Slip Op. 08 – 72
UNITED STATES COURT OF INTERNATIONAL TRADE
THYSSENKRUPP ACCIAI SPECIALI
TERNI S.P.A. and THYSSENKRUPP
AST USA, INC.,
Before: Richard W. Goldberg,
Plaintiffs, Senior Judge
v. Court No. 07-00390
UNITED STATES,
CARLOS M.GUTIERREZ, UNITED
STATES DEPARTMENT OF COMMERCE,
AMBASSADOR SUSAN C. SCHWAB,
and OFFICE OF THE UNITED
STATES TRADE REPRESENTATIVE,
Defendants,
and
AK STEEL CORPORATION, and
ALLEGHENY LUDLUM CORPORATION
Defendant-
Intervenors.
OPINION
[Defendants’ partial motion to dismiss is denied.]
Dated: July 1, 2008
Hogan & Hartson, LLP (Lewis E. Leibowitz, Craig A. Lewis, Harold
D. Kaplan, Jonathan T. Stoel, Theodore C. Weymouth) for
Plaintiffs ThyssenKrupp Acciai Speciali Terni S.p.A and
ThyssenKrupp AST USA, Inc.
Gregory G. Katsas, Acting Assistant Attorney General, Jeanne E.
Davidson, Director, Commercial Litigation Branch, Civil
Division, U.S. Department of Justice, Patricia M. McCarthy,
Assistant Director, Commercial Litigation Branch, Civil
Court No. 07 - 00390 Page 2
Division, U.S. Department of Justice, (Claudia Burke), for
Defendants United States, Carlos M. Gutierrez, United States
Department of Commerce, Ambassador Susan C. Schwab, and the
Office of the United States Trade Representative. Office of
Chief Counsel for Import Administration, U.S. Department of
Commerce (Natasha Camille Robinson) for Defendant United States
Department of Commerce.
Kelley Drye & Warren, LLP (Mary Tuck Staley, Daniel Philip
Lessard, David Alan Hartquist) for Defendant-Intervenors AK
Steel Corporation and Allegheny Ludlum Corporation.
GOLDBERG, Senior Judge: This matter is before the Court on the
defendants’ partial motion to dismiss two counts of a four-count
complaint for lack of subject matter jurisdiction pursuant to
USCIT Rule 12(b)(1) and for failure to state a claim upon which
relief can be granted pursuant to USCIT Rule 12(b)(5). For the
following reasons, the defendants’ partial motion to dismiss is
denied.
I. BACKGROUND
Plaintiff ThyssenKrupp Acciai Speciali Terni S.p.A.
(“ThyssenKrupp”) is the sole producer of stainless steel sheet
and strip in coils (“SSSS”) from Italy.1 In 1998, the U.S.
Department of Commerce (“Commerce”) initiated an antidumping
investigation of imports of SSSS from Italy, and ultimately
calculated a weighted-average dumping margin of 11.23% for
1
The other plaintiff in this action, ThyssenKrupp Acciai
Speciali Terni AST USA, Inc., is ThyssenKrupp’s U.S. reseller
and is the sole importer of SSSS from Italy. Throughout this
opinion, the term “ThyssenKrupp” will refer to both plaintiffs.
Court No. 07 - 00390 Page 3
ThyssenKrupp. See Stainless Steel Sheet and Strip in Coils from
Italy, 64 Fed. Reg. 40567, 40570 (Dep’t Commerce July 27, 1999)
(final amended determination) (“1999 Antidumping Order”). To
make this determination, Commerce used a methodology commonly
referred to as “zeroing.”2
In 2006, the WTO Dispute Settlement Body adopted a WTO
dispute resolution panel report that found Commerce’s zeroing
methodology to be inconsistent with U.S. obligations under the
WTO agreements. See Panel Report, United States – Laws,
Regulations and Methodology for Calculating Dumping Margins
(Zeroing), WT/DS294/R (Oct. 31, 2005). The European Communities
had challenged the use of the zeroing methodology in fifteen of
Commerce’s antidumping duty investigations. After the WTO
2
During the course of an antidumping duty investigation,
Commerce must determine whether the subject merchandise is being
sold at less than fair value. Commerce normally employed an
“average-to-average methodology” to make this determination.
