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Al Tech Specialty Steel Corp. v. United States

October 3, 1984

AL TECH SPECIALTY STEEL CORP., ET AL., APPELLEES
v.
THE UNITED STATES, APPELLANT



Appealed from: Court of International Trade

Before Davis, Smith and Newman, Circuit Judges. Davis, Circuit Judge.

Davis

This is an appeal by the United States from a decision of the United States Court of International Trade (CIT)*fn1 holding that the International Trade Administration (ITA or agency) of the Department of Commerce (Commerce) is required under section 776 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1677e(a)*fn2 to verify information submitted to it by a foreign manufacturer during a periodic review of an outstanding antidumping duty order.*fn3 We affirm.

I

On August 28, 1973, the Assistant Secretary of the Treasury published a finding of dumping with regard to stainless steel wire rods from France.*fn4 38 Fed. Reg. 22961 (1973). These rods thus became subject to the imposition of an antidumping duty in an amount equal to the difference between the foreign market value and the purchase price for such rods, pursuant to the Antidumping Act of 1921, as amended, 19 U.S.C. § 160(a).

The Antidumping Act of 1921 was subsequently replaced, effective January 1, 1980, by a new antidumping law enacted as part of Title VII of the Tariff Act of 1930, as amended. Title I of the Trade Agreements Act of 1979, Pub. L. 96-39, 93 Stat. 144, 146-193. Section 106 of the new Act provided that "findings in effect on the effective date of the Act . . . shall remain in effect, subject to review under [the new] section 751 of the Tariff Act of 1930" (providing for periodic reviews). 93 Stat. 193. In addition, the responsibility for administering the antidumping law and acting as the "administering authority" under section 751 (codified at 19 U.S.C. § 1675) was transferred from the Treasury Department to the Secretary of Commerce, effective January 2, 1980. At Commerce, the antidumping law's administration was delegated to the ITA.

Final results of the ITA's first administrative periodic review under section 751(a), 19 U.S.C. § 1675(a), with regard to stainless steel wire rods from France, were published on November 9, 1981, covering January 1974 through June 1980. The final results of this review were not challenged in court, although the domestic manufacturers apparently did raise in a prehearing brief the question now before us.

Notice of the preliminary results of the second section 751 periodic review with regard to the rods was published on August 23, 1982 for the period July 1, 1980 through June 30, 1981. 46 Fed. Reg. 55297 (1982). The dispute leading to this appeal began during the administrative review proceeding when the appellees, domestic manufacturers of stainless steel wire rods, contended that the ITA was required under 19 U.S.C. § 1677e(a), supra note 2, to verify the information supplied to it during the review by Ugine Glaciers, the foreign manufacturer, and Intsel Corporation, the domestic importer. Counsel for both Ugine Glaciers and Intsel represented that his clients were available for verification. Notice of the final results of this second administrative review were published on January 21, 1983, 48 Fed. Reg. 2808 (1983); in that notice the ITA responded as follows to appellees' contention concerning verification: " Department Position: In Section 751 administrative reviews verification by the Department is discretionary . . . . [Citation omitted.] We have determined that verification was not required for this review." 48 Fed. Reg. at 2808-2809 (1983).

The domestic manufacturers appealed to the CIT the ITA's refusal to verify, raising three grounds, only two of which now remain in contention (see note 1, supra): (1) the statute requires verification in section 751 reviews, and (2) even if verification in section 751 reviews is discretionary, refusal to verify in this case (in which at least eight years had passed since the last verification) was an abuse of discretion. On cross-motions for judgment upon the administrative record, Judge Maletz of the CIT held, as a matter of law, that the ITA is required by statute under section 1677e(a), supra, to verify information upon which assessment of antidumping duties is based (including periodic reassessments), and remanded the case for such verification.

II

19 U.S.C. § 1677e(a), supra, states (with an exception not relevant here) that "the administering authority shall verify all information relied upon in making a final determination in an investigation."*fn5 Appellant contends that the CIT erred in holding that this provision requires such verification in section 751 periodic reviews of outstanding antidumping or countervailing duty orders under 19 U.S.C. § 1675(a). It maintains that "a final determination in an investigation" occurs only in what appellant calls "the investigative phase" of an administrative antidumping or countervailing duty "proceeding," not in "the assessment phase" of a proceeding in which section 751 periodic reviews occur. Under this theory, the only required verification is in the investigative phase, and any other verification is discretionary with the administering authority. More particularly, appellant maintains that the CIT (1) misconstrued the statutory language; (2) ignored some parts and misconstrued other parts of the legislative history; and (3) failed to follow the principle that, in the absence of statutorily imposed procedures, courts should defer to the judgment of administrative agencies in deciding how best to carry out their duties. In addition, appellant argues that the ITA committed no abuse of its discretion in this case. Because we agree with the CIT that the statute, informed and supported by the legislative history and purpose, requires verification in periodic reviews, we do not reach appellant's arguments concerning the deference to be given agencies in the absence of statutory requirements, or the issue of abuse of discretion.

III

We start with a summary of the statutory requirements for antidumping duty cases under the Trade Agreements Act of 1979. As noted above, the 1979 Act added Title VII to the Tariff Act of 1970, as amended. Title VII contains new antidumping and countervailing duty provisions (sections 701-778 of the Tariff Act of 1930, codified at 19 U.S.C. § 1671-1677g), including a new section 751, 19 U.S.C. § 1675. Section 751 or section 1675*fn6 requires annual review of outstanding antidumping and countervailing duty findings.

