Bethlehem Steel Corp. v. United States

159 F. Supp. 2d 730, 25 Ct. Int'l Trade 895, 25 C.I.T. 895, 23 I.T.R.D. (BNA) 1902, 2001 Ct. Intl. Trade LEXIS 96
United States Court of International Trade·Decided August 3, 2001·No. Slip Op. 01-93; Court 99-08-00525·Published·Cited by 8 cases

Opinion

OPINION

RIDGWAY, Judge.

[Determination of U.S. Department of Commerce’s International Trade Administration on countervailing duty suspension agreement remanded for action consistent with this opinion.]

This action challenges a July 1999 agreement between the U.S. Department of Commerce (“Commerce”) and the Government of Brazil, suspending at the eleventh hour the investigation into alleged eountervailable subsidies received by three Brazilian steel exporters (“Brazilian Exporters”) 1 from the Brazilian Government. See Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From Brazil, 64 Fed. Reg. 38,797 (Dept. Commerce 1999) (suspension of countervailing duty investigation and entry of suspension agreement) (Public Administrative Record Document (“P.R. Doc.”) No. 173) (“Suspension Determination” or “Suspension Agreement” or “Agreement”). 2 That investigation was initiated at the behest of, among others, the plaintiff domestic steel producers here (“Domestic Producers”). 3 See Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From Brazil, 63 Fed. Reg. 56,623 (Dep’t Commerce 1998) (initiation of countervailing duty investigation) (P.R. Doc. No. 33).

As the Domestic Producers have observed, a suspension agreement is essentially a unique form of settlement agreement: a settlement agreement to which the complainant — that is, the domestic in *732 dustry — is not a signatory. Tr. at 5; 4 see also 125 Cong. Rec. 20,168 (1979). 5 While Congress has authorized Commerce to enter into suspension agreements, Congress has emphasized the limited circumstances in which such agreements are appropriate, and has established rigorous procedural safeguards to ensure that they are not abused to the detriment of domestic interests. 6

The law on suspension agreements requires, among other things, that Commerce afford the domestic industry the opportunity to review and comment on any proposed agreement. 19 U.S.C. § 1671c(e) (1994). The Domestic Producers here argue that “there is no indication that anyone at the Department read [their comments]. Indeed, there is substantial evidence that they did not.” See Plaintiffs’ Reply Brief in Support of Motion for Judgment Under Rule 56.2 (“Reply Memo”) at 35. The Domestic Producers further assert that, .under the facts of this case, Commerce cannot make the substantive determinations required to justify the Suspension Agreement. Id. passim.

Pending before the Court is Plaintiffs’ Motion for Judgment Upon the Agency Record (filed under USCIT Rule 56.2), in which the Domestic Producers seek an order directing Commerce to terminate the Suspension Agreement and to issue a countervailing duty order on the subject merchandise. Plaintiffs’ motion is opposed by Defendant, the United States (“the Government”), as well as the Brazilian Exporters, who argue that Commerce’s determination to suspend the countervailing duty investigation should be sustained in all respects. 7

Plaintiffs’ motion is granted in part. Whether or not Commerce read the comments filed by the Domestic Producers and other petitioners, the record indicates that those comments were not given adequate consideration. Accordingly, for the reasons discussed more fully below, this case is remanded to the Department of Commerce to enable it to comply with the applicable notice, comment and consultation requirements of the statute, and to reconsider its determination in light of all comments and consultation. 8

*733 I. Background,

A. The Suspension Agreement Statute

The statutory provisions authorizing suspension agreements in countervailing duty cases were added to the Tariff Act of 1930 as part of the Trade Agreements Act of 1979 (the “Act”). Prior to the Act, the Secretary of the Treasury — who was then responsible for implementing the anti-dumping and countervailing duty laws— had the authority to waive the imposition of countervailing duties after an investigation was concluded, where the Secretary found that “adequate steps” had been taken to reduce substantially or eliminate the adverse effect of a “bounty or grant.” S. Rep. No. 96-249 at 50-51 (1979), reprinted in 1979 U.S.C.C.A.N. 381 at 436-37. Domestic industries generally were highly critical of the Secretary’s exercise of waiver authority. See, e.g., 125 Cong. Rec. 20,161-62 (1979) (Memorandum of Ad Hoc Subsidies Coalition asserting, in relevant part, “5. Treasury Has Stretched the Authority of the Trade Act of 1974 With Regard to the Granting of Waivers”). 9

The suspension agreement provisions of the Act were adopted to impose “strict limits on discontinuing or suspending investigations pursuant to deals with foreign governments or producers.” 125 Cong. Rec. 20,163 (1979). The provisions on suspension of countervailing duty investigations effected “a major change in ... [the then-existing] law,” eliminating waiver authority and instead “authorizing the suspension of investigations based on agreements with the exporters or the government of the country in which the subsidy practice is alleged to occur.” H. Rep. No. 96-317 (1979) at 53.

In authorizing the use of suspension agreements in appropriate countervailing duty cases, Congress recognized their “importance ... to both importers and domestic industry as a means of achieving the remedial purposes of the law in as short a time as possible and with a minimum expenditure of resources by all parties involved.” H. Rep. No. 96-317 at 53. Accord, S. Rep. No. 96-249 at 54, 1979 U.S.C.C.A.N. at 440 (suspension agreements “permit rapid and pragmatic resolutions of countervailing duty cases”). 10

But Congress was equally mindful of the potential for abuse of suspension agreements. To ensure that such agreements are not entered into to the disadvantage of a petitioning domestic industry (for foreign policy or other political reasons), the statute is replete with stringent requirements that must be met before an agreement can be concluded. Congress emphasized that “the authority to suspend *734 investigations [is to] be exercised within the carefully circumscribed limits” set forth in the law. H. Rep. No. 96-317 at 53-54; see also S. Rep. No. 96-249 at 54, 1979 U.S.C.C.A.N. at 440 (to ensure that suspension agreements are used only in those cases where they “serve[ ] the interest of the public and the domestic industry affected,” agency authority to suspend investigations is “narrowly circumscribed”); 125 Cong. Rec.

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Bethlehem Steel Corp. v. United States, 159 F. Supp. 2d 730, 25 Ct. Int'l Trade 895, 25 C.I.T. 895, 23 I.T.R.D. (BNA) 1902, 2001 Ct. Intl. Trade LEXIS 96 (cit 2001).

159 F. Supp. 2d 730 (Bethlehem Steel Corp. v. United States) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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