Slip Op. 09-19
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,
Defendant,
and
AK STEEL CORP., AND
ALLEGHENY LUDLUM CORP.,
Defendant-
Intervenors.
OPINION
[Commerce’s section 129 determination is sustained.]
Date: March 23, 2009
Hogan & Hartson, LLP (Lewis E. Leibowitz, Brian S. Janovitz,
Craig A. Lewis, Harold D. Kaplan, Jonathan T. Stoel, Theodore C.
Weymouth) for Plaintiff ThyssenKrupp Acciai Speciali Terni
S.p.A., and ThyssenKrupp AST USA, Inc.
Michael F. Hertz, Deputy Assistant Attorney General, Jeanne E.
Davidson, Director, U.S. Department of Justice, Civil Division,
U.S. Department of Justice, Patricia M. McCarthy, Assistant
Director, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, (Claudia Burke), for Defendants United
States, Otto J. Wolff, United States Department of Commerce,
Ambassador Ron Kirk, and the Office of the United States Trade
Representative. Office of the Chief Counsel for Import
Administration, U.S. Department of Commerce (Natasha Camille
Robinson) for Defendant United States Department of Commerce.
Court No. 07 – 00390 Page 2
Kelley Drye & Warren, LLP (Mary T. Staley, Daniel P. Lessard,
David A. Hartquist) for Defendant-Interveners AK Steel
Corporation, and Allegheny Ludlum Corporation.
GOLDBERG, Senior Judge: This case is before the Court on
plaintiff’s motion for judgment on the agency record.1 For the
following reasons, plaintiffs ThyssenKrupp Acciai Speciali Terni
S.p.A. and ThyssenKrupp AST, USA, Inc.’s (collectively
“ThyssenKrupp”) motion is denied, and the U.S. Department of
Commerce’s (“Commerce”) final determination is sustained.
I. BACKGROUND
ThyssenKrupp’s argument centers on whether Commerce can now
correct two alleged mistakes in its 1999 less-than-fair-value
investigation of Italian stainless steel sheet and strip coils
(“SSSS”). To understand the procedural background of this case,
three events are relevant: (1) Commerce’s 1999 investigation;
(2) the subsequent proceedings before the WTO; and (3) the
current section 129 determination.
1
This was originally styled as a motion for judgment on the
agency record, or in the alternative, a motion for summary
judgment. As the Court finds that Commerce’s interpretation of
its authority under section 129 is reasonable, counts one and
two of ThyssenKrupp’s complaint are moot. As counts three and
four of ThyssenKrupp’s complaint arise under § 1581(i), the
scope of this action is limited to the agency record. See
Defenders of Wildlife v. Hogarth, 25 CIT 1309, __, 177 F. Supp.
2d 1336, 1343 (2001). For a more full discussion of the
jurisdictional issues raised in this case, see ThyssenKrupp
Acciai Speciali Terni S.P.A. v. United States, 32 CIT __, 572 F.
Supp. 2d 1323 (2008).
Court No. 07 – 00390 Page 3
A. The 1999 Investigation
In its 1999 investigation, Commerce applied adverse facts
available to calculate the antidumping duty margin applicable to
Italian SSSS. Final Determination of Sales at Less than Fair
Value: Stainless Steel Sheet and Strip in Coils from Italy, 64
Fed. Reg. 30,750, 30,757 (Dep’t Commerce June 8, 1999). Using
an “average-to-average” methodology to compare U.S. and Italian
SSSS prices, Commerce set this margin at 11.17%. Memorandum
from Lesley Stagliano, Case Analyst, To File, Analysis of Acciai
Terni S.p.A. for the Final Determination in the Antidumping
Investigation of Stainless Steel Sheet and Strip in Coils from
Italy for the Period April 1, 1996 – March 31, 1998 (May 19,
1999). Shortly after setting this margin, ThyssenKrupp notified
Commerce of the company’s belief that this calculation contained
several “ministerial” or “computational” errors. In an amended
final determination, Commerce set a revised dumping margin of
11.23%, but did not correct or address the errors alleged by
ThyssenKrupp. Amended Final Determination of Sales at Less Than
Fair Value: Stainless Steel Sheet and Strip in Coils from
Italy, 64 Fed. Reg. 40,567, 40,570 (Dep’t Commerce July 27,
1999).
