# United States **Court of Appeals**  **for the Federal Circuit**

______________________
MID CONTINENT NAIL C ORPORATION, Plaintiff

- Appellant

v.

UNITED STATES, DUBAI WIRE FZE, ITOCHU BUILDING PRODUCTS CO ., INC., Defendants

PRECISION FASTENERS, LLC, Defendant

- Appellee

______________________

2016

- 1426

______________________ Appeal from the United States Court of International Trade in No s . 1:12

- cv

- 00133

- GWC, 1:12

- cv

- 00153

- GWC, 1:12

- cv

- 00162

- GWC, Judge Gregory W. Carman.

______________________
Decided: January 27, 2017

______________________

D AVID A LBERT Y OCIS , Picard Kentz & Rowe LLP

, Washington, DC, argued for plaintiff

- appellant. Also represented by A NDREW W ILLIAM K ENTZ , R OOP B HATTI , M EIXUAN L I , D OUGLAS K NOX B EMIS , J R

.2 MID CONTINENT NAIL C ORPORATION v. US

M ICHAEL P AUL H OUSE , Perkins Coie, LLP , Washin gton, DC, argued for defendant

- appellee. Also represented by D AVID J OHN T OWNSEND , D AVID S TEWART C HRISTY , J R

.

______________________

Before N EWMAN , L OURIE , and D YK , Circuit Judges.

D YK , Ci rcuit Judge

. In 2012, the Department of Commerce issued a final determination in an antidumping investigation of certain steel nails from the United Arab Emirates (“UAE”) fin ding that Precision Fasteners, LLC had engaged in targe ted dumping and imposed a duty

. In calculating Precision’ s dumping margin

, Commerce declined to apply a regul ation limiting the use of the average

- to

- transaction met hodology to non

- targeted sales because the agency asserted that the regulation had been withdrawn in 2 008. See 19 C.F.R. § 351.414(f)(2) (2008).

T he Court of International Trade ( “Trade Court”) held that Commerce had violated the Administrative Proc edure Act (“APA”) by withdrawing the regulation without providing notice and opportunity for comment . On r em and, Com merce redetermined Precision’s duty by appl ying the withdrawn regulation and found that no duty was owing . T he Trade Court af firmed. We hold that Commerce violated the requirements of the APA in withdrawing the regulation, leaving the regulation in force ; that its viol ation of the APA was not harmless; and that the agency did not err in applying the regulation on remand . We ther efore affirm the final judgment of the Trade Court

. B ACKGROUND

I

I n 2011
, appellant Mid Continent Nail Corp. filed a petition with Commerce alleging that “imports of certain
stee l nails from the UAE

. . . [were being ] sold in the United States at less than fair value,

. . . and that suchMID CONTINENT NAIL C ORPORATION v. US 3

imports [were] materially injuring, or threatening mat erial injury to, an industry i n the United States .” Certain Steel Nails From the United Arab Emirates: Initiation of Antidumping Duty Investigation , 76 Fed. Reg. 23,559, 23
, 560 (Apr. 27, 2011). Commerce initiated an antidum ping investigation during which it determined that appe llee Pre cision was a mong the mandatory respondent s , i.e.

, an importer whose dumping rate would be individually determined in the course of the investigation

. 1 See Ce rtain Steel Nail s From the United Arab Emirates: Prelim inary Determination, 76 Fed. Reg. 68,129 (Nov. 3, 2011). In 2012, C ommerce issued an antidumping duty order imposing a 2.51 percent duty on Precision

. See Certain Steel Nails F rom the United Arab Emirates: Final D etermination, 77 F e d. Reg. 17,029, 17,031

– 32 (Mar. 23, 2012) ; Certain Steel Nails fr om the United Arab Emi rates: Amended Final Determination

, 77 Fed. Reg. 27,421, 27,422 (May 10, 2012)

. Commerce found that Precision ha d engaged in “ta rgeted dump ing ” because Precision’s sales reflected a “pattern of export prices

. . . that differ [ed] significantly
among certain customers , regions, and time periods .” 77 Fed. Reg. at 17,031 ; see also 19 U.S.C. § 1677 f1(d)(1)(B)(i); U.S. Steel Corp. v. United States , 621 F.3d 1351, 1359 (Fed. Cir. 2010). And, central to this appeal,
t he agency proceeded to calculat e Precision’s dumping margin by ap plying the average

- to

- transaction methodo logy to all U.S. sales reported by Precision

, irrespective of

1 Another mandatory respondent identified by Commerce

, Dubai Wire FZE (“Dubai Wire”), participated in the agency’s dumping investigation and intervened in the Trade Court, but did not file a brief in this appeal. We have limited our recitation of the facts to those pertinent to Precision, but note that the relief sought by Mid Cont inent could impact Dubai Wire as wel l

.4 MID CONTINENT NAIL C ORPORATION v. US

whether the agency had deemed a sale to be targeted or
not

. See 77 Fed. Reg. at 17,031

. The average

- to

- transaction methodology is one of the three methods that Commerce may use in an investig ation to calculate dumping margins in accordance with the Tariff Act of 1930

, as amended by the Uruguay Round Agreements Act (URAA), Pub. L. No. 103

– 465, 108 Stat. 4809 (1994)

. The statute provides that

, in general, Co mmerce “shall determine whether

. . . subject merchandise is being sold in the United States at less than fair value ” by either: (1) “ comparing the weighted average of the normal values to the weighted average of the export prices (and constructed export prices) for comparable merchandise ”; or (2) “ comparing the normal values of individual transactions to the export prices (or construc ted export prices) of individual transactions for comparable

me rchandise .” 19 U.S.C. § 1677f

- 1(d)(1)(A)(i)

– (ii). These
two methods are respectively known as the “average

- to

average” and “transaction

- to

- transaction” methodologies.
The statute permits Commerce to use a third met hod— the aver age

- to

- transaction methodology— if certain conditions are met. The average

- to

- transaction method o logy “compar[es] the weighted average of the normal values to the export prices (or constructed export prices) of individual transactions for comparable merchandise .” Id. § 1677f

- 1(d) (1)(B). To calculate dumping margins using the average

- transaction methodology , however, Commerce must find “ a pattern of export prices (or co nstructed export prices) for comparable merchandise that differ significantly among purchasers, regions, or pe riods of time ,” ( i.e. , targeted dumping) and explain “ why such differences cannot be taken into account using ” the first two methods. Id. § 1677f

- 1(d)(1)(B)(i)

– (ii)

. In other words

, Commerce must first conclude that a respondent is e ngaged in targeted dumping and explain why the other two statutory methodologies fail to sufficiently account for it

. See U.S. Steel , 621 F.3d at 1358

– 59

.MID CONTINENT NAIL C ORPORATION v. US 5

I n calculating dumping margins using the average

- to

transaction methodology , Commerce has “historically” used a practice known as “zeroing” in which “ negative dumping margins ( i.e. , margins of sales of merchandise sold at nondumped prices) are given a value of zero and only positive dumping margins ( i.e. , margins for sales of merchandise sold at dumped prices) are a ggregated .” Union Steel v. United States

, 713 F.3d 1101, 1104 (Fed. Cir. 2013). As a result, “ dumping margins for sales below normal value are not offs et by ‘negative dumping margins’ for those sales made above normal value .” Corus Staal BV v. United State s , 502 F.3d 1370, 1372 (Fed. Cir. 2007). This lack of offsetting leads to higher dumping mar gins when the average

- to

- transaction methodology is used

, which has made calculation of margins using this met hodology “controversial.” See Union Steel , 713 F.3d at 1104

. II Shortly after the enactment of the URAA, Commerce promulgated a regulation through notice

- and

- comment rulemaking restricting the agency’s use of the average

- to

transaction methodology. This regulation —k nown as the

“ Limiting Regulation ”— provided that even in cases meeting the statutory criteria for applying the average

- to

transaction methodology

, the agency would “normally .

. . limit [its] application

. . . to those sales that constitute targeted dumping ,” as opposed to applying the aver age

- to

transaction methodology to all of a respondent’s sales

. See 19 C.F.R. § 351.414(f)(2) (2008) ; see also Antidumping Du ties; Countervailing Duties, Final Rule, 62 Fed. Reg. 27,296 , 27
, 375 (May 19, 1997).

