Court Opinion

ID: 9957311
Source: CourtListenerOpinion
Date Created: 2024-04-04 14:01:03.189446+00
Date Added: 2024-06-11T08:18:15.631427
License: Public Domain

Case: 22-2078   Document: 75     Page: 1   Filed: 04/04/2024

   United States Court of Appeals
       for the Federal Circuit
                 ______________________

      UNITED STATES STEEL CORPORATION,
                Plaintiff-Appellant

                NUCOR CORPORATION,
                      Plaintiff

                            v.

  UNITED STATES, BLUESCOPE STEEL (AIS) PTY
   LTD., BLUESCOPE STEEL LTD, BLUESCOPE
            STEEL AMERICAS, INC.,
               Defendants-Appellees
              ______________________

                       2022-2078
                 ______________________

    Appeal from the United States Court of International
 Trade in No. 1:20-cv-03815-RKE, Senior Judge Richard K.
 Eaton.
                  ______________________

                 Decided: April 4, 2024
                 ______________________

     SARAH E. SHULMAN, Cassidy Levy Kent (USA) LLP,
 Washington, DC, argued for plaintiff-appellant. Also rep-
 resented by YOHAI BAISBURD, THOMAS M. BELINE, CHASE
 DUNN, JAMES EDWARD RANSDELL, IV.

     EMMA EATON BOND, Commercial Litigation Branch,
 Civil Division, United States Department of Justice,
Case: 22-2078     Document: 75    Page: 2    Filed: 04/04/2024

 2                    UNITED STATES STEEL CORPORATION v. US

 Washington, DC, argued for defendant-appellee United
 States. Also represented by BRIAN M. BOYNTON, TARA K.
 HOGAN, PATRICIA M. MCCARTHY; SPENCER NEFF, Office of
 the Chief Counsel for Trade Enforcement & Compliance,
 United States Department of Commerce, Washington, DC.

     DANIEL L. PORTER, Curtis, Mallet-Prevost, Colt &
 Mosle LLP, Washington, DC, argued for defendants-appel-
 lees BlueScope Steel (AIS) Pty Ltd., BlueScope Steel Ltd,
 BlueScope Steel Americas, Inc. Also represented by JAMES
 BEATY, CHRISTOPHER A. DUNN, JAMES P. DURLING.
                  ______________________

     Before MOORE, Chief Judge, HUGHES and STARK, Circuit
                           Judges.
 HUGHES, Circuit Judge.
     United States Steel Corp. appeals a decision from the
 United States Court of International Trade sustaining the
 Department of Commerce’s determination that Australian
 producer and exporter of hot-rolled steel, BlueScope Steel
 (AIS) Pty Ltd., did not reimburse its affiliated U.S. im-
 porter, BlueScope Steel Americas, Inc., for antidumping
 duties. Because we agree with the trial court that the
 agency’s determination is supported by substantial evi-
 dence and is otherwise in accordance with law, we affirm.
                              I
                              A
     Under the Tariff Act of 1930, as amended, the Depart-
 ment of Commerce is authorized to administer the anti-
 dumping statute. See 19 U.S.C. §§ 1673, 1677(1). The
 purpose of the antidumping statute is to protect domestic
 industries from injury caused by foreign manufactured
 goods that are sold in the United States at prices below the
 fair market value of those goods. See U.S. Steel Corp. v.
 United States, 621 F.3d 1351, 1353 (Fed. Cir. 2010). In
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 UNITED STATES STEEL CORPORATION v. US                      3

