Searing Industries v. United States

Slip Op. 09-129

UNITED STATES COURT OF INTERNATIONAL TRADE
______________________________
:
SEARING INDUSTRIES, SOUTHLAND :
TUBE INC., AND WESTERN TUBE :
CONDUIT CORPORATION, :
:
Plaintiffs, : Before: Richard K. Eaton, Judge
:
: Court No. 08-00278
v. :
:
:
UNITED STATES, :
:
Defendant. :
______________________________:

[The United States Department of Commerce’s final results are
sustained.]

Dated: November 6, 2009

Schagrin Associates (Roger B. Schagrin and Michael J.
Brown), for plaintiffs.

Tony West, Assistant Attorney General; Jeanne E. Davidson,
Director, Patricia M. McCarthy, Assistant Director, Claudia
Burke, Senior Trial Counsel, United States Department of Justice,
Civil Division; Office of the Chief Counsel for Import
Administration, United States Department of Commerce (Jonathan
Zielinski), of counsel, for defendant.

Eaton, Judge: This action is before the court on the USCIT

Rule 56.2 motion for judgment on the agency record of plaintiffs

Searing Industries, Southland Tube Inc., and Western Tube Conduit

Corporation. By their motion, plaintiffs challenge the final

results of the United States Department of Commerce’s (“Commerce”
Court No. 08-00278 Page 2

or the “Department”) antidumping investigation of Nexteel, Co.,

Ltd. (“Nexteel”) for the period of investigation April 1, 2006

through March 31, 2007. See Light-Walled Rectangular Pipe and

Tube from the Republic of Korea, 73 Fed. Reg. 35,655 (Dep’t of

Commerce June 24, 2008) (notice of final determination of sales

at less than fair value) and the accompanying Issues and Decision

Memorandum (Dep’t of Commerce June 13, 2008) (“Issues & Dec.

Mem.”); Light-Walled Rectangular Pipe and Tube from Mex., the

People's Republic of China, and the Republic of Korea, 73 Fed.

Reg. 45,403 (Dep’t of Commerce Aug. 5, 2008) (antidumping duty

orders and notice of amended final determination of sales at less

than fair value) (collectively, “Final Results”).

In particular, plaintiffs contest Commerce’s methodology of

offsetting positive dumping margins with negative dumping margins

in calculating the weighted-average dumping margin applicable to

imports of light-walled rectangular pipe and tube from Korea.

Jurisdiction lies pursuant to 28 U.S.C. § 1581(c) (2006), and 19

U.S.C. § 1516a(a)(2)(B)(iii) (2006). For the reasons set forth

below, Commerce’s Final Results are sustained.
Court No. 08-00278 Page 3

BACKGROUND

Plaintiffs are domestic manufacturers of pipe and tube who

petitioned Commerce in June 2007, “alleg[ing] that imports of

light-walled rectangular pipe and tube from Korea, Mexico,

Turkey, and the [People’s Republic of China], are being, or are

likely to be, sold in the United States at less than fair value,

. . . and that such imports are materially injuring, or

threatening material injury” to the domestic industry. Light-

Walled Rectangular Pipe and Tube from the Republic of Korea,

Mex., Turkey, and the People’s Republic of China, 72 Fed. Reg.

40,274, 40,275 (Dep’t of Commerce July 24, 2007) (initiation of

antidumping duty investigation). In July 2007, Commerce

initiated an antidumping investigation in response to plaintiffs’

petition. See id.

In June 2008, Commerce issued a final affirmative

determination with respect to sales at less than fair value of

light-walled rectangular pipe and tube from the Republic of

Korea. See Light-Walled Rectangular Pipe and Tube from the Rep.

of Korea, 73 Fed. Reg. 35,655 (Dep’t of Commerce June 24, 2008)

(notice of final determination of sales at less than fair value).