In 20 08, however

, Commerce withdrew the Limiti ng Regulation , along with several other regulations gover ning the agency’s handling of targeted dumping alleg ations

. See Withdrawal of the Regulatory Provisions Governing Targeted Dumping in Antidumping Duty Investigations , Interim Final Rule , 73 Fed. Reg. 74,930

,6 MID CONTINENT NAIL C ORPORATION v. US

74,931 (Dec. 10, 2008) [hereinafter Withdrawal Notice ]

. The agency stated that it had originally promulgated the regulations “without the benefit of any experience on the issue of targeted dumping,” and that the regulations “may have est ablished thresholds or other criteria that .

. . prevented the use of [the average

- to

- transaction] metho dology to unmask dumping, contrary to the [c]ongressional intent.” Id. Commerce noted that withdrawal would allow the agency to gain “additional experie nce” with targeted dumping through “case

- by

- case adjudication .” Id.

Commerce acknowledged in Withdrawal Notice that repeal of t he target ed dumping regulations was subject to “the requirement to provide prior notice and opportunity for public comment, pursuant to .

. . 5 U.S.C. § 553(b)(B), ” but expr essly “waive[d] the requirement” by invoking the APA’s “good cause” excep tion to noti ce

- and -comment rulemaking . 73 Fed. Reg. at 74,931. In finding good cause, Commerce explained that n otice

- and

- comment rulem aking was “impracticable and contrary to the public inter est” because the rescinded regulations were “applicable to ongoing anti dumping investigations ” and that “immediate revocation [was] necessary to ensure the proper and efficien t operation of the antid umping law[s].” Id

. At no point in Withdrawal Notice did Commerce refer to any prior notices proposing to withdraw the Limiting Regulation , or otherwise su ggest that the agency had provided adequate notice and opportunity for comment under the APA.

I n calculating Precision’s dumping margin three years later in this proceeding

, Commerce applied the average

to

- transaction methodology, having found both “a pattern of export prices .

. . that differ[ed] significantly among customers, regions, or by time -p eriod,” and that applying the “average

- to

- average methodology mask[ed] differences in the patterns of prices between the targeted and non

targeted groups .” 77 Fed. Reg. at 17,031. In this appeal,MID CONTINENT NAIL C ORPORATION v. US 7

no party has challenge d Commerce’s determination that the st atutory criteria for applying the average

- to

transaction methodology were met . W hat the parties dispute is the agency’s decision to apply the average

- to

transaction methodology not just to “those sales that constitute[d] targeted dumping

, ” as the Limiting Regul ation had previously provided , but “to all U.S. sales repor ted by .

. . Precision

. ” See id. (emphasis added)

. II I Precision challenged Commerce’s final determination in the Trade Court

. See Mid Continent Nail Corp. v. United States ( Mid Continent I ), 999 F. Supp. 2d 1307, 13 09

– 10 (Ct. Int’l Trade 2014). In relevant part, Precision argued that Commerce was required to apply the Limi ting Regulation to calculate Precision’s dumping margin because the agency’s repeal of the regulation in “ Wit hdrawal Notice was ineffective and contra ry to law,” as it had “occurred outside the basic procedural framework required by Congress under the [APA].” Id. at 1319

– 20. According to Precision, h ad the agency applied the Limiting Regulation

, application of the averag e- to

- transaction methodology to all of Precision’s domestic sales would not have been “justif[ied]” because the agency had “only found evidence of targeting for less than one percent ” of Prec ision’s U.S. sales, the exact scenario that had concerned Commerce when it adopted the Limiting Regulation in the first place

. Id

. at 1319

. 2

The Trade Court agreed that Commerce’s withdrawal of the Limiting Regulation violated the APA

. After co ncluding that withdrawal of the regulation was subject to

2 Commerce stated at the time that “it would be ‘unreasonable and unduly punitive’ to apply the [average

to

- transaction methodology] to all sales where, for exa mple, targeted dumping accounted for only one percent of a firm’s total sales.” 62 Fed. Reg. at 27,375.8 MID CONTINENT NAIL C ORPORATION v. US

notice

- and

- comment rulemaking , the court rejected the argument that t he ag en cy had provided adequate notice and opportunity for comment through two earlier Federal Register notices because those notices had not proposed to repeal the regulation

. See i d. at 1322. The court al so rejected Comm erce’s invocation of good cause and found that the agency’s procedural default w as not excusable as harmless error

. See i d . Accordingly, the Trade Court remanded Commerce’s final determination and instructed the agency to “redetermine [Precision’s] dumping ma rgin[] by applying the Limiting Regulation .” Id

. at 1323

. IV On remand, Commerce applied the Limiting Regul ation as ordered by the Trade Court

. As the regulation provided that Commerce would “normally” not apply the
average

- to

- tra nsaction methodology to all sales, see 19 C.F.R. § 3 51.414(f)(2) (2008), the agency concluded that application of the average

- to

- transaction methodology to all of Precision’s sales was unwarranted because “the record does not contain evidence to suggest that this normal limitation should not be applied.” J.A. 89. As a consequence of limiting the average

- to

- transaction met hodology to only targeted sales, Commerce found that Precision’s dumping margi n was “ de minimis

, ” and ther efore imposed a duty of 0.00 percent

. Id.

Mid Continent appealed Commerce’s remand red etermination to the Trade Court, arguing that the agency had misapplied the Limiting Regulation

. See Mid Cont inent Nail Corp. v. United State s ( Mid Continent II ), 113 F. Supp. 3d 1318, 1326 (Ct. Int’l Trade 2015)

. The court rejected Mid Conti nent’s argument and affirmed Co mmerce’s remand redetermination. See id. at 1327

– 28, 1331. Mid Continent then filed this appeal, which Co mmerce has not join ed

. We have jurisdiction under 28 U.S.C. § 1295(a)(5).MID CONTINENT NAIL C ORPORATION v. US 9

V During the pendency of the Trade Court proceedings

, and in light of the court’s ruling that Withdrawal Notice was ineffective to repeal the Limiting Regulation

, 3 Co mmerce in 2013 initiated a new proceeding to accomplish the repeal

. The agency published a Notice of Proposed R ulemaking (“NPRM”) in which it sought comments on a proposal “not to apply .

. . the previously withdrawn regulatory provisi ons governing targ eted dumping. ” No nApplication of Previously Withdrawn Regulatory Prov isions Governing Targeted Dumping in Antidumping Duty Investigation s , Proposed Rule, 78 F ed. Reg. 60,240

, 60,240 (Oct. 1, 2013 ). In 2014, Commerce issued a final rule making withdrawal of the regulations effective May 22, 2014. See 79 Fed. Reg. 22,371 (Apr. 22, 2014). No party to this appeal has challenged the 2014 withdrawal

, or contended that it should be applied retroactively

. Accordingly , this case solely addresses whether the wit hdrawn regulations were in effect during the period b etween December 10, 2008, and May 22, 2014.

D ISCUSSION We review the Trade Court’s decision to uphold Co mmerce’s remand redetermination de novo

. See U.S. Steel

, 621 F.3d at 1357. W e will affirm the agency unless its decision “ is unsupported by substantial evidence on the record, or other wise not in accordance with law

. ” 19 U.S.C. § 1516a(b)(1)(B)(i)

. “Commerce’s decision will [also] be set aside if it is arbitrary and capricious.” Changzhou Wujin Fine Chem. Factory Co. v. Uni ted States , 701 F.3d 1367, 1374 (Fed. Cir. 2012)

. We do not defer to an agency’s interpretation of the APA ’s statutory requirements , although the statute itself

3 The Trade Court first reached this conclusion in an earlier case, Gold East Paper (Jiangsu) Co. v. United States , 918 F. Supp. 2d 1317, 1328 (Ct. Int’l Trade 2013).10 MID CONTINENT NAIL C ORPORATION v. US

presumes that review of agency action under the arb itrary

- and

- capricious standard is “highly de ferential.” Nat’l Org. of Veterans’ Advocates, Inc. v. Sec’y of Veterans Affairs , 260 F.3d 1365, 1372 (Fed Cir. 2001); s ee also Collins v. Nat’l Transp. Safety Bd. , 351 F.3d 1246, 1253 (D.C. Cir. 2003) (“ For generic statutes like the APA

, . . . the broadly sprawling applicability undermines any basis for deference, and courts must therefore review interpr etative questions de novo .” ); Mobil Oil Corp. v. Dep’t of Energy , 728 F.2d 1477, 1486

– 87 (Temp. Emer. Ct. App. 1983) (“ We are free to make an independent determin ation of the legal question as to whether the agency has made a showing of good cause. ” ). 4

I

We first address Mid Continent’ s contention that Commerce provided adequate notice for the repeal of the Limiting Regulation through two Federa l Register notices issued in 2007 and 2008: (1) Targeted Dumping in Ant idumping Investigations; Request for Comment, 72 Fed. Reg. 60,651 (Oct. 25, 2007) [hereinafter Request for Co mment ]; and (2) Proposed Methodology for Identifying and Analyzing Targeted Dumping in Antidumping Investig ations; Request for Comment

, 73 Fed. Reg. 26,371 (May 9, 2008) [hereinafter Proposed Methodology ].