 administering the statute, the agency will conduct investi-
 gations and assess antidumping duties where it deter-
 mines that foreign goods are being sold in the United
 States at less-than-fair value. 19 U.S.C. § 1673. If re-
 quested by an interested party, the agency must also con-
 duct an annual review of a previously issued antidumping
 duty order to determine the amount of dumping and the
 duties owed for the period of review. Id. § 1675(a)(1)(B),
 (2)(A). During the review, the agency calculates a “dump-
 ing margin” by comparing the price at which the merchan-
 dise is sold in the United States (export price) to a “normal
 value” benchmark. See id. §§ 1675(a)(2)(A)(ii),1677(35)(A).
 Where a domestic importer is affiliated with the foreign ex-
 porter, the agency will use “constructed export price,” de-
 fined as the price at which the merchandise is first sold to
 a non-affiliated purchaser, with adjustments made to ac-
 count for expenses incurred by the affiliated seller. Id.
 § 1677a(b), (d)(1).
      When calculating export price or constructed export
 price, the agency must also account for additional factors,
 including whether the exporter has reimbursed the im-
 porter for antidumping duties owed on the merchandise.
 See 19 C.F.R. § 351.402(a), (f). If the agency finds that the
 importer has been reimbursed for antidumping duties, it
 will subtract the amount of reimbursement from the calcu-
 lated export price, ultimately leading to a higher dumping
 margin and a larger duty owed. Id. § 351.402(f)(1)(i) (“In
 calculating the export price (or the constructed export
 price), the Secretary will deduct the amount of any anti-
 dumping duty or countervailing duty which the exporter or
 producer . . . [p]aid directly on behalf of the importer;
 or . . . [r]eimbursed to the importer.”). The agency requires
 importers to file a certification with United States Customs
 and Border Protection stating whether the importer has
 been reimbursed or refunded by the manufacturer, pro-
 ducer, seller, or exporter for all or part of the antidumping
 duties assessed. Id. § 351.402(f)(2)(i).
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 4                    UNITED STATES STEEL CORPORATION v. US

                               B
      This appeal arises out of the Department of Com-
 merce’s second administrative review of the existing anti-
 dumping duty order on hot-rolled steel flat products from
 Australia, covering a period of review from October 1, 2017
 to September 30, 2018. Defendants-Appellees BlueScope
 Steel (AIS) Pty Ltd., BlueScope Steel Ltd, and BlueScope
 Steel Americas, Inc. (collectively, BlueScope) are all affili-
 ated parties that comprise the only hot-rolled steel pro-
 ducer and exporter in Australia. BlueScope Steel Ltd
 (hereinafter, BSL) is the ultimate corporate parent com-
 pany. BlueScope Steel (AIS) Pty Ltd. (hereinafter, AIS) is
 a wholly owned subsidiary of BSL and is the actual pro-
 ducer and exporter of BlueScope hot-rolled steel.
 BlueScope Steel Americas, Inc. (hereinafter, BSA) is the af-
 filiated United States importer. BSL also owns a 50% con-
 trolling interest in Steelscape LLC, an affiliated
 downstream U.S. customer that receives the majority of
 the imported steel.
     For exports of AIS steel that are destined for Steels-
 cape, AIS first invoices BSA, and in a “back-to-back trans-
 action,” BSA then invoices the ultimate customer,
 Steelscape. BlueScope Br. 4. The shipment of the physical
 merchandise goes directly from AIS to Steelscape.
     Prior to the agency’s release of its preliminary findings
 in the 2017–2018 administrative review, Plaintiff-Appel-
 lant United States Steel Corp. (hereinafter, U.S. Steel) al-
 leged that BlueScope had reimbursed BSA for the
 antidumping duties it incurred when importing AIS steel.
 U.S. Steel argued to the agency—and now argues to us on
 appeal—that BlueScope engaged in antidumping duty re-
 imbursement by failing to charge BSA a predetermined
 “formula price” and instead charged a price that accounted
 for estimated antidumping duties owed by BSA. The “for-
 mula price” at issue in this case is housed in a supply agree-
 ment between BlueScope entities. Because the parties offer
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 UNITED STATES STEEL CORPORATION v. US                        5

