Nippon Steel Corp. v. United States

337 F.3d 1373, 2003 WL 21853156
CourtCourt of Appeals for the Federal Circuit
DecidedAugust 8, 2003
DocketNos. 02-1266, 02-1267
StatusPublished
Cited by265 cases

This text of 337 F.3d 1373 (Nippon Steel Corp. v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nippon Steel Corp. v. United States, 337 F.3d 1373, 2003 WL 21853156 (Fed. Cir. 2003).

Opinion

LINN, Circuit Judge.

A group of domestic steel producers (“petitioners”), including appellants Bethlehem Steel and U.S. Steel Group (collectively, “Bethlehem”), petitioned the Department of Commerce (“Commerce”) to initiate an antidumping investigation of hot-rolled flat-rolled carbon-quality steel products (“hot-rolled steel”) from Japan. The United States and Bethlehem separately appeal from a final judgment entered by the United States Court of International Trade, in which the court (1) rejected Commerce’s application of partial adverse facts available; (2) invalidated 19 [1377]*1377C.F.R. § 851.104(a); (3) ordered the use of a particular weight conversion factor; and (4) affirmed Commerce’s starting price for the hot-rolled steel sales at issue. Because Commerce’s decision to apply partial adverse facts available to the theoretical weight sales is supported by substantial evidence and is otherwise in accordance with law, we reverse the Court of International Trade’s judgment to the contrary. Because Commerce’s methodology of calculating the starting price was not in accordance with law, we reverse the Court of International Trade’s affirmance of that issue.

BACKGROUND

The underlying facts in this case are largely undisputed and are taken from the Court of International Trade’s decisions. See Nippon Steel Corp. v. United States, 118 F.Supp.2d 1366, 1369-72 (Ct. Int’l Trade 2000) (“Nippon I ”). On September 30, 1998, petitioners filed a petition with Commerce pursuant to section 732(b) of the Tariff Act of 1930, 19 U.S.C. § 1671a(b) (2000), alleging that hot-rolled steel from Japan and other countries was being dumped in the United States, injuring a domestic industry. On October 22, 1998, in response to the information presented in the petition, Commerce published its notice of initiation of the antidump-ing investigation underlying this litigation. Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From Brazil, Japan, and the Russian Federation, 63 Fed. Reg. 56,607 (Dep’t Commerce Oct. 22, 1998) (“Initiation of Antidumping Invest.”').

Commerce issued antidumping questionnaires to six Japanese steel producers identified in the petition. Because Commerce could not examine all six, it selected plaintiff-appellee Nippon Steel Corporation (“NSC”) and two other producers as respondents and advised the remaining companies that they need not respond. See Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Japan, 64 Fed.Reg. 8291, 8292 (Dep’t Commerce Feb. 19,1999) (“Preliminary Results ”).

From November 16, 1998, through January 25, 1999, Commerce received responses to initial and supplemental questionnaires. Questionnaire section B requested, among other things, figures that Commerce could use to convert sales made at actual and theoretical weights, respectively, to a common basis (“conversion factor data”). NSC, in a response dated December 21, 1998, did not provide that data, asserting instead that Commerce did not need a “uniform quantity of measure” because “all NSC quantity types are consistent within the product type.” In its January 25, 1999 response to a supplemental request, NSC stated that steel sheet sold at theoretical weight (i.e., estimated weight, based upon dimensions) “are never actually weighed” and, thus, NSC had “no way of calculating the requested theoretical-to-actual weight conversion factor.” NSC later admitted that, contrary to its initial and supplemental responses, “the actual weight can be calculated.”

NSC timely reported its gross unit prices for U.S. sales in dollars. It also reported net prices in yen for each sale, which NSC and its customers derived by discounting the invoiced dollar amount by the standard discount rate, then converting to yen at the exchange rate applicable on the ninth day after shipment. NSC’s invoices reflect both the gross dollar price and the net yen price. Commerce verified that NSC received payments in yen, and [1378]*1378that NSC internally recorded the accounts receivable in yen.

On February 19, 1999, Commerce published its preliminary dumping determination. Preliminary Results, 64 Fed.Reg. at 8291. Among other findings, Commerce preliminarily assigned an adverse (highest calculated) margin to sales made by NSC upon a theoretical weight basis because “NSC did not provide conversion factors for these U.S. sales upon [Commerce’s] request....” Id. at 8298. Three days later, on February 22, 1999, NSC submitted a theoretical-to-actual weight conversion factor with no explanation for its lateness. On March 2, 1999, NSC submitted pre-verification changes and raw backup data supporting a corrected conversion factor. NSC stated that its prior “misstatement” that actual weights were unavailable was “based on a factual misunderstanding on the part of the NSC staff responsible for the preparation of NSC’s responses in the instant investigation.” Because NSC had not timely provided weight conversion data, Commerce informed NSC at verification that it would not accept or verify the conversion factor or supporting data. See Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From Japan, 64 Fed.Reg. 24,329, 24,361 (Dep’t Commerce May 6, 1999) (“Final Results ”).

In its May 6, 1999 final determination, Commerce reached a number of conclusions, two of which are pertinent to this appeal. First, Commerce used the yen value listed on NSC’s invoices as the starting point for determining NSC’s U.S. prices, upon the ground that the yen figure was “the value which is invoiced and paid by NSC’s customers.” Id. at 24,345. Commerce converted this value to dollars at the exchange rate effective on the shipment date. See id. Second, Commerce confirmed its rejection of NSC’s conversion factor data and assigned a margin to the affected sales based upon facts available. See id. at 24,360-61. Finding that NSC had failed to act to the best of its ability with respect to the conversion factor data because NSC could have provided it when originally requested, Commerce drew an adverse inference in assigning that margin. See id. at 24,362.

Bethlehem and NSC timely filed actions before the Court of International Trade contesting Commerce’s final determination pursuant to 19 U.S.C. § 1516a(a)(2). The Court of International Trade remanded the case to Commerce three times before entering final judgment. See Nippon Steel Corp. v. United States, 118 F.Supp.2d 1366, (Ct. Int’l Trade 2000) (“Nippon I ”); Nippon Steel Corp. v. United States, 146 F.Supp.2d 835 (Ct. Int’l Trade 2001) (“Nippon II”); Nippon Steel Corp. v. United States, No. 01-122 (Ct. Int’l Trade Oct. 12, 2001) (“Nippon III”); Nippon Steel Corp. v. United States, No. 01-152 (Ct. Int’l Trade Dec. 27, 2001) (“Nippon IV”). In Nippon I, the court vacated Commerce’s decision to use adverse facts available against NSC and remanded the matter to determine whether the failure to timely produce the conversion factor data was “an excusable inadvertence on NSC’s part or a demonstration of a lack of due regard for its responsibilities in the investigation.” 118 F.Supp.2d at 1378-79. The court also affirmed Commerce’s use of the invoiced yen price as the starting price in its export price calculations. Id. at 1380-81. In Nippon II,

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