Save Domestic Oil, Inc. v. U.S.
| Decision Date | 17 December 2002 |
| Docket Number | Slip Op. 02-150.,Court No. 99-09-00558. |
| Citation | 240 F.Supp.2d 1342 |
| Parties | SAVE DOMESTIC OIL, INC., Plaintiff, v. UNITED STATES, Defendant, and API Ad Hoc Free Trade Committee; Saudi Arabian Oil Company; Petroleos De Venezuela, S.A. and Citgo Petroleum Corporation; Petroleos Mexicanos, P.M.I. Comercio Internacional S.A. De C.V., and Pemex Exploracion Y Produccion; Chevron Corporation; Exxon Corporation; Mobil Corporation; Shell Oil Company; Texaco Inc.; and Bp Amoco, Defendants-Intervenors. |
| Court | U.S. Court of International Trade |
Wiley Rein & Fielding LLP (Charles Owen Verrill, Jr., Timothy C. Brightbill), Washington, DC, for Plaintiff Save Domestic Oil, Inc.
Robert D. McCallum, Jr., Assistant Attorney General, David M. Cohen, Director, A. David Lafer, Senior Trial Counsel, Lucius B. Lau, Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, Robert J. Heilferty, Senior Attorney, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, for Defendant United States, of counsel.
Dewey Ballantine LLP (Harry Clark, John W. Bohn), Washington, DC, for Defendant-intervenor API Ad Hoc Free Trade Committee.
Shearman & Sterling (Thomas B. Wilner, Jeffrey M. Winton, Perry S. Bechky, Jeronimo Gomez del Campo), Washington, DC, for Defendants-Intervenors Petroleos de Venezuela, S.A. and CITGO Petroleum Corporation.
White & Case LLP (Carolyn B. Lamm, Adams C. Lee, Frank J. Schweitzer), Washington, DC, for Defendant-Intervenor Saudi Arabian Oil Company.
On September 19, 2000, in Save Domestic Oil, Inc. v. United States, 24 CIT ___, 116 F.Supp.2d 1324 (2000) ("SDO I"), this Court ordered the Department of Commerce ("Commerce") to reconsider its determination in Certain Crude Petroleum Oil Products from Iraq, Mexico, Saudi Arabia, and Venezuela, 64 Fed.Reg. 44,480 (Dep't Commerce Aug. 16, 1999) (dismissal of antidumping and countervailing duty petitions) ("Dismissal Determination").1 The Dismissal Determination found that the antidumping and countervailing duty petitions filed by Save Domestic Oil, Inc. lacked sufficient industry support for initiation of antidumping and countervailing duty investigations.
The Court now reviews Commerce's Administrative Determination Pursuant to Court Instructions: Antidumping and Countervailing Duty Petitions on Certain Crude Petroleum Oil Products from Iraq, Mexico, Saudi Arabia, and Venezuela (Aug. 7, 2001) ("Remand Determination").2 Jurisdiction lies under 28 U.S.C. § 1581(c) (2000).
Commerce's Remand Determination must be sustained unless it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(A). This deferential standard requires only that Commerce "articulate a satisfactory explanation for its action including a `rational connection between the facts found and the choice made.'" Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983) (quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168, 83 S.Ct. 239, 9 L.Ed.2d 207 (1962)).
During Commerce's original inquiry, the IPAA expressed support for the antidumping and countervailing duty petitions. Commerce disregarded the IPAA's support, however, after concluding that the association did not qualify as an interested party because it had failed to demonstrate that a majority of its members were regional crude oil producers. See Dep't of Commerce Mem. from Judith Wey Rudman to Richard Moreland, The Status of the Independent Petroleum Association of America as an Interested Party (Aug. 9, 1999), P.R. Doc. AD-251 (Venezuela).3 The agency stated that
in order to be an interested party, one must be a member of the industry on behalf of which relief is being sought.... Thus, if only regional producers are members of the regional industry, only producers within the region qualify as interested parties. Moreover, if only regional producers qualify as interested parties, then only an association of which a majority of members are regional producers may qualify as an interested party.
Id. at 2-3; see also 19 U.S.C. §§ 1671a(c)(4)(C), 1673a(c)(4)(C) (); 19 U.S.C. § 1677(9)(E) ().
The Court approved Commerce's analysis in SDO I, stating that Commerce had "properly required IPAA to prove the necessary connection to the regional domestic like product." 24 CIT at ___, 116 F.Supp.2d at 1339. The Court also noted, however, that IPAA "may still be able to establish on remand that its members are regional producers." Id.
