Slip Op. 06-134
UNITED STATES COURT OF INTERNATIONAL TRADE
CARPENTER TECHNOLOGY
CORPORATION,
Plaintiff,
Before: Leo M. Gordon, Judge
v.
Court No. 04-00246
UNITED STATES,
Defendant.
OPINION
[Defendant’s motion to dismiss denied; plaintiff’s motion for judgment on the agency
record denied; judgment for defendant.]
Dated: September 6, 2006
Kelley Drye Collier Shannon (Robin H. Gilbert) for the plaintiff.
Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director, and
Jeanne E. Davidson, Deputy Director, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice (Michael Panzera); and Office of Chief Counsel for Import
Administration, U.S. Department of Commerce (Ada E. Bosque), of counsel, for the
defendant.
Gordon, Judge: Plaintiff Carpenter Technology Corporation moves for judgment
upon the agency record pursuant to USCIT R. 56.2, challenging a decision of the United
States Department of Commerce (“Commerce”) to collapse two foreign producers and
treat them as a single entity during an administrative review of an antidumping duty
order covering stainless steel wire rods from India. Plaintiff, however, did not raise this
issue before the agency, failing to exhaust its administrative remedies.
As an initial matter, defendant has moved to dismiss this action pursuant to
USCIT R. 12(b)(1), mistakenly asserting that plaintiff’s failure to exhaust administrative
Court No. 04-00246 Page 2
remedies divests the Court of International Trade of subject matter jurisdiction. The
requirement of exhaustion of administrative remedies for judicial review of antidumping
determinations is not jurisdictional, but discretionary pursuant to
28 U.S.C. § 2637(d) (2000). See United States v. Priority Prods., Inc., 793 F.2d 296,
300 (Fed. Cir. 1986) (noting that the Court of International Trade has discretion to
excuse failure to exhaust administrative remedies for actions covered by 28 U.S.C.
§ 2637(d) (2000)); see also Avocados Plus Inc. v. Veneman, 370 F.3d 1243, 1247-50
(D.C. Cir. 2004) (explaining the difference between jurisdictional and non-jurisdictional
exhaustion of administrative remedies). Accordingly, defendant’s motion to dismiss is
denied. The court has jurisdiction pursuant to 19 U.S.C. § 1516a(a)(2)(B)(iii) (2000) and
28 U.S.C. § 1581(c) (2000). As explained below, however, plaintiff failed to exhaust its
administrative remedies, and the court will therefore enter judgment in favor of
defendant.
I. Background
During the administrative review, which covers the period December 1, 2001
through November 30, 2002, Commerce collapsed respondents Viraj Alloys, Ltd.
(“VAL”) and VSL Wires, Ltd. (“VSL”). See Stainless Steel Wire Rods from India,
69 Fed. Reg. 29,923 (Dep’t of Commerce May 26, 2004) (final results admin. review)
(“Final Results”). When Commerce collapses two or more entities, it treats them as a
“single entity” for the antidumping analysis and margin calculation.
19 C.F.R. § 351.401(f)(1) (2004). Prior to the Preliminary Results, Commerce issued an
8-page decisional memorandum analyzing the issue of collapsing and concluding that
Court No. 04-00246 Page 3
VAL and VSL should be treated as a collapsed entity. (Pl.’s Mot. J. Agency R., App. 5.)
VAL and VSL were therefore collapsed for the Preliminary Results. Stainless Steel
Wire Rods from India, 68 Fed. Reg. 70,765, 70,771-72 (Dep’t of Commerce
Dec. 19, 2003) (prelim. results admin. review) (“Preliminary Results”). Plaintiff did not
challenge Commerce’s decision, opting not to address the issue. Receiving no
comments, Commerce treated VAL and VSL as one collapsed entity in the Final
Results.
II. Discussion
Exhaustion of Administrative Remedies
When reviewing Commerce’s antidumping determinations, the Court of
International Trade requires litigants to exhaust administrative remedies “where
appropriate.” 28 U.S.C. § 2637(d) (2000). This form of non-jurisdictional exhaustion is
generally appropriate in the antidumping context because it allows the agency to apply
its expertise, rectify administrative mistakes, and compile a record adequate for judicial
review—advancing the twin purposes of protecting administrative agency authority and
promoting judicial efficiency. See Woodford v. Ngo, 548 U.S. __, __, 126 S. Ct. 2378,
2385 (2006) (discussing the “two main purposes” of exhaustion of administrative
remedies); Avocados Plus Inc., 370 F.3d at 1247; Ta Chen Stainless Steel Pipe, Ltd. v.
United States, 28 CIT __, __, 342 F. Supp. 2d 1191, 1206 (2004).
An exception to the requirement of exhaustion is futility. See Budd Co., Wheel &
Brake Div. v. United States, 15 CIT 446, 452 n.2, 773 F. Supp. 1549, 1555 n.2 (1991).
