Corus Staal Bv v. U.S.

593 F.Supp.2d 1373

CORUS STAAL BV, Plaintiff, v. UNITED STATES and Unites States Department of Commerce, Defendants, and United States Steel Corporation and Arcelormittal USA Inc., Defendant-Intervenors.

Slip Op. 08-144.

Court No. 07-00221.

United States Court of International Trade.

December 29, 2008.

Steptoe & Johnson LLP, Washington, DC (Joel D. Kaufman), Richard O. Cunningham, Alice A. Kipel, and Jamie B. Beaber for Plaintiff.

Gregory G.Kastas, Assistant Attorney General; Jeanne E. Davidson, Director; Patricia M. McCarthy, Assistant Director; (Claudia Burke), Commercial Litigation Branch, Civil Division, United States Department of Justice for Defendant United States.

Skadden Arps Slate Meagher & Flom, LLP, Washington, DC (John J. Mangan), Jeffrey D. Gerrish, and Robert E. Lighthizer for Defendant-Intervenor United States Steel Corporation.

Stewart and Stewart, (William A. Fennell) and Terence P. Stewart for Defendant-Intervenor ArcelorMittal Steel USA, Inc.

OPINION AND ORDER

BARZILAY, Judge.

Plaintiff Corus Staal BV ("Corus") challenges the imposition of antidumping duties by Defendant United States on certain entries of hot-rolled carbon steel ("HRCS") flat products from the Netherlands in an administrative review of an antidumping duty order.¹ See Certain Hot-Rolled Carbon Steel Flat Products from the Netherlands; Final Results of Antidumping Duty Administrative Review, 72 Fed.Reg. 28,676 (Dep't Commerce May 22, 2007) ("Final Results"); Certain Hot-Rolled Carbon Steel Flat Products from the Netherlands; Amended Final Results of the Antidumping Duty Administrative Review, 72 Fed.Reg. 34,441 (Dep't Commerce June 22, 2007) ("Amended Results"); Issues and Decision Memorandum for the 2004-2005 Administrative Review of Certain Hot-Rolled Carbon Steel Flat Products from the Netherlands; Final Results of Antidumping Duty Administrative Review (Dep't Commerce May 15, 2007), Pub. R. Doc. ("P.R.Doc.") 111 ("Issues and Decision Memorandum").² United States Steel Corporation ("U.S.Steel") and ArcelorMittal USA, Inc. ("ArcelorMittal") join as Defendant-Intervenors. Corus has participated in several proceedings before this Court contesting the Department of Commerce's ("Commerce") use of zeroing³ to calculate dumping margins.⁴ Pursuant to USCIT R. 56.2, Corus moves for Judgment upon the Agency Record alleging that Commerce did not act in accordance with the law and acted without substantial evidence when it (1) used zeroing to calculate Corus's weighted-average dumping margin, (2) instructed Customs and Border Protection ("Customs") to impose antidumping duties on subject merchandise imported during the fourth period of review when there was no valid determination of dumping, and (3) conducted a duty absorption inquiry and determined that antidumping duties related to sales of subject merchandise were absorbed by Corus. The court finds that Commerce's actions under (1) and (2) are in accordance with law and supported by substantial evidence. However, the court finds that Commerce did not act in accordance with law as to claim (3). Therefore, for the reasons stated below, the court denies in part, and grants in part, Corus's Motion for Judgment upon the Agency Record.

I. Background

A. The Original Antidumping Order & Subsequent Litigation

On November 13, 2000, U.S. Steel and certain other domestic steel producers petitioned Commerce to determine whether HRCS were being sold in the United States at less than fair value (LTFV) and, if appropriate, levy antidumping duties on the subject merchandise.⁵ Notice of Initiation of Antidumping Duty Investigations: Certain Hot-Rolled Carbon Steel Flat Products From Argentina, India, Indonesia, Kazakhstan, the Netherlands, the People's Republic of China, Romania, South Africa, Taiwan, Thailand, and Ukraine, 65 Fed.Reg. 77,568 (Dep't Commerce Dec. 12, 2000). Commerce conducted an investigation wherein it applied zeroing and ultimately found that Corus dumped the subject merchandise at a rate of 3.06 percent.⁶ Notice of Final Determination of Sales at Less Than Fair Value; Certain Hot-Rolled Carbon Steel Flat Products From The Netherlands, 66 Fed. Reg. 50,408, 50,409 (Dep't Commerce Oct. 3, 2001). On November 29, 2001, Commerce issued an antidumping duty order covering HRCS from the Netherlands. Antidumping Duty Order: Certain Hot-Rolled Carbon Steel Flat Products From the Netherlands, 66 Fed.Reg. 59,565, 59,566 (Dep't Commerce Nov. 29, 2001).

