Shinhan Diamond Industrial Co. v. United States , 34 Ct. Int'l Trade 227 ( 2010 )

Slip Op. 10- 24
UNITED STATES COURT OF INTERNATIONAL TRADE
:
EHWA DIAMOND INDUSTRIAL CO., LTD., :
:
Plaintiff, :
:
v. : Before: R. Kenton Musgrave, Senior Judge
: Court No. 09-00508
UNITED STATES, :
:
Defendant, :
:
and :
:
DIAMOND SAWBLADES :
MANUFACTURERS’ COALITION, :
:
Defendant-Intervenor. :
:
OPINION AND ORDER
[Granting Defendant’s motion for correction of ministerial errors; staying all other court proceedings
in this matter until issuance of a conclusive court decision in Diamond Sawblades Manufacturers’
Coalition v. United States, Slip Op. 09-5.]
Dated: March 11, 2010
Akin Gump Strauss Hauer & Feld LLP (Jarrod M. Goldfeder), for the plaintiff.
Tony West, Assistant Attorney General; Jeanne E. Davidson, Director, Franklin E. White,
Jr., Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice
(Delisa M. Sanchez); Office of the Chief Counsel for Import Administration, U.S. Department of
Commerce (Joanna V. Theiss), for the defendant U.S. Department of Commerce.
Wiley Rein LLP (Daniel B. Pickard, Maureen E. Thorson) for the defendant-intervenor.
Court No. 09-00508 Page 2
Musgrave, Senior Judge: Before the court is a motion submitted by Defendant United
States Department of Commerce, International Trade Administration (“Commerce” or “the
Department”) seeking leave from the Court to issue and publish an amended determination that
incorporates corrections to certain alleged ministerial errors in the dumping margin calculation set
forth in its final affirmative antidumping determination regarding diamond sawblades and parts
thereof imported from the Republic of Korea. See Def.’s Mot. for Leave to Publish Am. Final
Determ. Correcting Ministerial Errors (“Def.’s Mot.”); Notice of Final Determination of Sales at
Less than Fair Value and Final Determination of Critical Circumstances: Diamond Sawblades and
Parts Thereof from the Republic of Korea, 71 Fed. Reg. 29310 (May 22, 2006) (“Final Results”).
Plaintiff Ehwa Diamond Industrial Co., Ltd., (“Ehwa”) consents to the motion; Defendant-Intervenor
Diamond Sawblades Manufacturers’ Coalition (“DSMC”) opposes the motion on several grounds.
Def-Int’s Opp’n to Def.s’ Mot. for Leave to Amend Final Determ. (“Def-Int’s Opp’n”). For the
reasons set forth below, the motion will be granted.
I. Background
Commerce published the Final Results on May 22, 2006. The Final Results differed
from the preliminary determination in several respects that are relevant to this matter. First, contrary
to its preliminary findings, Commerce determined that respondents Ehwa and Shinhan should not
be “collapsed” into a single entity and instead treated them as separate entities with different
dumping margins. See Final Results, 71 Fed. Reg. at 29312; Issues and Decision Memorandum
(“Decision Mem.”), Pub. R. Doc. 529 at 51. Second, the weighted average dumping margins were
revised upward from 11.25% to 12.76% for Ehwa, from 11.25% to 26.55% for Shinhan, and 16.39%
Court No. 09-00508 Page 3
for the “all others” rate, which had been previously set at 10.25%. Final Results, 71 Fed. Reg. at
29312. See Notice of Preliminary Determination of Sales at Less Than Fair Value, Postponement
of Final Determination, and Negative Preliminary Critical Circumstances Determination: Diamond
Sawblades and Parts Thereof from the Republic of Korea, 70 Fed. Reg. 77135 (Dept. Commerce,
Dec. 29, 2005) (“Preliminary Results”). Finally, the Department found that, due (at least in part) to
the higher dumping margins, “critical circumstances” existed for Shinhan and for the “all others”
category of companies, triggering the 90-day “retroactive” suspension of liquidation pursuant to 19
U.S.C. § 1673d(c)(4)(B). Final Results, 71 Fed. Reg. at 29312.