In its Remand Determination, Commerce re-evaluated the IPAA's interested party status using the same analysis and additional data. Commerce noted that
[b]ecause the petitioner requested relief on behalf of a regional domestic industry, only an association for which a majority of its members are regional producers may qualify as an interested party. To satisfy this requirement, no less than 50 percent of the association's members must qualify as interested parties, i.e., regional crude-oil producers.
Remand Determ. at 5. In order to assess whether IPAA met this requirement, Commerce compared a listing of all IPAA members that are producers of crude oil with a list obtained from the Energy Information Administration ("EIA") of all regional crude oil producers. Where an IPAA member's name did not appear in the EIA list but a similar name did appear there, Commerce gave the IPAA the benefit of the doubt and counted that IPAA member as a regional oil producer. See Remand Determ. at 5-6; Dep't of Commerce Mem. from Oil Team to Richard W. Moreland, Crude Oil from Four Countries: Counting the Support of an Association (Aug. 7, 2001), Prop. Rem. Doc. 3 ("IPAA Mem."). Despite this conservative approach, the comparison indicated that regional producers of crude oil do not form a majority of the IPAA's members, and therefore the IPAA did not qualify as an interested party.4 Remand Determ. at 6; IPAA Mem. at 3. As Commerce has articulated a "rational connection between the facts found and the choice made," Motor Vehicle Mfrs. Ass'n, 463 U.S. at 43, 103 S.Ct. 2856 (internal citations omitted), the Court finds Commerce's determination that IPAA is not an interested party to be in accordance with law.
Where an antidumping or countervailing duty petition "does not establish support of domestic producers or workers accounting for more than 50 percent of the total production of the domestic like product," Commerce is directed to
(i) poll the industry or rely on other information in order to determine if there is support for the petition as required by sub-paragraph (A), or
(ii) if there is a large number of producers in the industry, [Commerce] may determine industry support for the petition by using any statistically valid sampling method to poll the industry.
19 U.S.C. §§ 1671a(c)(4)(D), 1673a(c)(4)(D). When Commerce conducts such an industry poll, 19 C.F.R. § 351.203(e)(5) provides that the agency "will include unions, groups of workers, and trade or business associations."
In the initial inquiry preceding the Dismissal Determination, Commerce conducted a poll of the regional domestic oil industry to assess support for the Save Domestic Oil petitions, surveying each of the 410 largest producers in the region and 401 of the remaining producers in the region. See Dep't of Commerce Mem. from Industry Support Team to Richard W. Moreland, Calculation of Industry-Support Percentages at 2 (Aug. 9, 1999), P.R. Doc. AD-245 (Venezuela). Commerce did not, however, include workers' groups or unions in the poll.
Commerce received comments on the petition from the Paper, Allied Industrial, Chemical & Energy Workers International Union, AFL-CIO, CLC ("PACE"),5 and the agency concluded that PACE was an interested party with respect to six companies at which the union represented workers employed in crude oil production in the region. See, e.g., Dep't of Commerce Mem. from Oil Team to Richard W. Moreland, Remand on Dismissal of Petitions for the Imposition of Antidumping and Countervailing Duties on Crude Oil from Iraq, Mexico, Saudi Arabia, and Venezuela: Counting the Support of Labor at 2-3 (Aug. 7, 2001), Prop. Rem. Doc. 1 ("Labor Mem."). However, due to the lack of production information for these six firms, Commerce was initially unable to determine what portion of the industry the firms represented.6 Id. Consequently, Commerce did not count the union's support for the petition. Id. With respect to four companies involved in transporting crude oil to refinery and shipping facilities, rather than in crude oil production, Commerce determined that PACE was not an interested party. Id. Commerce did not otherwise attempt to ascertain the views of workers on Save Domestic Oil's petitions.
In SDO I, the Court noted that Commerce is required to account for the views of labor when assessing support for an antidumping or countervailing duty petition.7 The Court stated that although Commerce had polled the industry in accordance with 19 U.S.C. §§ 1671a(c)(4)(D) and 1673a(c)(4)(D) in order to assess support for the petitions, it had not "made any attempt to poll production workers at those particular firms, nor did it otherwise determine where labor stands vis-a-vis SDO's petition." SDO I, 24 CIT at ___, 116 F.Supp.2d at 1340. The Court further stated, "given that statute and the clear intent of Congress in enacting URAA, this court concludes that it was not in...
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