Union Steel v. U.S.

• Decision Date: 28 September 2009
• Docket Number: Slip Op. 09-105.,Court No. 08-00101.
• Citation: 645 F.Supp.2d 1298
• Parties: UNION STEEL, Plaintiff, v. UNITED STATES, Defendant, and United States Steel Corporation and Nucor Corporation, Defendant-Intervenors.
• Court: U.S. Court of International Trade

645 F.Supp.2d 1298

UNION STEEL, Plaintiff, v. UNITED STATES, Defendant, and United States Steel Corporation and Nucor Corporation, Defendant-Intervenors.

Slip Op. 09-105.

Court No. 08-00101.

United States Court of International Trade.

September 28, 2009.

Troutman Sanders LLP (Donald B. Cameron, Brady W. Mills, Jeffrey S. Grimson, Julie C. Mendoza, Rudi W. Planert, and Mary S. Hodgins), Washington, DC, for Plaintiff.

Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Claudia Burke); Jonathan Zielinski and Daniel J. Calhoun, Office of the Chief Counsel for Import Administration, United States Department of Commerce, of counsel, for defendant.

Skadden Arps Slate Meagher & Flom, LLP (Ellen J. Schneider, Jeffrey D. Gerrish, Jared R. Wessel, John J. Mangan, Robert E. Lighthizer, and Luke A. Meisner), Washington, DC, for Defendant-Intervenor United States Steel Corporation.

Wiley Rein, LLP (Timothy C. Brightbill, Alan H. Price, and Robert E. DeFrancesco, II), Washington, DC, for Defendant-Intervenor Nucor Corporation.

OPINION AND ORDER

STANCEU, Judge.

Plaintiff Union Steel ("Union") contests the final determination ("Final Results") issued by the International Trade Administration, U.S. Department of Commerce ("Commerce" or the "Department"), in a periodic administrative review of an antidumping duty order on imports of certain corrosion-resistant carbon steel flat products (the "subject merchandise") from the Republic of Korea ("Korea"). See Certain Corrosion-Resistant Carbon Steel Flat Products from the Republic of Korea: Notice of Final Results of the Thirteenth Admin. Review, 73 Fed.Reg. 14,220 (Mar. 17, 2008) ("Final Results"). Union, a producer and exporter of subject merchandise and a respondent in the review, brings two claims. Union challenges Commerce's "model match" methodology, by which Commerce compared Union's U.S. sales of painted corrosion-resistant carbon steel flat products to Union's home market sales, which included not only painted products but also "laminated" products, i.e., products that are coated with a plastic film rather than paint. Second, plaintiff challenges Commerce's construction of 19 U.S.C. § 1677(35) (2006), according to which Commerce concluded that it was permissible to apply "zeroing," i.e., the deeming of the sales a respondent makes in the United States at prices above normal value to have individual dumping margins of zero rather than negative margins.

Without confessing error, defendant requests that the court order a partial voluntary remand to allow Commerce to reconsider its denial, made during the review, of plaintiff's request to revise the model match methodology. Plaintiff responds that a remand on this issue is required but submits that the court, in issuing a remand order, should consider plaintiff's substantive arguments, make certain findings with respect to Commerce's model match determination, and issue specific instructions governing the scope and substance of the remand redetermination. Defendant-intervenors Nucor Corporation ("Nucor") and United States Steel Corporation ("U.S.Steel") argue that the Department's model match methodology is supported by substantial evidence and otherwise consistent with law and, in the alternative, oppose the specific remand instructions sought by Union. For the reasons discussed herein, the court grants defendant's request for voluntary remand and declines to issue a remand order in the form that plaintiff advocates.

Based on applicable precedent, the court affirms the Department's use of zeroing in the Final Results. Accordingly, the court denies relief on plaintiff's second claim.

I. BACKGROUND

In September 2006, Commerce initiated the thirteenth administrative review of an antidumping duty order on certain corrosion-resistant carbon steel flat products from Korea for the period of August 1, 2005, through July 31, 2006 (the "period of review"). Initiation of Antidumping and Countervailing Duty Admin. Reviews, 71 Fed.Reg. 57,465 (Sept. 29, 2006). In conducting the review, Commerce sent Union and other respondents a questionnaire detailing twelve model-match criteria, the first of which was termed "TYPE." Letter from U.S. Dep't of Commerce to Union Steel Manufacturing Co., Ltd. (Sept. 13, 2006) (Admin.R.Doc. No. 7); Letter from U.S. Dep't of Commerce to Dongbu Steel Co., Ltd., App. IV at 1 (Sept. 13, 2006) (Admin.R.Doc. No. 9); Br. in Supp. of the Mot. of Pl. Union Steel for J. upon the Agency R. 2-3 ("Pl.'s Br."). The questionnaire listed four possible types of corrosion-resistant carbon steel flat products: (1) "Clad (metals bonded by the hot-rolling process), less than 3/16" in thickness"; (2) "Coated/plated with metal: Painted, or coated with organic silicate, Polyvinylidene Flouride (PVDF)"; (3) "Coated/plated with metal: Painted, or coated with organic silicate, All Other (i.e., other than PVDF)"; and (4) "Not painted, and not coated with organic silicate." Pl.'s Br. 3; Letter from U.S. Dep't of Commerce to Dongbu Steel Co., Ltd. at B-7 (Sept. 13, 2006); Letter from U.S. Dep't of Commerce to Union Steel Manufacturing Co., Ltd. (Sept. 13, 2006). Respondents were asked to classify their sales of subject merchandise made during the period of review into one of these four types. Pl.'s Br. 3; Letter from U.S. Dep't of Commerce to Dongbu Steel Co., Ltd. at B-7 (Sept. 13, 2006); Letter from U.S. Dep't of Commerce to Union Steel Manufacturing Co., Ltd. (Sept. 13, 2006).

