Slip Op. 09-7
UNITED STATES COURT OF INTERNATIONAL TRADE
ARCELORMITTAL DOFASCO INC.,
SOREVCO INC., and DO SOL GALVA LTD.,
Plaintiffs,
and
UNITED STATES STEEL CORPORATION,
Plaintiff-Intervenor, Before: Timothy C. Stanceu, Judge
v. Court No. 07-00135
UNITED STATES,
Defendant,
and
UNITED STATES STEEL CORPORATION,
Defendant-Intervenor.
OPINION AND ORDER
[Remanding for reconsideration of the decision of the U.S. Department of Commerce not to
rescind an administrative review of an antidumping duty order because the final results of the
administrative review did not set forth reasoning adequate to support that decision]
Dated: January 22, 2009
Hunton & Williams LLP (William Silverman, Douglas J. Heffner, and Richard P. Ferrin)
for plaintiffs.
Skadden, Arps, Slate, Meagher & Flom LLP (Robert E. Lighthizer, John J. Mangan,
Jeffrey D. Gerrish, Soo-Mi Rhee, and Ellen J. Schneider) for plaintiff-intervenor and defendant-
intervenor United States Steel Corporation.
Court No. 07-00135 Page 2
Michael F. Hertz, Deputy Assistant Attorney General, Jeanne E. Davidson, Director,
Patricia M. McCarthy, Assistant Director, Barbara S. Williams, Attorney in Charge,
International Trade Field Office, Commercial Litigation Branch, Civil Division, United States
Department of Justice (Stephen C. Tosini and Michael D. Panzera); Mark B. Lehnardt, Office of
Chief Counsel for Import Administration, United States Department of Commerce, of counsel,
for defendant.
Stanceu, Judge: Plaintiffs ArcelorMittal Dofasco Inc., formerly Dofasco Inc. (“Dofasco”),
Sorevco Inc., and Do Sol Galva Ltd. (collectively, “plaintiffs”) initiated this action under
19 U.S.C. § 1516a (2000) to contest a final determination (“Final Results”) issued by the
International Trade Administration, United States Department of Commerce (“Commerce” or the
“Department”) in an administrative review of an antidumping duty order on certain
corrosion-resistant carbon steel flat products from Canada (the “subject merchandise”). See
Certain Corrosion-Resistant Carbon Steel Flat Prods. from Canada: Final Results of
Antidumping Duty Admin. Review, 72 Fed. Reg. 12,758 (Mar. 19, 2007) (“Final Results”).
Dofasco is a Canadian producer of the subject merchandise. Before the court is plaintiffs’
motion, made under USCIT Rule 56.2, for judgment on the agency record.
Plaintiffs, joined by plaintiff-intervenor United States Steel Corporation (“U.S. Steel”), a
domestic steel producer and a petitioner in the original antidumping investigation, argue that the
Department abused its discretion in deciding not to rescind the administrative review after all of
the original requesters had withdrawn, or sought to withdraw, their requests for the review.
Plaintiffs seek a remand order directing the Department to rescind the administrative review. In
the alternative, plaintiffs challenge the value that the Department, when performing its
calculations to determine whether plaintiffs’ home market sales were made below the cost of
production, assigned to certain iron ore fluxed pellets that Dofasco obtained from an affiliated
Court No. 07-00135 Page 3
supplier. U.S. Steel, who is participating in the litigation as defendant-intervenor with respect to
this issue, argues that Commerce’s valuation of the iron ore fluxed pellets should be found to be
in accordance with law in the event the court does not order the rescission of the administrative
review. Defendant argues that Commerce properly exercised the discretion provided by its
regulations to continue the administrative review. Defendant contends that Commerce properly
exercised its discretion in refusing to extend the due date for the filing of the letters seeking to
withdraw requests for review because two of the letters were filed long after the due date
provided in the Department’s regulations and near the time of completion of the review. On the
issue of valuation of iron ore fluxed pellets, Commerce requests a voluntary remand so that it
may reconsider, and possibly redetermine, its valuation of this material.