4 Accord Sorenson Commc’ns Inc. v. FCC , 755 F.3d 702, 706 (D.C. Cir. 20 14); Iowa League of Cities v. EPA

, 711 F.3d 844, 872 (8th Cir. 2013); Meister v. U.S. Dep’t of Agric. , 623 F.3d 363, 370

– 71 (6th Cir. 2010); Reno

- Sparks Indian Colony v. EPA , 336 F.3d 899, 909 n.11 (9th Cir. 2003); Warder v. Shalala , 149 F.3d 73, 79 (1st Cir. 1998); Weyerhaeuser Co. v. Shalala , 590 F.2d 1011, 1027 (D.C. Cir. 1978). See generally United States v. Reynolds , 710 F.3d 498, 507

– 09 (3d Cir. 2013); Jared P. Cole, Cong. Research Serv., R44356, The Good Cause Exception to Notice and Comment Rulemaki ng: Judicial Review of Agency Action 13

– 14 (2016).MID CONTINENT NAIL C ORPORATION v. US 11

A
The requirement that an agency provide adequate n otice before altering its regulations is rooted in the APA ’s provision s governing the administrative rulemaking
pro cess. Under the APA , whenever an agency decides to “formulat[e], amend[], or repeal[] a rule,” it must first publish an NPRM setting forth “either the terms or substance of the proposed rule [,] or a description o f the subjects and issues involved

. ” 5 U.S.C. §§ 553(b), 551(5). For the purposes of notice and comment, withdrawal or repeal of an existing regulation is treated the same as promulgation of a new regulation. See Tunik v. MSPB

, 407 F.3d 1326, 1342 (Fed. Ci r. 2005). Although the notice “need not specify every precise proposal which [the age ncy] may ulti mately adopt ,” it “ must be sufficient to fairly apprise interested parties of the issues involved.” Nuvio Corp. v. FCC , 473 F.3d 302, 310 (D.C. Cir. 2006) (qu oting Action for Children’s Television v. FCC , 564 F.2d 458, 470 (D.C. Cir. 1977 )). Adequate notice “is crucial to ‘ ensure that agency regulations are tested via exposure to diverse public comment,

. . . to ensure fa irness to affected parties, and

. . . to give affected parties an opportunity to develop evidence in the record to support their objections to the rule and thereby enhance the quality of judicial review .’ ” Int’l Union, United Mine Workers of Am. v. Mine Safety & Health Admin. , 626 F.3d 84

, 95 (D.C. Cir. 2010) (quoting Int’l Union, United Mine Workers of Am. v. Mine Safety & Health Admin. , 407 F.3d 1250, 1259 (D.C .Cir. 2005)).

T he disposi tive question in assessing the adequacy of notice under th e A PA is whether an agency’ s final rule is a “logical outgrowth” of an earlier request for comment

. Long Island Care at Home, Ltd. v. Coke , 551 U.S. 158, 174 (2007); Veteran’s Justice Grp., LLC v. Sec’y of Veterans Affairs , 818 F.3d 1336, 1344 (Fed. Cir. 2016).12 MID CONTINENT NAIL C ORPORATION v. US

The logical outgrowth doctrine recognizes that a ce rtain degree of change be tween an NPRM and a final rule is inherent to the APA’s scheme of rulemaking through notice and comment

. See Int’l Harvester Co. v. Rucke lshaus , 478 F.2d 615, 632 n.51 (D.C. Cir. 1973)

. Accordin gly, j u di cial formulations of the doctrine have sought to “balance” the values served by adequate notice, see Int’l Union , 626 F.3d at 94

– 95, with “ the public int erest in expedi tion and finality .” Small Refiner Lead Phase

- Down Task Force v. EPA , 705 F.2d 506, 547 (D.C. Cir. 1983)

. W e recently stated , for instance, that “[a] final rule is a logical outgrowth of a proposed rule only if interested parties should have anticipated that the change was possible, and thus reasonably should have filed their comments on the subject during the notice

- and

- comment period .” Veteran’s Jus tice , 818 F.3d at 1344 (alterations and internal quot ation marks omitted). 5

C ourts have consistently upheld final rules as logical
out growths “where the NPRM expressly asked for co mments on a particular issue or otherwise made clear that the agency was contemplating a particular change.” CSX Transp. Inc. v. Surface Transp. Bd. , 584 F.3d 1076, 1081 (D.C. Cir. 2009) (citing Owner

– Operator Indep. Drivers Ass’n v. Fed. Motor Carrier Safe ty Admin. , 494 F.3d 188, 209

– 10 (D.C. Cir. 2007) ; and City of Portland v. EPA , 507 F.3d 706, 715 (D.C. Cir. 2007) ); see also , e.g. , Alto Dairy v. Veneman , 336 F.3d 560, 570 (7th Cir. 2003) ( upholding final rule prohibiting “paper pooling” of milk producers with “distant supply plants” because agency’s notice raised the issue of “pool” eligibility); Public Service Co m-

5 S ee also Am. Water Works Ass ’ n v. EPA , 40 F.3d 1266, 1274 (D.C .Cir. 1994) (“We apply [the logical ou tgrowth] standard functionally by asking . . . whether a new round of notice and comment would provide the first opportunity for interested parties to offer comments that could persuade the agency to modify its rule.”).MID CONTINENT NAIL C ORPORATION v. US 13

mission v. FCC , 906 F.2d 713, 715 (D.C. Cir. 1990) (final rule was logical outgrowth because board affiliated with the agency asked for comments on the proposal that was finally adopted , even though the agency itself did not)

. Courts applying the logical outgrowth doctrine have also permitted agenci es to drop critical elements of pr oposed rule s even if a resulting final rule effectively aba ndons an agency’s initial proposal . I n Long Island Care

, for example, the Department of Labor proposed a rule that would have rendered certain “companionship worke rs”

o utside the exemption to wage and hour restrictions under the Fair Labor Standards Act (“FLSA”)

. See 551 U.S. at 174

– 75 . The rule the agency eventually adopted, however, left these workers within the FLSA’s exemption. The Court sustained the agency’s f inal rule, observing that “ [s]ince the propos ed rule was simply a proposal, its presence meant that the Department was considering the matter; after that consideration the Department migh t choose to adopt the proposal or to withdraw it.” Id. at 175. Because this result was “reasonably foreseeable,” the Court held that the agency had complied with notice

- and

comment rulemaking

. Id. 6
Nonetheless, t here are limits to how far a notice of proposed rulemaking may be stretched under the logical outgrowth doctrine

. In some cases, these limits may be difficult to discern, Kooritzky v. Reich , 17 F.3d 1509 , 1513 (D.C. Cir. 1994), but certain clear lines have been drawn. “The logical outgrowth doctrine does not extend to a final

6 See also, e.g.

, Veterans Justice , 818 F.3d at 1345 (upholding a final rule because “[o]ne logical outgrowth of a proposal is surely . . . to refrain from taking the pr oposed step”); Ariz. Pub. Serv. Co. v. EPA , 211 F.3d 1280, 1299 (D.C. Cir. 2000) (“In first proposing that tribes would have to meet the ‘ same requirements ’ [for judicial review under the Clean Air Act] as states, EPA effect ively raised the question as to whether this made sense.”).14 MID CONTINENT NAIL C ORPORATION v. US

rule that finds no roots in the ag ency’s proposal because something is not a logical outgrowth of no thing, . . . [or] where interested parties would have had to divine t he agency’s unspoken thoughts, because the final rule was surprisingly distant from the [a]gency’s proposal .” Envtl. Inte grity Project v. EPA , 425 F.3d 992, 996 (D.C. Cir. 2005) (internal quotation marks and citations omitted).

