Court Opinion

ID: 6337943
Source: CourtListenerOpinion
Date Created: 2022-05-05 14:00:35.032527+00
Date Added: 2024-06-11T09:25:09.200037
License: Public Domain

Case: 21-2119   Document: 48     Page: 1   Filed: 05/05/2022

        NOTE: This disposition is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                 ______________________

          UTTAM GALVA STEELS LIMITED,
                 Plaintiff-Appellant

                            v.

      UNITED STATES, CALIFORNIA STEEL
    INDUSTRIES, INC., STEEL DYNAMICS, INC.,
              Defendants-Appellees
             ______________________

                       2021-2119
                 ______________________

    Appeal from the United States Court of International
 Trade in No. 1:19-cv-00044-LMG, Senior Judge Leo M.
 Gordon.
                 ______________________

                  Decided: May 5, 2022
                 ______________________

    JOHN M. GURLEY, ArentFox Schiff LLP, Washington,
 DC, for plaintiff-appellant. Also represented by DIANA
 DIMITRIUC QUAIA, JESSICA R. DIPIETRO, AMAN KAKAR,
 MATTHEW MOSHER NOLAN, NANCY NOONAN, LEAH N.
 SCARPELLI.

     MOLLIE LENORE FINNAN, Commercial Litigation
 Branch, Civil Division, United States Department of Jus-
 tice, Washington, DC, for defendant-appellee United
Case: 21-2119    Document: 48    Page: 2   Filed: 05/05/2022

 2                         UTTAM GALVA STEELS LIMITED   v. US

 States. Also represented by BRIAN M. BOYNTON, CLAUDIA
 BURKE, PATRICIA M. MCCARTHY; RACHEL BOGDAN, Office of
 the Chief Counsel for Trade Enforcement and Compliance,
 United States Department of Commerce, Washington, DC.

     ROGER BRIAN SCHAGRIN, Schagrin Associates, Wash-
 ington, DC, for defendants-appellees California Steel In-
 dustries, Inc., Steel Dynamics, Inc. Also represented by
 MICHELLE ROSE AVRUTIN, BENJAMIN JACOB BAY, NICHOLAS
 J. BIRCH, CHRISTOPHER CLOUTIER, ELIZABETH DRAKE,
 WILLIAM ALFRED FENNELL, LUKE A. MEISNER, KELSEY
 RULE.
                   ______________________

     Before PROST, TARANTO, and CHEN, Circuit Judges.
 PROST, Circuit Judge.
      Uttam Galva Steels Limited (“Uttam Galva”) was a
 mandatory respondent in the Department of Commerce’s
 (“Commerce”) administrative review of a countervailing
 duty order. Commerce applied adverse facts available
 (“AFA”) after it determined that Uttam Galva improperly
 failed to report an affiliated, cross-owned company. Uttam
 Galva appealed to the Court of International Trade and ar-
 gued, in relevant part, that Commerce’s application of AFA
 and its inclusion of certain programs in calculating Uttam
 Galva’s net countervailable subsidy rate were not sup-
 ported by substantial evidence. The Court of International
 Trade sustained Commerce’s decisions on both counts. Ut-
 tam Galva appeals. Because we likewise determine that
 Commerce’s decisions are supported by substantial evi-
 dence, we affirm.
                         BACKGROUND
                             I
     Commerce conducted an investigation under its coun-
 tervailing duty order covering certain corrosion-resistant
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 UTTAM GALVA STEELS LIMITED   v. US                           3

 steel products (CORE) from India. Certain Corrosion-Re-
 sistant Steel Products from India, 84 Fed. Reg. 11,053
 (Dep’t of Commerce Mar. 25, 2019). Uttam Galva was a
 mandatory respondent in that administrative review. Id.
 Commerce found that a net countervailable subsidy rate
 existed for Uttam Galva for the period of November 6,
 2015, to December 31, 2016. Id. Commerce applied AFA
 after determining that Uttam Galva failed to report its af-
 filiation with Lloyds Steels Industries Limited (“LSIL”) 1 as
 Commerce’s questionnaire required.
      Three questions on the questionnaire are relevant
 here. First, the questionnaire asked Uttam Galva to “iden-
 tify all companies with which [it] is affiliated” according to
 any one of seven listed criteria. 2 J.A. 238. Second, it