Commerce provided no explanation in the Final Results of its reasoning for refusing to
extend the deadline for withdrawal of the requests for the administrative review and thereby for
deciding that the review should continue. The communication to the parties of Commerce’s
reasoning was stated in a letter not incorporated into the Final Results. The stated reasoning was
inadequate to support the decision. Accordingly, the court remands the Final Results to the
Department and directs the Department to reconsider its decision not to rescind the
administrative review.
I. BACKGROUND
On August 1, 2005, Commerce announced the opportunity to request a periodic
administrative review of entries of certain corrosion-resistant carbon steel flat products from
Canada that were made during the period of August 1, 2004 to July 31, 2005 (the “period of
review”). Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation;
Court No. 07-00135 Page 4
Opportunity To Request Admin. Review, 70 Fed. Reg. 44,085 (Aug. 1, 2005). Commerce
initiated the review following requests by plaintiffs and another Canadian steel producer, Stelco,
Inc. (“Stelco”), and a request by petitioner U.S. Steel for review of the sales of Dofasco’s and
Stelco’s subject merchandise. Initiation of Antidumping and Countervailing Duty Admin.
Reviews and Request for Revocation in Part, 70 Fed. Reg. 56,631 (Sept. 28, 2005); Certain
Corrosion-Resistant Carbon Steel Flat Prods. from Canada: Preliminary Results of Antidumping
Duty Admin. Review, 71 Fed. Reg. 53,363, 53,364 (Sept. 11, 2006) (“Preliminary Results”);
Letter from Willkie Farr & Gallagher LLP to Sec’y of Commerce 1 (Aug. 31, 2005) (Admin. R.
Doc. No. 2). Plaintiffs timely informed Commerce on December 20, 2005 that they were
withdrawing their request for an administrative review, pursuant to 19 C.F.R. § 351.213(d)(1)
(2005), which provides that a party who requested an administrative review may withdraw its
request within ninety days of the date of the notice of initiation. See Letter from Hunton &
Williams to Sec’y of Commerce 1 (Dec. 20, 2005) (Admin. R. Doc. No. 18); see 19 C.F.R.
§ 351.213(d)(1). Because U.S. Steel’s request for review with respect to respondent Dofasco and
respondent Stelco was still in effect, Commerce continued the review with respect to both
respondents. See Preliminary Results, 71 Fed. Reg. at 53,364. Commerce published preliminary
results of the administrative review on September 11, 2006, assigning to Dofasco, Sorevco, Inc.
and Do Sol Galva Ltd., which three companies Commerce treated for purposes of the review as a
single respondent, a weighted-average antidumping duty margin of 4.78%. Id. at 53,365, 53,369.
On February 14, 2007, Commerce revoked the antidumping duty order on certain
corrosion-resistant carbon steel flat products from Canada (the “Order”), pursuant to the second
sunset review. Revocation Pursuant to Second Five-Year (“Sunset”) Reviews of Antidumping
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and Countervailing Duty Orders: Certain Corrosion-Resistant Carbon Steel Flat Prods. from
Australia, Canada, Japan, and France, 72 Fed. Reg. 7010 (Feb. 14, 2007). Because the
revocation of the Order was effective with respect to entries made on or after December 15,
2005, the revocation did not affect the antidumping duty liability of entries of plaintiffs’
merchandise that were subject to the administrative review, the period of which had ended on
July 31 of that year. See id. at 7010. Citing the revocation of the Order, U.S. Steel asked to
withdraw its request for an administrative review with respect to respondents Dofasco and
Stelco. See Letter from Skadden, Arps, Slate, Meagher & Flom LLP to Sec’y of Commerce 1
(Mar. 7, 2007) (Admin. R. Doc. No. 77) (“Skadden Letter”). On that same day, Stelco also
sought to withdraw its review request. See Letter from Vinson & Elkins to Sec’y of Commerce 1
(Mar. 7, 2007) (Admin. R. Doc. No. 78) (“Vinson Letter”). Twelve days later, Commerce
published the Final Results, assigning to Dofasco, Sorevco, Inc., and Do Sol Galva Ltd. a
weighted-average antidumping duty margin of 5.25%. Final Results, 72 Fed. Reg. at 12,758.
