Essar Steel Ltd. v. United States

United States Court of Appeals
for the Federal Circuit
__________________________

ESSAR STEEL LIMITED,
Plaintiff-Appellant,

v.
UNITED STATES,
Defendant-Cross Appellant,

and
UNITED STATES STEEL CORPORATION,
Defendant-Cross Appellant.
__________________________

2011-1270, -1271, -1289
__________________________

Appeals from the United States Court of International
Trade in case no. 09-CV-0197, Judge Judith M. Barzilay.
___________________________

Decided: April 27, 2012
___________________________

MARK P. LUNN, Arent Fox LLP, of Washington, DC, ar-
gued for plaintiff-appellant.

DAVID D’ALESSANDRIS, Trial Attorney, Commercial Liti-
gation Branch, Civil Division, United States Department of
Justice, of Washington, DC, argued for defendant-cross
appellant. With him on the brief were TONY WEST, Assis-
ESSAR STEEL v. US 2

tant Attorney General, JEANNE E. DAVIDSON, Director,
PATRICIA M. MCCARTHY, Assistant Director. Of counsel on
the brief was DEBORAH R. KING, Attorney-International,
Office of the Chief Counsel for Import Administration,
United States Department of Commerce, of Washington,
DC.

NATHANIEL B. BOLIN, Skadden, Arps, Slate, Meagher &
Flom, LLP, of Washington, DC, argued for the defendant-
cross appellant United States Steel Corporation. With him
on the brief were ROBERT E. LIGHTHIZER, JEFFREY D.
GERRISH and STEPHEN J. NARKIN. Of counsel was JAMES C.
HECHT.
__________________________

Before NEWMAN, LOURIE, and MOORE, Circuit Judges.
Opinion for the court filed by Circuit Judge MOORE.
Circuit Judge NEWMAN dissents in part, concurs in the
result.

MOORE, Circuit Judge.

Essar Steel Limited (Essar) appeals from the United
States Court of International Trade’s decision affirming the
Department of Commerce’s (Commerce) finding that Essar
received countervailable subsidies from the government of
India for certain hot-rolled carbon steel flat products. The
United States government and United States Steel Corpora-
tion (US Steel) cross-appeal the trial court’s decision affirm-
ing Commerce’s finding that Essar received no subsidies
through the Chhattisgarh Industrial Program (CIP). For
the reasons described below, we affirm the trial court’s
decision to uphold the subsidies found by Commerce and
reverse its decision regarding the CIP.

BACKGROUND
3 ESSAR STEEL v. US

In 2008, Commerce initiated an investigation to assess
whether Essar received countervailable subsidies for its iron
ore products in India for the period of review from January
1, 2007 through December 31, 2007. See Initiation of Anti-
dumping and Countervailing Duty Administrative Reviews
and Request for Revocation in Part, 73 Fed. Reg. 4829 (Jan.
28, 2008). Commerce investigated several programs, includ-
ing Essar’s purchase of iron ore from the government-owned
National Mineral Development Corporation (NMDC), par-
ticipation in programs under India’s Special Economic Zone
(SEZ) Act, and participation in the CIP administered by the
state government of Chhattisgarh, India.

Commerce concluded that Essar’s purchase of iron ore
from NMDC was countervailable. To compare pricing of
iron ore purchases, Commerce sought benchmark purchases
of both iron ore lumps and fines, which are two different
types of iron ore products. Commerce relied on Essar’s
previous purchase of iron ore lumps from a non-affiliated
Brazilian supplier during the period of review. Commerce
found no comparable Essar purchase of iron ore fines, so it
used the price from Hamersley, Australia listed in the Tex
Report, which is a daily Japanese publication reporting on
international price negotiations for high-grade iron ore. In
addition, Commerce included freight and delivery charges in
its benchmark pricing.

With respect to the SEZ Act, Commerce found that the
government of India did not cooperate to the best of its
ability in responding to Commerce’s questions. As a result,
Commerce applied adverse facts available and determined
that Essar’s use of programs under the SEZ Act constituted
subsidies.

