PAO Severstal v. United States , 2017 CIT 50 ( 2017 )


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  •                                         Slip Op. 17-50
    UNITED STATES COURT OF INTERNATIONAL TRADE
    PAO SEVERSTAL and SEVERSTAL
    EXPORT GMBH,
    Plaintiffs,
    v.
    UNITED STATES,
    Before: Gary S. Katzmann, Judge
    Defendant,
    Court No. 16-00172
    and
    ARCELORMITTAL USA LLC,
    AK STEEL CORPORATION,
    NUCOR CORPORATION, and
    UNITED STATES STEEL CORPORATION,
    Defendant-Intervenors.
    OPINION
    [Defendant’s Motion to Dismiss is granted. Plaintiffs’ Complaint is dismissed without
    prejudice.]
    Dated: April 25, 2017
    Daniel J. Cannistra and Benjamin Blase Caryl, Crowell & Moring LLP, of Washington, DC,
    argued for plaintiffs.
    Renee A. Burbank, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
    Department of Justice, of Washington, DC, argued for defendant. With her on the brief were
    Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director,
    and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Michael T. Gagain,
    Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of
    Commerce, of Washington, DC. Of counsel, Lydia Pardini, Attorney, Office of the Chief Counsel
    for Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, DC,
    argued for defendant.
    Brooke Ringel, Kelly Drye & Warren, LLP, of Washington, DC, argued for defendant-intervenor.
    Court No. 16-00172                                                                            Page 2
    Katzmann, Judge: If this case evokes a sense of déjà vu, it is because it presents from the
    same record the principal question posed and addressed in an opinion issued today by this court in
    ArcelorMittal v. United States, 41 CIT __, Slip Op. 17-49 (April 25, 2017) (“ArcelorMittal”):
    Does a foreign exporter and producer, having obtained a de minimis subsidy rate in an
    investigation by the U.S. Department of Commerce (“Commerce”), and not being subject to a
    countervailing duty (“CVD”) order, nonetheless have standing to challenge Commerce’s
    calculation of that subsidy rate. Put another way, where a party ultimately prevails at the
    administrative level in Commerce’s investigation, must its challenge to that proceeding fail
    because there is no case or controversy and thus no jurisdiction lies?
    This matter is before the court on defendant United States’ Rule 12(b)(1) Motion to
    Dismiss for Lack of Jurisdiction plaintiffs PAO Severstal and Severstal Export GmbH’s
    (collectively “Severstal”) action. Def.’s Mot. Dismiss for Lack of Jurisdiction, Dec. 2, 2016, ECF
    No. 35 (“Def.’s Mot.”); Pl.’s Compl., Sep. 26, 2016, ECF No. 10 (“Pl.’s Compl.”). Severstal, a
    foreign exporter and producer of cold-rolled steel flat products from Russia, challenges certain
    factual findings and legal conclusions upon which Commerce’s final determination in the CVD
    investigation of certain cold-rolled steel flat products from the Russian Federation is based.
    Countervailing Duty Investigation of Certain Cold-Rolled Steel Flat Products From the Russian
    Federation: Final Affirmative Countervailing Duty Determination and Final Negative Critical
    Circumstances Determination, 
    81 Fed. Reg. 49,935
     (Dep’t Commerce July 29, 2016) (“Final
    Determination”) and the accompanying July 20, 2016 Issues and Decision Memorandum, C–821–
    823. For the reasons set forth below, the court finds that it lacks subject matter jurisdiction to hear
    Severstal’s claim and grants defendant's motion to dismiss without prejudice.
    Court No. 16-00172                                                                           Page 3
    BACKGROUND
    The court need not detail the factual and administrative background resulting in the Final
    Determination, as it is the same as that set forth in ArcelorMittal. 1
    Severstal filed suit on August 26, 2016 and filed its complaint, containing four counts, one
    month later. Pl.’s Sum., ECF No. 1; Pl.’s Compl. Count four is essentially identical to the sole
    count in Severstal’s cross-claim in 16-cv-00168; Severstal in both is challenging Commerce’s
    determination to apply adverse facts available (“AFA”) in calculating the benefit from the tax
    deduction for exploration expenses subsidy program. Pl.’s Compl. ¶¶ 44–48. In the other three
    counts, Severstal alleges and challenges, first, Commerce’s use of the price of coal, rather than the
    price of coal mining rights, as the benchmark for its calculation of benefit under the provision of
    coal mining rights for less than adequate remuneration (“LTAR”) program; second, Commerce’s
    comparison of coal prices to a constructed coal price that does not include several costs Severstal
    allegedly incurred in obtaining and delivering coal to its steel factory, rather than a comparison of
    a constructed coal mining right price benchmark to Severstal’s coal mining rights prices; and third,
    Commerce’s alleged refusal to include most of Severstal’s coal extraction-related costs in its
    construction of a Severstal coal price used to calculate the benefit for the provision of coal mining
    rights for LTAR program. Pl.’s Compl. ¶¶ 32–43.
