Essar Steel Limited v. United States
2014 U.S. App. LEXIS 10910
| Fed. Cir. | 2014Background
- Essar Steel Ltd., an Indian producer, was investigated by Commerce for alleged countervailable subsidies under the Chhattisgarh Industrial Program (CIP) for 2007; Commerce concluded Essar benefited from CIP and applied adverse facts available (AFA) after Essar and Indian authorities failed to cooperate.
- Essar repeatedly denied having facilities in Chhattisgarh; other record evidence contradicted those denials, and this Court previously upheld Commerce’s decision to apply AFA because of Essar’s failure to cooperate.
- The Trade Court remanded for Commerce to explain how it corroborated the chosen AFA rate (54.68%) or why corroboration was not practicable.
- Commerce explained it used a hierarchical methodology: where company-specific data were unavailable it relied on subsidy rates calculated for identical or similar programs in prior reviews (Gujarat tax incentives; Steel Authority grants; captive‑mining land program) and aggregated them to reach 54.68%.
- The Trade Court found Commerce corroborated the secondary information “to the extent practicable” under 19 U.S.C. § 1677e(c) because Essar, the state of Chhattisgarh, and India failed to provide company‑specific independent information.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Commerce corroborated the AFA/secondary information under 19 U.S.C. § 1677e(c) | Essar: Commerce failed to corroborate the AFA rate and cannot rely on unrelated prior rates | U.S./U.S. Steel: Commerce corroborated to the extent practicable given lack of cooperation and used reasonably accurate prior rates | Court: Affirmed—Commerce corroborated the AFA rate to the extent practicable; reliance on prior similar-program rates was supported by substantial evidence |
| Whether Commerce’s AFA selection methodology produced a reasonably accurate estimate (and deterrent) under § 1677e(b) | Essar: The aggregated rate is not a proper estimate and overstates benefits | U.S./U.S. Steel: Rate was a reasonably accurate estimate drawn from prior verified calculations and permitted as an adverse inference | Court: Affirmed—rate is a reasonably accurate estimate with deterrent element consistent with precedent |
| Whether additional corroboration arguments (e.g., overlap of benefits, allocation to upstream inputs, program caps) could be raised in court | Essar: Court should consider these substantive challenges | U.S./U.S. Steel: Essar failed to exhaust administrative remedies on these issues | Court: Affirmed—Trade Court did not abuse discretion; Essar failed to raise these issues before Commerce so they are exhausted/waived |
Key Cases Cited
- F.lli De Cecco Di Filippo Fara S. Martino S.p.A. v. United States, 216 F.3d 1027 (Fed. Cir.) (AFA should be a reasonably accurate estimate of respondent’s actual rate with a deterrent increase)
- Essar Steel Ltd. v. United States, 678 F.3d 1268 (Fed. Cir.) (upholding Commerce’s application of AFA where respondent provided dishonest denials and failed to cooperate)
- Wheatland Tube Co. v. United States, 161 F.3d 1365 (Fed. Cir.) (standard of review for CIT decisions)
- Sandvik Steel Co. v. United States, 164 F.3d 596 (Fed. Cir.) (administrative exhaustion doctrine)
- Yangzhou Bestpak Gifts & Crafts Co. v. United States, 716 F.3d 1370 (Fed. Cir.) (exceptions to exhaustion: useless formality or no opportunity to raise issue)
- Corus Staal BV v. United States, 502 F.3d 1370 (Fed. Cir.) (review standard for Trade Court’s application of exhaustion)