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Full Court Hearing Needed Over Question of PMS Adjustment in AD Cases, Petitioners Tells CAFC

A U.S. Court of Appeals for the Federal Circuit should reconsider its wrongfully decided opinion finding that the Commerce Department cannot make a particular market situation adjustment to the sales-below-cost test in antidumping duty proceedings, three defendant-appellants told the Federal Circuit in a Feb. 2 brief. Seeking a full court hearing, Atlas Tube, Searing Industries and Nucor Tubular Products said that the decision violates D.C. Circuit precedents over the "operation of ordinary canons of statutory construction in the administrative law context," and the Federal Circuit's precedents over deference afforded to Commerce (Dong-A Steel Company v. United States, Fed. Cir. #21-2153).

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In December, the Federal Circuit said in Hyundai Steel Co. v. U.S. that Commerce was not allowed to make a cost-based PMS adjustment to the sales-below-cost test when determining normal value (see 2112100039). Rather, the statute -- namely, the 2015 Trade Preferences Extension Act -- only permits such an adjustment for constructed value. This was a widely used practice in Commerce's antidumping duty proceedings.

One such instance was in the 2016-17 ADD administrative review of heavy-walled rectangular welded carbon steel pipes and tubes from South Korea. Commerce said that a PMS existed for these goods' cost of production and that a PMS adjustment was warranted. A group of companies, led by Dong-A Steel Company, contested this at the Court of International Trade which said that no such adjustment was allowed. The case appealed to the Federal Circuit by Atlas, Searing and Nucor, prior to the Federal Circuit's holding in Hyundai.

Atlas, Searing and Nucor now want a full court hearing of their case since it "involves a question of exceptional importance" relating to how Chevron deference is given to Commerce. "[Hyundai Steel] conflicts with a significant number of authoritative decisions from the U.S. Court of Appeals for the D.C. Circuit, which has held repeatedly that the expressio unius canon has limited value in the context of administrative law and can almost never constitute Congressional intent for purposes of Chevron step one," the brief said. "It also conflicts with Chevron itself, which held that, 'if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.'"

The defendant-appellants argued that Commerce's decision when making PMS adjustments is entitled to triple deference. The first layer comes from the Chevron decision, the second comes from another Federal Circuit decision, PSC VSMPO-Avisma Corp. v. U.S., which established further deference in ADD proceedings, and the third comes from a D.C. Circuit opinion granting heightened deference when an agency is interpreting a new law, the trio said. This third layer of deference, established in At. Richfield Co. v. U.S. Dep't of Energy, applies in the current situation, the brief said. "The TPEA was enacted in 2015. These appeals involve Commerce’s first -- and immediate -- interpretations of the new statutory scheme."