Union Steel v. United States , 713 F.3d 1101 ( 2013 )


Menu:
  •   United States Court of Appeals
    for the Federal Circuit
    ______________________
    UNION STEEL, LG HAUSYS, LTD., LG HAUSYS
    AMERICA, INC., AND DONGBU STEEL CO., LTD.,
    Plaintiffs-Appellants,
    v.
    UNITED STATES,
    Defendant-Appellee,
    AND
    NUCOR CORPORATION,
    Defendant-Appellee,
    AND
    UNITED STATES STEEL CORPORATION,
    Defendant-Appellee.
    ______________________
    2012-1248, -1315
    ______________________
    Appeal from the United States Court of International
    Trade in No. 11-CV-0083, Judge Jane A. Restani.
    ______________________
    Decided: April 16, 2013
    ______________________
    2                                       UNION STEEL   v. US
    DONALD B. CAMERON, Morris Manning & Martin LLP,
    Washington, DC, argued for plaintiffs-appellants. With
    him on the brief were JULIE C. MENDOZA, R. WILL
    PLANERT, BRADY W. MILLS, MARY S. HODGINS and
    JEFFREY O. FRANK.
    L. MISHA PREHEIM, Trial Attorney, Civil Division,
    Commercial Litigation Branch, United States Department
    of Justice, of Washington, DC, argued for defendant-
    appellee, United States. With her on the brief were
    STUART F. DELERY, Acting Assistant Attorney General,
    JEANNE E. DAVIDSON, Director, and CLAUDIA BURKE,
    Assistant Director. Of counsel on the brief was DANIEL J.
    CALHOUN, Attorney, Office of the Chief Counsel for Import
    Administration, United States Department of Commerce,
    of Washington, DC.
    TIMOTHY C. BRIGHTBILL, Wiley Rein LLP, of Washing-
    ton, DC, argued for defendant-appellee, Nurcor Corpora-
    tion. With him on the brief was ALAN H. PRICE. Of
    counsel were MAUREEN E. THORSON, LORI SCHEETZ,
    ROBERT E. DEFRANCESCO, III, and TESSA V. CAPELOTO.
    JEFFREY D. GERRISH, Skadden, Arps, Slate, Meagher
    & Flom, LLP, of Washington, DC, argued for defendant-
    appellee, United States Steel Corporation. With him on
    the brief were ROBERT E. LIGHTHIZER and ELLEN J.
    SCHNEIDER.
    NEIL R. ELLIS and JILL CAIAZZO, for amici curiae, Ami
    JTEKT Corporation, et al. and ROBERT A. LEPSTEIN and
    ALEXANDER H. SCHAEFER counsel for NSK Corporation, et
    al. and KEVIN M. O’BRIEN, DIANE A. MACDONALD and
    CHRISTINE M. STREATFIELD, counsel for NTN Corporation,
    et al.
    UNION STEEL   v. US                                      3
    TERENCE P. STEWART and GEERT DE PREST, Stewart
    and Stewart, of Washington, DC, for amicus curiae,
    Committee to support US Trade Laws.
    ______________________
    Before LOURIE, PLAGER, and WALLACH, Circuit Judges.
    WALLACH, Circuit Judge.
    In the decision now on appeal, the United States
    Court of International Trade affirmed the Department of
    Commerce’s (“Commerce”) use of zeroing to determine
    antidumping duties in administrative reviews, even
    though Commerce no longer uses zeroing in investigations
    establishing antidumping orders. This court has twice
    considered whether such divergent practices constitute a
    reasonable construction of Commerce’s governing statute,
    both times remanding for Commerce to provide an expla-
    nation. In the case now on appeal, Commerce has provid-
    ed such an explanation. Union Steel, LG Hausys, Ltd., LG
    Hausys America, Inc., and Dongbu Steel Co., Ltd. (collec-
    tively, “Appellants”) appeal from the Court of Interna-
    tional Trade’s decision that, in light of this explanation,
    Commerce’s zeroing practices are a reasonable interpreta-
    tion of statute. Union Steel v. United States, 
    823 F. Supp. 2d
     1346, 1360 (Ct. Int’l Trade 2012) (“Union Steel”).
    Because the Court of International Trade properly found
    that Commerce’s interpretation of its governing statute is
    in accordance with law, we affirm.
    BACKGROUND
    Dumping occurs when imported merchandise is sold
    for a lower price in the United States than it is sold in its
    home market. This practice can harm domestic producers
    who are selling the same goods at market value. See Sioux
    Honey Ass’n v. Hartford Fire Ins. Co., 
    672 F.3d 1041
    , 1046
    (Fed. Cir. 2012). The antidumping duty statute provides
    for the imposition of remedial duties to imported mer-
    4                                          UNION STEEL   v. US
    chandise sold, or likely to be sold, in the United States “at
    less than fair value” when the relevant domestic industry
    is harmed. 19 U.S.C. § 1673. “Sales at less than fair value
    are those sales for which the ‘normal value’ (the price a
    producer charges in its home market) exceeds the ‘export
    price’ (the price of the product in the United States) or
    ‘constructed export price.”’ U.S. Steel Corp. v. United
    States, 
    621 F.3d 1351
    , 1353 (Fed. Cir. 2010) (quoting 19
    U.S.C. § 1677(35)(A)).
    Commerce calculates a “dumping margin,” which is
    “the amount by which the normal value exceeds the
    export price or constructed export price.” 1 19 U.S.C.
    § 1677(35)(A). Commerce relies upon three comparison
    methods to calculate dumping margins:
    (1) Average-to-transaction, in which Commerce
    compares the weighted average of the normal
