Globe Metallurgical, Inc. v. United States

Slip Op. 05-90

UNITED STATES COURT OF INTERNATIONAL TRADE

BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
________________________________________
GLOBE METALLURGICAL, INC. :
and SIMCALA, INC., :
:
Plaintiffs, :
:
v. :
:
UNITED STATES, :
: Consol. Court No.
Defendant, : 03-00202
:
and :
:
BRATSK ALUMINIUM SMELTER :
and RUAL TRADE LIMITED, :
:
Defendant-Intervenors. :
________________________________________:

[The United States Department of Commerce’s Final Remand Results
are remanded.]

DLA Piper Rudnick Cary Gray US LLP, (William D. Kramer and
Clifford E. Stevens, Jr.), for Globe Metallurgical, Inc. and
SIMCALA, Inc., plaintiffs.

Peter D. Keisler, Assistant Attorney General; David M. Cohen,
Director; Jeanne E. Davidson, Deputy Director; Commercial
Litigation Branch, Civil Division, United States Department of
Justice (Michael Panzera); of counsel: Jonathan J. Engler, Office
of the Chief Counsel for Import Administration, United States
Department of Commerce, for the United States, defendant.

OPINION AND ORDER

I. Standard of Review

The Court will uphold the United States Department of

Commerce’s (“Commerce”) redetermination pursuant to the Court’s
Court No. 02-00202 Page 2

remand unless it is “unsupported by substantial evidence on the

record, or otherwise not in accordance with law.” 19 U.S.C. §

1516a(b)(1)(B)(I) (2000). Substantial evidence is “more than a

mere scintilla. It means such relevant evidence as a reasonable

mind might accept as adequate to support a conclusion.” Universal

Camera Corp. v. NLRB, 340 U.S. 474, 477 (1951) (quoting Consol.

Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)). Substantial

evidence “is something less than the weight of the evidence, and

the possibility of drawing two inconsistent conclusions from the

evidence does not prevent an administrative agency’s finding from

being supported by substantial evidence.” Consolo v. Fed. Mar.

Comm’n, 383 U.S. 607, 620 (1966) (citations omitted).

II. Background

The relevant facts and procedural history in this case are set

forth in the Court’s remand opinion, Globe Metallurgical, Inc. v.

United States, 28 CIT ___, 350 F. Supp. 2d 1148 (2004). Commerce

determined that market economy Russian values did not constitute

“the best available information,” and, therefore, such values were

not used to calculate normal value (“NV”). See Notice of Final

Determination of Sales at Less Than Fair Value for Silicon Metal

From the Russian Federation (“Final Determination”), 68 Fed. Reg.

6,885 (Feb. 11, 2003), as amended by Notice of Amended Final

Determination of Sales at Less Than Fair Value for Silicon Metal
Court No. 02-00202 Page 3

From the Russian Federation (“Amended Final Determination”) 68 Fed.

Reg. 12,037 (Mar. 13, 2003). In its Final Determination, Commerce

excluded the cost of recycled silicon metal fines as a factor of

production of silicon metal produced by Bratsk Aluminium Smelter

(“Bratsk”), Zao Kremny (“Kremny”) and SUAL-Kremny-Ural Ltd.

(“SKU”). See Final Determination 68 Fed. Reg. at 6,885. On

September 24, 2004, the Court issued a remand order directing

Commerce to: (1) use Russian market economy values or explain why

such values are not “the best available information;” and, (2)

explain why it excluded recycled silicon metal fines from its

factor of production cost analysis. See Globe, 28 CIT at ___, 350

F. Supp. 2d at 1161. Subsequent to the Court’s remand, Bratsk

entered a notice of voluntary dismissal on December 1, 2004, and

withdrew its challenge to Commerce’s use of values other than

Russian market economy values in calculating NV. See Stipulation

of Dismissal. Accordingly, this issue is moot.

Commerce filed its final results of redetermination pursuant

to court remand (“Final Remand Results”) on December 23, 2004.

Plaintiffs, Globe Metallurgical, Inc. and SIMCALA, Inc.

(collectively, “Globe”) filed comments to Commerce’s Final Remand

Results on January 25, 2005.1 See Pls.’ Comments Remand

1
Bratsk and Rual Trade Limited did not file a response to
Commerce’s Final Remand Results.
Court No. 02-00202 Page 4

Determination (“Globe’s Comments”). Commerce filed its response to

Globe’s Comments on March 8, 2005. See Def.’s Resp. Pls.’ Comments

(“Commerce’s Reply”). Globe filed rebuttal comments on March 25,

2005. See Reply Resp. Pls.’ Comments Remand Redetermination

(“Globe’s Reply”). Globe agrees with all aspects of Commerce’s

determinations on remand except with respect to the antidumping

duty margin calculated for Kremny.