    1
    In ArcelorMittal, Severstal, as defendant-intervenor, challenges through cross-claim certain
    factual findings and legal conclusions made by Commerce in the Final Determination. Defendant
    United States has moved in that action to dismiss Severstal’s cross-claim, which this court grants
    in the contemporaneous opinion noted above.
    Court No. 16-00172                                                                            Page 4
    The Government moved under Rule 12(b)(1) of this Court to dismiss Severstal’s action for
    lack of jurisdiction. Def.’s Mot.; USCIT R. 12(b)(1). Severstal responded on January 9, 2017,
    and the Government replied on January 30. Pl.’s Opp’n., ECF No. 39 (“Pl.’s Opp’n”); Def.’s
    Reply, ECF No. 41 (“Def.’s Reply”). Defendant argues that Severstal, having obtained a de
    minimis subsidy rate in Commerce’s investigation, and not being subject to any CVD order, 2
    cannot show injury in fact, 3 and thus lacks standing to file suit against the defendant. Def.’s Mot.
    at 2–6.
    JURISDICTION AND STANDARD OF REVIEW
    The party seeking to invoke the Court’s jurisdiction carries the burden of establishing that
    subject matter jurisdiction lies. Nat'l Presto Indus., Inc. v. Dazey Corp., 
    107 F.3d 1576
    , 1580 (Fed.
    Cir. 1997). This burden extends to each cause of action asserted. DaimlerChrysler Corp. v. United
    States, 
    442 F.3d 1313
    , 1318–19 (Fed. Cir. 2006); see Washington Red Raspberry Com. v. United
    States, 
    11 CIT 173
    , 183–84, 
    657 F. Supp. 537
    , 545–46 (1987). “[W]hen a federal court concludes
    that it lacks subject-matter jurisdiction, the complaint must be dismissed in its entirety.” Arbaugh
    2
    On September 16, 2016, the International Trade Commission (“ITC”) determined that “imports
    of cold-rolled steel flat products from Russia that are sold in the United States at [less than fair
    value] and subsidized by the government of Russia are negligible” and terminated the
    investigations. Cold-Rolled Steel Flat Products From Brazil, India, Korea, Russia, and the United
    Kingdom, 
    81 Fed. Reg. 63,806
     (ITC Sep. 16, 2016) (final determination); Cold-Rolled Steel Flat
    Products From Brazil, India, Korea, Russia, and the United Kingdom, USITC Pub. 4637, USITC
    Inv. Nos. 701-TA-540, 542-544 and 731-TA-1283, 1285, 1287, and 1289-1290 (Sep. 2016); see
    19 U.S.C. § 1671d(b)(1). As a result, no CVD order was issued as to Russian importers of cold-
    rolled steel flat products.
    3
    Plaintiffs acknowledge in regard to all four counts: "The claims put forth below in paragraphs
    32-48 are contingent upon a finding by Commerce that reverses the negative Final Determination
    as to Severstal." Pl.’s Compl. ¶ 5 (emphasis added).
    Court No. 16-00172                                                                           Page 5
    v. Y&H Corp., 
    546 U.S. 500
    , 502 (2006), quoted in Nitek Elec., Inc. v. United States, 36 CIT
    ____, ____, 
    844 F. Supp. 2d 1298
    , 1302 (2012), aff’d, 
    806 F.3d 1376
     (Fed. Cir. 2015).
    In deciding a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction, the
    Court “accepts as true all uncontroverted factual allegations in the complaint,” Engage Learning,
    Inc. v. Salazar, 
    660 F.3d 1346
    , 1355 (Fed. Cir. 2011), cited in Nitek, 844 F. Supp. 2d at 1302, and
    draws all reasonable inferences in the plaintiff’s favor. Carl v. U.S. Sec'y of Agric., 36 CIT ____,
    ____, 
    839 F. Supp. 2d 1351
    , 1352 (2012) (citing Cedars–Sinai Med. Ctr. v. Watkins, 
    11 F.3d 1573
    ,
    1583–84 (Fed. Cir. 1993); Henke v. United States, 
    60 F.3d 795
    , 797 (Fed. Cir. 1995)).
    DISCUSSION
    Severstal submits that the Court possesses jurisdiction to entertain this action pursuant to
    
    28 U.S.C. § 1581
    (c). Pl.’s Compl. ¶ 2. Severstal also argues that it is an interested party within
    the meaning of 
    19 U.S.C. §§ 1677
    (9)(A) and 1516a(f)(3), having participated fully in the
    underlying countervailing duty investigation at issue, and thus has standing pursuant to 19 U.S.C.
