POSCO v. United States

556 F.Supp.3d 1364

POSCO, Plaintiff,

Nucor Corporation, Consolidated Plaintiff,

ArcelorMittal USA LLC and SSAB Enterprises LLC, Plaintiff-Intervenors,

v.UNITED STATES, Defendant,andSSAB Enterprises LLC, Nucor Corporation, ArcelorMittal USA LLC and POSCO, Defendant-Intervenors.

Slip Op. 22-3

Consol. Court No. 17-00137

United States Court of International Trade.

January 13, 2022

Brady W. Mills, Ragan W. Updegraff, Donald B. Cameron, Julie C. Mendoza, R. Will Planert, Mary S. Hodgins, Eugene Degnan, and Sarah S. Sprinkle, Morris, Manning & Martin LLP, of Washington, D.C., for Plaintiff and Defendant-Intervenor POSCO.

Adam H. Price, Christopher Weld and Adam M. Teslik, Wiley Rein, LLP, of Washington, D.C., for Consolidated Plaintiff and Defendant-Intervenor Nucor Corporation.

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

OPINION

Katzmann, Judge:

The court returns to a challenge to the U.S. Department of Commerce's ("Commerce") determination that Korean producers of certain carbon and alloy steel cut-to-length plate ("CTL plate") did not receive a countervailable benefit through the provision of electricity for less than adequate remuneration ("LTAR"). Before the court is Commerce's Final Results of Redetermination Pursuant to Court Remand (Dep't Commerce July 6, 2021), ECF No. 118 ("Second Remand Results"), which were ordered following the decision of the United States Court of Appeals for the Federal Circuit in POSCO v. United States, 977 F.3d 1369 (Fed. Cir. 2020) (" POSCO IV") so that Commerce could amend its CVD determination to comply with that decision. See generally, Mandate, Feb. 18, 2021, ECF No. 111. On remand, Commerce "reexamined its benefit analysis in the provision of electricity for LTAR" and concluded that (1) the Korean Electricity Corporation ("KEPCO") did not provide electricity for LTAR, and (2) the electricity prices established by the Korean Power Exchange ("KPX") do not constitute a countervailable benefit. Consolidated Plaintiff Nucor Corporation ("Nucor") challenges Commerce's Second Remand Results on the basis that they do not comply with POSCO IV’s holdings that (1) a preferential-rate analysis is not a legally permissible method for the assessment of LTAR, and (2) Commerce's failure to investigate KPX's influence on KEPCO's pricing constituted a failure to support its final determination with substantial evidence. Nucor's Cmts. in Opp. to Final Results of Redetermination Pursuant to Ct. Remand, Aug. 6, 2021, ECF No. 121 ("Nucor's Br."). Defendant the United States ("Government") requests that the court sustain Commerce's Second Remand Results. Def.’s Resp. to Cmts. on Final Results of Redetermination, Sept. 7, 2021, ECF No. 123 ("Def.’s Br."). Upon consideration of the arguments presented by the parties, the court now sustains Commerce's Second Remand Results.

BACKGROUND

The court set out the relevant legal and factual background of the proceedings in further detail in its previous opinions, POSCO v. United States, 42 CIT ––––, 353 F. Supp. 3d 1357 (2018) (" POSCO I"); POSCO v. United States, 43 CIT ––––, 382 F. Supp. 3d 1346 (2019) (" POSCO II"); and POSCO v. United States, 43 CIT ––––, 415 F. Supp. 3d 1233 (2019) (" POSCO III"). Information relevant to the instant opinion is set forth below.

In 2016, Commerce initiated a countervailing duty investigation of certain CTL plate from Korea, with a period of investigation ("POI") of January 1, 2015 through December 31, 2015. Certain Carbon and Alloy Steel Cut-to-Length Plate from Brazil, the People's Republic of China, and the Republic of Korea: Initiation of Countervailing Duty Investigations, 81 Fed. Reg. 27,098 (Dep't Commerce May 5, 2016), P.R. 59. POSCO was selected as a mandatory respondent.¹ Respondent Selection Mem. (Dep't Commerce May 31, 2016), P.R. 102. On April 4, 2017, Commerce issued a final affirmative countervailing duty ("CVD") determination, imposing a duty rate of 4.31% on POSCO. Certain Carbon and Alloy Steel Cut-To-Length Plate From the Republic of Korea: Final Affirmative Countervailing Duty Determination and Final Negative Critical Circumstances Determination, 82 Fed. Reg. 16,341 (Dep't Commerce Apr. 4, 2017), P.R. 505 ("Final Determination") and accompanying Issues and Decision Mem. (Mar. 29, 2017), P.R. 497 ("IDM").

