                                        Slip Op. 03 - 126

 UNITED STATES COURT OF INTERNATIONAL TRADE
________________________________________________
                                                :
ALLEGHENY LUDLUM CORPORATION,                   :
AK STEEL CORPORATION, NORTH AMERICAN            :
STAINLESS, BUTLER ARMCO INDEPENDENT             :
UNION, ZANESVILLE ARMCO INDEPENDENT             :
ORGANIZATION, and UNITED STEEL WORKERS          :
OF AMERICA, AFL-CIO/CLC,                        :
                                                :
                        Plaintiffs,             :                 Before: MUSGRAVE, JUDGE
                                                :
                  v.                            :                 Court No. 01-01091
                                                :
UNITED STATES,                                  :
                                                :
                        Defendant,              :
                  and                           :
                                                :
ALZ, N.V.,                                      :
                                                :
                        Defendant-Intervenor.   :
________________________________________________:


[Plaintiffs brought this action challenging (1) Commerce’s decision to allow defendant-intervenor
to remove its business proprietary information from the record after it decided not to participate in
the administrative review in question and (2) Commerce’s method of calculating the adverse facts
available dumping margin which it subsequently assigned to defendant-intervenor. Held:
Commerce’s interpretation of 19 U.S.C. § 1677f to permit a party to withdraw its proprietary
information during the course of the review is reasonable and in accord with the agency’s practice.
Furthermore, Commerce’s decision not to use the public versions of defendant-intervenor’s
proprietary submissions in calculating the adverse facts available margin because the numbers
contained therein were “ranged” plus or minus 10 percent, and were thus inaccurate and unreliable,
was supported by substantial evidence and in accordance with law. Therefore, plaintiffs’ Motion
for Judgment Upon the Agency Record is denied.]


                                                                      Decided: September 29, 2003
Court No. 01-01091                                                                           Page 2


        Collier Shannon Scott, PLLC (David A. Hartquist, David C. Smith, Jr. and Adam H. Gordon)
for Plaintiffs.

        Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, Patricia M.
McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of
Justice (Ada E. Bosque), and Office of Chief Counsel for Import Administration, U.S. Department
of Commerce (Elizabeth Doyle), of counsel, for defendant.

        Shearman & Sterling LLP (Thomas B. Wilner, Jeffery M. Winton and Christopher M. Ryan)
for defendant-intervenors.


                                            OPINION


       This action arises from the first administrative review of the antidumping order on stainless

steel plate in coils from Belgium for the period from November 4, 1998 through April 30, 2000. The

United States Department of Commerce, International Trade Administration, (“Commerce”) initiated

this review on July 7, 2000 upon the request of members of the domestic steel industry including

plaintiffs Allegheny Ludlum Corp., AK Steel Corp., North American Stainless, Buter Armco

Independent Union, Zanesville Armco Independent Union, and the United Steelworkers of America,

AFL-CIO/CLC (collectively, “Allegheny”) and defendant-intervenor the Belgian steel company

ALZ, N.V. and its affiliated U.S. importer, TrefilARBED, Inc. (collectively, “ALZ”).

       On August 14, September 5, and September 15, 2000 ALZ submitted both public and

proprietary responses to Commerce’s antidumping questionnaire and consented to the release of

proprietary information pursuant to an administrative protective order (“APO”). Then, on October

5, 2000, ALZ made a timely request for withdrawal from the administrative review pursuant to 19

C.F.R. § 351.213(d) and also requested that all copies of its questionnaire responses be returned or

destroyed. Allegheny objected, but on October 27, 2000 Commerce granted ALZ’s request.
Court No. 01-01091                                                                               Page 3


Allegheney requested that Commerce reconsider its decision, but on December 19, 2000 Commerce

issued an internal decision memorandum affirming the decision to remove and destroy ALZ’s

information. Commerce also required Allegheny to destroy its copies of ALZ’s proprietary

information and any analysis of it. Allegheny then sought a temporary restraining order against this.

The court ruled that Commerce could withdraw ALZ’s proprietary information from the record, but

instead of destroying these documents, the court ordered Allegheny to return its copies of the

proprietary information to Commerce where it was to be placed under seal pending the completion

of the administrative review and any legal action which might follow.