II. DISCUSSION
The court exercises jurisdiction over this action pursuant to 28 U.S.C. § 1581(c) (2000),
under which the Court of International Trade is granted exclusive jurisdiction of any civil action
commenced under 19 U.S.C. § 1516a. See 28 U.S.C. § 1581(c). The court reviews the Final
Results on the basis of the agency record and must “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); see also 28 U.S.C. § 2640(b) (2000).
Section 351.213(d)(1) of Commerce’s regulations provides that “[t]he Secretary will
rescind an administrative review under this section, in whole or in part, if a party that requested a
Court No. 07-00135 Page 6
review withdraws the request within 90 days of the date of publication of notice of initiation of
the requested review.” 19 C.F.R. § 351.213(d)(1). In this proceeding, plaintiffs’ withdrawal of
the request for the review was timely, as it was filed on December 20, 2005, seven days prior to
the due date set by the regulation. Although a literal reading of the regulation might suggest that
Commerce was required to rescind the review, at least as to entries of plaintiffs’ merchandise, as
a result of plaintiffs’ withdrawal of their request for a review, such a reading would conflict with
the applicable statutory provision. Congress provided, in 19 U.S.C. § 1675 (a)(1) (2000), that
Commerce is to conduct a periodic review of an antidumping duty order “if a request for such a
review has been received.” 19 U.S.C. § 1675(a)(1). Although plaintiffs’ withdrawal of their
request for an administrative review was filed on December 20, 2005 and therefore was timely
under § 351.213(d)(1), the request by U.S. Steel for a review of Dofasco’s and Stelco’s sales was
still in effect as of that date, as was Stelco’s request for a review, and as a result Commerce’s
continuation of the review was proper at the time.
The statute, in 19 U.S.C. § 1675(a)(1), does not authorize Commerce to initiate a periodic
review in the absence of a request. See id. The statute, however, is silent on the question of
whether Commerce should continue a periodic review in the situation in which each party who
had requested that review has expressed its intention to withdraw its request. Commerce has
addressed this situation in its regulation, 19 C.F.R. § 351.213(d)(1), which, when construed in
accordance with 19 U.S.C. § 1675(a)(1), requires rescission of a review if all requesters
withdraw their requests within ninety days of the date of notice of initiation. Notices of
withdrawal received after that date are given effect only if the Secretary retroactively extends the
Court No. 07-00135 Page 7
ninety-day time limit. The regulation provides that “[t]he Secretary may extend this time limit if
the Secretary decides that it is reasonable to do so.” 19 C.F.R. § 351.213(d)(1).
Plaintiffs argue, essentially, that the Department reasonably could not exercise its
discretion to continue the administrative review in the particular circumstances that existed once
the Order had been revoked and all requesters had withdrawn, or sought to withdraw, their
requests for the review. Mem. in Supp. of Mot. for J. on The Agency R. Under Rule 56.2 Filed
by Pls. ArcelorMittal Dofasco Inc., Sorevco Inc., and Do Sol Galva Inc. 7 (“Pls.’ Mem.”).
Plaintiffs point out, further, that no interested party took the opportunity to file an opposition to
the March 7, 2007 requests of U.S. Steel and Stelco and that Nucor Corporation, a domestic steel
producer, also favored recission.1 Id. at 3 & n.2; Oral Argument 1:55-57, Jan. 8, 2009. Plaintiffs
also direct the court’s attention to various past instances in which the Department has rescinded
an administrative review upon withdrawals of requests filed after the regulatory deadline. Pls.’
Mem. at 10-12. They argue that the Department’s decision to continue the review after all
requesters had withdrawn or attempted to withdraw their requests, and in the absence of the
objection of any interested party to rescission, is unprecedented. Id. at 7, 12. Citing the various
circumstances, plaintiffs seek an order directing the Department to rescind the review. Id. at 19.
The regulation (the validity of which no party has challenged in this case) affords wide
discretion to the Secretary in determining whether to extend the ninety-day period for withdrawal
of review requests. Although circumstances other than timeliness were relevant to the decision
1
Nucor Corporation, a domestic producer of the subject merchandise, sought to intervene
in this case, and brought its own appeal of the Final Results, attempting to take the position
before the court that the Department unlawfully continued the review. See Dofasco Inc. v.