    values to the export prices (or constructed ex-
    port prices) of individual transactions.
    (2) Average-to-average, in which Commerce com-
    pares the weighted average of the normal val-
    ues to the weighted average of the export
    prices (or constructed export prices).
    (3) Transaction-to-transaction, in which Com-
    merce compares the normal value of an indi-
    1    Commerce calculates a “weighted average dump-
    ing margin” by “dividing the aggregate dumping margins .
    . . by the aggregate export prices . . . of such exporter or
    producer.” 19 U.S.C. § 1677(35)(B). Put simply, a “dump-
    ing margin” is a comparison of the normal value and the
    export price (or constructed export price), whereas a
    “weighted average dumping margin” is the aggregation of
    the results of those comparisons.
    UNION STEEL   v. US                                      5
    vidual transaction to the export price (or con-
    structed export price) of an individual trans-
    action.
    See Statement of Administrative Action accompanying the
    Uruguay Round Agreements Act, H.R. Doc. No. 103–316,
    vol. 1, at 842–43, reprinted in 1994 U.S.C.C.A.N. 3773
    (“SAA”).
    Commerce calculates dumping margins both in inves-
    tigations, which establish an antidumping order, and in
    subsequent administrative reviews of that order. Follow-
    ing an investigation, Commerce issues an antidumping
    order which imposes a duty based upon the dumping
    margin. See 19 U.S.C. §§ 1673a, 1673b(b), 1673b(d),
    1673d(a), 1673d(c). Any exporter of the goods subject to
    the antidumping order may annually request an adminis-
    trative review to determine the exact amount by which
    the foreign market value exceeds the U.S. price and
    assess the precise amount of duties owed for their ex-
    ports. 2 See 19 U.S.C. §§ 1675(a)(1), 1675(a)(2)(A).
    As explained in the SAA accompanying the Uruguay
    Round Agreements Act (“URAA”) Commerce had a prac-
    tice of using average-to-transaction comparisons to calcu-
    late dumping margins in both investigations and
    administrative reviews. SAA at 842. After adoption of the
    URAA in 1995, Commerce switched to using average-to-
    average or transaction-to-transaction comparisons in
    antidumping duty investigations. 3 Id.; 19 U.S.C. § 1677f-
    2   “Commerce uses [the] weighted-average dumping
    margin to calculate the duties owed on an entry-by-entry
    basis.” Timken Co. v. United States, 
    354 F.3d 1334
    , 1338
    (Fed. Cir. 2004).
    3    The statute carves out an exception, however, al-
    lowing Commerce to use average-to-transaction compari-
    sons if “there is a pattern of export prices (or constructed
    export prices) for comparable merchandise that differ
    6                                         UNION STEEL   v. US
    1(d)(1)(A).    Commerce continued to use average-to-
    transaction comparisons as its general practice in admin-
    istrative reviews.
    In calculating the weighted average dumping margin,
    Commerce has historically used a methodology called
    “zeroing” where negative dumping margins (i.e., margins
    of sales of merchandise sold at nondumped prices) are
    given a value of zero and only positive dumping margins
    (i.e., margins for sales of merchandise sold at dumped
    prices) are aggregated. “That is, after [Commerce] com-
    puted an average dumping margin for each averaging
    group, if that averaging group . . . product did not have a
    positive dumping margin, Commerce set the margin at
    zero rather [than] at a negative number that would offset
    a positive margin for another averaging group.” 4 Union
    Steel, 
    823 F. Supp. 2d
     at 1350. The applicable statute, 19
    U.S.C. § 1677(35)(A), does not mention zeroing. However,
    as authority for this method, Commerce has emphasized
    the part of the statute stating that the dumping margin
    “means the amount by which the normal value exceeds the
    export price or constructed export price of the subject
    merchandise.” 19 U.S.C. § 1677(35)(A) (emphasis added).
    This court has repeatedly addressed zeroing and has
    held 19 U.S.C. § 1677(35)(A) ambiguous and deferred to
    Commerce’s reasonable interpretation of that statute.
    Timken Co. v. United States, 
    354 F.3d 1334
    , 1342 (Fed.
    significantly among purchasers, regions, or periods of
    time.” 19 U.S.C. § 1677f-1(d)(1)(B). This is generally
    referred to as “targeted” or “masked” dumping.
    4    In calculating weighted average dumping mar-
    gins, Commerce creates an averaging group by grouping
    together sales of merchandise for purpose of price compa-
    rability based upon physical characteristics, referred to as
    “models,” and assigns a control-number called
    “CONNUM”. See Union Steel, 
    823 F. Supp. 2d
     at 1349.
    UNION STEEL   v. US                                    7
    Cir. 2004) (applying Chevron analysis to determine that
    Commerce’s practice of using zeroing in administrative
    reviews was a reasonable interpretation of the statute);
    Corus Staal BV v. Dep’t of Commerce, 
    395 F.3d 1343
    , 1347
