Globe Metallurgical, Inc. v. United States , 29 Ct. Int'l Trade 867 ( 2005 )

Slip Op. 05-90
UNITED STATES COURT OF INTERNATIONAL TRADE
BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
________________________________________
GLOBE METALLURGICAL, INC. :
and SIMCALA, INC., :
:
Plaintiffs, :
:
v. :
:
UNITED STATES, :
: Consol. Court No.
Defendant, : 03-00202
:
and :
:
BRATSK ALUMINIUM SMELTER :
and RUAL TRADE LIMITED, :
:
Defendant-Intervenors. :
________________________________________:
[The United States Department of Commerce’s Final Remand Results
are remanded.]
DLA Piper Rudnick Cary Gray US LLP, (William D. Kramer and
Clifford E. Stevens, Jr.), for Globe Metallurgical, Inc. and
SIMCALA, Inc., plaintiffs.
Peter D. Keisler, Assistant Attorney General; David M. Cohen,
Director; Jeanne E. Davidson, Deputy Director; Commercial
Litigation Branch, Civil Division, United States Department of
Justice (Michael Panzera); of counsel: Jonathan J. Engler, Office
of the Chief Counsel for Import Administration, United States
Department of Commerce, for the United States, defendant.
OPINION AND ORDER
I. Standard of Review
The Court will uphold the United States Department of
Commerce’s (“Commerce”) redetermination pursuant to the Court’s
Court No. 02-00202 Page 2
remand 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) (2000). Substantial evidence is “more than a
mere scintilla. It means such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion.” Universal
Camera Corp. v. NLRB, 340 U.S. 474, 477 (1951) (quoting Consol.
Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)). Substantial
evidence “is something less than the weight of the evidence, and
the possibility of drawing two inconsistent conclusions from the
evidence does not prevent an administrative agency’s finding from
being supported by substantial evidence.” Consolo v. Fed. Mar.
Comm’n, 383 U.S. 607, 620 (1966) (citations omitted).
II. Background
The relevant facts and procedural history in this case are set
forth in the Court’s remand opinion, Globe Metallurgical, Inc. v.
United States, 28 CIT ___, 350 F. Supp. 2d 1148 (2004). Commerce
determined that market economy Russian values did not constitute
“the best available information,” and, therefore, such values were
not used to calculate normal value (“NV”). See Notice of Final
Determination of Sales at Less Than Fair Value for Silicon Metal
From the Russian Federation (“Final Determination”), 68 Fed. Reg.
6,885 (Feb. 11, 2003), as amended by Notice of Amended Final
Determination of Sales at Less Than Fair Value for Silicon Metal
Court No. 02-00202 Page 3
From the Russian Federation (“Amended Final Determination”) 68 Fed.
Reg. 12,037 (Mar. 13, 2003). In its Final Determination, Commerce
excluded the cost of recycled silicon metal fines as a factor of
production of silicon metal produced by Bratsk Aluminium Smelter
(“Bratsk”), Zao Kremny (“Kremny”) and SUAL-Kremny-Ural Ltd.
(“SKU”). See Final Determination 68 Fed. Reg. at 6,885. On
September 24, 2004, the Court issued a remand order directing
Commerce to: (1) use Russian market economy values or explain why
such values are not “the best available information;” and, (2)
explain why it excluded recycled silicon metal fines from its
factor of production cost analysis. See Globe, 28 CIT at ___, 350
F. Supp. 2d at 1161. Subsequent to the Court’s remand, Bratsk
entered a notice of voluntary dismissal on December 1, 2004, and
withdrew its challenge to Commerce’s use of values other than
Russian market economy values in calculating NV. See Stipulation
of Dismissal. Accordingly, this issue is moot.
Commerce filed its final results of redetermination pursuant
to court remand (“Final Remand Results”) on December 23, 2004.
Plaintiffs, Globe Metallurgical, Inc. and SIMCALA, Inc.
(collectively, “Globe”) filed comments to Commerce’s Final Remand
Results on January 25, 2005.1 See Pls.’ Comments Remand
1
Bratsk and Rual Trade Limited did not file a response to
Commerce’s Final Remand Results.
Court No. 02-00202 Page 4
Determination (“Globe’s Comments”). Commerce filed its response to
Globe’s Comments on March 8, 2005. See Def.’s Resp. Pls.’ Comments
(“Commerce’s Reply”). Globe filed rebuttal comments on March 25,
2005. See Reply Resp. Pls.’ Comments Remand Redetermination
(“Globe’s Reply”). Globe agrees with all aspects of Commerce’s
determinations on remand except with respect to the antidumping
duty margin calculated for Kremny.
