Union Steel v. United States

836 F.Supp.2d 1382

34 ITRD 1463

UNION STEEL, Plaintiff,andWhirlpool Corporation, Plaintiff–Intervenor,

v. UNITED STATES, Defendant,andUnited States Steel Corporation and Nucor Corporation, Defendant–Intervenors.

United States Court of International Trade.

Slip Op. 12–56.

Court No. 09–00130.

April 25, 2012.

Donald B. Cameron, Julie C. Mendoza, R. Will Planert, Brady W. Mills, and Mary S. Hodgins, Morris, Manning & Martin, LLP, of Washington, DC, for plaintiff.

William R. Rucker and Nicolas Guzman, Drinker Biddle & Reath, LLP, of Chicago, IL, for plaintiff-intervenor.

Tara K. Hogan, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for defendant. With her on the brief were Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, and Claudia Burke, Assistant Director. Of counsel on the brief was Daniel J. Calhoun, Attorney, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of Washington, DC.

Jeffrey D. Gerrish, Ellen J. Schneider, and Robert E. Lighthizer, Skadden, Arps, Slate, Meagher & Flom LLP, of Washington, DC, for defendant-intervenor United States Steel Corporation.

Timothy C. Brightbill and Alan H. Price, Wiley Rein LLP, of Washington, DC, for defendant-intervenor Nucor Corporation.

OPINION AND ORDER

STANCEU, Judge:

Plaintiff Union Steel Manufacturing Co., Ltd. (“Union”) brought this action in 2009 to contest the final determination (“Final Results”) issued by the International Trade Administration, U.S. Department of Commerce (“Commerce” or the “Department”), that concluded the Department's fourteenth periodic administrative review of an antidumping duty order on imports of certain corrosion-resistant carbon steel flat products (“CORE”) from the Republic of Korea (“Korea”). Compl. (Mar. 24, 2009), ECF No. 5; Certain Corrosion–Resistant Carbon Steel Flat Products from the Republic of Korea: Notice of Final Results of the Fourteenth Admin. Review & Partial Rescission, 74 Fed.Reg. 11,082 (Mar. 16, 2009) (“ Final Results ”). The Final Results assigned Union, a Korean producer and exporter of CORE subject to the order, a weighted-average dumping margin of 7.56%. Final Results, 74 Fed.Reg. at 11,083.

In its first opinion and order in this case, Union Steel v. United States, 33 CIT ––––, 617 F.Supp.2d 1373 (2009) (“Union Steel I ”), the court ruled that Whirlpool Corporation had plaintiff-intervenor status as of right and enjoined the liquidation of entries of Whirlpool's merchandise pending judicial review. In its second opinion and order, Union Steel v. United States, 35 CIT ––––, 755 F.Supp.2d 1304 (2011) (“Union Steel II ”), the court held that Commerce acted lawfully in basing Union's general and administrative (“G & A”) expenses and interest expense on financial statements that pertained to seven of the twelve months of the period of review and in using the “zeroing” methodology in determining Union's weighted-average dumping margin for the Final Results. Id. at ––––, 755 F.Supp.2d at 1315–16. Further, in response to defendant's request for a voluntary remand, the court ordered that Commerce reconsider its denial of Union's request for a revision to the model-match methodology Commerce applied in the fourteenth review. Id. at ––––, 755 F.Supp.2d at 1315–16.

Before the court is the determination (“Remand Redetermination”) Commerce issued in response to the remand order in Union Steel II. Final Results of Redetermination Pursuant to Remand (July 15, 2011), ECF No. 115 (“ Remand Redetermination ”). In the Remand Redetermination, Commerce altered its model-match methodology with respect to the treatment of “laminated” CORE, which is CORE that is coated with a plastic film. In the Final Results, Commerce considered laminated CORE products to be products identical in physical characteristics with subject CORE that was painted but not laminated. Under the altered methodology, Commerce no longer compared subject non-laminated, painted CORE products with laminated CORE products as products identical in physical characteristics. Id. at 2. The Remand Redetermination lowered Union's weighted-average dumping margin from 7.56% to 7.45%. Id. at 18.

Also before the court is Union's motion requesting that the court reconsider its decision in Union Steel II affirming the Department's use of zeroing in the fourteenth administrative review. Union bases its motion for reconsideration on an intervening judicial decision, Dongbu Steel Co. v. United States, 635 F.3d 1363 (Fed.Cir.2011) (“Dongbu ”), in which the U.S. Court of Appeals for the Federal Circuit (“Court of Appeals”) declined to affirm a judgment of the Court of International Trade sustaining the Department's use of zeroing in an administrative review of an antidumping duty order.