    (Fed. Cir. 2005) (“Corus”) (extending Timken to encom-
    pass Commerce’s practice of zeroing in investigations).
    Zeroing is controversial because some parties claim it
    does not fully account for all of the comparable export
    transactions, and so is not a “fair comparison” between
    export price and normal value as required by Article 2.4
    and 2.4.2 of the Anti-Dumping Agreement. See Panel
    Report, United States—Laws, Regulations and Methodol-
    ogy for Calculating Dumping Margins (“Zeroing”),
    ¶¶ 7.32, 7.33, WT/DS294/R (Oct. 31, 2005); aff’d Appellate
    Report, United States—Laws, Regulations and Methodol-
    ogy for Calculating Dumping Margins (“Zeroing”), ¶ 146,
    WT/DS294/AB/R (Apr. 18, 2006); see also Dongbu Steel
    Co. v. United States, 
    635 F.3d 1363
    , 1366 (Fed. Cir. 2011)
    (characterizing zeroing as “controversial”).
    Commerce’s use of zeroing with average-to-average
    comparisons in certain antidumping duty investigations
    was challenged by the European Communities before the
    World Trade Organization’s (“WTO”) Dispute Settlement
    Body. See Panel Report, ¶¶ 7.32, 7.33. The WTO found
    Commerce’s practice inconsistent with the United States’
    international obligations, and Commerce determined that
    it would cease using zeroing methodology in new and
    pending investigations. See Antidumping Proceedings:
    Calculation of the Weighted-Average Dumping Margin
    During an Antidumping Investigation; Final Modifica-
    tion, 71 Fed. Reg. 77,722 (Dec. 27, 2006). Instead, Com-
    merce started using a method of “offsetting” to account for
    sales made at less than fair value, such that some of the
    dumping margins used to calculate a weighted average
    dumping margin would be negative. U.S. Steel, 621 F.3d
    at 1355.
    8                                        UNION STEEL   v. US
    In 2011, this court considered a challenge to Com-
    merce’s continuing use of zeroing in administrative re-
    views in an earlier review of the same antidumping duty
    order at issue in this case. In Dongbu, appellant Union
    Steel argued “that it is unreasonable to construe a single
    statutory provision [19 U.S.C. § 1677(35)] that applies to
    both investigations and administrative reviews as having
    opposite meanings depending on the nature of the anti-
    dumping proceeding.” Dongbu, 635 F.3d at 1370. The
    court determined that “[a]lthough 19 U.S.C. § 1677(35) is
    ambiguous with respect to zeroing and Commerce plays
    an important role in resolving this gap in the statute,
    Commerce’s discretion is not absolute. Commerce must
    provide an explanation for why the statutory language
    supports its inconsistent interpretation.” Id. at 1372. The
    decision of the Court of International Trade was vacated
    and remanded for further proceedings “to give Commerce
    the opportunity to explain its reasoning.” Id. at 1373.
    Shortly thereafter, but before Commerce had the
    opportunity to provide an explanation, the court again
    addressed Commerce’s practice of zeroing in administra-
    tive reviews but not in investigations in JTEKT, stating
    that Commerce
    failed to address the relevant question—why is it
    a reasonable interpretation of the statute to zero
    in administrative reviews, but not in investiga-
    tions? It is not illuminating to the continued
    practice of zeroing to know that one phase uses
    average-to-average comparisons while the other
    uses average-to-transaction comparisons. In or-
    der to satisfy the requirement set out in Dongbu,
    Commerce must explain why these (or other) dif-
    ferences between the two phases make it reasona-
    ble to continue zeroing in one phase, but not the
    other.
    UNION STEEL   v. US                                     9
    JTEKT Corp. v. United States, 
    642 F.3d 1378
    , 1384–85
    (Fed. Cir. 2011). Accordingly, the Court of International
    Trade’s decision was vacated and the case was remanded
    “in order for Commerce to provide its reasoning.” Id. at
    1385.
    Commerce’s explanation is now before the court. At
    the Court of International Trade, Appellants challenged
    Commerce’s application of zeroing methodology to the
    final results of the sixteenth administrative review for
    imports of certain corrosion-resistant carbon steel flat
    products from the Republic of Korea, the same antidump-
    ing duty order at issue in Dongbu. Union Steel, 823 F.
    Supp. 2d at 1347–48; see Dongbu, 635 F.3d at 1373. The
    United States sought a voluntary remand from the Court
    of International Trade in light of this court’s decision in
    JTEKT, and the court granted the motion. J.A.96. On
    remand, Commerce discussed the inconsistent use of
    zeroing in administrative reviews and investigations, and
    explained why it believed its interpretation is reasonable,
    stating in summary:
    First [Commerce] has, with one limited exception,
    maintained a long-standing, judicially-affirmed
    interpretation of [19 U.S.C. § 1677(35)] pursuant
    to which [Commerce] does not consider export
    price to be a dumped price where normal value is
    less than export price. Pursuant to this interpre-
