Slip Op 10-68
UNITED STATES COURT OF INTERNATIONAL TRADE
Before: Nicholas Tsoucalas, Senior Judge
________________________________________
:
SAHAVIRIYA STEEL INDUSTRIES PUBLIC :
COMPANY LIMITED, :
:
Plaintiff, :
:
v. :
:
UNITED STATES, : Court No. 09-00229
: PUBLIC VERSION
Defendant, :
:
and :
:
UNITED STATES STEEL CORPORATION, :
:
Defendant-Intervenor. :
________________________________________:
OPINION
Held: Plaintiff’s Motion for Judgment On the Agency Record is
denied. Judgment is entered for Defendant, United States. Case is
dismissed.
Dated: June 15, 2010
Hughes Hubbard & Reed LLP, (Kenneth J. Pierce, Robert L.
LaFrankie, Victor S. Mroczka) for Sahaviriya Steel Industries
Public Company Limited, Plaintiff.
Tony West, Assistant Attorney General; Jeanne E. Davidson,
Director, Commercial Litigation Branch, Civil Division, United
States Department of Justice, Patricia M. McCarthy, Assistant
Director, Commercial Litigation Branch, Civil Division, United
States Department of Justice (Michael D. Panzera and Jane C.
Dempsey); Aaron P. Kleiner, Office of Chief Counsel for Import
Administration, United States Department of Commerce, Of Counsel,
for the United States, Defendant.
Skadden, Arps, Slate, Meagher & Flom LLP, (Jeffrey D. Gerrish
Robert E. Lighthizer, and Nathaniel B. Bolin) for United States
Steel Corporation, Defendant-Intervenor.
Court No. 09-00229 Page 2
TSOUCALAS, Senior Judge: This matter is before the Court on a
Motion for Judgment On the Agency Record brought by Plaintiff,
Sahaviriya Steel Industries (“SSI”), pursuant to Rule 56.2 of the
Rules of the United States Court of International Trade (“USCIT”).
Plaintiff challenges certain aspects of the U.S. Department of
Commerce’s (“Commerce’s” or “Department’s”) final results with
respect to the changed circumstances review of the antidumping duty
order in Certain Hot-Rolled Carbon Steel Flat Products from
Thailand: Final Results of Antidumping Duty Changed Circumstances
Review and Reinstatement in the Antidumping Duty Order, 74 Fed.
Reg. 22,885 (May 15, 2009) Public Rec. Doc. No. 1180 (“Final
Results”).1 Plaintiff contends that the Department lacks the
authority to conduct a changed circumstances review for the purpose
of reinstating a “previously revoked” antidumping duty order. Mem.
in Supp. of Pl.’s Mot. for J. On the Agency R. (“Pl.’s Brief”) at
2. Plaintiff further contests the Department’s date of sale
methodology and argues that Commerce acted unlawfully when it
changed its previous practice of relying on the contract date as
the date of sale for its margin calculations. See id. at 3.
JURISDICTION
The Court has jurisdiction over this matter pursuant to 19
U.S.C. § 1516a(a)(2) (2006) and 28 U.S.C. § 1581(c) (2006).
1
Hereinafter all documents in the public record will be
designated “PR,” and all documents in the confidential record
designated “CR.”
Court No. 09-00229 Page 3
STANDARD OF REVIEW
When reviewing the final results in an antidumping changed
circumstances review “[t]he 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). Substantial
evidence is “‘such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.’” Huaiyin Foreign Trade
Corp. (30) v. United States, 322 F.3d 1369, 1374 (Fed. Cir. 2003)
(quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).
There must be a “rational connection between the facts found and
the choice made” in an agency determination if it is to be
characterized as supported by substantial evidence and otherwise in
accordance with law. Burlington Truck Lines, Inc. v. United
States, 371 U.S. 156, 168 (1962). The Court “must affirm a
Commission determination if it is reasonable and supported by the
record as a whole, even if some evidence detracts from the
Commission’s conclusion.” Nippon Steel Corp. v. United States, 458
F.3d 1345, 1352 (Fed. Cir. 2006) (internal citation and quotation
marks omitted).
When the Court examines the lawfulness of Commerce’s statutory
interpretations and regulations, it must employ the two-pronged
test established in Chevron, U.S.A., Inc. v. Natural Res. Def.
Council, Inc., 467 U.S. 837, 842-43 (1984). First, the Court must
Court No. 09-00229 Page 4
examine “whether Congress has directly spoken to the precise
question at issue.” Id. at 842. If it has, the agency and the
Court must comply with the clear intent of Congress. See id. at
842-43. If it has not, the question for the Court is “whether the
agency’s answer is based on a permissible construction of the
statute.” Id. at 843.
BACKGROUND
On November 29, 2001, Commerce issued an antidumping duty
order on certain hot-rolled carbon steel flat products from
Thailand. See Antidumping Duty Order: Certain Hot-Rolled Carbon
Steel Flat Products From Thailand, 66 Fed. Reg. 59,562 (Nov. 29,
2001). The order was based on separate findings by Commerce and
the U.S. International Trade Commission (“ITC” or “Commission”)
that certain hot-rolled steel from Thailand had been sold in the
United States at less than fair value and contributed to the
material injury suffered by the domestic hot-rolled steel industry.
See id. at 59,563. SSI was among the Thai producers of subject
merchandise included in the antidumping duty order. See id.
Following its issue, Commerce conducted a series of
administrative reviews of the order in which it determined that SSI
had not sold hot-rolled steel at less than normal value. See
Certain Hot-Rolled Carbon Steel Flat Products From Thailand: Final
Results and Partial Rescission of Antidumping Duty Administrative
Review, 69 Fed. Reg. 19,388 (Apr. 13, 2004); Certain Hot-Rolled
Court No. 09-00229 Page 5
Carbon Steel Flat Products from Thailand: Rescission of Antidumping
Duty Administrative Review, 69 Fed. Reg. 18,349 (Apr. 7, 2004)
(this second administrative review was rescinded when the parties
requesting the review withdrew their requests); Certain Hot-Rolled
Carbon Steel Flat Products from Thailand: Final Results of
Antidumping Duty Administrative Review, Partial Revocation of
Antidumping Duty Order and Partial Rescission of Antidumping Duty
Administrative Review (“Final Results of Third Administrative
Review”), 71 Fed. Reg. 28,659 (May 17, 2006). In November 2004, as
part of its request to conduct the third administrative review, SSI
sought partial revocation of the order with respect to its sales
pursuant to 19 C.F.R. § 351.222 (2004). In support of its request,
SSI agreed “to immediate reinstatement of the order, so long as any
Thai exporter or producer is subject to it, should the Department
determine that SSI, subsequent to the requested revocation, sold
the subject merchandise at less than fair value.” Request For
Changed Circumstances Review On Behalf Of United States Steel Corp.
(Nov. 8, 2006), Ex. 1 at 3 (PR 721).
