley, Carter & Blauvelt, PC (Beatrice A. Brickell and Peter J. Baskin), for the plaintiff-intervenor.

Peter D. Keisler, Assistant Attorney General; Jeanne E. Davidson, Director; Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (David S. Silverbrand and Michael D. Panzera); Mark B. Lehnardt, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of counsel, for the defendant.

OPINION

RESTANI, Chief Judge:

Plaintiffs Parkdale International, Ltd., Riverview Steel Co., Ltd., and Samuel, Son & Co., Ltd., and plaintiff-intervenor Russel Metals Export (collectively, "Plaintiffs") are importers and exporter-resellers of certain corrosion-resistant carbon steel flat products from Canada. Since 1993, Plaintiffs' merchandise has been subject to an antidumping duty order. See Certain Corrosion-Resistant Carbon Steel Flat Prods. & Certain Cut-to-Length Carbon Steel Plate from Canada, 58 Fed.Reg. 44,162, 44,162 (Dep't Commerce Aug. 19, 1993) (antidumping duty order). Plaintiffs challenge the validity of the United States Department of Commerce's ("Commerce") interpretation of its regulations governing the assessment of antidumping duties on merchandise entered into the United States by resellers who are unaffiliated with a foreign producer. For the reasons stated below, the court finds that it has jurisdiction to adjudicate this dispute, but that Commerce's interpretation is valid.

Background

Under the United States' retrospective system of assessing antidumping duties, Commerce instructs Customs and Border Protection ("Customs") to collect cash deposits of estimated antidumping duties from importers at the time the subject merchandise is entered, instead of immediately assessing duties on entries of subject merchandise. See 19 C.F.R. §§ 351.211(b), 351.212(a) (2007). Assessment of antidumping duties occurs after the opportunity for an administrative review of the antidumping duty order.¹ See 19 C.F.R. § 351.213. Under 19 U.S.C. § 1675(a) (2000), Commerce publishes a notice of opportunity to Court No. 06-00289 Page 3 request an administrative review in the "anniversary month" in which the relevant antidumping duty order was published. 19 U.S.C. § 1675(a)(1); 19 C.F.R. § 351.102(b). If a request for review is received, Commerce is required to determine "the normal value and export price ... of each entry of the subject merchandise" and "the dumping margin for each such entry." 19 U.S.C. § 1675(a)(2)(A). After the dumping margins are established, Commerce is required to "publish in the Federal Register the results of such review, together with notice of any duty to be assessed [or] estimated duty to be deposited." Id. § 1675(a)(1). Following publication, the final results of an administrative review become "the basis for the assessment of countervailing or antidumping duties on entries of merchandise covered by the determination and for deposits of estimated duties." Id. § 1675(a)(2)(C).

Because administrative reviews under § 1675(a) are granted only on request, not all entries of subject merchandise are necessarily subject to the requested review. Congress foresaw this possibility, but elected not to legislate a particular method for assessing duties on entries not covered by an administrative review. See H.R.Rep. No. 98-1156, at 181 (1984) (Conf. Rep.), as reprinted in 1984 U.S.C.C.A.N. 5220, 5298 (delegating to Commerce the responsibility to promulgate regulations governing automatic assessment of duties on entries for which no request for review was received). To fill this gap in statutory authority, Commerce published regulations, currently codified at 19 C.F.R. § 351.212(c), that govern the automatic assessment of duties on entries for which no review was requested. See Mittal Can., Inc. v. United States, 461 F.Supp.2d 1325, 1329 (CIT 2006). Under those regulations, if no one requests an administrative review of any entity subject to an antidumping duty order, Commerce will instruct Customs to assess antidumping duties at "rates equal to the cash deposit of, or bond for, estimated antidumping duties ... required on that merchandise at the time of entry." 19 C.F.R. § 351.212(c)(1)(i). If Commerce receives a timely request for a review of an order, it will instruct Customs "to assess antidumping duties ... and to continue to collect cash deposits, on the merchandise not covered by the request in accordance with paragraph (c)(1) of this section." Id. § 351.212(c)(2).