    tation, [Commerce] includes no (or zero) amount
    of dumping, rather than a negative amount of
    dumping, in calculating the aggregate weighted-
    average dumping margin where normal value is
    less than export price. Second, the limited excep-
    tion to this interpretation was not adopted as an
    arbitrary departure from established practice, but
    was adopted, instead, in response to a specific in-
    ternational obligation the Executive Branch de-
    termined to implement pursuant to the
    procedures established by the [URAA] for such
    10                                        UNION STEEL   v. US
    changes in practice with full notice, comment and
    explanation thereof. Third, [Commerce’s] inter-
    pretation reasonably resolves the ambiguity in [19
    U.S.C. § 1677(35)] in a way that accounts for the
    inherent differences between the result of an av-
    erage-to-average comparison on the one hand and
    the result of an average-to-transaction comparison
    on the other.
    Results of Redetermination Pursuant to Remand at 7 (Oct.
    14, 2011) (“Remand Results”). 5 The Court of Internation-
    al Trade sustained Commerce’s explanation, concluding
    that Commerce “did not abuse its discretion in changing
    its investigation methodology, but not its review method-
    ology . . . in response to WTO decisions.” Union Steel, 
    823 F. Supp. 2d
     at 1360. This appeal followed. We have
    jurisdiction pursuant to 28 U.S.C. § 1295(a)(5).
    5   It bears noting that Commerce has since revised
    its methodology in administrative reviews using average-
    to-average comparisons as the default method for calcu-
    lating weighted average dumping margins. See Anti-
    dumping Proceedings: Calculation of the Weighted-
    Average Dumping Margin and Assessment Rate in Certain
    Antidumping Duty Proceedings; Final Modification, 77
    Fed. Reg. 8,101 (Feb. 14, 2012) (Final Modification for
    Reviews). This change only applies prospectively. Id. As
    part of the modification, Commerce indicated it would not
    use the zeroing methodology, but instead would allow for
    offsets when making average-to-average comparisons in
    administrative reviews. Id. This modification does not
    foreclose the possibility of using zeroing methodology
    when Commerce employs a different comparison method
    to address masked dumping concerns. See id.
    UNION STEEL   v. US                                     11
    DISCUSSION
    While we recognize the Court of International Trade
    has unique and specialized expertise in trade law, 6 its
    decision is reviewed de novo, applying anew the same
    standard used by that court in its consideration of Com-
    merce’s determination. Dongbu, 635 F.3d at 1369. Ac-
    cordingly, Commerce’s antidumping determination will be
    upheld 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). We apply a two-part inquiry
    to determine whether to sustain Commerce’s statutory
    interpretation. See Chevron, U.S.A., Inc. v. Natural Res.
    Def. Council, Inc., 
    467 U.S. 837
    , 842–43 (1984). First, we
    determine “whether Congress has directly spoken to the
    precise question at issue.” Id. at 842. If so, we “must give
    effect to the unambiguously expressed intent of Con-
    gress.” Id. at 842–43. “[I]f the statute is silent or ambigu-
    ous with respect to the specific issue,” however, “the
    question for the court is whether the agency’s answer is
    based on a permissible construction of the statute.” Id. at
    843.
    The question here, as in Dongbu and JTEKT, is
    whether it is reasonable for Commerce to use zeroing in
    administrative reviews even though it no longer uses
    zeroing in investigations. See Dongbu, 635 F.3d at 1369;
    6    “The expertise of the Court of International Trade
    . . . guides it in making complex determinations in a
    specialized area of the law. . . .” United States v. Haggar
    Apparel Co., 
    526 U.S. 380
    , 394 (1999); see also Ad Hoc
    Shrimp Trade Action Comm. v. United States, 
    618 F.3d 1316
    , 1321 (Fed. Cir. 2010) (quoting Int’l Trading Co. v.
    United States, 
    281 F.3d 1268
    , 1274) (Fed. Cir. 2002) (“the
    Court of International Trade ‘has expertise in addressing
    antidumping issues and deals on a daily basis with the
    practical aspects of trade practice.”’).
    12                                         UNION STEEL   v. US
    JTEKT, 642 F.3d at 1384–85. Our analysis of the issue,
    however, is now aided by Commerce’s explanation why
    the ambiguous statute, 19 U.S.C. § 1677(35), supports use
    of zeroing in administrative reviews and not in investiga-
    tions. Thus, our task is now to determine whether Com-
    merce’s explanation of its zeroing practice is a reasonable
    interpretation of the statute.
    Commerce’s decision to modify its zeroing practice has
    previously been sustained by this court. In U.S. Steel, the
    court sustained Commerce’s decision to cease zeroing
    when making average-to-average comparisons in anti-
    dumping duty investigations while recognizing Commerce
    intended to continue zeroing in other circumstances. See
