Royal Thai Government v. U.S.

• Decision Date: 26 July 2006
• Docket Number: Slip Op. 06-117. Court No. 02-00026.
• Parties: ROYAL THAI GOVERNMENT, et al., Plaintiffs, v. UNITED STATES, Defendant, and United States Steel Corp., Defendant-Intervenor.
• Court: U.S. Court of International Trade

Page 1350

441 F.Supp.2d 1350

ROYAL THAI GOVERNMENT, et al., Plaintiffs, v. UNITED STATES, Defendant, and United States Steel Corp., Defendant-Intervenor.

Slip Op. 06-117. Court No. 02-00026.

United States Court of International Trade.

July 26, 2006.

COPYRIGHT MATERIAL OMITTED

Willkie Farr .& Gallagher LLP (Kenneth J. Pierce, Robert Edward DeFrancesco, and Victor S. Mroczka) for Plaintiffs the Royal Thai Government and Sahaviriya Steel Industries Public Company Limited.

Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Patricia M. McCarthy); Mykhaylo A. Gryzlov, International Attorney-Advisor, Office of the Chief Counsel for the Import Administration, United States Department of Commerce, for Defendant United States.

Skadden, Arps, Slate, Meagher & Flom LLP (John J. Mangan) for Defendant-Intervenor United States Steel Corporation.

OPINION

RICHARD W. GOLDBERG, Senior Judge.

Goldberg, Senior Judge:

In Royal Thai Government v. United States, 436 F.3d 1330 (Fed.Cir.2006) ("Royal Thai II"), the United States Court of Appeals for the Federal Circuit (the "Federal Circuit") remanded this case for further proceedings following that court's reversal-in-part of Royal Thai Government v. United States, 28 CIT ___, 341 F.Supp.2d 1315 (2004) ("Royal Thai I"), familiarity with which is presumed. Pending before the Court are motions for reconsideration which seek review of two issues previously considered moot as a result of a now overturned holding in Royal Thai I. The Court has jurisdiction over this case pursuant to 28 U.S.C. § 1581(c).

I. BACKGROUND

In Royal Thai I, the Court reviewed the final affirmative countervailing duty determination made by the U.S. Department of Commerce ("Commerce") with respect to certain hot-rolled carbon steel flat products from Thailand ("subject imports"). See Certain Hot—Rolled Carbon Steel Flat Products From Thailand, 66 Fed.Reg. 50410 (Dep't Commerce Oct. 3, 2001) (final determination) ("Final Determination"); Issues and Decision Memorandum in the Final Affirmative Countervailing Duty Determination: Certain Hot-Rolled Carbon Steel Flat Products from Thailand, C-549-818 (Sept. 21, 2001), available at http://ia.ita .doc.gov/frn/summary/thailand/01-24753-1.txt ("Decision Memo").

The Court affirmed Commerce's decision not to countervail a debt restructuring program administered by Plaintiff the Royal Thai Government ("RTG"), as well as Commerce's decision not to investigate alleged equity infusions in Plaintiff Sahaviriya Steel Industries Public Company Limited ("SSI") made by RTG. Royal Thai I, 28 CIT at ___, 341 F.Supp.2d at 1317-23. However, the Court reversed Commerce's decision to countervail the entire amount of duty exemptions, or drawbacks, provided by RTG for SSI's imports of steel slab used as the sole raw material in the manufacture of hot-rolled steel coil for export. See id. at ___, 341 F.Supp.2d at 1323-26. As a result Of this holding, the countervailing duty rate applicable to SSI was rendered de minimis and, accordingly, the Court instructed Commerce to find that no countervailable subsidies were provided to SSI. See id. at ___, 341 F.Supp.2d at 1326-27. Also as a result of this holding, the Court declined to address two additional issues raised by the parties with respect to (1) the sustainability of Commerce's determination that SSI (and its subsidiary, Prachuab Port Company ("PPC")) received a countervailable regional subsidy from RTG through the provision of electricity at less than adequate remuneration and (2) the appropriate benchmark to be used in calculating the alleged countervailable benefit received from the imported steel slab duty exemptions. See id. at ___, 341 F.Supp.2d at 1326. The Court reasoned that these issues had been rendered moot by the calculation of a de minimis countervailing duty rate and the corresponding, legally-compelled finding that no countervailable subsidies were provided to SSI.¹ Id.

On appeal, however, the Federal Circuit reversed this Court's holding with respect to RTG's provision of duty exemptions to SSI for steel slab imports. Royal Thai II, 436 F.3d at 1339-41. The Federal Circuit instead upheld Commerce's decision to countervail the entire amount of these import duty exemptions received by SSI. Id. In light of this reversal, the Federal Circuit remanded the case for this Court to conduct further proceedings consistent with Royal Thai II.