Commerce initially calculated a 1.30 percent de minimus

antidumping duty rate for imports from Nexteel, a Korean producer
Court No. 08-00278 Page 4

of light-walled rectangular pipe and tube; the rate was later

reduced to 0.92 percent. See Light-Walled Rectangular Pipe and

Tube from Mex., the People's Republic of China, and the Republic

of Korea, 73 Fed. Reg. 45,403, 45,404 (Dep’t of Commerce Aug. 5,

2008) (antidumping duty orders and notice of amended final

determination of sales at less than fair value). As a result,

although Commerce found that Nexteel’s merchandise was dumped,

because the antidumping duty rate was de minimus, it did not

issue an antidumping order. See, e.g., USEC, Inc. v. United

States, 31 CIT 1049, 1071, 498 F. Supp. 2d 1337, 1356 (2007).

STANDARD OF REVIEW

When reviewing Commerce’s final antidumping determinations,

the court “shall hold unlawful any determination, finding, or

conclusion found . . . to be unsupported by substantial evidence

on the record, or otherwise not in accordance with law . . . .”

19 U.S.C. § 1516a(b)(1)(B)(i).

DISCUSSION

The antidumping laws are designed to “level the playing

field” between imported and domestically-produced goods by

imposing increased duties on foreign-produced goods that are sold
Court No. 08-00278 Page 5

in the United States at less than fair value.1 U.S. Steel Corp.

v. United States, 33 CIT __, __, Slip Op. 09-74 at 4 (July 20,

2009) (“U.S. Steel”). Calculating the weighed-average dumping

margin2 plays a significant role in the application of these laws

because it is determinative of the deposit rate3 to be paid on

the importation of merchandise.

In an antidumping investigation, Commerce generally may

determine whether the subject merchandise is being sold at less

than fair value through one of two methods. 19 U.S.C. § 1677f-

1
To determine if goods are sold at less than fair value,
Commerce must first calculate the dumping margin: “the amount by
which the normal value exceeds the export price or constructed
export price of the subject merchandise.” 19 U.S.C.
§ 1677(35)(A). If the price of a good in the home market (normal
value) is higher than the price for the same good in the United
States (export price), then the dumping margin comparison
produces a positive number that indicates dumping has occurred.
On the other hand, when the price charged for the subject
merchandise in the United States is greater than that charged for
the same merchandise in the home market, the dumping margin
calculation yields a negative value, thus indicating that dumping
has not occurred.
2
The weighted-average dumping margin is “the percentage
determined by dividing the aggregate dumping margins determined
for a specific exporter or producer by the aggregate export
prices and constructed export prices of such exporter or
producer.” 19 U.S.C. § 1677(35)(B).
3
Upon a preliminary determination of dumping, Commerce orders
the posting of a cash deposit or bond in an “amount based on the
estimated weighted average dumping margin . . . .” 19 U.S.C.
§ 1673b(d)(1)(A)(ii); see NSK Ltd. v. United States, 27 CIT 56,
105, 245 F. Supp. 2d 1335, 1375 (2003).
Court No. 08-00278 Page 6

1(d). Commerce may compare a weighted-average of normal values4

to a weighted-average of the export or constructed export prices

of comparable merchandise, or it may compare the normal values of

individual transactions to the export prices or constructed

export prices of individual transactions for comparable

merchandise. 19 U.S.C. § 1677f-1(d)(1)(A)(i)-(ii). When

Commerce applies the first, or average-to-average, methodology

during an investigation, it usually divides the export

transactions into groups by model and level of trade. 19 C.F.R.

§ 351.414(d)(2) (2008). Commerce then compares an average of the

export prices or constructed export prices of the transactions

within one averaging group to the weighted-average of normal

values of such sales. 19 C.F.R. § 351.414(d)(1).