Commerce also questioned Essar regarding its partici-
pation in the CIP. In May 2008, Essar stated that it did not
ESSAR STEEL v. US 4

have any manufacturing facilities in the State of Chhattis-
garh. Commerce then identified a press release indicating
that Essar did, in fact, have an iron ore manufacturing
plant in Chhattisgarh, so Commerce submitted the question
to Essar a second time. In response to the second question,
in October 2008, Essar stated that it did not have an iron
ore beneficiation plant in Chhattisgarh. A beneficiation
plant differs from a manufacturing plant, but both are
involved in the processing of iron ore. Essar claimed that
the Chhattisgarh facilities were still in the planning stage.
Accordingly, in its preliminary results that same month,
Commerce found that Essar had no facilities in Chhattis-
garh and therefore did not benefit from the CIP.

Before Commerce initiated its investigation for the 2007
period of review and before Essar’s denials regarding the
existence of any plant (manufacturing or beneficiation),
Essar applied to the government of Chhattisgarh for bene-
fits under the CIP because of its facility in Chhattisgarh.
Essar sent a request to the government of Chhattisgarh on
March 26, 2007. Essar received word from the government
of Chhattisgarh on September 12, 2008—while the instant
investigation was still underway—that its application for
benefits under CIP was denied. Essar did not submit either
its request for benefits or the denial of these benefits to
Commerce in response to Commerce’s questionnaires.

Along with its answers to Commerce’s questions during
the investigation for the 2007 period of review, Essar sub-
mitted to Commerce a 2006–2007 annual report, which lists
an Essar facility in Chhattisgarh. Hence the only evidence
of record at that time was an annual report and press
release which both indicated the presence of a facility in
Chhattisgarh and two separate denials by Essar of any
facilities in Chhattisgarh. Finally, in its February 2009
rebuttal brief to Commerce during Commerce’s review of its
5 ESSAR STEEL v. US

initial results, Essar argued for the first time that its facil-
ity in Chhattisgarh was ineligible for benefits under the
CIP. It did not submit any evidence in support of this claim.
Commerce noted Essar’s failure to respond to the best of its
ability to Commerce’s questions by providing false informa-
tion about its Chhattisgarh facility. Because of Essar’s
failure to respond to the best of its abilities, Commerce
applied adverse facts in its May 2009 final results and
concluded that Essar did benefit from the CIP.

Essar appealed Commerce’s final results to the Court of
International Trade. The court upheld Commerce’s decision
to impose duties for Essar’s purchase of iron ore from
NMDC and its participation in the SEZ Act. Essar Steel
Ltd. v. United States, 721 F. Supp. 2d 1285, 1295–96 (Ct.
Int’l Trade 2010). The trial court held that Commerce
applied appropriate benchmark pricing for its evaluation of
Essar’s iron ore purchases from NMDC and correctly in-
cluded freight and delivery charges. Id. at 1295. It further
upheld Commerce’s results with respect to the SEZ Act. Id.
at 1296. Essar argued for the first time at the trial court
that it did not produce merchandise within the Special
Economic Zone, but the court held that Essar failed to
exhaust administrative remedies with respect to that argu-
ment. Id.

The trial court remanded the case to Commerce for fur-
ther proceedings regarding the CIP. The court relied on the
September 12, 2008 letter in which the government of
Chhattisgarh stated that Essar’s Chhattisgarh facility was
not eligible for benefits under the CIP. The court knew of
the letter because Essar had submitted it during Com-
merce’s independent review in a different investigation of
Essar’s iron ore practices for the 2006 period of review, not
the instant investigation. Id. at 1300. Although the trial
court accepted that Essar did not act to the best of its ability
ESSAR STEEL v. US 6

in responding to Commerce’s questions, it directed Com-
merce to reopen the record to consider the letter on remand.

On remand, Commerce entered two documents into the
record: the March 26, 2007 letter from Essar to the gov-
ernment of Chhattisgarh requesting subsidies under the
CIP; and the September 12, 2008 letter from the govern-
ment of Chhattisgarh informing Essar that it did not qualify
for benefits under the CIP for 2004 to 2009. Despite having
the documents in its custody during Commerce’s investiga-
tion, Essar did not submit either document to Commerce.
Commerce “strongly disagreed” with the trial court’s deci-
sion to remand and enter the documents into the record, but
“under protest” it held that Essar did not receive benefits
under the CIP. The Court of International Trade affirmed
Commerce’s finding post-remand.