During the period of review, Union did not have sales of subject merchandise that consisted of clad products but had sales in the United States and in Korea of unpainted products, products painted with PVDF, and products in the "All Other" painted category. Pl.'s Br. 3. In addition, Union made sales in Korea of corrosion-resistant steel flat products that were laminated with a plastic film but had no sales of laminated products in the United States during the period of review. Id. at 3-4. In responding to Commerce's questionnaire, Union reported its sales based on the four types Commerce had described but also proposed, and reported sales based on, a product type not specified in the questionnaire: "Coated/plated with metal: Laminated with film." See Letter from Kaye Scholer LLP to Sec'y of Commerce, Attach. 1 at 5-6 (Nov. 20, 2006) (Admin.R.Doc. No. 52) ("Union's Section B Resp."); see also Letter from Kaye Scholer LLP to Sec'y of Commerce, Attach. 1 at 20-21 (Feb. 2, 2007) (Admin.R.Doc. No. 99) ("Union's Supplemental Resp."). Union advocated that Commerce recognize this proposed new type category by explaining that its laminated products underwent a different production process than its painted products, were physically different from its painted products because they were coated with plastic film and not with paint, and were costlier than its painted products. See Union's Section B Resp. 6; see also Union's Supplemental Resp. 20-21.

In calculating Union's antidumping duty margin for the preliminary results of the administrative review, Commerce rejected Union's proposed new type category and grouped within the type category of "All Other" painted products the home market sales of products Union had categorized as laminated. Pl.'s Br. 5; see also Mem. from Case Analysts, AD/CVD Operations, Office 3, to The File 4 (Aug. 31, 2007) (Admin.R.Doc. No. 230). Using Union's information grouped according to Commerce's type categories, Commerce assigned Union a preliminary antidumping duty margin of 4.35%. Certain Corrosion-Resistant Carbon Steel Flat Products from the Republic of Korea: Notice of Prelim. Results and Partial Rescission of Antidumping Duty Admin. Review, 72 Fed. Reg. 51,584, 51,588 (Sept. 10, 2007).

Commerce issued the Final Results of the thirteenth administrative review on March 17, 2008. Final Results, 73 Fed. Reg. 14,220. As explained in the Issues and Decision Memorandum ("Decision Memorandum") that was incorporated into the Final Results, Commerce once again classified as "All Other" painted products the sales of laminated subject merchandise that Union had proposed for a separate type category. See Issues and Decisions for the Final Results of the Thirteenth Admin. Review of the Antidumping Duty Order on Certain Corrosion-Resistant Carbon Steel Flat Products from the Republic of Korea (2005-2006) (Final Results) 14-15 (March 10, 2008) ("Decision Mem."); Final Results, 73 Fed.Reg. at 14,221 (adopting the Decision Mem.). Commerce also rejected an argument, made by Union and by other respondents, that Commerce should cease "zeroing" in its administrative reviews, including the current review. Decision Mem. 3-5. Based on these decisions, Commerce assigned Union a final antidumping duty margin of 4.35%. Final Results, 73 Fed. Reg. at 14,221.

In the instant action, Union advances two claims against the United States, Compl. ¶¶ 7-16, and moves for judgment upon the agency record pursuant to USCIT Rule 56.2. Pl. Union Steel's Mot. for J. upon the Agency R.; see also Pl.'s Br. Union's first claim is that Commerce failed to explain how the model match criteria utilized by the agency could be reasonable or supported by substantial evidence. Compl. ¶¶ 15-16; see also Pl.'s Br. 13. Plaintiff's second claim is that Commerce's construction of 19 U.S.C. § 1677(35) to allow zeroing, as applied in the subject review, is contrary to law. Compl. ¶¶ 7-14; Pl.'s Br. 29-39. Pursuant to plaintiff's motion, the court held oral argument on April 24, 2009. Mot. for Oral Argument 1.

II. DISCUSSION

The court exercises jurisdiction under 28 U.S.C. § 1581(c), pursuant to which the court reviews actions commenced under 19 U.S.C. § 1516a (2006), including an action contesting the final results of an administrative review that Commerce issues under 19 U.S.C. § 1675(a) (2006). 28 U.S.C. § 1581(c) (2006). The court will...