Slip Op. 04-13

UNITED STATES COURT OF I NTERNATIONAL

TRADE

_______________________________________________ : 

### B ETH LE HEM 

### S TEEL 

### C ORPORATION , 

### U

. 

### S

. 

### S TEEL 

### G ROUP , 

### A U

NIT OF 

### USX C ORPORATION , 

### I SPAT : 

### I NLAND 

### I NC ., 

### LTV S TEEL 

### C OMPANY , 

### I NC

. and 

### N ATION AL 

### S TEEL 

### C ORPORATION , : Plaintiff s, :

v. : 

### U NITED 

### S TATES , : Court No. 99-08-00525 Defendant, : and : 

### U SINAS 

### S IDERÚRGICAS DE 

### M INAS 

### G ERAIS S 

### / A , : 

### C OMPANHIA 

### S IDERÚRGICA 

### P AULISTA and 

### C OMPANHIA 

### S IDERÚRGICA 

### N ACIONAL , : Defenda nt-Inter

venors . :

_______________________________________________ [U.S. Department o f Commerce’s Amended Fi nal Remand Determination reaffirming countervai ling duty suspension agr

eement remanded again for further action consistent with opinion.]

Decided: February

17, 2004 Skadden, Ar

ps , S lat e, M eag her & Fl om LLP ( Robert E. Lighthizer , John J. Mangan , and Jeffrey D. Gerr ish ) and Dew ey Bal lan ti ne LLP ( A lan Wm. Wolff and Michael

H. Stein ), for Plaintiffs

. Peter D. Keisler , Assistan

t Attorne y G eneral ; David M. Cohen , D irector, Commercial Liti gation Branch, Civil Division, U.S. Department of Justice ( Lucius B. L au ); Linda S. Chang , Senior Attorney, Off

ice of the Chief Counsel for Import Administration, U.S. Depa rtment of Commerce , Of Counse l; for De fendant

.Court No. 99- 08-00525 Pag e 2

1 John Bartlett, Familiar Quotations 754 (Justin Kaplan ed., 16 th ed. 1992).

2 See Certain Hot-Rolled

Flat-Rolled Carbon-Quality Steel from Brazil, 64 Fed. Reg. 38,797 (July 19, 1999) (suspension of counte rvailing duty investig ation and

entry of suspen sion agr

eement) (Public Administrative Record Document (“P.R. Doc.”) No.173) (the “Suspension Agreement” or the “Agreement”).

3 The Brazilian Exporters – Usinas Siderúrgicas de Minas Gerais (“USIMI NAS”), Companhi a Siderúrgica

Paulista ( “COSI

PA”), an d Companhi a

Siderúrgica

Naciona l (“CSN”) – are De fendant

Intervenors in this action.

4 Bethlehem

I issued in a

companio n case c

halle nging the suspe nsion agreement in the parallel antidumping duty procee ding. Bethlehem Steel Corp. v. United States , 25 CIT ____, 146 F. Supp. 2d 927 (2001) (“ Bethlehem

I ”). After Bethleh em I

remanded that action to Commerce, the Brazilian steel exporters were determined to be in violation of that suspension agreement. The ag reement was therefore te rminate d, and the action was dismissed. See Final Re sults of An tidumping

Duty Administrative Review and Termination of the Suspension Agree ment, C ertain H ot-RolledFlatRolledCarbon Quality Steel Products Fr om Brazil, 67 Fed. Reg. 6226 (Feb. 11, 200 2). Read together, Bethleh em I

and Bet hl ehe m II provide the backdrop for this opinion. Willkie Farr & Gallaghe r ( Christopher A. Dunn , Matthew R. N ice ly , and Robert E. DeFrancesco ), for De fendant -Int ervenor s.

OPINION RIDGWAY, Judge: In the immortal words of Yogi B erra, “It’ s deja vu all over again.” 1 Bethlehem

II – the first opinion in this act ion – rema nded to the U.S. Department of Commer c e (“Commerce”) the July 1999 a greement between that ag ency a nd the Government of Brazil, 2 which suspended at t he eleventh hour the investigation into alleged c ountervailable subsidies received from the Brazilian Government by three Brazilian steel exporters (“Brazilian Exporters”). 3 See Bethlehem Steel Corp. v. United States , 25 CIT ____, 159 F. Supp. 2d 730 (2001) (“ Bethlehem II ”)

. 4 Familiarity with that opinion is presumed.Court No. 99- 08-00525 Pag e 3

5 The Domestic

Produce rs are B ethlehe

m Steel Cor

poration ; U.S. Steel Gro

up, a unit o f USX Corporation; Ispa

t Inla nd In c.; L TV Steel Co mpany , Inc .; a nd Nationa l Steel Corporation. As discussed in greater detail below, they constitute roughly ha

lf of the industry

overall , and well over half of the indu stry that parti cipat ed in t he und erlying i nves tigation. See Bet hl ehe m II , 25 CIT at ____ n.3, 159 F. Supp. 2d at 731 n.3. Bethlehem