III. Commerce Reasonably Explained its Determination to Include and
Value Recycled Silicon Metal Fines as a Factor of Production

In its Final Remand Results, Commerce determined that the

usage of silicon metal fines sized zero to five millimeters were

included in the production quantity provided by Bratsk and Kremny.

See Final Remand Results at 3. Accordingly, Commerce determined

that the usage of such fines in the production of the subject

merchandise should have been valued and included in the calculation

of NV. See id. Commerce, however, found that SKU had excluded

silicon metal fines from its factors of production because it

treated such fines as a byproduct. See id. at 11-12. In its Final

Determination, Commerce did not adjust SKU’s reported production

figure. See Remand Results at 7-8. Commerce granted SKU a

byproduct offset for the sale and reuse of silicon metal fines.

See id. at 12. Accordingly, Commerce determined that, for SKU, the

use of silicon metal fines to produce silicon metal should not be
Court No. 02-00202 Page 5

included in the calculation of NV “because it represents the reuse

of a byproduct and no costs have been allocated to SKU’s silicon

metal sized zero to five millimeters.” Id.

Commerce reviewed the record and determined that the

composition, use, and value of quartzite fines and silicon metal

fines were different and precluded the use of the former as a

surrogate value for the latter. See Final Remand Results at 8-9.

Consequently, Commerce determined that Kremny and Bratsk’s

surrogate-valued cost of manufacture of silicon metal constituted

“the best available information.” See id. at 9-10. Accordingly,

such values were used as surrogate values for Kremny and Bratsk’s

silicon metal fines sized zero to five millimeters. See id. Based

on the record evidence, Commerce found it appropriate to account

for and value Kremny’s consumption of silicon metal fines sized

zero to five millimeters during its production of silicon metal.

See id. at 10-11. As a result, Commerce recalculated Kremny’s

antidumping duty margin. See id. at 11.

Commerce found that there was substantial record evidence

indicating that Bratsk included the usage of recycled silicon metal

fines in its production figure. See id. at 12. While there was

record evidence “that Bratsk reuse[d] at least some silicon metal,

there [was] no information on its usage amount of silicon metal

sized zero to five millimeters in the production of silicon metal.”
Court No. 02-00202 Page 6

Id. at 13. Accordingly, Commerce used non-adverse facts available

because Bratsk had been cooperative and acted to the best of its

ability to provide information during the proceeding. See id. To

value recycled silicon metal fines for Bratsk, Commerce assumed

that the difference between the production and reported sales of

silicon metal sized zero to five millimeters represented the amount

of silicon metal fines reused by Bratsk. See id. at 14. Commerce

calculated a per-unit rate by dividing the quantity of silicon

metal reused by Bratsk’s total production of silicon metal. See

id. Commerce applied Bratsk’s cost of manufacture to value its

consumption of silicon metal fines sized zero to five millimeters

and recalculated the antidumping duty margin accordingly. See id.

Commerce recalculated the antidumping duty margins for Kremny

and Bratsk to 56.20 percent and 87.08 percent, respectively. See

Final Remand Results at 15. All parties agree with Commerce’s

determination to capture the cost of recycled fines in NV and with

Commerce’s recalculated antidumping margin for Bratsk.2 See

Globe’s Comments at 2. The Court finds that Commerce reasonably

explained why each producer’s surrogate-valued cost of manufacture

was the “best available information”. See Universal Camera, 340

U.S. at 477. Commerce also reasonably explained why recycled

2
No party contested the reporting of SKU’s production
quantity, therefore Commerce made no adjustments to SKU’s reported
production figure. See Final Remand Results at 7-8.
Court No. 02-00202 Page 7

silicon metal fines sized zero to five millimeters should be

included in its calculation of NV. Moreover, Commerce’s

determination is supported by substantial record evidence and in

accordance with law. Therefore, the Court affirms Commerce’s

determination to include recycled silicon metal fines as a factor

of production and its determination to use each producer’s

surrogate-valued cost of manufacture as the best available

information. Furthermore, the Court affirms Commerce’s

recalculated antidumping duty margin for Bratsk.