Essar appealed Commerce’s decision to impose subsidies
for its purchase of iron ore from NMDC and its participation
in the SEZ Act program. The United States and US Steel
cross-appealed the decision regarding the CIP. We have
jurisdiction to review the final judgment of the Court of
International Trade pursuant to 28 U.S.C. § 1295(a)(5).

DISCUSSION

We review the Court of International Trade’s decisions
de novo, applying anew the same standard of review applied
by that court. SKF USA, Inc. v. United States, 537 F.3d
1373, 1377 (Fed. Cir. 2008). We uphold Commerce’s deter-
mination unless it is “unsupported by substantial evidence
on the record, or otherwise not in accordance with law.”
NSK Ltd. v. United States, 510 F.3d 1375, 1379 (Fed. Cir.
2007); 19 U.S.C. § 1516a(b)(1)(B)(i). Substantial evidence is
“such relevant evidence as a reasonable mind might accept
as adequate to support a conclusion.” U.S. Steel Corp. v.
7 ESSAR STEEL v. US

United States, 621 F.3d 1351, 1357 (Fed. Cir. 2010) (cita-
tions omitted).

The countervailing duty laws impose duties on imported
goods that are subsidized by the country of export or manu-
facture. The countervailing duty laws provide that a coun-
tervailable subsidy exists when a foreign government
provides a specific financial contribution to a party and that
party benefits from the contribution. See 19 U.S.C.
§ 1677(5). One way that a party receives a benefit is
through the provision of goods or services at “less than
adequate remuneration.” 19 U.S.C. § 1677(5)(E)(iv).

I. Essar’s Appeal

A. NMDC

At the outset, we note that in this appeal Essar presents
identical arguments for the NMDC subsidies as in its previ-
ous appeal, which was decided after Essar submitted its
principal brief in this case. We rejected Essar’s arguments
in the previous appeal and upheld the trial court’s decision
to use the Australian and Brazilian benchmarks and add
freight and import costs to the benchmarks. U.S. Steel
Corp. v. United States, 425 Fed. App’x 900 (Fed. Cir. 2011).
The previous appeal relates to a separate Commerce inves-
tigation of the period of review covering January 1, 2006
through December 31, 2006, so it is not binding on us in this
case. We identically conclude that Commerce’s decision to
apply countervailing duties for the NMDC subsidies is
supported by substantial evidence and comports with the
regulation. 19 C.F.R. § 351.511.

Essar argues that Commerce erred in choosing bench-
mark prices for the sale of iron ore lumps and fines. Rather
than relying on the sales to Essar by the Brazilian suppliers
ESSAR STEEL v. US 8

and the Australian sales listed in the Tex Report, Essar
argues that Commerce should have used sales made by
NMDC to Japanese buyers as the proper benchmark.

Commerce must determine the proper benchmark price
in order to determine if the goods were sold for “less than
adequate remuneration.” See 19 C.F.R. § 351.511. Com-
merce’s regulations set forth a three-tiered hierarchy to
identify the appropriate benchmark. Id. First, Commerce
looks for a “tier 1” benchmark, an actual transaction price in
the country in question, which may, in some cases, include
sales by competitively-run government auctions.
§ 351.511(a)(2)(i). If no such transactions exist, Commerce
looks for a “tier 2” benchmark, a world market price for the
goods in question. § 351.511(a)(2)(ii). If neither of those is
available, Commerce measures the adequacy of the remu-
neration by assessing whether the price is consistent with
market principles. § 351.511(a)(2)(iii).

Essar contends that NMDC’s sale to Japanese buyers is
an appropriate tier 1 benchmark for both lumps and fines.
Although Essar acknowledges that NMDC is controlled by
the Indian government, it submitted no evidence that
NMDC’s sale price to Japanese buyers was determined by a
competitively-run government auction. Commerce has
stated that a competitively-run government auction must be
open to everyone, protect confidentiality, and be based solely
on price. Countervailing Duties, 63 Fed. Reg. 65348, 65377
(Dep’t Commerce Nov. 25, 1998). The record evidence shows
that NMDC’s sale to Japanese buyers was open only to
Indian government officials and five Japanese buyers dur-
ing a private iron ore dealing mission. Therefore Com-
merce’s conclusion that the NMDC sale price to Japanese
buyers is not an appropriate tier 1 benchmark price is
supported by substantial evidence.
9 ESSAR STEEL v. US