III. Commerce Reasonably Explained its Determination to Include and
Value Recycled Silicon Metal Fines as a Factor of Production
In its Final Remand Results, Commerce determined that the
usage of silicon metal fines sized zero to five millimeters were
included in the production quantity provided by Bratsk and Kremny.
See Final Remand Results at 3. Accordingly, Commerce determined
that the usage of such fines in the production of the subject
merchandise should have been valued and included in the calculation
of NV. See id. Commerce, however, found that SKU had excluded
silicon metal fines from its factors of production because it
treated such fines as a byproduct. See id. at 11-12. In its Final
Determination, Commerce did not adjust SKU’s reported production
figure. See Remand Results at 7-8. Commerce granted SKU a
byproduct offset for the sale and reuse of silicon metal fines.
See id. at 12. Accordingly, Commerce determined that, for SKU, the
use of silicon metal fines to produce silicon metal should not be
Court No. 02-00202 Page 5
included in the calculation of NV “because it represents the reuse
of a byproduct and no costs have been allocated to SKU’s silicon
metal sized zero to five millimeters.” Id.
Commerce reviewed the record and determined that the
composition, use, and value of quartzite fines and silicon metal
fines were different and precluded the use of the former as a
surrogate value for the latter. See Final Remand Results at 8-9.
Consequently, Commerce determined that Kremny and Bratsk’s
surrogate-valued cost of manufacture of silicon metal constituted
“the best available information.” See id. at 9-10. Accordingly,
such values were used as surrogate values for Kremny and Bratsk’s
silicon metal fines sized zero to five millimeters. See id. Based
on the record evidence, Commerce found it appropriate to account
for and value Kremny’s consumption of silicon metal fines sized
zero to five millimeters during its production of silicon metal.
See id. at 10-11. As a result, Commerce recalculated Kremny’s
antidumping duty margin. See id. at 11.
Commerce found that there was substantial record evidence
indicating that Bratsk included the usage of recycled silicon metal
fines in its production figure. See id. at 12. While there was
record evidence “that Bratsk reuse[d] at least some silicon metal,
there [was] no information on its usage amount of silicon metal
sized zero to five millimeters in the production of silicon metal.”
Court No. 02-00202 Page 6
Id. at 13. Accordingly, Commerce used non-adverse facts available
because Bratsk had been cooperative and acted to the best of its
ability to provide information during the proceeding. See id. To
value recycled silicon metal fines for Bratsk, Commerce assumed
that the difference between the production and reported sales of
silicon metal sized zero to five millimeters represented the amount
of silicon metal fines reused by Bratsk. See id. at 14. Commerce
calculated a per-unit rate by dividing the quantity of silicon
metal reused by Bratsk’s total production of silicon metal. See
id. Commerce applied Bratsk’s cost of manufacture to value its
consumption of silicon metal fines sized zero to five millimeters
and recalculated the antidumping duty margin accordingly. See id.
Commerce recalculated the antidumping duty margins for Kremny
and Bratsk to 56.20 percent and 87.08 percent, respectively. See
Final Remand Results at 15. All parties agree with Commerce’s
determination to capture the cost of recycled fines in NV and with
Commerce’s recalculated antidumping margin for Bratsk.2 See
Globe’s Comments at 2. The Court finds that Commerce reasonably
explained why each producer’s surrogate-valued cost of manufacture
was the “best available information”. See Universal Camera, 340
U.S. at 477. Commerce also reasonably explained why recycled
2
No party contested the reporting of SKU’s production
quantity, therefore Commerce made no adjustments to SKU’s reported
production figure. See Final Remand Results at 7-8.
Court No. 02-00202 Page 7
silicon metal fines sized zero to five millimeters should be
included in its calculation of NV. Moreover, Commerce’s
determination is supported by substantial record evidence and in
accordance with law. Therefore, the Court affirms Commerce’s
determination to include recycled silicon metal fines as a factor
of production and its determination to use each producer’s
surrogate-valued cost of manufacture as the best available
information. Furthermore, the Court affirms Commerce’s
recalculated antidumping duty margin for Bratsk.
IV. Commerce’s Calculation of Kremny’s Antidumping Duty Margin
A. Background
In its Preliminary Determination, Commerce used adverse facts
available to determine the antidumping duty margin for Kremny’s
United States sales made through its affiliated United States
company. See Notice of Preliminary Determination of Sales at Less
Than Fair Value and Postponement of Final Determination for Silicon
Metal From the Russian Federation (“Preliminary Determination”), 67
Fed. Reg. 59,253, 59,260 (September 20, 2002). In determining
Kremny’s antidumping duty margin, Commerce based a percentage of
Kremny’s dumping margin on Bratsk’s rate. See id. In its Final
Determination and Amended Final Determination, Commerce used
Bratsk’s dumping margin of 77.51 percent and 79.42, respectively,
as adverse facts available and weight averaged these rates with the
Court No. 02-00202 Page 8
margin calculated for the remaining Kremny sales. See Final
Determination, 68 Fed. Reg. at 6,888; Amended Final Determination,
68 Fed. Reg. at 12,039. For the Final Remand Results, Commerce
recalculated the antidumping duty margin for Kremny using the 79.42
percent rate found for Bratsk in the Amended Final Determination.
