MID CONTINENT NAIL CORPORATION, DAVIS WIRE CORPORATION, MAZE NAILS (DIVISION OF W.H. MAZE COMPANY) and TREASURE COAST FASTENERS, INC., Plaintiffs, v. UNITED STATES, Defendant, and ILLINOIS TOOL WORKS, INC. and PASLODE FASTENERS (SHANGHAI) CO., LTD., Defendant-Intervenors.
Court No. 08-00225
United States Court of International Trade
May 4, 2010
712 F.Supp.2d 1370
RESTANI, Chief Judge
Public Version
Conclusion
For the aforementioned reasons and based on this record, the court concludes that utilization of the “nails test” for the targeted dumping analysis was reasonable and Commerce‘s determinations were supported by substantial evidence, and in accordance with law. Accordingly, the plaintiffs’ Rule 56.2 motion for judgment on the agency record is denied. Judgment, therefore, will be entered for the defendant.
712 F.Supp.2d 1370
Wiley Rein, LLP (Adam Henry Gordon and Maureen Elizabeth Thorson) for the plaintiffs.
Tony West, Assistant Attorney General; Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (David F. D‘Alessandris); Office of Chief Counsel for Import Administration, U.S. Department of Commerce (William G. Isasi, Hardeep K. Josan and Brian Soiset), of counsel, for the defendant.
McDermott, Will & Emery, LLC (David John Levine) for the defendant-intervenors.
RESTANI, Chief Judge: This court action challenges the Department of Commerce‘s (“Commerce“) final determination rendered in a targeted antidumping duty investigation of certain steel nails from the People‘s Republic of China (“PRC“). See Certain Steel Nails from the People‘s Republic of China: Final Determination of Sales at Less Than Fair Value and Partial Affirmative Determination of Critical Circumstances, 73 Fed. Reg. 33,977 (Dep‘t Commerce June 16, 2008) (“Final Determination“). The plaintiffs, Mid Continent Nail Corporation, Davis Wire Corporation, Maze Nails and Treasure Coast Fasteners, Inc., collectively the domestic industry, submitted a motion for judgment on the agency record. For the reasons stated below, the court denies the plaintiffs’ motion and grants judgment on the agency record in favor of the United States.
Background
I. Targeted Dumping
Targeted dumping analysis is “an alternative method for determining the existence of margins of dumping in an investigation....” Targeted Dumping in Antidumping Investigations; Request for Comment, 72 Fed. Reg. 60,651, 60,651 (Dep‘t Commerce Oct. 25, 2007) (“Request for Comment“). The purpose of this methodology is to enable Commerce to identify dumping when a seller is providing lower prices to only certain United States purchasers “by comparing the weighted average of the normal values to the export prices (or constructed export prices) of individual transactions for comparable merchandise.”
II. Commerce‘s Investigation of Certain Steel Nails from the PRC
In May 2007, the plaintiffs filed petitions with Commerce concerning certain steel nails from the PRC. Certain Steel Nails from the People‘s Republic of China and the United Arab Emirates: Initiation of Antidumping Duty Investigations, 72 Fed. Reg. 38,816, 38,817
In its Preliminary Determination, published on January 23, 2008, Commerce used the methodology it had accepted in a previous investigation to conclude that targeted dumping had occurred.1 Id. at 3939-40. The following month, Commerce amended its Preliminary Determination to correct significant ministerial errors with respect to the calculation of Paslode‘s antidumping duty (AD) margin. See Certain Steel Nails From the People‘s Republic of China: Amended Preliminary Determination of Sales at Less Than Fair Value, 73 Fed. Reg. 7254 (Dep‘t Commerce Feb. 7, 2008) (“Amended Preliminary Determination“). In the Amended Preliminary Determination, Commerce calculated an AD margin of 4.70 percent for Paslode whereas Xingya‘s AD margin remained unchanged at 44.57 percent. Id. at 7255. At that time, however, Commerce stated that it intended to develop a new methodology to assess Paslode and Xingya‘s alleged targeted dumping and requested comments on the matter. Preliminary Determination, 73 Fed. Reg. at 3939.
On April 21, 2008, Commerce informed the plaintiffs of its new methodology (“the nails test“) and set a sixteen day deadline for comments.2 (Pls.’ Documentary App. Accompanying Mem. of Law in Supp. of Pls.’ Rule 56.2 Mot. for J. Upon the Agency R. (“Pls.’ App.“)
The plaintiffs filed their case brief in response to the nails test on May 7, 2008. (See Pls.’ App. Tab 9.) On May 9, 2008, Commerce published the nails test and provided the public thirty days to comment. Proposed Methodology, 73 Fed. Reg. at 26,372. Commerce subsequently extended this deadline until June 23, 2008. Antidumping Methodologies for Proceedings that Involve Significant Cost Changes Throughout the Period of Investigation (POI)/Period of Review (POR) that May Require Using Shorter Cost Averaging Periods; Request for Comment and Proposed Methodology for Identifying and Analyzing Targeted Dumping in Antidumping Investigations; Request for Comment, 73 Fed. Reg. 32,557, 32,557 (Dep‘t Commerce June 9, 2008). On June 16, 2008, however, Commerce published its Final Determination, which adopted the nails test, and used it to calculate an AD margin of zero percent for Paslode and 21.24 percent for Xingya. Final Determination, 73 Fed. Reg. at 33,981.