Commerce appropriately identified Essar’s purchase of
iron ore lumps from the Brazilian supplier as a tier 1
benchmark for the iron ore lumps Essar purchased from
NMDC. For iron ore fines, Commerce had no tier 1 bench-
mark, so it identified the published price of iron ore fines
from Hamersley, Australia as a tier 2 world market price.
Though the Australian iron ore is not identical to NMDC’s
iron ore, Commerce’s regulations require only that it be a
comparable market-determined price that would be avail-
able to the purchasers in the country at issue. We conclude
Commerce properly took into account factors affecting
comparability in its selection of the benchmark. Com-
merce’s conclusion that the Hamersley, Australia iron ore
fines price is an appropriate benchmark is supported by
substantial evidence. See § 351.511(a)(2)(ii).

Essar further argues that Commerce and the trial court
erred by adding freight and import costs to the world mar-
ket price. Both the statute and the regulation, however,
require that these costs be added to the benchmark prices.
19 U.S.C. § 1677(5)(E) (“[T]he adequacy of remuneration
shall be determined in relation to prevailing market condi-
tions . . . includ[ing] price, quality, availability, marketabil-
ity, transportation, and other conditions of sale.” (emphasis
added)); 19 C.F.R. § 351.511(a)(2)(iv) (stating that the
benchmark price “will include delivery charges and import
duties” (emphasis added)). Commerce’s decision to add
these charges to the benchmark prices is consistent with the
relevant statute and regulation and is supported by sub-
stantial evidence.

B. SEZ Act

Essar also appeals the trial court’s decision to uphold
countervailing duties for benefits received under the SEZ
Act. Though Essar acknowledges that it was eligible for
ESSAR STEEL v. US 10

subsidies under the SEZ Act at some point and that it did
receive SEZ benefits during the period of review, it argues
that the subject merchandise was ineligible because it was
produced before the date on which Essar’s eligibility for SEZ
Act benefits took effect. Accordingly, Essar urges that the
benefits should be “tied” only to merchandise produced or
exported after this date. Because none of its subject mer-
chandise was produced after that date, Essar argues that no
countervailing duty should be imposed.

Commerce’s regulations state that “[i]f a subsidy is tied
to the production or sale of a particular product, the Secre-
tary will attribute the subsidy only to that product.” 19
C.F.R. § 351.525(b)(5)(i). However, no evidence exists to
support “tying” the benefits under the SEZ Act only to
particular products. In the absence of such evidence, Com-
merce was correct to apply the subsidies to all products
exported by Essar. See 19 C.F.R. § 351.525(b)(2). That is
precisely what Commerce did here.

Finally, Essar argues that Commerce should not have
imposed any countervailing duties under the SEZ Act be-
cause it does not produce any subject merchandise in the
SEZ area and therefore cannot benefit from the SEZ Act. As
the trial court correctly held, this argument fails because
Essar has not exhausted its administrative remedies. Essar
did not raise this argument before Commerce and is thus
precluded from raising it for the first time at the Court of
International Trade. See Dorbest Ltd. v. United States, 604
F.3d 1363, 1375 (Fed. Cir. 2010). We agree that substantial
evidence supports Commerce’s decision to impose counter-
vailing duties on Essar for benefits received under the SEZ
Act.

II. The United States and US Steel’s Cross-Appeal
11 ESSAR STEEL v. US

The United States and US Steel (collectively, the cross-
appellants) appeal from the trial court’s decision affirming
the post-remand determination that Essar received no
countervailable benefits through the CIP. The cross-
appellants argue that the court should have let stand Com-
merce’s previous determination applying adverse facts.
Commerce has the power to apply adverse facts when “an
interested 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). The trial court acknowledged that
Essar did not act to the best of its ability when responding
to Commerce’s questions, but nonetheless vacated and
remanded Commerce’s determination to apply adverse facts.
The trial court based its remand on Essar’s belated admis-
sion—after the imposition of adverse facts—that it had a
facility in Chhattisgarh and on the court’s own identification
of the two letters relating to Essar’s facility in Chhattisgarh.
The trial court ordered the remand and required Commerce
to place the letters on the record and consider them. This
exceeded the trial court’s authority and was erroneous.

