Reiner Brach Gmbh & Co.Kg v. U.S.

• Decision Date: 04 June 2002
• Docket Number: Court No. 01-00055.
• Citation: 206 F.Supp.2d 1323
• Parties: REINER BRACH GmbH & CO.KG and Novosteel SA, Plaintiffs, v. UNITED STATES, Defendant, and Bethlehem Steel Corporation and United States Steel Corporation, Defendant-Intervenors SLIP OP. 02-50.
• Court: U.S. Court of International Trade

206 F.Supp.2d 1323

REINER BRACH GmbH & CO.KG and Novosteel SA, Plaintiffs, v. UNITED STATES, Defendant, and Bethlehem Steel Corporation and United States Steel Corporation, Defendant-Intervenors SLIP OP. 02-50.

Court No. 01-00055.

United States Court of International Trade.

June 4, 2002.

Edmund Maciorowski, P.C. (Edmund Maciorowski, Pamela L. St. Peter), Bloomfield Hills, Michigan, for Plaintiffs.

Robert D. McCallum, Jr., Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice; Lucius B. Lau, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice; Glenn R. Butterton, Attorney, Office of the Chief Counsel for Import Administration, United States Department of Commerce, Of Counsel, for Defendant.

Dewey Ballantine LLP (Michael H. Stein, Bradford L. Ward, Navin Joneja) Washington, D.C., for Defendant-Intervenors.

OPINION

CARMAN, Chief Judge.

Plaintiffs Reiner Brach GmbH & Co. KG ("Reiner Brach") and Novosteel SA ("Novosteel") move for judgment upon the agency record, challenging the final results of two administrative reviews of cut-to-length carbon steel plates from Germany by the United States Department of Commerce ("Commerce"). See Certain Cut-to-Length Carbon Steel Plate From Germany: Final Results of Antidumping Duty Administrative Reviews, 66 Fed. Reg. 3545 (Jan. 16, 2001) (Final Results); see also Issues and Decision Memorandum for the Administrative Reviews of Certain Cut-to-Length Carbon Steel Plate from Germany: August 1, 1997 through July 31, 1998, and August 1, 1998 through July 31, 1999 (Jan. 16, 2001), Def. Pub. App. Ex. 2 (Decision Memo). In the Final Results, Commerce calculated a 36 percent dumping margin based on total adverse facts available. See Final Results, 66 Fed.Reg. at 3546; see also Preliminary Results, 65 Fed.Reg. at 54,207. Plaintiffs assert Commerce's decision to apply total facts otherwise available with adverse inferences and its application of a 36 percent dumping margin are not supported by substantial evidence and are not otherwise in accordance with law. Defendant United States and Defendant-Intervenors Bethlehem Steel Corporation and United States Steel Corporation ("Defendant-Intervenors") contend the application of total facts otherwise available with adverse inferences is reasonable. Plaintiffs' challenge to Commerce's determination is denied. This Court has jurisdiction to hear this case pursuant to 28 U.S.C. 1581(c) (2000).

BACKGROUND

Reiner Brach is a German producer of cut-to-length steel plate. The merchandise at issue was purchased from Reiner Brach by the Swiss company Novosteel. See Final Results, 66 Fed.Reg. at 3545-46. On August 11, 1998, Commerce published a notice of opportunity to request administrative review of Antidumping Duty Orders and Amendments to Final Determinations of Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat Products, Certain Corrosion-resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate From Germany, 58 Fed.Reg. 44170 (Aug. 19, 1993) for the period August 1, 1997 through July 31, 1998. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review, 63 Fed.Reg. 42,821 (Aug. 11, 1998). A similar notice was published on August 11, 1999 as to that order for the period of August 1, 1998 through July 31, 1999. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review, 64 Fed.Reg. 43,649 (Aug. 11, 1999). Novosteel requested administrative reviews and a scope inquiry for both periods of review. See Final Results, 66 Fed.Reg. at 3545. After Commerce received Novosteel's responses to its questionnaires, Defendant-Intervenors requested termination of the administrative reviews, arguing Reiner Brach, rather than Novosteel, was the appropriate respondent. See id. In opposition to termination of the reviews, on February 2, 2000 Reiner Brach submitted a letter to Commerce agreeing to become a respondent for the reviews. See id. Commerce found that "Reiner Brach not only was the producer of the subject merchandise, but also had knowledge that the products were destined for the United States, and that, thus, the sale between Reiner Brach and Novosteel was the appropriate link in the sales chain" upon which to focus. Id. at 3545-46.

Commerce issued a questionnaire to Reiner Brach on February 15, 2000 directing it to:

Report all sales of the foreign like product, whether or not you consider particular merchandise to be that which is most appropriately compared to your sales of the subject merchandise. The Department will then select the appropriate comparison sales from your sales listing.