Upon completion of the third administrative review, Commerce
revoked the antidumping duty order for SSI’s exports of hot-rolled
steel.2 See Final Results of Third Administrative Review, 71 Fed.
Reg. 28,661. Commerce’s decision was based on its determination
2
This revocation was made effective November 1, 2004. See
Memorandum to File Regarding Effective Date of Revocation for SSI
(May 23, 2006).
Court No. 09-00229 Page 6
that SSI had sold the subject merchandise at not less than normal
value for a period of three consecutive years. Despite partial
revocation of the antidumping order with respect to SSI, the order
itself remained in effect as to other Thai producers and exporters.
See Certain Hot-Rolled Carbon Steel Flat Products from India,
Indonesia, the People’s Republic of China, Taiwan, Thailand, and
Ukraine: Continuation of Antidumping Duty and Countervailing Duty
Orders, 72 Fed. Reg. 73,316 (Dec. 27, 2007).
On November 8, 2006, United States Steel Corporation (“U.S.
Steel”) filed with Commerce an allegation claiming SSI had resumed
sales of hot-rolled steel products at less than normal value
subsequent to its removal from the original antidumping order.
Invoking 19 C.F.R. § 351.216(b),3 U.S. Steel requested that
Commerce initiate a changed circumstances review to reinstate the
order with regard to SSI’s exports of subject merchandise to the
United States. Accordingly, Commerce conducted an analysis of the
information it received from U.S. Steel to determine the
sufficiency of its allegations. On March 28, 2008, the Department,
relying on its authority under 19 U.S.C. § 1675(b)(1), initiated
the underlying changed circumstances review to determine whether
SSI had sold hot-rolled steel at less than normal value during the
3
19 C.F.R. § 351.216(b) allows an interested party to
request a changed circumstances review of an antidumping duty
order.
Court No. 09-00229 Page 7
period in question,4 and whether it should therefore be reinstated
in the original antidumping duty order. See Initiation of
Antidumping Duty Changed Circumstances Review: Certain Hot-Rolled
Carbon Steel Flat Products from Thailand (“Notice of Initiation”),
73 Fed. Reg. 18,766 (Apr. 7, 2008).
On October 7, 2008, SSI commenced an action with this Court
seeking injunctive relief to prevent the Department from continuing
with its changed circumstances review. Attempting to invoke the
Court’s jurisdiction under 28 U.S.C. § 1581(i), SSI challenged the
Department’s initiation of the changed circumstances review for the
purpose of reinstating a previously revoked antidumping duty order,
as unlawful and ultra vires. See Sahaviriya Steel Indus. Co., Ltd.
v. United States, 33 CIT ___, 601 F. Supp. 2d 1355 (2009) (“SSI
I”). The Court granted Commerce’s motion to dismiss based on the
lack of subject matter jurisdiction and because SSI’s claims were
not yet ripe. See id.
On May 15, 2009, the Department published the Final Results of
its changed circumstances review in which it determined that SSI
had resumed dumping of hot-rolled steel products, and reinstated
Plaintiff under the antidumping duty order still in effect. A
dumping margin of 9.04 percent ad valorem was calculated for all
entries of subject merchandise produced by SSI. See Final Results,
4
The period of review is July 1, 2006, through June 30,
2007.
Court No. 09-00229 Page 8
74 Fed. Reg. at 22,886.
Plaintiff commenced this action on June 11, 2009, seeking
judicial review of Commerce’s Final Results in the changed
circumstances review (“CCR” or “changed circumstances review”).
Specifically, Plaintiff contests the legality of the Department’s
initiation of a changed circumstances review for the purpose of
reinstating a previously revoked antidumping duty order, and the
methodologies employed by Commerce to determine the dumping margin
and cash deposit rate. See Compl. ¶ 24.
DISCUSSION
1. Commerce’s Use of a CCR for Reinstatement of a Partially
Revoked Antidumping Duty Order
A. Plaintiff’s Arguments
The gravamen of Plaintiff’s argument is that Commerce lacks
the statutory authority to support its initiation and conduct of a
changed circumstances review for the purpose of reinstating a
partially revoked antidumping duty order. See Pl.’s Brief at 15.
According to SSI, there are only two statutory provisions which
affect the manner in which a changed circumstances review is
conducted. The first, section 1675(b),5 expressly limits the
5
The relevant portions of 19 U.S.C. § 1675(b) state:
Reviews based on changed circumstances
(1) In general
Whenever the administering authority or the Commission
receives information concerning, or a request from an
interested party for a review of-
Court No. 09-00229 Page 9
Department’s authority to review three types of agency decisions,
none of which is a previous determination to revoke an antidumping
duty order. See id. Plaintiff argues that, as it relates to this
litigation, section 1675(b) only allows Commerce to conduct a
changed circumstances review of “a final affirmative determination
that resulted in an antidumping duty order” provided there are
changed circumstances sufficient to warrant such a review. 19
U.S.C. § 1675(b)(1)(A); see also Pl.’s Brief at 15-16. As SSI
explains it, there are only two final affirmative determinations
that result in an antidumping duty order; a final dumping
determination made by Commerce in a less-than-fair value
investigation; and a final injury determination made by the ITC.
See Pl.’s Brief at 16. Nowhere does the statute suggest a
unilateral authority to review a determination of revocation as
proffered by Commerce. See id. Thus, SSI concludes, because the
underlying changed circumstances review does not involve a review
of any of the authorized determinations listed in section 1675(b),
(A) a final affirmative determination that resulted in an
antidumping duty order under this subtitle . . . ,
(B) a suspension agreement accepted under section 1671c or
1673c of this title, or
(C) a final affirmative determination resulting from an
investigation continued pursuant to section 1671c(g) or
1673c(g) of this title,
which shows changed circumstances sufficient to warrant a review
of such determination . . ., the administering authority . . .
shall conduct a review of the determination[.]
Court No. 09-00229 Page 10
Commerce exceeded its statutory authority. See id. at 17.
Plaintiff further argues that, as presently constructed, the
statute is an unambiguous declaration by Congress limiting
Commerce’s authority to conduct a changed circumstances review to
those instances where revocation of an existing order is
contemplated. See id. Plaintiff points to the text of the statute
as evidence “that Congress did not intend to authorize the
Department to reinstate an order with respect to merchandise
covered by a revocation.” Pl.’s Brief at 15. Therefore, any
deference afforded the agency under Chevron, is mooted as the Court
“must give effect to the unambiguously expressed intent of
Congress.” Chevron, 467 U.S. at 842-43. In addition, SSI cites to
portions of the legislative history purporting to show that
Congress never intended to endow Commerce with the authority to
conduct a changed circumstances review for the purpose of
reinstating a previously revoked antidumping duty order. See Pl.’s
Brief at 19. Plaintiff draws this conclusion based upon Congress’
failure to specifically provide for the reinstatement of an
antidumping duty order notwithstanding the numerous opportunities
it had to do so. See id. at 18-19.