Essar’s responses to Commerce’s questions in the initial
determination demonstrate that it did not act to the best of
its ability to comply with requests for information. When
asked the first time about facilities in Chhattisgarh, Essar
stated that “Essar does not have any manufacturing facili-
ties in the State of Chhattisgarh.” J.A. 662. After finding
the Press Release about Essar’s Chhattisgarh plant, Com-
merce presented the question a second time, but Essar still
withheld the truth about its Chhattisgarh facility:

Commerce: On page III-68 of your May QR, you
stated that you “do {} not have any manufacturing
facilities in the State of Chhattisgarh.” An Essar
press release on the record of this review appears to
indicate that you have an iron ore beneficiation
ESSAR STEEL v. US 12

plant located in . . . Chhattisgarh. Please state
whether you received subsidies under the Chhattis-
garh Industrial Policy with respect to an iron ore
beneficiation plant in [Chhattisgarh] and any other
facility in Chhattisgarh.”

Essar: No. Essar does not have an iron ore
beneficiation plant in . . . Chhattisgarh.

J.A. 1179. Essar repeatedly denied having a plant (manu-
facturing or beneficiation) in Chhattisgarh. If Essar had no
plant in Chhattisgarh, then there would be no question
about the CIP subsidies. Both of these denials occurred
after Essar had applied for these exact same CIP subsidies
claiming entitlement because of its Chhattisgarh plant.
Hence, Essar was applying for CIP benefits because of its
Chhattisgarh facility and then telling Commerce it does not
even have a plant in Chhattisgarh. Essar then received a
response to its application for subsidies from the govern-
ment of Chhattisgarh—despite Essar’s Chhattisgarh plant,
the government of Chhattisgarh determined that it was not
entitled to CIP subsidies. After its repeated claims that it
did not have a plant in Chhattisgarh, Essar did not submit
the letter which indicated that its plant in Chhattisgarh
was not entitled to CIP benefits to Commerce.

At the time Commerce determined to apply adverse
facts with regard to whether Essar received CIP benefits the
only evidence of record was Essar’s repeated claims that it
had no manufacturing or beneficiation plant in Chhattis-
garh and a press release and annual report indicating that
Essar did have a plant in Chhattisgarh. Only after Essar
was denied benefits under the CIP and after Commerce had
applied adverse facts against Essar did Essar change its
story. In light of the record, there can be no doubt Com-
13 ESSAR STEEL v. US

merce’s decision to apply adverse facts was supported by
substantial evidence.

Essar had custody of both its request for benefits and
the government’s rejection during Commerce’s investigation.
Yet Essar withheld these documents and provided contra-
dictory information to Commerce. We have held that
“[c]ompliance with the ‘best of its ability’ standard is deter-
mined by assessing whether respondent has put forth its
maximum effort to provide Commerce with full and com-
plete answers to all inquiries in an investigation.” Nippon
Steel Corp. v. United States, 337 F.3d 1373, 1382 (Fed. Cir.
2003). Providing false information and failing to produce
key documents unequivocally demonstrate that Essar did
not put forth its maximum effort. See id. at 1383 (“While
intentional conduct, such as deliberate concealment or
inaccurate reporting, surely evinces a failure to cooperate,
the statute does not contain an intent element.”).

Because Commerce lacks subpoena power, Commerce’s
ability to apply adverse facts is an important one. Rhone
Poulenc, Inc. v. United States, 899 F.2d 1185, 1191 (Fed.
Cir. 1990). The purpose of the adverse facts statute is “to
provide respondents with an incentive to cooperate” with
Commerce’s investigation, not to impose punitive damages.
F. LLi De Cecco Di Filippo Fara S. Martino S.p.A. v. United
States, 216 F.3d 1027, 1032 (Fed. Cir. 2000). An appropri-
ate decision based on adverse facts is “a reasonably accurate
estimate of the respondent's actual rate, albeit with some
built-in increase intended as a deterrent to non-compliance.”
Id. at 1032. A decision based on adverse facts is not puni-
tive when determined in accordance with the statutory
requirements, as Commerce did here. KYD, Inc. v. United
States, 607 F.3d 760, 767–68 (Fed. Cir. 2010).
ESSAR STEEL v. US 14

