Thyssenkrupp Acciai Speciali Terni S.P.A. v. United States

United States Court of Appeals for the Federal Circuit
2009-1363

THYSSENKRUPP ACCIAI SPECIALI TERNI S.P.A.
and THYSSENKRUPP AST USA, INC.,

Plaintiffs-Appellants,

v.

UNITED STATES,
Gary Locke, SECRETARY OF COMMERCE,
UNITED STATES DEPARTMENT OF COMMERCE,
Ron Kirk, AMBASSADOR and UNITED STATES TRADE REPRESENTATIVE,
and THE OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE,

Defendants-Appellees,

and

AK STEEL CORP.,

Defendant,

and

ALLEGHENY LUDLUM CORPORATION,

Defendant-Appellee.

Lorane F. Hebert, Hogan & Hartson LLP, of Washington, DC, argued for
plaintiffs-appellants. With her on the brief were Lewis E. Leibowitz, T. Clark Weymouth,
Craig A. Lewis, Jonathan T. Stoel, and Brian S. Janovitz.

Claudia Burke, Senior Trial Counsel, Commercial Litigation Branch, Civil
Division, United States Department of Justice, of Washington, DC, argued for
defendants-appellees United States, et al. With her on the brief were Tony West,
Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy,
Assistant Director.

Mary T. Staley, Kelley Drye & Warren LLP, of Washington, DC, argued for
defendant-appellee Allegheny Ludlum Corporation. With her on the brief were David A.
Hartquist and Daniel P. Lessard.

Appealed from: United States Court of International Trade

Senior Judge Richard W. Goldberg
United States Court of Appeals for the Federal Circuit

2009-1363

THYSSENKRUPP ACCIAI SPECIALI TERNI S.P.A.
and THYSSENKRUPP AST USA, INC.,

Plaintiffs-Appellants,

v.

UNITED STATES,
Gary Locke, SECRETARY OF COMMERCE,
UNITED STATES DEPARTMENT OF COMMERCE,
Ron Kirk, AMBASSADOR and UNITED STATES TRADE REPRESENTATIVE,
and THE OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE,

Defendants-Appellees.
and

AK STEEL CORP.,

Defendant,

and

ALLEGHENY LUDLUM CORPORATION,

Defendant-Appellee.

Appeal from the United States Court of International Trade in Case No.
07-00390, Senior Judge Richard W. Goldberg.

____________________________

DECIDED: April 23, 2010
____________________________

Before LOURIE, GAJARSA, and MOORE, Circuit Judges.

LOURIE, Circuit Judge.
 ThyssenKrupp Acciai Speciali Terni SpA and ThyssenKrupp AST USA, Inc.

(collectively “ThyssenKrupp”) appeal from the decision of the United States Court of

International Trade holding that the Department of Commerce (“Commerce”) reasonably

interpreted section 129 of the Uruguay Round Agreement Act (“URAA”) when it declined

to correct an alleged clerical error in the original investigation that was not raised in the

World Trade Organization dispute settlement proceeding. See ThyssenKrupp Acciai

Speciali, Terni S.P.A. v. United States, 602 F. Supp. 2d 1362 (Ct. Int’l Trade 2009)

(“ThyssenKrupp”) (upholding Commerce’s determination in Implementation of the

Findings of the WTO Panel in US—Zeroing (EC), 72 Fed. Reg. 25,261 (Dep’t

Commerce May 4, 2007) and accompanying Issues and Decision Mem. (Aug. 20, 2007)

(“Section 129 Determination”)). Because the court properly sustained Commerce’s

reasonable interpretation of the statute, we affirm.

BACKGROUND

Three adjudicative processes are relevant to this case: (A) Commerce’s original

antidumping determination against ThyssenKrupp, including inter alia, its challenge

before the Court of International Trade and subsequent stipulated-to dismissal; (B) the

successful challenge before the dispute settlement body of the World Trade

Organization (“WTO”) to the U.S. practice of “zeroing” in antidumping determinations;

and (C) Commerce’s implementation of the WTO determination pursuant to 19 U.S.C.