Plaintiff looks to section 1675(d)(1) as the only other
provision in the statute that affects the conduct of a changed
Court No. 09-00229 Page 11
circumstances review.6 According to SSI, the omission of any
reference to “reinstatement” in the statutory text is evidence of
the legislature’s intent to limit Commerce’s use of a changed
circumstances review solely for revocation purposes, not
reinstatement. See id. at 20. In light of this unequivocal
statement by Congress, the argument goes, any inquiry under Chevron
should end at the first prong analysis.7 See id. Moreover,
Plaintiff claims, when Commerce revokes an antidumping duty order
in whole, the order ceases to exist and cannot later be reinstated.
See id. Therefore, because section 1675(d) does not distinguish
between partial and total revocation, the effect is the same for
both procedures. Under partial revocation, the part of the order
that was revoked ceases to exist, and the Department may not
reinstate the order over merchandise covered by that revocation.
See id. To further illustrate this point, SSI references the
6
Section 1675(d)(1) states in part that:
The administering authority may revoke, in whole or in part,
. . . an antidumping duty order . . . after review under
subsection (a) [administrative review] or (b) [changed
circumstances review] of this section.
7
As directed by the Supreme Court, a reviewing court must
first consider “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, however, “the
statute is silent or ambiguous with respect to the specific
issue, the question for the court is whether the agency’s answer
is based on a permissible construction of the statute.” Id. at
843.
Court No. 09-00229 Page 12
Department’s own regulations which define the term “revocation” as
the end of an antidumping proceeding.8 See id. at 21.
Next, Plaintiff challenges the Department’s assertion that its
reinstatement regulation, 19 C.F.R. § 351.222(b) and (e), is a
reasonable exercise of its statutory authority to revoke and later
reinstate an antidumping duty order. See id. SSI takes particular
issue with Commerce’s rationale that reinstatement is the “natural
corollary” to revocation, and explains that the Department’s
regulations cannot provide the agency with a level of authority not
contemplated by the statute. See id. at 22. For example, the
regulation’s requirement that a respondent agree in writing to
immediate reinstatement if the Department later concludes that the
exporter or producer has resumed dumping subsequent to revocation,
cannot confer upon Commerce the legal authority it lacks under the
statute. See id. Moreover, claims Plaintiff, even if the Court
were to afford the Department’s actions deference under Chevron,
they would still fail because Chevron only defers to the agency in
its interpretation of statutes, “not in creating statutory
authority where none exists.” Id. at 23 (emphasis omitted).
8
The relevant portion of 19 C.F.R. § 351.222(a) reads as
follows:
Revocation of orders; termination of suspended
investigations.
(a) Introduction. “Revocation” is a term of art that refers to
the end of an antidumping or countervailing proceeding in which
an order has been issued.
Court No. 09-00229 Page 13
Plaintiff relies on this Court’s decision in Asahi Chemical
Indus. Co. Ltd., v. United States, 13 CIT 987, 727 F. Supp. 625
(1989), as further evidence that section 1675(b) precludes Commerce
from reinstating an order against merchandise that was previously
revoked. See id. at 23-24. The Court in Asahi examined the
Department’s reinstatement regulation in effect at the time, 19
C.F.R. § 353.54(e) (1988), and whether its requirement that a party
agree to immediate suspension of liquidation and reinstatement of
the antidumping duty order was enforceable.9 SSI interprets the
Court’s holding in Asahi as standing for the proposition that
revocation of the antidumping order renders the order moot with
respect to the merchandise covered by the previous revocation. See
id. at 24. Therefore, “once the Department makes a revocation
determination, ‘the antidumping duty order ceases to be operative
and may not be reinstated.’” Id. (quoting Asahi, 13 CIT at 990,
727 F. Supp. 625, 628). Plaintiff maintains that the Department’s
current regulation, 19 C.F.R. § 351.222(b)(2)(i)(B), is
“substantively no different from the regulation at issue in Asahi,”
9
Commerce’s previous regulation read in pertinent part:
Before the Secretary may tentatively revoke a Finding
or an Order . . . the parties who are subject to the
revocation . . . must agree in writing to an immediate
suspension of liquidation and reinstatement of the
Finding or Order . . . if circumstances develop which
indicate that the merchandise thereafter imported into
the United States is being sold at less than fair
value. 19 C.F.R. § 353.54(e).
Court No. 09-00229 Page 14
id., and contains the same defects identified by the Court in that
case,10 see id. at 25-26. Namely, the regulation abrogates the
statutory requirement of affirmative dumping and injury
determinations necessary to impose duties, and fails to address the
interrelationship between reinstatement and the existing statutory
framework for imposing duties. See id. Therefore, Plaintiff
concludes, the Court’s holding in Asahi is equally applicable here,
and eliminates the Department’s legal authority to reinstate the
order over SSI. See id. at 27.
B. Defendant’s Arguments
Defendant counters that, under the doctrine of collateral
10
Commerce’s current reinstatement regulation provides in
part:
In determining whether to revoke an antidumping duty order in
part, the Secretary will consider:
(A) Whether one or more exporters or producers covered by
the order have sold the merchandise at not less than normal
value for a period of at least three consecutive years;
(B) Whether, for any exporter or producer that the
Secretary previously has determined to have sold the
subject merchandise at less than normal value, the
exporter or producer agrees in writing to its immediate
reinstatement in the order, as long as any exporter or
producer is subject to the order, if the Secretary
concludes that the exporter or producer, subsequent to
the revocation, sold the subject merchandise at less
than normal value; and
(C) Whether the continued application of the antidumping
duty order is otherwise necessary to offset dumping.
19 C.F.R. § 351.222(b)(2)(i).
Court No. 09-00229 Page 15
estoppel, SSI is precluded from making the argument that Commerce
lacks the authority to conduct a CCR for purposes of reinstating an
antidumping duty order. See Def.’s Resp. to Pl.’s Mot. for J. Upon
the Agency R. (“Def.’s Brief”) at 8. According to Commerce, the
Court in SSI I, “specifically ruled upon the merits and settled the
issue as a matter of law.” Id. As a result, the doctrine of issue
preclusion applies and relitigation of this matter cannot proceed.
Defendant further opines that, even assuming collateral
estoppel does not apply, Commerce’s reinstatement efforts derive
from and are consonant with its statutory authority. See id. at 9.
This, says Defendant, was the holding of the Court in SSI I, which
also affirmed the agency’s promulgation of 19 C.F.R. §
351.222(b)(2)(i), giving effect to the agency’s authority to
reinstate. See id. The Department acknowledges that section
1675(b)(1) does not expressly authorize a changed circumstances
review for reinstatement, nevertheless, it is Commerce’s position
that there is “binding precedent” for such an expansive view of
this section of the statute. Id. at 12. Commerce relies on the
Federal Circuit’s holding in Tokyo Kikai Seisakusho, Ltd. v. United
States, 529 F.3d 1352 (Fed. Cir. 2008) for the proposition that
“Commerce’s authority to conduct changed circumstances reviews
under section 1675(b) is not limited to the circumstances described
in the statute, and . . . encompasses a determination to reinstate
an antidumping duty order.” Id.