     1    Two similarly named entities are relevant in this
 appeal: Lloyds Steels Industries Limited (i.e., LSIL) and
 Lloyds Steel Industries Limited (“Lloyds Steel”). Lloyds
 Steel is described infra.
     2    The questionnaire states:
         In accordance with section 771(33) of the
         [Tariff Act of 1930, as amended], affiliated
         companies include: (1) members of the
         same family, (2) any officer or director of an
         organization and such organization,
         (3) partners, (4) employers and their em-
         ployees, and (5) any person or organization
         directly or indirectly owning, controlling, or
         holding with power to vote, 5 percent or
         more of the outstanding voting stock or
         shares of any organization and such organ-
         ization.    In addition, affiliates include
         (6) any person who controls any other per-
         son and that person, or (7) any two persons
         who directly control, are controlled by, or
         are under common control with, any
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 4                         UTTAM GALVA STEELS LIMITED   v. US

 requested that Uttam Galva “describe in detail the nature
 of the relationship between [Uttam Galva] and those com-
 panies listed in response” to the previous question and pro-
 vided some exemplary details to include. J.A. 238–39. And
 third, it explained that Uttam Galva “must provide a com-
 plete questionnaire response for” its affiliated companies
 “where cross[-]ownership exist[ed] and” one of five criteria
 was met. 3 J.A. 239 (emphasis in original). The question-
 naire stated that
     cross-ownership exists between two or more corpo-
     rations where one corporation can use or direct the
     individual assets of the other corporation(s) in es-
     sentially the same ways it can use its own assets.
     Normally, this standard will be met where there is
     a majority voting ownership interest between two
     corporations or through common ownership of two
     (or more) corporations.
 J.A. 239 (emphasis added).

        person. “Control” exists where one person
        is legally or operationally in a position to
        exercise restraint or direction over the
        other person.
 J.A. 238 (emphasis added).
     3   Those five criteria were: (1) “the cross-owned com-
 pany produces the subject merchandise”; (2) “the cross-
 owned company is a holding company or a parent company
 (with its own operations) of your company”; (3) “the cross-
 owned company supplies an input product to you that is
 primarily dedicated to the production of the subject mer-
 chandise”; (4) “the cross-owned company has received a
 subsidy and transferred it to your company”; or (5) “the
 cross-owned company is not a producer or manufacturer
 but provides a good to your company.” J.A. 239.
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 UTTAM GALVA STEELS LIMITED   v. US                           5

     Uttam Galva disclosed Uttam Value Steels Limited
 (“Uttam Value”), among others, as an affiliated, cross-
 owned company that required its own questionnaire re-
 sponse. J.A. 6664. Uttam Value’s response indicated that
 it was formerly known as Lloyds Steel and that, during the
 review period, its controlling shareholders were First India
 Infrastructure Private Limited (“FIIPL”) and Metallurgical
 Engineering and Equipment Limited (“MEEL”). J.A. 6665.
 FIIPL and MEEL were controlled by the Miglani family, as
 was Uttam Galva. J.A. 6665–66.
     While Uttam Galva disclosed its affiliation with Lloyds
 Steel via its disclosure of Uttam Value, neither Uttam
 Galva nor Uttam Value mentioned LSIL. Lloyds Steel and
 LSIL are now two separate companies but were once two
 divisions within a single company owned by the Gupta fam-
 ily. See Uttam Galva Steels Ltd. v. United States,
 425 F. Supp. 3d 1366, 1369–70 (Ct. Int’l Trade 2020) (“Ut-
 tam Galva I”). The Gupta family sought to split the two
 divisions, with its Steel Division to be known as Lloyds
 Steel and its Engineering Division to be known as LSIL.
 See id. The Gupta family entered into an agreement with
 Uttam Value in which Uttam Value would initially acquire
 the entire company and later transfer the Engineering Di-
 vision (i.e., LSIL) back to the Gupta family.           See
 J.A. 147–48. However, during the period of Commerce’s re-
 view, Uttam Value controlled both divisions. See J.A. 147.
 This means that Uttam Galva and Uttam Value, including
 Lloyds Steel and LSIL, were controlled by the Miglani fam-
 ily during the relevant period. Specifically, the Miglani
 family controlled 46.11 percent of LSIL’s shares. See
 J.A. 149.
     This is where the dispute begins. Due to Uttam Galva’s
 failure to disclose an affiliation with LSIL through the
 Miglani family, Commerce found that AFA “[was] war-
 ranted in determining whether Uttam Galva and LSIL
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 6                           UTTAM GALVA STEELS LIMITED     v. US

