Diamond Sawblades Manufacturer v. United States , 809 F.3d 626 ( 2015 )

United States Court of Appeals
for the Federal Circuit
______________________
DIAMOND SAWBLADES MANUFACTURERS
COALITION,
Plaintiff-Appellee
v.
HYOSUNG D&P CO., LTD., EHWA DIAMOND
INDUSTRIAL CO., LTD.,
Plaintiffs-Appellants
v.
UNITED STATES, SH TRADING, INC., SHINHAN
DIAMOND INDUSTRIAL CO. LTD.,
Defendants-Appellees
______________________
2015-1216, 2015-1224
______________________
Appeals from the United States Court of International
Trade in Nos. 1:06-cv-00248-RKM, 1:09-cv-00508-RKM,
1:09-cv-00509-RKM, 1:09-cv-00510-RKM, Senior Judge R.
Kenton Musgrave.
______________________
Decided: December 14, 2015
______________________
DANIEL B. PICKARD, Wiley Rein, LLP, Washington,
DC, argued for plaintiff-appellee. Also represented by
MAUREEN E. THORSON.
2 DIAMOND SAWBLADES MANUFACTURER v. US
JEFFREY S. GRIMSON, Mowry & Grimson, PLLC,
Washington, DC, argued for plaintiff-appellant Hyosung
D&P Co., Ltd. Also represented by JILL A. CRAMER,
KRISTIN HEIM MOWRY, SARAH M. WYSS.
MARK PARDO, Grunfeld, Desiderio, Lebowitz, Silver-
man & Klestadt LLP, Washington, DC, argued for plain-
tiff-appellant Ehwa Diamond Industrial Co., Ltd. Also
represented by ANDREW THOMAS SCHUTZ; MAX FRED
SCHUTZMAN, NED H. MARSHAK, BRUCE M. MITCHELL, New
York, NY.
ALEXANDER V. SVERDLOV, Commercial Litigation
Branch, Civil Division, United States Department of
Justice, Washington, DC, argued for defendant-appellee
United States. Also represented by FRANKLIN E. WHITE,
JR., BENJAMIN C. MIZER; AMAN KAKAR, Office of Chief
Counsel for Trade Enforcement and Compliance, United
States Department of Commerce, Washington, DC.
MICHAEL PAUL HOUSE, Perkins Coie, LLP, Washing-
ton, DC, for defendants-appellees SH Trading, Inc., Shin-
han Diamond Industrial Co., Ltd. Also represented by
DAVID JOHN TOWNSEND.
______________________
Before TARANTO, PLAGER, and LINN, Circuit Judges.
TARANTO, Circuit Judge.
In late 2006, the Department of Commerce announced
that it was changing one of the methods it uses to calcu-
late whether imported goods are being sold in the United
States at less than fair value, i.e., being dumped. Com-
merce also addressed the issue of what dumping proceed-
ings would be governed by the new policy, which generally
made it more difficult to find dumping. When two com-
panies found to have dumped in the present case—
DIAMOND SAWBLADES MANUFACTURER v. US 3
Hyosung D&P Co., Ltd. and Ehwa Diamond Industrial
Co., Ltd.—argued that their case is among those governed
by the new policy, Commerce disagreed. We uphold
Commerce’s determination, because Commerce spoke
ambiguously on the timing issue in adopting its new
policy and Commerce reasonably resolved the ambiguity
to exclude the present matter.
BACKGROUND
A
Commerce and the International Trade Commission
share responsibility for investigations about whether an
antidumping duty should be imposed on goods being
imported in the United States, and they proceed in two
stages—first making certain preliminary determinations
and then, for those investigations which proceed, making
final determinations. See 19 U.S.C. §§ 1673–1677n.