II found that the Suspension Agreement itself rebutted any presumption that the agency had cons idered t

he comme

nts of th e plai ntiff dome stic stee l produce rs (“Dom estic Producers”), 5 as re qu ir ed ag en cy by the appli cable st atute. Spe cifical ly, the Agr eement not only failed to incorp orate

any of the substantive r

evisions sought

in the Dome stic Produ

cers’ c omments

on the proposed agreement ; it also failed to correct the numerous drafting e rrors and inaccuracies that their comments identified. Based on “Commerce’s failure to comply with the notice, comment and consulta tion requ irements of the sus

pension a greem ent statut

e,” the r emand wa s intende d to permit the agency

to “reconsider its Suspension Determination, giving du e consid eration to all of the petit ioner s’ com ments – the s ubst antiv e ones as wel l as th ose id entif ying drafting or clerical errors.” 25 CIT at ____, 159 F . Supp. 2d at 743. Now before the Court is Commerce’s Amended Final Redete rmina ti on Pursuant to Court Remand (“Amended Final Remand Results” or “Amended Remand D etermination”). Commerce has there ste adfastly

reaff irmed its defense

of the Susp ension Ag

reemen t and, inde ed, asse

rts boldly that “the only chang es made . . . should be the corrections of the [specified] clerical err ors.” Id . at 8. See also i

d . at 38. The Brazilia

n Export ers join Defendant, the United States (“the Government” ) in urging dismissal of this action, arguing that the Amende d Final Remand Results are supported by substantial evidence and otherwise in accorda n ce with law. Se e Defendant’s Response in OppositionCourt No. 99- 08-00525 Pag e 4

to Plaintiffs’ Comments on the Department of Commerce’s Amended Final Remand Results (“Def.’s B rief”) at 1-2; Defendant-Int ervenors’ Comments on the Department of Commerce’s Amende d Final Remand Determination (“Def.-I nts.’ Brief”) at 1. In contras t, the Dome stic Produ cers co ntend tha

t “ [d]esp ite being given not one, but two opportunities on remand, [Commerce ] still has fa iled to mee

t any of the stringent requirements set forth in the [suspension agreement] statute . . . .” Plai ntiffs’ Comments on the Department of Commerce’s Amended

Final Re

mand Resu

lt s (“ Pls.’ Bri ef”) a

t 1-2. As su

ch, the D omestic Producers assert th at Comm er ce’s Amended Final Remand Results, as well as its underly ing suspension determination, are not supported by substantial evidence on the record and are otherwis e not in accordance with law. For the reasons set forth below, this action must be remanded y et again t o the Department of Commerce.

I. Background In late September 1998, the Domestic Producers, among others, petitioned Commerce and the Inte rnationa l Trade C ommission ( “IT C”), see king the impositi on of coun tervailing duties on

cer tai n st eel pro duc ts fro m Br az il . In keeping with the tight statutory dea

dlines established by the countervailing duty

laws, the ITC is sued its prelimina ry materia l injury determination one

month late r. Commerce’s preliminary determination issued in mid-February 1999, finding that counter vailable subsidies were ind eed bein g provid ed to the B razilian E

xporters. On June 6, 1999, bar ely one mont h prior to the deadline for its final determination, Commerc e and the B razilian G overnme nt initiale d a propo sed ag reemen t to suspen

d th eCourt No. 99- 08-00525 Pag e 5

6 The following month, the I TC issued its final determination on material injury, conf irming its affirmative preliminary finding. countervailing duty

investigation. Because the relevant statute re quires that a suspension agreement be completed no later than the date of Commerce’s final de termination, and

becaus e the sta

tute requires Commerce to notify and consult with petitioners at least 30 days in adva nce, June 6, 1999,

was the last possible day on which Commerce could announce its intention to s usp end the investigation. Commerce provided a copy of the proposed a g reemen t to the Dom estic Pro ducers, and required that any

comments be submitted by June 28, 1999. The Domestic P rodu cers filed a timely , and lengthy submission detailing numerous substantive objections to the proposed suspension agreement. Neverthele ss, a few day s later, o n July 6, 1999 – the deadline for issuance of Commerce’s fina l determination in the

counter vailing duty investigation

– the agency

and the Brazilian Government execut ed the Suspension Agree ment. Commerce’s final affirmative determination in the underly ing investigation – issued that same day

– found net subsidy rates f

or the Brazilian Exporters ranging between 6.35% and 9.67%. 6 However, as a result of the Suspension Agreement, no counter vailing duty orde

r has ever issued. This challen

ge to the Suspension Agreement ensued, resulting in Bet hl ehe m II and a remand to Com m erce, “to enable [the agenc y] to comply

with the notice, comment and consultation requir ements of t he suspension agreement statute; to allow it to articulate its interpretation of the monitoring provisions of the statute; to afford it the opportunity to ar ticulate its int erpretation ofCourt No. 99- 08-00525 Pag e 6

7 See , e.g. , Commerce M e morandum to File Regarding Consultations with Consuming Indu stries, Producers, and Workers (Nov. 2, 2001), P.R. Doc. No. 261 (docum enting Commerce consultations with other entities). certain provisions of

the ‘extraordinary

circumstances’ requirement of the sta tute . . .; to

allow it to articula te its interp retation

of the pub lic inter

est r equirem ent; and to permit it to reconsider the Suspension Agreement and its underly ing Suspension Determination in that light.” See Bethlehem II , 159 F. Supp. 2d at 762. In lieu of fi ling the

remand r esults in accordance with the timetable established in the order accompany

ing Bet hl ehe m II , Commerce sought and was granted an extension of time of more than 60 days to, inter alia , “solicit and consider comments from the interested parties.” See Defendant’s Consent Motion for

Extension of

Time in whi ch Commer

ce may File its Remand

Results (Sept. 10, 2001) at 2. Commerce nevertheless did not release its dr a ft reman d results t

o the Dome stic Producers until 6:00 p.m. on November 13, 2001 – under cover of a letter r equiring that any

c omments be fil ed no l ater t han cl ose of busi ness t wo days th ereaft er, and empha sizi ng t hat “n o extensions can be granted.” See Letter from Commerce to Skadde n, Arps (Nov. 13, 2001), P.R. Doc. No. 2 65. Thus, more than 100 days e lapsed before Commerce release d its draft remand r esults

. Moreover, during that period, the agency consulted with other entities, but engaged in no consultations with the D omestic Pr oducers