 [were] cross-owned” under 19 U.S.C. § 1677e(a)(2)(A)–(C) 4
 and (b). 5 J.A. 149. Commerce then applied AFA to deter-
 mine that Uttam Galva and LSIL were, at the relevant
 time, cross-owned and that LSIL had used all of the sub-
 sidy programs available to it. Consistent with its cross-
 ownership determination, Commerce attributed LSIL’s use
 of those subsidy programs to Uttam Galva. J.A. 149. Ut-
 tam Galva and LSIL’s cross-ownership thus impacted Ut-
 tam Galva’s final countervailable subsidy rate, which was
 initially assessed at a total rate of 588.43 percent based off
 of 70 programs.         Uttam Galva I, 425 F. Supp. 3d
 at 1372–73.
                                II
     In the lifetime of this case, Uttam Galva has appealed
 to the Court of International Trade three times, each from
 a separate Commerce decision. 6         Uttam Galva first

     4     This provision provides that “[i]f . . . (2) an inter-
 ested party . . . (A) withholds information that has been re-
 quested by [Commerce] . . ., (B) fails to provide such
 information by the deadlines for submission . . . or in the
 form and manner requested . . ., [or] (C) significantly im-
 pedes a[n investigation] proceeding . . ., [Commerce]
 shall . . . use the facts otherwise available in reaching the
 applicable       determination     under     this      subtitle.”
 § 1677e(a)(2)(A)–(C).
     5     Section 1677e(b) grants Commerce the discretion
 to “use an inference that is adverse to the interests of” “an
 interested party [that] has failed to cooperate by not acting
 to the best of its ability to comply with a request for infor-
 mation from” Commerce.
     6     Uttam Galva I, 425 F. Supp. 3d 1366; Uttam Galva
 Steels Ltd. v. United States, 476 F. Supp. 3d 1387
 (Ct. Int’l Trade 2020) (“Uttam Galva II”); Uttam Galva
 Steels Ltd. v. United States, 518 F. Supp. 3d 1333
 (Ct. Int’l Trade 2021) (“Uttam Galva III”).
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 UTTAM GALVA STEELS LIMITED   v. US                           7

