Court Opinion

ID: 4686944
Source: CourtListenerOpinion
Date Created: 2021-05-14 15:01:18.75736+00
Date Added: 2024-06-11T08:04:37.291126
License: Public Domain

Case: 20-1461   Document: 95    Page: 1   Filed: 05/14/2021

   United States Court of Appeals
       for the Federal Circuit
                 ______________________

          UTTAM GALVA STEELS LIMITED,
                 Plaintiff-Appellee

                           v.

    UNITED STATES, AK STEEL CORPORATION,
      CALIFORNIA STEEL INDUSTRIES, INC.,
                   Defendants

  ARCELORMITTAL USA LLC, STEEL DYNAMICS,
   INC., UNITED STATES STEEL CORPORATION,
             NUCOR CORPORATION,
                Defendants-Appellants
               ______________________

                       2020-1461
                 ______________________

    Appeal from the United States Court of International
 Trade in No. 1:16-cv-00162-JCG, Judge Jennifer Choe-
 Groves.
                ______________________

                 Decided: May 14, 2021
                 ______________________

    DIANA DIMITRIUC QUAIA, Arent Fox, LLP, Washington,
 DC, argued for plaintiff-appellee. Also represented by
 JOHN M. GURLEY, CLAUDIA DENISE HARTLEBEN, MATTHEW
 MOSHER NOLAN, NANCY NOONAN.

    ELIZABETH DRAKE, Schagrin Associates, Washington,
Case: 20-1461    Document: 95    Page: 2     Filed: 05/14/2021

 2              UTTAM GALVA STEELS LIMITED   v. UNITED STATES

 DC, argued for defendants-appellants ArcelorMittal USA,
 LLC, Steel Dynamics, Inc., United States Steel Corpora-
 tion. Steel Dynamics, Inc. also represented by NICHOLAS J.
 BIRCH, CHRISTOPHER CLOUTIER, GEERT M. DE PREST,
 WILLIAM ALFRED FENNELL, PAUL WRIGHT JAMESON, LUKE
 A. MEISNER, KELSEY RULE, ROGER BRIAN SCHAGRIN.

     MELISSA M. BREWER, Kelley Drye & Warren, LLP,
 Washington, DC, for defendant-appellant ArcelorMittal
 USA, LLC. Also represented by KATHLEEN CANNON,
 ROBERT ALAN LUBERDA, PAUL C. ROSENTHAL, DAVID C.
 SMITH, JR.

    THOMAS M. BELINE, Cassidy Levy Kent USA LLP,
 Washington, DC, for defendant-appellant United States
 Steel Corporation. Also represented by CHASE DUNN,
 JAMES EDWARD RANSDELL, IV, SARAH E. SHULMAN.

     MAUREEN E. THORSON, Wiley Rein, LLP, Washington,
 DC, argued for defendant-appellant Nucor Corporation.
 Also represented by STEPHANIE MANAKER BELL, TIMOTHY
 C. BRIGHTBILL, TESSA V. CAPELOTO, LAURA EL-SABAAWI,
 CYNTHIA CRISTINA GALVEZ, DERICK HOLT, ALAN H. PRICE,
 ADAM MILAN TESLIK, CHRISTOPHER B. WELD.
                 ______________________

      Before DYK, MAYER, and CHEN, Circuit Judges.
 DYK, Circuit Judge.
     This appeal arises out of an antidumping duty investi-
 gation by the United States Department of Commerce con-
 cerning certain corrosion-resistant steel products from
 India. Following two remands, the United States Court of
 International Trade (Trade Court) sustained Commerce’s
 determination that granted Uttam Galva Steels Ltd. a duty
 drawback adjustment under 19 U.S.C. § 1677a(c)(1)(B)
 that resulted in no dumping margin. Defendants-Appel-
 lants ArcelorMittal USA LLC, Steel Dynamics, Inc., United
Case: 20-1461     Document: 95      Page: 3    Filed: 05/14/2021