. 7 Yet, once it releas ed its draft reman d results, Commerce accorded the Domestic Producers less than 48 hours to analyze the draf

t results, research and draf t comments , and file

those com

ments. When the Domestic Producers objected strenuou sly

to Commerce’s procedure, the ag ency filed its “fina l remand results” with the Co

urt but sou

ght, and was g

ranted, a second

remand t o solicitCourt No. 99- 08-00525 Pag e 7

comments

and to consult

with the pa

rties. See Order (Dec. 10, 2001) (gr anting Defendant’s Consent Motion for Remand). Even after that second remand, howeve r, Com merce d

id not initiat

e consulta tions with th e Domesti c Produc ers. The Domestic Producers submitted comments on Commerce’s fina l re mand results on January 11, 2002. See Plaintiffs’ Comments on the Department of Commerce’s Amended F i nal Remand Results, P.R. Doc. No. 279 at 5. Still, Commerce did not meet with the Domestic Producers until February

19, 2002 – more than a month after the Domestic Producers had filed their co mments

on the “final remand results,” three months after th ose “final remand results” were filed w ith the Court, more than three months after Co mmerce’ s draft r emand re sults wer

e relea sed, more

than six months after Bet hl ehe m II remanded th e c as e t o t he ag en cy, and more than two and a half y ears after Commerce

signed t he Suspen sion Agr

eement. In any event, a s discusse d below, t he Domes tic Produc ers c ontend that Comm erce’s February 2002 consultations were perfunctory and pro forma , at best. The Fina l Amended

Remand Re sults here at issue were filed approximately two weeks thereafter.

II. Analysis As Bet hl ehe m II explained , there a re esse ntially two distinct typ es of susp ension ag reemen ts in countervailing duty

cases – so-called “subsection (b) ag reements” and “subsection ( c ) agreements.” See generally Bethlehem II , 25 CIT at ____, 159 F. Supp. 2d at 734-35. Subsection (b) agree ments elim

inate or offset c ompletely

a counte rvailab le subsidy, or cea se exports of theCourt No. 99- 08-00525 Pag e 8

sub ject merchandise. 19 U.S.C. § 1671c(b). I n contrast, subsection (c) agree ment s – like th e Suspension Agreement at issue here – do not ce ase exports; nor do they completely eliminate or offset counter vailable subsidies . Rather, they

eliminate only the export s’ injurious e ffect. 19 U.S.C. § 1671c(c). Prior to accepting either a subsection (b) or (c) agreement, Commerce must find both that “suspension of the inve stigation is in the public interest,” and that “effective monitoring of the agreement

by the United States is practica ble.” 19 U.S.C. § 1671c(d). Commerce also is required to notify petitioners of, and consult with them concerning, its intention to suspend the investigation. In addition, Commerce must provide petitione rs with a c opy

of the pr oposed a greem ent, and accord them an opportunity to comment. 19 U.S.C. § 1671c(e). But there are addition al requirements for subsection (c) ag reements. Because such agree ments, by d

efinition , allow som e subsidy practic es to continue, Congress restricted subsection (c) agree ments to cases involving “extraordinary circumstances” – cases where the suspension of the investigation

is more be

neficia l to the dome stic industry th an its continuation, and where the investigation

is “complex .” S

ee S. Rep. No. 96-249 at 51 (discussing the extraordinary circumstances requirement set out in 19 U.S.C. § 1671c(c)(4))

. Moreover, while a ll subsection (c) agreements require findings of “extraordinary circumst ances” and “c omplexity

” (as dis cussed a

bove), th ere ar

e unique r

equirem ents for

those subsection (c) agreem ents which are – like the Agreeme nt at issue here – quantitative restrictionCourt No. 99- 08-00525 Pag e 9

8 A quantitative restriction agreement is an ag reement by a

foreign government to limit the volume of imports o f the merchandise at issue into the United States – that is, an agre ement establishing a quota. See 19 U.S.C. § 1671c(c)(3). agree ments. 8 Specifically, the

statute mandates that, in evaluating the public interest vis-à-vis such

anagree ment, Co mme rce must both (i) consult with potentially aff ected consuming industries, as well as potent

ially affec ted produ

cers an d worker s in

the domes tic industr

y, a nd (ii) ta ke into account the impact of such an agreement on U.S

. consumers, the international economic interests of the United States, and the competitiveness of the domestic industry (in addition to any other necessary or appropriate factors). 19 U.S.C. § 1671c(d)(1)

. As Congress intended, Commerce has invoked the suspension provisions of the trade laws only infrequently in both counter vailing duty and antidumping investig ations. Notably, prior to the suspensions of bot h the c ount ervail ing du ty invest iga tion at is sue and the parallel antidumping investigation, Commerce had accepted only fo ur other s ubsectio n (c) ag reemen ts, includ ing both antidumping and countervailing duty cases . Sig nifican

tly, in each o f those f

our prior cases, Commerce sought –

and obtai ned – the c onsent of

the petiti oners. See Bet hl ehe m II , 25 CIT at ____, 159 F. Supp. 2d at 735. Attacking the Amended Final Remand Results, th e Domesti c Produc ers cont inue to ch all eng e virtually every a spect of the suspension her e at issue, arguing (a) that Commerce still has not complied with the notice, comment and consultation requirements of the suspension agree mentCourt No. 99- 08-00525 Pag e 10

9 In addition to

the consu

ltation re quireme

nts of 19 U.S.C. § 167 1c(e), which g overn al l suspension agreements under both subsections (b) and ( c), the re are add itional consultation require ments which apply to quantitative restriction ag reements such as the Suspension Agreement at issue here. See 19 U.S.C. § 1671c(d)(1). statute; (b) that there are no “extraordinary ci r cumstances” in this case ( i.e. , that, inter alia , the Agreement

is not more benefic ial to the d omestic in

dustry than a co unterva iling dut y order); (c) that effective monitoring of the Agreement is not practicable; and