For many years, Commerce’s methodology for calculating

weighted-average dumping margins employed the “zeroing” of

negative dumping margins. Corus Staal BV v. Dep’t of Commerce,

4
As found in 19 U.S.C. § 1677b(a)(1)(B)(i), normal value or
home market value is defined as

the price at which the foreign like product
is first sold (or, in the absence of a sale,
offered for sale) for consumption in the
exporting country, in the usual commercial
quantities and in the ordinary course of
trade and, to the extent practicable, at the
same level of trade as the export price or
constructed export price . . . .
Court No. 08-00278 Page 7

395 F.3d 1343, 1345 (Fed. Cir. 2005) (“Corus Staal I”). That is,

when aggregating the results of the averaging groups in order to

determine the weighted-average dumping margin, Commerce decreased

to zero any weighted-average export price or constructed export

price that exceeded the normal value. Antidumping Proceedings:

Calculation of Weighted-Average Dumping Margin During an Admin.

Investigation, 71 Fed. Reg. 77,722, 77,722 (Dep’t of Commerce

Dec. 27, 2006). Thus, any positive result was not used to offset

the results of averaging groups for which the weighted-average

export price or constructed export price was less than the

weighted-average normal value. Essentially, this practice meant

that only sales at less than fair value were included in the

final calculation of the weighted-average dumping margin.

In October 2005, a World Trade Organization (“WTO”) dispute

settlement panel determined that Commerce’s “denial of offsets

when using the average-to-average comparison methodology in

certain antidumping investigations . . . was inconsistent with

Article 2.4.2 of the Antidumping Agreement5.” See id. (citing

5
The Uruguay Round Agreements Act, Pub.L. No. 103-465, § 224,
108 Stat. 4809, 4878-86 (1994), “implemented the Agreement on
Implementation of Article VI of the General Agreement on Tariffs
and Trade 1994 (‘Antidumping Agreement’).” Thai I-Mei Frozen
Foods Co., Ltd. v. United States, 32 CIT __, __, 572 F. Supp. 2d
1353, 1361 (2008) (citation omitted).
Court No. 08-00278 Page 8

Panel Report, United States-Laws, Regulations and Methodology for

Calculating Dumping Margins, WT/DS294/R (Oct. 31, 2005)).

Thereafter, on March 6, 2006, the Department published in

the Federal Register a notice that it intended to cease zeroing

negative margins in investigations and instead to provide offsets

for non-dumped comparisons in order to comply with the WTO

panel’s findings. Antidumping Proceedings: Calculation of the

Weighted Average Dumping Margin During an Antidumping Duty

Investigation, 71 Fed. Reg. 11,189, 11,189 (Dep’t of Commerce

March 6, 2006). After soliciting rebuttal comments, Commerce

finalized its new methodology by publishing notice that it would

“no longer make average-to-average comparisons in investigations

without providing offsets for non-dumped comparisons.”

Antidumping Proceedings: Calculation of Weighted-Average Dumping

Margin During an Admin. Investigation, 71 Fed. Reg. 77,722,

77,722 (Dep’t of Commerce Dec. 27, 2006). Thus, Commerce gave

notice that it would cease zeroing negative dumping margins in

investigations and stated that in the future it would subtract

negative dumping margins from positive dumping margins in

calculating weighted-average dumping margins. In so doing,
Court No. 08-00278 Page 9

Commerce followed the statutory procedures6 by which a WTO report

may be implemented into domestic law. See 19 U.S.C. § 3533(g).

Plaintiffs raise three related issues in challenging

Commerce’s offsetting methodology. First, they contend that

Commerce’s incorporation of negative dumping margins into its

calculation of Nexteel’s weighted-average dumping margin

conflicts with the plain meaning of 19 U.S.C. § 1677(35)(A).

Plaintiffs’ Br. Supp. Mot. J. Agency R. (“Plaintiffs’ Br.”) 7.