Shortly after the publication of the Final Results, Ehwa and Shinhan submitted, in
compliance with the Department’s regulations, ministerial error comments alleging, among other
things, that the dumping margin calculation was incorrect because Commerce had inadvertently
failed to allow for a constructed export price (“CEP”) offset in its calculations for Ehwa and
Shinhan. See May 24, 2006 Ministerial Error Comments, Pub. R. Docs. 542, 543. In rebuttal, then-
petitioner DSMC argued that the Department’s failure to include a CEP offset was not a ministerial
error because the lack of analysis in the Final Results indicated that “Commerce did not analyze
whether Ehwa or Shinhan are entitled to . . . a CEP offset adjustment as separate entities.” May 30,
2006 Ministerial Error Reply, Pub. R. Doc. 545.
In a June 28, 2006 memorandum to the Acting Director, a senior International Trade
Compliance Analyst concluded that the Department had indeed made a ministerial error with respect
to Ehwa and Shinhan’s CEP offset, and recommended that the error be corrected. Ministerial
Allegations Mem., Pub. R. Doc. 547 at 2, 4. The analyst explained that “given that the preliminary
Court No. 09-00508 Page 4
determination analysis was based upon Shinhan and Ehwa’s individual selling functions, and given
that no information or argument was submitted subsequent to the preliminary determination to
demonstrate otherwise, we find that a ministerial error occurred . . . .” Pub. R. Doc. 547 at 2-3.
However, two subsequent events prevented Commerce from implementing the
recommended corrections. First, on July 11, 2006, the International Trade Commission (“ITC”)
published in the Federal Register its final determination that the domestic diamond sawblade
industry was not materially injured or threatened with material injury by reason of the subject
imports. See Diamond Sawblades and Parts Thereof from China and Korea, Investigation Nos. 731-
TA-1092 and 1093 (Final), 71 Fed. Reg. 39128 (ITC July 11, 2006). Accordingly, and pursuant to
the Department’s own regulations, the antidumping investigation terminated automatically on that
date. See 19 C.F.R. § 351.207(d) (2009) (stating that “an investigation terminates automatically
upon publication in the Federal Register” of negative ITC determination). See also Customs Telex,
Pub. R. Doc. 553. Second, as noted by the defendant, DSMC initiated a challenge to the Final
Results on July 25, 2006 (see Diamond Sawblades Manufacturers’ Coalition v. United States, Court
No. 06-00248), which divested Commerce of jurisdiction over the matter.
On October 12, 2006, DSMC’s Court No. 06-00248 challenge to the Final Results
was stayed pending the outcome of Court No. 06-00247, DSMC’s parallel action contesting the
ITC’s negative-injury determination. See October 12, 2006 Stay Order, Court No. 06-00248. The
challenge to the ITC determination is not yet resolved. After a remand and subsequent reversal by
the ITC on the question of threat-of-material-injury, the court issued a final decision sustaining the
ITC’s (now affirmative) remand determination on January 25, 2009. Diamond Sawblades
Court No. 09-00508 Page 5
Manufacturers’ Coalition v, United States, 33 CIT __, Slip Op. 09-5 (appeal docketed, Oct. 15,
2009; argued Feb. 2, 2010) (“Diamond Sawblades II”). Yet because Diamond Sawblades II is now
pending appeal before the United States Court of Appeals for the Federal Circuit (“Federal Circuit”),
the conclusive outcome of that case has not been determined. Because the outcome of that case has
the potential to obviate Ehwa’s current challenge to the Final Results, the court will stay the merits
adjudication of this action until issuance of a final and conclusive decision in that case.
Pursuant to the mandamus relief granted in Diamond Sawblades Mfrs.’ Coalition v.
United States, 33 CIT __, 650 F. Supp 1331 (2009) (appeal docketed, Oct. 15, 2009) (“Diamond
Saawblades III”), Commerce issued and published antidumping duty orders and ordered the
collection of cash deposits on imports of subject merchandise. See Diamond Sawblades and Parts
Thereof From the People’s Republic of China and the Republic of Korea: Antidumping Duty
Orders, 74 Fed. Reg. 57145 (Dep’t Commerce Nov. 4, 2009). Accordingly, Ehwa, as well as two
other plaintiffs have initiated challenges to the Final Results pursuant to 19 U.S.C. §
1516a(a)(2)(A)(i)(II). See Shinhan Diamond Industrial Co., Ltd., v. United States, (Court No. 09-
00509) and Hyosung D&P Co., Ltd., v. United States, (Court No. 09-00510). In all four actions that
challenge the Final Results the government has filed parallel motions for leave to issue an amended
determination correcting ministerial errors; all but DSMC have consented to the motion.
DSMC opposes the motion on the grounds that (1) the alleged errors are not
ministerial; (2) the defendant has failed to show good cause for making the corrections; and (3) the
balance of hardships are in DSMC’s favor, because the merits of the case will reveal that the cash
Court No. 09-00508 Page 6
deposit rate is “already lower than it should be” and that even if it is determined otherwise, any
excess cash deposits would ultimately be returned. Def-Int’s Opp’n at 2, 5, 6.
II. Discussion
A.
The court’s jurisdiction over this matter is derived from 28 U.S.C. 1581(c) (2006).