In August 2008, the plaintiffs filed a complaint contesting the Final Determination. In February 2009, the plaintiffs filed a motion for judgment on the agency record pursuant to USCIT Rule 56.2.
The court has jurisdiction pursuant to
Discussion
I. Reasonable Time under 19 U.S.C. § 1677m(g)
The plaintiffs allege that Commerce‘s actions deprived them of their due process rights under the Fifth Amendment. (Mem. of Law in Supp. of Pls.’ Rule 56.2 Mot. for J. Upon the Agency R. (“Pls.’ Mem.“) 12-20.) The plaintiffs claim that by providing the domestic industry only sixteen days to comment on the nails test, Commerce did not afford enough time to submit meaningful comments to demonstrate all of the nails test‘s errors. (See Id. at 15.) In support of their position that the comment period was unreasonable, the plaintiffs cite the facts that Commerce needed “several months” to develop the nails test, that Commerce typically affords parties fifty days to comment on preliminary determinations,4 and that Commerce provided the public over thirty days to comment. (Id.) This claim lacks merit.
Congress has provided a fair process for commenting within the statutory language of
Information that is submitted on a timely basis to the administering authority or the Commission during the course of a proceeding under this subtitle shall be subject to comment by other parties to the proceeding within such reasonable time as the administering authority or the Commission shall provide. The administering authority and the Commission, before making a final determination ... shall cease collecting information and shall provide the parties with a final opportunity to comment on the information obtained by the administering authority or the Commission ... upon which the parties have not previously had an opportunity to comment. Comments containing new factual information shall be disregarded.
Generally, “[w]here a right to be heard exists, due process requires that right be accommodated at a meaningful time and in a meaningful manner.” Barnhart v. United States Treasury Dep‘t, 588 F. Supp. 1432, 1438 (CIT 1984). Recognizing that “[w]ith more time most parties could improve the quality of their comments,” courts ask whether there is “evidence that given more time [a plaintiff] would have, in fact, provided more meaningful comments.” Sichuan Changhong Electric Co. v. United States, 466 F. Supp. 2d 1323, 1328 (CIT 2006). If, however, a plaintiff makes thoughtful comments that Commerce addresses in its determination, then, “as a practical matter, [the plaintiff] was not substantially deprived of an opportunity to be heard before the agency.” Borden, 23 CIT at 375 n.3. This understanding has previously led the court to conclude that a comment period as brief as four days can be reasonable. See Sichuan, 466 F. Supp. 2d at 1329.
Despite having a full opportunity to demonstrate that the comment period was unreasonable by presenting the court with additional critiques of the nails test that they were not previously afforded the opportunity to develop, the plaintiffs have failed to provide any new and convincing arguments. Although the plaintiffs filed a thorough case brief, the court notes that most of their arguments are similar, if not identical, to the ones raised at the administrative level. (Compare Pls.’ App. Tab 9, with Pls.’ Mem.) The plaintiffs claim that they would have made many additional arguments if they were afforded more time to comment, yet now provide only one such example. (Pls.’ Mem. 18.) They argue that the mean price was incorrectly used to calculate the standard deviation. (Id.) The plaintiffs contend that if the statistically correct median price were used, Commerce might have found dumping in this case. (Id.) Contrary to the plaintiffs’ claim, however, the use of a mean to calculate a standard deviation is, by definition, a perfectly acceptable statistical method. Christine Ammer & Dean S. Ammer, Dictionary of Business and Economics 397 (1977). Although median can be substituted for mean in certain situations, such a
There is no evidence before the court, therefore, to suggest that the plaintiffs would have provided more meaningful comments if they were afforded additional time to comment. Accordingly, the court holds that Commerce afforded the plaintiffs a reasonable time to comment under
II. The Nails Test
The plaintiffs challenge the Final Determination on the grounds that the nails test violates
Under
A. Commerce‘s decision to consider only identical products is supported by substantial evidence.
The plaintiffs first claim that Commerce‘s decision to test only identical products was in violation of the clear language of
B. Commerce‘s use of standard deviation is statistically valid.
The plaintiffs claim that Commerce‘s use of standard deviation in the nails test is unreasonable because “[a] standard deviation is simply a descriptive measure of a population; in other words, standard deviation measures describe the dispersion of data, and then calculate how spread out prices are from the average price.” (Pls.’ Mem. 24.) The plaintiffs go on to claim that “[a]t the most basic level, then, the Department‘s starting point violated the regulatory requirement that it use a ‘standard and appropriate’ statistical technique to determine whether targeting was occurring” because, contrary to Commerce‘s assertion, “the standard deviation cannot validly be used as a method to calculate a ‘relative measure.‘” (Id.)