Second, plaintiffs maintain that the plain meaning of the statute

requires zeroing or exclusion of negative margins in both

6
Commerce followed the procedure laid out in Section 123 of
the Uruguay Rounds Agreements Act to implement an adverse
decision from the World Trade Organization into domestic law.
Section 123 establishes procedures for amending, rescinding, or
modifying “an agency regulation or practice that is found to be
inconsistent [by a WTO Dispute Settlement Panel or Appellate
Body] with any of the Uruguay Round Agreements.” U.S. Steel,
Slip Op. 09-74 at 6 (citing 19 U.S.C. § 3533(g)). The
appropriate Congressional committees named in Section 123(f) must
be consulted. 19 U.S.C. § 3533(g)(1)(A). The Trade
Representative must seek advice regarding the modification from
relevant private sector advisory committees and “submit[] . . . a
report describing the proposed modification, the reasons for the
modification, and a summary of the advice obtained . . . .” 19
U.S.C. § 3533(g)(1)(B), (D). The agency must “publish[] in the
Federal Register the proposed modification and the explanation
for the modification” to provide an opportunity for public
comment. Id. at § 3533(g)(1)(C). “[T]he Trade Representative
and the head of the relevant department or agency [must] have
consulted with the appropriate congressional committees on the
proposed contents of the final rule or other modification.” 19
U.S.C. 3533(g)(1)(E). “[T]he final rule or other modification
[must be] published in the Federal Register.” 19 U.S.C.
3533(g)(1)(F).
Court No. 08-00278 Page 10

investigations and reviews. Plaintiffs’ Br. 20. Third,

plaintiffs insist that Commerce’s efforts to bring its

investigation methodology into conformity with the WTO panel’s

decision violated United States law because the plain meaning of

the statute requires Commerce to disregard positive margins.

Plaintiffs’ Br. 6.

A. Legal Framework for Dumping Margins

Plaintiffs’ primary claim is that the plain meaning of 19

U.S.C. § 1677(35)(A) precludes the inclusion in weighted-average

dumping margin calculations of any dumping margins where the

normal value is less than the export price. Plaintiffs’ Br. 7.

As noted, in accordance with the unfair trade laws, Commerce

makes its less than fair value determinations by calculating the

dumping margin, or “the amount by which the normal value exceeds

the export price or constructed export price of the subject

merchandise.” 19 U.S.C. § 1677(35)(A). Here, in calculating the

weighted-average dumping margin for Nexteel, Commerce used its

offsetting methodology and thus subtracted negative dumping

margins from positive margins. Issues & Dec. Mem. 10.

Plaintiffs argue that Commerce was prohibited from using its

offset methodology because the word “exceeds,” as used in 19
Court No. 08-00278 Page 11

U.S.C. § 1677(35)(A), unambiguously requires that only sales at

less than fair value be used in calculating the weighted-average

dumping margin. See Plaintiffs’ Br. 10 (“The result of a

comparison between the [normal value] and [export price] where

the [normal value] is less than the [export price] does not

comport with the statutorily established condition for a dumping

margin . . . .”).

Because the issue raised by plaintiffs has been thoroughly

examined by both the Federal Circuit and this Court, an

exhaustive discussion is unnecessary. First, plaintiffs’

contention that 19 U.S.C. § 1677(35)(A) only contemplates a

calculation methodology that excludes negative dumping margins

has been addressed by the Federal Circuit. See, e.g., Timken Co.

v. United States, 354 F.3d 1334 (Fed. Cir. 2004) (“Timken”);

Corus Staal I, 395 F.3d at 1343.

Although plaintiffs attempt to distinguish the two cases,

Timken and Corus Staal I direct the outcome here. Each case

relied on the rules of statutory construction set out in Chevron

U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837

(1984) (“Chevron”), to find that Commerce’s former zeroing

methodology was a permissible construction of 19 U.S.C.
Court No. 08-00278 Page 12

§ 1677(35)(A). Using Chevron’s7 first step, each case examined

19 U.S.C. § 1677(35)(A) and found, in the context of unfair trade

laws, the word “exceeds” to be ambiguous and the statute overall

to “not directly speak to the issue” of whether only positive

dumping margins might be included in weighted-average dumping

margin calculations. Timken, 354 F.3d at 1342. Then, using

Chevron’s second step, the Federal Circuit considered whether

Commerce made a “reasonable choice within a gap left open by

Congress.” Chevron, 467 U.S. at 866.