Commerce investigates and ultimately determines wheth-
er the goods at issue are being or are likely to be sold in
the United States at less than fair value, as measured in
various ways specified by statute. §§ 1673(1), 1673d(a),
1677–1677n. The Commission determines whether a
domestic industry is “materially injured” or threatened
with material injury, or whether establishment of a
domestic industry is materially retarded, by reason of
imports or sales for which Commerce has made an affirm-
ative determination (i.e., found dumping). §§ 1673(2),
1673d(b)(1). The statute provides for issuance of an
antidumping-duty order—imposing import duties in
amounts keyed to the magnitude of the underpricing—if
both agencies make the specified affirmative final deter-
minations against the imports, and it provides for termi-
nation of the investigation if either agency does not make
those determinations. §§ 1673, 1673d(c)(2); see 19 C.F.R.
§§ 351.205(a), 351.210(a). Specified determinations of
Commerce and the Commission are reviewable in the
4 DIAMOND SAWBLADES MANUFACTURER v. US
Court of International Trade, 19 U.S.C. § 1516a, and then
this court, 28 U.S.C. § 1295(a)(5).
Commerce sometimes determines whether dumping is
occurring, and if so in what amounts, by examining
certain pools of goods and calculating an average amount
by which they are being sold at less than fair market
value. 19 U.S.C. § 1677(35). Before early 2007, Com-
merce employed “zeroing” in making that calculation: for
goods sold above fair value, Commerce treated the sale
price as being at (rather than above) fair value—it zeroed
out the margins above fair value. Thus, Commerce per-
mitted no offset against below-fair-value sales in the
calculation of the average, resulting in larger average
dumping margins than if offsetting had been allowed. See
Union Steel v. United States, 713 F.3d 1101, 1104 (Fed.
Cir. 2013); Corus Staal BV v. Dep’t of Commerce, 395 F.3d
1343, 1347 (Fed. Cir. 2005); Advanced Tech. & Materials
Co. v. United States, 33 I.T.R.D. 1874 (Ct. Int’l Trade
2011); Antidumping Proceedings: Calculation of the
Weighted-Average Dumping Margin During an Antidump-
ing Investigation; Final Modification, 71 Fed. Reg. 77,722(Dec. 27, 2006) (Final Modification).
On October 31, 2005, the World Trade Organization
issued a report stating that Commerce’s practice of zero-
ing in certain investigations violated the WTO Anti-
dumping Agreement. See Advanced Tech., 33 I.T.R.D. at
1874. Commerce responded by proposing a formal change
in its methodology for calculating dumping margins in
investigations, following the notice-and-comment proce-
dures specified in 19 U.S.C. § 3533 for adopting revisions
of policies based on certain WTO determinations. It
published a notice in the Federal Register on March 6,
2006, proposing to abandon its policy of zeroing and
seeking public comment. Antidumping Proceedings:
Calculation of the Weighted Average Dumping Margin
During an Antidumping Duty Investigation, 71 Fed. Reg.
11,189 (Dep’t of Commerce Mar. 6, 2006). In its “Timeta-
DIAMOND SAWBLADES MANUFACTURER v. US 5
ble” section, Commerce proposed that the new policy
would apply only to “investigations initiated on the basis
of petitions received on or after the first day of the month
following the date of publication of the Department’s final
notice” of the new policy. Id. at 11,189.
On December 27, 2006, after receipt of public com-
ments, Commerce published its final modification, ex-
plaining that it would indeed discontinue its practice of
zeroing in investigations. Final Modification, supra.
Commerce departed from its initially proposed policy,
however, in the respect at issue here: it expanded the pool
of investigations to which the new policy would apply, no
longer limiting its application to new investigations. In
its “Timetable” section, which the “Summary” identified
as setting forth the schedule for implementing the change,
71 Fed. Reg. at 77,722, Commerce stated that the change
in policy would apply “in all current and future antidump-
ing investigations as of the effective date.” Id. at 77,725.
In the “Analysis of Final Comments” section, Commerce
stated that it had “determined to apply the final modifica-
tion adopted through this proceeding to all investigations
pending before the Department as of the effective date.”
Id. (emphasis added). And it noted that there were only
seven such investigations, all of them initiated by peti-
tions filed after March 6, 2006, when the new no-zeroing
policy was proposed. Id.