 incompatible interpretations of the Supply Agreement and
 the entities to which it applies, we present each party’s rec-
 itation of the underlying facts in turn.
                               1
     BlueScope explains that the Supply Agreement at is-
 sue is a “Substrate Supply Agreement” among BSL, BSA,
 and Steelscape. BlueScope Br. 6. BlueScope states:
     The Agreement sets the price that BSA charges
     Steelscape for the merchandise, according to a for-
     mula using two published hot-rolled price indices.
     Article 5.1 of the Supply Agreement uses this for-
     mula to determine the price of the purchase order
     (“PO”) that Steelscape submits to BSA. Article 3.5
     of the Supply Agreement states that “Steelscape
     will submit two POs {purchase orders} to BSA for
     the total amount of HRC {hot-rolled coil} in the
     Steelscape Order for each supply month . . . [.]” Ar-
     ticle 6.1 of the Agreement further sets forth invoice
     the price [sic] that “BSA will provide to Steelscape.”
     That price is a delivered, duty-paid price—a price
     that includes both the duties and the cost of deliv-
     ering the merchandise to Steelscape.
 BlueScope Br. 6–7 (internal citations omitted). In sum,
 BlueScope asserts that while the Supply Agreement con-
 trols the invoice price between BSA and Steelscape, it does
 not set forth the “transfer price” for the transaction be-
 tween AIS and BSA. Instead, BlueScope reports that it cal-
 culates the transfer price between AIS and BSA by starting
 with the formula price to Steelscape and subtracting the
 estimated antidumping duties that BSA will owe. To sup-
 port its explanation of the pricing methodology, BlueScope
 submitted evidence into the agency record during review,
 including a questionnaire response discussing the method-
 ology, a copy of the Supply Agreement, and a series of sales
 traces showing the actual amounts paid by AIS to BSA and
 then BSA to Steelscape in previous transactions.
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 6                    UNITED STATES STEEL CORPORATION v. US

 BlueScope also submitted evidence showing that BSA ac-
 tually paid the antidumping duty amounts owed and filed
 the certifications of nonreimbursement that are required
 under 19 C.F.R. § 351.402(f)(2)(i). J.A. 25.
                              2
      Notwithstanding BlueScope’s proffered explanation of
 its own Supply Agreement, U.S. Steel has adopted the po-
 sition that BSA—not Steelscape—is required to pay the
 Supply Agreement’s formula price for hot-rolled steel. U.S.
 Steel points to several record documents as support for this
 contention. The first is the Supply Agreement itself, which
 BlueScope submitted in response to the agency’s request
 that BlueScope “[e]xplain how you determined the net unit
 transfer price.” J.A. 114. In responding to that question,
 BlueScope provided the Supply Agreement and stated that
 the agreement governed “[t]he price of material sold by
 BlueScope to BSA and subsequently to Steelscape.” J.A.
 114. The second document is another questionnaire re-
 sponse that provides a worksheet “demonstrat[ing] the ap-
 plication of the transfer price formula” for a sale “made by
 AIS on invoice to BSA and destined for Steelscape.” J.A.
 1458. U.S. Steel also references a third questionnaire re-
 sponse where BlueScope reported that “BlueScope issues
 an invoice to BSA for the merchandise according to the
 amount shipped and the formula price,” and further that
 “there is no negotiation of sales prices or terms of sale be-
 tween Steelscape and BSA or BSA and BlueScope.” J.A. 97.
     Because U.S. Steel argues that BSA was required to
 pay the formula price and because “the pricing formula
 does not establish a basis to deduct antidumping duties,”
 U.S. Steel concludes that BlueScope’s practice of calculat-
 ing the transfer price between AIS and BSA by subtracting
 estimated duties from the formula price is impermissible
 reimbursement of antidumping duties. Appellant’s Br. 8–9,
 12 (“That BlueScope lowered the price of the [hot-rolled
 steel] by antidumping duties outside of its pricing formula
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 UNITED STATES STEEL CORPORATION v. US                    7