B Having summarized the principles animating the lo gical outgrowth doctrine, we turn to whether Commerce’s repeal of the Limiting Regulation in Withdrawal Notice was a logical outgrowth of Request for Comment and Proposed Methodology

. The Trade Court determined that the notices were insufficient because neither notice made “obvious to an interested observer that

. . . rule making [ to withdraw the rule was] intend ed” by the agency

. Mid Continent I

, 999 F. Supp. 2d at 1322. We agree. We begin with the statute. The T ariff Act as amended by the URAA obligates Commerce to make two findings before the agency may use the aver age

- to

- transaction methodology to assess targeted dumping in an investig ation

. First, the agency must find “ a pattern of export prices (or constructed export prices) for comparable me rchandise that differ significantly among purchasers, regions, or periods of time .” 19 U.S.C. § 1677f

- 1(d)(1)(B)(i). Second, Commerce must “explain[] why such differences cannot be taken into account using ” the other two statut ory methods. Id. § 1677f

- 1(d) (1)(B)(ii).
Once these criteria are met, however, the statute leaves undefined the precise scope of Commerce’ s applic ation of the ave rage

- to

- transaction methodology ; this led to concerns that if a respondent had been found to be e ngaged in targeted dumping , but only in some limited fashion , application of the methodology to “all of [the respondent’s] sales . . . would be unreasonable and unduly punitive.” See Antidumping Duties; Countervailing D u-MID CONTINENT NAIL C ORPORATION v. US 15

ties, 61 Fed. Reg. 7308 , 7350 (Feb. 27, 1997). Commerce responded to these concerns by promulgating the Limiting Regulation , which provided that the agency would “no rmally limit the application of the ave rage

- to

- transaction method[ology] to those sales that constitute targeted dumping.” 19 C.F.R. § 351.414(f)(2) (2008)

. Thus, even if the agency had found a respondent to have engaged in targeted dumping —a condition precedent to the agency’s use of the average

- to

- transaction methodology

— under the Limiting Regulation

, Commerce would “normally” limit the scope of the average

- to

- transaction methodology to the respondent ’ s targeted sales

— instead of all sales.

T en years after promulgating the Limiting Regul ation, Commerce published Request for Comment

, in which the agency sought guidance regarding an appropriate test
to determine the existence of targeted dump ing

. In this notice

, Commerce admitted that it had accrued only “limited experience with targeted dump ing ” despite the interven ing years; that it had yet to develop a standard targeted dumping test ; and that its “experience with regard to the use of the [average

- to

- transaction] method ha[d] been very limited.” 72 Fed. Reg. at 60,651. By publishing Request for Commen t , Com merce hoped to solicit the public ’s views on “its development of a metho dology for determining whether targeted dumping is occu rring in antidumping investiga tions,” and “ input on standards and tests that may be appropriate in a targeted dumping analysis.” Id. Specifically, t he agency sought guidance on: (1) how to determine the existence of a “pattern of export prices . . . among purchasers, regions, or periods of time”; (2) how to determine if such a pattern “differ[s] significantly”; and (3) the “appropriate statistical techniques” to assess targeted dumping. Id.
Despite raising these concerns

, Request for Comment was not published in the Federal Register as an NPRM, meaning that the notice on its face did not indicate that Commerce was considering a rulemaking. More proble m-16 MID CONTINENT NAIL C ORPORATION v. US

atic ally

, Request for Comment did not propose any kind of rule or raise a ny question about the scope of the average

to

- transaction methodology , much less the conditions under which the agency should depart from its “nor mal ” practice of not applying the methodology to all sales

. Request for Comment did not even include a citation to the Limiting Regulation

. Instead

, in Request for Comment

, Commerce simply sough t information on the broad issue of how the agency should determine the existence of targeted dumping

— a distinct, predicate issue to the problem addressed by the Limiting Regulation ( i.e. , the scope of the average

- to

- transaction methodology)

. The consequenc e of these deficiencies is that Request for Comment falls short of satisfying the APA’s requir ement s for notic e and opportunity for comment

. W e find the D.C. Circuit decision in Kooritzky to be instructive on this point

. At issue in Kooritzky was a “no

- substitution” rule promulgated by the Department of Labor that pr ohibited em ployers from substituting one alien for another with respect to certifications necessary for obtaining employment- based visas. See 17 F.3d at 1512. In a notice of proposed rule making to implement then

- recent statut ory amendments, the agency made no mention of substit ution

. Id. at 1513. In rejecting the agency’s NPRM as inadequate, t he D.C. Circuit observed that the “notice .

. . contain[ed] nothing, not the merest hint, to sugge st that the [agency] might tighten its existing practice of allowing substitu tion, ” and that the preamble to the agency’s notice in the Federal Register “ offered no clues” to a “nonexpert rea der .

. . of what was to come .” Id

. Like the notice at issue in Kooritz ky

, Request for Comment gave no indication that Commerce was conte mplating a potential change in the Limiting Regulation

. Nor did commentators responding to Request for Co mment perceive t he agency to be raising the issue of the regulation’s repeal o r revision, or suggest such repeal orMID CONTINENT NAIL C ORPORATION v. US 17

revision themselves. 7 We therefore have no doubt that Commerce’s repeal of the Limiting Regulation was not a logical outgrowth of Request for Comment because

, as in Kooritzky

, “[s] omething is not a logical outgrowth of nothing.” 17 F.3d at 1513.

C

Six months after Request for Comment , Commerce

— still concerned with the appropriate test for determining the existence of targeted dumping —p roposed a new two

part test addressing the problem in Proposed Methodol ogy

. 8 This seco nd notice acknowledged the responses that

7 At best, commenting parties understood the age ncy to be open to suggestions on how to apply the Limiting Regulation. To illustrate, as one commentator stated: “[T]he Department should clarify w hen it will apply the
average

- to

- transaction methodology to all sales , rather than only targeted sales. We think it would be appropr iate .

. . to apply the average

- to

- transaction method to all sales .

. . where the targeted quantity exceeds twenty percent of the U.S. sales database.” Letter from David A. Hartquist, Executive Director, Committee to Support U.S. Trade Laws to David Spooner, Assistant Secretary for Import Administration 3 (Dec. 10, 2007) (emphasis ad ded), available at https://perma.cc/5FJR

- WKZD

. 8 Under this test

— also known as the Nails test, see JBF RAK LLC v. United States , 790 F.3d 1358, 1367 & n.5 (Fed. Cir. 2015)

— Commerce first “determine[s], on an exporter- specific basis, the share of the allegedly targeted customer’ s purchases of subject merchandise, by sales value, that are at prices more than one standard devi ation below the weighted

- average price to all customers of that exporter, targeted and non -targeted .” 73 Fed. Reg. at 26,372. “ If that share exceeds 33 pe rcent of the total value of the exporter ’ s sales of subject merchandise to the allegedly targeted customer, then the pattern requir ement is met. ” Id. In the second part of the Nails test,18 MID CONTINENT NAIL C ORPORATION v. US

Commerce had received following Request for Comment

, but did not offer the agency’s response thereto

. See Pr oposed Methodology

, 73 Fed. Reg. at 26, 371 . In addition to seeking new comments on its proposed test for d etermi ning the existence of targeted dumping , Commerce also raised several “related issues .” Id

. In particular , the
agency “request[ed] comment on the application of the [average

- to

- transaction methodology] and the conditions, if any, under which the [average

- to

- transaction] metho dology should apply to all sales to the target, even if some sales of a control number do not pass the targeted dum ping test.” Id

. at 26,372 (emphasis added)

. Proposed Methodology thus presents a closer question under the logi cal outgrowth doctrine than Request for Comment . T he Limiting Regulation had provided that Commerce would “normally” apply the average