ThyssenKrupp then appealed Commerce’s amended final
determination. Although the Court affirmed Commerce’s overall
application of adverse facts available, it remanded for
Court No. 07 – 00390 Page 4
consideration of the alleged errors. Acciai Speciali Terni
S.P.A. v. United States, 25 CIT 245, 142 F. Supp. 2d 969 (2001).
Before Commerce could address these errors, this case was
dismissed without prejudice at the request of the parties.
B. Proceedings before the World Trade Organization
Commerce’s original antidumping duty investigation of
Italian SSSS relied on “zeroing” methodology.2 In 2004, the
European Community (“EC”) requested the formation of a WTO panel
to address the validity of this methodology. Request for the
Establishment of a Panel by the European Communities, United
States – Laws, Regulations and Methodology for Calculating
Dumping Margins (“Zeroing”), WT/DS294/7/Rev.1 at 1, 11 (Feb. 19,
2004). Upon completing its investigation, the WTO panel found
zeroing inconsistent with U.S. obligations under various WTO
2
Zeroing refers to a methodology formerly applied by Commerce in
antidumping investigations. In antidumping investigations,
Commerce is required to determine whether a product is being
sold at less than fair value. Typically, Commerce employs an
“average-to-average” comparison; rather, it divides export
transactions into groups by model and level of trade (“averaging
groups”) and then compares the average export price of the
averaging group to the weighted-average of the sales of the
particular model at issue. Commerce then aggregates the results
of the averaging groups and determines the weighted-average
margin. The problems arose in that Commerce did not allow the
results of those averaging groups which exceeded the weighted-
average margin to “offset” the results of those below the
weighted-average margin. This practice of not allowing offsets
was 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 5
agreements. Panel Report, United States–Laws, Regulations and
Methodology for Calculating Dumping Margins (Zeroing),
WT/DS294/R (Oct. 31, 2005). Subsequently, Commerce abandoned
zeroing. See Calculation of the Weighted-Average Dumping Margin
During an Antidumping Investigation, 71 Fed. Reg. 77722 (Dep’t
Commerce Dec. 20, 2006) (final modification).
C. The Section 129 Proceeding
To implement the decision of the WTO panel, Commerce
initiated a section 129 proceeding. Section 129 of the Uruguay
Round Agreements Act (as set forth in 19 U.S.C. § 3538) is the
mechanism through which determinations found inconsistent with
the U.S.’s WTO obligations are brought into compliance. Under
section 129, the United States Trade Representative (“USTR”) is
first required to consult with Commerce and various
congressional committees to determine their response. See 19
U.S.C. § 3538(b)(1) (2000). After this consultation, the USTR
may request that Commerce issue a determination (a “Section 129
determination”) to bring the challenged determination into
compliance with U.S. obligations. Id. § 3538(b)(2).
Here, Commerce issued a section 129 determination related
to the antidumping duty order on Italian SSSS. After abandoning
zeroing, Commerce determined that the new margin applicable to
Italian SSSS was 2.11%. A margin below 2% is de minimis and
would merit revocation of the antidumping duty order. See 19
Court No. 07 – 00390 Page 6
U.S.C. § 1673b(b)(3) (2000). 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). Specifically,
ThyssenKrupp objects to Commerce’s refusal to reexamine the
alleged errors committed during the original 1999 investigation
in its current section 129 determination. Each error, if
accurate and corrected, would bring the dumping margin below the
2% de minimis threshold and would merit revocation of the
antidumping duty order.
II. JURISDICTION & STANDARD OF REVIEW
The Court has jurisdiction pursuant to both 28 U.S.C. §
1581(c) and 28 U.S.C. § 1581(i). The Court will uphold an
agency’s determination unless it is “unsupported by substantial
evidence on the record, or otherwise not in accordance with
law.” 19 U.S.C. § 1516a(b)(1)(B)(1)(2000). In reviewing
ThyssenKrupp’s challenge to Commerce’s construction of a
statute, the Court applies the two-step analytical framework
laid out in Chevron, U.S.A., Inc. v. Natural Resources Defense
Council, 467 U.S. 837 (1984). Step one requires the Court to
determine whether Congress has spoken clearly to the issue at
hand. Id. at 842-43. If the intent of Congress is clear, the
Court’s inquiry concludes and this express intent governs. Id.
However, if Congress’s intentions are unclear, the agency is
Court No. 07 – 00390 Page 7
given the discretion to interpret the statute as “statutory
interpretations articulated by Commerce during its antidumping
proceedings are entitled to judicial deference under Chevron.”