§ 3538 (“section 129”) and ThyssenKrupp’s challenge to that determination, which is

now before this court. We take them in turn.

2009-1363 2
A. Commerce’s Original Antidumping Determination and Proceedings in the Court
of International Trade

Under the antidumping statute, Commerce imposes antidumping duties on

imported merchandise that “is being, or is likely to be, sold in the United States at less

than its fair value” and that harms domestic industry. 19 U.S.C. § 1673. Sales at less

than fair value are those where the “normal value” (the price a producer charges in its

home market) exceeds the “export price” (the price of the product in the United States).

19 U.S.C. § 1677(35)(B). One methodology for determining the appropriate dumping

margin is “average-to-average” comparison of normal value and export price, according

to which Commerce divides the products under investigation into groups (based on

model and level of trade) and calculates the average export price and average normal

value of each group. 19 C.F.R. § 351.414(c)(1). The dumping margin for each group is

calculated as the amount by which the weighted-average normal value exceeds the

weighted-average export price. The dumping margins for the groups are then

aggregated to calculate an overall weighted-average dumping margin for the

transactions being investigated. See 19 U.S.C. § 1677(35)(B).

In the context of average-to-average comparisons, “zeroing” consists of

aggregating dumping margins greater than zero, while treating “negative” dumping

margins (groups for which the weighted-average export price exceeded the weighted

average normal value) as if they were zero. Commerce’s “zeroing” methodology has

been challenged at various times and upheld as a reasonable construction of the URAA

by the Court of International Trade, Serampore Indus. Pvt. Ltd. v. U.S. Dep’t of

Commerce, 675 F. Supp. 1354, 1360-61 (Ct. Int’l Trade 1987); Bowe Passat

Reinigungs-Und Waschereitechnik GmbH v. United States, 926 F. Supp. 1138, 1150

2009-1363 3
(Ct. Int’l Trade 1996)), and by this court, Timken Co. v. United States, 354 F.3d 1334,

1342 (Fed. Cir.), cert. denied 543 U.S. 976 (2004); Corus Staal BV v. Dep’t of

Commerce, 395 F.3d 1343 (Fed. Cir. 2005), cert. denied 546 U.S. 1089 (2006); Corus

Staal BV v. United States, 502 F.3d 1370 (Fed. Cir. 2007).

In July 1999, Commerce issued an amended final determination in its

antidumping duty investigation of stainless steel sheet and strip in coils (“SSSS”) from

Italy, finding that ThyssenKrupp was dumping at a margin of 11.23%. Amended Final

Determination of Sales at Less than Fair Value: Stainless Steel Sheet and Strip in Coils

from Italy, 64 Fed. Reg. 40,567, 40,570 (Dep’t Commerce July 27, 1999). 1 In making its

original determination that SSSS was being sold at less than fair value, Commerce used

the average-to-average comparison methodology and adhered to its practice of

“zeroing” in comparing aggregate normal value to aggregate export price.

ThyssenKrupp challenged the determination at the Court of International Trade

on various grounds, including a challenge to the figures now at issue, albeit on different

grounds. The court affirmed in part, reversed in part, and remanded the determination

to Commerce. Acciai Speciali Terni S.p.A. v. United States, 142 F. Supp. 2d 969 (Ct.

Int’l Trade 2001).

Before the Court of International Trade reviewed Commerce’s redetermination,

the parties stipulated to a dismissal of the action, without prejudice and effective

January 23, 2002. ThyssenKrupp states that its agreement to dismiss its challenge to

the original investigation was a result of the publication of Commerce’s final results of its

first administrative review, in which Commerce calculated a dumping margin of 0.66%

1
Final Determination at 64 Fed. Reg. 30,750, 30,757 (Dep’t Commerce
June 8, 1999).

2009-1363 4
for imports between January 1999 and June 2000. ThyssenKrupp explains in its

briefing that its agreement to the dismissal, terminating its challenge to the findings of

dumping of SSSS, was a result of the significantly lower duties and cash deposit rate

calculated for future entries.