As previously described, the nails test uses standard deviation to measure the dispersion of values in an exporter‘s price data, to aid in identifying which of the exporter‘s sales were relatively low compared to others.9 See Proposed Methodology, 73 Fed. Reg. at 26,372. After the dispersion is identified, the nails test requires Commerce to use the thirty-three percent test to determine whether a “pattern” existed under the statute. Id. Thus, contrary to the plaintiffs’ assertions, Commerce‘s use of standard deviation was, by definition, statistically valid because it was used to measure the dispersion of the sales prices.10 This aspect of the nails test, therefore, is not in violation of
C. The nails test‘s definitions of “pattern” and “differ significantly” do not violate 19 U.S.C. § 1677f-1(d)(1)(B)(i) .
The plaintiffs further challenge Commerce‘s definitions of “pattern” and “differ significantly” as arbitrary, unexplained, and unreasonable. (Pls.’ Mem. 33-35.) Particularly, the plaintiffs claim that Commerce‘s use of thirty-three percent in its “pattern” definition and five percent in its “differ significantly” definition are seemingly random values with no meaning. (Id.) The plaintiffs contend that, in this case,
As previously discussed, Commerce included a thirty-three percent threshold requirement in its definition of “pattern.” Issues and Decision Memorandum at 20. Commerce explained that it considered thirty-three percent reasonable for establishing a pattern of activity. Id. The court has no reason to disagree.
Commerce defined “differ significantly” as any situation when the five percent price gap test is satisfied. Id. at 21-22. Commerce stated that it considered a five percent difference as significant, when used in combination with the thirty-three percent threshold, under the statutory language. Id. at 22. Although these tests may create a standard that is more difficult to satisfy than the domestic industry would have preferred, the nails test “does not violate any statute and is not otherwise arbitrary and capricious.” U.S. Steel Group, 96 F.3d at 1362. In other AD contexts, and for a long period of time five percent tests have been used to measure significance for AD purposes. See, e.g.,
In December 2008, Commerce issued an “interim final rule for the purpose of withdrawing the regulatory provisions governing the targeted dumping analysis in antidumping duty investigations.” Revocation, 73 Fed. Reg. at 74,930. Commerce explained that it “may have established thresholds or other criteria that have prevented the use of this comparison methodology to unmask dumping, contrary to the Congressional intent. In that case, these provisions would act to deny relief to domestic industries suffering material injury from unfairly traded imports.” Id. at 74,931. The plaintiffs now cite these statements as evidence to support their arguments that given more time they could have provided more meaningful comments and that the nails test violates
Contrary to this proposition, courts have made it clear that unreasonableness cannot be inferred from a subsequent withdrawal. See FCC v. Fox Television Stations, Inc., 129 S. Ct. 1800, 1811 (2009) (holding that an agency “need not demonstrate to a court‘s satisfaction that the reasons for the new policy are better than the reasons for the old one; it suffices that the new policy is permissible under the statute, that there are good reasons for it, and that the agency believes it to be better, which the conscious change of course adequately indicates“); GPX Int‘l Tire Corp. v. United States, 645 F. Supp. 2d 1231, 1238 (CIT 2009) (holding that “[i]f the statutes are ambiguous, it does not matter whether Commerce‘s new interpretation of the statutes conflicts with its old interpretation, because the court is now looking at Commerce‘s new interpretation and will give that interpretation deference if it is reasonable“).
Furthermore, in the Revocation, Commerce stated that it “believes the withdrawal of this rule is not significant. Withdrawal will allow the Department to exercise the discretion intended by the statute and, thereby, develop a practice that will allow interested parties to pursue all statutory avenues of relief in this area.” Revocation, 73 Fed. Reg. at 74,931. Commerce also provided that it “is not replacing these provisions with new provisions. Instead, the Department is Court No. 08-00225 Page 16 returning to a case-by-case adjudication, until additional experience allows the Department to gain a greater understanding of the issue.” Id. By its very terms, therefore, the
Conclusion
For the aforementioned reasons and based on this record, the court concludes that utilization of the “nails test” for the targeted dumping analysis was reasonable and Commerce‘s determinations were supported by substantial evidence, and in accordance with law. Accordingly, the plaintiffs’ Rule 56.2 motion for judgment on the agency record is denied. Judgment, therefore, will be entered for the defendant.