United States, 31 CIT __, 519 F. Supp. 2d 1284, 1285 (2007); Nucor Corp. v. United States, 31
CIT __, 516 F. Supp. 2d 1348, 1349 (2007).
Court No. 07-00135 Page 8
not to rescind the review, there is no question that the requests of U.S. Steel and Stelco were filed
long after the regulatory due date established by 19 C.F.R. § 351.213(d)(1). U.S. Steel filed its
letter seeking to withdraw its request for an administrative review with respect to Dofasco and
Stelco, and Stelco filed its own withdrawal letter, on March 7, 2007, a date that was one year and
seventy days after that due date and only twelve days prior to the date on which Commerce
published the Final Results. See Skadden Letter at 1; see Vinson Letter at 1. The court, however,
need not decide the question of whether the Department reasonably exercised its discretion in
choosing to continue the review in the midst of all the circumstances that existed on March 7,
2007.
In reviewing the Secretary’s exercise of discretion to accept untimely withdrawals, and
therefore the Secretary’s exercise of discretion on whether to rescind, based on those untimely
withdrawals, a periodic review initiated under 19 U.S.C. § 1675(a)(1), a court must apply the
broad standard of reasonableness that the regulation establishes. A court may do so only
according to the reasoning the Department put forth in the decision being reviewed. See
Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 167-69 (1962) (faulting the agency
because “[t]here are no findings and no analysis here to justify the choice made, no indication of
the basis on which the [agency] exercised its expert discretion” and stating that “Chenery
requires that an agency’s discretionary order be upheld, if at all, on the same basis articulated in
the order by the agency itself” (citing Sec. and Exch. Comm’n v. Chenery Corp., 332 U.S. 194,
196 (1947)). In this case, however, the Final Results do not discuss, or even mention, the issue
of rescission that was posed to the Department when U.S. Steel and Stelco informed the
Department of their respective desires to withdraw their requests for review. The Final Results
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incorporate, as an appendix, a document identified as an “Issues and Decision Memorandum,”
but this document, like the Final Results, makes no mention of the recission issue. See Final
Results, 72 Fed. Reg. at 12,759; see also Issues and Decision Mem. for the Final Results of the
Admin. Review of the Antidumping Duty Order on Certain Corrosion-Resistant Carbon Steel
Flat Prods. from Canada (Mar. 12, 2007) (Admin. R. Doc. No. 80).
The administrative record contains a one-page letter dated March 9, 2007 that the
Department sent to interested parties, including plaintiffs, addressing the submissions by which
U.S. Steel and Stelco sought to withdraw their requests for the review. See Letter from
Stephen J. Claeys, Deputy Assistant Sec’y for Imp. Admin., to All Interested Parties (Mar. 9,
2007) (Admin. R. Doc. No. 79). After noting that the submissions did not occur within the
ninety-day period established by the Department’s regulation, 19 C.F.R. § 351.213(d)(1), the
letter communicates to the recipients the Department’s decision not to extend the due date for
those two submissions and to bring the review to a conclusion. Id. The letter mentions that the
two submissions “were filed five days before the due date of the final results of review, and the
Department has effectively completed its substantive and quantitative analyses, drafted extensive
analysis and decision memoranda, and prepared a Federal Register notice.” Id. The letter gives
the following as the reasoning for the Department’s decision: “Because the Department has
expended significant resources in conducting this administrative review, we find these March 7
withdrawal requests untimely and, consequently, we intend to complete this administrative
review on March 12.” Id.