Commerce has a stated policy that "company-specific assessment rates must be based on the sales information of the first company in the commercial chain that knew, at the time the merchandise was sold, that the merchandise was destined for the United States." Antidumping & Countervailing Duty Proceedings: Assessment of Antidumping Duties, 63 Fed.Reg. 55,361, 55,362 (Dep't Commerce Oct. 15, 1998) (notice and request for comment on policy concerning assessment of antidumping duties) ("Reseller Notice"). By identifying the party that had knowledge of the destination of the subject merchandise, Commerce determines which entity was the "price discriminator" that engaged in the dumping, and hence which company's dumping margin should apply to a given entry. See Antidumping & Countervailing Duty Proceedings: Assessment of Antidumping Duties, 68 Fed.Reg. 23,954, 23,960 (Dep't Commerce May 6, 2003) (notice of policy concerning assessment of antidumping duties) ("Reseller Policy"). When conducting an antidumping investigation, Commerce examines the records of responding producers, but rarely examines the sales of resellers such as Plaintiffs. Reseller Notice, 63 Fed.Reg. at 55,362. Instead of determining whether a producer had knowledge of the destination of its sales to identified resellers, Commerce assumes that a producer knew the destination of all of its sales to every reseller it identifies during the initial investigation. Id. Because the producer is assumed to be the first company in the commercial chain that knew of the, product's destination, cash deposits for antidumping duties on all merchandise sold to identified resellers is initially set at the producer's cash deposit rate. Id.

This assumption remains in effect until the time for an administrative review. If no interested party requests a review of a reseller or its producer during the anniversary month of the antidumping duty order pursuant to 19 U.S.C. § 1675(a), Commerce will continue to assume that the producer was aware, of the ultimate destination of the goods that it sold to the reseller and assess duties on the reseller's entries at the cash deposit rate placed on the producer under the automatic assessment regulation, 19 C.F.R. § 351.212(c)(1). Reseller Notice, 63 Fed.Reg. at 55,363. If a review is requested for a reseller, Commerce will cease to assume that the producer was aware of the reseller's entries, and set a rate specific to the reseller if Commerce determines it was unaffiliated with a producer. Id. If someone requests a review of a producer, Commerce will determine whether the producer in question was aware of the ultimate destination of sales to a given reseller. Id. If Commerce discovers that the producer was aware of the destination of a sale to a reseller, Commerce will find that the producer set the price of sale into the United States and assess antidumping duties accordingly. Id. If, however, Commerce finds that a producer was unaware of the ultimate destination of the sales to a reseller, it can no longer rely on its prior assumption to apply the producer's assessment rate calculated during the administrative review. Id.

In such a case, Commerce has at least two options to determine what assessment rate should apply to the unaffiliated reseller that is not covered by the results of the administrative review. First, Commerce could retain the status quo, applying the producer's cash deposit rate used at the time the merchandise was entered. Following this approach, Commerce would retain its initial assumption that, at the time of the investigation (or last review), the producer was aware of the destination of the reseller's merchandise, even though that assumption proved false during the current administrative review. Alternatively, Commerce could reject its initial assumption that the producer was aware of the ultimate destination of the merchandise that it sold to the reseller. Absent that assumption, the reseller would fall into the category of unaffiliated exporters who did not participate in the investigation. The assessment rate for unreviewed parties is the so-called "all others" rate.²

For most of the time that the antidumping duty order at issue in this case has been in effect, Commerce chose the first option, instructing Customs that "if the exporter is not a firm covered in this review, or the original investigation, but the manufacturer is, the [cash] deposit rate will be the rate established for the most recent period for the manufacturer of the merchandise." Certain Corrosion-Resistant Carbon Steel Flat Prods. & Certain Cut-to-Length Carbon Steel Plate from Canada, 62 Fed.Reg. 18,448, 18,468 (Dep't Commerce Apr. 15, 1997) (final results of antidumping duty administrative reviews).³ As exporter-resellers, Plaintiffs purchase the subject merchandise from Canadian producers and arrange the eventual sale of the goods in U.S. commerce. It is uncontested that Plaintiff resellers are not affiliated with their producers; the...