This methodology involves dividing the export transactions into
groups by model and level of trade (“averaging groups”) and then
comparing the average export price of an averaging group to the
weighted-average of normal values of such sales. Commerce then
aggregated the results of the averaging groups in order to
determine the weighted-average dumping margin. However, when
aggregating the results, Commerce did not permit the results of
averaging groups for which the weighted-average export price
exceeded the normal value to offset the results of averaging
groups for which the weighted-average export price is less than
the weighted-average normal value. This method of average-to-
average comparisons without providing offsets is generally
referred to as “zeroing.” See generally Calculation of the
Weighted Average Dumping Margin During an Antidumping Duty
Investigation, 71 Fed. Reg. 11189 (Dep’t Commerce Mar. 6, 2006)
(request for comments).
Court No. 07 - 00390 Page 4
report was issued, Commerce abandoned the zeroing methodology in
its antidumping investigations. See Calculation of the
Weighted-Average Dumping Margin During an Antidumping
Investigation, 71 Fed. Reg. 77722 (Dep’t Commerce Dec. 20, 2006)
(final modification).
Commerce initiated a section 129 proceeding to implement
the WTO findings in the antidumping investigations challenged by
the European Communities. Section 129 of the Uruguay Round
Agreements Act (set forth in 19 U.S.C. § 3538) is the means by
which final determinations resulting from antidumping
investigations are modified to comply with WTO rulings. After
the WTO declares an action by Commerce to be inconsistent with
U.S. obligations under the WTO agreements, the United States
Trade Representative (“USTR”) is required to consult with
Commerce and congressional committees on the matter. See 19
U.S.C. § 3538(b)(1) (2000). Then, at the request of the USTR,
Commerce must issue a determination (“Section 129
determination”) that brings the challenged determination into
compliance with the WTO ruling. See id. § 3538(b)(2). Once
Commerce issues the Section 129 determination, the USTR may,
after consulting with both Commerce and the congressional
committees, direct Commerce to implement the determination in
whole or in part. See id. § 3538(b)(4).
Court No. 07 - 00390 Page 5
In the present case, Commerce issued a Section 129
determination with respect to the 1999 Antidumping Order
applicable to ThyssenKrupp’s SSSS imports. Abandoning the
zeroing methodology, Commerce calculated a preliminary revised
weighted-average margin for ThyssenKrupp of 2.11%. A margin
below 2% is de minimis and would warrant revocation of the
order. See 19 U.S.C. § 1673b(b)(3) (2000). ThyssenKrupp
challenged Commerce’s preliminary calculation and alleged that
Commerce made certain errors that inflated the dumping margin.
Commerce declined to make any changes to the Section 129
determination. See Implementation of the Findings of the WTO
Panel in US-Zeroing (EC); Antidumping Duty Order on Stainless
Steel Sheet and Strips in Coils from Italy, 72 Fed. Reg. 54640,
54641-42 (Dep’t Commerce Sept. 20, 2007) (final determination).
Subsequently, ThyssenKrupp commenced this action against
Commerce, the Secretary of Commerce (the Honorable Carlos M.
Gutierrez), the Office of the USTR, and the USTR (Ambassador
Susan C. Schwab) (collectively, “the government”).3
ThyssenKrupp’s action consists of a four-count complaint
challenging the Section 129 proceeding. The first two counts
directly challenge the substance of the Section 129
3
The Secretary of Commerce and the Department of Commerce will
be collectively referred to as “Commerce.” Likewise, the United
States Trade Representative and the Office of the United States
Trade Representative will be collectively referred to as “USTR.”
Court No. 07 - 00390 Page 6
determination. In Count 1, ThyssenKrupp alleges that Commerce
erroneously transposed two numbers in one of its calculations,
which inflated the ultimate margin calculation above the de
minimis level. In Count 2, ThyssenKrupp alleges that Commerce
erred when, with respect to certain sales, it applied the net
margin rate to gross unit prices instead of to net unit prices.