B. Proceedings before the World Trade Organization

In February 2004, the European Communities (“EC”) asked the WTO to establish

a dispute settlement panel to determine the legality of the United States’ use of a

zeroing methodology in its determination of antidumping duties. Request for the

Establishment of a Panel by the European Communities, United States – Laws,

Regulations and Methodology for Calculating Dumping Margins (Zeroing),

WT/DS294/7/Rev.1 at 1, 11 (Feb. 19, 2004). The EC specifically challenged fifteen

investigations, including Commerce’s investigation of SSSS from Italy. Id. at para. 7.9 &

n.119. The panel found, and on appeal the Appellate Body affirmed, that zeroing was

inconsistent with the Antidumping Agreement, and recommended that the United States

bring its actions into conformity with the Agreement. Panel Report, United States –

Laws, Regulations and Methodology for Calculating Dumping Margins (Zeroing),

WT/DS294/R (Oct. 31, 2005), aff’d by United States – Laws, Regulations and

Methodology for Calculating Dumping Margins (Zeroing), WT/DS294 (May 9, 2006).

C. Proceedings Pursuant to Section 129

The government followed the prescribed statutory process to determine whether

and how to respond. Specifically, following consultation between the legislative and

executive branches of government, the U.S. Trade Representative (“USTR”) instructed

Commerce to issue a determination that would make the investigation “not inconsistent

with the findings of the panel or the Appellate Body.” See 19 U.S.C. § 3538(b)(2).

2009-1363 5
 As a result, Commerce recalculated the margins in the investigations at issue in

order to implement the new margins prospectively on goods entering the country. 2

Commerce issued a preliminary determination with a new margin of 2.11% for

ThyssenKrupp. ThyssenKrupp then challenged Commerce’s underlying calculation of

the average unit value for certain sales, arguing that there was a clerical error in the

original investigation. ThyssenKrupp’s suggested correction, if adopted, would bring the

calculated margin below 2%, thus rendering it de minimis and resulting in the revocation

of the antidumping duty order ab initio. See 19 U.S.C. § 1673(b)(3).

Commerce then allowed the parties to comment. In August 2007, Commerce

issued final results that did not consider or correct the alleged error, stating that “the

limited purpose of a section 129 proceeding is to reopen for revision those aspects of

[Commerce’s] original determination found to be inconsistent with the WTO

Agreements,” and that it was therefore inappropriate to consider unrelated clerical or

computational errors. Section 129 Determination at 8. ThyssenKrupp then challenged

Commerce’s determination by filing a complaint in the Court of International Trade.

In considering ThyssenKrupp’s complaint, the court analyzed Commerce’s

interpretation of the requirements of section 129 under the framework laid out in

Chevron. ThyssenKrupp, 602 F. Supp. 2d at 1366-67 (applying Chevron, U.S.A., Inc. v.

Natural Res. Def. Council, Inc., 467 U.S. 837 (1984)). The court first found that the

intended scope of section 129 is ambiguous. Id. The court specifically found the

statute unclear as to whether Commerce’s determination must amend only those

2
Commerce also stopped using zeroing in new and pending investigations.
See Calculation of the Weighted-Average Dumping Margin During an Antidumping
Investigation, 71 Fed. Reg. 77,722 (Dep’t Commerce Dec. 20, 2006) (final modification).

2009-1363 6
aspects of the original determination found to violate the WTO agreements, or whether

the proceeding allows for—or requires—other changes to the original determination,

unrelated to the WTO violation. Id. The court then found that it was reasonable for

Commerce to have determined, based on the statutory language and the goals of

finality and fairness, that it would address only those issues affected by the WTO ruling

in the context of a section 129 proceeding. Id. at 1367-68. 3

ThyssenKrupp timely appealed. We have jurisdiction pursuant to 28 U.S.C.