Shortly thereafter, on March 20, 2006, Plaintiffs RTG and SSI filed a motion for reconsideration, requesting that the Court reexamine their claim that Commerce erroneously concluded that SSI received a countervailable regional subsidy from RTG through the provision of electricity at less than adequate remuneration. On April 20, 2006, Defendant-Intervenor United States Steel Corporation ("U.S.Steel") filed a second motion for reconsideration, requesting that the Court also reassess its claim that Commerce had selected an incorrect benchmark when calculating the countervailable benefit received by SSI from the steel slab duty exemptions. This case is now properly² before the Court upon Plaintiffs' and Defendant-Intervenor's motions, consolidated for purposes of this opinion.

II. STANDARD OF REVIEW

With respect to the motions for reconsideration, the Court will not exercise its discretion to disturb a previous decision unless it is "manifestly erroneous." Former Employees of Quality Fabricating, Inc. v. United States, 28 CIT ____, ____, 353 F.Supp.2d 1284, 1288 (2004) (quotation marks omitted). "The major grounds justifying reconsideration are an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice." Doe v. New York City Dep't of Social Servs., 709 F.2d 782, 789 (2d Cir.1983) (quotation marks omitted).

With respect to the underlying Final Determination, the Court must uphold a determination made by Commerce if it is supported by substantial evidence and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i) (1999). Concerning the substantial evidence requirement, the U.S. Supreme Court has defined this term to mean "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion," taking into account the record as a whole. Pierce v. Underwood, 487 U.S. 552, 565, 108 S.Ct. 2541, 101 L.Ed.2d 490 (1988) (quoting Consol. Edison Co. v. NLRB, 305 U .S. 197, 229, 59 S.Ct. 206, 83 L.E d. 126 (1938)). It requires "more than a mere scintilla" but is satisfied by "something less than the weight of the evidence . ." Luoyang Bearing Factory v. United States, 27 CIT ___, ___, 288 F.Supp.2d 1369, 1370 (2003).

III. DISCUSSION

A. The Motions for Reconsideration Are Well—Founded in Light of the Federal Circuit's Decision in Royal Thai II

Plaintiffs' and Defendant—Intervenor's unopposed motions both argue that the Federal Circuit's reversal of a key holding in Royal Thai I had the effect of resurrecting two issues in this case which were previously considered moot.

The Court agrees. Because Commerce's decision to countervail the entire amount of the import duty exemptions received by SSI has been sustained by the Federal Circuit, the Court can no longer say with certainty that SSI's countervailing duty rate is de minimis. Rather, if sustained, Commerce's decision to countervail RTG's provision of electricity to SSI would result in a combined countervailing duty rate of 2.38 percent. This exceeds the two percent de minimis (and thus nonactionable) rate afforded developing countries like Thailand under U.S. countervailing duty law. See 19 U.S.C. § 1671b(b)(4)(B) (1999); Developing and Least—Developed Country Designations under the Countervailing Duty Law, 63 Fed.Reg. 29945, 29948 (USTR June 2, 1998) (interim final rule). In addition, SSI's countervailing duty rate could be increased even more if, as contended by U.S. Steel, Commerce erred in its calculation of the benefit received by SSI with respect to the steel slab import duty exemptions.

As such, it is clear that, in light of the intervening decision in Royal Thai II, it is "manifestly erroneous" to view the issues raised by Plaintiffs and Defendant—Intervenor in their respective motions as moot. Former Employees of Quality Fabricating, 28 CIT at ___, 353 F.Supp.2d at 1288. The motions for reconsideration are therefore granted and the Court now proceeds to its substantive analysis of these two issues.

B. With Regard to Plaintiffs' Claim, Commerce's Decision to Countervail RTG's Provision of Electricity to SSI Is Supported by Substantial Evidence and in Accordance with Law

During the period of investigation, the provision of electricity to residential and commercial consumers in Thailand was largely controlled by RTG through various government entities. Decision Memo at 11. The National Energy Policy Council developed electricity rate-setting policy, which was then implemented by the National Energy Policy Office ("NEPO"). NEPO accomplished its mission through three additional RTG authorities: (1) the Electricity Generating Authority of Thailand ("EGAT"), which was responsible for generation and transmission; (2) the Metropolitan Electricity Authority ("MEA"), which was responsible for distribution in and around Bangkok; and (3) the Provincial Electricity Authority ("PEA"), which was responsible for distribution in the remainder of Thailand. Id. PEA's delivery costs were higher than MEA's. Id. at 12. Nonetheless, "RTG maintain[ed] a `uniform national tariff policy' which provide[d] that consumers in the same customer category [paid] the same rate regardless of whether they [were] in MEA's distribution area or PEA's distribution area." Id. at 11. In order to implement this uniform tariff policy, EGAT gave a discount to PEA and applied a surcharge to MEA for their respective electricity purchases (the "internal...