POSCO challenged several aspects of Commerce's Final Determination, including the countervailability of research and development grants received by POSCO M-Tech and Commerce's application of adverse facts available ("AFA") to POSCO Chemtech and to Hyundai. POSCO III, 415 F. Supp. 3d at 1235-36. Nucor also challenged Commerce's determination, arguing that Commerce wrongly determined that POSCO did not benefit from subsidized electricity. POSCO I, 353 F. Supp. 3d at 1363.

In POSCO I, the court upheld Commerce's application of AFA to POSCO M-Tech's unreported additional government subsidies, but remanded for reconsideration the question of whether POSCO M-Tech's research and development grants constituted a countervailable subsidy. Id. at 1374-76, 1383. POSCO then moved for the court to reconsider its affirmance of (1) Commerce's application of a 1.05% AFA rate to POSCO M-Tech for unreported government subsidies received by Ricco Metal and Nine-Digit, both companies acquired by POSCO M-Tech; and (2) Commerce's application of a 1.05% AFA rate to Hyundai and attribution of this rate to POSCO. Mot. of Pl. POSCO for Reh'g. and Recons. at 2-3, Dec. 21, 2018, ECF No. 82. In POSCO II, responding to the motion for reconsideration, the court concluded that "Commerce did not provide any additional explanation of how it determined that there was no identical program [to the research & development grants] before moving to the second step of its AFA methodology -- using the rate in another investigation -- and thus did not make the requisite factual findings to address POSCO's contention that the [Industrial Technology Innovation Promotion Act] grant was an identical program in the proceeding." POSCO II, 382 F. Supp. 3d at 1349. The court accordingly further remanded to Commerce the issue of whether, under the first step of the AFA methodology, a program identical to the assistance received by Ricco Metal and Nine-Digit existed. Id. The court declined to reconsider Commerce's application of AFA to Hyundai and the attribution of that rate to POSCO. Id. at 1346.

Commerce filed its first redetermination results with the court in July of 2019. Final Results of Redetermination Pursuant to Court Remand (Dep't Commerce July 1, 2019), ECF No. 97 ("First Remand Results"). In the First Remand Results, Commerce concluded that (1) POSCO M-Tech's research and development grants (as received by Ricco Metal and Nine-Digit) were countervailable; (2) the use of the highest AFA rate was appropriate in light of POSCO's failure to cooperate; (3) the initial 1.64% AFA rate assigned to Chemtech should be reduced to 1.05%; and (4) no program identical to the research & development grants existed. The court, after consideration of the First Remand Results and comments by the parties, sustained Commerce's determination on remand. POSCO III, 415 F. Supp. 3d at 1240.

On January 7, 2020, Nucor appealed the court's decision in POSCO III to the Federal Circuit. The appeal was subsequently stayed pending resolution of a related appeal, POSCO v. United States No. 19-1213. Order Granting Mot. to Stay, POSCO v. United States, No. 20-1357 (Fed. Cir. Feb. 27, 2020), ECF No. 16. On October 15, 2020, the Federal Circuit issued its decision in the related appeal, POSCO IV, in which it determined that the application of a preferential-rate standard is insufficient to establish adequacy of remuneration (and is thus contrary to law), and that Commerce's failure to address "the role of KPX in the Korean electricity market" in the investigation on appeal rendered its final determination unsupported by substantial evidence. POSCO IV, 977 F.3d at 1378. This court's decision in POSCO III was accordingly vacated and remanded for further proceedings. Order Granting Mot. to Terminate Appeal, POSCO v. United States, No. 20-1357, 2021 WL 6496562 (Fed. Cir. Feb. 18, 2021), ECF No. 19.

This court subsequently ordered the filing of remand results consistent with POSCO IV by June 23, 2021. Scheduling Order, Mar. 16, 2021, ECF No. 114. On July 6, 2021, after an extension of time, Commerce filed its Second Remand Results. Nucor filed comments in opposition to the Second Remand Results on August 6, 2021. Nucor's Br. The Government then filed a reply to Nucor's comments in opposition on September 7, 2021. Def.’s Br.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction over this action pursuant to 28 U.S.C. § 1581(c). The standard of review in this action is set forth in 19 U.S.C. § 1516a(b)(1)(B)(i) : "[t]he court shall hold unlawful any determination, finding or conclusion found ... to be unsupported by substantial evidence on the record, or otherwise not in accordance with law." Substantial evidence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938). "[T]he possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence." Mid Continent Steel & Wire, Inc. v. United States, 940 F.3d 662 (2019) (quoting Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966) ). Where Congress has entrusted...