Slip Op. 11-13 UNITED STATES COURT OF INTERNATIONAL TRADE
MCC EUROCHEM, Plaintiff,

v. UNITED STATES, Defendant. Before: Leo M. Gordon, Judge Court No. 10-00260

MEMORANDUM and ORDER [Defendant’s partial motion to dismiss granted.] Dated: February 4, 2011 Squire Sanders & Dempsey, LLP (Peter J. Koenig , Christine J. Sohar Henter , Christopher A. Williams ) for Plaintiff MCC Eurochem. Tony West , Assistant Attorney General, Jeanne E. Davidson , Director, Patricia M. McCarthy , Assistant Director, Commercial Li tigation Branch, Civil Division, U.S. Department of Just ice (David D’Alessandris , Trial Attorney); and Office of Chief Counsel, Department of Commerce (Shana Hofstetter ), of counsel, for Defendant United States. Akin, Gump, Strauss, Hauer & Feld, LLP (Valerie A. Slater , Margaret C. Marsh ) for Defendant-Intervenor Ad Hoc Commi ttee of Domestic Nitrogen Producers.

Gordon, Judge: Defendant moves pursuant to USCIT Rule 12(b)(5) to partially dismiss Plaintiff MCC Euroc hem’s (“Eurochem”) complaint ch allenging the final results of the U.S. Department of Commerce’s (“Co mmerce”) administrative review covering solid urea from Russia during the July 1, 2008 through June 30, 2009 period of review. See Solid Urea from Russia , 75 Fed. Reg. 51,440 (Dep’t of Commerce Aug. 20, 2010) (final results) and accompanying Iss ues and Decision Memorandum, A-821-801, AR 2008/09 (Aug. 13, 2010), available at h ttp://ia.ita.doc.gov/frn/summary/russia/2010-Court No. 10-00260 Page 2 20750-1.pdf (last visited Feb. 4, 2011). Def endant’s motion to dismiss is limited to Count 2 (¶ 11) of Eurochem’s complain t, which challenges Commerce’s “zeroing” methodology. The court has jurisdiction ov er this action pursuant to 28 U.S.C. § 1581(c). For the reasons set forth below, the court grants Defendant’s motion and dismisses Count 2 (¶ 11) of Plaintiff’s complaint. Discussion In deciding a USCIT Rule 12(b)(5) motion to dismiss for failure to state a claim upon which relief can be granted, the court a ssumes all factual allegations to be true and draws all reasonable inferences in the plai ntiff's favor. Gould, Inc. v. United States , 935 F.2d 1271, 1274 (Fed. Cir. 1991). In Count 2, Euro chem claims that “[t]he Final Results decision to zero wa s not supported by substantia l evidence and not otherwise in accordance with law.” Pl. Compl. ¶ 11, ECF No. 6. More specifically, Eurochem claims that Commerce’s use of “zeroing” in t he subject review constitutes an unreasonable application of the antid umping statute. Eurochem suggest s that the legal landscape with respect to “zeroing” has f undamentally changed, which cr eates a novel legal issue distinguishable from prior decisions that have upheld Commerce’s “zeroing” methodology. Pl. Resp. Br. 8, ECF No. 26. In particular, Eurochem argues that Commerce’s use of “zeroing” in the current re view is unlawful because it occurred after the effective date of the Un ited States’ change in policy and statutory interpretation regarding “zeroing” in investigations; after U.S. courts affirmed Commerce’s new statutory interpretation and polic y to eliminate “zeroing” in investigations; and after the United States’ commitment to implement the World Trade Organization’s Japan ZeroingCourt No. 10-00260 Page 3 decision that rejected application of “zeroing” in administrative review s. Pl. Resp. Br. 7. Eurochem argues that these events carry legal significance and establish the basis for a claim that Commerce’s continued application of “zeroing” in administrative reviews, but not in investigations, is inconsistent with 19 U.S.C. § 1677(35). According to Eurochem, the U.S. Court of Appeals for the Federal Circuit has not “previously ruled on the question of whether construi ng section 1677(35) to have two different meanings in reviews and investigations is reasonable under prong II of Chevron U.S.A., Inc. v. Natural Res. Def. Council , 467 U.S. 837 (1984).” Pl. Resp. Br. 8. Eurochem’s arguments are unpersuasive. The Federal Circuit has consistently upheld the reasonableness of Commerce’s practi ce of “zeroing” in administrative reviews. See Koyo Seiko Co. v. United States , 551 F.3d 1286 (Fed. Cir. 2008); SKF USA, Inc. v. United States , 537 F.3d 1373 (Fed. Cir. 2008); NS K Ltd. v. United States , 510 F.3d 1375 (Fed. Cir. 2007); Coru s Staal BV v. United States , 502 F.3d 1370 (Fed. Cir. 2007); Timken Co. v. United States , 354 F.3d 1334 (Fed. Cir. 2004), cert. denied , Koyo Seiko Co. v. United States , 543 U.S. 976 (2004). The Federal Circuit has further denied petitions for rehearing and rehearing en banc in Koyo , NSK , and Timken

. With regard to the specific challenge presented here, t he Federal Circuit and the Court of International Trade have already considered and rejected the same legal argument that Eurochem adv ances in this case. See SKF USA, Inc. v. United States , ___ F.3d ___, 2011 WL 73179 (Fed. Cir. J an. 7, 2011) (“SKF ”); Dongbu Steel Co. v. United States , 34 CIT ___, 677 F. Supp. 2d 1353 (2010) (“Dongbu”); Corus Staal BV v. United States , 32 CIT ___, 593 F. Supp. 2d 1373 (2008), aff’d without decision ,Court No. 10-00260 Page 4 370 Fed. Appx. 111 (Fed. Cir. 20 10). Eurochem concedes that Count 2 raises the same legal issue addressed in SKF and Dongbu . Pl. Resp. Br. 4. (“In fact, two cases are currently pending appeal before the Federal Ci rcuit challenging this exact same issue, which we are contesting.”). After briefing in this action was completed, the Federal Circuit issued its decision in SKF , which again sustained Commerce’s pr actice of “zeroing” negative dumping margins in administrative reviews. See SKF , ___ F.3d at ___, 2011 WL 73179 at *8. As noted above, the appellants in SKF raised the same legal argument that Eurochem brings here. Brief for A ppellants at *32-*40, SKF , 2010 WL 894953; Reply Brief for Appellants at *17-*18, SKF , 2010 WL 2416207. The Federal Circuit, however, concluded that Commerce’s pr actice of “zeroing” was reas onable and thereby rejected appellants’ claim. SKF , ___ F.3d at ___, 2 011 WL 73179, at *8. Likewise, in Dongbu, the Court of International Tr ade entertained the very same argument that Eurochem relies on in this action and, after a thor ough examination of the issue, the court sustained Commerce’s practice of “zeroing.” See Dongbu , 34 CIT at ___, 677 F. Supp. 2d at 1362-66. The Federal Circuit ’s decision in SKF constitutes controlling authority, and while Dongbu is not binding on the court, it is legally sound and consistent with Federal Circuit precedent. SKF and Dongbu make clear that Commerce’s practice of “zeroing” in administrative reviews remains a reasonabl e application of the antidumping statute under the second step of Chevron

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Conclusion For these reasons, Eurochem cannot prevai l on Count 2 (¶ 11) of its complaint. Accordingly, it is hereby ORDERED that Defendant’s partial motion to dism iss is granted; and it is further ORDERED that Count 2 (¶ 11) of Euroc hem’s complaint is dismissed.

/s/ Leo M. Gordon Judge Leo M. Gordon

Dated: February 4, 2011 New York, New York