BlueScope Steel Ltd. v. United States

548 F.Supp.3d 1351

BLUESCOPE STEEL LTD., BlueScope Steel (AIS) Pty Ltd., and BlueScope Steel Americas, Inc., Plaintiffs,

v. UNITED STATES, Defendant,andUnited States Steel Corp., et al., Defendant-Intervenors.

Slip Op. 21–160

Court No. 19-00057

United States Court of International Trade.

November 30, 2021

Christopher A. Dunn and Daniel L. Porter, Curtis, Mallet-Prevost, Colt & Mosle LLP, of Washington D.C., argued for Plaintiffs BlueScope Steel Ltd., BlueScope Steel (AIS) Pty Ltd., and BlueScope Steel Americas, Inc. With them on the brief was Gina Colarusso.

Kelly A. Krystyniak, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for Defendant United States. With her on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and Tara K. Hogan, Assistant Director. Of counsel on the brief was Spencer Neff, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C.

Sarah E. Shulman, Cassidy Levy Kent (USA) LLP, of Washington, D.C., argued for Defendant-Intervenor United States Steel Corp. With her on the brief was Thomas M. Beline.

OPINION AND ORDER

Eaton, Judge:

Before the court is the motion for judgment on the agency record of Plaintiffs BlueScope Steel Ltd., an Australian steel company, and its affiliates BlueScope Steel (AIS) Pty Ltd. (its Australian producer and exporter), and BlueScope Steel Americas, Inc. (its U.S. affiliated importer) (collectively, "Plaintiffs").¹ By their motion, Plaintiffs challenge the final results of the U.S. Department of Commerce's ("Commerce" or the "Department") first administrative review of the antidumping duty order on hot-rolled steel flat products from Australia. See Certain Hot-Rolled Steel Flat Products From Australia , 84 Fed. Reg. 18,241 (Dep't Commerce Apr. 30, 2019) ("Final Results") and accompanying Issues and Decision Mem. (Apr. 23, 2019) ("Final IDM"), PR 122; see also Certain Hot-Rolled Steel Flat Products From Australia, Brazil, Japan, the Republic of Korea, the Netherlands, the Republic of Turkey, and the United Kingdom , 81 Fed. Reg. 67,962 (Dep't Commerce Oct. 3, 2016) ("Order"). Jurisdiction is found under 28 U.S.C. § 1581(c) (2018) and 19 U.S.C. § 1516a(a)(2)(B)(iii) (2018).

Plaintiffs contend that Commerce's use of "total" adverse facts available² in the Final Results cannot be sustained. See Pls.’ Mem. Supp. Mot. J. Agency R., ECF No. 34 ("Pls.’ Br."); Pls.’ Reply, ECF No. 43. That is, Plaintiffs maintain that Commerce's decision to replace all of BlueScope's information with facts available and then apply adverse inferences to those facts is based on a misinterpretation of the antidumping statute and is unsupported by substantial evidence. According to Plaintiffs, BlueScope fully and accurately complied with Commerce's requests for information, and to the extent that there were any deficiencies in its initial responses to Commerce's questionnaires, it remedied them by timely responses to the supplemental questionnaires issued by the Department when permitted to do so. See Pls.’ Br. 7; see also 19 U.S.C. § 1677m(d). Plaintiffs ask the court to remand the Final Results for a recalculation of the BlueScope's dumping margin without the use of either facts available or adverse inferences.

For its part, Defendant maintains that Commerce's use of adverse facts available is supported by substantial evidence and otherwise in accordance with law, and asks the court to sustain the Final Results. See Def.’s Resp. Pls.’ Mot. J. Agency R., ECF No. 39; see also U.S. Steel Corp.’s Resp. Pls.’ Mot. J. Agency R., ECF No. 41.

Because Commerce's decision to replace all of BlueScope's submitted information with facts available was not supported by substantial evidence, the court remands the Final Results.

BACKGROUND

In 2017, BlueScope Steel Ltd., BlueScope Steel Americas, Inc., and Steelscape LLC (the U.S. affiliated processor) asked Commerce to conduct an administrative review of BlueScope Steel Ltd.’s and its affiliates’ sales under the Order during the period of review from March 22, 2016 to September 30, 2017. BlueScope's Req. for Admin. Rev. (Oct. 31, 2017), PR 1. In response, Commerce initiated the first administrative review. See Initiation of Antidumping and Countervailing Duty Admin. Revs. , 82 Fed. Reg. 57,705 (Dep't Commerce Dec. 7, 2017).