The imposition of adverse facts can be inappropriate if it
is overly punitive. For example, in Gallant Ocean (Thai-
land) Co. v. United States, 602 F.3d 1319, 1324 (Fed. Cir.
2010), Commerce imposed an unreasonably high anti-
dumping margin, which was “more than ten times higher
than the average dumping margin for cooperating respon-
dents.” Id. at 1324. That rate was “punitive, aberrational,
or uncorroborated.” Id. In this case, however, the counter-
vailing duty imposed for Essar’s participation in the CIP
was on par with similar subsidy programs and therefore not
punitive. Commerce did not err in its application of adverse
facts, and no party argues that the application of adverse
facts based on the record before the remand was punitive.

Without the ability to enforce full compliance with its
questions, Commerce runs the risk of gamesmanship and
lack of finality in its investigations. Indeed, Essar’s actions
demonstrate both. Essar withheld information about its
Chhattisgarh facility. Only when Essar knew that it would
face countervailable subsidies did it finally make conces-
sions about its Chhattisgarh facility. In addition, Essar’s
failure to cooperate with Commerce’s questions lengthened
the investigation.

The trial court’s remand to Commerce was precipitated
by Essar’s belated admission—after the imposition of ad-
verse facts—relating to its Chhattisgarh facility and the
court’s independent identification of Essar’s lack of eligibil-
ity for benefits under the CIP. The trial court did not con-
clude that the application of adverse facts, in light of the
record before Commerce was improper. In fact, the trial
court held that “the court accepts that Essar did not act to
the best of its ability during the review with regard to this
issue.” J.A. 2472. The trial court was aware of Essar’s
application for CIP benefits and the government of Chhat-
tisgarh‘s denial of those benefits because of an administra-
15 ESSAR STEEL v. US

tive review in a different year where Essar did admit the
existence of a plant in Chhattisgarh and did submit those
documents into the record. Essar, 721 F. Supp. 2d at 1300.
The trial court then asked the government if it would volun-
tarily remand this case for consideration of those additional
documents. J.A. 2472. The government declined to do so.
The government explained that it would not seek a volun-
tary remand and reopen the record because “Essar had an
opportunity to place this document in the administrative
record for the 2007 period of review, which Commerce
conducted between January 26, 2008, and May 6, 2009, a
period that includes and extends beyond the date of that
letter.” J.A. 1628. The government further explained that
the agency makes its decision solely on the basis of the
record; that the government should not consider evidence
not timely filed; that Essar had the responsibility to create
an accurate record; Essar had these documents and chose
not to submit them; and Essar failed to cooperate and gave
false statements. J.A. 1628. After the government declined
to voluntarily remand and reopen the record, the trial court
ordered Commerce to reopen the administrative record,
place two letters—Essar’s application for CIP benefits and
the government of Chhattisgarh’s denial of benefits—on the
record, and “consider these documents in its reassessment of
whether Essar benefitted from Chhattisgarh’s Industrial
Program.” Essar Steel, 721 F. Supp. 2d at 1301. The trial
court explained that the evidence “strongly impugn, if not
outright refute, the Department’s determination that Essar
benefitted” from the CIP. Id. at 1300. The government
argues that the trial court exceeded its authority when it
ordered Commerce to reopen the record and admit the
documents in this case. We agree.

It is Essar’s burden to create an accurate record during
Commerce’s investigation. See Zenith Elecs. Corp. v. United
States, 988 F.2d 1573, 1583 (Fed. Cir. 1993). Commerce
ESSAR STEEL v. US 16

must consider all information timely filed by interested
parties. 19 C.F.R. § 351.301(c)(3)(ii). The trial court then
reviews the record, which consists of “a copy of all informa-
tion presented to or obtained by [Commerce] during the
course of the administrative proceeding.” 19 U.S.C.
§ 1516a(b)(2)(A). The record on review did not include
Essar’s request for benefits under the CIP, nor the govern-
ment of Chhattisgarh’s denial of those benefits. The record
on review included Essar’s repeated dishonest denials of a
facility in Chhattisgarh, as well as Commerce’s question-
naire including a press release contradicting those state-
ments.