    U.S. Steel, 621 F.3d at 1355 n.2, 1362–63. The court
    relied upon the differences among various types of com-
    parison methodologies, recognizing that 19 U.S.C.
    § 1677f-1(d)(1) allows Commerce to use average-to-
    transaction comparisons in investigations where certain
    patterns of significant price differences exist. Id. at 1362.
    Additionally, the court sustained Commerce’s decision to
    use zeroing methodology in an administrative review
    using average-to-transaction comparisons. SKF USA Inc.
    v. United States, 
    630 F.3d 1365
    , 1375 (Fed. Cir. 2011). In
    SKF, the court stated that “[e]ven after Commerce
    changed its policy with respect to original investigations,
    we have held that Commerce’s application of zeroing to
    administrative reviews is not inconsistent with the stat-
    ute.” Id.
    Contrary to Appellants’ assertions, Commerce’s rea-
    sonable interpretation of the statute is not foreclosed by
    this court’s prior decisions. 7 In Corus, the court held that
    7  Amici JTEKT Corp., Koyo Corp. of U.S.A., NSK
    Ltd., NSK Corp., NTN Corp., NTN Bearing Corp. of
    America, American NTN Bearing Mfg. Corp., NTN-Bower
    Corp., and NTN Driveshaft, Inc., have forthrightly con-
    ceded as much, stating: “But the [c]ourt in Donbgu and
    UNION STEEL   v. US                                    13
    the statute was equally ambiguous for both administra-
    tive reviews and investigations and thus Commerce may
    use zeroing in both despite using different comparison
    methodologies in each. Corus, 395 F.3d at 1347. Although
    this court noted, in dicta, that “[i]t may be that Commerce
    cannot justify using opposite interpretations of 19 U.S.C.
    § 1677(35) in investigations and in administrative re-
    views,” Dongbu, 635 F.3d at 1373, neither Dongbu nor
    JTEKT foreclosed the opportunity for Commerce to pro-
    vide an explanation. Instead, both cases specifically
    requested that Commerce do so. Id.; JTEKT, 642 F.3d at
    1384–85. Commerce’s explanation now on review demon-
    strates that its varying interpretations are reasonable
    given the distinction between the comparison methodolo-
    gies used in investigations and administrative reviews.
    Moreover, Commerce attributes the differing interpreta-
    tions as necessary to comply with international obliga-
    tions, while preserving a practice that serves recognized
    policy goals. Each of these analyses will be discussed in
    turn.
    1.
    Commerce justifies using zeroing in administrative re-
    views but not in investigations in part based on the
    different comparison methodologies used in each. Com-
    merce explained in its Remand Results that average-to-
    average comparison methodology typically used in inves-
    tigations is useful for examining an exporter’s or manu-
    facturer’s overall pricing behavior. Remand Results at 13.
    Overall pricing behavior helps determine the appropri-
    ateness of imposing an antidumping duty order on a
    particular product. Id. With an antidumping duty order
    JTEKT stopped well short of a categorical answer, instead
    affording [Commerce] an opportunity to further explain
    and justify its disparate interpretations.” Amicus Br. in
    Support of Plaintiffs-Appellants and Reversal at 7–8.
    14                                        UNION STEEL   v. US
    already in place, administrative reviews typically use
    average-to-transaction comparison methodology which
    permits greater specificity to determine pricing behavior
    for individual transactions. Id. The greater specificity
    afforded through that methodology furthers the transac-
    tional accuracy interests of administrative review. Union
    Steel, 
    823 F. Supp. 2d
     at 1359. We agree with the Court
    of International Trade’s explanation that this distinction
    is supported by statute: “Specificity is less important in
    investigations in that [product group (CONNUM)] aver-
    ages in investigations are not even monthly averages, as
    they are in reviews. Rather, they are averages over a
    broad time period compared to all other broad averages.”
    Id. (citing 19 U.S.C. § 1677f-1(d); 19 C.F.R.
    § 351.414(d)(3), (e)). However, “when it comes to setting
    the final rates to be used for actual assessment, i.e., the
    review rates, it is reasonable for the agency to look for
    more accuracy, which it achieves in some measure
    through monthly averaging, and also for the agency to
    look for the full measure of duties resulting therefrom,
    which it better achieves through zeroing.” Id. The Court
    of International Trade noted that “parties who are mar-
    ginally dumping or not dumping may be excluded from
    the order pursuant to the looser standards of the investi-
    gation.” Id. That is, in an investigation, margins of less
    than two percent are treated as de minimis, resulting in a
    party’s exclusion from the order, while in an administra-
    tive review, margins of 0.5 percent or less are treated as
    de minimis. Id.
    Commerce also explained that the average-to-average
    methodology justifies the use of offsetting (i.e., not zero-