In Timken, the Federal Circuit upheld Commerce’s zeroing

methodology in administrative reviews under Chevron’s second

step. In doing so, the Court first found that 19 U.S.C.

§ 1677(35)(A) “does not unambiguously require that dumping

margins be positive numbers,” and then found that “Commerce based

its zeroing practice on a reasonable interpretation of the

statute.” Timken, 354 F.3d at 1342. Importantly for the case

7
In accordance with Chevron, a court must undertake a two-
part analysis when reviewing an agency’s construction of the
statute. First, a court must 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; for the
court, as well as the agency, must give effect to the
unambiguously expressed intent of Congress.” Chevron, 467 U.S.
at 842-43. If Congress has not addressed the question at issue
and the statute is “silent or ambiguous,” the court must
determine “whether the agency’s answer is based on a permissible
construction of the statute.” Id. at 843.
Court No. 08-00278 Page 13

now before the court, however, the Timken Court found the statute

had not spoken directly on the zeroing question, and thus going

to the second Chevron step was required. Although plaintiffs

argue otherwise, it is apparent that the Federal Circuit found

ambiguity in 19 U.S.C § 1677(35)(A).

In Corus Staal I, the Federal Circuit reiterated its holding

that, because 19 U.S.C § 1677(35)(A) was ambiguous, the second

step of Chevron applied and the test was whether Commerce’s

interpretation was reasonable. In its holding, the Corus Staal I

Court found zeroing reasonable in the context of investigations.

It is again significant, however, that the Court concluded that

the statute remained ambiguous in the context of an investigation

and therefore, found zeroing also “permissible in the context of

administrative investigations.” Corus Staal I, 395 F.3d at 1347.

When Timken and Corus Staal I are read together, it is apparent

that the Federal Circuit has found § 1677(35)(A) to be ambiguous

both in the context of investigations and administrative reviews.

It is equally apparent, however, that neither case found that

zeroing is unambiguously required by the statute.

Now that Commerce has abandoned zeroing in investigations,

the question becomes whether Commerce’s new offsetting

methodology is reasonable under Chevron’s second step in the
Court No. 08-00278 Page 14

context of investigations. Whenever Congress has “explicitly

left a gap for the agency to fill,” the agency’s regulation is

“given controlling weight unless [it is] arbitrary, capricious,

or manifestly contrary to the statute.” Chevron, 467 U.S. at

843-44. “To survive judicial scrutiny, [Commerce’s] construction

need not be the only reasonable interpretation or even the most

reasonable interpretation.” Koyo Seiko Co. v. United States, 36

F.3d 1565, 1570 (Fed. Cir. 1994) (citing Zenith Radio Corp. v.

United States, 437 U.S. 443, 450 (1978)).

Recently, this Court addressed this question, and found

that, “[b]ecause the cited provisions do not directly speak to

the issue of positive and negative value dumping margins, the

second step of Chevron requires that the court evaluate whether

Commerce’s interpretation is based on a permissible construction

of the statutes at issue.” U.S. Steel, 33 CIT __, __, Slip Op.

09-74 at 18. The Court reached this conclusion based on its

reading of Timken and Corus Staal I. See id. at 16 (“The court

is bound by the Federal Circuit’s reading of these provisions in

Timken, which found that Congress’s definition of ‘dumping

margin’ is unclear as to whether the positive and negative value

dumping margins fit within the description of that term. See

Timken, 354 F.3d at 1341-43. The Federal Circuit held that
Court No. 08-00278 Page 15

neither the ‘fair comparison’ phrase in § 1677b(a), nor the

‘exceeds’ language in § 1677(35)(A), requires that Commerce

consider only those dumping margins that yield a positive value

as satisfying the statutory definition of the term ‘dumping

margin.’ See id. The Federal Circuit in Corus [Staal] I also

made clear that the formula described in § 1677(35)(B) does not

limit Commerce as to the specific values that it must consider

when calculating the weighted-average dumping margin. See 395

F.3d at 1346-47.”).