As in Count 1, this error allegedly inflated the dumping margin
above 2%.
In Count 3, ThyssenKrupp alleges that the USTR acted
arbitrarily and capriciously and abused its discretion when it
directed Commerce to implement a Section 129 determination that
left errors (those described in Counts 1 and 2) uncorrected.
Count 4 alleges that Commerce unlawfully refused to correct
errors in the Section 129 Determination pursuant to 19 C.F.R. §
351.224.4
II. STANDARD OF REVIEW
The government requests that the Court dismiss Counts 3 and
4 of the Complaint for lack of subject matter jurisdiction
pursuant to USCIT Rule 12(b)(1). In this case, the plaintiffs
have the burden of establishing jurisdiction. See Cedars-Sinai
4
Section 351.224 states in relevant part: “The Secretary [of
Commerce] will analyze any comments received and, if
appropriate, correct any significant ministerial error by
amending the preliminary determination, or correct any
ministerial error by amending the final determination or the
final results of review . . . .” 19 C.F.R. § 351.224(e) (2007).
Court No. 07 - 00390 Page 7
Med. Ctr. v. Watkins, 11 F.3d 1573, 1583 (Fed. Cir. 1993). The
Court “assumes all factual allegations to be true and draws all
reasonable inferences in plaintiff’s favor.” See Mukand Int'l
Ltd. v. United States, 30 CIT __, __, 452 F. Supp. 2d 1329, 1331
(2006). The government also moves to dismiss Counts 3 and 4 for
failure to state a claim upon which relief could be granted
pursuant to USCIT Rule 12(b)(5). To avoid dismissal for failure
to state a claim, the “factual allegations must be enough to
raise a right to relief above the speculative level on the
assumption that all the allegations in the complaint are true
(even if doubtful in fact).” Bell Atl. Corp. v. Twombly, 127 S.
Ct. 1955, 1965 (2007) (internal citations omitted).
III. DISCUSSION
A. Motion to Dismiss for Lack of Jurisdiction
i. Statutory Jurisdiction Over Count 3 pursuant to §
1581(i)
The parties agree that the Court has subject matter
jurisdiction over Counts 1 and 2 because a Section 129
determination is a “reviewable determination” listed in 19
U.S.C. § 1516a(a)(2)(B). The Court has jurisdiction over any
civil action commenced under 19 U.S.C. § 1516a. See 28 U.S.C. §
1581(c). The parties disagree about the jurisdictional basis
for Counts 3 and 4. ThyssenKrupp alleges jurisdiction under
either § 1581(c) or (i), whereas the government claims
Court No. 07 - 00390 Page 8
ThyssenKrupp has failed to establish jurisdiction under either
subsection.
Count 3 of ThyssenKrupp’s complaint alleges a cause of
action pursuant to the Administrative Procedures Act (“APA”).
ThyssenKrupp claims that it has been “adversely affected or
aggrieved by” USTR’s decision to implement the Section 129
determination without correcting certain alleged errors made by
Commerce. 5 U.S.C. § 702 (2000). When a plaintiff alleges an
APA cause of action, the Court may have jurisdiction pursuant to
28 U.S.C. § 1581(i). See Motions Sys. Corp. v. Bush, 437 F.3d
1356, 1359 (Fed. Cir. 2006) (en banc) (per curiam). Section
1581(i) states that this Court has exclusive jurisdiction over:
[A]ny civil action commenced against the United
States, its agencies, or its officers, that arises out
of any law of the United States providing for—
(1) revenue from imports or tonnage;
(2) tariffs, duties, fees, or other taxes on the
importation of merchandise for reasons other than the
raising of revenue;
(3) embargoes or other quantitative restrictions on
the importation of merchandise for reasons other than
the protection of the public health or safety; or
(4) administration and enforcement with respect to the
matters referred to in paragraphs (1)—(3) of this
subsection and subsections (a)—(h) of this section.