(d) that the Agreement does not serve the public interest

. A. Notice, Comment and Consultation The notice, c omment and consulta tion requ irements of the sus

pension a greem ent statut

e mandate that, bef ore ente ring int o a suspen sion agr

eement, Commerce

must: (1) notif y th e petition er of, a

nd consult

with the petitioner concerning, its intention to s uspen d the inve stigatio n . . . not le ss than 30 d ay s before

the date on which i

t suspends the investigation, (2) provide a

copy of the

proposed agreement to the petitioner . . . tog ether with an explanation of how t he agreem ent will be carried out and enforced (inc luding any actionrequired of foreign g overnm en ts), and of how the agreement will meet the requirements of subsections (b) and (d) or (c) and (d) of [the statute], and (3 ) permit all interested parties . . . to submit comments and information for the record before the date on which notice of

suspension of the investigation is published

. . . . 19 U.S.C. § 1671c(e). 9 The leg islati ve his tory of the sta

tute hig hlights th e importa

nce of th ose provision s, emphasizing that “the requirement that the petitioner be consulted will not be met by pr o forma communic ations. Com

plete disc losure a

nd discuss ion is required.” S. Rep. No. 96-249 at 54.Court No. 99- 08-00525 Pag e 11

10 As summarized in section I above and detailed in Bet hl ehe m II , Commerce notified petitioners here of the proposed suspension agreement on the last possible day under the suspension agreement

statute, g iven the i mminent de adli ne f

or issuance of the

agenc y’ s final co

unterva iling dut y deter mination. 25 CIT

at ____, 1 59 F. Supp . 2d at 735 -36. Comme rce’s ti ming thus t ruly cam e “down to the wir

e,” plac ing tre

mendous pr

essure o n the ag ency

and all parties. As Bet hl ehe m II not ed, there can be no d oubt that “the tandem t asks of bot h finaliz ing the [agency’s] Fi na l Determination

and determ in ing whether to suspend the investigation in fact did tax Commerce From the beginning of this case, the Gover nment has maintained that Commerce has complied fully with all applicable n o tice, comment and consultation requirements. However, as Bethlehem

II noted, apart from

several conclusory

statements, the administrative record initially was utterly devoid of affi rmative evidenc e “to indi cate tha t Commerc e even r

eviewe d – much le ss considered

or r esponded to – the petitioners’ written comments” on the proposed suspension agree ment. 25 CIT at ____, 159 F. Supp. 2d at 740. Similarly , Bet hl ehe m II obser ved th at, al thou gh the Governm ent’s br

ief state d that Comme

rce “me t severa l times” wi

th petitione

rs “‘re gardin

g its intention to suspend the investigation’ . . . the only recor d evidence cited to support that assertion [was] the Suspension Determination, which state[d] simp ly that the petitioners were ‘consulted.’” 25 CIT at ____ n.21, 159 F. Supp

. 2d at 740 n.21 (citations omitted). And, according to the Domesti c Produce

rs, while “the De partmen t did infor

m the Petiti oners se

veral tim es that it w a s de termined

to suspend the investigation regardless of whe ther Petitioners objected,” Commer c e “never consulted with the Petitioners regarding the deta il s of the Agreement, as opposed to the concept of suspending the investigation.” Id . (citations omitted). Indeed, at oral a rgument, counsel for the Gove

rnment c andid ly con ceded that the press of time had prevented Commerce from responding to the petitioners’ comments in its Sus pe nsion Determination or engaging in greater consulta tio n. Bet hl ehe m II , 25 CIT at ___ n.24, 159 F. Supp. 2d at 742 n.24 (citation omitted). 10Court No. 99- 08-00525 Pag e 12

personnel to the limit. ” In fact, Commerce had

revised its reg ulations in

1997 to sig

nifican tly advance the deadlines for initialing and signing suspension agreement s to avoid precisely the dilemma presented here – the “enormous burden on the parties and on the Departm ent” inhe rent in the simultaneous consideration of a suspension agreement and prepar ation of a final determination. It is unclear why

that regulatory

timeline was ignored in this case. 25 CI T at ____ n.24, 159 F. Supp. 2d at 742 n.24. As discussed above, Bet hl ehe m II concluded that the Suspension Agreement itself rebutted any presumption that the agency had considered all evidence of rec ord in reaching its determination. Specifically, Bet hl ehe m II reasoned that “Commerce’s failure

. . . to correct in the final Suspension Agreement

even the drafting and clerica l errors identified by

the petitioners [was] compelling evidence that Comme

rce fa iled to g ive appr

opriate consider ation to the

petit io ners’ written comments.” 25 CIT at ____, 159 F. Supp. 2d at 743. Bas ed on “Com

merce’ s failure

to comply

with the notice, comment

and cons ultation r equirem ents of th e suspens ion agr eement s tatute,”

the case

was remande d to the ag ency , to permit it to “rec onsider i

ts Suspensi on Determination, giving due consideration

to all of the petitioners’ comments – the substantive ones as well as those identifying drafting or clerical errors” and to permit it to “underta ke any furthe r consultation that may be appropriate.” Id

. The Amende d Final R emand Results acknowledge that the Agr eement includes “minor clerical errors ,” and in dicate that Commerce has reached an ag reement with the Brazilian Government

to correct those errors. Amended Fina l Remand Results at 3 5. But the Domestic P roducers charge that Commerce never theless remains in default on its notice, comment and consultation obligations under the statute. See generally Pls.’ Brief at 2-12.Court No. 99- 08-00525 Pag e 13

