Slip Op. 03 - 126



## UNITED STATES COURT OF INTERNATIONAL TRADE

________________________________________________ : ALL EGHENY LUDL

UM CORPORATION, : AK STEEL CORPORATIO N, NORTH AMERICAN : STAINL ESS, BUTLER ARMCO I NDEPENDENT : UNION, Z

ANESVIL

LE ARMCO I

NDEPENDENT : ORGANI ZATI ON, and U

NITE D STEEL WORKERS : OF AMERICA, AFL -CIO/CLC, : : Plaintiff s, : Before: MUS GRAVE, JUDGE

: v. : Court No. 01-01091 : UNI TED STATE S, : : Defend ant, : and : : ALZ, N.V., : : Defendant-Inte

rvenor. : ________________________________________________: [Plaintiffs brought this action challenging (1) Commerce’s decision to allow defendant-intervenor to remove its business proprietary information from the record after it decided not to par

ticipate in the administrative review in questio

n and (2)Commerce ’s method of calc ulating the adve rse facts availab le du mpi ng margin which it subsequently assigned to defendant-intervenor. Held: Commerce’s interpretation of 19 U.S.C. § 1677f to permit a party to withdra w its proprietary information during the course o f the re view is reasonable and in accord with the ag ency’s pr actice. Furthermore, Commerce’s decision not to use the public versions of defenda nt-interv enor’s proprietary

submissions in calculating the adverse facts available ma rgin because the numbers contained therein were “range d” plus or minus 10 percent, and were thus inaccura te and unreliable, was supported by substantial evide nce and in accordance with law. The refore, plaintiffs’ Motion for Judgment Upon the Agency Record is denied.] Decided: September 29, 2003Court No. 01-01091 Page 2

Collier Shannon Sc ott, PLLC (

David A. H

artquist, David C. Sm ith, Jr. and Adam H. Gordon ) for Plain tiffs. Peter D. Keisler , A ss is ta nt At to rn ey General, D avid M. Cohen , Director, Patricia M. McCarthy , Assistant Director, Commercial Litiga tion Branch, Civil Division, U.S. Department of Justice ( Ada E. Bosque ), and Office of Chief Counsel for I mport Administration, U.S. Department of Commerce (

Elizabeth Doyle ), of cou

nsel, for defenda nt. Shearman & Sterling

LLP ( Thomas B. Wilner, Jeffery M. Winton and Christopher M. Ryan ) for def endant- interve

nors.

OPINION

This action arises from the first administrative review of the antidumping order on stainle ss steel plate in c oils from B elgium f or the pe riod fro m Novembe

r 4, 1998 th

rough A pril 30, 2000. The United States Department of Commerce, International Trade Administra tion, (“Co mmerce” ) initi ate d this review on July 7, 2000 upon the req ue st of members of the domestic steel industry including plaintiffs Allegheny

Ludlum Corp., AK Steel Corp., North American Stainless, Bute r A r mco Independent

Union, Zanesville Armco I ndependent Union, and the United Steelworkers of America , AFL -CIO/CL C (coll ectively, “A llegheny ”) and defendant-intervenor the B elgian steel company ALZ, N.V. a

nd its affiliated U.S. importer, TrefilARBED, I nc. (collectively , “ALZ” ). On August 1 4, Septemb er 5, and Septemb er

15, 2000 ALZ submitted both public and p roprietar

y responses to Commerce’s antidumping questionnaire and consente d to the release of proprietary

informat ion pursua

nt to an administrative protective order (“APO”). The n, on October 5, 2000, ALZ made

a timely request for withdrawal from the administrative review pursuant to 19 C.F.R. § 351.213(d) and also requested that all copies of its questionnaire responses be returned or destroyed. Allegheny

objected, but on October 27, 2000 Commerce gra nted ALZ’s re q uest.Court No. 01-01091 Page 3

Allegheney

request ed that Com

merce r econside r its decision, but

on December 19, 2000 Commerce issued an internal decision memorandum affirming the decision to remove and destroy ALZ’s information. Com mer ce also required Allegheny to destroy its copies of AL Z’s proprietary information and any a

nalysis of it. Alleghe

ny then sought a

temporary

restrainingorder a

gainst t his. The court ruled that Commerce could withdraw AL Z’s proprietary

information from the record, but instead of destroying

these documents, the cou rt orde red Allegheny

to return its copies of the proprietary

information to Commerce where it was to be placed under seal pending

the completion of the administrative review and any legal action which might follow. Afte r ALZ’s propr

ietary informa

tion was removed from the record, Commerce pro ceede d with the administrative review and issued Stainless S teel Plate in Coils from Belgium; Prelimina ry Results of Antidumping Duty Administrative Review , 66 Fed. Reg. 11559 (Feb. 26, 2001), inwhich it determined that AL