 UTTAM GALVA STEELS LIMITED    v. UNITED STATES               3

 States Steel Corp., and Nucor Corp. appeal, challenging
 the propriety of the Trade Court’s first remand to Com-
 merce and arguing that Commerce’s original determina-
 tion should be reinstated. We affirm.
                                I
       As this court has explained, “[d]umping occurs when a
 foreign firm sells a product in the United States at a price
 lower than the product’s normal value.” Home Prods. Int’l,
 Inc. v. United States, 633 F.3d 1369, 1372 (Fed. Cir. 2011).
 By statute, Commerce must impose antidumping duties on
 imported goods that are being sold, or are likely to be sold,
 in the United States at a less than fair value in a way that
 injures the domestic industry in the United States.
 19 U.S.C. § 1673. Commerce determines a respondent’s
 dumping margin by calculating the amount by which nor-
 mal value exceeds export price (U.S. price) or constructed
 export price. Id. Normal value is generally calculated to
 be “the price at which the foreign like product is first sold
 . . . for consumption in the exporting country.” 19 U.S.C.
 § 1677b(a)(1)(B)(i). To determine normal value, Commerce
 will disregard sales made at less than the respondent’s cost
 of production. Id. § 1677b(b)(1). Cost of production consti-
 tutes (1) the cost of manufacture; (2) “selling, general, and
 administrative expenses”; and (3) packaging expenses. Id.
 § 1677b(b)(3). If there are no sales in the exporting country
 that remain after removing the sales below cost of produc-
 tion, then Commerce will base normal value on the con-
 structed value of the subject merchandise.                 Id.
 § 1677b(b)(1). Constructed value is essentially the cost of
 production plus profit. See id. § 1677b(e). Export price is
 typically calculated to be the price at which the subject
 products are first sold to an unaffiliated purchaser in the
 United States. Id. § 1677a(a). Constructed export price is
 “the price at which the subject merchandise is first sold . . .
 in the United States . . . by or for the account of the pro-
 ducer or exporter of such merchandise or by a seller
Case: 20-1461     Document: 95      Page: 4    Filed: 05/14/2021

 4              UTTAM GALVA STEELS LIMITED    v. UNITED STATES

 affiliated with the producer or exporter, to a purchaser not
 affiliated with the producer or exporter.” Id. § 1677a(b).
 The export price is subject to several possible adjustments.
 Id. § 1677a(c).
     One such adjustment is the “duty drawback adjust-
 ment,” which is at issue here. This adjustment involves
 duties paid or owed on imports (e.g., raw materials) to the
 home-market country that produces the goods for export to
 the United States (the country of exportation). Saha Thai
 Steel Pipe (Pub.) Co. v. United States, 635 F.3d 1335,
 1340–41 (Fed. Cir. 2011). The import duties on the inputs
 used to produce home-market goods increase the normal
 value. The statute provides that the duty drawback adjust-
 ment requires an increase to U.S. price, stating that
     [t]he price used to establish export price and con-
     structed export price shall be . . . increased by . . .
     the amount of any import duties imposed by the
     country of exportation which have been rebated, or
     which have not been collected, by reason of the ex-
     portation of the subject merchandise to the United
     States.
 19 U.S.C. § 1677a(c)(1)(B). In Saha Thai, we held that
 Commerce may appropriately adjust normal value to in-
 clude “exempted duties in [cost of production] and [con-
 structed value]” when making the duty drawback
 adjustment in situations in which “[i]t would be illogical to
 increase [export price] to account for import duties that are
 purportedly reflected in [normal value], while simultane-
 ously calculating [normal value] based on a [cost of produc-
 tion] and [constructed value] that do not reflect those
 import duties.” 635 F.3d at 1342–43.
     The question here is whether Commerce’s initial duty
 drawback methodology complied with 19 U.S.C.
 § 1677a(c)(1)(B).
Case: 20-1461    Document: 95      Page: 5   Filed: 05/14/2021

 UTTAM GALVA STEELS LIMITED   v. UNITED STATES             5

                              II
      In 2015, several groups, including appellants here, pe-
 titioned Commerce and the United States International
 Trade Commission to initiate an antidumping duty inves-
 tigation, alleging that imports of corrosion-resistant steel
 products (“CORE”) from India had been imported to and
 sold in the United States at prices that violated antidump-
 ing laws. Commerce commenced an investigation and se-
 lected Uttam and another entity (not involved in this
 appeal) as mandatory respondents.
      During the investigation, Uttam provided Commerce
 with information about the duty drawbacks that it received
 from the Indian government in connection with its produc-
 tion of CORE. Uttam explained that it received drawbacks
 in the form of exemptions and rebates on import duties for
 three major imported inputs: hot-rolled steel coil, cold-
 rolled steel coil, and zinc. Because Uttam exports CORE to
 both affiliated and non-affiliated companies in the United
 States, Commerce calculated both an export price and con-
 structed export price to determine Uttam’s dumping mar-
 gin.
     On June 2, 2016, Commerce issued its Final Determi-
 nation that CORE from India was being sold in the United
 States at less than fair value, calculating a final dumping
 margin of 3.05% for Uttam. It is not clear from Commerce’s
 Final Determination whether Commerce based normal
 value on home-market sales or constructed value. In this
 Final Determination, Commerce made an adjustment to
 Uttam’s export price and constructed export price consid-
 ering Uttam’s reported benefit from the three Indian
Case: 20-1461    Document: 95      Page: 6    Filed: 05/14/2021