To allow constant reopening and supplementation of the
record would lead to inefficiency and delay in finality. The
Supreme Court has stated:

Administrative consideration of evidence . . . always
creates a gap between the time the record is closed
and the time the administrative decision is promul-
gated [and, we might add, the time the decision is
judicially reviewed]. . . . If, upon the coming down of
the order litigants might demand rehearings as a
matter of law because some new circumstance has
arisen, some new trend has been observed, or some
new fact discovered, there would be little hope that
the administrative process could ever be consum-
mated in an order that would not be subject to re-
opening.

Vermont Yankee Nuclear Power Corp. v. Natural Res. De-
fense Counsel, Inc., 435 U.S. 519, 554–55 (1978) (citations
omitted); see also Co-steel Raritan, Inc. v. Int’l Trade
Comm’n, 357 F.3d 1294, 1316 (Fed. Cir. 2004) (Interest of
finality of agency decisions is best served by not reopening
and supplementing the record.).
17 ESSAR STEEL v. US

We have carved out a small number of exceptions when
we allow supplementation of an agency record. For exam-
ple, one exception is to allow a remand to supplement the
record when “the original record was tainted by fraud.”
Home Prods. Int’l, Inc. v. United States, 633 F.3d 1369, 1379
(Fed. Cir. 2011). We have also made an exception and
allowed supplementation when the underlying agency
decision was based on “inaccurate data” that the “agency
generating those data indicates are incorrect.” Borlem S.A.-
Empreedimentos Industriais v. United States, 913 F.2d 933,
937 (Fed. Cir. 1990). The present case does not fall into one
of these exceptions, nor does it merit the creation of a new
exception.

Certainly Commerce could have requested that the trial
court remand to allow them to reopen the record if it be-
lieved that was warranted. The trial court could have
remanded the case to Commerce with instructions for
Commerce to decide whether to reopen and supplement the
record. 1 It was improper in this case, however, for the trial
court to remand and require that Commerce reopen and
supplement the record. The government is correct that the
trial court’s order usurps agency power, undermines Com-
merce’s ability to administer the statute entrusted to it,
contradicts important principles of finality, and discourages
compliance.

Commerce generally does not consider untimely filed
factual information. 19 C.F.R. § 351.302(d)(1) (“[T]he Secre-
tary will not consider or retain in the official record of the
proceeding . . . untimely filed factual information . . . .”);
QVD Food Co. v. Int’l Trade Comm’n, 658 F.3d 1318 (Fed.

1 It would have been futile in this case given that the
trial court asked Commerce to seek a voluntary remand and
to reopen the record and Commerce indicated that it would
not do so.
ESSAR STEEL v. US 18

Cir. 2011) (Commerce correctly declined to rely on late-filed
evidence.). Important principles of timeliness and finality
undergird all aspects of litigation. Essar had an opportu-
nity to present its evidence regarding the CIP subsidies to
Commerce during the review. Instead it denied having a
plant in Chhattisgarh. Only after the record closed, after
adverse facts were applied, after the case was being re-
viewed by the trial court, these documents surfaced. In
light of the facts of this case, Commerce did not err when it
declined to reopen the record after it had long since closed to
accept evidence that Essar at all times had and had refused
to provide. The decision to reopen the record is best left to
the agency, in this case Commerce. We cannot conclude
that the agency abused its discretion by refusing to reopen
the record and admit the evidence in this case. In light of
this, the trial court exceeded its authority when it ordered
the agency to do so.

Commerce’s application of adverse facts against Essar
was appropriate. We have recognized Commerce’s authority
to apply adverse facts, even when a party provides relevant
factual information if a party has not acted to the best of its
ability to provide the information. In Nippon Steel, Nippon
Steel withheld relevant information from Commerce after
Commerce asked for it twice during the investigation. 337
F.3d at 1383. Nippon Steel provided the information to
Commerce only after Commerce published its preliminary
results, which applied adverse facts against Nippon Steel.
Id. at 1378. Because Nippon Steel did not timely file the
information, Commerce chose not to accept it, and instead
upheld its application of adverse facts against Nippon Steel
in its final results. Id. The Court of International Trade,
after several remands to Commerce, ordered Commerce to
use the late-filed information, instead of adverse facts. Id.
at 1379. We reversed the Court of International Trade’s
decision, and held that Commerce’s decision to apply ad-
19 ESSAR STEEL v. US

verse facts was supported by substantial evidence. Id. at
1385.