The Domestic Producers assert that, in contrav ent ion of the directive in Bet hl ehe m II , Commerce failed on reman d to funda mentally reconside r the Suspension Agreement and the underlying

suspension determination. Pls.’ Brief at 8-12. The purpose of the remand w as, in fa ct, to permit Commerce to “ reconsider its Suspension Determination.” Bet hl ehe m II , 25 CIT at ____, 159 F. Supp. 2d at 743 (emphasis added). Moreover, as the Domestic Prod ucer s emphasize, Bethlehe m II expre ssly disavowed any assumptions as to “the outcome on remand,” opining that “[w]hile it is possible that, upon r econs ideration, Commerce will once again conclude that suspension is justifie d and that the Suspen sion Agr

eement s hould rem ain uncha nged, i t is also conceiv able that Comme

rce will determin e that –

while suspension is justified – some of the terms of the Agreement must be altered, or that Commerc e will abandon the conce pt of a su spension agreement

entirely.” Pls.’ B rief at 8-9 ( quoting Bethlehem II , 25 CIT at ____ n.8, 159 F. Supp. 2d at 732 n.8). As evidence that Commerce failed to comply with the mandate to reconsider the Suspension Agree ment, the Domes tic Producers point first to the failure of the Ame

nded Fin al Remand

Results to address a number

of their comments, which they submitted initially in late June 1999 (on the then proposed Suspension Agreement), and later resubmitted (in re sponse to Commerce’s initial remand results). Accord

ing to the Domestic

Produce rs, Commer

ce “ig nored” t heir suggestions in its Final Amended Remand Re su lts , even tho ugh the ir commen

ts on the in

itial rema nd result s specif

ically noted that the agency

had not previously addre ssed certain specific points. Pls.’ Brief at 9-10. However, Commerce is not required to respond to all comm ents; rat her, its o bligation is to give meaningful consideration to them. The Domestic Producers have cited no authority to supportCourt No. 99- 08-00525 Pag e 14

11 In its brief, the Government provides summary responses to the substance of eac h of th e comments

that th e Domest ic Producers assert were ignor ed. Compare Def.’s Brief at 51-53 with Pls.’ Brief at 9-10. H owe ver, thos e respon ses are not based

on the re cord and , as such, constitute post hoc rationa

lization by

litigati on counse l. their intimation to the contrary. See generally Bet hl ehe m II , 25 CIT at ____ n.23, 159 F. Supp. 2d at 740 n.23 ( discussin

g Commer

ce’s pa st practice on responding

to comments on draft suspension agree ments, in context of Domestic Producers’ criticism of Commerce ’s failur e to resp ond to comments). Moreover, absent some showi ng to the contrary , Commerce is presumed to have considered

not only all comme

nts, but al l evidenc e of rec ord, in re aching its det erm in ati ons . 25 CIT at ____, 159 F. Supp. 2d at

741 ( citing , inter alia , Hoogovens Staal BV v. United States , 24 CIT 242, 247, 93 F. Supp. 2d 1303, 1307 (200 0) ). I ndeed, in this case , the Amen

ded Fina l Remand Re sults affirma tively state tha t Commerc e “did, in

fact, c onsider a

ll of plaintiffs ’ other comments, and determined

that none of these other proposed substantive changes were requir ed.” Amended Final Remand Results at 40. 11 Similarly unpersua sive is the

Domestic

Produce rs’ comp laint that , of their comme nts th at Commerce specifically a

ddressed, the agency

“flatly re jected every single one.” Pls.’ Brief at 10-11. The fact tha

t Commerc e does no t agre e with and adopt a pa

rty ’s commen

ts does not ipso facto prove that the agency

failed to give them meaningful considera tion. The Domestic

Producers’ claim that Commerce failed to “give any meaning ful consideration to terminating or abandoning the Ag reement” is nevertheless a matter of grave concern. See Pls.’ Brief at 11-12. The Amended Final Remand Results state simp ly th at “Comme rce has not only considered

the possibility of termination, but has also discussed this possibility with theCourt No. 99- 08-00525 Pag e 15

12 See Appendic es 11-13 t

o Defen dant’s Ap pendix for

Defend ant’s Res ponse in Opposition to Plaintiffs’ Comments on the Department of Commerce’s Amended Final Remand Results. [Government

of Br azil]” and “[c]ontrary to the asse rtion of plaintiffs, Commerce did in fact consider the v arious op ti ons posed by the Court, including w hether or not to alter or to abandon the Agreement.” Amended Final Remand Results at 8, 38. The administrative record is devoid of any real explanation, reaso ning or a naly sis by

the age ncy . And, in deed, the Amended Final Remand Results and the r

ecord on remand t hemselve s sugg est that Co mmerce c onsidere d termina tion only to the extent that it raised the matter with the Government of Br azil – and, even then , in th e con

text of the termination of the companion antidumping suspension agree ment. Amended Final Remand Results at 6-7 (d

iscussing Commerce ’s consul

tations wi th the Brazilian

Government as to whether it wished to t

erminate the Agr eement) ; P.R. Doc. Nos. 281, 285, 286. 12 Here, Commerce has failed to compile a record

sufficient to enable a court to “satisfy itself that the agency

exercised a reasoned discreti on” in deter mining not to terminate – or revise – the Suspension Agreement. See Greater Boston Televisi on Corp. v. Feder al Communic ations Comm

. , 444 F.2d 841, 850 (D.C. Cir. 1971). The Do mes tic Producers further contend that Commerce failed to e ngage in “meaning ful consul tations”

with them, as required by the suspension agreement statute. See Pls.’ Bri ef at 6-8

. The Government retorts that it “sought remand expressly to allow B ethlehe

m a full opp ortunity

to provide i ts comment s.” Def

.’s Brie f at 50. A s Bet hl ehe m II explained, however, the consultation require ments imposed by the statute are separate and distinct from its notice and commentCourt No. 99- 08-00525 Pag e 16

require ments. 25 CIT at ____ n.26, 159 F. Supp. 2d at 743 n.26. Thus, Commerce’s solicitation and consideration

of writte n comment s from the

Domestic

Produce rs could n

ot fulf ill t he agency ’s independ ent oblig ation to c onsult with them. Commerce’s reliance on its face-to-face meeting with the D omestic Pr

oducers ’ counse l is similarly problematic. See Def.’s Brief at 50. A s discussed above, the legislative history of the suspension agree

me n t statute makes it clear that “the requirement that the petitioner be c onsulted will not be met by pro forma c ommunications.” S. Rep. No. 96-249 at 54. Congress imposed the consultation requirement on Commerce to ensure that petitioners have a meanin gful opp ortunity

to present their vie ws. But, a s reflec

ted in the Commerce

Departm ent’s own

memo summarizing its meeting with the Domestic Producers, “the Department briefed Petitioners on the Department’s . .