28 U.S.C. § 1581(i) (2000). Because ThyssenKrupp’s APA cause of
action challenges the administration and enforcement of the
collection of import duties, it is “facially embraced” by
Court No. 07 - 00390 Page 9
paragraphs (1) and (4) of § 1581(i). Conoco, Inc. v. U.S.
Foreign-Trade Zones Bd., 18 F.3d 1581, 1590 (Fed. Cir. 1994).
Although a claim may technically fall within the language
of § 1581(i), it is well-established that jurisdiction is not
appropriate under that subsection when “jurisdiction under
another subsection of § 1581 is or could have been available,
unless the remedy provided under that other subsection would be
manifestly inadequate.” Miller & Co. v. United States, 824 F.2d
961, 963 (Fed. Cir. 1987). The government argues the Court
lacks jurisdiction to entertain Counts 3 and 4 because “adequate
relief is available through ThyssenKrupp’s 28 U.S.C. [§] 1581(c)
claims.” Defs.’ Partial Mot. to Dismiss 8.
In support of its argument that § 1581(c) is both available
and adequate, the government notes that all of ThyssenKrupp’s
claims essentially seek the same relief. If Commerce corrects
the alleged errors in the Section 129 determination, either as a
result of a direct challenge to that determination (Counts 1 and
2) or to the administration and enforcement of the same (as in
Count 3), ThyssenKrupp’s dumping margin would be de minimis and
the order would be revoked. The government concludes that
because ThyssenKrupp has invoked 1581(c) as the jurisdictional
basis for the first two claims, then 1581(i) cannot be invoked
for Count 3, which seeks the same remedy. Allowing a litigant
to allege an alternative jurisdictional basis for the same
Court No. 07 - 00390 Page 10
remedy is tantamount to providing a “second bite at the apple”
which, the government alleges, is not permissible under well-
settled precedent. Defs.’ Partial Mot. to Dismiss 11.
For this proposition, the government relies on Consolidated
Bearings Co. v. United States, 348 F.3d 997 (Fed. Cir. 2003).
In that case, the plaintiff challenged liquidation instructions
sent by Commerce to Customs that did not accurately reflect the
results of the underlying final determination. The Court of
Appeals for the Federal Circuit (“Federal Circuit”) held that
subject matter jurisdiction pursuant to § 1581(i) was proper
because the plaintiff was not challenging the final results of
the administrative review. If it were, then § 1581(c)
jurisdiction would have been available. The Federal Circuit
stated:
Commerce’s liquidation instructions direct Customs to
implement the final results of administrative reviews.
Consequently, an action challenging Commerce’s
liquidation instructions is not a challenge to the
final results, but a challenge to the “administration
and enforcement” of those final results.
Consol. Bearings, 348 F.3d at 1002 (quoting 18 U.S.C. §
1581(i)(4)). In the present case, the government argues that
the opposite is true in ThyssenKrupp’s Complaint: ThyssenKrupp
is challenging both the final Section 129 determination and the
administration and enforcement of that determination. Such a
strategy is not permitted under the Court’s § 1581(i)
Court No. 07 - 00390 Page 11
jurisprudence. See Corus Staal BV v. United States, 31 CIT __,
__, 493 F. Supp. 2d 1276, 1285 (2007) (holding that plaintiff
cannot challenge liquidation instructions under § 1581(i) when
it truly seeks to challenge the underlying determination).
By glossing over the “manifest inadequacy” requirement in
its analysis, the government has failed to grasp the unique
nature of ThyssenKrupp’s Complaint. In both Consolidated
Bearings and Corus Staal, the Court could decide whether §
1581(i) jurisdiction was appropriate because it was in a
position to determine the “manifest inadequacy” of any
alternative jurisdictional bases. In the present case, the
question of whether the remedy available pursuant to § 1581(c)
is “manifestly inadequate” is still unsettled at this point in
the proceedings. If Commerce has no authority to grant the
relief that ThyssenKrupp seeks in Counts 1 and 2, then the
remedy available under § 1581(c) would be manifestly inadequate.