The European Communities ("EC") subsequently initiated a proceeding before the World Trade Organization ("WTO") challenging the United States' use of zeroing to calculate dumping margins.⁷ See EC Consultations Request, WT/DS294/1.⁸ On October 31, 2005, the WTO Panel concluded that Commerce's use of zeroing in antidumping investigations violated U.S. obligations under the WTO Antidumping Agreement ("AD Agreement") with respect to antidumping investigations.⁹ See Report of the Panel, United States—Laws, Regulations and Methodology for Calculating Dumping Margins ("Zeroing"), ¶¶ 8.2-8.4, WT/DS294/R (Oct. 31, 2005) ("Panel Report"). The WTO Panel stated that the use of the zeroing methodology in investigations violates the AD Agreement "as such," and "as applied" in the fifteen specific investigations at issue.¹⁰ Id. Although the United States appealed certain aspects of the Panel Report, the determination concerning zeroing remained unchanged. See Report of the Appellate Body, United States—Laws, Regulations and Methodology for Calculating Dumping Margins ("Zeroing"), ¶ 263, WT/ DS294/AB/R (Apr. 18, 2006) ("EC Zeroing Challenge"). Moreover, the Appellate Body in EC Zeroing Challenge also held that the use of zeroing by Commerce in administrative reviews is impermissible. See id. at ¶¶ 132-35, 263(a)(i).

Accordingly, the United States started the process of implementing the decision outlined in the Panel Report. Corus Staal 1AR, 31 CIT at ___, 515 F.Supp.2d at 1341 (citing Implementation of the Findings of the WTO Panel in U.S. Zeroing (EC): Notice of Initiation of Proceedings Under Section 129 of the [Uruguay Round Agreements Act ("URAA")]; Opportunity to Request Administrative Protective Orders; and Proposed Timetable and Procedures, 72 Fed.Reg. 9306 (Dep't Commerce Mar. 1, 2007)). "The administrative procedures for implementing such a decision are contained in Sections 123 and 129 of the URAA, codified at 19 U.S.C. §§ 3533(g) and 3538 (2000), respectively."¹¹ Corus Staal 1AR, 31 CIT at ___, 515 F.Supp.2d at 1341-42 (footnotes omitted); see also 19 U.S.C. § 3511 (2000) (implementing the URAA). On March 6, 2006, Commerce issued a notice under Section 123 of the URAA requesting comments from the public on its proposal to implement the Panel Report with respect to the use of zeroing in antidumping investigations. Antidumping Proceedings: Calculation of the Weighted Average Dumping Margin During an Antidumping Duty Investigation, 71 Fed.Reg. 11,189, 11,189-90 (Dep't Commerce Mar. 6, 2006). In December 2006, Commerce announced that it would no longer use zeroing to calculate dumping margins in "current and future investigations" as of February 22, 2007.¹² See Antidumping Proceedings: Calculation of the Weighted-Average Dumping Margin During an Antidumping Duty Investigation; Final Modification, 71 Fed.Reg. 77,722, 77,725 (Dep't Commerce Dec. 27, 2006) ("Section 123 Determination"). Commerce noted that the modification would apply only to specific investigations—i.e., investigations involving weighted-average-to-average comparisons—and, therefore, not to any other types of investigations or administrative reviews. Id. at 77,723-24.

On February 22, 2007, Commerce initiated proceedings pursuant to Section 129 of the URAA to recalculate dumping margins in each antidumping investigation without zeroing. Implementation of the Findings of the WTO Panel in U.S. Zeroing (EC): Notice of Initiation of Proceedings Under Section 129 of the URAA; Opportunity to Request Administrative Protective Orders; and Proposed Timetables and Procedures, 72 Fed.Reg. 9306, 9306 (Dep't Commerce Mar. 1, 2007). In these Section 129 proceedings, Commerce recalculated the dumping margin on HRCS imported by Corus. When Commerce issued the final determination of the recalculated dumping margin, it found the margin to be zero and accordingly revoked the antidumping order on HRCS. Implementation of the Findings of the WTO Panel in US—Zeroing (EC): Notice of Determinations Under Section 129 of the [URAA] and Revocations and Partial Revocations of Certain Antidumping Duty Orders, 72 Fed.Reg. 25,261, 25,262 (Dep't Commerce May 4, 2007) ("Section 129 Determination"). The USTR directed Commerce to implement its determination on April 23, 2007. Id.

While Commerce revoked the antidumping order on HRCS, it expressly rejected Corus's argument that the results of a Section 129 proceeding apply to entries made prior to the date USTR directs Commerce to implement the determination. Issues and Decision Memorandum at 12-14. Commerce noted that the clear, unambiguous language of Section 129 of the URAA and the Statement of Administrative Action ("SAA") provides that determinations resulting from a Section 129 proceeding will not affect entries made before the date of the USTR's direction.¹³ Id. at 14. Commerce emphasized it would instruct Customs to liquidate only those entries of the subject merchandise that "entered, or [were] withdrawn from warehouse, for consumption on or after April 23, 2007...." Section 129 Determination, 72 Fed.Reg. at 25,263 (emphasis added).

On April 25, 2007, Corus filed an action with this Court to preclude the application of antidumping duties on its entries of subject merchandise in the fifth administrative review covering entries from November 1, 2005 to October 31, 2006. In that case, Corus challenged the instructions given by Commerce to Customs to liquidate entries of the subject merchandise made by Corus during the review period at the...