Mid Continent Nail Corporation v. United States

846 F.3d 1364 (D.C. Cir. 2017)

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Nature of the Case

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Facts

In 2011, P filed a petition with Commerce (D) alleging that imports of certain steel nails from the UAE were being sold in the United States at less than fair value. D initiated an antidumping investigation. D issued an antidumping duty order imposing a 2.51 percent duty. D proceeded to calculate the dumping margin by applying the average-to-transaction methodology to all U.S. sales reported, irrespective of whether D had deemed a sale to be targeted or not. The average-to-transaction methodology is one of the three methods that d may use in an investigation to calculate dumping margins in accordance with the Tariff Act of 1930. D compares the weighted average of the normal values to the weighted average of the export prices (and constructed export prices) for comparable merchandise or compares the normal values of individual transactions to the export prices (or constructed export prices) of individual transactions for comparable merchandise. These are known as the 'average-to-average' and 'transaction-to-transaction' methodologies. The statute permits D to use a third method-the average-to-transaction methodology-if certain conditions are met. It compares the weighted average of the normal values to the export prices (or constructed export prices) of individual transactions for comparable merchandise. To use the average-transaction methodology D must find 'a pattern of export prices (or constructed export prices) for comparable merchandise that differ significantly among purchasers, regions, or periods of time,' (i.e., targeted dumping) and explain 'why such differences cannot be taken into account using' the first two methods. D has 'historically' used a practice known as 'zeroing' in which 'negative dumping margins (i.e., margins of sales of merchandise sold at nondumped prices) are given a value of zero and only positive dumping margins (i.e., margins for sales of merchandise sold at dumped prices) are aggregated.' This leads to higher dumping margins when the average-to-transaction methodology is used. D promulgated a regulation through notice-and-comment rulemaking restricting D's use of the average-to-transaction methodology. This regulation-known as the 'Limiting Regulation'-provided that even in cases meeting the statutory criteria for applying the average-to-transaction methodology, the agency would 'normally . . . limit [its] application . . . to those sales that constitute targeted dumping,' as opposed to applying the average-to-transaction methodology to all of a respondent's sales. In 2008, D withdrew the Limiting Regulation. D acknowledged in Withdrawal Notice that repeal of the targeted dumping regulations was subject to 'the requirement to provide prior notice and opportunity for public comment, pursuant to . . . 5 U.S.C. § 553(b)(B),' but expressly 'waived the requirement' by invoking the APA's 'good cause' exception to notice-and-comment rulemaking. In calculating Precision's dumping margin three years later in this proceeding, D applied the average-to-transaction methodology. P's dispute D's decision to apply the average-to-transaction methodology not just to 'those sales that constituted targeted dumping,' as the Limiting Regulation had previously provided, but 'to all U.S. sales reported by . . . Precision.' Precision challenged D's final determination in the Trade Court. Precision argued that Commerce was required to apply the Limiting Regulation to calculate Precision's dumping margin because D's repeal of the regulation in 'Withdrawal Notice was ineffective and contrary to law,' as it had 'occurred outside the basic procedural framework required by Congress under the [APA].' The Trade Court agreed that D's withdrawal of the Limiting Regulation violated the APA. After concluding that withdrawal of the regulation was subject to notice-and-comment rulemaking, the court rejected the argument that the agency had provided adequate notice and opportunity for comment through two earlier Federal Register notices because those notices had not proposed to repeal the regulation. The Trade Court remanded D's final determination and instructed the agency to 'redetermine [Precision's] dumping margin by applying the Limiting Regulation.' D applied the Limiting Regulation as ordered by the Trade Court. D then found that Precision's dumping margin was 'de minimis,' and therefore imposed a duty of 0.00 percent. P appealed D's remand redetermination to the Trade Court, arguing that the agency had misapplied the Limiting Regulation. The court affirmed D's remand redetermination and P appealed.