 appealed Commerce’s Final Decision that assessed a total
 rate of 588.43 percent against Uttam Galva. Uttam Galva
 argued in relevant part that Commerce’s assigned rate for
 the Market Access Initiative Program was not supported
 by the record and that four other programs were improp-
 erly assigned a rate since they were not in “the initial ques-
 tionnaire or initiated as a part of the new subsidy
 allegations during the administrative review.” Uttam
 Galva I, 425 F. Supp. 3d at 1373. Commerce requested a
 remand to reconsider the AFA rates for those five pro-
 grams, and the Court of International Trade remanded ac-
 cordingly. Id. at 1373–74.
      On the first remand, Commerce decreased the assigned
 rate for the Market Access Initiative Program and removed
 the other four programs from its total rate calculation.
 J.A. 26–27. Uttam Galva appealed. In relevant part, Ut-
 tam Galva asserted two problems with Commerce’s first re-
 mand decision. First, it challenged Commerce’s AFA rate
 assignments to the remaining programs as inconsistent
 with Commerce’s decision not to apply total AFA to JSW, a
 different mandatory respondent, that also failed to timely
 disclose a cross-owned affiliate but was subject to only par-
 tial AFA. Uttam Galva II, 476 F. Supp. 3d at 1390–92; Ut-
 tam Galva III, 518 F. Supp. 3d at 1336–37. Second, Uttam
 Galva contested Commerce’s inclusion of 20 programs in its
 rate calculation because of Uttam Galva’s affiliation with
 LSIL since there was evidence that LSIL could not have
 benefited from those programs.           Uttam Galva II,
 476 F. Supp. 3d at 1392–93. The Court of International
 Trade remanded as to Uttam Galva’s first argument “so
 [that] Commerce may provide a reasoned explanation for
 the differences in its application of AFA to JSW and Uttam
 Galva, and, if appropriate, reconsider its application of
 AFA to Uttam Galva.” Id. at 1392. But the Court of Inter-
 national Trade rejected Uttam Galva’s second argument
 and sustained Commerce’s decision to include the 20
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 8                          UTTAM GALVA STEELS LIMITED   v. US

 disputed programs, determining that Commerce’s decision
 was reasonable. Id. at 1392–93.
     Commerce, on the second remand, explained that it ap-
 plied total AFA to Uttam Galva but not to JSW because the
 circumstances of JSW’s mistake by omission involved “mit-
 igating factors.” J.A. 76. For example, JSW corrected its
 own mistake, whereas Uttam Galva required direct
 prompting by Commerce. J.A. 76–78. Uttam Galva ap-
 pealed to the Court of International Trade again and ar-
 gued, in relevant part, that Commerce failed to offer a
 sufficient explanation for treating Uttam Galva and JSW
 differently in this case. Uttam Galva III, 518 F. Supp. 3d
 at 1338. The Court of International Trade sustained Com-
 merce’s second remand results since Commerce “provided
 a reasoned explanation” for distinguishing Uttam Galva’s
 circumstances from those of JSW. Id. at 1341.
      Uttam Galva now appeals to this court. It asserts
 (I) that Commerce’s application of total AFA to Uttam
 Galva was error and (II) that Commerce’s inclusion of 20
 programs (the same ones contested in Uttam Galva’s sec-
 ond appeal to the Court of International Trade) in Com-
 merce’s rate calculation was error. We have jurisdiction
 under 28 U.S.C. § 1295(a)(5).
                         DISCUSSION
     We review Commerce’s determinations under the same
 standard of review as the Court of International Trade: we
 “uphold[] Commerce determinations that are supported ‘by
 substantial evidence’ . . . and otherwise ‘in accordance with
 the law.’” Nan Ya Plastics Corp. v. United States, 810 F.3d
 1333, 1341 (Fed. Cir. 2016) (quoting 19 U.S.C.
 § 1516a(b)(1)(B)(i)). “Substantial evidence is such relevant
 evidence as a reasonable mind might accept as adequate to
 support a conclusion.” Essar Steel Ltd. v. United States,
 678 F.3d 1268, 1272 (Fed. Cir. 2012) (cleaned up). “[T]he
 informed opinion of the [Court of International Trade] . . .
 is nearly always the starting point of our analysis,”
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 UTTAM GALVA STEELS LIMITED   v. US                           9