        After ALZ’s proprietary information was removed from the record, Commerce proceeded

with the administrative review and issued Stainless Steel Plate in Coils from Belgium; Preliminary

Results of Antidumping Duty Administrative Review, 66 Fed. Reg. 11559 (Feb. 26, 2001), in which

it determined that ALZ had failed to cooperate to the best of its ability since it refused to participate

in the review. As a result, Commerce calculated ALZ’s dumping margin using total adverse facts

available, assigning it the highest rate calculated from the petition, 16 percent. Commerce invited

Allegheny to submit “public and probative information” for use in calculating the final results. In

response, Allegheny argued that Commerce should assign ALZ a 38.90 percent margin using

information from the public version of ALZ’s proprietary questionnaire responses. Commerce

declined to use the information submitted by Allegheny and instead updated the constructed value

amount from the petition calculation using publically available information from ALZ’s 1998, 1999,

and 2000 financial statements. Based on this, Commerce calculated a 24.43 percent margin for ALZ

in Stainless Steel Plate in Coils from Belgium; Final Results of Antidumping Duty Administrative

Review, 66 Fed. Reg. 56272 (Nov. 7, 2001) (“Final Results”).
Court No. 01-01091                                                                            Page 4


       There are three issues raised by Allegheny in this action. First, whether Commerce was

correct in allowing ALZ to revoke its consent to the disclosure and use of the proprietary information

it had placed on the administrative record. Second, if the Court finds that Commerce was correct

in allowing ALZ to revoke its consent, whether it was reasonable for Commerce to use a

“constructed value to price” methodology to calculate ALZ’s total adverse facts available rate.

Finally, if the Court finds this methodology reasonable, whether Commerce should have updated the

U.S. price side of the calculation (not just the constructed value side) in order to make them

methodologically comparable and consistent. For the reasons which follow, the Court holds that

Commerce acted reasonably in permitting ALZ to withdraw its proprietary information from the

administrative record and also holds that Commerce’s method of calculating the adverse facts

available rate for ALZ is supported by substantial evidence and in accordance with law. Therefore,

Allegheny’s Motion for Judgment Upon the Agency Record is denied.



                                        Standard of Review

       The Court shall uphold Commerce’s determination unless it is “unsupported by substantial

evidence on the record, or otherwise not in accordance with the law.” 19 U.S.C. § 1516a(b)(1)(B)(i).

Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequate to

support a conclusion.” Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927, 933 (Fed. Cir.

1984) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229 (1938), and Universal Camera

Corp. v. NLRB, 340 U.S. 474, 477 (1951)). This standard requires “something less than the weight

of the evidence, and the possibility of drawing two inconsistent conclusions from the evidence does

not prevent an administrative agency’s finding from being supported by substantial evidence.”
Court No. 01-01091                                                                           Page 5


Consolo v. Federal Maritime Comm’n, 383 U.S. 607, 620 (1966).               In reviewing whether

Commerce’s interpretation of the antidumping statutes is in accordance with the law, the Court

considers “whether Commerce has directly spoken to the precise question at issue,” and if not,

whether the agency’s interpretation is reasonable. Pesquera Mares Australes Ltda. v. United States,

24 CIT 443, 444 (2000) (quoting Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S.

837, 842 (1984).



                                           Discussion

       Regarding the first issue, Allegheny argues that Commerce’s interpretation permitting a party

to revoke its consent to the disclosure and use of its proprietary information is contrary to other

regulations and APO practice, and is therefore impermissible. Mem. of Law in Supp. of Pl.s’ Mot.

for J. Upon the Agency R. (“Pl.s’ Br.”) at 13. Specifically, Allegheny cites 19 C.F.R. § 351.306(b)

which provides that an authorized applicant may retain proprietary information subject to the APO

and may place that information on the record in subsequent administrative reviews if it is relevant

to an issue in the later review. Id. Allegheny states that in practice Commerce normally permits

authorized parties to use business proprietary information in the two consecutive administrative

reviews following the review in which the information was obtained. Id. 13-14 (citing Antidumping

and Countervailing Duty Proceedings: Administrative Protective Order Procedures; Procedures

for Imposing Sanctions for Violations of a Protective Order, 63 Fed. Reg. 24,391, 24,398 (May 4,

1998)). Thus Allegheny concludes that it was entitled to retain ALZ’s information not only for the

review at issue, but also for two subsequent reviews.