Z had f ailed to c ooperat

e to the be st of its ability

since it r efused t o particip ate in the re view. As a

result, Co mmerce c alculate d ALZ ’s dumping margin using tot al adverse facts available, assigning it the highest rate ca lculated from the petition, 16 percent. Commerce invited Allegheny

to submit “public and probative information” for use in calculating thefin al r esu lt s. In response , Allegheny

argued that Commerce should assign AL Z a 38.90 percent margin usin g informa tion from the public version of ALZ ’s proprietary questionnaire responses. Commerc e declined to use the information submitted by Alleg heny and instead upda

ted the constructed value amount from the petition calculation using publically available information

from ALZ’s 1998, 1999, and 2000 financial st ate men ts . Ba sed on t hi s, C om mer ce c alc ul ate d a 2 4.4 3 pe rce nt mar gin for ALZ in Stainless

Steel Plate in Coils from Belgium; Final Results of Antidumping Duty Administrative Review , 66 Fed. Reg. 56272 (Nov. 7, 2001) (“ Final Resu lts ”).Court No. 01-01091 Page 4

There are three issues raised by Allegheny

in this action. First, whether Commerce was correct in allowing ALZ

to revoke its consent to the disclosure and use of the proprietary information it had placed on the admini st rative record. Second, if the Court finds that Commerce was c orrect inallowing

ALZ to revoke

its conse

nt, wheth er it was

reasona ble for C ommerce to use a “constructed

value to price” me

thodolog y to calcula te AL Z’s tota l adve rse facts available rate. Fi na ll y, if the Court

finds this methodology rea sonable, whether Commerce should have updated the U.S. price side of the calculation (not just the constructed value side) in order to make them methodolo gicall

y comparable and consistent. For the reasons whic h follow, the Court holds that Commerce acted r

easonab ly in

permittin

g ALZ to withdraw its proprietary information from the administrative record and also holds t hat Commer ce’s method of ca

lculating the adve rse facts availab le rate for ALZ

is supported by substantial evidence and in accordance with law. Therefore, Allegheny ’s Motion for Judgment Upon the Agency Record is denied.

Standard of Review The Courtshall upho ld Commerc e’s dete rmination unless it is

“unsupported by substantial evidence on the record, or otherwise not in accordance with the law.” 19 U.S.C. § 1516a(b)(1)(B)(i). Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequa te to support a conclusion.” Matsushita Elec. Indus. Co. v. United States , 750 F.2d 927, 933 (Fed. Cir. 1984) (quot ing Consolidated Edison Co. v. NLRB , 305 U.S. 197, 229 (1938), and Universa l Camera Corp. v. NLRB , 340 U.S. 474, 477 (1951)). This standard requires “something less than the weig ht of the evidence, and the possibility of dr awing two inconsistent conclusions from the evidence does notprevent an administrative agen cy ’s finding from being supported by substantial evidence.”Court No. 01-01091 Page 5

Consolo v. Fede ral Mar itime Comm’n , 383 U.S. 607, 620 (1966). In reviewing whether Commerce’s interpretation of the antidumpi ng statutes is in accordance with the law, the Court

con siders “whether Commerce has directly spoken to the precise question at issue,” and if not , whether the agency ’s interpretation is reasonable. Pesquera Mares Australes Ltda. v. United States , 24 CIT 443, 444 (2 000) ( quot ing Chevron U.S.A. v. Natural Resources Defense Council , 467 U.S. 837, 842 (1984).

Discussion Regarding

the first issue, Allegheny

ar gues that Commerce’s interpre tation pe rmitting a party to revoke i

ts consen t to the disc losure a

nd use of i

t s pr oprietary infor

mation is contrary to other regulations and APO pr

actice , and is the

refore impermiss ible. Mem. of La w in Supp. of

Pl.s’ Mot. for J. Upon the Agency

R. (“Pl.s’ Br.”) at

13. Specifically, Alleg

heny cites 19 C.F.R. § 351.306(b) which provides that an authorized applica nt may retain p roprieta

ry informat ion subject to the APO and may plac e that information on the record in subsequent administrativereviews if it is relevant to an issue in the later review. Id . Allegheny states that in practice Commerce normally per mit s authorized

parties t o use business propr

ieta ry in formation in the two consecutive administrative reviews following the review in which theinformationwas obtained. Id . 13-1 4 (cit ing Antidumping and Countervailing Duty Proceedings: Administrative P rotect ive Order Procedures; Procedures for Imposing Sanctions for Violations of a Protective Order , 63 Fed. Reg. 24,391, 24,398 (May 4, 1998)). Thus Allegheny

