Arcelormittal Dofasco Inc. v. U.S.

602 F.Supp.2d 1330

ARCELORMITTAL DOFASCO INC., Sorevco Inc., and Do Sol Galva Ltd., Plaintiffs, and United States Steel Corporation, Plaintiff-Intervenor, v. UNITED STATES, Defendant, and United States Steel Corporation, Defendant-Intervenor.

No. Slip Op. 09-7.

Court No. 07-00135.

United States Court of International Trade.

January 22, 2009.

Hunton & Williams LLP (William Silverman, Douglas J. Heffner, and Richard P. Ferrin), Washington, DC, for plaintiffs.

Skadden, Arps, Slate, Meagher & Flom LLP (Robert E. Lighthizer, John J. Mangan, Jeffrey D. Gerrish, Soo-Mi Rhee, and Ellen J. Schneider), Washington, DC, for plaintiff-intervenor and defendant-intervenor United States Steel Corporation.

Michael F. Hertz, Deputy Assistant Attorney General, Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Barbara S. Williams, Attorney in Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Department of Justice (Stephen C. Tosini and Michael D. Panzera); Mark B. Lehnardt, Office of Chief Counsel for Import Administration, United States Department of Commerce, of counsel, for defendant.

OPINION AND ORDER

STANCEU, Judge.

Plaintiffs ArcelorMittal Dofasco Inc., formerly Dofasco Inc. ("Dofasco"), Sorevco Inc., and Do Sol Galva Ltd. (collectively, "plaintiffs") initiated this action under 19 U.S.C. § 1516a (2000) to contest a final determination ("Final Results") issued by the International Trade Administration, United States Department of Commerce ("Commerce" or the "Department") in an administrative review of an antidumping duty order on certain corrosion-resistant carbon steel flat products from Canada (the "subject merchandise"). See Certain Corrosion-Resistant Carbon Steel Flat Prods. from Canada: Final Results of Antidumping Duty Admin. Review, 72 Fed.Reg. 12,758 (Mar. 19, 2007) ("Final Results"). Dofasco is a Canadian producer of the subject merchandise. Before the court is plaintiffs' motion, made under UCIT Rule 56.2, for judgment on the agency record.

Plaintiffs, joined by plaintiff-intervenor United States Steel Corporation ("U.S.Steel"), a domestic steel producer and a petitioner in the original antidumping investigation, argue that the Department abused its discretion in deciding not to rescind the administrative review after all of the original requesters had withdrawn, or sought to withdraw, their requests for the review. Plaintiffs seek a remand order directing the Department to rescind the administrative review. In the alternative, plaintiffs challenge the value that the Department, when performing its calculations to determine whether plaintiffs' home market sales were made below the cost of production, assigned to certain iron ore fluxed pellets that Dofasco obtained from an affiliated supplier. U.S. Steel, who is participating in the litigation as defendant-intervenor with respect to this issue, argues that Commerce's valuation of the iron ore fluxed pellets should be found to be in accordance with law in the event the court does not order the rescission of the administrative review. Defendant argues that Commerce properly exercised the discretion provided by its regulations to continue the administrative review. Defendant contends that Commerce properly exercised its discretion in refusing to extend the due date for the filing of the letters seeking to withdraw requests for review because two of the letters were filed long after the due date provided in the Department's regulations and near the time of completion of the review. On the issue of valuation of iron ore fluxed pellets, Commerce requests a. voluntary remand so that it may reconsider, and possibly redetermine, its valuation of this material.

Commerce provided no explanation in the Final Results of its reasoning for refusing to extend the deadline for withdrawal of the requests for the administrative review and thereby for deciding that the review should continue. The communication to the parties of Commerce's reasoning was stated in a letter not incorporated into the Final Results. The stated reasoning was inadequate to support the decision. Accordingly, the court remands the Final Results to the Department and directs the Department to reconsider its decision not to rescind the administrative review.