Cf. Gilda Indus., Inc. v. United States, 446 F.3d 1271, 1276
(Fed. Cir. 2006) (holding that the remedy available under §
1581(a) was manifestly inadequate because Customs had no
authority to overturn or disregard a decision made by the USTR);
Conoco, 18 F.3d at 1587-90 (concluding that jurisdiction under §
1581(i) was appropriate because an action brought under §
1581(a) would be futile due to lack of Customs’ authority to
overturn an action by another agency).
Court No. 07 - 00390 Page 12
In its motion to dismiss, the government plainly admits
that this exact issue is still unresolved:
[T]he ultimate question posed by all of ThyssenKrupp’s
claims is whether Commerce, in a section 129
determination, may reconsider matters that have long
been settled in the litigation of an investigation—
matters that are entirely outside the scope of the
section 129 determination itself (which, as the
parties must agree, concerned only the issue of
zeroing in investigations).
Defs.’ Partial Mot. to Dismiss 11. If Commerce does have
discretion to address the alleged errors, then jurisdiction is
available pursuant to § 1581(c), and Counts 3 and 4 should be
dismissed inasmuch as they invoke § 1581(i) as their
jurisdictional basis.5 On the other hand, if Commerce does not
have the authority to consider matters that do not relate to
zeroing, then it would be futile and therefore manifestly
inadequate for ThyssenKrupp to pursue its claims under § 1516a
and § 1581(c). The Court would therefore have jurisdiction
pursuant to § 1581(i) over ThyssenKrupp’s APA cause of action.
To be clear, the Court construes Count 3 as an alternative
cause of action to Counts 1 and 2. If the Court ultimately
decides that ThyssenKrupp should prevail on Counts 1 and 2, the
remedy available would be adequate, and no jurisdiction would
support Count 3. In the same vein, if the Court determines that
5
ThyssenKrupp alleged both § 1581(c) and § 1581(i) as potential
jurisdictional bases for Count 4. As discussed below, the Court
concludes that the Court has jurisdiction over Count 4 pursuant
to § 1581(c).
Court No. 07 - 00390 Page 13
Commerce had the authority to grant the relief sought in Counts
1 and 2, but acted within its discretion to refuse to do so,
such relief would still be deemed adequate, and the Court would
not have jurisdiction over Count 3. See Miller, 824 F.2d at 964
(holding that an adverse decision under § 1581(c) does not
render a remedy manifestly inadequate). On the other hand, if
Commerce had no discretion to correct the alleged errors, then
the relief would be manifestly inadequate, and the Court would
have jurisdiction over Count 3 pursuant to § 1581(i). It would
be premature for the Court to grant Defendants’ motion to
dismiss without fully considering the merits of Counts 1 and 2.
ii. Statutory Jurisdiction Over Count 4
In Count 4, Commerce is alleged to have unlawfully refused
to correct ministerial errors as required by 19 C.F.R. §
351.224. Commerce’s decision whether to correct ministerial
errors under this regulation is subject to judicial review
pursuant to § 1581(c). See Alloy Piping Prods., Inc. v. United
States, 334 F.3d 1284, 1292 (Fed. Cir. 2003). The government
does not provide any analysis challenging § 1581(c) as the
Court’s jurisdictional basis for Count 4 against Commerce.
In addition to the allegations against Commerce, Count 4
also includes a component that involves the USTR. As the USTR’s
actions have already been challenged (with nearly identical
Court No. 07 - 00390 Page 14
language) in Count 3 as an APA cause of action,6 the Court does
not see how the USTR component of Count 4 affects its
jurisdictional basis. The USTR component simply reiterates
ThyssenKrupp’s argument that Commerce cannot use the USTR
implementation instructions as a valid defense for failing to
correct the alleged errors if those instructions were unlawful.
iii. Standing to Challenge the USTR’s Actions
The government argues that ThyssenKrupp lacks Article III
standing to challenge the USTR’s actions. To satisfy Article
III standing, ThyssenKrupp must show: (1) it has suffered an
actual injury, (2) such injury is fairly traceable to the
challenged action, and (3) such injury is likely to be redressed
by a favorable decision. See Valley Forge Christian Coll. v.