- to

transaction methodology only to “those sales” found to “constitute targeted dumping.” 19 C.F.R. § 351.414(f)(2) (2008) . Therefore , by seeking public comment on “ the condi tions, if any,” under which the average

- to

transacti on methodology should be applied to all sales made by a respondent

— instead of just the respondent’s targeted sales

— Commerce effectively raised the general subject of the Limiting Regulation , perhaps suggesting

Commerce “determine[s] the total sales value for which the difference between (i) the sales

- weighted average price to the allegedly targeted customer and (ii) the next higher sales

- weighted average price to a non

- targeted customer exceeds the average price gap

. . . for the non

targeted group .” Id. If the share of sales satisfying these criteria “ exceeds 5 percent of the total value of sales of subject merchandise to the allegedly targeted customer ,” then the pattern of price differences is deemed “significant,” and the exporter will be found to have engaged in targeted dum ping. Id.MID CONTINENT NAIL C ORPORATION v. US 19

wholesale elimination of the agency’s discretion to apply the average

- to

- transaction methodology to all sales

. Although courts have found logical outgrowths when

an NPRM “ expressly asked for c omments on a particular issue or otherwise made clear that the agency was co ntemplating a particular change ,” CSX , 584 F.3d at 1081, we do not think that this principle supports holding Proposed Methodology to have provided the “necessary predicate” for Wi thdrawal Notice

. Kooritzky , 17 F.3d at 1513. For starters, like Request for Comment

, Proposed Methodology on its face did not indicate that further action to withdraw the Limiting Regulation was being considered

. Instead, Proposed Methodology merely sought public views on how to interpret the regulation itself

— which provided that the agency would “normally” not apply the average

- to

- trans action methodology to all sales

— that is, how exactly Commerce should apply the “normally ” limitation. Becaus e the agency had left the circumstances in which it would have applied the ave rage

- to

- transaction methodology to all sales largely und efined

, “interested persons” would have perceived the question regarding the Limiting Regulation posed in Proposed Methodo logy as simply Commerce’s first step in clarifying the scope of its own regulation

. Indeed, co mments that the agency received in response to Proposed Methodology did not understand Commerce to be raising a broader question, i.e.

, whether to repeal the Limiting Regulation

. See note 10
, infra

. Posing such a general “scope” question does not suffic e to provide the requisite “fair notice” for an agency rule to be upheld as a logical outgrowth. See Long Island Care

, 551 U.S. at 174. In CSX , the D.C. Circuit conf ronted a similar problem in addressing a rule promulgated by the Surface Transportation Board (“STB”) to resolve railroad rate disputes. The STB had originally proposed a rule allowing such disputes to be resolved using “comparison groups drawn from t he most recent year of waybill sa m-20 MID CONTINENT NAIL C ORPORATION v. US

pling.” 584 F.3d at 1078. In the rule finally adopted, however, the agency “switch[ed] from one year to four years’ worth of data.” Id. The STB argued that the final rule was a logical outgrowth because “mention[ing]

. . 

### . the release of one

- year data

. . . gave notice that the amount of data available

. . . might change.” Id. at 1082. The D.C. Circuit rejected this argument for two re asons. First, the court observed that although the STB’s notice had proposed a number o f related regulatory changes , “it nowhere even hinted that [ t he agency ] might consider expanding the number of years from which comparison groups could be derived.” Id. Second, permi tting the “mere mention” of the one

- year timeframe for drawing comparison groups to provide adequate notice would allow the agency “to justify any final rule it might be able to devise by whimsically picking and choosin g within the four corners of a lengthy ‘ notice.’” Id. (quoting Envtl. Integrity Project , 425 F.3d at 998). “ Suc h a rule would hardly promote the purposes of the APA’s notice requirement.” Id.

The same reasoning applies to Proposed Methodology. Despite mentioning the subject matter of the Limiting Regulation , Commerce’s primary purpose in the P roposed Methodology was to propose a new test for determining whether a respondent was engaged in target ed dumping and to seek public comment on this proposal. As a “rela ted issue” the agency posed a general question of when to apply the average

- to

- transaction methodology to all sales, not just targeted sales. But this question did not raise the “particular issue” of withdrawing the Limiting Regul ation ; it sought only to clarify the meaning of the Limiting Regulation ’s recitation of the word “normally .” And, a s in CSX

, a llowi ng Commerce’s question in Proposed Metho dology to provide ade quate notice for Withdrawal Notice would permit the agency to adopt a final rule from a limitless continu um of regulatory actions. Given this range of possibilities, we cannot say that Commerce’sMID CONTINENT NAIL C ORPORATION v. US 21

repeal of the Limiting Regulation was “reasonably for eseeable.” Long Island Care , 551 U.S. at 175

. It follows that n either Request for Comment nor Proposed Metho dology provided adequate notice and oppor tunity for co mment necessary for compliance with the APA.

D Mid Continent argues that even if Commerce did not itself provide the required notice, comments made in response to Request for Comment and Proposed Methodo logy urged Commerce to apply the average

- to

- transaction methodology to “all sales” and thereby effectively raised the issue of repealing the Limiting Regulation

. Although responses by commentators may be relevant to the court’s inquiry under the logical outgrowth do ctrine, as a ge neral matter, an agency “cannot bootstrap notice from a comment.” Fertilizer Inst. v. EPA , 935 F.2d 1303, 1312 (D.C. Cir. 1991). 9 Here , the comments relied

on by Mid Continent never urged Commerce to repeal the Limiting Regulation ; commentators simply ask ed the agency to construe the regulation more or less broadly

. 10

9 See also Shell Oil Co. v. EPA , 950 F.2d 741, 751 (D.C. Cir. 1991) (noting that under NRDC v. Thomas , 838 F.2d 1224, 1243 (D.C. Cir. 1998), comments to an agency proposal are a relevant factor if they raise a “foreseeable possibility of agenc y action”); Int’l Union , 407 F.3d at 1261 (underscoring that NRDC v. Thomas represents “the outer limits of the ‘logical outgrowth’ doctrine” and that the agency in that case gave notice and opportunity for comment two weeks before promulgating the final r ule).

10 R esponses to Proposed Methodology , for example, suggested a number of ways to apply the Limiting Reg ulation , including the establishment of numerical thres holds that if satisfied would result in applying the average

transaction methodology to all sales

. See Letter from King & Spalding LLP to Hon. David Spooner, Assistant Secr e-22 MID CONTINENT NAIL C ORPORATION v. US

Many of these comments simply urged Commerce to follow the approach the agency had set forth when it first promulgated the regulation in 1997, viz. , that “in some instances, it may be necessar y to apply the average

- to

transaction methodology to all sales to the targeted area

,

. . . or even to all sales of a particular respondent ,” 62 Fed. Reg. at 27,375 (noting that such c ases could encompass

tary for Import Administration 12 (June 23, 2008), avai lable at https://perma.cc/ Q7T6

- 5RH3 (proposing a twenty percent threshold based on U.S. sales); Letter from Ska dden, Arps, Slate, Meagher & Flom LLP to David Spooner, Assistant Secretary for Import Administration 20 (June 23, 2008), available at https://perma.cc/HUJ4

- UXPE (proposing a twenty percent threshold or “when the Department cannot identify the full scope of the respon dent’s targeted dumping”). Mid Continent identifies a number of specific co mments responding to Proposed Methodology that it co ntends addressed “ possible modification” of the Limiting Regulation . We disagree . T hese comments ad dress ed Commerce’s interpretation of the Limiting Regulation ’ s “nor mally ” limitation a nd did not suggest revision or repeal

. To illustrate, one comment cited by Mid Conti nent stated that Commerce “should apply the [average

- to

transaction] methodology to all of th e sales to the target ” because “ [o]nce a customer or region has been identified as being targeted by a respondent

. . . [Commerce] should consider that all sales to that target are subject to the same pricing practices and are, therefore, targeted sales.” Letter from David A. Hartquist, Kelley Drye & Warren LLP to Secretary of Commerce 30 (June 23, 2008) (e mphasis added)

, available at https://perma.cc/D34C

- VU94

. The emphasized portion s of this comment u nderscore the comment’s con sisten cy with the Limiting R egulation, i.e.

