2019 CIT 97
Ct. Int'l Trade2019Background
- Commerce's Final Determination in the CVD investigation of certain cold-rolled steel from Russia applied AFA to Severstal (for an unreported mining-expense tax deduction) and found Gazprom's provision of natural gas to NLMK to be a countervailable LTAR subsidy; NLMK received a .03% program-specific rate and Severstal was assigned that same rate under Commerce's CVD AFA hierarchy.
- The Court in ArcelorMittal (337 F. Supp. 3d 1285) remanded for Commerce to (1) explain why the .03% AFA rate applied to Severstal was sufficiently adverse, and (2) identify the specific record facts supporting its de facto specificity finding regarding Gazprom's natural-gas sales to NLMK.
- On remand Commerce (a) re‑applied the .03% AFA rate to Severstal, defending use of its CVD AFA hierarchy and the .03% rate as the highest available program-specific rate, and (b) identified Gazprom’s 2013 annual report (from the petition) as factual support that the metallurgy sector was a predominant user of Gazprom gas.
- NLMK submitted its remand comments late and Commerce rejected them as untimely under its established procedures; NLMK sought to supplement the record in court and argued Commerce abused its discretion and failed to justify specificity.
- ArcelorMittal argued the .03% rate was insufficiently adverse and Commerce’s hierarchy reasoning was boilerplate; the Government defended the remand redetermination in full.
- The Court sustained Commerce’s Remand Redetermination in its entirety, upheld rejection of NLMK’s late submissions, found Commerce adequately explained why the .03% rate was sufficiently adverse, and accepted the Gazprom 2013 annual report as record support for de facto specificity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was the .03% AFA program‑specific rate sufficiently adverse when applied to Severstal? | ArcelorMittal: Commerce’s remand explanation was inadequate—reliance on AFA hierarchy was boilerplate and failed to address case‑specific circumstances. | Gov: Hierarchy use was appropriate; .03% was the highest corroborated program rate available and reasonably balances deterrence and accuracy. | Court: Sustained Commerce. The agency adequately explained that .03% was the highest corroborated rate available and its use balanced statutory aims; no evidence supported departing from the hierarchy. |
| Did Commerce provide specific record facts supporting its de facto specificity finding for Gazprom’s supply of gas to NLMK? | NLMK: Commerce failed to justify specificity and improperly relied on the petition; remand record lacked the necessary factual basis. | Gov: Commerce identified and explained reliance on Gazprom’s 2013 annual report (in the petition) showing metallurgy’s heavy use, ranking among top sectors, and separate listing—supporting predominance. | Court: Sustained Commerce. The 2013 Gazprom annual report on the record supplied sufficient factual basis for the de facto specificity finding. |
| Did Commerce abuse its discretion by rejecting NLMK’s untimely remand comments? | NLMK: No regulation expressly governs remand-time extensions; Commerce should have accepted comments for fairness/accuracy. | Gov: Commerce has broad discretion to set and enforce remand deadlines; rejecting untimely submissions was reasonable under its procedures (modeled on 19 C.F.R. §351.302). | Court: Sustained Commerce. Rejection was not an abuse—NLMK offered only inattentiveness to email while counsel traveled; timeliness and finality justified enforcement. |
| Did NLMK exhaust administrative remedies before challenging remand results in court? | NLMK: (argued merits) | Gov: Because Commerce excluded NLMK’s late comments, NLMK failed to present objections to Commerce and therefore failed to exhaust administrative remedies. | Court: Sustained Commerce. NLMK failed to exhaust administrative remedies; court declined to consider the untimely arguments. |
Key Cases Cited
- Huaiyin Foreign Trade Corp. v. United States, 322 F.3d 1369 (Fed. Cir.) (standard of review for Commerce determinations)
- F.lli De Cecco di Filippo Fara S. Martino S.p.A. v. United States, 216 F.3d 1027 (Fed. Cir.) (AFA rate must balance deterrence and accuracy)
- Dongtai Peak Honey Indus. Co. v. United States, 777 F.3d 1343 (Fed. Cir.) (Commerce may reject late submissions absent good cause)
- Mittal Steel Point Lisas Ltd. v. United States, 548 F.3d 1375 (Fed. Cir.) (exhaustion requirement applies to remand proceedings)
- SolarWorld Americas, Inc. v. United States, 229 F. Supp. 3d 1362 (CIT) (AFA selection must reasonably balance objectives)
- Vt. Yankee Nuclear Power Corp. v. Nat. Res. Def. Council, Inc., 435 U.S. 519 (U.S.) (agencies have discretion to establish their procedures)
- PSC VSMPO‑Avisma Corp. v. United States, 688 F.3d 751 (Fed. Cir.) (courts defer to agency record development)
- Essar Steel Ltd. v. United States, 678 F.3d 1268 (Fed. Cir.) (timeliness and finality in administrative process)