Ams. United for Separation of Church and State, Inc., 454 U.S.
464, 472 (1982). ThyssenKrupp has demonstrated that it has
suffered an injury (a higher dumping margin) that can be fairly
6
In Count 4, ThyssenKrupp makes an allegation against the USTR
that is practically identical to the allegation in Count 3.
Compare Compl. ¶ 53 (“Defendant USTR’s and Defendant Ambassador
Schwab’s direction to the Department to implement, in accordance
with 19 U.S.C. § 3538(b)(4), the unlawful Section 129 Final
Determination without correcting the mathematical errors
described in this Complaint, was ‘arbitrary, capricious, an
abuse of discretion . . . .’ 5 U.S.C. § 706(2).”), with Compl. ¶
58 (“Defendant USTR’s and Defendant Ambassador Schwab’s
direction to the Department, to the extent that USTR directed
the Department to implement, in accordance with 19 U.S.C. §
3538(b)(4), the unlawful Section 129 Final Determination without
correcting the ministerial errors described herein, was
‘arbitrary, capricious, an abuse of discretion . . . .’ 5 U.S.C.
§ 706(2).”).
Court No. 07 - 00390 Page 15
traced to the challenged action (implementation of an allegedly
unlawful Section 129 determination). The government, however,
claims that ThyssenKrupp’s injury is not likely to be redressed
by a favorable decision of the Court. The government
characterizes ThyssenKrupp’s Complaint as seeking, among other
things, a finding that USTR lacked authority to direct Commerce
to implement an unlawful Section 129 determination. If the
Court does make such a finding, ThyssenKrupp would simply be
placed in the position it was in before the implementation of
the Section 129 determination (i.e., subject to an 11.23%
dumping margin). Hence, a favorable decision by this Court
would not redress ThyssenKrupp’s injury.
The government misapprehends the relief set forth in the
Complaint. ThyssenKrupp does not simply ask the Court for a
finding that the USTR lacked authority to direct Commerce to
implement the Section 129 determination. Instead, ThyssenKrupp
asks the Court to “[d]eclare contrary to law USTR’s direction to
[Commerce] to adopt and publish Commerce’s unlawful Section 129
Final Determination to the extent that USTR directed [Commerce]
to implement, in accordance with 19 U.S.C. § 3538(b)(4), the
unlawful Section 129 Final Determination without correcting the
errors described in this Complaint.” Compl. ¶ 59(b). If the
USTR’s implementation instructions were unlawful, or if the USTR
never limited Commerce’s authority to correct errors, then this
Court No. 07 - 00390 Page 16
Court could remand the issue back to Commerce for further
review. Providing such an opportunity for review would
sufficiently redress ThyssenKrupp’s injury and satisfy Article
III standing. See Gilda, 446 F.3d at 1279 (holding that
deprivation of opportunity for agency to exercise discretionary
review is sufficient injury to satisfy Article III standing).
Next, the government argues that ThyssenKrupp lacks
prudential standing under the APA because ThyssenKrupp is not
with the “zone of interest” of Section 129. A plaintiff
satisfies the “zone of interest” test if “the interest sought to
be protected by the [plaintiff] is arguably within the zone of
interests to be protected or regulated by the statute or
constitutional guarantee in question.” Ass’n of Data Processing
Serv. Orgs., Inc. v. Camp, 397 U.S. 150, 153 (1970). The
Supreme Court has explained that this “zone of interest” test
“is not meant to be especially demanding,” and, “[i]n cases
where the plaintiff is not itself the subject of the contested
regulatory action,” the test is satisfied unless “the
plaintiff’s interests are so marginally related to or
inconsistent with the purposes implicit in the statute that it
cannot reasonably be assumed that Congress intended to permit
the suit.” Clarke v. Sec. Indus. Ass’n, 479 U.S. 388, 399
(1987).