       Allegheny likens the facts of the present situation to those in Notice of Final Determination
Court No. 01-01091                                                                            Page 6


of Sales at Less Than Fair Value: Live Cattle from Canada, 64 Fed. Reg. 56739 (Oct. 21, 1999)

(“Live Cattle”), where Commerce denied a request by one of the respondents to withdraw its

proprietary submissions on the ground that this would allow the respondent to manipulate the

administrative process and prevent an accurate determination of antidumping rates. In Live Cattle

Commerce limited its investigation to the six largest Canadian cattle producers because the total

number of producers was “overwhelming.” Id. at 56742. On the day Commerce was scheduled to

issue its preliminary determination, one of the six producers, Schaus, submitted information that

“substantially altered its reported costs.” Id. Commerce did not have time to incorporate this new

information in calculating the preliminary results, but noted that it would likely result in a higher

margin. Id. Commerce subsequently confirmed that the newly submitted data increased Schaus’s

dumping margin from 5.43 percent to 15.69 percent. Id. Schaus then notified Commerce that it “had

decided to decline verification and withdrew all questionnaire responses from the record of the

investigation.” Id. Commerce denied Schaus’s request to withdraw its information and amended

its preliminary determination, raising Schaus’s antidumping rate to 15.69 percent and raising the “all

others” rate from 4.73 percent to 5.57 percent.” Id. at 56743. In the present case, Allegheny alleges

that ALZ is similarly manipulating the process to receive a lower rate than it would have received

had it cooperated with Commerce during the review. Pl.s’ Br. at 19-20.

       Commerce asserts that the plain meaning of Section 777 of the Tariff Act of 1930, as

amended, 19 U.S.C. § 1677f, supports an inference that a party’s consent to the release of proprietary

information is revocable at any time prior to the conclusion of the proceeding. Def.’s Mem. In

Opp’n to Pl.s’ Mot. For J. Upon the Agency R. (“Def.’s Br.”) at 13. Section 1677f provides in

relevant part that “information submitted to the administering authority or the Commission which
Court No. 01-01091                                                                            Page 7


is designated as proprietary by the person submitting the information shall not be disclosed to any

person without the consent of the person submitting the information.” 19 U.S.C. § 1677f (emphasis

added). Commerce argues that “[t]he plain meaning of the word ‘consent’ suggests that it can be

withdrawn.” Def.’s Br. at 14. Moreover, Commerce notes that § 1677f is a limited exception to the

Trade Secrets Act, 18 U.S.C. § 1905, which generally prohibits an agency from disclosing business

proprietary information. Id. at 12.      In response to Allegheny’s assertion that Commerce’s

interpretation is contrary to APO practice, Commerce notes that “the APO is not a source of

independent authority,” but “is a product of 19 U.S.C. § 1677f” and must be interpreted in light of

the consent requirement of that statute. Id. at 16. Commerce concludes that its established practice

-- to allow a party to withdraw consent and remove the party’s business proprietary information from

the record and require other parties to the APO to return or destroy such information -- is at least a

reasonable interpretation of the statute. Id. at 11-12.

       Commerce also argues that the present case is distinguishable from Live Cattle because it

concerns an administrative review rather than a less than fair value investigation, and the removal

of ALZ’s information did not have an effect on the “all others” rate. Def.’s Br. at 17 (citing

Commerce’s Issues and Decisions Memorandum (Oct. 24, 2001), Public R. Doc. 52, at 13).

Commerce states that Live Cattle is the “sole exception to [its] long-standing practice of removing

proprietary data from the record upon the withdrawal of consent” and was a “unique situation” which

“did not establish ‘precedent’ for the agency.” Id. (citing Commerce’s Memorandum regarding the

Return or Destruction of ALZ, N.V. (“ALZ”) Questionnaire Responses and (Dec. 19, 2000), Public

R. Doc. 36, and Commerce’s Issues and Decisions Memorandum (Oct. 24, 2001), Public R. Doc.

52).
Court No. 01-01091                                                                           Page 8


       The Court finds that Commerce’s interpretation of 19 U.S.C. § 1677f is reasonable. The

Court agrees that the “consent” requirement in 19 U.S.C. § 1677f suggests that release of proprietary

information is voluntary, and therefore may be revoked. Furthermore, the Court finds Commerce’s

reasoning in its Live Cattle determination noteworthy.

               The Department must balance any potential negative impact that
               refusing to allow a respondent to withdraw information may have on
               its ability to obtain business proprietary information in future
               proceedings, against any negative impact on the integrity of the
               proceeding if withdrawal is permitted, and determine where the
               public interest lies.

                       The Department does not have subpoena power. The
               submission of information is voluntary. To administer the
               antidumping law, the Department depends heavily upon the
               willingness of the parties to provide extensive business proprietary
               information. As a result, there is a public interest in preserving the
               trust of companies subject to its proceedings that such information
               will have limited use and will remain largely within the control of the
               companies submitting information.          However, once a party
               voluntarily submits business proprietary information in an
               antidumping proceeding, the submitting party relinquishes some
               control over the information to the Department. For example, after
               the Department issues a final determination, a submitting party may
               not withdraw its proprietary information. Once the record of a
               proceeding is closed, no information may be added to, or withdrawn
               from the administrative case record.