IV. Commerce’s Calculation of Kremny’s Antidumping Duty Margin

A. Background

In its Preliminary Determination, Commerce used adverse facts

available to determine the antidumping duty margin for Kremny’s

United States sales made through its affiliated United States

company. See Notice of Preliminary Determination of Sales at Less

Than Fair Value and Postponement of Final Determination for Silicon

Metal From the Russian Federation (“Preliminary Determination”), 67

Fed. Reg. 59,253, 59,260 (September 20, 2002). In determining

Kremny’s antidumping duty margin, Commerce based a percentage of

Kremny’s dumping margin on Bratsk’s rate. See id. In its Final

Determination and Amended Final Determination, Commerce used

Bratsk’s dumping margin of 77.51 percent and 79.42, respectively,

as adverse facts available and weight averaged these rates with the
Court No. 02-00202 Page 8

margin calculated for the remaining Kremny sales. See Final

Determination, 68 Fed. Reg. at 6,888; Amended Final Determination,

68 Fed. Reg. at 12,039. For the Final Remand Results, Commerce

recalculated the antidumping duty margin for Kremny using the 79.42

percent rate found for Bratsk in the Amended Final Determination.

See Final Remand Results.

B. Contentions of the Parties

1. Globe’s Contentions

Globe contends that in calculating Kremny’s antidumping duty

rate, Commerce should have used the corrected 87.08 percent margin

found for Bratsk in the Final Remand Results. See Globe’s

Comments. Globe asserts that Commerce correctly used the margin

calculated for Bratsk as adverse facts available and weight-

averaged this rate with the margin calculated for the remaining

Kremny sales. See id. at 4-5. Globe, however, argues that

Commerce erroneously “used the invalidated 79.42 percent rate found

for Bratsk in the Amended Final Determination” as adverse facts

available. Id. at 5. Commerce offered no explanation for its

failure to use the corrected rate for Bratsk. See id. Moreover,

the antidumping duty margin for Kremny is inaccurate because it

does not completely capture the cost of recycled fines. See id. at

7. Globe also argues that Commerce did not provide notice of its

determination to use the Bratsk rate calculated for the Amended
Court No. 02-00202 Page 9

Final Determination. See Globe’s Reply at 5. Commerce corrected

the antidumping margin for Bratsk in the Final Remand Results,

which substantially increased the antidumping duty margin from the

two prior determinations. See id. It did not become clear,

however, that Commerce had improperly selected the lower,

previously “invalidated” rate as adverse facts available for Kremny

until after the Final Remand Results had been published. See id.

at 4-6.

2. Commerce’s Contentions

Commerce argues that Globe failed to raise the issue of

Commerce’s reliance upon the 79.42 antidumping duty margin for

Bratsk prior to the publication of the Final Remand Results. See

Commerce’s Reply at 7. Commerce maintains that Globe “had the

opportunity and sufficient time in which to raise arguments

concerning the relevance of Bratsk’s new [adverse facts available]

margin for Kremny’s rate, but Globe failed to take advantage of

that opportunity.” Id. Commerce contends that its draft remand

results put Globe on notice that it did not intend to update

Kremny’s margin to reflect the new Bratsk rate. See id.

Accordingly, Commerce asserts that Globe failed to exhaust its

administrative remedies and that it now “seeks to circumvent the

administrative proceedings and preclude Commerce from addressing

the issue in the first instance to adjust its remand determination
Court No. 02-00202 Page 10

accordingly, if appropriate . . . .” Id. at 8. Commerce,

therefore, argues that the Court should reject Globe’s arguments

and sustain the Final Remand Results. See id. at 9.

Commerce alternatively asserts that a remand may be necessary

because it did not explain why the recalculated Bratsk antidumping

duty margin of 87.08 percent was not used in applying adverse facts

available for United States sales by Kremny. See id. Accordingly,

Commerce requests the Court to remand this case for Commerce to

provide an explanation for its determination, and, if warranted,

recalculate the antidumping margin for Kremny. See id.

C. Analysis

The Court agrees with Globe and finds that Commerce’s use of

the Bratsk antidumping duty rate calculated for the Amended Final

Determination to calculate Kremny’s antidumping duty margin for the

Final Remand Results is not in accordance with law. The Court

finds that Commerce did not use an “invalidated” rate as argued by

Globe. See Globe’s Comments at 5. Rather, Commerce used a

previously abandoned rate in lieu of a subsequently corrected rate

in its calculation of Kremny’s antidumping duty rate.

Nevertheless, “[w]hile an abandoned rate is not quite the same as

a rate invalidated by a court . . . it is very close.” Pulton Chain

Co., Inc. v. United States, 21 CIT 1290, 1293 (1997). Commerce

adjusted and redetermined the antidumping duty margin for Kremny
Court No. 02-00202 Page 11

and Bratsk to 56.20 percent and 87.08 percent, respectively. See

Final Remand Results at 15. Although Commerce calculated an 87.08

percent rate for Bratsk, Commerce based a percentage of Kremny’s

sales made to the United States on the previously abandoned rate of

79.42 percent, found in its earlier Amended Final Determination.

See Final Remand Results. Commerce, however, has failed to provide

any explanation for its departure and use of a previously abandoned

rate. and why it did not use Bratsk’s recalculated antidumping duty

margin in the Final Remand Results.