concludes that it was entitled to retain ALZ’ s information not only for the review a t issue, bu

t also for two subse quent re

views. Allegheny

likens the

facts of the pres ent situat

ion to those

in Notice of Final DeterminationCourt No. 01-01091 Page 6

of Sales at Less Than F

air Value: Live Cattle from Canada , 64 Fed. Reg. 56739 (Oct. 21, 1999) (“ Live Cattle ”), whe

re Commerce de nied a re quest by one of the

responde nts to withd

raw its proprietary

submissions

on the g round th a t this would allow the respondent to manipulate the administrative process and prevent an accurate determination of antidumping ra tes. In Live Cattle Commerce limit ed its investigation to the six largest Canadian cattle producers bec ause the total number of producers was “overwhelming .” Id . at 56742. On

the day Commerce

was sche duled to i ssue its preliminary determination, one of the six producers, Schaus, submitted information that “substan tially altered its reported costs.” Id . Commerc e did not ha ve timeto incorporate this new information in calculating the preliminary res ults, bu t noted that it would likely result in a higher margin. Id . Commerce subsequently c onfirmed that the newly submitted data

increased Schaus’s dumping margin from 5.43 percent to 15.69 percent. Id . Schaus then notified Commerce that it “had decided to decline verification and withdrew all questionnaire re sponses from the record of the investigation.” Id . Commerce denied Schaus’s request to withdraw its information and amended its prelimina

ry determination, ra

ising Schaus’s an

tidumping

rate to 15.69 percent

and rais ing the “ all others” rate from 4.73 percent to 5.57 percent.” Id . at 56743. In the present case , Allegheny alleges that ALZ is similarly

manipulating the process to receive a lowe r rate than

it would have received had it cooperated with Commerce during the re view. Pl.s’ Br. at 19-20. Commerce asserts t

hat the pl ain mean

ing of Se ction 777 o f th e Tari ff Act of 1930, as amended, 19 U.S.C. § 1677f, supports an inference that a party ’s consent to the release of proprietary inform ation is revocable at any time prior to the conclusion of the proceeding. Def .’s Mem . I n Opp’n to Pl.s’ Mot. For J. Up on the Ag ency R. (“Def .’s Br. ”) at 13. Section 16 77f provi des in relevant part that “information submitted to the administering authority or the Commission whichCourt No. 01-01091 Page 7

is designated as proprietary by the person submitting the infor mation shall not be disclosed to any person without the consent of the pe rson submi

tting the informat ion.” 19 U .S.C. § 1677f (e mphasis added). Commerce argues that “[t]he plain meani ng of th e word ‘consent’ sugge sts that it can be withdrawn.” Def.’s Br. at 14. Mor eover, C ommerce

notes tha t § 1677f is

a limited exception to the Trade Secrets

Act, 18 U.S.C. § 1905, which gener ally prohibits a

n agen cy from disc losing bu siness proprietary

information. Id. at 12. I n respons e to Alleg

heny ’s asser

ti o n that Commerce’s inter p retation is contrary to APO pra ctice, Commerce notes that “the APO is not a source of independent

authority,” but “is a produc t of 19 U.S.C. § 1677f” and must be interpreted in light of the consent requirement

of that statute. Id . at

16. Commerce concludes that its established practice

-- to allow a party to withdra w consent and remove the party ’s business proprietary information from the record and requ ire othe r partie s to the APO to r

eturn or destroy such info rmation - - is at lea st a reasonable interpretation of the statute. Id . at 11-12. Commerce also argues that the present case is distinguishable f

rom Li ve Cattle because

it concerns an administrative review rather than a less than fair value investigation, and the removal of ALZ’s informa

tion did not have an effect on the “all others” rate. Def.’s Br. a t 17 (citing Commerce’s Issues and Decisions Memorandum (O ct. 24, 2001) , Publ ic R. Doc. 52, at 13). Commerce states tha

t Live Cattle is the “sole exception to [its] long-standing practice of removing proprietary

data from the record upon the withdr

awal of c onsent”

and was a “unique situation” which “did not estab lish ‘pre cedent’ for the agency .” Id . (citing Commerce’s Memorandum regarding the Return or Destruction of ALZ , N.V. (“ALZ” ) Questionnaire Response s and (De c. 19, 200 0), Public R. Doc. 36, and Commerce’s Issues and De cisions Memorandum (Oct. 24, 2001), Public R. Doc. 52).Court No. 01-01091 Page 8