    § 1516a(d) and 
    28 U.S.C. § 2636
    (c). Pl.’s Compl. ¶ 3. The Government takes issue not with
    Severstal’s status as an interested party who participated fully in the underlying proceeding, but
    rather with Severstal’s standing under the United States Constitution, specifically regarding the
    necessary presence of an injury in fact. Def.’s Mot. at 3–5; Def.’s Reply at 3–4.
    The jurisdiction of Federal Courts is limited to “Cases” and “Controversies.” U.S. Const.
    art. III, § 2, cl. 1. “A necessary component of establishing a case or controversy pursuant to Article
    III is standing.” Royal Thai Gov't v. United States, 38 CIT ____, ____, 
    978 F. Supp. 2d 1330
    ,
    1333 (2014) (citing Lujan v. Defenders of Wildlife, 
    504 U.S. 555
    , 560 (1992) (“[T]he core
    component of standing is an essential and unchanging part of the case-or-controversy requirement
    Court No. 16-00172                                                                             Page 6
    of Article III.”)). To establish standing, the plaintiff must show an “injury in fact” that is “concrete
    and particularized” as well as “actual or imminent, not conjectural or hypothetical.” Royal Thai,
    978 F. Supp. 2d at 1333 (quoting Lujan, 
    504 U.S. at 560
    ). Additionally, the plaintiff must
    demonstrate that the injury is “fairly traceable to the challenged action” and that it is “likely, as
    opposed to merely speculative, that the injury will be redressed by a favorable decision.” 
    Id.
    (quoting Lujan, 
    504 U.S. at
    560–61).
    The U.S. Court of Appeals for the Federal Circuit and this Court have held that when a
    respondent challenges an administrative proceeding in which it has prevailed, there is no case or
    controversy, and thus no jurisdiction lies. Zhanjiang Guolian Aquatic Prod. Co. v. United States,
    38 CIT ____, ____, 
    991 F. Supp. 2d 1339
    , 1342 (2014) (citing Royal Thai, 978 F. Supp. 2d. at
    1333); see Rose Bearings Ltd. v. United States, 
    14 CIT 801
    , 802–03, 
    751 F. Supp. 1545
    , 1546–47
    (1990); see also Freeport Minerals Co. v. United States, 
    758 F.2d 629
    , 634 (Fed. Cir. 1985).
    Because Commerce assigned Severstal a de minimis subsidy rate, Severstal prevailed as a
    respondent in the underlying proceeding. A de minimis subsidy rate removes a respondent from
    payment obligations under a relevant CVD order. 19 U.S.C. § 1671d(a)(3) (“In making a
    determination under this subsection, [Commerce] shall disregard any countervailable subsidy rate
    that is de minimis . . . .”); see 19 U.S.C. § 1671b(b)(4); 
    19 C.F.R. § 351.204
    (e)(1) (2016) (“The
    Secretary will exclude from an . . . order under [19 U.S.C. § 1671e] . . . any exporter or producer
    for which the Secretary determines an individual weighted-average dumping margin or individual
    net countervailable subsidy rate of zero or de minimis.”). Further, the ITC determined that imports
    of subsidized steel from Russia are negligible, resulting in the termination of the CVD
    investigation without the issuance of a CVD order. Supra n.2; see Royal Thai, 978 F. Supp. 2d at
    Court No. 16-00172                                                                           Page 7
    1333 (“The lack of a CVD order means that plaintiff is currently not suffering any actual or
    imminent injury in fact due to any alleged errors committed by Commerce.”) (citing Lujan, 
    504 U.S. at 560
    ); Zhanjiang, 991 F. Supp. 2d at 1342 (“[T]he fact that no CVD order has been issued
    means that Plaintiff is not suffering any injury due to the errors it alleges the ITC committed.”);
    19 U.S.C. § 1671d(c)(2)(B) (mandating that cash deposits be refunded and the relevant
    investigation be terminated in the event that either Commerce or the ITC makes a negative final
    injury determination).    Severstal’s disagreement with Commerce’s AFA application in the
    underlying proceeding does not overcome the reality that it has not been injured by Commerce’s
    Final Determination. “[A] prevailing party may not appeal an administrative determination merely
    because it disagrees with some of the findings or reasoning.” Royal Thai, 978 F. Supp. 2d at 1333
    (quoting Rose Bearings, 14 CIT at 803).
    Severstal contends that “[t]he specific injury that is imminent . . . is receiving an above-de
    minimis countervailing duty rate on remand and not being able to challenge the factual findings
    and legal conclusions contained in Commerce’s final determination.” Pl.’s Opp’n at 12. The court
    addresses these alleged injuries in turn.