Court No. 09-00229 Page 16
As evidence that the Department’s actions in this review are
consistent with its past practice, Defendant offers two proceedings
in which, after conducting a changed circumstances review, Commerce
reinstated a company under a partially revoked antidumping duty
order. See id. at 13-14; see also Sebacic Acid from the People’s
Republic of China: Final Results of Antidumping Duty Changed
Circumstances Review and Reinstatement of the Antidumping Duty
Order, (“Sebacic Acid”) 70 Fed. Reg. 16,218 (Mar. 30, 2005);
Polyethylene Terephthalate Film, Sheet, and Strip from the Republic
of Korea: Final Results of Antidumping Duty Changed Circumstances
Review and Reinstatement of the Antidumping Duty Order, (“PET
Film”) 73 Fed. Reg. 18,259 (Apr. 3, 2008).
With regard to section 1675(d)(1), Defendant, once again,
concedes that the statute “is silent with respect to Commerce’s
exercise of its revocation power.” Def.’s Brief at 15. However,
the Department maintains that its “authority to reinstate an
exporter or producer in the antidumping order derives from its
authority to revoke the antidumping order in part as to that
particular exporter or producer.” Id. Because section 1675(d)(1)
provides for revocation “in whole or in part,” the argument goes,
Commerce is entitled to resolve the ambiguity created by the
statute’s failure to define this term. Id. (quoting 19 U.S.C. §
1675(d)(1)). Towards this end, Commerce promulgated 19 C.F.R. §
351.222 in order to administer the procedure for withdrawing
Court No. 09-00229 Page 17
partial revocation “by means of reinstating companies in an order
that remains in effect for other producers or exporters.” Id. As
the Department further explains, it “interpreted the authority to
partially revoke the antidumping duty order with respect to a
particular company it finds to be no longer dumping to include the
authority to impose a condition that the partial revocation may be
withdrawn.” Id. at 16 (quoting Initiation of Antidumping Duty
Changed Circumstances Review: Certain Hot-Rolled Carbon Steel Flat
Products from Thailand, 73 Fed. Reg. 18,770 (Apr. 7, 2008)).
Similar to its previous argument, Commerce construes the Court’s
holding in SSI I as affirming this grant of authority. See id. at
18. Having already determined that its actions regarding
reinstatement are statutorily based, Commerce dismisses as
meritless, Plaintiff’s claim that the certification signed by SSI
cannot confer upon Commerce any authority beyond that provided by
law. See id. at 19. As to the absence of any distinction
between partial and total revocation of an order in the language of
section 1675(d)(1), Defendant argues that the presence of the term
“‘in whole or in part’ expressly contemplates two types of
revocation: total revocation and partial revocation.” Id. at 21.
Thus, because partial revocation assumes the continued operation of
the antidumping duty order, at least with respect to other
producers or exporters, Commerce has not relinquished jurisdiction
over this still functional order. See id. Therefore, Defendant
Court No. 09-00229 Page 18
concludes, there is “no need to undertake a new investigation
because the order remain[s] in effect.” Id.
Insofar as the Plaintiff relies on this Court’s decision in
Asahi, Defendant argues two points of error. First, based upon the
Court’s ruling in SSI I, “the question as to whether Asahi has any
bearing upon whether Commerce acted ultra vires has [already] been
decided in favor of the United States.” Id. at 22. Second, even
assuming Asahi were relevant, Commerce’s current reinstatement
regulation has since been substantively amended, curing each of the
defects identified by the court in that case.11 See id.
Consequently, the Department offers an interpretation of Asahi that
does not invalidate the agency’s authority to order reinstatement.
C. Analysis
As a threshold matter, Defendant invokes the well-established
principle of collateral estoppel in claiming that Plaintiff is
precluded from relitigating matters already decided against them in
SSI I, specifically whether Commerce lacks the authority for
reinstatement pursuant to sections 1675(b) and (d). Under the
doctrine of collateral estoppel, or issue preclusion, a litigant
11
The Asahi court identified three specific concerns with
Commerce’s prior reinstatement regulation; 1) the regulation did
not specify the circumstances under which Commerce was to
consider reinstatement; 2) the regulation did not specify the
type of investigation necessary for reinstatement; and 3) the
regulation failed to address the interrelationship between
reinstatement and the existing statutory framework. See Asahi, 13
CIT at 991, 727 F. Supp. 625, 628.
Court No. 09-00229 Page 19
who has litigated an issue in a full and fair proceeding is
estopped from relitigating the same issue in a subsequent
proceeding. See Thomas v. Gen. Servs. Admin., 794 F.2d 661, 664
(Fed. Cir. 1986). Four conditions must be satisfied before a party
can seek to apply collateral estoppel; (1) the issue or fact
previously adjudicated is identical with the one now presented; (2)
the issue or fact was actually litigated in the prior case; (3)
resolution of the issue or fact was essential to a final judgment
in the first action; and (4) the party against whom preclusion is
applied had a full and fair opportunity to litigate the particular
issue or fact. See id.
In addressing the first and second prongs of the Thomas test,
the Court finds that the legal issue presented here is not
identical to the issue actually litigated in SSI I. While it is
true that Plaintiff, in SSI I, urged review of the agency’s
reinstatement authority, it did so under the premise of an ultra
vires rationale. The Court was careful to make the distinction
between a claim of ultra vires agency conduct, and one that merely
amounted to a “mistake of law.” SSI I, 33 CIT at ___, 601 F. Supp.
2d 1355, 1367. As the Court noted:
An ultra vires claim cannot be construed to allege that
Commerce promulgated its reinstatement regulation based
on an erroneous interpretation of the statute, but rather
that Commerce acted outside the scope of its authority,
and was without any legal basis to make that
interpretation at all. Plaintiff’s effort at recasting
its ultra vires argument, merely amounts to a claim that
Commerce committed a “mistake of law” in promulgating the
Court No. 09-00229 Page 20
reinstatement regulation, not that the Department acted
“completely outside [its] governmental authority.”
Id. (quoting State of Alaska v. Babbitt, 67 F.3d 864, 867 (9th Cir.
1995)). The Court ultimately concluded that:
[S]hould Commerce decide to reinstate the partially
revoked antidumping duty order as to SSI, Plaintiff will
have the opportunity to bring an action challenging those
results. In such an action, SSI is entitled to contest
“any factual findings or legal conclusions upon which the
determination is based,” 19 U.S.C. § 1516a(a)(2)(A),
including the statutory and regulatory bases for the
Department’s initiation of the changed circumstances
review.
Id. at 1369. Hence, the issue, in SSI I, of whether or not
Commerce was empowered to engage in the challenged course of
conduct in the first place is different from the issue of whether
Commerce’s reinstatement of a partially revoked antidumping duty
order was an errant application of the statute. Therefore,
Plaintiff’s claim is not barred by the doctrine of collateral
estoppel.