After concluding that Timken and Corus Staal I controlled,

the U.S. Steel Court continued by noting that the Federal

Circuit’s overriding lesson in Timken was that

Congress, in crafting the statutory
definitions of ‘dumping margin’ and
‘weighted-average dumping margin,’ did not
address whether Commerce must (1) employ a
certain methodology to calculate the dumping
margins for the subject merchandise, and (2)
consider only certain values – positive,
negative, or both – as a ‘dumping margin’
when calculating the weighted-average dumping
margin.

U.S. Steel, 33 CIT __, __, Slip Op. 09-74 at 16-17. Based on the

Federal Circuit’s holding in Timken, the U.S. Steel Court found

that “the statutory text does not unambiguously compel the court

to find that Commerce’s use of offsetting is prohibited.” Id. at

17.
Court No. 08-00278 Page 16

Moving to the second step of Chevron, the U.S. Steel Court

found that Commerce’s new methodology was a reasonable

construction of 19 U.S.C § 1677(35)(A). The Court thoroughly

analyzed several factors indicating reasonableness, including:

the deference owed to Commerce and the Executive Branch

(“deference accorded to Commerce’s interpretation is at its

highest when that agency acts under the authority of a

Congressional mandate to harmonize U.S. practices with

international obligations”); the changing of the policy within

the framework set out by Congress (“result of . . . a careful

balancing act”); the full compliance with proper procedures to

make the change (“followed the agency’s regular practice and

procedure in so doing”); the tacit approval by Congress of the

change (“Congress had the opportunity to indicate its

disagreement with Commerce’s adoption of the new rule”); the

central purpose of the antidumping laws (“Commerce does not

offend the central aim of the antidumping laws”); the more

complete view of the market the new methodology allows (“[i]n

using the new methodology, Commerce must consider all sales in

certain investigations”); and the effect of the change on other

statutory sections (“Commerce’s reading of the term . . . does

not render [other statutory sections] meaningless”). Id. at 18-
Court No. 08-00278 Page 17

24; see also id. at 26 (“For the reasons explained herein, the

Section 123 Determination is in accord with law and is

reasonable. Accordingly, . . . the court . . . therefore affords

Commerce’s reasonable reading of § 1677(35)(A)-(B) the deference

it is due under Chevron.”) (citations omitted).

Taken together, these cases all lead to the conclusion that

Commerce reasonably interpreted an ambiguous statute. Based on

the holdings in Timken and Corus Staal I and the analysis in U.S.

Steel, the court finds that Commerce’s methodology of offsetting

positive dumping margins with negative dumping margins in

calculating the weighted-average dumping margins is a permissible

interpretation of 19 U.S.C. § 1677(35)(A).

B. Commerce’s Application of Two Different Methodologies

Plaintiffs point out that the language of § 1677(35)(A) that

the “normal value exceeds the export price” applies to both

investigations and administrative reviews. Plaintiffs’ Br. 20.

As a result, their second claim is that “the statute’s directive

that the dumping margin under [§] 1677(35)(A) equals the amount

that the normal value exceeds the export price applies with equal

force to investigations as it does to reviews.” Plaintiffs’ Br.

25. Put another way, plaintiffs contend that a plain reading of
Court No. 08-00278 Page 18

the statute requires that positive margins be disregarded in both

investigations and reviews when constructing weighted-average

margins.

The problem with plaintiffs’ argument is that it presupposes

that the plain meaning of § 1677(35)(A) unambiguously precludes

Commerce’s offset methodology. As established above, however, it

does not. The statute is ambiguous and Commerce reasonably

interpreted it to permit the offsetting of negative margins in

average-to-average comparisons made in investigations.