Plaintiff argues that it would have been futile to raise the collapsing issue in the
Court No. 04-00246 Page 4
administrative review because of Commerce’s alleged “intransigence” in four other
administrative proceedings involving the Viraj companies.1 (Pl.’s Reply Br. at 5.) In
those proceedings, Commerce collapsed the companies, rejecting plaintiff’s arguments
that the companies should be treated as separate entities. (Pl.’s Reply Br. at 2-4.)
The court is not convinced that this matter was rendered futile by whatever
difficulties plaintiff previously experienced in failing to persuade Commerce not to
collapse the Viraj companies. Collapsing is a complex, fact-specific issue, Slater Steels
Corp. v. United States, 28 CIT _, _, 316 F. Supp. 2d 1368, 1379 (2004), which the
court reviews on the administrative record. See 28 U.S.C. § 2640(b) (2000);
19 U.S.C. § 1516a(b)(2) (2000). The standard of review requires the court to uphold
Commerce’s collapsing decision unless it is unsupported by substantial evidence or
otherwise not in accordance with law. 19 U.S.C. § 1516a(b)(1)(B) (2000). For the court
to apply this standard properly, plaintiff had to raise the issue to allow Commerce to
compile an administrative record adequate for judicial review. See McCarthy v.
Madigan, 503 U.S. 140, 145 (1992) (“exhaustion of the administrative procedure may
produce a useful record for subsequent judicial consideration, especially in a complex or
technical factual context.”).
1
Stainless Steel Wire Rod from India, 67 Fed. Reg. 37,391 (Dep’t of Commerce
May 29, 2002) (final results admin. review) (period of review: Dec. 1, 1999 through
Nov. 30, 2000); Stainless Steel Wire Rods from India, 68 Fed. Reg. 26,288 (Dep’t of
Commerce May 15, 2003) (final results admin. review) (period of review: Dec. 1, 2000
through Nov. 30, 2001); Stainless Steel Bar from India, 67 Fed. Reg. 45,956 (Dep’t of
Commerce July 11, 2002) (final results admin. review) (period of review: Feb. 1, 2000
through Jan. 31, 2001); Stainless Steel Bar from India, 68 Fed. Reg. 47,543 (Dep’t of
Commerce Aug 11, 2003) (final results admin. review) (period of review: Feb. 1, 2001
through Jan. 31, 2002).
Court No. 04-00246 Page 5
Commerce issued a detailed 8-page memorandum on the sole issue of
collapsing before the Preliminary Results. Plaintiff therefore had the chance in its case
brief to develop the administrative record by challenging the legal and factual bases for
the agency’s collapsing determination, which the agency could have addressed in the
Final Results on the administrative record. By failing to brief the issue before the
agency, plaintiff did not allow the agency to consider plaintiff’s arguments in the first
instance. See Unemployment Comp. Comm’n of Alaska v. Aragon, 329 U.S. 143, 155
(1946) (“A reviewing court usurps the agency’s function when it sets aside the
administrative determination upon a ground not theretofore presented and deprives the
[agency] . . . of an opportunity to consider the matter, make its ruling, and state the
reasons for its action.”) (emphasis added) (footnote omitted). Plaintiff’s failure has left
the court the task of sorting through post hoc rationalizations of agency counsel. See
Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168-69 (1962) (“The courts
may not accept . . . counsel’s post hoc rationalizations for agency action; . . . an
agency’s discretionary order [must] be upheld, if at all, on the same basis articulated in
the order by the agency itself . . . .”).
Moreover, to the extent plaintiff argues in its brief before this court that
Commerce wrongly changed its position from a prior administrative review in which it
did not collapse the Viraj companies, Stainless Steel Wire Rod from India, 65 Fed. Reg.
31,302 (Dep’t of Commerce May 17, 2000) (final results admin. review) (period of
review: Dec. 1, 1997 through Nov. 30, 1998), plaintiff needed to raise that issue before
the agency first. An agency “has the flexibility to change its position providing that it
Court No. 04-00246 Page 6
explains the basis for its change and providing that the explanation is in accordance
with law and supported by substantial evidence.” Cultivos Miramonte S.A. v. United
States, 21 CIT 1059, 1064 & nn.6-7, 980 F. Supp. 1268, 1274 & nn.6-7 (1997). Plaintiff
had the opportunity to develop the administrative record on this issue and challenge any
change of agency practice, which the agency could have addressed on the
administrative record.
It suffices to say that the exhaustion requirement is appropriate in this case. Had
plaintiff raised the collapsing issue before the agency, the administrative record would
have been more fully developed and adequate for judicial review, the agency would
have exercised its primary jurisdiction (without the need to rely on post hoc
rationalizations of agency counsel), and the court could then have efficiently applied the
standard of review to analyze whether the collapsing decision was supported by
substantial evidence or otherwise in accordance with law.
III. Conclusion
Plaintiff failed to exhaust its administrative remedies and the futility exception
does not apply. Accordingly, the court will enter judgment in favor of defendant.
/s/ Leo M. Gordon
Judge Leo M. Gordon
Dated: New York, New York
September 6, 2006