. consultations with the Brazilians and their requ est to main tain the CV

D suspens ion agr

eement. [Petitioner s’ counsel] stated that Petitione r s are opposed to maintaining the CVD suspension agreement.”

Commerce Memorandum on Consultations with Plaintiffs, P.R. Doc. No. 280. Commerce’s own words paint a picture of “consultations” that can only be described

as perfunctory and pro forma , in

patent contravention of the statute – an impression that is further reinforc ed by the timing of

the meeti

ng, whic h Commerc e held a f

ull three months after it had file d its fina l remand results (defending the Ag reement to the very

letter). In light of Commerce’s failure to consult meaningfully with the Domestic Producers before signing the Suspen sion Agr eement, the age

ncy ’s b elated “consultation” on remand si mply adds insul

tCourt No. 99- 08-00525 Pag e 17

to injury. The ag ency’s r

ecord of “consult ation” – b oth initial ly, and on re mand – als o tends to b elie

a sincere intere st in see king to ascertain and (if possible) accommodate legitimate concerns of petiti oners, and to suggest instead a desire to “g o through the motions” of conferring a nd the n t o “paper over” any

objections. Commerce’s failure

in this cas e to consult meaningfully w ith the petitioners and

its failure to give me aningf

ul conside

ration to terminating or abandoning the Agreement are, in fact, both mere sym ptoms of a much greater, under lying problem – the unique circumstan ces surroun ding the executi on of this Agre ement. Du e to its own

failure to allow its elf suff

icient time

to consult

m eaningfu lly

with the D omestic Pr

oducers before enterin g into the

Suspension

Agree ment, Commerce may

well now f

eel trap ped betw een a ro ck and a hard pla ce. Alth ough i t has sought (however be la te dl y) to consult

with the D omestic Pr

oducers , it (at le ast

argua bly ) cannot repudia te the Agreement, or even revise it without the c onsent of the Brazilia n Govern ment. Und

er these circumst ances, it is perha

ps not surp rising th at Commer ce’s g eneral

tenor thr

oughout these procee dings ha s been to m inimize or d

ismiss the D omestic Pr

oducers ’ commen

ts and con

cerns. One can onl y speculate w

hat the Suspension Agreement would have looked like had Commerce allowed i

tself suf ficient t ime to con fer in

advance with the Domestic Producers in order to ascertain their concerns, and then to neg otiate with the Brazilian Government in an eff ort to resolve them. Maybe t

imely co nsultations and negotiations would have y ielded a suspension agreement

accept able to the Dome stic Produ cers (a s such con sultations and neg otiations h ave in al lCourt No. 99- 08-00525 Pag e 18

13 As noted above, Commerce sought – and obtained – the cons ent of the

petitione rs to each o f the four subsecti on (c) su spension a greem ents that p

redate d the suspe

nsion ag reemen ts in th is cas e and in the companion antidumping proceeding. None of those other cases involved the exigencies present in this case, and in the companion case; thus, there was presumably the opportunity for greater consultation and negotiation between Commerce and the domestic interests on the one hand, and betwee n Commerc e and the

foreig n intere sts on the o ther han d. Of cou

rse, as Bet

hlehem II explained, Commerce

has no one

but itself to blame for the exigency surrounding the Agr

eements both in this case and in the companion case. 25 CIT at ____ n.24, 159 F. Supp. 2d at 742 n.24. other cases); 13 maybe there

would have been

no agr eement a t all. I n any event, it is highly unlikely that – had Commerce consulted with the Domestic Producer s in a timely fashion ( as the sta

tute require s) – any

resulting agreement would have been identical in every

respect to the Agreement now in place. Further, due to the

unique po sture of

this case , Co mmerce now necessarily views the Domestic Producers’ comments through the prism of an executed Agreement by which it is bound, and rejects their co ncerns b ecause

(accor ding to Commerce) they

do not reflect either

a violation of the statute, or a violation of the Agreement (which would justify its termination). See , e.g. , Amended Final Remand Results at 8. There can be little doubt that this is a very different – and much more rigorous – standard for comments than that which Commerce has applied in other c ases, where it has consulted petitioners in advance. In this sense , Commerc e’s viola tion in this c ase of its procedural obligation

under the

statute to

consult wi

th petitio ners before concluding the Ag reement has potentia lly f ar-re aching

and fund amental substantive implications for the case. It is, of course, impossible to turn the clock back to a time before the Suspension Agreement

was signed. It

is thus now impossible for Commerce to fulfill – literally – the statutory requirement that the age ncy engag e in mean

ingful c onsultatio ns with pet itioners “ not less than 30 days” bef oreCourt No. 99- 08-00525 Pag e 19

the date of suspension. See 19 U.S.C. §1671c(e)(1). Given the fac t of the executed Suspension Agree ment, Commerce’s wi ll in gn es s ( an d p er ha ps it s a bi li ty) to give m eaning ful consi deratio n to termin ating or abandoning that Agree ment is similarly constrained. I n short, it is clear that the Domestic Producers have been

deprived of certain procedural r ights accorded them by

the statute. What is entirely unclear is whe ther those deprivations can be effectively remedied. This matter thus must be remanded to afford Commerce one fina l opportun

ity t o engag e in further consulta tions with th e Domesti c Produc ers (if appropriate), and – in any event – to make the

case that its consultations have, indeed, been meaningful. At the same time, Commerce must give

m eaningful consideration to terminating, abandoning or re vising the Agreement, in light of the Domestic Producers’ comments and the agency ’s consultations; and that conside ration must be sufficie ntly document

ed in the a dministra tive rec ord to ena

ble a cou rt to review the agency ’s action and satis fy

itself tha t the ag ency ’s consid

eration of options

was, inde ed, mean

ingful. Becau se the matter is being remande d to enabl e Commerc e to demon strate c omplianc e with t he notice, comment and consultation requirements of the suspension agre ement statute, a “substantial evidence” review of the agency ’s factual findings would be premature. See gen erally Bethlehem