At its core, this case revolves around the issue of whether
Commerce has the authority, under 19 U.S.C. § 1675(b) and (d), to
initiate a changed circumstances review for purposes of reinstating
a previously revoked antidumping duty order. Plaintiff argues that
the authority granted by Congress under section 1675(b) and (d) is
exclusive to the explicit textual content of these provisions. In
other words, because the statute did not expressly provide for
reinstatement via a changed circumstances review or through any
other mechanism for that matter, Congress’ grant of authority is
Court No. 09-00229 Page 21
restricted to review of only those specific types of final
determinations listed therein (i.e., under section 1675(b)(1)), and
is otherwise intended only to allow the Department to revoke
existing orders (i.e., under section 1675(d)), not reinstate them.
Moreover, Plaintiff asserts, Congress has directly spoken to the
issue, therefore, Chevron deference does not apply. The Court
disagrees. In determining whether an agency’s interpretation and
application of a statute is “in accordance with law,” the Court
must undertake the two-step analysis prescribed by Chevron.
Chevron, 467 U.S. at 837. The first Chevron step is to determine
whether “Congress has directly spoken to the precise question at
issue.” Id. at 842. Employing traditional tools of statutory
construction, the Court looks first to the text of the statute.
See Timex V.I., Inc. v. United States, 157 F.3d 879, 882 (Fed. Cir.
1998). Because the “statute’s text is Congress’ final expression
of its intent, if the text answers the question, that is the end of
the matter.” Id. at 882. If, however, the statute’s text does not
explicitly address the question at issue, the Court must seek to
determine whether Congress had an intent on the matter. See id.
Only if after this investigation the Court is still at a loss as to
what Congress intended does the second prong of Chevron apply.
A review of 19 U.S.C. § 1675(b)(1) does not support the
suggestion that Congress intended to circumscribe the changed
circumstances review process to only those determinations listed
Court No. 09-00229 Page 22
therein. Neither the language of the statute nor the legislative
history expressly prohibit Commerce from using a CCR for
reinstatement purposes. As Defendant points out, this Court has
recognized the Department’s use of a CCR for purposes other than
those listed in the statute. See Def.’s Brief at 12. Plaintiff
attempts to distinguish the cases offered by Commerce as
inapposite for purposes of comparison to the facts at bar.
Specifically, SSI criticizes the Department’s application of the
Court’s holding in Mittal Canada, Inc. v. United States, 30 CIT
1565, 1572 n.7, 461 F. Supp. 2d 1325, 1332 n.7 (2006). In Mittal
Canada, the Court recognized as “broad” Commerce’s discretion as to
the range of matters subject to a changed circumstances review.
Id. SSI claims that Mittal Canada, and the cases cited within
Mittal Canada,12 are distinguishable on the grounds that each of the
12
Plaintiff’s comments with regard to the Court’s
characterization, in SSI I, of Jia Farn Mfg. Co., Ltd. v. United
States, 17 CIT 187, 817 F. Supp. 969 (1993) deserve some mention
in that Jia also serves as one of the seven cases cited within
the Mittal Canada opinion. See Pl.’s Reply Brief at 8 n.2. In SSI
I, under its discussion of the jurisdictional issue, the Court
represented the holding of Jia as one which affirmed Commerce’s
authority, under section 1675, to reinstate an antidumping duty
order. See SSI I, 33 CIT ___, 601 F. Supp. 2d 1355, 1368 n.13.
SSI accurately points out that the respondent in Jia was excluded
from the original antidumping duty order during the less than
fair value investigation. As a result, the question of
reinstatement was never before the court. However, the Jia court
did examine, and eventually sustained, the agency’s authority to
place an exporter or producer under an antidumping duty order
from which it had been previously excluded. Therefore, while
Commerce was not conducting the CCR for purposes of
reinstatement, it was contemplating instatement of the respondent
under an order already in place as to other companies.
Court No. 09-00229 Page 23
underlying CCR proceedings implicated an order that was in place on
the relevant party. See Pl.’s Reply Brief at 7-8. In this way,
only the particular application of each order was being considered
by Commerce.
This line of reasoning, however, misses the point. These
cases are not offered as justification for reinstatement per se,
but rather establish a judicial recognition of Commerce’s authority
to conduct changed circumstances reviews for purposes other than
those described in section 1675(b)(1). The existence, or lack
thereof, of an antidumping duty order on the affected party does
nothing to detract from the argument that the scope of section
1675(b)(1) is not so constrained. The lack of certainty as to
whether Congress has directly spoken to this precise issue, compels
an examination of whether the Department’s interpretation is based
on a permissible construction of the statute. In other words, the
Court must proceed to the second step of the Chevron analysis.
Under the second step of Chevron, “[a]ny reasonable
construction of the statute is a permissible construction.” Timken
Co. v. United States, 354 F.3d 1334, 1342 (Fed. Cir. 2004) (quoting
Torrington v. United States, 82 F.3d 1039, 1044 (Fed. Cir. 1996)).
Regardless, Plaintiff’s objection to the Court’s interpretation
of the Jia decision is misplaced. In SSI I, the Court was
adducing evidence with regard to jurisdiction, not reinstatement.
In fact, the Court in SSI I specifically declined to review
Commerce’s reinstatement regulation under the guise of a
jurisdictional claim. See SSI I, 33 CIT ___, 601 F. Supp. 2d
1355, 1368.
Court No. 09-00229 Page 24
With this as a guide, the courts have accorded particular deference
to Commerce in antidumping determinations. See id. Here, the
wording of section 1675(d) is instructive. The statute expressly
contemplates the revocation “in whole or in part” of an antidumping
duty order or “finding.” 19 U.S.C. § 1675(d). Both parties agree
that there was only a partial revocation with respect to the
merchandise produced and exported by SSI, and that the order
remained in effect as to other producers of hot-rolled steel from
Thailand. While this fact, in and of itself, negates Plaintiff’s
claim that section 1675(d)(1) does not distinguish between total
and partial revocation, it also underscores what Commerce actually
did in this case. The removal of SSI from the duties imposed by
the order did not serve as a revocation of the order itself, but
rather a revocation of the finding that SSI was dumping and
therefore liable under the strictures of the order. In this way,
Commerce’s reinstatement of SSI to the order from which it was
removed is not a reinstatement of the antidumping duty order, but
a reinstatement of the finding that SSI was dumping.13 Hence, the
argument Plaintiff advances that upon revocation an “order ceases
to exist and cannot later be ‘reinstated’” is without merit. Pl.’s
Brief at 20. The antidumping duty order is still in effect as to
13
While it is true that Commerce characterizes its initial
removal of SSI from the order as a partial revocation, the
moniker Commerce attaches does not detract from the legal
authority it derives from section 1675(d)(1).