The Court find s that Comme rce’ s interpretation of 19 U.S.C. § 1677f is reasonable. The Courtagrees that the “consent” r equirement in 19 U.S.C. § 1677f suggests that release of proprietary information is voluntary, and there fore may be revoked. Furthermore, the Court finds Commerce’s reasoni ng in its Live Cattle determination noteworthy. The Department must balance any potential negative impac t tha t refusingto allow a respondent to withdraw information may have on its ab il it y to ob ta in bu si ne ss pr op ri et ar y i n formation in future procee dings, against any negative impa ct on the integrity of the proceeding

i f wit hdrawal is permitted, and determine where the public inte

rest lies

. The Department does not have s ubpoe na power. The submission of inform ation i s voluntary. To administer the an tidumping law, the Department depends heavily upon t h e willingn ess of the parties to pr ov ide extensive business proprietary information. As a result, there is a public interest in preserving the trust of companies subject to its proceedings that such information will have limited

use and w

ill remain large ly within the control of the companies submitting

informa tion. Howeve

r, once a

party voluntar ily submits business propr i etary infor mation in an antidumping procee ding, the submitting

party relinquishes some control over the information to the Department. F or exa mple, after the Department issues a final determination, a submitting party may notwithdraw its proprietary information. Once the record of a proceeding

is closed, no information may be added to, or withdrawn from the administrative case record. Equally compelling is the public’s interest in the agency enforcing the antid umping la

w and pre serving

the inte gr it y o f its procee dings. While there is no statutory provision expressly dealing with the withdrawal of business propriet ary in formation once it has been submitted, the courts have recognized “the inhere nt power of an administrative agenc

y to protect the integ rity of its own proceedings.” Alberta G

as Chemic als, Ltd. v. Celanese Corp. , 650 F.2d 9, 12 [(2d Cir. 19 81 )] . T hu s t he ag en cy h as th e d is cr et io n t o d en y a respondent’s request to withdraw information whereit is necessary to preserve the fundamental integrity of the process and the remedial purpose of the law.Court No. 01-01091 Page 9

Inpractice, the Department has allow ed submitti

ng par ties to withdrawtheir

bu siness proprietary

submissions from the administrative record. [citations omitted] In suc h ca ses, the Department

bases the company ’s margin on facts available using a n adverse infe renc e where

warran ted. I t is the De

partmen t’s ability to use adverse

facts a vailable th a t insures that a company w ill not benefit by a refusa l to participate in a proceeding. [footnote omitted] Becau se investigated compani es no rmally accoun t for subs tantially all exports to the UnitedSt ates, the elimination of the noncooperative company fr

om the “all othe rs” r ate in tha t situation

is likely to be of ma

rginal signific a nce. Thu s, the adv erse fa cts availab le rule nor

mally enables the Depa rtment to p ermit

withdrawal of proprietary

informat i o n while protecting the integrity of the process. Inthe pres ent case , howeve r, the ad verse f acts ava ilable ru le cannot serve that function. Substantially all future exports of live cattle, which wil l be subje ct to the “ all other s” rate if an antidumping duty order is issued, would i napprop riately benefit from Scha

us’ refusal to participate. Li ve Cattle , 64 Fed. Reg. at 56743. As the quoted text demonstrates, Live Catt le was a uniqu e situation where the use of adverse facts a vailable could not protect th e integ rity of the pr oceedin gs. Alth ough Allegheny

challenges the particular adve rse facts available margin Commerce applied to ALZ, it does not

argue that t he integrity

of this review cannot be preserved throug h the use of adverse fac ts ava il abl e. S in ce A LZ is the only responde nt in this revie w and the “all othe rs” rate will notbe affec ted by i

ts withdra

wal, ther e is no log ical rea son why an adve rse facts availa

ble rate cannot serve Commerce’s purposes. Thus the Court conclude s that Co mmerce’ s decisio n is both reasonable and in accord with the ag ency’s pr actice. Turning to the second

issue, Allegheny

argues that Commerce erred in determining AL Z’s adverse facts a vailable dumpin g margin by

recalculating a prior marg in, which was determined throu gh a comparison of constructed value to U.S. price, whe n it could hav e used the publicCourt No. 01-01091 Page 10

information submitted by AL Z to make a comparison of Belgian price to U.S. price. Pl.s’ Br. at 22-23. Allegheny

notes that, pu rsuant to Section 773(a) of the Tariff Act of 1930, 19 U.S.C. § 1677b(a)(1)(B), a compar ison of hom e market pric e to U.S. price is preferred over a c onstructed value to U.S. price comparison. Id . at 27. Allegheny also argues that precedent is found in Smith Co rona Corp. v. United States , 16 CI T 562, 796 F . Supp. 1532(1992), w here the court pe rmitt e d Commerce to use the public version of proprietary