I. BACKGROUND

On August 1, 2005, Commerce announced the opportunity to request a periodic administrative review of entries of certain corrosion-resistant carbon steel flat products from Canada that were made during the period of August 1, 2004 to July 31, 2005 (the "period of review"). Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Admin. Review, 70 Fed.Reg. 44,085 (Aug. 1, 2005). Commerce initiated the review following requests by plaintiffs and another Canadian steel producer, Stelco, Inc. ("Stelco"), and a request by petitioner U.S. Steel for review of the sales of Dofasco's and Stelco's subject merchandise. Initiation of Antidumping and Countervailing Duty Admin. Reviews and Request for Revocation in Part, 70 Fed.Reg. 56, 63 1 (Sept. 28, 2005); Certain Corrosion-Resistant Carbon Steel Flat Prods. from Canada: Preliminary Results of Antidumping Duty Admin. Review, 71 Fed.Reg. 53,363, 53,364 (Sept. 11, 2006) ("Preliminary Results"); Letter from Willkie Farr & Gallagher LLP to Sec'y of Commerce 1 (Aug. 31, 2005) (Admin.R.Doc. No. 2). Plaintiffs timely informed Commerce on December 20, 2005 that they were withdrawing their request for an administrative review, pursuant to 19 C.F.R. § 351.213(d)(1) (2005), which provides that a party who requested an administrative review may withdraw its request within ninety days of the date of the notice of initiation. See Letter from Hunton & Williams to Sec'y of Commerce 1 (Dec. 20, 2005) (Admin.R.Doc. No. 18); see 19 C.F.R. § 351.213(d)(1). Because U.S. Steel's request for review with respect to respondent Dofasco and respondent Stelco was still in effect, Commerce continued the review with respect to both respondents. See Preliminary Results, 71 Fed.Reg. at 53,364. Commerce published preliminary results of the administrative review on September 11, 2006, assigning to Dofasco, Sorevco, Inc. and Do Sol Galva Ltd., which three companies Commerce treated for purposes of the review as a single respondent, a weighted-average antidumping duty margin of 4.78%. Id. at 53,365, 53,369.

On February 14, 2007, Commerce revoked the antidumping duty order on certain corrosion-resistant carbon steel flat products from Canada (the "Order"), pursuant to the second sunset review. Revocation Pursuant to Second Five-Year ("Sunset") Reviews of Antidumping and Countervailing Duty Orders: Certain Corrosion-Resistant Carbon Steel Flat Prods. from Australia, Canada, Japan, and France, 72 Fed.Reg. 7010 (Feb. 14, 2007). Because the revocation of the Order was effective with respect to entries made on or after December 15, 2005, the revocation did not affect the antidumping duty liability of entries of plaintiffs' merchandise that were subject to the administrative review, the period of which had ended on July 31 of that year. See id. at 7010. Citing the revocation of the Order, U.S. Steel asked to withdraw its request for an administrative review with respect to respondents Dofasco and Stelco. See Letter from Skadden, Arps, Slate, Meagher & Flom LLP to Sec'y of Commerce 1 (Mar. 7, 2007) (Admin.R.Doc. No. 77) ("Skadden Letter"). On that same day, Stelco also sought to withdraw its review request. See Letter from Vinson & Elkins to Sec'y of Commerce 1 (Mar. 7, 2007) (Admin.R.Doc. No. 78) ("Vinson Letter"). Twelve days later, Commerce published the Final Results, assigning to Dofasco, Sorevco, Inc., and Do Sol Galva Ltd. a weighted-average antidumping duty margin of 5.25%. Final Results, 72 Fed.Reg. at 12,758.

II. DISCUSSION

The court exercises jurisdiction over this action pursuant to 28 U.S.C. § 1581(c) (2000), under which the Court of International Trade is granted exclusive jurisdiction of any civil action commenced under 19 U.S.C. § 1516a. See 28 U.S.C. § 1581(c). The court reviews the Final Results on the basis of the agency record and must "hold unlawful any determination, finding, or conclusion found ... to be unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i); see also 28 U.S.C. § 2640(b) (2000).

Section 351.213(d)(1) of Commerce's regulations provides that "[t]he Secretary will rescind an administrative review under this section, in whole or in part, if a party that requested a review withdraws the request within 90 days of the date of publication of notice of initiation of the requested review." 19 C.F.R. § 351.213(d)(1). In this proceeding, plaintiffs' withdrawal of the request for the review was timely, as it was filed on December 20, 2005, seven days prior to the due date set by the regulation. Although a literal reading of the regulation might suggest that Commerce was required to rescind the review, at least as to entries of plaintiffs' merchandise, as a result of plaintiffs' withdrawal of their request for a review, such a reading would conflict with the applicable statutory provision. Congress provided, in 19 U.S.C. § 1675(a)(1) (2000), that Commerce is to conduct a periodic review of an antidumping duty order "if a request for such a review has been received." 19 U.S.C. § 1675(a)(1). Although plaintiffs' withdrawal of their request for an administrative review was filed on December 20, 2005 and therefore was timely under § 351.213(d)(1), the request by U.S. Steel for a review of Dofasco's and Stelco's sales was still in effect as of that date, as was Stelco's request for a review, and as a result Commerce's continuation of the review was proper at the time.

The statute, in 19 U.S.C. § 1675(a)(1), does not authorize Commerce to initiate a periodic review in the absence of a request. See id. The statute, however,...