On December 7, 2017, Commerce issued its initial questionnaire to BlueScope. See Dep't Commerce Initial Quest. (Dec. 7, 2017) ("Initial Quest."), PR 4. Subsequently, Commerce issued Section A supplemental questionnaires relating to the quantity and value of BlueScope Steel Ltd.’s and its affiliates’ U.S., home market, and third-country market sales. See Dep't Commerce Sec. A Suppl. Quest. (Feb. 2, 2018), PR 34; Dep't Commerce Secs. A-C Suppl. Quest. (July 2, 2018) ("Secs. A-C Suppl. Quest."), PR 75. In addition, Commerce issued supplemental questionnaires asking for further information and clarifications as to BlueScope's sales in the home market (Section B) and the United States (Section C). See Dep't Commerce Secs. B & C Suppl. Quest. (Feb. 26, 2018), PR 47; Dep't Commerce Secs. B-E Suppl. Quest. (Apr. 9, 2018) ("Secs. B-E Suppl. Quest."), PR 57; see also Secs. A-C Suppl. Quest.

BlueScope timely responded to all of Commerce's questionnaires.³ Importantly, in its initial responses and in its supplemental responses, BlueScope reported that all of its U.S. sales of subject merchandise were made by its affiliated company BlueScope Steel (AIS) Pty Ltd. ("Australian Iron & Steel") to another affiliated company, BlueScope Steel Americas, Inc. BlueScope further stated that BlueScope Steel Americas entered the merchandise and then resold the product to Steelscape LLC, BlueScope's U.S. affiliated processor. See, e.g. , BlueScope's Sec. A Quest. Resp. at 14-15. Steelscape then "further processed the subject merchandise into coated and galvanized steel" before making "the first [U.S.] sale to an unrelated customer." See BlueScope's Sec. A Quest. Resp. at 3. In other words, throughout the review, BlueScope reported that its only sales in the United States to unaffiliated customers⁴ were of further processed merchandise, processed and sold by its affiliate Steelscape.

Commerce published the preliminary results of its review on November 14, 2018. See Certain Hot-Rolled Steel Flat Products From Australia , 83 Fed. Reg. 56,817 (Dep't Commerce Nov. 14, 2018) ("Preliminary Results"), and accompanying Preliminary Decision Mem. (Nov. 1, 2018) ("PDM"), PR 95. It published the Final Results on April 30, 2019. See 84 Fed. Reg. at 18,241.

In the Final Results,⁵ Commerce determined that necessary information was missing from the record because BlueScope had failed to provide, in the form and manner requested by the Department, usable information (1) to determine the total quantity and value of U.S. sales (Section A), and (2) to reconcile a mismatch between the total U.S. sales quantity reported in Section A, and the total quantity of sales reported for BlueScope's U.S. sales in Section C (i.e. , the U.S. sales database). Commerce further found that the record lacked a usable home market sales reconciliation of its home market sales databases (Section B) because of deficiencies in BlueScope's final consolidated Section B database. See Final IDM at 11, 18.

The Department ultimately concluded that none of BlueScope's information was usable and that all of its submissions should be replaced with facts available, and applied adverse inferences to all of the facts. See Final IDM at 18. Commerce did not address Section D of BlueScope's questionnaire responses, concerning cost of production, in either the Preliminary or Final Results. Thus, Commerce did not calculate an antidumping margin, but instead assigned an adverse facts available antidumping duty rate of 99.20 percent.⁶ See Final IDM at 15-16, 19.

Plaintiffs commenced this action to challenge Commerce's decision to use facts available to replace all of BlueScope's information, and to apply adverse inferences to those facts.⁷

STANDARD OF REVIEW

The court will sustain a determination by Commerce unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i).

LEGAL FRAMEWORK

Under the antidumping statute, Commerce determines if goods are being sold, or are likely to be sold, in the United States at less than fair value by finding the amount by which normal value exceeds export price or constructed export price. See 19 U.S.C. § 1673. The margin between the two is used to calculate an antidumping duty rate. Id. § 1677(35)(A).

During an administrative review, "[i]f ... necessary information is not available on the record, or ... an interested party or any other person ... withholds information that has been requested by [Commerce]," "fails to provide such information by the deadlines for submission of the information or in the form and manner requested," or "significantly impedes a proceeding," Commerce uses the facts otherwise available in place of the missing information. 19 U.S.C. § 1677e(a)(1)-(2)(A)-(C).

Where Commerce determines that the use of facts available is warranted, it may apply adverse inferences to those facts when replacing an interested party's information only if it makes the requisite additional finding that that party has "failed to cooperate by not acting to the best of its ability to comply with a request for information." 19 U.S.C. § 1677e(b)(1). The application of adverse facts available is, then, a two-step process. See Nippon Steel Corp. v. United States , 337 F.3d 1373, 1381 (Fed. Cir. 2003) ("The statute has two distinct parts respectively addressing two distinct circumstances under which Commerce has received less than the full and complete facts needed to make a determination.... The focus of subsection (a) is respondent's failure to provide information. ...