 is evidence of reimbursement.”). In response, BlueScope ar-
 gues that “nothing in the Substrate Supply Agreement sets
 forth the invoice price that foreign producer AIS is to
 charge its related party importer BSA for the merchan-
 dise,” and therefore, “AIS cannot have ‘lowered’ an invoice
 price when that invoice price is nowhere set forth in the
 relevant agreements between the parties.” BlueScope Br.
 9.
                             C
    In its preliminary findings, the agency rejected U.S.
 Steel’s allegations of reimbursement, stating that its pre-
 liminary analysis of the record “[did] not demonstrate that
 BlueScope reimbursed its U.S. affiliate.” J.A. 48. Because
 the agency did not find evidence of reimbursement, it did
 not adjust BlueScope’s U.S. gross unit price to account for
 such reimbursement. In its final results, the agency again
 determined that BSA was not reimbursed for antidumping
 duties deposited during the period of review. The agency
 focused on record evidence showing that BSA filed the req-
 uisite certifications of nonreimbursement when it imported
 subject merchandise and stated that “there [was] no record
 evidence to contradict BSA’s statements in these certifica-
 tions.” J.A. 25. In fact, the agency found that BlueScope
 submitted record evidence to support the statements of
 nonreimbursement and further that the information
 demonstrated that BSA actually paid the requisite cash de-
 posit of antidumping duties. The agency determined that
 BlueScope’s explanation of the Supply Agreement “showed
 that these parties have a long-standing supply agreement
 which set the transfer prices of subject merchandise to
 Steelscape according to a formula.” J.A. 26 (emphasis
 added). Turning to BlueScope’s method of calculating the
 transfer price between AIS and BSA, the agency stated:
    We disagree with the petitioners that record evi-
    dence establishes that AIS deducted [antidumping]
    duties when setting the price to BSA. Rather, the
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 8                    UNITED STATES STEEL CORPORATION v. US

     information provided by BlueScope demonstrates
     that BSA paid [antidumping] duties on its imports
     of subject merchandise, and it passed these duties
     on to Steelscape as part of the transfer price
     [charged] to it. Despite the petitioners’ claim, this
     information does not show that AIS deducted [an-
     tidumping] duties from the price that it charged to
     BSA; to the contrary, it simply shows the calcula-
     tion of the transfer price to the U.S. customer, al-
     beit an affiliated one.
 J.A. 26 (footnote omitted). The agency also addressed U.S.
 Steel’s contention that a finding of no reimbursement was
 inconsistent with previous agency decisions. The agency
 explained that because there was “no evidence that AIS de-
 ducted the [antidumping] duties paid by BSA from the
 transfer price charged to BSA or otherwise reimbursed
 BSA for those duties,” its determination that the reim-
 bursement regulation did not apply was consistent with
 previous cases and past practice. J.A. 27 (citing cases
 where the agency clarified that “reimbursement, within
 the meaning of the regulation, takes place between affili-
 ated parties if the evidence demonstrates that the exporter
 directly pays antidumping duties for the affiliated importer
 or reimburses the importer for such duties”).
      Following the agency’s final decision, U.S. Steel filed a
 complaint in the United States Court of International
 Trade challenging the decision. U.S. Steel Corp. v. United
 States, 578 F. Supp. 3d 1323 (Ct. Int’l Trade 2022). The
 trial court sustained the agency’s decision, finding that it
 was supported by substantial evidence and was otherwise
 in accordance with the law. Id. at 1325. The trial court
 noted that “[t]he Exporter’s deduction of estimated anti-
 dumping duties from the Importer’s invoice price, on its
 own, is unremarkable when viewed in the context of the
 record.” Id. at 1331. The court further explained that
 “[t]ogether with the non-reimbursement evidence in the
 form of the certificate filed by the Importer, and evidence
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 UNITED STATES STEEL CORPORATION v. US                      9

 that the Importer paid duties owed on the subject steel, the
 court concludes it was not unreasonable for Commerce to
 find that the reimbursement regulation did not apply
 here.” Id. The trial court also rejected U.S. Steel’s argu-
 ment that the agency erred as a matter of law by failing to
 apply its reimbursement regulation, stating, “Plaintiffs’ ar-
 gument that Commerce unlawfully ignored its ‘practice’ of
 considering the lowering of an invoice price to be ‘indirect
 reimbursement’ under its regulations is meritless.” Id. at
 1331–32. Like the agency, the trial court reasoned that in
 previous cases concerning allegations of antidumping duty
 reimbursement between affiliated parties, the agency has
 required a showing of something more than a transfer of
 funds between parties: there must be evidence that the ex-
 porter directly paid the duties or reimbursed the importer
 for such duties. Id. at 1332–33. The trial court then con-
 cluded that because there was no evidence of such reim-
 bursement—direct or indirect—it was “unconvinced by
 Plaintiff’s argument that Commerce has departed from an
 established practice.” Id. at 1333.
    U.S. Steel now appeals. We have jurisdiction under 28
 U.S.C. § 1295(a)(5).
                              II
     We review the decisions of the Court of International
 Trade de novo, applying the same standard of review used
 by the trial court in reviewing the administrative record
 before the agency. Boomerang Tube LLC v. United States,
 856 F.3d 908, 912 (Fed. Cir. 2017). This court will uphold
 the agency’s determination unless it is “unsupported by
 substantial evidence on the record, or otherwise not in ac-
 cordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i); Union
 Steel v. United States, 713 F.3d 1101, 1106 (Fed. Cir. 2013).
     A decision is supported by substantial evidence if the
 evidence amounts to “more than a mere scintilla” and “a
 reasonable mind might accept [it] as adequate to support a
 conclusion.’” Ad Hoc Shrimp Trade Action Comm. v. United
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 10                   UNITED STATES STEEL CORPORATION v. US