The term “ministerial error” is defined both in statute and regulation as “an error in addition,
subtraction, or other arithmetic function, clerical error resulting from inaccurate copying, duplication,
or the like, and any other similar type of unintentional error which the Secretary considers
ministerial.” 19 U.S.C. § 1623d(e) (2006); 19 C.F.R. § 351.224(f) (2009). The power of an
administrative agency to correct its own ministerial errors is presumed and considered analogous to
the power of a court to correct ministerial errors set forth in Federal Rule of Procedure (“FRCP”)
Rule 60(a). American Trucking Ass’n v. Frisco, 358 U.S. 133, 145 (1958). In this case, Congress
expressly delegated that power to the Department by the enactment of section 1333 of The Omnibus
Trade and Competitiveness Act of 1988 (codified as 19 U.S.C. § 1673d(e)).
However, once a lawsuit has been commenced in this Court, Commerce is no longer
authorized to amend its determination. See 28 U.S.C. § 1581(c). As the Zenith Court explained,
“once [this] court’s exclusive jurisdiction has been invoked, Commerce may correct clerical errors
only with the court’s prior authorization.” Zenith Electronics Corp. v. United States, 884 F.2d 566,
561 (Fed. Cir. 1989). The “prior authorization” requirement announced in Zenith is also analogized
from FRCP Rule 60(a), which provides that, once an appeal has been docketed in the appellate court,
clerical mistakes may only be corrected “with leave of the appellate court.” FRCP Rule 60(a);
Court No. 09-00508 Page 7
USCIT Rule 60(a). Without the court’s authorization, Commerce would be left to correct the errors
only if the judicial review process results in a remand to the agency that specifically or implicitly
contemplates such correction rather than through the procedure contemplated by section 1673d(e).
See NTN Corp v. United States, 32 CIT __, 587 F. Supp.2d 1313 (2008).
On the other hand, “it is axiomatic that fair and accurate determinations are
fundamental to the proper administration of our dumping laws[;] [c]onsequently, courts have
uniformly authorized the correction of any clerical errors which would affect the accuracy of a
determination.” Koyo Seiko Co. v. United States, 14 CIT 680, 682, 746 F. Supp. 1108, 1110 (1990).
Moreover, where, as here, Congress has provided a specific mechanism for the correction of
ministerial errors, the enactment of those provisions may be interpreted to “indicate[] a legislative
preference for determinations that are factually correct.” Koyo Seiko, 14 CIT at 683, 746 F. Supp.
2d at 1111. Accordingly, it follows that allowing correction of a ministerial error contained in a
dumping margin calculation would further the congressional purpose underlying 19 U.S.C.
§ 1673d(e).
The decision of whether to allow correction of ministerial errors is left to the court’s
discretion. In this Court, that determination has generally turned on whether the proposed correction
would be prejudicial or procedurally unfair to one of the parties. See, e.g., NTN, 587 F. Supp.2d at
1313. However, where the issue is contested, the court must first determine whether the error
described by the defendant’s motion is accurately characterized as ministerial; in which case the
court will uphold that characterization if it is supported by substantial evidence of record. See 19
U.S.C. § 1516a(b)(1)(B)(i); American Trucking, 358 U.S. 133 (reversing decision of district court
Court No. 09-00508 Page 8
on the ground that substantial evidence supported Interstate Commerce Commission’s finding that
an error was inadvertent and ministerial).
In the context of Rule 60(a), whether the alleged error is truly ministerial is generally
the only question before the court. In that regard, it has been observed that a ministerial error
“encompasses only errors mechanical in nature, apparent on the record, and not involving an error
of substantive judgment,” or includes only “mindless and mechanistic mistakes [and] minor shifting
of facts.” Pfizer Inc. v. Uprichard, 422 F.3d 124, 129-130 (3d Cir. 2005) (describing ministerial
errors in a Rule 60(a) analysis) (internal quotes and citation omitted). Although the expansive final
clause contained in definition of “ministerial error” set forth in section 1623d(e) (“. . . and any other
similar type of unintentional error which the Secretary considers ministerial”) may indicate a broader
scope than Rule 60(a), the definition cannot be seen as open ended; mistakes of law or mistakes that
require “cerebration or research into the law or planetary excursions into facts” are not reasonably
viewed as ministerial errors. Pfizer, 422 F.3d at 130 (citing In re W. Tex. Mktg., 12 F.3d 497, 504
(5th Cir. 1994)).