§ 1295(a)(5).

DISCUSSION

We review the decision of the Court of International Trade de novo, “apply[ing]

anew the same standard used by the court, and [we] will uphold Commerce’s

determination unless it is unsupported by substantial evidence on the record, or

otherwise not in accordance with law.” Mittal Steel Point Lisas Ltd. v. United States,

548 F.3d 1375, 1380 (Fed. Cir. 2008) (citation and internal quotation marks omitted).

I.

ThyssenKrupp argues that Chevron deference is inapplicable to Commerce’s

determination, which it characterizes as a determination of the legal scope of the

agency’s authority. Regardless of the standard of review, however, ThyssenKrupp

argues that congressional intent as to the scope of section 129 actions is unambiguous.

ThyssenKrupp contends that the Statement of Administrative Action (“SAA”)

accompanying the URAA makes clear that a section 129 proceeding is a “new” or

3
The court further found that the USTR’s directions to Commerce were in
accordance with law. Id. at 1368. ThyssenKrupp does not appeal that aspect of the
decision.

2009-1363 7
“second” antidumping determination, and as such, it is subject to comment and review

just as the first proceeding was.

ThyssenKrupp further points out that Congress has shown an interest in having

Commerce correct clerical errors at any time during a proceeding. Refusal to do so,

according to ThyssenKrupp, is inconsistent with the objectives of fairness and accuracy,

and forces the courts to knowingly affirm a determination that includes errors.

ThyssenKrupp argues that section 129 does not preclude fixing errors, and that judicial

review of a section 129 proceeding in the antidumping statute is not limited.

The government responds that Chevron deference is indeed applicable to this

case because an agency has authority to fill in gaps in a statute it is required to

implement. Within that framework, the government next contends that the statute is

ambiguous as to whether Commerce is to consider aspects of an underlying

investigation not related to the section 129 proceeding. Specifically, according to the

government, the statute’s requirement that Commerce issue a new determination

consistent with the WTO’s findings does not specify whether Commerce may address

an issue not raised before the WTO.

The government next argues that Commerce’s interpretation is reasonable

because it comports with the purpose of the statute and the overall statutory scheme.

The statutory language requires the USTR, Congress, and Commerce all to consult on

“the matter,” referring, according to the government, to the limited issue that was before

the WTO. The focus of the consultations should therefore reasonably be considered

the appropriate focus of Commerce’s action.

2009-1363 8
 The government states that the Court of International Trade rightly found that the

statute did not compel Commerce to address issues outside the scope of the WTO

decision, and that Commerce’s decision meets the objective of finality in the

antidumping scheme. The government points to the fact that section 129

determinations are implemented prospectively as support for the proposition that

adverse WTO reports were not meant to affect issues otherwise finally decided. The

government argues that other parties to the investigation have the right to expect finality

from a ten-year old Commerce determination. The government emphasizes that

ThyssenKrupp’s argument is based on the same documents it had available to it during

the original investigation and that its inability or unwillingness to formulate a full

challenge during the original investigation is not a reason to grant it a second

opportunity to litigate the claim now.

II.

We agree with the government and affirm the Court of International Trade’s

decision upholding Commerce’s reasonable interpretation of the statute. As a

preliminary matter, we find that the court properly applied the Chevron framework to its

analysis of Commerce’s interpretation of the statute.

Commerce concluded that section 129 determinations “have a limited purpose”

and that “[t]o correct alleged errors that were not raised as part of the WTO dispute and

otherwise became final and conclusive years ago exceeds the scope of this section 129

proceeding.” Section 129 Determination at 9. In contrast to ThyssenKrupp’s

assertions, the scope of Commerce’s authority was not at issue here, as the agency

2009-1363 9
presumably retained the full scope of its authority within the bounds of the section 129

determination. As such, analysis pursuant to the Chevron framework is appropriate.