U.S. Department of Commerce, Import Administration, Administrative Review Questionnaire (Feb. 15, 2000), at B-1, Pub. Docs. 33 and 34, Def. Pub.App. Ex. 1 at B-1 (Feb. 15 Administrative Questionnaire). Additionally, Section D of the questionnaire asked for cost of production (COP) and constructed value (CV) information. It stated, "The COP and CV figures that you report in response to this section of the questionnaire should be calculated based on the actual costs incurred by your company during the period of review (`POR'), as recorded under its normal accounting system." Id. at D-1.

After Reiner Brach submitted its responses, Commerce sent supplemental questionnaires requesting 1) clarification of discrepancies between the total quantity of home market sales reported in Reiner Brach's responses and the quantity indicated by the sales data in its spreadsheets, and 2) clarification as to why various reported costs were the same for both periods of review. See U.S. Department of Commerce Supplemental Questionnaire (May 25, 2000), at 1, Pub. Doc 51, Def. Pub.App. Ex. 3 at 3; U.S. Department of Commerce Supplemental Questionnaire (July 11, 2000), at 5-8, Pub. Doc. 68, Def. Pub.App. Ex. 5 at 7-10. As to the first question, Reiner Brach responded that while the total quantity of home market sales were "based on a review of their aggregate sales data," the figures derived from the data spreadsheets were "based on individual invoices for the period of review." Reiner Brach Supplemental Questionnaire Response (June 15, 2000), at 2, Pub. Doc. 60, Def. Pub.App. Ex. 4 at 4. With regard to the second question, Reiner Brach explained the costs "do not markedly change from year to year. The costs given are averages which reflect any slight increase or decrease in costs over the periods of review." Reiner Brach Supplemental Questionnaire Response (July 24, 2000), at 22-29, Pub. Doc. 73, Def. Pub.App. Ex. 6 at 5-12.

Commerce conducted verification of Reiner Brach's responses from August 2 through August 5, 2000. During verification Reiner Brach sought to submit previously unreported home market sales data of identical merchandise, but Commerce refused to accept the information because it constituted substantial new information and therefore was untimely. See Letter from the U.S. Department of Commerce to Edmund Maciorowski, PC (on behalf of Reiner Brach) (Aug. 9, 2000), at 1, Pub. Doc. 92, Def. Pub.App. Ex. 7 at 1. Commerce also discovered during verification that although the cost of production figures submitted for both periods of review were based on the same cost data, Reiner Brach could distinguish costs on a month-by-month basis yet had failed to do so despite the request for "actual" costs. (Def. Br. at 9, citing Verification Report (Aug. 21, 2000) at 11, Conf. Doc. 26.)

Commerce issued its preliminary determination on September 7, 2000. See Certain Cut-to-Length Carbon Steel Plate From Germany: Preliminary Results of Antidumping Duty Administrative Reviews, 65 Fed.Reg. 54,205 (Sept. 7, 2000) (Preliminary Results). Significantly, Commerce used the total facts otherwise available pursuant to section 776(a)(2)(A) of the Tariff Act of 1930 ("the Act"). See Preliminary Results, 65 Fed.Reg. at 54,207. It noted Reiner Brach's provision of information only on a minimal portion of its home market sales of the foreign like product because Reiner Brach had "interpreted [Commerce's] questionnaire to mean that Reiner Brach only had to report identical sales in the home market that matched its U.S. sales." Id. Additionally, Commerce indicated that Reiner Brach had failed to provide accurate cost of production information. See id. Furthermore, because Reiner Brach had in its records the data that Commerce sought and was capable of providing it but failed to do so, Commerce used adverse inferences when choosing from among the facts otherwise available pursuant to section 776(b) of the Act. See id. Commerce decided the "all others rate" of 36 percent was appropriate because it was the highest rate applied to any company in any segment of the proceeding and was calculated during the less-than-fair-value investigation. See id. After receiving comments from the parties regarding the preliminary results, Commerce issued its final results on January 16, 2001, which contained no changes in its margin calculations. Final Results, 66 Fed.Reg. at 3545.

PARTIES' CONTENTIONS

I. Plaintiffs' Contentions

Plaintiffs contend that Commerce's decision to apply total facts otherwise available with adverse inferences is not supported by substantial evidence on the record and is not otherwise in accordance with law. Plaintiffs present seven arguments to support their contention. First, Plaintiffs argue that in submitting information to Commerce, they complied with the definition of the term "foreign like product" contained in 19 U.S.C. § 1677(16) and their "fair reading" of Commerce's questionnaires. (Pl. Br. at 18.) Based on Plaintiffs' understanding of the statute and questionnaire definitions, Plaintiffs believed they were required to submit...