 6              UTTAM GALVA STEELS LIMITED   v. UNITED STATES

 government duty drawback programs. 1 But Uttam con-
 tended that the adjustments were not properly calculated.
      Historically, Commerce, in calculating drawback duty
 adjustments, attributed all of a respondent’s reported duty
 drawbacks to U.S. sales. In other words, Commerce took
 the respondent’s reported duty drawbacks and divided that
 reported amount by the respondent’s total number of sub-
 ject U.S. exports, attributing to each U.S. export its share
 of the duty drawback. Here, in initially calculating Ut-
 tam’s duty drawback adjustment, Commerce departed
 from this historical practice. Its new methodology allo-
 cated the import duties exempted or rebated “based on the
 import duty absorbed into, or imbedded in, the overall cost
 of producing the merchandise under consideration.” J.A.
 6043. The effect was to attribute some portion of the duty
 drawbacks to home market sales and another portion to
 U.S. exports, rather than attributing the whole amount to
 U.S. exports. Commerce explained that it needed to change
 its methodology because certain respondents, such as Ut-
 tam, “source[d] a material input from both domestic and
 foreign suppliers,” which might “result in an imbalance in
 the comparison of [export price] or [constructed export
 price] with [normal value].” J.A. 6043. Uttam appealed
 the Final Determination to the Trade Court.
     Uttam argued that Commerce’s new methodology of al-
 locating drawbacks was “inconsistent with the statute and
 the agency’s alleged practice of computing exempted and
 rebated duties over total exports to the U.S.” Uttam Galva
 Steels Ltd. v. United States (Uttam I), 311 F. Supp. 3d 1345,
 1352 (Ct. Int’l Trade 2018). The Trade Court agreed,

     1  These programs were: (1) the Duty Drawback
 Scheme (a rebate program); (2) the Advance Authorization
 Program (an exemption program); and (3) the Duty Free
 Import Authorization Program (an exemption program).
Case: 20-1461    Document: 95     Page: 7    Filed: 05/14/2021

 UTTAM GALVA STEELS LIMITED   v. UNITED STATES              7

 concluding that Commerce’s new methodology was not per-
 mitted under 19 U.S.C. § 1677a(c)(1)(B) and remanded the
 Final Determination to Commerce with directions to recal-
 culate the adjustment. Id. at 1355–57.
     On remand, Commerce calculated the duty drawback
 adjustment by increasing the export price by the total
 amount of drawback duties. But Commerce also made a
 circumstance-of-sale adjustment that Uttam again chal-
 lenged at the Trade Court. The Trade Court also deter-
 mined this adjustment to be impermissible and remanded.
 Uttam Galva Steels Ltd. v. United States (Uttam II),
 374 F. Supp. 3d 1360, 1363–65 (Ct. Int’l Trade 2019).
     In its Second Remand Redetermination (the determi-
 nation now before us on appeal), Commerce continued to
 grant the same duty drawback adjustment to Uttam’s ex-
 port price (as required by Uttam I). Commerce, however,
 made three other adjustments to Uttam’s normal value by
 doing the following:
    [1] not including imputed import duties to Uttam
    Galva’s cost of production . . . ; [2] making a [cir-
    cumstance of sale] adjustment to remove all booked
    import duties from constructed value . . . and from
    Uttam Galva’s home market prices; and [3] making
    another [circumstance of sale] adjustment to [con-
    structed value] and home market price to add the
    same amount of the per-unit amount of import du-
    ties added to U.S. price.
 J.A. 65. In Commerce’s view, these circumstance of sale
 adjustments “remedy[] the imbalance in the comparison
 between normal value and [export price] or [constructed ex-
 port price]” by “remov[ing] unrecovered paid and exempted
 duties from [constructed value] or home market price as a
 [circumstance of sale] adjustment” and “add[ing] the per-
 unit amount [of import duties] to normal value that was
 added to U.S. price as a second [circumstance of sale]
Case: 20-1461    Document: 95       Page: 8   Filed: 05/14/2021