Court No. 07 - 00390 Page 17
This exact issue has already been addressed in Tembec, Inc.
v. United States, 30 CIT __, __, 441 F. Supp. 2d 1302 (2006)
(“Tembec I”).7 The Tembec I court noted that Section 129
explicitly provided interested parties (such as ThyssenKrupp)
several procedural rights throughout the Section 129 proceeding.
The courts are to consider the “overall context” of the relevant
statutory framework in deciding which interests are arguably
protected. Clarke, 479 U.S. at 401. The Tembec I court held
that “[t]he procedural interest of participating in the section
129 process cannot be divorced from the substantive interest
such participation arguably protects—ensuring that new section
129 determinations are implemented in accordance with U.S. law.”
Tembec I, 30 CIT at __, 441 F. Supp. 2d at 1324. As such, the
court concluded that foreign governments and producers are
within the zone of interests protected by Section 129. Id. The
7
The government implores the Court to disregard Tembec I because
its judgment was later vacated. In Tembec I, the Court held
that it could exercise jurisdiction over a challenge to the
USTR’s authority to direct implementation of a Section 129
determination. Subsequently, the court issued Tembec, Inc. v.
United States, 30 CIT __, 461 F. Supp. 2d 1355 (2006) (“Tembec
II”), which decided the case on the merits. The court later
vacated the judgment in Tembec II but explicitly refused to
withdraw the decision. See Tembec, Inc. v. United States, 31
CIT __, 475 F. Supp. 2d 1393, 1402 (2007) (“Tembec III”). The
decision concerning jurisdiction in Tembec I was not withdrawn
by the Tembec III court. Although the judgment resulting from
Tembec II was eventually vacated due to settlement, there is no
reason Tembec I should not be treated as persuasive authority.
See, e.g., Samsung Elecs. Am., Inc. v. United States, 195 F.3d
1367, 1371 (Fed. Cir. 1999) (citing a vacated decision as
persuasive legal authority, despite its vacatur for mootness).
Court No. 07 - 00390 Page 18
Court is persuaded by the reasoning of Tembec I, and finds that
ThyssenKrupp, a foreign producer and interested party, has
standing under the “zone of interest” test.
B. Motion to Dismiss for Failure to State a Claim
i. Failure to State A Claim Against the USTR
The government argues, in the alternative, that
ThyssenKrupp’s APA cause of action against the USTR fails to
state a claim upon which relief can be granted. The APA grants
a right of review to “[a] person suffering legal wrong because
of agency action, or adversely affected or aggrieved by agency
action . . . .” 5 U.S.C. § 702 (2000). This right of review is
not available if judicial review is precluded by another
statute. See id. § 701(a). There is a general presumption in
favor of judicial review that can be overcome by congressional
intent to preclude that is “fairly discernable” from the
legislative scheme. See Block v. Cmty. Nutrition Inst., 467
U.S. 340, 351 (1984). The Supreme Court has stated that
“[w]hether and to what extent a particular statute precludes
judicial review is determined not only from its express
language, but also from the structure of the statutory scheme,
its objectives, its legislative history, and the nature of the
administrative action involved.” Id. at 345. The government
essentially argues that the express language and the statutory
Court No. 07 - 00390 Page 19
scheme of Section 129 preclude any APA cause of action against
the USTR.
The government frames ThyssenKrupp’s allegations as an
attempt to challenge an “unimplemented” Section 129
determination. “Section 129 determinations that are not
implemented will not be subject to judicial or binational panel
review, because such determinations will not have any affect
under domestic law.” Statement of Administrative Action,
Uruguay Round Agreements Act, accompanying H.R. Doc. No. 103-
316, 656, 1026 (1994), reprinted in 1994 U.S.C.C.A.N. 4040,
4314. ThyssenKrupp is not attempting to challenge an
unimplemented Section 129 determination. In fact, the present
action was filed after the final Section 129 determination at
issue was implemented by Commerce, and in Counts 1 and 2,
ThyssenKrupp directly challenges that determination pursuant to
19 U.S.C. § 1516a. As noted above, the government admits that
in defense of Counts 1 and 2, it intends to claim that Commerce
had no discretion to correct ministerial errors in Section 129
determinations. ThyssenKrupp alleges that Commerce’s authority
to correct such errors was expressly limited by the USTR’s
unlawful implementation instructions. If this allegation is
true, then ThyssenKrupp has a cause of action under the APA to
challenge the USTR’s implementation instructions, which may have
been unlawful.
