Thyssenkrupp Acciai Speciali Terni v. U.S.

• Citation: 572 F.Supp.2d 1323
• Decision Date: 01 July 2008
• Docket Number: Slip Op. 08-72. Court No. 07-00390.
• Parties: THYSSENKRUPP ACCIAI SPECIALI TERNI S.P.A. and Thyssenkrupp AST USA, Inc., Plaintiffs, v. UNITED STATES, Carlos M.Gutierrez, United States Department of Commerce, Ambassador Susan C. Schwab, and Office of the United States Trade Representative, Defendants, and AK Steel Corporation, and Allegheny Ludlum Corporation, Defendant-Intervenors.
• Court: U.S. Court of International Trade

Page 1323

572 F.Supp.2d 1323

THYSSENKRUPP ACCIAI SPECIALI TERNI S.P.A. and Thyssenkrupp AST USA, Inc., Plaintiffs, v. UNITED STATES, Carlos M.Gutierrez, United States Department of Commerce, Ambassador Susan C. Schwab, and Office of the United States Trade Representative, Defendants, and AK Steel Corporation, and Allegheny Ludlum Corporation, Defendant-Intervenors.

Slip Op. 08-72. Court No. 07-00390.

United States Court of International Trade.

July 1, 2008.

COPYRIGHT MATERIAL OMITTED

Hogan & Hartson, LLP, Washington, DC (Lewis E. Leibowitz, Craig A. Lewis, Harold D. Kaplan, Jonathan T. Stoel, Theodore C. Weymouth) for Plaintiffs ThyssenKrupp Acciai Speciali Terni S.p.A and ThyssenKrupp AST USA, Inc.

Gregory G. Katsas, Acting Assistant Attorney General, Jeanne E. Davidson, Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, (Claudia Burke), for Defendants United States, Carlos M. Gutierrez, United States Department of Commerce, Ambassador Susan C. Schwab, and the Office of the United States Trade Representative. Office of Chief Counsel for Import Administration, U.S. Department of Commerce (Natasha Camille Robinson) for Defendant United States Department of Commerce.

Kelley Drye & Warren, LLP (Mary Tuck Staley, Daniel Philip Lessard, David Alan Hartquist) for Defendant-Intervenors

AK Steel Corporation and Allegheny Ludlum Corporation.

Before: Richard W. Goldberg, Senior Judge.

OPINION

GOLDBERG, Senior Judge.

This matter is before the Court on the defendants' partial motion to dismiss two counts of a four-count complaint for lack of subject matter jurisdiction pursuant to USCIT Rule 12(b)(1) and for failure to state a claim upon which relief can be granted pursuant to USCIT Rule 12(b)(5). For the following reasons, the defendants' partial motion to dismiss is denied.

I. BACKGROUND

Plaintiff ThyssenKrupp Acciai Speciali Terni S.p.A. ("ThyssenKrupp") is the sole producer of stainless steel sheet and strip in coils ("SSSS") from Italy.¹ In 1998, the U.S. Department of Commerce ("Commerce") initiated an antidumping investigation of imports of SSSS from Italy, and ultimately calculated a weighted-average dumping margin of 11.23% for Thyssen-Krupp. See Stainless Steel Sheet and Strip in Coils from Italy, 64 Fed.Reg. 40567, 40570 (Dep't Commerce July 27, 1999) (final amended determination) ("1999 Antidumping Order"). To make this determination, Commerce used a methodology commonly referred to as "zeroing."²

In 2006, the WTO Dispute Settlement Body adopted a WTO dispute resolution panel report that found Commerce's zeroing methodology to be inconsistent with U.S. obligations under the WTO agreements. See Panel Report, United States— Laws, Regulations and Methodology for Calculating Dumping Margins (Zeroing), WT/DS294/R (Oct. 31, 2005). The European Communities had challenged the use of the zeroing methodology in fifteen of Commerce's antidumping duty investigations. After the WTO report was issued, Commerce abandoned the zeroing methodology in its antidumping investigations. See Calculation of the Weighted-Average Dumping Margin During an Antidumping Investigation, 71 Fed.Reg. 77722 (Dep't Commerce Dec. 20, 2006) (final modification).

Commerce initiated a section 129 proceeding to implement the WTO findings in the antidumping investigations challenged by the European Communities. Section 129 of the Uruguay Round Agreements Act (set forth in 19 U.S.C. § 3538) is the means by which final determinations resulting from antidumping investigations are modified to comply with WTO rulings. After the WTO declares an action by Commerce to be inconsistent with U.S. obligations under the WTO agreements, the United States Trade Representative ("USTR") is required to consult with Commerce and congressional committees on the matter. See 19 U.S.C. § 3538(b)(1) (2000). Then, at the request of the USTR, Commerce must issue a determination ("Section 129 determination") that brings the challenged determination into compliance with the WTO ruling. See id. § 3538(b)(2). Once Commerce issues the Section 129 determination, the USTR may, after consulting with both Commerce and the congressional committees, direct Commerce to implement the determination in whole or in part. See id. § 3538(b)(4).