Pesquera Mares Australes Ltda. v. United States, 266 F.3d 1372,
1382 (Fed. Cir. 1992). If Chevron deference applies, the Court
cannot substitute “its own construction of a statutory provision
for a reasonable interpretation made by [Commerce].” IPSCO,
Inc. v. United States, 965 F.2d 1056, 1061 (Fed. Cir. 1992). In
reviewing ThyssenKrupp’s challenge to the decisions of both
Commerce and the USTR, the Court reviews these determinations to
address whether they are “not in accordance with law . . . [or]
in excess of statutory jurisdiction, authority, or limitations.”
5 U.S.C. § 706(2)(A); 28 U.S.C. § 2640(e).
III. DISCUSSION
ThyssenKrupp raises two arguments: (1) that Commerce’s
refusal to correct the alleged errors violates the agency’s
statutory mandate; and (2) in the alternative, if the USTR’s
instructions led to Commerce’s refusal to address these errors,
these instructions violate U.S. antidumping law. These
arguments are addressed in turn.
A. Commerce’s Section 129 Proceeding
ThyssenKrupp’s first argument is that Commerce’s
calculation of the margin applicable to Italian SSSS is
arbitrary and capricious and unsupported by substantial
Court No. 07 – 00390 Page 8
evidence. ThyssenKrupp argues that Commerce is required to
correct the alleged errors as part of its greater obligation to
reconcile adverse WTO mandates with domestic trade law. In
ThyssenKrupp’s view, a section 129 determination is a “‘new’,
‘second’, and ‘different’ determination[]” meriting
individualized attention to ensure that the newly selected
margin corresponds with the relevant requirements of antidumping
duty law — including the obligation to calculate margins “as
accurately as possible” and to correct “any ministerial error by
amending the final determination.” See Implementation of the
Findings of the WTO Panel in US—Zeroing (EC): Notice of
Determinations Under Section 129 of the Uruguay Round Agreements
Act and Revocations and Partial Revocations of Certain
Antidumping Duty Orders, 72 Fed. Reg. 25, 261 (Dep’t Commerce
May 4, 2007) (quoting Statement of Administrative Action, URAA,
H. Doc. 316, Vol. 1, 103rd Cong. (1994); Rhone Poulenc v. United
States, 899 F.2d 1185, 1191 (Fed. Cir. 1990); 19 U.S.C. §
1673(d). Commerce, however, advances a narrower view of its
authority concluding that section 129 determinations are limited
to the specific issue found inconsistent with the U.S.’s WTO
obligations (in this case, zeroing). For the reasons that
follow, this Court affirms Commerce’s reasonable interpretation
of section 129.
Court No. 07 – 00390 Page 9
i. The Scope of Section 129 is Ambiguous
As an initial matter, the Court agrees with Commerce that
the intended scope of section 129 is ambiguous. Section 129
provides only that “Commerce shall, within 180 days after the
receipt of a written request from the Trade Representative,
issue a determination in connection with the particular
proceeding that would render the administering authority’s
action described in paragraph (1) not inconsistent with the
findings of the panel or the Appellate Body.” 19 U.S.C. §
3538(b)(2). It is unclear whether Congress intended to limit
the scope of section 129 to include only issues found to violate
the WTO agreements or to more broadly include other potential
issues related to the contested determination. ThyssenKrupp
repeatedly stresses Commerce’s authority to reopen the record
and to conduct new investigations as unambiguously conferring
upon Commerce the discretion to address issues wholly unrelated
to the relevant WTO proceedings. See, e.g., Mem. From Stephen
J. Claeys, Deputy Ass’t Sec’y AD/CVD Operations, to David M.
Spooner, Ass’t Sec’y for Import Admin., Section 129
Determination: Final Results of Sunset Review, Oil Country
Tubular Goods from Mexico, at 2 (Dep’t Commerce Apr. 26, 2007).
However, this authority fails to provide any additional clarity.
In many instances, Commerce could potentially need to reopen the
administrative record or conduct a new investigation to resolve
Court No. 07 – 00390 Page 10
issues which had been directly before a WTO panel or the
Appellate Body. Accordingly, the Court finds that the intended
scope language of section 129 provides “precisely the type of
ambiguity which an administrative agency, like Commerce, is
given deference under Chevron step one to reasonably interpret.”