Court No. 07 - 00390 Page 20
The crux of the government’s argument in favor of
preclusion is that the events leading to final implementation of
a Section 129 determination are insulated from judicial review
because they are “political in nature.” Defs.’ Partial Mot. to
Dismiss 15. In NSK Ltd. v. United States, upon which the
government heavily relies, the plaintiffs challenged Commerce’s
zeroing methodology in light of the recent WTO ruling that found
zeroing to be inconsistent with U.S. international obligations.
See 510 F.3d 1375, 1379 (Fed. Cir. 2007). Although Commerce had
expressed its intent to comply with this ruling in the future,
the WTO decision had not yet been implemented under section 129.
The Federal Circuit declined to consider the WTO decision
because it had not yet been “‘adopted pursuant to the specified
statutory scheme.’” Id. (quoting Corus Staal BV v. Dep’t of
Commerce, 395 F.3d 1343, 1349 (Fed. Cir. 2005)). NSK Ltd. is
inapposite because in the present case, ThyssenKrupp is not
asking the Court to consider an unimplemented WTO decision, nor
is it challenging any aspects of the zeroing issue.
ThyssenKrupp did not interrupt the political process; in fact,
it filed this action after the final Section 129 determination
was implemented. The government fails to demonstrate how a
refusal to correct ministerial errors is “political in nature”
and therefore unreviewable.
Court No. 07 - 00390 Page 21
In Gilda v. United States, the government attempted to
persuade the Federal Circuit that with respect to the USTR’s
decision not to revise a retaliation list pursuant to 19 U.S.C.
§ 2416, the USTR’s “actions or inactions are unreviewable.” 446
F.3d at 1282. The Federal Circuit disagreed, and stated that
while such decisions are entitled to substantial deference,
“that does not preclude review of whether the Trade
Representative has actually made a determination required by the
statute, or whether, instead, the Trade Representative has
wholly ignored the statute’s commands.” Id. In the present
case, it is far from clear that the USTR complied with section
129 when it allegedly instructed Commerce not to correct certain
errors in the final determination. If the Court determines that
it has jurisdiction over Count 3, the question of whether the
USTR acted within its substantial discretion will be decided
later in the proceeding. The government’s motion to dismiss
Count 3 for failure to state a claim against the USTR is denied.
ii. Failure to State a Claim Against Commerce
In a single paragraph on the last page of its motion to
dismiss, the government makes the sweeping claim that no cause
of action exists against Commerce in Count 4 because Commerce
has no discretion to decline to implement the Section 129
Determination once USTR directs it to do so. This argument
seems to misconstrue the nature of ThyssenKrupp’s claim. It
Court No. 07 - 00390 Page 22
appears that Commerce must implement a Section 129 determination
when directed to do so, see 19 U.S.C. § 3538(b)(4), but the
government has failed to demonstrate that Commerce lacks
authority to correct ministerial errors in that determination.
The extent of Commerce’s discretion to correct the alleged
errors, and how such discretion may have been limited by the
USTR’s implementation instructions, is the primary issue in this
matter. At this stage of the litigation, the government has
failed to show that ThyssenKrupp has failed to state a claim
upon which relief can be granted.
IV. CONCLUSION
In light of the foregoing, the government’s partial motion
to dismiss is denied. A separate order will be issued
accordingly.
/s/ Richard W. Goldberg
Richard W. Goldberg
Senior Judge
Date: July 1, 2008
New York, New York