In the present case, Commerce issued a Section 129 determination with respect to the 1999 Antidumping Order applicable to ThyssenKrupp's SSSS imports. Abandoning the zeroing methodology, Commerce calculated a preliminary revised weighted-average margin for ThyssenKrupp of 2.11%. A margin below 2% is de minimis and would warrant revocation of the order. See 19 U.S.C. § 1673b(b)(3) (2000). ThyssenKrupp challenged Commerce's preliminary calculation and alleged that Commerce made certain errors that inflated the dumping margin. Commerce declined to make any changes to the Section 129 determination. See Implementation of the Findings of the WTO Panel in US-Zeroing (EC); Antidumping Duty Order on Stainless Steel Sheet and Strips in Coils from Italy, 72 Fed.Reg. 54640, 54641-42 (Dep't Commerce Sept. 20, 2007) (final determination). Subsequently, Thyssen-Krupp commenced this action against Commerce, the Secretary of Commerce (the Honorable Carlos M. Gutierrez), the Office of the USTR, and the USTR (Ambassador Susan C. Schwab) (collectively, "the government").³

ThyssenKrupp's action consists of a four-count complaint challenging the Section 129 proceeding. The first two counts directly challenge the substance of the Section 129 determination. In Count 1, ThyssenKrupp alleges that Commerce erroneously transposed two numbers in one of its calculations, which inflated the ultimate margin calculation above the de minimis level. In Count 2, ThyssenKrupp alleges that Commerce erred when, with respect to certain sales, it applied the net margin rate to gross unit prices instead of to net unit prices. As in Count 1, this error allegedly inflated the dumping margin above 2%.

In Count 3, ThyssenKrupp alleges that the USTR acted arbitrarily and capriciously and abused its discretion when it directed Commerce to implement a Section 129 determination that left errors (those described in Counts 1 and 2) uncorrected. Count 4 alleges that Commerce unlawfully refused to correct errors in the Section 129 Determination pursuant to 19 C.F.R. § 351.224.⁴

II. STANDARD OF REVIEW

The government requests that the Court dismiss Counts 3 and 4 of the Complaint for lack of subject matter jurisdiction pursuant to USCIT Rule 12(b)(1). In this case, the plaintiffs have the burden of establishing jurisdiction. See Cedars-Sinai Med. Ctr. v. Watkins, 11 F.3d 1573, 1583 (Fed.Cir.1993). The Court "assumes all factual allegations to be true and draws all reasonable inferences in plaintiffs favor." See Mukand Int'l Ltd. v. United States, 30 CIT ___, ___, 452 F.Supp.2d 1329, 1331 (2006). The government also moves to dismiss Counts 3 and 4 for failure to state a claim upon which relief could be granted pursuant to USCIT Rule 12(b)(5). To avoid dismissal for failure to state a claim, the "factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Bell Atl. Corp. v. Twombly, ___ U.S. ___, 127 S.Ct. 1955, 1965, 167 L.Ed.2d 929 (2007) (internal citations omitted).

III. DISCUSSION

A. Motion to Dismiss for Lack of Jurisdiction

i. Statutory Jurisdiction Over Count 3 pursuant to § 1581(i)

The parties agree that the Court has subject matter jurisdiction over Counts 1 and 2 because a Section 129 determination is a "reviewable determination" listed in 19 U.S.C. § 1516a(a)(2)(B). The Court has jurisdiction over any civil action commenced under 19 U.S.C. § 1516a. See 28 U.S.C. § 1581(c). The parties disagree about the jurisdictional basis for Counts 3 and 4. ThyssenKrupp alleges jurisdiction under either § 1581(c) or (i), whereas the government claims ThyssenKrupp has failed to establish jurisdiction under either subsection.

Count 3 of ThyssenKrupp's complaint alleges a cause of action pursuant to the Administrative Procedures Act ("APA"). ThyssenKrupp claims that it has been "adversely affected or aggrieved by" USTR's decision to implement the Section 129 determination without correcting certain alleged errors made by Commerce. 5 U.S.C. § 702 (2000). When a plaintiff alleges an APA cause of action, the Court may have jurisdiction pursuant to 28 U.S.C. § 1581(i). See Motions Sys. Corp. v. Bush, 437 F.3d 1356, 1359 (Fed.Cir. 2006) (en banc) (per curiam). Section 1581(i) states that this Court has exclusive jurisdiction over:

[A]ny civil action commenced against the United States, its agencies, or its officers, that arises out of any law of the United States providing for —

(1) revenue from imports or tonnage;

(2) tariffs, duties, fees, or other taxes on the importation of merchandise for reasons other than the raising of revenue;

(3) embargoes or other quantitative restrictions on the importation of merchandise for reasons other than the protection of the public health or safety; or

(4) administration and enforcement with respect to the matters referred to in paragraphs (1)-(3) of this subsection and subsections (a)-(h) of this section.

28 U.S.C. § 1581(i) (2000). Because ThyssenKrupp's APA cause of action challenges the administration and enforcement of the collection of import duties, it is "facially embraced" by paragraphs (1) and (4) of § 1581(i). Conoco, Inc. v. U.S. Foreign-Trade Zones Bd., 18 F.3d 1581, 1590 (Fed. Cir.1994).

Although a claim may technically fall within the language of § 1581(i), it is well-established that jurisdiction is not appropriate under that subsection when "jurisdiction under another subsection of § 1581 is or could have been available, unless the remedy provided under that other...