, that Commerce should “normally” limit the average

- to

transaction methodology to “sales that constitute targeted dumping

. ” 19 C.F.R. § 351.414(f)(2) (2008).MID CONTINENT NAIL C ORPORATION v. US 23

respondent s engaged in “widespread” or “ extensive[]” targeted dumping)

. See note 10, supra

. And, the fact that comments responding to Request for Comment and Pr oposed Methodology were entirely silent on the issue of repealing the Limiting Regulation supports the conclusion that these notices were insufficie nt to render the agency’s actions in Withdrawal Notice a “logical outgrowth.” See,
e.g. , Council Tree Commc’ns, Inc. v. FCC , 619 F.3d 235, 256 (3d Cir. 2010)

. Finally, o ur conclusion that Withdrawal Notice is not a logical outgrowth of either Request for Comment or Proposed Methodology is further bolstered by four other considerations. First, Commerce never referred to Request for Comment or Proposed Methodology in Withdrawal Notice

, nor responded to the comments it had received in response to the two earlier notices

. 11 Second, in Wit hdrawal Notice the agency did not adopt any of the pr oposals mad e by commentators, choosing instead to resolve the scope of the average

- to

- transaction methodology through “case

- by

- case adjudication.” 73 F ed. Reg. at 74,931. Third, Commerce curiously requested further comments regarding its repeal of the Limiting Regulation in Withdrawal Notice , which suggests that the agency believed itself to not have secured adequate comments on the issue. In contrast, Commerce did not make a similar request for additional comments in its 2014 rulemaking to withdraw the Limiting Regulation. See 79 Fed. Reg. at 22,378. Last but not least

, Commerce did not suggest in Withdrawal Notice that it had in fact complied with the

11 See, e.g.

, Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co. , 463 U.S. 29, 48 (1983); Disabled Am. Veterans v. Gober , 234 F.3d 682, 692 (Fed. Cir. 2000) (“[I] nextricably intertwined with

. . . 5 U.S.C. § 553(c) is the agency’ s need to respond, in a reasoned manner, to any comments received by the agency that raise significant issues with respect to a proposed rule. ”).24 MID CONTINENT NAIL C ORPORATION v. US

APA by issuing the ea rlier notices. To the contrary, Co mmerce thought it necessary to invoke the APA’s good cause exception, which implies that the agency did not consider its prior notices to have satisfied the statute’s procedural requirements

. Although the inconsistency of simultaneously invoking good cause and arguing post hoc compliance with the APA is not dispositive, the ten sion between these conflicting positions strong ly supports our view that Commerce’s (and now, Mid Continent’s) asse rtion that the agency had complied with notice

- and

comment rulemaking is not supportable

. In summary, w e hold that Commerce’s repeal of the Limiting Regulation in Withdrawal Notice was not a logical outgrowth of Request for Comment and Proposed Methodology , and that agency failed to provide adequate notice under the APA.

II

W e must now consider whether Commerce’s failure to provide adequate notice may be excused for good cause

, the sole ground Commerce cited for dispensing with notice and comment in Withdrawal Notice . A n agency ma y forgo notice

- and

- comment rulemaking for good cause if it “ finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest .” 5 U.S.C. § 553(b)(3)(B). As a general matter, e xceptions to notice

- and

comment rulemaking under the APA are “narrowly co nstrued and only reluctantly countenanced.” Mobil Oil , 728 F.2d at 1490 (quoting New Jersey v. EPA , 626 F.2d 1038, 1045 (D.C. Cir. 1980))

. 12 In Mobil Oil , we stated that an

12 Accord NRDC v. Abraham , 355 F.3d 179, 204 (2d Cir. 2004); United States v. Reynolds , 710 F.3d 498, 507

– 08 (3d Cir. 2013); United States v. Gould , 568 F.3d 459, 469 (4th Cir. 2009); United States v. Johnso n , 632 F.3dMID CONTINENT NAIL C ORPORATION v. US 25

invocation of good cause requires an agency to show that delaying the rule at issue would create “a significant threat of serious damage to im portant public interests ” as the exception would otherwise bec ome an “all purpose

escape

- clause” to the APA’s rulemaking provisions

. Id

. at 1492. Such “significant threat[s]” encompassed situations where the announcement of a proposed rule itself would “precipitate activity by affected parties that would harm the pub lic welfare,” for example, price controls subject to predatory regulatory arbitrage or other market disloc ations. Id. (citing Nader v. Sawhill , 514 F.2d 1064, 1068

– 69 (Temp. Emer. Ct. App. 1975)). Other courts have emphasized the need to find similarly serious threats in order to invoke the good cause exception

. See, e.g.

, Mack Trucks, Inc. v. EPA , 682 F.3d 87, 93 (D.C. Cir. 2012) (citing “possible imminent hazard to aircraft, persons, and property” and rules of “life

- saving importance” necessary to “sta ve off any imminent threat to the environment or safety or national security”); Haw. Helicopter Operators Ass’n v. FAA , 51 F.3d 212, 214 (9th Cir. 1995) ( citing a “recent escalation of fatal air tour accidents”). The requirement that an agency “incorporate [] the finding and a brief statement of reasons” for good cause “in the rules issued” means that we are limited to exami ning the reasons Commerce cited in Withdrawal Notice to justify its invocation of good cause. See Mobil Oil Corp. v. Dep’t of Energy , 61 0 F.2d 796, 802

– 03 (Temp. Emer. Ct. App. 1979); see also N.C. Growers’ Ass’n, Inc. v. United

912, 928 (5th Cir. 2011); United States v. Cain , 583 F.3d 408, 420

– 21 (6th Cir. 2009); Nw. Airlines, Inc. v. Gol dschmidt , 645 F.2d 1309, 1321 (8th Cir. 1981); Alcaraz v. Block , 746 F.2d 593, 612 (9th Cir. 1984); N. Am. Coal Corp. v. Dep’t of La bor , 854 F.2d 386, 388 (10th Cir. 1988); United States v. Dean , 604 F.3d 1275, 1279 (11th Cir. 2010); Utility Solid Waste Activities Grp. v. EPA , 236 F.3d 749, 754 (D.C. Cir. 2001).26 MID CONTINENT NAIL C ORPORATION v. US

Farm Workers , 702 F.3d 755, 7 66

– 67 (4th Cir. 2012). Commerce cited two of the three available statutory grounds for invoking the good cause exception. First, the agency stated that notice and comment were “impractic able” because the Limiting Regulation was applicable to ongoing dumping investigations, and “immediate revoc ation [was] necessary to ensure the proper and efficient operation of the antidumping law and to provide the relief intended by Congress. ” 73 Fed. Reg. at 74,931

. Mid Co ntinent relatedly asserts that dumping investigations are subject to statutory deadlines that cannot be extended at the agency’s discretion. See 19 U.S.C. § § 1673b(b )(1)(A), 1673b(c), 1673d(a). “Notice and comment on a rule may be found to be ‘impracticable’ when ‘the due and required execution of the agency functions would be unavoidably prevented by its undertaking public rulemaking proceedings.’” N.C. Growers , 702 F.3d at 7 66 (quoting Nat’l Nutritional Foods Ass’n v. Kennedy , 572 F.2d 377, 384

– 85 (2d Cir. 1978)). Critically, we along with several other courts have held that statutory deadline s in and of themselves do not generally provide a basis for invok ing good cause on t he ground of impracticability

. See, e.g.