The first step of Chevron requires a court to determine “whether Congress has

directly spoken to the precise question at issue. If the intent of Congress is clear, that is

the end of the matter.” Chevron, 467 U.S. at 842. Section 129 provides that Commerce

shall “issue a determination in connection with the particular proceeding that would

render the administering authority’s action described in paragraph (1) not inconsistent

with the findings of the . . . Appellate Body.” 19 U.S.C. § 3538(b)(2). The statute does

not explicitly require—nor does it expressly prohibit—reopening the entirety of an

otherwise closed investigation to consider issues neither raised before nor addressed

by the Appellate Body. If anything, its limited reference to making the action not

inconsistent with the findings of the Appellate Body leans toward precluding the

changes ThyssenKrupp is arguing for. NTN Bearing Corp. v. United States, 74 F.3d

1204, 1208 (Fed. Cir. 1995), which ThyssenKrupp cites for the proposition that clerical

errors should be corrected when brought to light during the pendency of a

determination, is inapposite. A rule that clerical or ministerial errors within the scope of

non-final determinations may—and sometimes should—be corrected only begs the

question. The appropriate scope of the section 129 determination, however, remains

ambiguous. The SAA’s characterization of section 129 determinations as “new” also

does not answer the question of the contemplated scope of that determination. Lastly,

ThyssenKrupp’s argument that correction of ministerial errors is not precluded by

section 129 serves only to emphasize that the statute is ambiguous and certainly does

2009-1363 10
not mandate such corrections. Having established ambiguity, our analysis proceeds to

an investigation of the reasonableness of Commerce’s interpretation.

Where a statute “is silent or ambiguous with respect to the specific issue,” the

court considers “whether the agency’s answer is based on a permissible construction of

the statute.” Chevron, 467 U.S. at 843. Here, we find persuasive the government’s

argument that the role of section 129 in the statutory scheme lends itself to Commerce’s

interpretation. As discussed above, nothing in the statutory language requires the

reexamination of issues that were not before the WTO. The Court of International

Trade correctly noted that section 129 “provides a procedural mechanism for aligning

inconsistent determinations with the provisions of the WTO agreements,” and that

“allowing Commerce to expand the scope . . . to unlitigated issues” does not have clear

relevance to this purpose. ThyssenKrupp, 602 F. Supp. 2d at 1367. This interpretation

also fits with the balance Congress has struck between finality and accuracy in

antidumping duty determinations. NTN Bearing emphasized the tension inherent in

administrative determinations between finality and accuracy, both generally and in the

context of the correction of ministerial errors in antidumping duty investigations. 74 F.3d

at 1208; see also Dorbest Ltd. v. United States, 547 F. Supp. 2d 1321, 1348 (Ct. Int’l

Trade 2008) (emphasizing that late-raised clerical errors may, but are not required to,

be corrected at the discretion of Commerce). Parties to a proceeding have an interest

in relying on final decisions of adjudicatory bodies. Here, ThyssenKrupp voluntarily

withdrew its challenge to Commerce’s original investigation, allowing that determination

to become final, and the only continuing challenge to the determination was on grounds

of zeroing. The parties’ interest in finality is apparent and accounted for by Commerce’s

2009-1363 11
interpretation of the statute. Commerce’s interpretation of section 129 here is thus

based on a permissible construction of the statute and it strikes a reasonable balance

by leaving undisturbed aspects of an investigation that the parties ceased to challenge

years ago, while reopening those necessary to bring its determination into accordance

with the WTO’s ruling.

CONCLUSION

For the foregoing reasons, we affirm the Court of International Trade’s summary

judgment decision upholding Commerce’s reasonable interpretation of the scope of a

section 129 proceeding.

AFFIRMED

2009-1363 12