Hynix Semiconductor, Inc. v. United States, 29 CIT 995, 1003,
391 F. Supp. 2d 1337, 1345 (2006).
ii. Commerce’s Interpretation is Reasonable
As the intended scope of section 129 is ambiguous, the
remaining question for this Court is “whether Commerce’s
construction of the statute is permissible.” Windmill Int’l
Pte. v. United States, 26 CIT 221, 223, 193 F. Supp. 2d 1303,
1306 (2002). This is an inquiry into the reasonableness of
Commerce’s interpretation. See Fujitsu Gen. Ltd. v. United
States, 88 F.3d 1034, 1038 (Fed. Cir. 1996). If Commerce’s
interpretation is reasonable, the Court cannot substitute its
judgment for that of the agency under Chevron step two. See
Koyo Seiko Co. v. United States, 36 F.3d 1565, 1570 (Fed. Cir.
1994). To determine the reasonableness of Commerce’s
interpretation, the Court must look at “the express terms of the
provisions at issue, the objectives of those provisions, and the
objectives of the antidumping scheme as a whole.” Globe
Metallurgical, Inc. v. United States, 28 CIT 1608, 350 F. Supp.
2d 1148, 1152 (2004).
Court No. 07 – 00390 Page 11
First, the Court considers the express language of section
129. Again, section 129 only requires that Commerce “issue a
determination in connection with the particular proceeding that
would render the administering authority’s action . . . not
inconsistent with the findings of the panel or the Appellate
Body.” 19 U.S.C § 3538(b)(2). This plain language does not
require Commerce to address issues which were not presented to a
WTO panel or the Appellate Body. While correcting the alleged
errors would also arguably have been consistent with the
statutory language, section 129 does not direct Commerce to
correct any and all errors in determining how to comply with an
adverse WTO decision.
Next, the Court considers the overarching goal of section
129 and whether Commerce’s interpretation is reasonably tied to
the vision behind its drafting. Overall, Section 129 provides a
procedural mechanism for aligning inconsistent determinations
with the provisions of the WTO agreements, and envisions an
extensive consultative process. From this framework alone, it
is not evident how allowing Commerce to expand the scope of
section 129 determinations to unlitigated issues would relate to
this goal or fit within this process. Moreover, the goal of
this statute does not call Commerce’s limited interpretation of
Court No. 07 – 00390 Page 12
its own authority into question.3 As such, the Court affirms
Commerce’s reasonable interpretation of section 129.4 Further,
as the scope of Commerce’s review under section 129 is limited,
its application to this case relates only to the issue presented
before to the WTO, or zeroing. ThyssenKrupp has raised no
objections regarding Commerce’s treatment of zeroing in this
section 129 determination. Therefore, Commerce’s determination
is also supported by substantial evidence.
B. The Statutory Authority of the USTR
ThyssenKrupp, in the alternative, argues that the USTR’s
directions ordering Commerce to implement a section 129
determination were not in accordance with law to the extent that
the orders prevented Commerce from correcting the alleged
errors. This argument lacks merit. The USTR instructed
3
An examination of Commerce’s interpretation within the entire
antidumping duty scheme also does not make its limited
interpretation unreasonable. ThyssenKrupp, however, argues that
the overarching goal of accuracy requires Commerce to address
all alleged errors. Commerce points to finality concerns within
the antidumping scheme and argues the Court should focus on this
aspect of the antidumping duty scheme. Neither goal, however,
substantially outweighs the opposing principle, nor renders
Commerce’s limited interpretation of section 129 indicates
unreasonable within the antidumping duty scheme.
4
The Court also finds no evidence that Commerce took an
inconsistent position in determining whether it had the
authority to address the alleged errors. Commerce’s first
decision memorandum explains that it required additional time to
determine whether it had this authority, not as ThyssenKrupp
alleges, to actually address the alleged errors.
Court No. 07 – 00390 Page 13
Commerce to adjust its prior determination to comply with the
adverse WTO determination. In short, USTR took only those
specific actions which were required under their statutory
mandate. See 19 U.S.C. § 3538(b)(4). Here, the WTO proceedings
were limited to the zeroing issue, and the alleged errors
currently raised by ThyssenKrupp were not before the WTO panel
or Appellate Body. As discussed above, section 129 does not
allow the USTR or Commerce to go outside this area in adjusting
its prior determination. Accordingly, the USTR’s instructions
were in accordance with law and did not violate their statutory
mandate.
IV. CONCLUSION
For the foregoing reasons, the Court sustains the final
results of Commerce’s section 129 determination. Judgment will
be entered accordingly.
/s/ Richard W. Goldberg
Richard W. Goldberg
Senior Judge
Date: March 23, 2009
New York, New York