Commerce argues that the doctrine of exhaustion precludes

judicial review of Commerce’s use of the lower rate found for

Bratsk in the Amended Final Determination. See Commerce’s Resp. at

6-7. Generally, the exhaustion doctrine requires a party to

present its claims to the relevant administrative agency for the

agency’s consideration before raising these claims to the Court.

See Unemployment Compensation 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.”) Congress, however, has granted the Court

with discretion to determine when it is appropriate to require the

exhaustion doctrine. See China Steel Corp. v. United States, 28
Court No. 02-00202 Page 12

CIT ___, ___, 306 F. Supp. 2d 1291, 1310 (2004). The court has

recognized certain exceptions to the application of the exhaustion

doctrine. One such applicable exception arises when the respondent

is not given the opportunity to raise its objections at the

administrative level because Commerce did not address the issue

until the final determination. See Philipp Bros., Inc. v. United

States, 10 CIT 76, 83-84, 630 F. Supp. 1317, 1324 (1986); see also

Hebei Metals & Minerals Imp. & Exp. Corp. v. United States, 2004

Ct. Intl. Trade LEXIS 89. Although Commerce enjoys broad latitude

in choosing the information it relies on, its discretion is not

unlimited. See Shandong Huarong Gen. Corp. v. United States, 25

CIT 834, 838, 159 F. Supp. 2d 714, 719 (2001). Commerce must

exercise its discretion “in a manner consistent with the underlying

objective of 19 U.S.C. § 1677b(c)—to obtain the most accurate

dumping margins possible.” Id.

In the case at bar, Globe never challenged Commerce’s

determination to use the lower Bratsk rate calculated in its

earlier determination. It only became apparent, however, that

Commerce would use the lower Brastk rate when the Final Remand

Results were released. Globe commented on several errors made by

Commerce in its draft remand determination. See Globe’s Reply at

4-6. It was only in the Final Remand Results, however, that

Commerce corrected these errors, which significantly increased the
Court No. 02-00202 Page 13

antidumping duty margin for Bratsk from 79.42 percent to 87.08

percent. See Final Remand Results at 15. The Court finds that the

exhaustion doctrine is inapplicable because Globe did not have the

opportunity to contest the use of the lower rate or the

recalculation of Kremny’s antidumping duty margin until after the

Final Remand Results were published. Cf. Philipp Bros., 10 CIT at

83-84, 630 F. Supp. at 1324. To hold otherwise would be “overly

technical and unfair” to Globe. Hebei Metals, 2004 Ct. Intl. Trade

LEXIS 89, at *29.

Consequently, the Court rejects Commerce’s exhaustion argument

and declines to defer to Commerce’s methodology because its

determination is not supported by substantial evidence or in

accordance with law.

CONCLUSION AND ORDER

The Court concludes that Commerce reasonably determined to

include the cost of recycled silicon metal fines sized zero to five

millimeters in the calculation of NV for Bratsk and Kremny.

Moreover, the Court finds that Commerce’s calculation of Bratsk’s

antidumping duty margin is supported by substantial evidence and in

accordance with law. Commerce, however, failed to provide a

reasonable explanation for its use of an abandoned antidumping duty

margin, rather than the recalculated margin, in its calculation of
Court No. 02-00202 Page 14

Kremny’s antidumping duty margin. Commerce’s determination to use

the 79.42 percent antidumping duty rate for Bratsk calculated in

its Amended Final Results is not supported by substantial evidence.

Accordingly, the Court remands this case to Commerce to recalculate

the antidumping duty margin for Kremny or explain why it used the

abandoned margin for Bratsk to calculate Kremny’s antidumping duty

margin for the Final Remand Results. For the foregoing reasons, it

is hereby

ORDERED that Commerce’s determination to include recycled

silicon metal fines sized zero to five millimeters in its factors

of production cost analysis is affirmed; it is further

ORDERED that Commerce’s calculation of Bratsk’s antidumping

duty margin is affirmed; it is further

ORDERED that this case is remanded to Commerce with

instructions to: (a) recalculate Kremny’s antidumping duty margin

using the antidumping duty margin for Bratsk calculated in the

Final Remand Results or explain the use of the Bratsk margin from

the Amended Final Determination; and its is further

ORDERED that Commerce shall have ninety (90) days, until

October 27, 2005, to complete and file its remand determination;
Court No. 02-00202 Page 15

plaintiffs shall have thirty (30) days from that filing to file

comments, and Commerce and defendant-intervenors shall have twenty

(20) days after plaintiffs’ comments are filed to file any reply.

/s/ Nicholas Tsoucalas
NICHOLAS TSOUCALAS
SENIOR JUDGE

Dated: July 27, 2005
New York, New York