Court No. 09-00229 Page 25
hot-rolled steel from Thailand. The fact that the order remains
effective as to other Thai producers defeats Plaintiff’s argument
of the need for a new investigation. Both the less than fair value
determination by Commerce and the injury determination by the ITC
continue to support application of antidumping duties on the
subject merchandise. Thus, all Commerce has done is to reconsider
its determination as to whether or not SSI has acted in a manner
consistent with its original exclusion from the order. See Jia, 17
CIT at 192, 817 F. Supp. 969, 973 (“[T]he exclusion of a firm from
the order applies only when the firm acts in the same capacity as
it was [when] excluded from the order”).
Because the statute does not define “in whole or in part,”
Commerce filled this statutory gap by promulgating regulations to
govern the procedures for partial revocation of an order or
finding. The mechanism by which Commerce chose to accomplish this
is 19 C.F.R. § 351.222. Commerce explains that the rationale
underlying this procedure is to ensure that injurious dumping is
remedied, especially under circumstances, such as those present
here, where a party removed from an antidumping order subsequently
resumes dumping. Without such procedures, it is conceivable that
a respondent company could evade penalty by curbing its dumping
activity for the requisite period of time in order to seek removal
from the order and after having done so, return to making sales at
below normal value. The reasonableness of this concern is embodied
Court No. 09-00229 Page 26
in the fact that SSI willingly entered into an agreement allowing
its reinstatement under the order. Although SSI now claims that it
only agreed to reinstatement pursuant to a new investigation, this
claim is inconsistent with Plaintiff’s acquiescence to “immediate
reinstatement of the order, so long as any Thai producer is subject
to it.” Request For Changed Circumstances Review On Behalf Of
United States Steel Corp. (Nov. 8, 2006), Ex. 1 at 3 (PR 721).
Plaintiff fails to explain why, if reinstatement could only be
effected through a new investigation, the company agreed to
predicate reinstatement on the condition that the order remain in
effect. The Court interprets Plaintiff’s acceptance of the terms
of the reinstatement agreement as its accedence to the
reasonableness of the practice.
Plaintiff’s reliance on the Court’s decision in Asahi is
similarly flawed. The Court’s principal objection to the
regulation at issue in Asahi was the degree to which the
provision’s ambiguity made any standard for reinstatement
conjectural. See Asahi, 13 CIT at 991, 727 F. Supp. 625, 628.
Specifically, 19 C.F.R. § 353.54(e) did not; (1) describe the
circumstances under which Commerce would consider reinstatement;
(2) specify the type of investigation necessary for reinstatement;
or (3) speak to the inter-relationship between reinstatement and
the existing statutory framework. See id. Under the terms of 19
C.F.R. § 353.54, it was theoretically possible for Commerce to
Court No. 09-00229 Page 27
impose antidumping duties without the benefit of an extant
antidumping duty order. This, the Asahi court found, was
impermissible. Commerce has since amended its reinstatement
regulations with the most significant change coming in the form of
the conditional requirement that reinstatement be considered only
if an exporter or producer is still subject to the order. With
this change, Commerce has addressed two of the concerns evoked in
Asahi. Namely, the circumstances under which reinstatement can
proceed are now elucidated, as is the inter-relationship between
reinstatement and the existing statutory framework. The stipulation
requiring an order to remain in effect as to other exporters or
producers before reinstatement can be contemplated speaks to the
necessity of two affirmative findings; a finding of dumping by
Commerce and a separate finding of material injury by the ITC. It
also serves as notice to those seeking partial revocation of the
conditions precedent necessary for reinstatement.
In light of the above, the Court finds that Commerce’s
rationale and interpretation of section 1675(b) and (d) are
reasonable within the Chevron framework, supported by substantial
evidence on the record and otherwise in accordance with law.
2. Commerce’s Use of Invoice Date Rather Than Contract Date as
U.S. Date of Sale
A. Plaintiffs’ Arguments
SSI complains that Commerce acted arbitrarily when it changed
its U.S. date of sale methodology. Rather than relying on the
Court No. 09-00229 Page 28
contract date, as was done in previous segments of this proceeding,
Commerce instead used invoice date in the date of sale analysis.
See Pl.’s Brief at 28-29. SSI alleges that had the Department
adhered to its longstanding practice of relying on respondent’s
contract date, SSI would have no antidumping duty margin. See id.
at 28. Hence, Commerce would have been precluded from reinstating
the order as to SSI. Acknowledging the regulatory preference for
use of invoice date as the date of sale, Plaintiff points out that
this same regulation provides for use of a date other than invoice
date, if the Secretary is satisfied that a different date better
reflects the date on which the material terms of sale are
established.14 See id. at 29. Because SSI’s contract dates better
reflect the date on which the material terms of its U.S. sales were
established, Commerce erred by not relying on those reported dates
as it had done in the four previous segments of this proceeding.
See id.
Plaintiff avers that date of sale issues are typically
resolved by examining the significance of any changes to the
14
19 C.F.R. § 351.401(i) provides:
Date of sale. In identifying the date of sale of the subject
merchandise or foreign like product, the Secretary normally will
use the date of invoice, as recorded in the exporter or
producer's records kept in the ordinary course of business.
However, the Secretary may use a date other than the date of
invoice if the Secretary is satisfied that a different date
better reflects the date on which the exporter or producer
establishes the material terms of sale.
Court No. 09-00229 Page 29
material terms of sale involved. See id. In other words, the
Department should have examined whether or not the material terms
of sale underwent any meaningful changes between the contract date
and date of invoice, before it deviated from using contract date as
the U.S. date of sale. SSI identifies Notice of Final Results of
Antidumping Duty Administrative Review and Final Partial
Rescission: Certain Cut-to-Length Carbon Steel Plate from Romania,
72 Fed. Reg. 6,522 (Feb. 12, 2007) (“Steel Plate from Romania”) as
an instance in which the Department has previously concluded that
the use of invoice date is not appropriate when there are only
minor changes in quantity between an order acknowledgment and
invoice.
SSI references another administrative decision by Commerce, in
which the agency declared that “a change in aggregate quantity does
not, in and of itself, necessarily constitute a meaningful change
to the material terms of sale.” Final Results of Redetermination
Pursuant to Second Remand, Nakornthai Strip Mill Public Co. Ltd. v.
United States, Court No. 07-00180, p.3 (Feb. 9, 2009); see also
Pl.’s Brief at 30. Therefore, because Plaintiff’s U.S. sales
process has remained the same throughout, resulting in only minor
changes in the aggregate quantity shipped, and Commerce has relied
on contract date as the date of sale in all previous segments of
this proceeding, the Department’s decision to change from contract
date to invoice date is unsupported by substantial evidence. See
Court No. 09-00229 Page 30
id. at 30-33.
Lastly, it is SSI’s position that “important policy reasons”
exist as to why contract date is the appropriate U.S. date of sale
in the underlying changed circumstances review. Id. at 34. To
begin with, Plaintiff maintains that it has complied with all
requests and cooperated fully in every segment of this proceeding,
and acted consistent with established Department precedent. See
id. Additionally, “the recording of final contract date is
consistent with the Department’s position as to what is considered
a ‘meaningful’ change in material terms.” Id. For instance, the
changes in shipment quantity under SSI’s contract sales were not
“meaningful in relation to the total quantity of U.S. sales.” Id.
at 33. Therefore, if, despite this, invoice date continues to be
the U.S. sale date, “contract terms will never be considered set”
and Commerce’s date of sale regulation will become “meaningless.”