data, which had been withdrawn, to calculate a dumping margin f

or the re spondent. Commerce argue s that the public inf ormation s

ubmitted by

ALZ in the pre sent act

ion is inheren tly unreliable because, in accordanc e with 19 C.F.R. § 351.304(c)(1), the numbers contained inthe public versions of

proprietary

documents are “ranged”

plus or minus 10 percent by the party submitting the information. Def.’s Br. at 19. Theref ore this in formation cannot b e used as the basis for an a ccurat e “price-to-price” comparison. Id. Commerce contends that Smith Corona does not support the use of ranged data, and argues that the decision merely upholds Commerce’s practice of updating informationfrom the original petition with public information submitted by the respondent to calcu late the a ntidumping margin. Id. at 20. I n the pre sent cas e, Commer ce arg ues that it similarly took the pe

tition rat e and upd

ated it usi ng AL Z’s pub lic finan

cial stat ements, wh ich it found to be less uncertain than the ranged da ta. Id . at 19-20. The Court agrees with

Commerce. As an initial matter, regarding the precedent established by Smith Corona , the issue in that case was whether the respondent re tained control over both the pr op ri et ar y and

the public versions of its information, so that the public version could not be used when the proprietary

version had been withdrawn. See 802 F. Supp. at 468. There is no indication that the accuracy

of the public data was raised as an issue. Thus Smith Corona is inappos ite to theCourt No. 01-01091 Page 11

1 Allegheny

also argues that it is unreasonable for Commerce to assign a 24.43 percent margin to ALZ as adv erse facts available when an a nalysis Alleghe

ny perfor med on ALZ’s proprietary

data show ed that AL

Z’s mar gin of dumping was “in excess of 29 percent.” Pl.s’ Br . at 25. Commerce rejected the use of this information on the ground that it was impossible to determine the accuracy

of Allegh eny ’s calc

ulations si

nce the u nderly ing doc uments were no longer part of the record. See Commerce’s Memorandum regarding the Returnor Destruction of ALZ , N.V. (“ALZ ”) Questionnaire Responses and (Dec. 19, 2000), Public R. Doc. 3 6, at 4-5; Commerce’s Issues and Decisions Memoran

dum (Oct. 24, 2001) , Public R. D oc. 52, a t 10-11. Sin

ce the Co urt has upheld Commerce’s decision to remove ALZ ’s proprietary information from the record, there is n othing in the administrative record to support Allegheny ’s allega tion that A

LZ ’s actua

l margin was “in excess of 29 percent.” issue presently bef

ore the Court. Commerce is considered to be “in the best position

. . . to select an adverse facts rate tha t will create the proper deterre nt to ensure that respondents cooper ate w ith its inve stigations and to

ensure a rea sonab le mar gin.” D ef.’s B r. at 1 9 (cit ing F.lli De Ce cco di Fil ippo Fara S

. Martin o S.p.A. v. United States , 216 F.3d 1027 , 1032 (Fed. Cir. 2000)). Nevertheless, its discretion is not without bounds . “An adve rse facts available rate must be ‘a r easonably a

ccurate estimate of respondent’s actual rate, albeit with some built-in increase inten ded as a d eterrent to noncompliance.’” Id . (quo ting De Cecco , 216 F.3d at 1032). Inthis action, it is undisputed that the d ata inthe public versions of ALZ ’s proprietary questionnaire responses were rang ed, and at oral argument coun sel for defendant-intervenors demonstrated the hig h degree of variation in margins that can result depending on theextent to which the numbers used in the calculation are adjusted up

or down. See Oral Argument Tr. at 37-39. Since these da ta were, by

design, inaccurate, the Court holds that Commerce’s decision not to use them in calculating an adverse facts available marg in for ALZ is supported by

substantial evidence and in accordance w ith law. 1 As to the thir

d issue, A lleghe

ny a rgues t hat if the Court sustains Commerce’s use of updatedCourt No. 01-01091 Page 12

information from the petition to calculate the constructed value, the Cour t should a lso require Commerce to update the net U.S. price to which the const ructed v alue is compared. Pl.s’ Br. at 32- 33. As this would require Commerce to use the ranged public ve rsions of ALZ’s propr

ietary data , which are inaccurate, to update the U .S. price, the Court holds that this would be unlawful.

Conclusion For the fore going

reasons , Alleg

heny ’s Motion f

or Judgme

nt Upon th e Age ncy

Record is denied and the Final Resu lts are sustained.

_______________________________________ R. KENTON MUSGRAVE, JUDGE Dated: September 29, 2003 New York, New York