Commerce set January 16, 2007, as the effective date
for the new policy. Id.; id. at 77,722. Commerce later
changed the effective date to February 22, 2007. Anti-
dumping Proceedings: Calculation of the Weighted-
Average Dumping Margins in Antidumping Investiga-
tions; Change in Effective Date of Final Modification, 72
Fed. Reg. 3,783 (Dep’t of Commerce Jan. 26, 2007).
B
On June 21, 2005—many months before the March
2006 proposal to end zeroing—Commerce began investi-
6 DIAMOND SAWBLADES MANUFACTURER v. US
gating possible dumping by several Chinese and Korean
producers and exporters of diamond sawblades (circular
sawblades made partly of diamonds). Initiation of Anti-
dumping Duty Investigations: Diamond Sawblades and
Parts Thereof from the People’s Republic of China and the
Republic of Korea, 70 Fed. Reg. 35,625 (Dep’t of Com-
merce Jun. 21, 2005). On May 22, 2006, Commerce
published its final determination that two companies,
appellants Hyosung and Ehwa, had engaged in dumping.
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. 29,310 (Dep’t of Commerce May 22,
2006) (Commerce Final Determination). Commerce used
zeroing in calculating an average dumping margin for
each company. Id. 1
Under the statutory regime, after Commerce reached
its final determination, the Commission made its final
determination regarding domestic-industry injury. In
July 2006, the Commission found no such injury. Dia-
mond Sawblades and Parts Thereof From China and
Korea, 71 Fed. Reg. 39,128 (Jul. 11, 2006). In late July
2006, the Diamond Sawblades Manufacturers Coalition—
a group of domestic producers, which filed the petition
that prompted Commerce’s investigation here—
challenged the Commission’s determination in the Court
of International Trade under 19 U.S.C.
§ 1516a(a)(2)(B)(ii). See Ehwa Br. 5. The matter was in
1 Issues & Decisions Memorandum for the Final
Determination in the Antidumping Investigation of
Diamond Sawblades and Parts Thereof from the People’s
Republic of Korea, May 15, 2006, at 40–42,
http://enforcement. trade.gov/frn/summary/KOREA-
SOUTH/E6-7771-1.pdf.
DIAMOND SAWBLADES MANUFACTURER v. US 7
the Court of International Trade when, in December 2006,
Commerce adopted its new no-zeroing policy.
In February 2008, well after the early-2007 effective
date of the new no-zeroing policy, the Court of Interna-
tional Trade remanded the matter to the Commission for
further consideration. Diamond Sawblades Mfrs. Coal. v.
United States, 32 C.I.T. 134 (Feb. 6, 2008). In May 2008,
the Commission found threatened material injury. Dia-
mond Sawblades & Parts Thereof from China & Korea,
USITC Inv. Nos. 731-TA-1092 and -1093, USITC Pub.
4007 (May 2008). That determination was sustained by
the Court of International Trade in January 2009, Dia-
mond Sawblades Mfrs. Coal. v. United States, 33 C.I.T. 48(Jan. 13, 2009), and this court later affirmed, Diamond
Sawblades Mfrs. Coal. v. United States, 612 F.3d 1348,
1350 (Fed. Cir. 2010).