, Shell Oil Co. v. Fed. Emer. Admin. , 527 F.2d 1243, 1248 (Temp. Emer. Ct. Ap p. 1975). 13 But see Phila. Citizens in Action v. Schwei ker , 669 F.2d 877, 885

– 86 (3d. Cir. 1982) (upholding good cause where Congress gave the agency only 49 days to promulgate regulations implementing a complex scheme of federally funded state benefits). A contrary rule would encourage administrative gamesmanship because “an
agency unwill ing to provide notice or an opportunity to comment could simply wait until the eve of a statutory,

13 See also Council of S. Mountains, Inc. v. Donovan

, 653 F.2d 573, 581 (D .C. Cir. 1981); U.S. Steel Corp. v. EPA , 595 F.2d 207, 213 (5th Cir. 1979); Am. Iron & Steel Inst. v. EPA , 568 F.2d 284, 292 (3d Cir. 1977).MID CONTINENT NAIL C ORPORATION v. US 27

judicial, or administrative deadline, then rai se up the ‘good cause’ banner and promulgate rules without follo wing APA procedures .” Council of S. Mountains, Inc. v. Donovan , 653 F.2d 573, 581 (D.C. Cir. 1981). In fact, the temporal exigency implied by Withdrawal Notice appears more theoretical than actual

— as Mid Continent observes, Commerce did not have occasion to apply the Limiting Regulation’s withdrawal un til eight months after Wit hdrawal Notice , and did not issue a final determination relying on the withdrawal until fifteen months later. 14 Thus, the fact that Commerce would have had to apply the Limiting Regulation to ongoing investigations cannot constitut e a basis for good cause ex cusing its failure to go through notice and comment.
Second, Commerce invoked the good cause exception on the ground that notice was “ contrary to the public interest” because the agency’s application of the Limiting Regulation “may have

. . . prevent ed the use of [the ave rage

- to

- transaction] methodology to unmask dumping.” 73 Fed. Reg. at 74,931

. This argument , however, is again foreclosed by precedent because an assertion of mere pocketbook (or balance

- sheet) harm to regulated entities is generally not sufficient to establish good cause as nearly every agency rule imposes some kind of economic
cost. 15 See Mack Trucks , 682 F.3d at 95 (contrasti ng such economic harms with a situation “in which an entire

14 See Polyethylene Retail Carrier Bags From Ta iwan, Preliminary Determination, 74 Fed. Reg. 55,183, 55,187

– 88 (Oct . 27, 2009); Polyethylene Retail Carrier Bags From Taiwan, Final Determination, 75 Fed. Reg. 14,569 , 14,569 (Mar. 26, 2010).

15 See generally Maeve P. Carey, Cong. Research Serv., R41974, Cost

- Benefit and Other Analysis Requir ements in the Rulemaking Proce ss (Dec. 9, 2014) (sum

marizing presidential and congressional actions requiring agencies to conduct economic cost

- benefit analysis).28 MID CONTINENT NAIL C ORPORATION v. US

industry and its customers [are] imperiled”)

. A s the Trade Court observed, the denial of regulatory relief in this case is not the sort of “pressing urgency of a type that does not always exist in the trade context.” Mid Continent I , 999 F. Supp. 2d at 1323 (citing Gold East Paper (Jiangsu) Co. v. United States , 918 F. Supp. 2d 1317, 1327 (Ct. Int’l Trade 2013)). Thus, Commerce did not show a public interest consideration sufficient to support the agenc y’s invocation of good cause.
On appeal, Mid Continent offers a new justification for good cause that Commerce did not adopt in Withdra wal Notice

. Citing Commerce’s statement that the “e ffect” of the agency’s targeted dumping regulations was “to deny relief to domestic industries,” and that this effect was “inconsistent with the [agenc y’s] statutory mandate to provide [such] relief, ” 73 Fed. Reg. at 74,931, Mid Cont inent argues that Commerce “had determined the wit hdrawal was necessary because the existing regulations were contrary to law ,” and thus “immediate withdrawal was . . . fully justified .” In connection with this argument, Mid Continent cites the doctrine of deference to agency statutory interpretations under Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc. , 467 U.S. 837, 842

– 45 (1984)

, to assert that the Limiting Regulatio n was contrary to statute because it was inconsistent with Commerce’s view of the statute in Withdrawal Notice

. Mid Continent’s theory, therefore, is that there was no need for Commerce to undergo notice

- and

- comment rulemaking because the Limiting Regulation was contrary to the statutory prov isions of the Tariff Act. This theory of good cause did not appear in Wit hdrawal Notice and therefore cannot support a finding of good cause. See N.C. Growers , 702 F.3d at 767

. In any

case, we do not agree with Mid Continent’s premise that the agency had determined the Limiting Regulation to be “contrary to law .” Commerce did not state in Withdrawal Notice that the Limiting Regulation was contrary to anMID CONTINENT NAIL C ORPORATION v. US 29

unambiguous statutory provisio n— and, to our knowledge,
no pa rty has ever challenged the validity of the Limiting Regulation under the Tariff Act

. What Commerce actually stated was that the “effect” of the regulations was “inco nsistent . . . with [its] statutory mandate

, ” which the age nc y broadly framed as “ provid[ ing] relief to domestic industries materially injured by unfairly traded imports.” 73 Fed. Reg. at 73,931. These statements are not tant amount to a determination that a regulation is contrary to an unambiguous provision of statutory law. 16 Nor do we agree that the inconsistency of a regulation adopted under an agency’s previous statutory interpret ation with the agency’s present statutory interpretation ipso facto renders the regulation “contrary to law.” By definition, an agency’s ability to alter its statutory inte rpretation requires statutory ambiguity, and, under Che vron , an agency can only reject a prior interpretation of an ambiguous statute if it explains why it is doing so

. See

, e.g. , Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs. , 545 U.S. 967, 981

– 82 (2005) ; Smiley v. Citibank (South Dakota), N.A. , 517 U.S. 735, 742 (1996); Rust v. Sullivan , 500 U.S. 173, 186

– 87 (1991)

. In this situation

, notice

- and

- comment rulemaking under the APA is more

— rather than less

— important to lay the groundwork for the
agency ’s exercise of its Chevron authority.

Thus , we agree with the Trade Court that Commerce’s invocation of the good

- cause exception did not support its decision to dispense with notice

- and

- comment rulemaking under the APA.

16 See Nat’l Customs Brokers & Forwarders Ass’n v. United States , 59 F.3d 1219, 1223

– 24 (Fed. Cir. 1995) (upholding agency’s invocation of good cause where reg ulation was amended without notice or comment to exactly parallel intervening statutory amendment).30 MID CONTINENT NAIL C ORPORATION v. US

III Mid Continent arg ues that even if Commerce’s repeal of the Limiting Regulation violated the APA, the agency’s actions may nonetheless be affirmed on the ground of harmless error. The APA directs reviewing courts to take “due account . . . of the rule of prejudicial error ” in deciding whether to “hold unlawful and set aside agen cy a ction. ” See 5 U.S.C § 706(2)

. The Supreme Court has d ede scribed this provision as an “administrative law .

. . harmless error rule.” Shinseki v. Sanders

, 556 U.S. 396, 406 (2009). We must therefore determine whether Co mmerce’s failure to comply with notice

- and

- comment rul emaking may be excused as harmless error. Mid Continent contends that Commerce’s procedura l

error was harmless because Precision cannot show prej udice of a sort cognizable under the statute

. Relying on our decision in Intercargo Insurance Co. v. United States

, Mid Continent argues that “ [p]rejudice . . . means injury to an interest that the statute, regulation, or rule in question was designed to protect,” and that the only injury Pre c ision can show

— that Commerce reached an adverse dec ision in its dumping investigation

— is not an interest protected by notice and comment. 83 F.3d 391 , 396 (Fed. Cir. 1996). Precision counters that it was required to show only that Commerce’s procedural error had some “bear ing

on .

. . the substance of [the] decision reached, ” and that given the magnitude of the agency’s error and its inability to participate in a rulemaking , this standard is satisfied

. Riverbend Farms, Inc. v. Madigan , 958 F.2d 1479, 1487 (9th Cir. 1992).
In determining whether a procedural error commi t ted in the course of rulemaking was harmless under the APA, courts have distinguished between an agency’s “technical failure” or substantial compliance with the APA’s proc edural requirements on one hand (which may constitute harmless error)

, and its “complete failure” to do so on theMID CONTINENT NAIL C ORPORATION v. US 31

other (which may prevent the error from being harmless)

. United States v. Reynolds , 710 F.3d 498, 516

– 19 (3d Cir. 2013)

. 17 “In the f irst category, the agency has provided some notification and method for commenting but some technical failure in that process violates statutory r equirements. In these ‘technical failure’ cases, the party challenging the agency rule ‘may be required to dem o nstrate that, had proper notice been provided, they would have submitted additional, different comments that could have invalidated the rationale’ of the rule.” Id. at 516 (internal citation omitted) (quoting City of Waukesha v. EPA , 320 F.3d 228, 246 (D.C. Cir. 2003))

.