Because this case involves the assessment of antidumping duties, we focus on the statutory requirements as they pertain to those duties. However, the review provisions at issue apply to administrative reviews of countervailing duty orders as well as antidumping duty orders. It is understood by all parties, as it was by the CIT, that a holding requiring verification in periodic reviews will cover both kinds of cases.*fn7

Both parties to this action agree that antidumping inquiries, in those cases in which duties are actually assessed, are composed of two phases: (1) an initial investigatory phase, the less-than-fair-value phase in which it is decided whether impermissible dumping occurred, and (2) the assessment phase, in which sales at less than foreign market value are actually assessed special antidumping duties. A less-than-fair-value investigation may be commenced either by the filing of a petition by an interested party on behalf of the domestic industry that alleges injury because of less-than-fair-value sales, or on the initiative of the ITA, the administering authority. 19 U.S.C. §§ 1673a(a), 1673a(b). The authority must then, within strict time limits (usually within 160 days of the petition's filing), make a preliminary determination concerning less-than-fair-value sales. If the determination is affirmative, liquidation of entries of the imports will be suspended, beginning with the date of publication of the preliminary determination in the Federal Register. (The statute also outlines circumstances in which suspension of liquidation could be made retroactive for 90 days. See 19 U.S.C. § 1673b(e)). In addition to liquidation of entries, an affirmative preliminary determination requires importers to post a cash deposit, bond or other security equal to the estimated amount by which the foreign market value exceeds the United States price. 19 U.S.C. § 1673b(d)(2).

The ITA must then (within 75 days of the preliminary determination, in the normal case) make a final determination of whether imports are being sold at less than fair value. 19 U.S.C. § 1673d(a)(1). In this case the Government contends that the verification requirement, supra, which states that "the administering authority [ITA] shall verify all information relied upon in making a final determination in an investigation", 19 U.S.C § 1677e(a), refers only to the making of this final determination just described, and not to any of the later determinations in which the actual amounts of duty -- rather than estimates -- are assessed.

The procedure for actual assessment of duties is as follows: If the ITA's determination is affirmative, and a final injury determination is made by the United States International Trade Commission (Commission), the ITA must issue an antidumping duty order. 19 U.S.C. § 1673d(c)(2). Specifically, within seven days after being notified by the Commission of its injury determination the ITA publishes an antidumping duty order which: (1) includes a description of the class or kind of merchandise to which it applies, (2) requires the deposit of estimated antidumping duties pending liquidation of entries of merchandise, and (3) requires the assessment of antidumping duties within 12 months, the period for which runs from different events depending on whether the merchandise in question was sold prior to importation into the United States. 19 U.S.C. § 1673c(a). Although this provision does direct the 84-774. actual assessment of antidumping duties, the time requirements are such that, as we understand them, the first actual assessment usually occurs at the time of the first annual administrative review under section 751 of the 1930 Act, 19 U.S.C. § 1675 (the periodic review or administrative review) and is conducted in the same way.*fn8

This assessment phase, leading to the determination of the actual amount of antidumping duties, takes place at least once annually under section 751 and requires the precise comparison of the United States price for the merchandise with the statutorily defined "foreign market value". The result of this assessment determination is the first and succeeding determinations of actual liability for antidumping duties.

The Government maintains, as we have said, that no verification of information is required for the information relied upon in making a determination of antidumping (or countervailing) duty in the assessment phase, or in a periodic review, because -- it claims -- such a determination is not "a final determination in an investigation" under § 1677e(a). The Government would have us construe the term "investigation" in § 1677e(a) to cover only that portion of the statute which results in a determination of whether dumping has occurred, i.e., the so-called investigative phase. It maintains that the assessment or periodic review of duties involves neither a "final determination" nor is it part of "an investigation." As we shall show, this position is not required by the wording of the statute, and is inconsistent with the Act in light of its legislative history and purposes. These show that Congress did not provide, as appellant contends, that verification is only required of information relied in making a determination that a duty is to be assessed, but when the actual assessment of duty takes place, in the assessment or a periodic review, verification of information relied upon in making that determination is entirely discretionary with ITA.On the contrary, the statute, properly read, requires verification at both stages.

IV

First, the bare text of the statute is, at most for the Government's position, ambiguous in its use of the pertinent terms; in our view nothing in the language of the legislation strictly limits the use of the term "investigation" (appearing in § 1677e(a), supra) to the investigative phase of the inquiry. Rather, the text permits that term, in that provision, to cover both the investigative and the assessment phases of the proceedings.

There is, to be sure, some uncertainty arising from the statute over the meanings of the terms "investigation", "proceeding", and "final determination." The Government strongly maintains that "investigation" covers only the investigative phase described supra, while a "proceeding" encompasses both the investigative and assessment phases, and that the "final determination" occurs only at the end of the investigative phase.

Indeed, the Commerce Department has made this proceeding/investigation distinction by so defining the terms in its regulations. 19 C.F.R. § 353.11.*fn9 Although this distinction has a certain attractiveness because it seems to do away with an otherwise troubling ambiguity over the meanings of the terms (as well as requires less work of the ITA), we find the distinction -- and the regulations which embody it (insofar as that regulation applies to § 1677e(a)) -- ...


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