Id. at 34.
B. Defendant’s Arguments
Commerce defends its use of invoice date as U.S. date of sale,
as a proper exercise of the regulatory presumption reflected in 19
C.F.R. § 351.401(i). See Def.’s Brief at 28-29. The regulation’s
use of the term “normally” establishes invoice date as the
presumptive date of sale. 19 C.F.R. § 351.401(i). According to
Commerce, this presumption may be overcome if satisfactory evidence
is presented establishing the material terms of sale on some other
Court No. 09-00229 Page 31
date. See id. at 29. In the underlying changed circumstances
review, Commerce alleges that the material contract terms were not
set until invoice date because the difference between the quantity
ordered and the quantity shipped exceeded the aggregate quantity
tolerance level allowed by the contract, thereby constituting
changes to the material terms of sale, i.e., price, quantity,
delivery, and payment. As to Plaintiff’s insistence that Commerce
should have used contract date as the U.S. date of sale because
this was the agency’s practice in all previous segments of this
proceeding, Commerce argues that the agency’s “date of sale
determination is based upon the facts presented by each review.”
Id. Therefore, even if SSI’s U.S. sales process has remained
unchanged from previous reviews, Commerce’s date of sale
determination is predicated on the unique facts of this case, not
those from earlier determinations. See id.
With respect to whether the material terms of sale underwent
changes sufficient enough to warrant a deviation from contract date
as U.S. date of sale, Defendant points to what it considers
“[s]ubstantial record evidence [which] demonstrates . . . that SSI
had multiple contracts, representing multiple sales, to multiple
customers, with final shipment quantities outside of the quantity
tolerance specified in the final contract terms.”15 Id. at 34.
15
Of the [[ ]] total contracts, [[ ]] were found to have
exceeded the specified “Delivery Allowance” of [[ ]]
provided for in each contract. See Def.’s Brief at 34.
Court No. 09-00229 Page 32
According to Commerce, these changes in delivery terms represent a
“substantial variation[] in material terms between the contract
date and the invoice date.” Id. at 36. Therefore, Commerce’s
methodology is consistent with the principle that “a party fails to
rebut the presumption that date of invoice shall be used where
there is a substantial variation between the quantity shipped and
the tolerance level specified in a contract.” Id. at 38. In this
way, the previous administrative proceedings to which Plaintiff
refers are factually distinguishable from the circumstances of the
present case. See id. at 37.
As a final point, Commerce rejects as irrelevant Plaintiff’s
contention that the instant case presents important policy
considerations. Plaintiff’s cooperation, says Commerce, has not
been called into question, therefore any such policy considerations
are extraneous to the issue of the agency’s determination that
Plaintiff failed to establish the requisite grounds for use of a
date other than invoice date. See id. at 40.
C. Analysis
The antidumping statute on its face does not specify the
manner in which Commerce is to determine the date of sale
methodology. The legislative history, however, provides some
insight into what Congress intended. As the Statement of
Administrative Action accompanying the statute explains, the date
of sale is the “date when the material terms of sale are
Court No. 09-00229 Page 33
established.” Uruguay Round Agreements Act, Statement of
Administrative Action (“SAA”), H.R. 5110 (H.R. Doc. No. 103-316),
reprinted in 1994 U.S.C.C.A.N. 4040, 4153. Hence, Congress has
“expressed its intent that, for antidumping purposes, the date of
sale be flexible so as to accurately reflect the true date on which
the material elements of sale were established.” Allied Tube and
Conduit Corp. v. United States, 24 CIT 1357, 1370, 127 F. Supp. 2d
207, 219 (2000). Towards this end, Commerce has promulgated
regulations which provide that invoice date is the presumptive date
of sale, but with an express caveat for situations where another
date better reflects the date on which the material terms of sale
were established. See 19 C.F.R. § 351.401(i). Thus, Commerce’s
date of sale regulation provides for a “rebuttable presumption”
that invoice date will normally be identified as the date of sale.16
See Nucor Corp. v. United States, 33 CIT ___, 612 F. Supp. 2d 1264,
1304 (2009). Consequently, unless the party seeking to establish
a date of sale other than the invoice date produces sufficient
evidence to overcome this presumption, Commerce will use invoice
date as the date of sale. This presumption notwithstanding,
16
As support for its presumptive use of invoice date,
Commerce explained that: “in many industries, even though a buyer
and seller may initially agree on the terms of a sale, those
terms remain negotiable and are not finally established until the
sale is invoiced. Thus, the date on which the buyer and seller
appear to agree on the terms of a sale is not necessarily the
date on which the terms of sale actually are established.”
Antidumping Duties; Countervailing Duties, 62 Fed. Reg. 27,296,
27,349 (Final Rule) (May 19, 1997).
Court No. 09-00229 Page 34
Commerce does not possess the unfettered discretion to apply
invoice date as the date of sale with no regard for the record
evidence in a given case. See id. Flexibility is the cornerstone
of Commerce’s date of sale analysis, and the invoice date
presumption is merely a “starting point” in the determination of
which date better reflects the date on which the material terms of
sale were established. Id. at 1307.
In its interpretation of material terms of sale, the
Department’s practice has evolved to include price, quantity,
delivery terms and payment terms. See SeAH Steel Corp. v. United
States, 25 CIT 133, 134 (2001); Nakornthai Strip Mill Public Co. v.
United States, 33 CIT ___, 614 F. Supp. 2d 1323, 1334 (2009)
(“Nakornthai III”). More recently, however, Commerce has
interpreted material terms of sale to include the specification of
an aggregate quantity tolerance level because the aggregate
quantity tolerance level may be viewed as specifying the amount or
quantity of the merchandise to be shipped. See Nakornthai Strip
Mill Public Co. v. United States, 32 CIT ___, 558 F. Supp. 2d 1319,
1327 (2008) (“Nakornthai I”).