While the merits were on appeal in this court, the
Court of International Trade issued a writ of mandamus
directing Commerce to publish an antidumping-duty
order. Diamond Sawblades Mfrs. Coal. v. United States,
650 F. Supp. 2d 1331, 1334 (Ct. Int’l Trade 2009). Com-
merce did so on November 4, 2009, using the calculations
it had made in May 2006 using zeroing. Diamond Saw-
blades and Parts Thereof From the People’s Republic of
China and the Republic of Korea: Antidumping Duty
Orders, 74 Fed. Reg. 57,145 (Dep’t of Commerce Nov. 4,
2009). This court eventually affirmed the mandamus
order. Diamond Sawblades Mfrs. Coal. v. United States,
626 F.3d 1374, 1382–83 (Fed. Cir. 2010).
Hyosung and Ehwa filed challenges in the Court of
International Trade. With the court’s permission, Com-
merce corrected some ministerial errors in its final de-
termination. Amended Final Determination of Sales at
Less Than Fair Value: Diamond Sawblades and Parts
Thereof From the Republic of Korea, 75 Fed. Reg. 14,126(Dep’t of Commerce March 24, 2010). In 2013, the Court
8 DIAMOND SAWBLADES MANUFACTURER v. US
of International Trade decided the issue now presented
for decision to us: it held that Commerce did not err by
deeming its new no-zeroing policy inapplicable to the
calculation of the dumping margin in this matter. Dia-
mond Sawblades Mfrs. Coal. v. United States, 2013 WL
5878684 (Ct. Int’l Trade 2013).
The Court of International Trade entered a final deci-
sion on October 29, 2014. J.A. 1. Hyosung and Ehwa
timely appealed. We have jurisdiction under 28 U.S.C.
§ 1295(a)(5).
DISCUSSION
Because we are presented only with a legal question,
we decide this dispute de novo: we apply the same stand-
ard applied by the Court of International Trade, asking if
the Commerce decision at issue is “not in accordance with
law.” 19 U.S.C. § 1516a(b)(1)(B)(i). See Michaels Stores,
Inc. v. United States, 766 F.3d 1388, 1391 (Fed. Cir.
2014). The question is not whether Commerce committed
any reversible error in what it decided in the Final Modi-
fication about which dumping proceedings would be
governed by the new no-zeroing policy; the question is
only what it did decide. As to that interpretive question,
it is undisputed that it suffices for us to uphold Com-
merce’s answer if we conclude that the Final Modification
is ambiguous on the point and Commerce’s interpretation
is a reasonable resolution of the ambiguity. See Auer v.
Robbins, 519 U.S. 452, 461 (1997); Michaels Stores, 766
F.3d at 1391; Cathedral Candle Co. v. Int’l Trade
Comm’n, 400 F.3d 1352, 1364 (Fed. Cir. 2005).
In the investigation at issue here, Commerce had, by
the Final Modification’s effective date of February 2007,
completed its non-ministerial work, making a “final
determination” of dumping in May 2006. Even the Com-
mission had completed its work, making a negative injury
determination in July 2006. The matter was pending
before the Court of International Trade. And when it
DIAMOND SAWBLADES MANUFACTURER v. US 9
returned to Commerce in 2009, Commerce had no more
than ministerial work to complete in order to issue an
antidumping-duty order.
We conclude that the Final Modification is at best
ambiguous as it applies to the present matter. In fact,
aspects of the Final Modification strongly support Com-
merce’s determination. We therefore uphold Commerce’s
determination that the no-zeroing policy does not apply
here.
As we have noted, the Final Modification’s Timetable
section says that the new policy will apply “in all current
and future antidumping investigations as of the effective
date,” 71 Fed. Reg. at 77,725, while an explanatory
statement in the response to public comments, within a
section entitled “Whether Implementation Should Apply
to On-Going Investigations,” says that “the Department
has determined to apply the final modification adopted
through this proceeding to all investigations pending
before the Department as of the effective date,” id. at
77,724-25. We need not decide whether even the former
language, if it stood alone, might properly be read to
exclude a matter, like this one, that was not before either
Commerce or the Commission in February 2007 and did
not thereafter return to Commerce for non-ministerial
work. The “current . . . investigations” language does not
stand alone, but is accompanied by the facially narrower
language, “pending before the Department,” which we
must take as explanation, not a statement of an incon-
sistent position. At least when read together, the lan-
guage can reasonably be given Commerce’s
interpretation—as not reaching investigations in which
Commerce had already made a final determination of
whether dumping was taking place (by February 2007)
and did not thereafter return to Commerce for substan-
tive determinations.