II , 25 CIT at ____, 159 F. Supp. 2d at 743. Even as to leg al issues, con si derations of judicial economy and de ference t o agency aut onomy and expertise counsel re straint – with the exception of one major, overarching leg al issue, addressed below.

B. Ex tr ao rd in ar y Ci rc um st an ce s/ “B en ef ic ia li ty” As sum mar iz ed i n se cti on II above, subsection (c) a greemen ts (like the Suspension A greem ent

here) a re limited

to cases

involving

“extraor dinary circumst

ances” – that is,Court No. 99- 08-00525 Pag e 20

circumstances i n which, inter alia , “suspension of an investigation will be more beneficial to the domestic industry than continuation of the investigation.” 19 U.S.C. §§ 1671c(c)(1), 1671c(c)(4)(A) (emphas is added). The parties here have spilt much ink on this so-called “beneficiality ” requirement and, in particular, on the Domestic Produce rs’ contenti on that it im plicitly require s petitione

rs’ consent for a subsection (c) agre ement; or, stated differently , that the petitioning domestic industry wields “veto power” over suspension agr eements of the type

at issue here. See generally Bethlehem II , 25 CIT at ____, 159 F. Supp. 2d at 747-50; Pls.’ Brief a t 14-24; Def.’s Brief at 25-30; Def.-I nts.’ Brief at 9-12. As Bet hl ehe m II pointed out, “On its face, the languag e of the suspension agree ment statu

te “entrus t[s] the ‘more

benefic ial’ determination to Commerce, and . . . [does] not expressly accord the domestic industry a veto power .’” 25 CIT at ____, 159 F. Supp. 2d at 748 ( quoting Bethlehem I , 25 C IT at ____, 146 F. Supp. 2d at 947-48). However, Bet hl ehe m II did not rule on th e Domesti c Produce rs’ contention that

the “ben eficial ity”

require ment implic itly

requires their consent; instead, it stated tha

t, “[o]n rem and, Comme rce will have the opportuni

ty a t the admin

istrative level t o explain its interp retation

of the ‘mo re bene ficial’ require ment, in light of the legislative history and Commerce’s own prior practice.” Bet hl ehe m II , 25 CIT at ____, 159 F. Supp. 2d at 753. In its Amende d Final Re

mand Resu

lts, Commer

ce round ly rejects the Domes tic Produc ers’ readin gs of both the legislative history of the suspension agreement statute and ag ency pa st practice. See generally Amended Final Remand Results at 47-51. The Domestic Producers have continued to rely heavily

on a statement by Senator Heinz that he “would f

ind it very difficul t to believ e a judg

ment that t

he domest

ic industr y w ould benefit moreCourt No. 99- 08-00525 Pag e 21

froma suspension agree

ment than

a completed inves tigation if that ind

ustry had expre ssed its oppositio n to such an action.” Pls.’ Brief at 15-16 ( quoting 125 Cong. Rec. 20,168 (1979)). O n remand, Commerce

minimized the

signific ance of

that state

ment, con

cluding that – vie

wed in

co ntext – it was reflective of the Senator’s personal opposition to suspension agr eement s i n principle. See Def.’s Brief at 27-28 ( citing Amended Final Remand Results at 47-48). The Domestic

Producers quarrel with Commerce’s chara cterization of the Heinz statement

as “pers onal,” and argue that – as a sponsor of the bill – statements by the Senator ar e properl y treated as authoritative legislative history pursuant to applicable rules of statutory construction. See Pls.’ Brief a

t 16-19. H owever , as Commer ce pointe d out, Senator Heinz also commented that “the domestic industry would be expec t ed to have some input into the question of

whether it would b enefit by an assura

nce.” Amended Final Remand Results at 48 ( quoting 125 Cong. Rec . 20,16 8 (emphas is added)). As the Amended Final Remand Results correctly note, “[t]he fact that even the stro ngest propone

nt of limita

tions on sus

pension a

greem ents and ‘ assuran

ces’ did not find it gener ally obvious tha

t the dome stic in dustry would have more than ‘some input’ belies the suggestion

that such input was g eneral ly a ss umed b y the Congr ess to reach the level of a veto.” Amended Final Remand Results at 48. The Domestic Producers seek to buttress the authority of the Heinz statement on which they rely by noti ng t hat Commerce has given the statement gr eat weight in the past. I

n particular, the Domestic Producers point to a 19 9 2 memo (the “Powell Memo”) prepared byCommerce’s thenChief Counsel for Import Administration, which advised – rely ing on the Heinz statement – that the