 States, 802 F.3d 1339, 1348 (Fed. Cir. 2015) (quoting Con-
 sol. Edison Co. of N.Y. v. NLRB, 305 U.S. 197, 217 (1938)).
 Our review “is limited to the record before Commerce in the
 particular proceeding at issue and includes all evidence
 that supports and detracts from Commerce’s conclusion.”
 Id. Further, the Department of Commerce’s findings “may
 still be supported by substantial evidence even if two in-
 consistent conclusions can be drawn from the evidence.” Id.
                              III
     On appeal, U.S. Steel argues that the trial court erred
 in sustaining the agency’s finding that BlueScope did not
 engage in antidumping duty reimbursement because such
 a decision is not supported by substantial evidence. U.S.
 Steel further argues that the agency erred as a matter of
 law when it declined to apply its antidumping duty regula-
 tion to the facts of the case. We disagree and hold that the
 agency’s determination was supported by substantial evi-
 dence and was otherwise in accordance with law.
      During the review, the agency based its determination
 on a number of record documents, including the nonreim-
 bursement certificate filed by BSA, the Supply Agreement,
 the sales trace of previous transactions amongst the par-
 ties, and documents showing that BSA had paid the owed
 duties to United States Customs and Border Protection.
 The agency’s Final Decision Memorandum and the Final
 Results Analysis Memorandum both demonstrate that the
 agency had a clear understanding of BlueScope’s transfer
 price methodology, including the ways that BlueScope fac-
 tored estimated antidumping duties into its calculation.
 See J.A. 26, 4103. Even after weighing this evidence, the
 agency found that the transfer pricing methodology did not
 constitute reimbursement. As the trial court explained, the
 agency determined that “it would have been unreasonable
 for the Exporter to include antidumping duties in the price
 charged to the Importer because the Exporter itself was not
 responsible for those duties.” U.S. Steel, 578 F. Supp. 3d at
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 UNITED STATES STEEL CORPORATION v. US                    11

 1327. The record indicates that the evidence before the
 agency was adequate to support the agency’s finding of
 nonreimbursement. Furthermore, the fact that U.S. Steel
 may be able to point to several instances in the record
 where BlueScope submitted questionnaire responses that
 could fairly be read to contradict its overall narrative re-
 garding the Supply Agreement, see Reply Br. 2–3, is not
 sufficient to render the agency’s decision unreasonable or
 not based on substantial evidence.
     Because we find that substantial evidence supports the
 agency’s determination that BlueScope did not engage in
 reimbursement, we are also not persuaded by U.S. Steel’s
 argument that the agency erred as a matter of law in fail-
 ing to apply its reimbursement regulation. Like the trial
 court, in the absence of evidence demonstrating that BSA
 was reimbursed for the duties it paid, we find no departure
 from an established practice by the agency that would con-
 stitute reversible error. See U.S. Steel, 578 F. Supp. 3d at
 1333.
                             IV
     We have considered the remainder of U.S. Steel’s argu-
 ments and find them unpersuasive. Accordingly, we affirm
 the Court of International Trade’s decision sustaining the
 Department of Commerce’s determination that BlueScope
 did not engage in antidumping duty reimbursement within
 the meaning of the statute.

                        AFFIRMED