17 See also, e.g.

, Sprint Corp. v. FCC , 315 F.3d 369, 376 (D.C. Cir. 2003) (“[A]n utter failure to comply with

no tice and comment cannot be considered harmless if there is any uncertainty at all as to the effect of that failure.”); Shell Oil Co. v. EPA , 950 F.2d 741, 752 (D.C. Cir. 1991) (“ While petitioners must show that they would have submitted new arguments to in validate rules in the case of certain procedu ral defaults, such as an agency’ s failure to provide access to supplemental studies, pet itioners need not do so here, where the agency has entirely failed to comply with notice

- and

- comment requirements, and the agency has offered no persuasive evidence that possible objections to its final rules have been given sufficient consideration. ” (citations omitted)); compare Int’l Union, 407 F.3d at 1259

– 61 (final rule setting max imum air velocity cap where proposed rule only set min imum cap was not a logical outgrowth, not harmless), with Int’l Union , 626 F.3d at 95

– 96 (D.C. Cir. 2010) (challenger failed to demonstrate prejudice because it was able to participate in the agency’s rulemaking proceedings and raised issues o n appeal that were already “encompassed in its comments”).32 MID CONTINENT NAIL C ORPORATION v. US

To illustrate this first “technical failure” category of

cases , in Riverbend Farms , the Ninth Circuit concluded that the Secretary of Agriculture’s failure to publish notice in the Federal Register and refusal to accept wri tten comments were harmless because the parties cha llenging the rule were given actual notice

— albeit not published in th e Federal Register

— and had the oppo rtunity to give oral comments at meet ings conducted by the agency. See 958 F.2d at 1488. Similarly, in Friends of Iwo Jima v. National Capital Planning Commission , the Fourth Circuit held that the National Capital Planning Commission’s failure to provide notice for two meetings in

a “protracted process ” was harmless because the cha lleng ers had notice of other opportun ities to submit co mments
, and th e substance of the comments they allegedly would have submitted was the “main focus of each stage in the approval process.” 176 F.3d 768, 774 (4th Cir. 1999); see also, e.g.

, Air Transport Ass’n of Am. v. Civil Aeronautics Bd.

, 732 F.2d 219, 224 n.11 (D.C. Cir. 1984) (agency’s failure to timely provide internal sta ff studies was harmless in the absence of petitioner “explain[ing] what it would have said had it been given earlier access”).

Our dec ision in Intercargo is consistent with these “technical failure ” cases . In Intercargo , after concluding that the Customs Service was required to recite a statut ory basis when issuing an extension of time to liquidate import entries, we considered whether t he Service’s failure to do so was harmless. See 83 F.3d at 392, 394. We noted that the “omission of the requisite language .

. . had no effect on [the] right to challenge the extension” and that th e importer had not alleged the absence of a stat utory basis

— the agency had simply failed to identify the basis in its notice. Id. at 396. I n rejecting the imposition of additional duties as a source of preju dice, we observed that “[a] party is not ‘prejudiced’ by a technical defect simply because that party will l ose its case if the defect is disregarded.” Id. (emphasis added).MID CONTINENT NAIL C ORPORATION v. US 33

In the second, “complete failure” category of cases , the total absence of notice

- and

- comment rulemaking and the resulting thin or nonexistent record make it difficult for a reviewing court to conclude with certainty that no prej udice has ensued

. See Reynolds

, 710 F.3d at 518 . In such cases, even a minimal showing of prejudice may suffice to defeat a claim of harmless error because “a n utter failure to comply with notice and comment cannot be considered harmless if there is any uncertainty at all as to the effect of that failure .” Sugarcane Growers Coop. of Fla. v. Ven eman , 289 F.3d 8 9, 96 (D.C. Cir. 2002) ; see also , e.g. , Sprint Corp. v. FCC , 315 F.3d 369, 376 (D.C. Cir. 2003); Paulsen v. Daniels

, 413 F.3d 999, 1007 (9th Cir. 2005). Commerce’s failure to comply with the APA was not a mere technical defect, but amounted to a complete failure to provide the adequate notice and opportunity for co mment that the APA requires. There is considerable unce rtainty as to the effect of this failure

. We find it significant that during Commerce’s subsequent r ule ma king to wit hdraw the Limiting Regulation , the agency relied on its post

- 2008 experience to justify the repeal. See 79 Fed. Reg. at 22,375 ( noting Commerce’s development of “diffe rential pricing analysis” ). Moreover , Commerce did not in Withdrawal Notice address any substantive objections to withdrawing the Limiting Regulation. Cf. United States v. Johnson

, 532 F.3d 912, 931 (5th Cir. 2011) ( finding har mless error where the agency “thoroughly engage[d] the issues and challenges inherent in the regulation” and “was able to address objections in the interim final rule”). The agency in fact did not address those objecti ons until its 2014 rulemaking. See 79 Fed. Reg. at 22,37 4– 75. All this suggests that Commerce’s failure to go through notice and comment could well have affected the result reached in Withdrawal Notice

. 18

18 We also do not think that Commerce’s subsequent decision to formally withdraw the Limiting Regulation34 MID CONTINENT NAIL C ORPORATION v. US

Accordingly, we hold that Commerce’s failure to co mply with notice

- and

- comment rulemaking cannot be excused as harmless error.

IV We finally address Mid Continent’s argument that Commerce erred in applying the Limiting Regulation on remand from the Trade Court. To recap, Commerce’s remand redetermination applied the Limiting Regulation and concluded that application of the average

- to

transaction methodology to all of Precision’s sales was unwarranted because “the record does not c ontain ev idence to suggest that this normal limitation should not be applied.” J.A. 89. On appeal, Mid Continent argues that Commerce misapplied the Limiting Regulation by failing to reinterpret the regulation to be consistent with the agency’s post

- 2008 i nterpretation of the statute , which assertedly req uir es broader application of the av erage

- to

transaction methodology

. In connection with this arg ument , Mid Continent suggests that Commerce misinte rpreted the Trade Court’s remand instructions as prohibitin g the agency from reinterpreting the regulation

, or that the court erred by depriving the agency of such discretion and then deferring to Commerce’s application of the Limiting Regulation on remand. Having examined Commerce’s remand redetermin ation, we fi nd Mid Continent’s arguments unavailing. The Trade Court’s instructions did not compel Commerce to apply the average

- to

- transaction methodology only t o targeted sales, and on remand

, the agency did not misi nterpret the court’s instructions

. See Mid Contine nt II , 113 F. Supp. 3d at 1327 (“To the extent that [Mid Continent]

changes the calculus of our decision; agency attempts to cure procedural defects ex post ar e not generally accepted as validating prior missteps. See, e.g.

, Mack Trucks , 682 F.3d at 95; U.S. Steel Corp. , 595 F.2d at 214

– 15.MID CONTINENT NAIL C ORPORATION v. US 35

argues that the government adopted an inappropriately narrow view of its authority .

. . and inaccurately co nstrued the remand order as cover for doing so, [Mid Co ntinent] is mistaken.”). As for Mid Continent’s argument that Commerce erred by not reinterpreting the Limiting Regulation

, this argument misses the mark. There is no serious contention that Commerce’s application of the Limiting Regulation contravened an unambiguous provision of statutory law,

or was otherwise “ plainly erron eous or inconsistent with the [Limiting] [R] egulation” itself. Auer v. Robbins , 519 U.S. 452, 462 (1997); Bowles v. Seminole Rock & Sand Co. , 325 U.S. 410, 414 (1945) . Nor has Mid Continent argued that the age ncy’s application of the regulation was arbitrary, capricious, or unsupported by substantial evidence. In the absence of these contentions, a court is not free to displace an agency’s reasoned application of its own rule. Mid Continent’s argument that Comm erce misapplied the Limiting Regulation in the agency’s remand redetermination is without merit.

C ONCLUSION For the stated reasons, we hold that Commerce failed to comply with notice

- and

- comment rulemaking under the APA by repealing the Limiting Regulation in Withdrawal Notice , that its failure cannot be excused for good cause or harmless error, and that the agency did not err in appl ying the Limiting Regulation on remand

. The judg ment of the Court of International Trade is

AFFIRMED

C OSTS Costs to ap pellee.