The additional question of whether allowing the correction will result in procedural
unfairness or prejudice appears limited to the context of administrative law. Courts have disallowed
ministerial corrections where doing so violates statutorily-mandated procedural requirements (see
Utility Solid Waste Activities Group v. E.P.A., 236 F.3d 749 (D.C. Cir. 2001) (setting aside EPA
Rule amendment on the ground that rule correction, even if ministerial, required proper notice and
comment procedure)); where a party was not afforded adequate due process at the agency level (see
Zenith Electronics Corp. v. United States, 12 CIT 932, 699 F. Supp. 296 (1988) (aff’d, 884 F.2d 566Court No. 09-00508 Page 9
(Fed. Cir. 1989) (enjoining Commerce from amending dumping margin where, inter alia, evidence
suggested that plaintiff was not provided an opportunity to express its views on the errors before the
agency)); and have indicated that a correction might be disallowed if the procedure were to cause
unnecessary delay or expense to one of the parties (see NTN, 587 F. Supp.2d at 1316 (giving
consideration to the court’s “obligations to prevent unfairness to any party and to avoid unnecessary
delay or expense.”) (citing USCIT Rule 1)).
B.
In this action, the ministerial nature of the error is apparent from the record. In the
Preliminary Results, the Department noted its decision to grant a CEP offset to Ehwa and Shinhan
as a collapsed entity, 70 Fed. Reg. 77141, and it is undisputed that no party challenged the CEP
offset. However, in the Final Results, the CEP offset was omitted from the margin calculations
without either notation in the decision itself or discussion of the issue in the Decision Memorandum.
In contrast, when Commerce (after receiving comments disputing the issue) changed its decision to
collapse Ehwa and Shinhan and instead treated them as separate entities, it included in the Decision
Memorandum nearly six pages of discussion on the matter. Decision Mem., 46-52. That the CEP
offset was omitted without explanation mitigates strongly toward the conclusion that the omission
was inadvertent, particularly when none of the interested parties disputed the preliminary grant of
it, and where the failure to explain a decision to exclude it would have been improper. Accordingly,
the court finds that the evidence supports the conclusion that the omission of the CEP offset was
unintentional and hence a “ministerial error” pursuant to the broad definition of that term set forth
in 19 C.F.R. § 351.224(f).
Court No. 09-00508 Page 10
Although DSMC argues that the error is not ministerial, its argument is more
accurately characterized as a disagreement with the manner in which the Department chose to correct
the error, i.e., that the decision to allow a CEP offset for Ehwa and Shinhan as separate entities is
not supported by substantial evidence of record. However, that point goes to the merits of the
determination, which are not currently before the court. The only question at issue here is whether
the Department’s omission of the CEP offset in the Final Results was an unintentional, ministerial
error.
DSMC next argues that the court should deny the motion because the defendant “has
not shown that good cause exists for the Court to grant its request” and notes that the Department’s
correction “would have no effect on whether critical circumstances are established . . . .” Def-Int’s
Opp’n at 2. This argument is misplaced. As discussed supra, the courts are very much in favor of
correcting ministerial errors where possible, and the clear Congressional preference for accuracy in
antidumping determinations strengthens that tendency. Accordingly, if it is determined that an error
is, in fact, ministerial, the burden of persuasion is essentially on the opponent of the motion to show
good cause why the motion should not be granted by showing that prejudice or some other
fundamental unfairness would result, and none has been shown here. DSMC’s “balance of
hardships” argument is similarly irrelevant because such a test is simply not part of the
determination.
DSMC asserts further that, “given the Department’s flawed analysis,” allowing
correction of the errors would not increase the accuracy of the dumping margins, but only distort
them further, and that delaying the ultimate adjudication of the issues serves only to prejudice the
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DSMC members. Def-Int’s Opp’n at 5. These arguments go to the merits of the case and must be
rejected in the context of the instant motion to correct ministerial errors. Moreover, given that the
merits adjudication of this matter must await the outcome of Federal Circuit’s decision in Diamond
Sawblades II, the corrections proposed by the Department will cause no delay whatsoever.
IV. Conclusion
In consideration of the foregoing, the court concludes that the Department should be
permitted to issue and publish an amended determination that incorporates the ministerial corrections
set forth in its motion. Accordingly, in consideration of all papers submitted herein, it is hereby
ORDERED that Defendant’s Motion for Leave to Publish Amended Final Results
Correcting a Ministerial Error, as filed on January 13, 2010, be, and hereby is GRANTED and that
the time for correcting the ministerial errors and publishing the amended determination will be
within 15 days of the date of this order. It is further
ORDERED that all other proceedings in this case be, and hereby are, STAYED
pending issuance of a final and conclusive decision in Diamond Sawblades Manufacturers’
Coalition v. United States, Slip Op. 09-5, which is now pending appeal at the United States Court
of Appeals for the Federal Circuit.
/s/ R. Kenton Musgrave
R. KENTON MUSGRAVE, Senior Judge
Dated: March 11, 2010
New York, New York