In choosing a date of sale, Commerce weighs the evidence
presented and determines the significance of any changes to the
terms of sale involved. From the beginning of this changed
circumstances review, SSI has argued that any changes made to the
contract were minimal and therefore not meaningful in relation to
Court No. 09-00229 Page 35
the total quantity of U.S. sales. In support of this contention,
SSI looks to Steel Plate from Romania where Commerce chose to use
order acknowledgment date (contract date) as the date of sale even
though one sale fell outside of the quantity tolerance limits set
in the contracts. See 72 Fed. Reg. 6,522 and accompanying Issues
and Decision Memorandum at cmt. 1, p.7. According to SSI, the
circumstances in Steel Plate from Romania are essentially the same
as those present here, in that the material terms of sale did not
undergo any meaningful changes subsequent to the final contract
date. The Court disagrees. Although both cases involve sales
exceeding the aggregate quantity tolerance level specified in the
contracts, Steel Plate from Romania implicated only a single sale
within a single contract. See id. at cmt. 1, p.5. Conversely, the
instant review involves multiple changes exceeding the contract
tolerances of multiple contracts, representing multiple sales to
multiple customers. See Memorandum to File from John K. Drury,
Analysis Memorandum for the Final Results of Changed Circumstances
Review of Certain Hot-Rolled Carbon Steel Flat Products from
Thailand: Sahaviriya Steel Industries Public Co., Ltd. (“SSI”),
dated May 7, 2009, at p.6 (CR 1178) (“Analysis Memorandum”). Of
the [[ ]] contracts examined, the Department found that the
quantity tolerance level was exceeded in [[ ]], accounting for
Court No. 09-00229 Page 36
almost [[ ]] of SSI’s contracts.17 See id. These changes
affected contracts representing [[ ]] of SSI’s customer base in
the U.S. See id. The significance of these changes stand in stark
contrast to the lone sale alluded to in Steel Plate from Romania.
Despite Plaintiff’s assertions to the contrary, it cannot be
gainsaid that changes to the material terms of sale occurred after
execution of the final sales contract.18 The Court, therefore,
finds Steel Plate from Romania to be inapposite for purposes of the
instant matter. Neither is the second of the two agency decisions
17
For contract [[ ]], the final quantity
delivered was [[ ]] than agreed to in the final
contract, exceeding the quantity tolerance level of [[ ]].
Contract [[ ]] delivered a final quantity that was
[[ ]] than agreed to in the final contract,
exceeding the quantity tolerance level of [[ ]]. Contract
[[ ]] delivered a final quantity that was [[
]] than agreed to in the final contract, also
exceeding the quantity tolerance level of [[ ]]. See
Analysis Memorandum, at p.6 (CR 1178).
18
SSI reported as the final contract date, the date of
final addendum, if an addendum was applicable.
In addition, SSI submitted affidavits from all [[ ]] of
its U.S. customers attesting to the fact that “while there might
be minor variations to non-material terms in the normal course of
business, once the Sales Contract is signed, [customer]
understands there can thereafter be no changes to the material
terms of sale without an amendment to the contract separately and
later agreed to by [customer] and SSI.” Response to the
Department’s Sept. 18, 2008 Third Supplemental Questionnaire
Regarding Sections A, B, And C, Ex. S3C-3, ¶ 7 (CR 1031); see
also Letter from Sahaviriya Steel Industries to the Department of
Commerce, dated Aug. 25, 2008, (CR 1021). While these
declarations may establish how the contracting parties intended
to proceed, they are not an accurate reflection of their course
of conduct.
Court No. 09-00229 Page 37
on which Plaintiff relies instructive here. In Nakornthai,
Commerce reasoned that “a change in aggregate quantity shipped is
not, on its own, significant and does not, by itself, materially
affect the date that the terms of contract were essentially
established.”19 Final Results of Redetermination Pursuant to Second
Remand, Nakornthai Strip Mill Public Co. Ltd. v. United States,
Court No. 07-00180, p.3 (Feb. 9, 2009). This determination was
made in the context of changes to the range of quantities purchased
for each item within the contract - i.e., the “per item tolerance
level.” Nakornthai III, 33 CIT ___, 614 F. Supp. 2d 1323, 1326
n.3. As a result, the changes in that case remained within the
total aggregate tolerance level provided for by the contract not,
as is the case here, outside the total quantity tolerance level
specified in the [[ ]] contracts in question. Indeed, Commerce
has previously recognized that within tolerance differences do not
constitute changes to the material terms of sale. See Notice of
Final Determination of Sales at Less Than Fair Value; Certain Hot-
Rolled Carbon Steel Flat Products From Thailand, 66 Fed. Reg.
49,622 (Sept. 28, 2001) and accompanying Issues and Decision
Memorandum, at cmt. 9 (“With respect to these quantity changes that
occurred within such delivery tolerances, we agree . . . that any
19
As Commerce correctly points out, SSI cites to the
Department’s Final Results of Redetermination Pursuant to Second
Remand. This has been superceded by the Court’s decision in
Nakornthai III, 33 CIT ___, 614 F. Supp. 2d 1323.
Court No. 09-00229 Page 38
differences between the quantity ordered and the quantity shipped
which fall within the tolerance specified by the entire contract do
not constitute changes in the material terms of sale.”).
Equally unconvincing is Plaintiff’s argument that the changes
in quantity tolerance levels are not meaningful in relation to the
total quantity of U.S. sales because they represent only [[ ]]
of all quantities ordered in the final contracts. As U.S. Steel
correctly points out, this is not the relevant measure of whether
a quantity change is meaningful. See Mem. in Opp’n to Plaintiff’s
Mot. for J. On the Agency R. (“Def.-Intervenor’s Brief”) at 32.
Plaintiff’s position would render meaningless the quantity
tolerance levels negotiated by the contracting parties. Under this
theory, SSI could conceivably exceed the quantity tolerance level
of virtually every contract, meriting a 100% non-compliance rate,
yet if the impact of these changes on the aggregate quantity and
value of all U.S. sales was minor, contract date would still be
appropriate for the date of sale analysis. Thus, SSI could
effectively evade the mutually agreed upon terms of its contracts
and thwart the agency’s efforts to calculate a dumping margin as
accurately as possible. This, the Court finds, is simply untenable
and cannot be understood as an accurate reflection of when the
material terms of sale were established by the parties.
In sum, Plaintiff’s assertion that Commerce inappropriately
used invoice date as the date of sale holds no merit. The evidence
Court No. 09-00229 Page 39
necessary to compel rejection of the regulatory presumption in
favor of invoice date as the date of sale is conspicuously absent.
Furthermore, Commerce’s decision to use the invoice date
underscores the contracts’ lack of finality stemming from sudden
changes to the aggregate quantity shipped by Plaintiff, which
significantly altered the material terms of sale. It is instances
such as this that motivated Congress to grant Commerce the
flexibility to choose the date of sale that best reflects the final
date on which the material terms of sale were established. Thus,
Commerce’s decision to proceed with the invoice date as the
benchmark for its antidumping determination, despite having applied
the contract date in previous reviews, is in accordance with the
agency’s consistent practice of determining the date of sale based
upon the facts specific to each review. Accordingly, the Court
finds, as supported by substantial evidence and otherwise in
accordance with law, Commerce’s date of sale methodology.
The Court takes note of SSI’s assertion that there are
important policy considerations which support the use of contract
date as the appropriate date of sale. Because this argument is not
grounded in any legal authority or supported by relevant record
evidence, the Court does not specifically address this claim.
Court No. 09-00229 Page 40
CONCLUSION
For the reasons set forth above, the Motion for Judgment on
the Agency Record filed by Sahaviriya Steel Industries is denied.
Judgment shall be entered accordingly.
/s/ Nicholas Tsoucalas
Nicholas Tsoucalas
Senior Judge
Dated: June 15, 2010
New York, New York