    The possibility of receiving an above-de minimis countervailing duty rate on remand fails
    to constitute an injury in fact, as several hypothetical events would need to occur before Severstal
    would be required to post cash deposits or pay countervailing duties. A plaintiff with standing,
    such as ArcelorMittal in ArcelorMittal, would first need to succeed in obtaining remand of the
    Final Determination to Commerce. The agency would then need to calculate an above-de minimis
    countervailing duty rate for Severstal on remand. See supra n.2. This is the event that Severstal
    characterizes as an imminent injury. Even at this step, however, Severstal would not be subject to
    Court No. 16-00172                                                                         Page 8
    a CVD order, unless the ITC had also reversed its negative injury determination. This chain of
    independent decisions and hypothetical outcomes cannot be said to be imminent. “Although
    imminence is concededly a somewhat elastic concept, it cannot be stretched beyond its purpose,
    which is to ensure that the alleged injury is not too speculative for Article III purposes . . . .”
    Clapper v. Amnesty Int'l USA, 568 U.S. ____, ____, 
    133 S. Ct. 1138
    , 1147 (2013) (quoting Lujan,
    
    504 U.S. at 565, n.2
    ). Severstal’s desired outcome of a remand would not remediate any actual or
    imminent injury. See Lujan, 
    504 U.S. at 561
     (“[I]t must be likely, as opposed to merely
    speculative, that the injury will be redressed by a favorable decision.”) (citing Simon v. E. Ky.
    Welfare Rights Org., 
    426 U.S. 26
    , 41 (1976)) (internal quotation marks omitted). “[W]hen a
    plaintiff merely alleges ‘hypothetical harm,’ the court must dismiss the case.” Royal Thai, 978 F.
    Supp. 2d at 1333 (citing Asahi Seiko Co. v. United States, 35 CIT ____, ____, 
    755 F. Supp. 2d 1316
    , 1322 (2011)). Attempts by this court to reconcile Severstal’s hypothetical harm would thus
    constitute an impermissible advisory opinion. Zhanjiang, 991 F. Supp. 2d at 1343 (“[T]he United
    States Constitution does not permit courts to issue advisory opinions.”) (citing Camreta v. Greene,
    
    563 U.S. 692
    , 717 (2011)); Royal Thai, 978 F. Supp. 2d at 1333 (“[A]ny discussion by the court
    regarding such potential harm would be an impermissible advisory opinion.”) (citing Georgetown
    Steel Corp. v. United States, 
    16 CIT 1084
    , 1087–88, 
    810 F. Supp. 318
    , 322 (1992)).
    Severstal’s second alleged injury––the loss of the ability “to appeal the factual findings,
    legal conclusions, and determinations made in Commerce’s original final determination” if it does
    not bring this claim now––is likewise unavailing. Pl.’s Opp’n at 12 (emphasis in original).
    Severstal is incorrect under the statutory framework. Were Severstal to receive an above-de
    minimis rate, and ultimately be subject to a CVD order following the ITC’s reversal of its
    Court No. 16-00172                                                                             Page 9
    negligibility determination then Severstal would be injured in fact.               Per 19 U.S.C. §
    1516a(a)(2)(i)(II), Severstal could challenge this outcome by filing a summons “within thirty days
    after . . . the date of publication in the Federal Register of . . . [a] countervailing duty order based
    upon any determination in clause (i) of subparagraph (B)” of that provision. Specifically, 19
    U.S.C. § 1516a(a)(2)(B)(i) refers to “[f]inal affirmative determinations by [Commerce].”
    Severstal could therefore bring a claim challenging elements of Commerce’s final affirmative
    determination upon the publication of a CVD order to which it is subject. Such a challenge could
    target Commerce’s application of AFA to Severstal, and other relevant portions of Commerce’s
    existing Final Determination, so long as they survive Commerce’s remand and thus contribute to
    the basis of the CVD order. See Royal Thai, 978 F. Supp. 2d at 1334 (describing this statutory
    trajectory in regards to a similar procedural background). 4
    CONCLUSION
    For the foregoing reasons, Severstal’s complaint is dismissed without prejudice.
    /s/      Gary S. Katzmann
    Gary S. Katzmann, Judge
    Dated: April 25, 2017
    New York, New York
    4
    The Government acknowledges that “[a]lthough Severstal may not make its challenges now
    because it has suffered no injury in fact, Severstal may indeed challenge ‘the factual findings, legal
    conclusions, and determinations made in Commerce’s original final determination,’ Pls.
    Opposition at 12-13, if Severstal ever suffers an injury in fact from those findings, conclusions and
    determinations.” Def.’s Reply at 5.