Nucor Corp. v. United States
286 F. Supp. 3d 1364
Ct. Intl. Trade2018Background
- Commerce investigated countervailing duties (CVD) on certain corrosion-resistant steel (CORE) from South Korea and examined whether KEPCO (state-owned utility) provided electricity to producers for less than adequate remuneration (LTAR).
- Commerce applied a tier-three benchmark under 19 C.F.R. § 351.511(a)(2)(iii) because no usable in-country market price or world market price was available, assessing whether KEPCO prices were "consistent with market principles."
- Commerce analyzed KEPCO’s price‑setting methodology (a single tariff schedule based on cost allocation and KPX purchase prices), verified responses, and concluded KEPCO’s industrial tariff recovered its costs and was uniformly applied to industrial users.
- Commerce declined to apply adverse facts available (AFA), finding the Government of Korea (GOK) timely and fully responded and that information was verifiable.
- Nucor and domestic steel producers challenged Commerce’s findings as contrary to law, arbitrary and capricious, and unsupported by substantial evidence, seeking remand; the Court sustained Commerce in full.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Commerce's tier‑three methodology (focusing on KEPCO's price‑setting mechanism) is contrary to statute | Nucor: method ignores statutory adequacy‑of‑remuneration standard and improperly compares government prices to themselves (retains old preferentiality test) | Govt: regulation permits tier‑three review of government price‑setting philosophy; Commerce reasonably assesses market principles within the government‑controlled market | Held: Commerce's approach is reasonable and consistent with statute/regulation; tier‑three may examine government price‑setting philosophy |
| Whether Commerce's determination is arbitrary and capricious for failing to consider generator costs or political intervention | Nucor: Commerce ignored that KPX pricing and political suppression of tariffs understate generator costs and cross‑subsidize industry | Govt: relevant inquiry is whether KEPCO (the authority) recovered its costs in its tariff; GOK provided cost and tariff data and Commerce verified it | Held: Not arbitrary; Commerce reasonably focused on KEPCO's KPX‑based costs and tariff application rather than upstream generator accounting |
| Whether substantial evidence supports finding that KEPCO prices are consistent with market principles and that KEPCO recovered costs | Nucor: record materials (reports, articles, calculations) show intervention, cross‑subsidization, and under‑recovery; alternative calculations undermine Commerce | Govt: record contained tariff, KPX purchase prices, and verifiable data showing KEPCO covered costs; petitioners’ alternatives were flawed or outdated | Held: Supported by substantial evidence; Commerce reasonably weighed evidence and rejected petitioners’ alternative analyses |
| Whether Commerce abused its discretion by not applying AFA to infer non‑market pricing | Nucor: prior Commerce decisions applied adverse inferences in similar contexts; GOK withheld informal consultation info and intervened politically | Govt: GOK timely, complete, and verifiable responses; no withholding or failure to cooperate warranting AFA | Held: Commerce reasonably declined AFA because GOK cooperated and Commerce could verify the record evidence |
Key Cases Cited
- Fujitsu Gen. Ltd. v. United States, 88 F.3d 1034 (Fed. Cir.) (deference to Commerce on complex economic and accounting determinations)
- Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (U.S.) (agency must cogently explain discretionary choices)
- Maverick Tube Corp. v. United States, 273 F. Supp. 3d 1293 (CIT) (tier‑three may take market "as it finds it," even if monopoly; supports government‑market focus)
- Consol. Bearings Co. v. United States, 348 F.3d 997 (Fed. Cir.) (failure to exhaust administrative remedies bars judicial review of new arguments)
- Corus Staal BV v. United States, 502 F.3d 1370 (Fed. Cir.) (strict view of exhaustion in trade cases)
- SKF USA Inc. v. United States, 263 F.3d 1369 (Fed. Cir.) (interpretation consistency across statutory contexts)
- Ceramica Regiomontana, S.A. v. United States, 636 F. Supp. 961 (Ct. Int'l Trade) (agency methodology must be reasonable to effectuate statute)