 8              UTTAM GALVA STEELS LIMITED    v. UNITED STATES

 adjustment.” J.A. 83. Making these circumstance of sale
 adjustments has been challenged in other investigations. 2
 Nevertheless, given this methodology, here, the estimated
 weighted average dumping margin for the period of inves-
 tigation for CORE from India was 0.00%.
     Reviewing the Second Remand Redetermination, the
 Trade Court held that Commerce’s duty drawback adjust-
 ment continued to be in accordance with the law. Uttam
 Galva Steels, Inc. v. United States (Uttam III), 416 F. Supp.
 3d 1402, 1406 (Ct. Int’l Trade 2019). The court, however,
 expressed skepticism that the three new adjustments to
 normal value were “supported by either the statute’s text
 or Commerce’s implementing regulation.” Id. at 1407. But
 because Uttam had not contested these adjustments, the
 Trade Court sustained Commerce’s Second Remand Rede-
 termination. Id.
     The appellants appeal, arguing that the Trade Court
 improperly set aside Commerce’s original Final Determi-
 nation and seeking to have the determination reinstated.
 We have jurisdiction under 28 U.S.C. § 1295(a)(5).
                              III
     “We review the Trade Court’s decision to sustain Com-
 merce’s final results and remand redeterminations de
 novo.” Dillinger France S.A. v. United States, 981 F.3d
 1318, 1320 (Fed. Cir. 2020) (citing U.S. Steel Corp. v.
 United States, 621 F.3d 1351, 1357 (Fed. Cir. 2010)). We
 will affirm Commerce unless its decision is “unsupported

     2    E.g., Habaş Sinai ve Tibbi Gazlar Isthsal Endüs-
 trisi, A.Ş. v. United States, 415 F. Supp. 3d 1195, 1206–13
 (Ct. Int’l Trade 2019), appeal docketed, No. 21-1066 (Fed.
 Cir. Oct. 19, 2020).
Case: 20-1461    Document: 95      Page: 9    Filed: 05/14/2021

 UTTAM GALVA STEELS LIMITED   v. UNITED STATES                9

 by substantial evidence on the record, or otherwise not in
 accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i).
     The petitioners argue that the methodology that Com-
 merce used to calculate Uttam’s duty drawback in its orig-
 inal Final Determination was proper and that the Trade
 Court erred in setting it aside.
    We explained the statute’s purpose in our decision in
 Saha Thai:
    The purpose of the duty drawback adjustment is to
    account for the fact that the producers remain sub-
    ject to the import duty when they sell the subject
    merchandise domestically, which increases home
    market sales prices and thereby increases [normal
    value]. That is, when a duty drawback is granted
    only for exported inputs, the cost of the duty is re-
    flected in [normal value] but not in [export price].
    The statute corrects this imbalance, which could
    otherwise lead to an inaccurately high dumping
    margin, by increasing [export price] to the level it
    likely would be absent the duty drawback.
 635 F.3d at 1338. In effect, the duty drawback adjustment
 constitutes an increase to the U.S. price because the pro-
 ducer receives additional revenue attributable to its U.S.
 sales by reason of the duty drawback.
     In the challenged methodology, Commerce allocated
 Uttam’s duty drawback adjustment between exported
 goods and home-market goods, which lessened Uttam’s
 overall duty drawback adjustment to export price. There
 is no basis for doing so. The statute provides that
    [t]he price used to establish export price and con-
    structed export price shall be . . . increased by . . .
    the amount of any import duties imposed by the
    country of exportation which have been rebated, or
    which have not been collected, by reason of the
Case: 20-1461    Document: 95     Page: 10    Filed: 05/14/2021

 10             UTTAM GALVA STEELS LIMITED   v. UNITED STATES

      exportation of the subject merchandise to the
      United States.
 19 U.S.C. § 1677a(c)(1)(B). The duty drawback statute re-
 quires an adjustment to “export price” based on the full ex-
 tent of the duty drawback. It does not impose an additional
 requirement that the respondent trace particular imported
 goods to U.S. exports.
      It does not make a difference whether the imported in-
 puts that qualified for a drawback were actually incorpo-
 rated into goods sold in the exporter’s domestic market
 because the Indian government credited the drawback to
 the quantity of goods that were in fact exported, whatever
 the source of the inputs used to produce foreign goods. As
 its text makes clear, the statute requires an upward adjust-
 ment to “export price and constructed export price” based
 on the drawback that occurred “by reason of the exporta-
 tion of the subject merchandise to the United States.” Id.
 § 1677a(c)(1)(B). The entire drawback was allowed “by rea-
 son of the exportation.” Id.
                        CONCLUSION
      Because Uttam does not challenge the additional ad-
 justments made by Commerce in its Second Remand Rede-
 termination, we have no reason to address these
 adjustments on appeal. The judgment of the Trade Court
 is affirmed.
                        AFFIRMED