 although we review the Court of International Trade’s de-
 cisions de novo. Nan Ya, 810 F.3d at 1341.
     Uttam Galva presents two substantial-evidence ques-
 tions on appeal. Uttam Galva first asserts that Com-
 merce’s determination that it impeded the proceeding is
 not supported by substantial evidence. Appellant’s Br. 2.
 It next contends that Commerce’s inclusion of 20 programs
 against Uttam Galva via its affiliation with LSIL is not
 supported by substantial evidence. Id. We disagree as to
 both arguments.
                               I
     Uttam Galva first asserts that Commerce’s decision to
 apply AFA is not supported by substantial evidence be-
 cause Uttam Galva did not impede Commerce’s proceed-
 ings.
      We need not reach Uttam Galva’s argument on the
 merits because Commerce found that Uttam Galva’s fail-
 ure to disclose its affiliation with LSIL warranted AFA un-
 der three independent standards—i.e., that Uttam Galva
 (1) “with[held] information . . . requested by [Commerce],”
 (2) “fail[ed] to provide [requested] information,” and
 (3) “significantly impede[d]” the investigation proceeding.
 § 1677e(a)(2)(A)–(C); J.A. 149 (citing § 1677e(a)(2)(A)–(C)).
 Uttam Galva focuses on the third ground, but any one of
 Commerce’s three determinations is sufficient to apply
 AFA if, as Uttam Galva does not separately dispute, the
 additional precondition stated in § 1677e(b) is also met.
 Uttam Galva admits that the Miglani family controlled it,
 Lloyds Steel, and LSIL during the period of review.
 J.A. 147–48. Although Uttam Galva attempts to contest
 that it cross-owned LSIL during that time, Commerce’s
 questionnaire explained how cross-ownership is “[n]or-
 mally . . . met where there is a majority voting ownership
 interest . . . or . . . common ownership of two (or more) cor-
 porations.” J.A. 239. Moreover, Commerce’s questionnaire
 separately requested information regarding affiliated
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 10                            UTTAM GALVA STEELS LIMITED      v. US

 entities, which include “any person or organization directly
 or indirectly . . . controlling . . . 5 percent or more of the . . .
 shares of any organization and such organization.”
 J.A. 238 (emphasis added); see also J.A. 151–52. Com-
 merce’s determination that Uttam Galva “with[held]” in-
 formation from or “fail[ed] to provide” information to
 Commerce regarding its affiliation and cross-ownership
 with LSIL is accordingly supported by substantial evi-
 dence. § 1677e(a)(2)(A)–(B).
                                 II
     Uttam Galva contends that Commerce’s inclusion of 20
 programs in Uttam Galva’s countervailing duty rate—by
 virtue of Uttam Galva’s affiliation with LSIL—is not sup-
 ported by substantial evidence. Uttam Galva argues that
 LSIL’s financial statement contains information demon-
 strating that LSIL could not have used those programs and
 that Commerce did not properly evaluate this evidence in
 reaching its conclusion.
     We disagree. The Court of International Trade also ad-
 dressed this question and accurately summarized Com-
 merce’s consideration of this evidence:
      Commerce explained that it did not find the LSIL
      financial statement to provide a sufficiently relia-
      ble basis to conclude that LSIL could not have ben-
      efited from the 20 disputed programs, stating that
      the LSIL financial statement did not provide a de-
      finitive listing of LSIL’s business activities or
      where LSIL conducted those business activi-
      ties. . . . [A]nd . . . Commerce had no opportunity to
      pursue these lines of inquiry due to Uttam Galva’s
      failure to fully cooperate.
 Uttam Galva II, 476 F. Supp. 3d at 1393 (cleaned up). Like
 the Court of International Trade, we determine that Uttam
 Galva failed to demonstrate that LSIL’s financial state-
 ment “could lead Commerce to reach one and only one
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 UTTAM GALVA STEELS LIMITED   v. US                      11

 reasonable outcome on this administrative record, namely
 that LSIL could not have benefit[]ed from the 20 disputed
 programs.” Id. (cleaned up). We therefore conclude that
 Commerce’s inclusion of the 20 disputed programs is sup-
 ported by substantial evidence.
                       CONCLUSION
      We have considered the parties’ remaining arguments
 but find them unpersuasive. For the foregoing reasons, we
 affirm with respect to the issues raised by Uttam Galva.
                       AFFIRMED