    ing) for reasons inapplicable to average-to-transaction
    comparisons. When using average-to-average compari-
    sons, transactions are divided into “averaging groups.”
    Remand Results at 11. Transactions are divided into
    averaging groups on the basis of physical characteristics
    and level of trade for the purpose of price comparison. Id.
    UNION STEEL   v. US                                    15
    When calculating the average export price or constructed
    export price, Commerce calculates a comparison result for
    each averaging group, and averages together high and low
    export prices within the group. Thus, those export prices
    above normal value offset those below normal value
    within the averaging group. Commerce then aggregates
    the results of the comparison for each averaging group to
    calculate a weighted average dumping margin. Id. at 11–
    12. Accordingly, this comparison methodology masks
    individual transaction prices below normal value with
    other above normal value prices within the same averag-
    ing group.
    In contrast, when Commerce uses the average-to-
    transaction comparison method, as it did in this adminis-
    trative review, Commerce compares the export price (or
    constructed export price) for a particular export transac-
    tion with an average normal value for the comparable
    sales of foreign like products within the averaging group.
    Id. at 12. For specific export transactions, Commerce
    calculates a comparison result which establishes the
    amount that transaction is priced at less than its normal
    value. Id. Using this methodology, Commerce does not
    average export transaction prices before comparing the
    export price (or constructed export price) to normal value.
    Instead, Commerce uses a single export transaction price
    and aggregates the transaction-specific comparison result.
    The average-to-transaction comparison methodology thus
    reveals individual dumping.
    Commerce’s decision to use or not use the zeroing
    methodology reasonably reflects unique goals in differing
    comparison methodologies. In average-to-average com-
    parisons, as used in investigations, Commerce examines
    average export prices; zeroing is not necessary because
    high prices offset low prices within each averaging group.
    When examining individual export transactions, using the
    average-to-transaction comparison methodology, prices
    are not averaged and zeroing reveals masked dumping.
    16                                       UNION STEEL   v. US
    This ensures the amount of antidumping duties assessed
    better reflect the results of each average-to-transaction
    comparison. 8    Commerce’s differing interpretation is
    reasonable because the comparison methodologies com-
    pute dumping margins in different ways and are used for
    different reasons.
    2.
    Commerce also explained the methodology for investi-
    gations was changed in response to an adverse WTO
    decision through a section 123 proceeding. 9 In Dongbu,
    8   The Court has previously recognized the purpose
    of relying on average-to-transaction comparison method-
    ology in administrative reviews:
    The purpose of the antidumping statute is to pro-
    tect domestic manufacturing against foreign
    manufacturers who sell at less than fair market
    value. Averaging U.S. prices defeats this purpose
    by allowing foreign manufacturers to offset sales
    made at less-than-fair value with higher priced
    sales.    Commerce refers to this practice as
    “masked dumping.” By using individual U.S.
    prices in calculating dumping margins, Commerce
    is able to identify a merchant who dumps the
    product intermittently—sometimes selling below
    the foreign market value and sometimes selling
    above it. We cannot say that this is an unfair or
    unreasonable result.
    Koyo Seiko Co., Ltd. v. United States, 
    20 F.3d 1156
    , 1159
    (Fed. Cir. 1994) (internal citations omitted).
    9  Section 123 is the part of the URAA that laid out
    the administrative procedure for response to adverse
    WTO rulings. The U.S. Trade Representative consulted
    public and private sector committees, and Commerce
    provided for public comment before determining whether
    UNION STEEL   v. US                                    17
    the government raised this rationale at oral argument,
    and this court indicated that “the government’s decision
    to implement an adverse WTO report standing alone does
    not provide sufficient justification for the inconsistent
    statutory interpretations.” Dongbu, 635 F.3d at 1372.
    Nevertheless, it is within Commerce’s discretion to adopt
    reasonable practices to meet international obligations.
    Union Steel, 
    823 F. Supp. 2d
     at 1357–58. 10 Certainly, this
    information is relevant when considered in conjunction
    with the other explanations offered by Commerce.
    Section 123 establishes how an adverse WTO decision
    may be implemented in domestic law. See 19 U.S.C.
    §§ 3533; 3538. The WTO’s decision was limited; it found
    that Commerce’s use of zeroing methodology with respect