The court affirms the Department's decision on remand to apply a revised model-match methodology, which plaintiff supports and defendant-intervenors oppose. The court issues a second remand order so that Commerce may provide an explanation of its decision to apply zeroing that addresses the issues identified by the Court of Appeals in Dongbu.

I. Background

Background on this litigation is set forth in the court's prior opinions and orders and supplemented herein. Union Steel I, 33 CIT at ––––, 617 F.Supp.2d at 1375–78; Union Steel II, 35 CIT at ––––, 755 F.Supp.2d at 1306–07.

Union brought three claims in this action. In Count I of its complaint, plaintiff challenged the Department's construction of section 771(35) of the Tariff Act of 1930 (“Tariff Act”), 19 U.S.C. § 1677(35) (2006), according to which the Department applied its practice of “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. Compl. ¶¶ 8–15. In Count II, Union challenged the Department's “model match” methodology as applied in the fourteenth review, claiming that Commerce unlawfully compared Union's U.S. sales of non-laminated, painted CORE products to Union's home market sales of both painted CORE products and laminated CORE products. Id. ¶¶ 16–17. In Count III, Union challenged the Department's decisions to use Union's 2007 financial statement, prepared for a fiscal year corresponding to the 2007 calendar year, to determine a G & A expense ratio and the decision to use the fiscal-year 2007 financial statement (also based on the calendar year) of Union's parent, Dongkuk Steel Mill (“DSM”), to determine Union's interest expense ratio. Id. ¶¶ 18–19. Union claimed that Commerce should have used the fiscal-year 2006 statements and that, in failing to do so, impermissibly departed from its practice, established during previous reviews of Union, of calculating Union's G & A expense and interest expense ratios using financial statements applying to the first, five-month portion of the POR (August through December) rather than financial statements pertaining to the second, seven-month portion of the POR (January through July). Id.

Addressing Count I of the complaint, the court in Union Steel II sustained the Department's use of the zeroing methodology in determining Union's weighted-average dumping margin in the fourteenth review. Union Steel II, 35 CIT at ––––, 755 F.Supp.2d at 1314–15. Responding to defendant's request for a voluntary remand on the claim in Count II, the court ordered Commerce to “review and reconsider its ‘model match’ methodology” and alter that methodology “if substantial record evidence does not support a finding that only minor and commercially insignificant physical differences distinguish Union's laminated products from the non-laminated products to which the Department compared Union's laminated products.” Id. at ––––, 755 F.Supp.2d at 1316. With respect to the claim in Count III, the court sustained the Department's decisions to use the 2007, rather than the 2006, financial statements. Id. at ––––, 755 F.Supp.2d at 1307–12.

Plaintiff filed its motion for reconsideration on April 5, 2011, relying on the decision of the Court of Appeals in Dongbu. Pl. Union Steel's Mot. for Reconsideration (April 5, 2011), ECF No. 106. On May 9, 2011, defendant and defendant-intervenors Nucor Corporation (“Nucor”) and United States Steel Corporation (“U.S. Steel”) opposed this motion. Def.'s Resp. in Opp'n to Pl. Union Steel's Mot. for Reconsideration (May 9, 2011), ECF No. 114 (“Def.'s Opp'n”); Def.-Intervenor's Opp'n to Union Steel's Mot. for Reconsideration (May 9, 2011), ECF No. 112 (“Nucor's Opp'n”); Mem. of Def.-Intervenor United States Steel Corporation in Opp'n to Pl. Union Steel's Mot. for Reconsideration (May 9, 2011), ECF No. 113 (“U.S. Steel's Opp'n”).

Commerce filed the Remand Redetermination on July 15, 2011. Remand Redetermination. Plaintiff commented in support of the Remand Redetermination on August 15, 2011. Pl. Union Steel's Comments on the U.S. Department of Commerce's July 15, 2011 Final Results of Redetermination Pursuant to Ct. Remand (Aug. 15, 2011), ECF No. 120. On the same day, defendant-intervenorss filed comments opposing the Remand Redetermination. Comments on Final Results of Redetermination Pursuant to Ct. Order (Aug. 15, 2011), ECF No. 118 (“Nucor's Comments”); United States Steel Corporation's Comments on the Final Results of Redetermination Pursuant to Remand Issued by the Department of Commerce (Aug. 15, 2011), ECF No. 119 (“U.S. Steel's Comments”). On August 26, 2011, defendant replied to the comments of defendant-intervenors. Def.'s Resp. to Def.-Intervenors' Comments on the Department of Commerce's Remand Results (Aug. 26, 2011), ECF No. 123.

Finally, on February 15, 2012, Union notified the court of a notice published by Commerce indicating that going forward Commerce no longer will employ the zeroing methodology in administrative reviews of antidumping duty orders. Notice of Supplemental Authority (Feb. 15, 2012), ECF No. 129 (citing ...