“ be ne fi ci al it y” require

ment pre sented a

“seriou s obstacl e” to con cluding an elimina

tion-of- inju

r yCourt No. 99- 08-00525 Pag e 22

agreement

such as the Suspension Agreement h ere, be cause “ [t]he legi slative hi story of this provision indicates that Congress arguably intended it to require that the domestic industry conse nt to this type of ag

reement.” See Pls.’ Brief at 19-21 (citation omitted). The Executive Summary of the Powell Memo was to the same effect, stating that “most options carry

procedu ral req uiremen ts. These include: securing the ag reement of the domestic petitioner . . . .” See id . at 20. In its Amended Final Remand Results, Commerce embarks on linguistic analy sis in an effort to establish

that the se

ntence i n the Powe ll Memo concerning the legislative history of the statute was nothing more tha

n an atte mpt to ident

ify hyp othetica

l argum ents that m

ight be m ade by

litigant s challenging

a subsection (c) agreeme nt. See Amended Final Remand Results at 49. Commerce similarly seeks to explain away the state ment quoted from

th e P ow el l M em o’ s E xe cu ti ve Su mm ar y. Id

. at 49-50. But, as the Domestic Producers observe, Commerce’s eff orts are more than strained. See Pls.’ Brief at 21-22. The Domestic Producers may well be right

that “the inescapable conclusion that must be drawn f rom the Pow ell Memorandum is that the Department itself has previously deter mined that it is required to secure the consent of petitioners for an elimination-of-injury suspension agreement like that ente

red into in

this case.” See id . at 22. But that is not necessarily the end of the matter. Commerce may

chang e its vie ws. See McClatchy Newspapers , Inc. v. N.L.R.B. , 131 F.3d 1026 (D.C. Cir. 1997) (hold ing th at agenc ies ar e enti tled t o devi ate fro m reas onin g u sed in pr ior decisions). Thus, “there is no rule of administrative stare decisis. Agency practice, once established, is no t f ro ze n i n p er pe tu it y. Agencies frequently adopt one interpretation of a statute and then, yea

rs later, adopt a different view. As long as the new interpretation is consistent with congressionalCourt No. 99- 08-00525 Pag e 23

intent , an age ncy may

make a ‘course correction.’” Toyota Motor Sales, U.S.A., I nc. v. United States , 7 CIT 1 78, 192-9 3, 585 F. S upp. 649, 6 61 (1984)(citatio ns omitted) ; cf ., Santa Fe

Pac. R.R. Co. v. United States , 294 F.3d 1336 (Fed. Cir. 2002) (holding that an agency

may chang e its position if it believes that the previous position was based on a mistaken legal interpre tation). As a general principle, of cour se, an agency is required to provide an adequate explanation for departing from prior practice. See Hussey Copper, L td. v. United States , 17 CIT 993, 834 F. Supp. 413, 418 (1993). Under the circumstances of this case , it is unclear whether Commerce’s prior approach to suspens ion agr

eements – including the Powell Memo – amounts to a prior practice. See generall y Bet hl ehe m II , 25 CI T at ____ n. 23, ____ n.37, 159 F. Supp. 2d at 740 n.23, 749 n.37 (reserving judgmen

t as to existence of established agency practice concerning suspension agree ments, and summarizing case law on requirements for de parture fro m s uch pra cti ces ). In any event, to the extent that it can be said that Commerce has an

established practice of interpreting the legislative history

discussed

above to require petitioners’ consent to a subsection (c) agreement, the agency ’s analysis of the suspension ag reemen t statute and its legislative history in the Ame nded Final Remand Results adequately justifies its departure from such practice. To say that the statute does not re quire petitioners’ consent to a s ub section ( c) agr eement, however, is not

to say that their opposition is irrelevant. Even if petitioners’ consent

is not per se required, the extent of the domestic industry’s consent – or opposition – logic ally must bear on (a nd,

ar gu ab ly, itself constitutes evidence as to) whether or not a suspension agree ment is, in the words of the statute, “more beneficial to the domestic indu stry .” When Co mmerce elects to enter into a subsection (c) agreement over the obj ections of a majority of the ind

ustry , it does so

at its per il –Court No. 99- 08-00525 Pag e 24

particu larly where, as here , it canno t point to “early settlement” as a benefit. Commerce is being far too cavalie

r here. It ca

nnot dismiss

the fac t that a ma

jority of the ind

ustry affirma tively a nd vehemen tly opposes the Suspension Agreement, and no one – n ot asingle domestic producer or

consumer – affirm atively

supports i

t. Some aspects of a “more beneficial” judg ment are inherently

subjective, just

as some are

necessa rily predictive. It is therefor

e the height

of hubris to presume to tell a majority of the industry what is in its best interes ts. W hile it is true that the statute requires – as a precondition to a subsection (c) agree ment – tha t Commerc e make a determination as to

whether the agr eement is

more beneficial to the domestic i ndustry, it strain s credul ity t o sugg est that Co ngress

intended that Comm erce substitute

its judgment for a majority of those in the trade, who live and breathe the industry every day , and whos e future s and for tunes ar e inextric ably

tied to it. Reviewing this administrative record as a whole, one is left with a distinctly uneasy sense

that there is more here than meets the eye – that not all the c ards are on the table. On remand, Commerce will have the opportunity to directly address the extent

of the opposition of the do me st ic in du st ry, and to articu late pre cisely

why its judgment

as to the best interests of the industry should be c redited over that of the industry itself.Court No. 99- 08-00525 Pag e 25

III. Conclusion For the rea sons set f

orth abov e, this ca se is rema nded y et aga in to the De

partm ent o f Commerce, to afford

it one final opportunity to comply with the notice, comment and consultation require ments of the sus

pension a greem ent statut

e, and to make the case that its consultations have been meani ngful; to all ow Com merce t o give m eanin gful co nsid erati on to termi natin g, aban doni ng,

or revis ing the Su sp ension Agreement, in light of the Domestic Producer s’ comments and the agency ’s consultations (and to document that consideration in the administrative record so that it can be subjected to judicial review); and to permit Commerce to direct ly addr ess the extent of the opposition of

the domestic industry, and to articula te precisely

why – under

the circ umstance s of this

case – its judgment as to the best interests of the industry should be credited over that of the industry itself. A separate order will enter acc ordingly.

/s / D el is sa A. Ri dg wa y Judge Decided: February

17, 2004 New York, New York