    to average-to-average comparisons in antidumping duty
    investigations was inconsistent with the United States’s
    international obligations. Panel Report ¶ 7.106. The
    Executive Branch responded by discontinuing its zeroing
    practice in new and pending investigations using average-
    to-average comparison methodology. Antidumping Pro-
    ceedings: Calculation of the Weighted-Average Dumping
    Margin During an Antidumping Duty Investigation; Final
    Modification, 71 Fed. Reg. 77,722 (Dec. 27, 2006); see U.S.
    Steel, 621 F.3d at 1354–55. Commerce, did not, however,
    alter its practice with respect to the use of zeroing meth-
    and how to change its practice. See 19 U.S.C. § 3533;
    Antidumping Proceedings: Calculation of the Weighted-
    Average Dumping Margin During an Antidumping Duty
    Investigation; Final Modification, 71 Fed. Reg. 77,722
    (Dec. 27, 2006).
    10  This court sustained Commerce’s decision to cease
    zeroing in average-to-average comparisons in investiga-
    tions, while acknowledging that Commerce intended to
    continue to use zeroing in other types of comparisons
    methods. U.S. Steel, 621 F.3d at 1355 n.2 1362–63.
    18                                       UNION STEEL   v. US
    odology in anything other than investigations using
    average-to-average comparisons. “[T]here is no reason to
    assume that [Commerce’s] only legal option is to expand
    the exception to apply in all contexts.” Remand Results at
    18. Commerce may reasonably decline to take any action
    beyond that which is necessary for it to come into compli-
    ance. See ThyssenKrupp Acciai Speciali Terni S.p.A. v.
    United States, 
    603 F.3d 928
    , 934 (Fed. Cir. 2010) (affirm-
    ing Commerce’s determination to only address that which
    was necessary to bring its determination into accordance
    with a WTO ruling). Commerce’s modification was lim-
    ited to changes that were necessary to comply with the
    WTO decision.
    Citing Clark v. Martinez, 
    543 U.S. 371
     (2005), 11 Ap-
    pellants argue that it is unreasonable to construe a single
    statutory provision that applies in both investigations and
    administrative reviews as having different meanings
    depending on the type of antidumping proceeding. In
    Clark, the Supreme Court relied upon the rule of lenity to
    support a limiting construction of a statutory provision
    concerning detention of aliens subject to removal from the
    United States. Clark, 543 U.S. at 380–81. The Supreme
    Court applied traditional rules of statutory construction,
    and never considered Chevron deference in reaching its
    determination. See Clark, 
    543 U.S. 371
    . Here, the court
    has repeatedly held that 19 U.S.C. § 1677(35) is ambigu-
    ous and Commerce’s explanation of its interpretation
    must be reasonable. See Timken, 354 F.3d at 1342; Corus,
    395 F.3d at 1347; U.S. Steel, 621 F.3d at 1361. Thus,
    Clark is distinguishable here, where there is a conflict
    between two permissible interpretations simultaneously
    maintained.
    11 In Clark, the majority determined that a single
    statutory provision cannot be given different meanings
    when applied to different categories of aliens. Clark, 543
    U.S. at 378.
    UNION STEEL   v. US                                     19
    No rule of law precludes Commerce from interpreting
    19 U.S.C. § 1677(35) differently in different circumstances
    as long as it provides an adequate explanation. “[I]f the
    agency adequately explains the reasons for a reversal of
    policy, ‘change is not invalidating, since the whole point of
    Chevron is to leave the discretion provided by the ambigu-
    ities of a statute with the implementing agency.”’ Nat’l
    Cable & Telecomms. Ass’n v. Brand X Internet Servs., 
    545 U.S. 967
    , 981 (2005) (quoting Smiley v. Citibank (South
    Dakota), N.A., 
    517 U.S. 735
    , 742 (1996)). 12
    CONCLUSION
    For these reasons, the Court of International Trade’s
    decision is affirmed.
    AFFIRMED
    12   Somewhat similarly, this court remanded a case
    for Commerce to provide an explanation of why interpret-
    ing the term “foreign like product” could be construed to
    mean different things in different parts of the antidump-
    ing statute. SKF USA Inc. v. United States, 
    263 F.3d 1369
    , 1382–83 (Fed. Cir. 2001). Following the remand,
    this court noted that 19 U.S.C. § 1677(16) contains three
    subsections providing three alternative definitions for the
    term “foreign like product” and that there was no re-
    striction that Commerce use just one of those subsections
    per proceeding. FAG Kugelfisher Georg Shaefer AG v.
    United States. 
    332 F.3d 1370
    , 1373 (Fed. Cir. 2003). The
    court held that it was therefore reasonable for Commerce
    to apply the definition in one subsection for purposes of
    price-based calculations for normal value under 19 U.S.C.
    § 1677b(a)(1), while applying the definition in a different
    subsection for purposes of establishing constructed value
    under 19 U.S.C. § 1677b(e)(2)(A). Id. at 1373–74; see SKF,
    263 F.3d at 1382–83.
    

