Nucor Corporation v. United States
927 F.3d 1243
Fed. Cir.2019Background
- In a 2016 countervailing-duty investigation, Commerce examined whether the Korean government subsidized Korean producers of corrosion‑resistant steel (CORE) by selling electricity for "less than adequate remuneration" during the period Jan. 1–Dec. 31, 2014.
- Commerce found KEPCO (Korea Electric Power Corporation) to be a government "authority," concluded market benchmarks were unavailable, and applied 19 C.F.R. § 351.511(a)(2)(iii) (the "consistent with market principles" residual test).
- Commerce determined KEPCO charged tariffed, nondiscriminatory rates and that its tariff methodology reflected cost recovery (KEPCO’s costs as relevant), so no electricity-sale subsidy was found; the Court of International Trade upheld Commerce’s decision.
- Nucor appealed, arguing (1) Commerce unlawfully treated mere nondiscriminatory/"preferentiality" analysis as sufficient under the adequate‑remuneration standard, (2) Commerce failed to analyze KPX (Korean Power Exchange) prices/costs and generator (especially nuclear) costs, and (3) Commerce’s cost‑recovery finding lacked substantial evidence.
- The Federal Circuit rejected Commerce’s broad claim that nondiscrimination alone suffices, held that Commerce’s regulation and statute require pricing linked to value/cost (i.e., adequate remuneration), but affirmed because Commerce here relied on cost‑recovery findings (not only nondiscrimination) and Nucor failed to exhaust its KPX argument before Commerce.
Issues
| Issue | Plaintiff's Argument (Nucor) | Defendant's Argument (Commerce / U.S.) | Held |
|---|---|---|---|
| Whether KEPCO sold electricity for "less than adequate remuneration" to CORE producers | KEPCO/KPX prices were too low and did not reflect full value; Commerce’s cost analysis omitted key generator/KPX costs | KEPCO prices were tariffed, nondiscriminatory, and Commerce found cost recovery based on KEPCO costs, so adequate remuneration exists | No subsidy: affirmed — Commerce’s cost‑recovery finding (as made) was supported and sufficient here |
| Whether mere nondiscrimination (no "preferential rate") satisfies the statutory "less than adequate remuneration" standard | N/A (argued that KEPCO’s nondiscrimination was insufficient because prices were too low) | Commerce argued nondiscrimination under a consistent/discernible tariff method can suffice when market benchmarks are unavailable | Rejected: nondiscrimination alone is not a permissible reading of the statute/regulation; pricing must be linked to value/market principles |
| Proper interpretation and application of 19 C.F.R. § 351.511(a)(2)(iii) ("consistent with market principles") | Regulation requires assessment tied to market principles/value; Commerce failed to do so fully | Regulation permits analysis of price‑setting philosophy, costs, and discrimination; Commerce applied this residual test | Held that the regulation requires linkage to market principles (tied to value/cost); Commerce’s invocation of cost recovery here fits within permissible range |
| Whether Commerce erred by not considering KPX/generators as part of the relevant "authority" (exhaustion) | KPX (and generator costs) are central; Nucor raised these issues to Commerce and they should have been considered | Commerce focused on KEPCO; U.S. says Nucor failed to exhaust argument that KPX is part of the authority | Affirmed refusal to consider KPX on jurisdictional/exhaustion grounds: Nucor failed to adequately present the KPX‑as‑authority theory to Commerce |
Key Cases Cited
- Delverde, SrL v. United States, 202 F.3d 1360 (Fed. Cir. 2000) (adequate‑remuneration inquiry tied to whether purchaser paid full value)
- Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (U.S. 1984) (agency statutory interpretation reviewed under Chevron two‑step framework)
- City of Arlington v. FCC, 569 U.S. 290 (U.S. 2013) (scope of agency statutory authority governs deference)
- Utility Air Regulatory Group v. EPA, 573 U.S. 302 (U.S. 2014) (agency interpretations unreasonable when they go beyond statute’s permissible meanings)
- Verizon Communications, Inc. v. FCC, 535 U.S. 467 (U.S. 2002) (distinguishing nondiscrimination from just and reasonable/adequate compensation in utility rate regulation)
- Diamond Sawblades Mfrs. Coal. v. United States, 866 F.3d 1304 (Fed. Cir. 2017) (standard of review for Commerce determinations)
- Dupont Teijin Films USA, LP v. United States, 407 F.3d 1211 (Fed. Cir. 2005) (substantial‑evidence and legal‑error standards in trade cases)
- Maverick Tube Corp. v. United States, 273 F. Supp. 3d 1293 (Ct. Int'l Trade 2017) (trade court decision applying nondiscrimination/consistent‑method analysis; discussed but not controlling)