10 DIAMOND SAWBLADES MANUFACTURER v. US
The two-agency structure of antidumping investiga-
tions admits of that view. To be sure, one might well
treat an “investigation,” under the statute and regula-
tions, as a single matter that is “pending” before both
Commerce and the Commission from the time it is initiat-
ed until it results in a termination or rescission of the
investigation or issuance of an antidumping-duty order.
Cf. 19 C.F.R. § 351.102(b)(30) (defining “investigation”).
But that is not the only facially reasonable view. As
relevant here, it also makes linguistic and structural
sense to view the investigation as pending before Com-
merce until Commerce completes its work, except for any
ministerial work like correcting arithmetic errors or
formal entry of an order, and then pending only before the
Commission for its injury determination, which comes
later. 19 U.S.C. § 1673d(b) (Commission makes injury
determination only as to imports or sales “with respect to
which [Commerce] has made an affirmative determina-
tion” of dumping). The agencies, after all, investigate
different aspects of a dumping allegation: Commerce
investigates whether dumping has occurred, and Com-
merce investigates whether such dumping has or had or
threatens certain domestic effects.
That view makes particular sense in determining the
application of the Final Modification to the present mat-
ter, because there is powerful internal evidence that the
Final Modification was not meant to apply to the Dia-
mond Sawblades investigation. First: Commerce ex-
plained in the Final Modification that “[a]ll of the
currently pending investigations were initiated as a result
of petitions filed after the date of publication of the De-
partment’s proposed modification,” i.e., March 6, 2006. 71
Fed. Reg. at 77,725. The petitions in this case were filed
much earlier—in 2005. 70 Fed. Reg. at 35,625. Second:
When Commerce stated in the Final Modification that it
would apply to “all investigations pending before the
Department as of the effective date,” it also stated that
DIAMOND SAWBLADES MANUFACTURER v. US 11
“[t]he number of pending antidumping investigations is
few (i.e. there are seven ongoing antidumping investiga-
tions).” 71 Fed. Reg. at 77,725. Hyosung, Ehwa, and
Commerce all agree in this court that this investigation is
not one of the seven investigations (which consist of those
filed after March 6, 2006). See Hyosung Br. 33; Ehwa Br.
31 n.7; Gov’t Br. 16 n.3. Diamond Sawblades does not
disagree. Diamond Sawblades Br. 2. Third: Commerce
explained that “even in the most advanced of the on-going
investigations, there is sufficient time to permit the
parties to comment on the application of this approach
prior to the final determination in the investigation.” 71
Fed. Reg. at 77,725 (emphasis added); see id. (in investi-
gations where Commerce had made a preliminary deter-
mination, parties will have an opportunity to comment on
application of the new policy). The implication is that
Commerce had not made a final determination in any of
the investigations to which the new policy would apply;
but in this matter, Commerce had already done so. 71
Fed. Reg. at 29,310.
Later events in this investigation did not make this a
new investigation (a “future antidumping investigation[],”
71 Fed. Reg. at 77,725) or make unreasonable the conclu-
sion that this investigation had not been pending before
Commerce in February 2007. When Commerce took up
the Diamond Sawblades matter again in 2009, after the
Court of International Trade upheld the Commission’s
finding of injury (after remand), Commerce performed
only ministerial actions. It issued the antidumping-duty
order based on its 2006 determination, 74 Fed. Reg. at
57,145, then made a ministerial correction based on an
arithmetic error it had recognized in June 2006 but not
implemented at the time, because the Commission had
the matter before it. See Amended Final Determination of
Sales at Less Than Fair Value: Diamond Sawblades and
Parts Thereof From the Republic of Korea, 75 Fed. Reg.
12 DIAMOND SAWBLADES MANUFACTURER v. US
14,126 (Mar. 24, 2010). Hyosung and Ehwa have pointed
to no more substantive actions that Commerce took.