See Final Remand Results.
B. Contentions of the Parties
1. Globe’s Contentions
Globe contends that in calculating Kremny’s antidumping duty
rate, Commerce should have used the corrected 87.08 percent margin
found for Bratsk in the Final Remand Results. See Globe’s
Comments. Globe asserts that Commerce correctly used the margin
calculated for Bratsk as adverse facts available and weight-
averaged this rate with the margin calculated for the remaining
Kremny sales. See id. at 4-5. Globe, however, argues that
Commerce erroneously “used the invalidated 79.42 percent rate found
for Bratsk in the Amended Final Determination” as adverse facts
available. Id. at 5. Commerce offered no explanation for its
failure to use the corrected rate for Bratsk. See id. Moreover,
the antidumping duty margin for Kremny is inaccurate because it
does not completely capture the cost of recycled fines. See id. at
7. Globe also argues that Commerce did not provide notice of its
determination to use the Bratsk rate calculated for the Amended
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Final Determination. See Globe’s Reply at 5. Commerce corrected
the antidumping margin for Bratsk in the Final Remand Results,
which substantially increased the antidumping duty margin from the
two prior determinations. See id. It did not become clear,
however, that Commerce had improperly selected the lower,
previously “invalidated” rate as adverse facts available for Kremny
until after the Final Remand Results had been published. See id.
at 4-6.
2. Commerce’s Contentions
Commerce argues that Globe failed to raise the issue of
Commerce’s reliance upon the 79.42 antidumping duty margin for
Bratsk prior to the publication of the Final Remand Results. See
Commerce’s Reply at 7. Commerce maintains that Globe “had the
opportunity and sufficient time in which to raise arguments
concerning the relevance of Bratsk’s new [adverse facts available]
margin for Kremny’s rate, but Globe failed to take advantage of
that opportunity.” Id. Commerce contends that its draft remand
results put Globe on notice that it did not intend to update
Kremny’s margin to reflect the new Bratsk rate. See id.
Accordingly, Commerce asserts that Globe failed to exhaust its
administrative remedies and that it now “seeks to circumvent the
administrative proceedings and preclude Commerce from addressing
the issue in the first instance to adjust its remand determination
Court No. 02-00202 Page 10
accordingly, if appropriate . . . .” Id. at 8. Commerce,
therefore, argues that the Court should reject Globe’s arguments
and sustain the Final Remand Results. See id. at 9.
Commerce alternatively asserts that a remand may be necessary
because it did not explain why the recalculated Bratsk antidumping
duty margin of 87.08 percent was not used in applying adverse facts
available for United States sales by Kremny. See id. Accordingly,
Commerce requests the Court to remand this case for Commerce to
provide an explanation for its determination, and, if warranted,
recalculate the antidumping margin for Kremny. See id.
C. Analysis
The Court agrees with Globe and finds that Commerce’s use of
the Bratsk antidumping duty rate calculated for the Amended Final
Determination to calculate Kremny’s antidumping duty margin for the
Final Remand Results is not in accordance with law. The Court
finds that Commerce did not use an “invalidated” rate as argued by
Globe. See Globe’s Comments at 5. Rather, Commerce used a
previously abandoned rate in lieu of a subsequently corrected rate
in its calculation of Kremny’s antidumping duty rate.
Nevertheless, “[w]hile an abandoned rate is not quite the same as
a rate invalidated by a court . . . it is very close.” Pulton Chain
Co., Inc. v. United States, 21 CIT 1290, 1293 (1997). Commerce
adjusted and redetermined the antidumping duty margin for Kremny
Court No. 02-00202 Page 11
and Bratsk to 56.20 percent and 87.08 percent, respectively. See
Final Remand Results at 15. Although Commerce calculated an 87.08
percent rate for Bratsk, Commerce based a percentage of Kremny’s
sales made to the United States on the previously abandoned rate of
79.42 percent, found in its earlier Amended Final Determination.
See Final Remand Results. Commerce, however, has failed to provide
any explanation for its departure and use of a previously abandoned
rate. and why it did not use Bratsk’s recalculated antidumping duty
margin in the Final Remand Results.
Commerce argues that the doctrine of exhaustion precludes
judicial review of Commerce’s use of the lower rate found for
Bratsk in the Amended Final Determination. See Commerce’s Resp. at
6-7. Generally, the exhaustion doctrine requires a party to
present its claims to the relevant administrative agency for the
agency’s consideration before raising these claims to the Court.