Document Info

Docket Number: 2012-1248, 2012-1315

Citation Numbers: 713 F.3d 1101

Judges: Lourie, Plager, Wallach

Filed Date: 4/16/2013

Precedential Status: Precedential

Modified Date: 8/6/2023

Authorities (18)

fag-kugelfischer-georg-schafer-ag-fag-italia-spa-barden-corporation , 332 F.3d 1370 ( 2003 )

Corus Staal BV v. Department of Commerce , 395 F.3d 1343 ( 2005 )

United States Steel Corp. v. United States , 621 F.3d 1351 ( 2010 )

Thyssenkrupp Acciai Speciali Terni S.P.A. v. United States , 603 F.3d 928 ( 2010 )

Dongbu Steel Co., Ltd. v. United States , 635 F.3d 1363 ( 2011 )

Skf USA Inc. v. United States , 630 F.3d 1365 ( 2011 )

International Trading Company v. United States , 281 F.3d 1268 ( 2002 )

Koyo Seiko Co., Ltd. And Koyo Corporation of U.S.A. v. The ... , 20 F.3d 1156 ( 1994 )

Sioux Honey Ass'n v. Hartford Fire Insurance , 672 F.3d 1041 ( 2012 )

Ad Hoc Shrimp Trade Action Committee v. United States , 618 F.3d 1316 ( 2010 )

skf-usa-inc-skf-france-sa-sarma-skf-gmbh-skf-industrie-spa-and , 263 F.3d 1369 ( 2001 )

the-timken-company-plaintiff-cross-v-united-states-v-koyo-seiko-co , 354 F.3d 1334 ( 2004 )

Smiley v. Citibank (South Dakota), N. A. , 116 S. Ct. 1730 ( 1996 )

Jtekt Corp. v. United States , 642 F.3d 1378 ( 2011 )

United States v. Haggar Apparel Co. , 119 S. Ct. 1392 ( 1999 )

Clark v. Martinez , 125 S. Ct. 716 ( 2005 )

National Cable & Telecommunications Assn. v. Brand X ... , 125 S. Ct. 2688 ( 2005 )

Chevron U. S. A. Inc. v. Natural Resources Defense Council, ... , 104 S. Ct. 2778 ( 1984 )

View All Authorities »