Hyosung and Ehwa argue that the treatment of this
investigation as outside the Final Modification is contra-
dicted by Commerce’s later decision to apply the Final
Modification to a separate investigation, Polyvinyl Alcohol
From Taiwan: Final Determination of Sales at Less Than
Fair Value, 76 Fed. Reg. 5562 (Feb. 1, 2011). Commerce’s
decision in the Polyvinyl Alcohol From Taiwan matter
gives us pause in assessing the coherence of Commerce’s
interpretation of the Final Modification. But we do not
think, in the end, that Commerce’s decision in that matter
suffices to make unreasonable Commerce’s decision that
the no-zeroing policy of the Final Modification is inappli-
cable here.
In the Polyvinyl Alcohol From Taiwan matter the
Commission issued a preliminary determination of insuf-
ficient injury before Commerce reached even a prelimi-
nary determination as to whether dumping had occurred,
and the Commission’s negative preliminary determina-
tion precluded Commerce from going forward. Initiation
of Anti Dumping Duty Investigation: Polyvinyl Alcohol
From Taiwan, 69 Fed. Reg. 59,204 (Oct. 4, 2004); Polyvi-
nyl Alcohol From Taiwan, 69 Fed. Reg. 63,177 (Oct. 29,
2004). At the time the Final Modification took effect,
therefore, the Polyvinyl Alcohol From Taiwan matter had
not been the subject of a Commerce final determination;
by February 2007, the matter had just been remanded to
the Commission for reconsideration of its preliminary
injury determination. See Celanese Chems. Ltd. v. United
States, 31 Ct. Int’l Trade 279, 280 (Jan. 29, 2007). Only in
March 2010 did the matter return to Commerce, and only
then did Commerce do the extensive work involved in
reaching a final determination of dumping—
questionnaire issuance, verification, scope amendment,
etc. See Polyvinyl Alcohol From Taiwan: Preliminary
DIAMOND SAWBLADES MANUFACTURER v. US 13
Determination of Sales at Less Than Fair Value and
Postponement of Final Determination, 75 Fed. Reg. 55,552(Sep. 13, 2010); see 76 Fed. Reg. at 5,562. In particular,
only then did Commerce calculate the respondent’s aver-
age dumping margin, which it had not previously done in
this matter. 75 Fed. Reg. at 55,558.
Commerce could readily decide that the Polyvinyl Al-
cohol From Taiwan proceeding was situated differently
from the present matter regarding the “final determina-
tion” point mentioned by Commerce in the Final Modifi-
cation, 71 Fed. Reg. at 77,722, 77,725. The key Commerce
work, including the margin determinations to which
zeroing is relevant, was not yet done there, whereas here
it was. That work was done only after the Final Modifica-
tion’s effective date, whereas here no such work was done
after the effective date. Thus, for reasons not applicable
here, the investigation in the Polyvinyl Alcohol From
Taiwan matter to which the no-zeroing policy was applied
can be described as a “future” investigation, as of Febru-
ary 2007, insofar as Commerce’s active role was con-
cerned. We need not decide whether, as Commerce briefly
suggested at oral argument, the investigation might be
described, in the alternative, as having been “pending
before the Department” in February 2007 within the
meaning of the Final Modification (Commerce’s work in
the overall investigation got interrupted well before it
arrived at a dumping determination, and the matter had
been remanded to the Commission by February 2007).
Those considerations ultimately seem to us enough to
prevent Commerce’s result in the Polyvinyl Alcohol From
Taiwan matter from making its result here unreasonable.
And that is so even though neither matter was among the
seven mentioned by Commerce in the Final Modification
(both were initiated before March 2006). We think it
reasonable for Commerce to treat the issue of coverage as
one to be assessed by looking at the Final Modification as
14 DIAMOND SAWBLADES MANUFACTURER v. US
a whole, not any single word (“pending” or “current”) from
its text. The particularly strong reasons that support a
finding of non-coverage of the present matter are not
contradicted by the weaker case for finding coverage of
Polyvinyl Alcohol From Taiwan.
CONCLUSION
We affirm the judgment of the Court of International
Trade.
AFFIRMED