See Unemployment Compensation Comm’n of Alaska v. Aragon, 329 U.S.
143, 155 (1946) (“A reviewing court usurps the agency’s function
when it sets aside the administrative determination upon a ground
not theretofore presented and deprives the [agency] of an
opportunity to consider the matter, make its ruling, and state the
reasons for its action.”) Congress, however, has granted the Court
with discretion to determine when it is appropriate to require the
exhaustion doctrine. See China Steel Corp. v. United States, 28
Court No. 02-00202 Page 12
CIT ___, ___, 306 F. Supp. 2d 1291, 1310 (2004). The court has
recognized certain exceptions to the application of the exhaustion
doctrine. One such applicable exception arises when the respondent
is not given the opportunity to raise its objections at the
administrative level because Commerce did not address the issue
until the final determination. See Philipp Bros., Inc. v. United
States, 10 CIT 76, 83-84, 630 F. Supp. 1317, 1324 (1986); see also
Hebei Metals & Minerals Imp. & Exp. Corp. v. United States, 2004
Ct. Intl. Trade LEXIS 89. Although Commerce enjoys broad latitude
in choosing the information it relies on, its discretion is not
unlimited. See Shandong Huarong Gen. Corp. v. United States, 25
CIT 834, 838, 159 F. Supp. 2d 714, 719 (2001). Commerce must
exercise its discretion “in a manner consistent with the underlying
objective of 19 U.S.C. § 1677b(c)—to obtain the most accurate
dumping margins possible.” Id.
In the case at bar, Globe never challenged Commerce’s
determination to use the lower Bratsk rate calculated in its
earlier determination. It only became apparent, however, that
Commerce would use the lower Brastk rate when the Final Remand
Results were released. Globe commented on several errors made by
Commerce in its draft remand determination. See Globe’s Reply at
4-6. It was only in the Final Remand Results, however, that
Commerce corrected these errors, which significantly increased the
Court No. 02-00202 Page 13
antidumping duty margin for Bratsk from 79.42 percent to 87.08
percent. See Final Remand Results at 15. The Court finds that the
exhaustion doctrine is inapplicable because Globe did not have the
opportunity to contest the use of the lower rate or the
recalculation of Kremny’s antidumping duty margin until after the
Final Remand Results were published. Cf. Philipp Bros., 10 CIT at
83-84, 630 F. Supp. at 1324. To hold otherwise would be “overly
technical and unfair” to Globe. Hebei Metals, 2004 Ct. Intl. Trade
LEXIS 89, at *29.
Consequently, the Court rejects Commerce’s exhaustion argument
and declines to defer to Commerce’s methodology because its
determination is not supported by substantial evidence or in
accordance with law.
CONCLUSION AND ORDER
The Court concludes that Commerce reasonably determined to
include the cost of recycled silicon metal fines sized zero to five
millimeters in the calculation of NV for Bratsk and Kremny.
Moreover, the Court finds that Commerce’s calculation of Bratsk’s
antidumping duty margin is supported by substantial evidence and in
accordance with law. Commerce, however, failed to provide a
reasonable explanation for its use of an abandoned antidumping duty
margin, rather than the recalculated margin, in its calculation of
Court No. 02-00202 Page 14
Kremny’s antidumping duty margin. Commerce’s determination to use
the 79.42 percent antidumping duty rate for Bratsk calculated in
its Amended Final Results is not supported by substantial evidence.
Accordingly, the Court remands this case to Commerce to recalculate
the antidumping duty margin for Kremny or explain why it used the
abandoned margin for Bratsk to calculate Kremny’s antidumping duty
margin for the Final Remand Results. For the foregoing reasons, it
is hereby
ORDERED that Commerce’s determination to include recycled
silicon metal fines sized zero to five millimeters in its factors
of production cost analysis is affirmed; it is further
ORDERED that Commerce’s calculation of Bratsk’s antidumping
duty margin is affirmed; it is further
ORDERED that this case is remanded to Commerce with
instructions to: (a) recalculate Kremny’s antidumping duty margin
using the antidumping duty margin for Bratsk calculated in the
Final Remand Results or explain the use of the Bratsk margin from
the Amended Final Determination; and its is further
ORDERED that Commerce shall have ninety (90) days, until
October 27, 2005, to complete and file its remand determination;
Court No. 02-00202 Page 15
plaintiffs shall have thirty (30) days from that filing to file
comments, and Commerce and defendant-intervenors shall have twenty
(20) days after plaintiffs’ comments are filed to file any reply.
/s/ Nicholas Tsoucalas
NICHOLAS TSOUCALAS
SENIOR JUDGE
Dated: July 27, 2005
New York, New York