Because it is not incorporated by reference in either the Final Results or the Issues and
Decision Memorandum that is made part of the Final Results, the court, in its discretion, may
Court No. 07-00135 Page 10
refuse to consider the Department’s March 9, 2007 letter in reviewing the Department’s reasons
for deciding not to extend the ninety-day time period provided for in 19 C.F.R. § 351.213(d)(1)
and thereby deciding to continue the administrative review. See 19 U.S.C. § 1516a(a)(2)(A)(i)(I)
& (B)(iii) (identifying the decision being contested as the published results of the administrative
review); see China Kingdom Imp. & Exp. Co., Ltd. v. United States, 31 CIT __, 507 F. Supp. 2d
1337, 1348 n.6 (2007). In this case, the court need not decide the question of whether to deem
the March 9, 2007 letter part of the Final Results because the reasoning stated in that letter is
plainly insufficient to support the Department’s decision. The resources the Department
expended in conducting the administrative review are not the only consideration that reasonably
should affect such a decision, and it is questionable whether these expended government
resources are the most important consideration. The March 9, 2007 letter makes no mention of
the significant fact that the Order had been revoked, an event that took place only twenty-one
days before U.S. Steel and Stelco filed their letters seeking to withdraw their review requests. In
its letter seeking to withdraw its request for the administrative review, U.S. Steel mentioned the
revocation and also referred to the additional Departmental resources that might be required were
the Department to continue the review. See Skadden Letter at 2 (“[T]he Department may benefit
by granting this request to withdraw. The reason is that such withdrawal will avoid the
likelihood of an appeal to the Court of International Trade, the World Trade Organization and/or
a NAFTA panel.”). Nor does the Department’s letter, in discussing resources, refer to any
resource implications for private parties.
Because the sole reason stated in the letter of March 9, 2007 would be inadequate to
support Commerce’s decision under 19 C.F.R. § 351.213(d)(1) even were the court to deem the
Court No. 07-00135 Page 11
letter to be part of the Final Results, the court must remand this matter to the Department. On
remand, the Department must reconsider, in light of all the relevant circumstances, its decision of
March 9, 2007 not to extend the regulatory due date and thereby not to rescind the review. The
Department’s redetermination in response to the court’s remand order must be supported with
adequate reasoning. If the Department, in its redetermination on remand, decides that the
administrative review should be rescinded, such rescission would become effective only upon the
court’s affirming the remand redetermination. Because the court is ordering a remand for the
limited purpose of requiring the Department to address the rescission issue, which remand may
result in the rescission of the administrative review, the court does not reach, at this time, the
issue of the Department’s decision on the valuation of iron ore fluxed pellets that Dofasco
obtained from a related supplier. Should Commerce decide on remand that the administrative
review should not be rescinded, and should the court conclude that the Department’s decision is
supported by adequate reasoning and therefore is in accordance with law, the court then will
consider the Department’s request for a voluntary remand on the issue of valuation of the iron ore
fluxed pellets.
III. ORDER
Based on the foregoing, and in consideration of all papers and proceedings herein, it is
hereby
ORDERED that the Department’s final determination in Certain Corrosion-Resistant
Carbon Steel Flat Products from Canada: Final Results of Antidumping Duty Administrative
Review, 72 Fed. Reg. 12,758 (March 19, 2007) is held to be contrary to law in failing to set forth
reasoning adequate to support the Department’s decision of March 9, 2007 not to extend the due
date for the submissions of U.S. Steel and Stelco, as filed on March 7, 2007, and thereby not to
rescind the administrative review; it is hereby
Court No. 07-00135 Page 12
ORDERED that the Department shall reconsider, in light of all relevant circumstances, its
decision not to extend the due date for submission of the requests of U.S. Steel and Stelco, as
filed on March 7, 2007, and thereby not to rescind the administrative review; it is further
ORDERED that the court’s ruling on the Department’s request for a voluntary remand on
the question of the valuation of iron ore fluxed pellets is held in abeyance at this time; it is
further
ORDERED that the Department shall file, within forty-five days of the date of this Opinion
and Order, a redetermination on remand in which the Department, in accordance with this
Opinion and Order, shall set forth its decision on the question of whether the administrative
review should be rescinded and shall support that decision with adequate reasoning based on all
relevant circumstances; and it is further
ORDERED that plaintiffs and U.S. Steel shall file any comments on the Department’s
redetermination on remand within thirty days of the filing of the Departments’ redetermination
on remand.
/s/ Timothy C. Stanceu
Timothy C. Stanceu
Judge
Dated: January 22, 2009
New York, New York