The only difference between Nippon Steel and this case
is that here, it was the trial court, not Essar, who identified
the late-filed documents. That does not change the fact that
Commerce’s application of adverse facts was supported by
substantial evidence and should have been upheld. The
Court of International Trade exceeded its authority when it
ordered Commerce to reopen and expand the agency record.
Article III courts are different from Article I agencies, and
we must be ever mindful that we not usurp their role in this
process.

CONCLUSION

We conclude that the trial court properly affirmed
Commerce’s imposition of countervailing subsidies for
Essar’s purchase of iron ore from NMDC and participation
in the SEZ Act, but it erred in remanding the issue of bene-
fits from the CIP. Accordingly, we affirm the Court of
International Trade’s decision with respect NMDC and SEZ
Act, and reverse the Court of International Trade’s decision
with respect to the CIP. Commerce’s decision to apply
adverse facts was supported by substantial evidence.

AFFIRMED-IN-PART AND REVERSED-IN-PART

COSTS

Costs to Defendants-Cross Appellants.
 United States Court of Appeals
for the Federal Circuit
__________________________

ESSAR STEEL LIMITED,
Plaintiff-Appellant,

v.
UNITED STATES,
Defendant-Cross Appellant,

and
UNITED STATES STEEL CORPORATION,
Defendant-Cross Appellant.
__________________________

2011-1270,-1271,-1289
__________________________

Appeal from the United States Court of International
Trade in Case No. 09-CV-0197, Judge Judith M. Barzilay.
__________________________

NEWMAN, Circuit Judge, dissenting in part, concurring in
the judgment.

I agree with the court’s conclusion, but write separately
to state my disagreement with the ruling that “the trial
court exceeded its authority when it ordered Commerce to
reopen the record and admit the documents in this case.”
Op. at 15. Surely it is within the authority of the trial court
to assure, in its sound discretion, that the record includes
the documents here at issue, documents that were in the
ESSAR STEEL v. US 2

possession of the trial court and the agency from a prior
review, and that concededly are relevant. Such a discre-
tionary instruction, serving to enlarge the agency record on
the specific point at issue, is not appropriate for appellate
revocation.

I do not condone the provision of misinformation by Es-
sar Steel. However, the action of the Court of International
Trade to assure that this potentially correct information is
before the agency was not an improper action. Although my
colleagues deplore “allow[ing] constant reopening and
supplementation of the record,” op. at 16, here there was
one reopening and supplementation, not “constant.” In
Borlem S.A.-Empreedimentos Industriais v. United States,
913 F.2d 933, 937 (Fed. Cir. 1990) this court observed that
“deference is not owed to a determination that is based on
data that the agency [knows to be] incorrect. The law does
not require, nor would it make sense to require, reliance on
data which might lead to an erroneous result.” The Court of
International Trade’s observation that “Commerce's deter-
mination in the sixth administrative review that Essar did
not benefit from the Chhattisgarh Industrial Policy, and the
Department's concurring admissions during oral argument,
cast grave doubt upon the present findings,” 721 F. Supp.2d
at 1300, surely supports entry of these documents into the
record for this review. The Court of International Trade did
not exceed its authority, in requiring Commerce to receive
this evidence into the record.

The Court of International Trade acted within its au-
thority for agency review. See, e.g., Rhone Poulenc, Inc. v.
United States, 880 F.2d 401, 402 (Fed. Cir. 1989) (28 U.S.C.
§ 1585 confers upon the Court of International Trade “all
the necessary remedial powers in law and equity possessed
by other federal courts established under Article III of the
Constitution”); Borlem, 913 F.2d at 936-937 (“The Court of
3 ESSAR STEEL v. US

International Trade has broad authority under 28 U.S.C. §
2643(c)(1) to require the Commission to reconsider its
actions.”).

Of course, I do not propose that Commerce must always
receive additional information. However, when the trial
court so requires, within its discretionary authority, it is not
a “usurpation of agency power” for the court to exercise its
statutory obligations. Even were this court to believe that
the Court of International Trade was unduly tolerant of
Essar’s misstatements during Commerce’s investigations,
this benevolence does not warrant appellate discipline.
From the panel’s determination that the trial court exceeded
its authority, I respectfully dissent.