Furthermore, the Federal Circuit has reviewed, and accepted,

the use of different calculation methodologies for reviews and

investigations. See Corus Staal BV v. United States, 502 F.3d

1370, 1375 (Fed. Cir. 2007) (“Corus Staal II”). The plaintiff in

that case asserted that Commerce’s elimination of zeroing in

investigations required it to also eliminate the practice in

reviews. In other words, the argument was the reverse of the

claim made here. The Federal Circuit found the Corus Staal II

plaintiff’s argument unconvincing, stating that the change in

policy for investigations only had “no bearing on the present

appeal” which involved a review. Id. at 1374. As a result, the

Federal Circuit concluded that its “previous determination that

Commerce’s policy of zeroing is permissible under the statute
Court No. 08-00278 Page 19

applies to the challenged administrative review,” even though

zeroing had been abandoned for use in investigations. Id. at

1375.

Analyzing Corus Staal II, this Court recently observed in

Union Steel v. United States that

the Court of Appeals in Corus [Staal] II made
it amply clear that it did not consider
Commerce’s decision to discontinue zeroing
when performing average-to-average
comparisons in antidumping investigations
while continuing zeroing in administrative
reviews to be a sufficient basis to disturb
its precedents, under which it had held
zeroing to be permissible in administrative
reviews based on the reasonableness of the
Department’s construction of 19 U.S.C. §
1677(35).

33 CIT __, __, Slip Op. 09-105 at 18 (Sept. 28, 2009). Put

another way, the Federal Circuit was fully aware that different

methodologies were being used in investigations and reviews, and

found no reason to conclude that the situation was unlawful.

This Court reached a similar conclusion in Fujian Lianfu

Forestry Co. v. United States. 33 CIT __, __, Slip Op. 09-81 at

51 (Aug. 10, 2009). In response to another challenge to the

continued use of zeroing in administrative reviews following its

elimination in investigations, the Court noted the “irony in

Commerce now adopting an interpretation of the statute that it
Court No. 08-00278 Page 20

previously rejected[;]” however, the Court added that “such irony

alone does not make Commerce’s new approach unlawful.” Id.

Relying both on Chevron’s anticipation of administrative

flexibility in handling ambiguous statutes and an acknowledgment

that a statute may contain several permissible constructions in

separate contexts, the Fujian Court accepted Commerce’s use of

different calculation methodologies for investigations and

reviews. Id. Commerce had not “arbitrarily shifted its

interpretation of the statute without reason,” but rather

“exercised its gap-filling authority to conform the

administration of the dumping laws with U.S. international

obligations.” Id.; see also Chevron, 467 U.S. at 863-64 (“The

fact that the agency has from time to time changed its

interpretation of the term . . . does not, as respondents argue,

lead us to conclude that no deference should be accorded the

agency's interpretation of the statute. . . . [T]he fact that the

agency has adopted different definitions in different contexts

adds force to the argument that the definition itself is

flexible, particularly since Congress has never indicated any

disapproval of a flexible reading of the statute.”).
Court No. 08-00278 Page 21

Relying on these cases, the court rejects the plaintiffs’

argument that the retention of zeroing in reviews requires its

continued use in investigations.

C. Implementing WTO Panel Decisions

Plaintiffs’ final contention is that “neither a WTO panel

report nor Commerce’s capitulation to the WTO trump” United

States law concerning the calculations of weighted-average

dumping margins. Plaintiffs’ Br. 6. As with their previous

arguments, plaintiffs’ primary claim is that the statute

unambiguously provides that only negative margins can be used to

calculate the weighted-average dumping margin. As noted,

however, § 1677(35)(A) simply does not require the use of zeroing

and Commerce’s offsetting methodology is a reasonable

interpretation of the statute. Therefore, the court holds that

plaintiffs are mistaken in their claim that the WTO ruling and

United States law are in conflict.
Court No. 08-00278 Page 22

CONCLUSION

Based on the foregoing, the court sustains as supported by

substantial evidence and otherwise in accordance with law

Commerce’s use of offsetting negative dumping margins in

calculating Nexteel’s weighted-average dumping margin in its

administrative investigation. Therefore, plaintiffs’ motion is

denied. Judgment shall be entered accordingly.

/s/ Richard K. Eaton
Richard K. Eaton

Dated: November 6, 2009
New York, New York