                      Equally compelling is the public’s interest in the agency
               enforcing the antidumping law and preserving the integrity of its
               proceedings. While there is no statutory provision expressly dealing
               with the withdrawal of business proprietary information once it has
               been submitted, the courts have recognized “the inherent power of an
               administrative agency to protect the integrity of its own proceedings.”
               Alberta Gas Chemicals, Ltd. v. Celanese Corp., 650 F.2d 9, 12 [(2d
               Cir. 1981)]. Thus the agency has the discretion to deny a
               respondent’s request to withdraw information where it is necessary to
               preserve the fundamental integrity of the process and the remedial
               purpose of the law.
Court No. 01-01091                                                                             Page 9


                       In practice, the Department has allowed submitting parties to
               withdraw their business proprietary submissions from the
               administrative record. [citations omitted] In such cases, the
               Department bases the company’s margin on facts available using an
               adverse inference where warranted. It is the Department’s ability to
               use adverse facts available that insures that a company will not
               benefit by a refusal to participate in a proceeding. [footnote omitted]
               Because investigated companies normally account for substantially
               all exports to the United States, the elimination of the non-
               cooperative company from the “all others” rate in that situation is
               likely to be of marginal significance. Thus, the adverse facts
               available rule normally enables the Department to permit withdrawal
               of proprietary information while protecting the integrity of the
               process.

                        In the present case, however, the adverse facts available rule
               cannot serve that function. Substantially all future exports of live
               cattle, which will be subject to the “all others” rate if an antidumping
               duty order is issued, would inappropriately benefit from Schaus’
               refusal to participate.

Live Cattle, 64 Fed. Reg. at 56743. As the quoted text demonstrates, Live Cattle was a unique

situation where the use of adverse facts available could not protect the integrity of the proceedings.

Although Allegheny challenges the particular adverse facts available margin Commerce applied to

ALZ, it does not argue that the integrity of this review cannot be preserved through the use of

adverse facts available. Since ALZ is the only respondent in this review and the “all others” rate will

not be affected by its withdrawal, there is no logical reason why an adverse facts available rate

cannot serve Commerce’s purposes. Thus the Court concludes that Commerce’s decision is both

reasonable and in accord with the agency’s practice.

       Turning to the second issue, Allegheny argues that Commerce erred in determining ALZ’s

adverse facts available dumping margin by recalculating a prior margin, which was determined

through a comparison of constructed value to U.S. price, when it could have used the public
Court No. 01-01091                                                                         Page 10


information submitted by ALZ to make a comparison of Belgian price to U.S. price. Pl.s’ Br. at

22-23. Allegheny notes that, pursuant to Section 773(a) of the Tariff Act of 1930, 19 U.S.C. §

1677b(a)(1)(B), a comparison of home market price to U.S. price is preferred over a constructed

value to U.S. price comparison. Id. at 27. Allegheny also argues that precedent is found in Smith

Corona Corp. v. United States, 16 CIT 562, 796 F. Supp. 1532 (1992), where the court permitted

Commerce to use the public version of proprietary data, which had been withdrawn, to calculate a

dumping margin for the respondent.

       Commerce argues that the public information submitted by ALZ in the present action is

inherently unreliable because, in accordance with 19 C.F.R. § 351.304(c)(1), the numbers contained

in the public versions of proprietary documents are “ranged” plus or minus 10 percent by the party

submitting the information. Def.’s Br. at 19. Therefore this information cannot be used as the basis

for an accurate “price-to-price” comparison. Id. Commerce contends that Smith Corona does not

support the use of ranged data, and argues that the decision merely upholds Commerce’s practice of

updating information from the original petition with public information submitted by the respondent

to calculate the antidumping margin. Id. at 20. In the present case, Commerce argues that it

similarly took the petition rate and updated it using ALZ’s public financial statements, which it

found to be less uncertain than the ranged data. Id. at 19-20.

        The Court agrees with Commerce. As an initial matter, regarding the precedent established

by Smith Corona, the issue in that case was whether the respondent retained control over both the

proprietary and the public versions of its information, so that the public version could not be used

when the proprietary version had been withdrawn. See 802 F. Supp. at 468. There is no indication

that the accuracy of the public data was raised as an issue. Thus Smith Corona is inapposite to the
Court No. 01-01091                                                                           Page 11


issue presently before the Court.

       Commerce is considered to be “in the best position . . . to select an adverse facts rate that

will create the proper deterrent to ensure that respondents cooperate with its investigations and to

ensure a reasonable margin.” Def.’s Br. at 19 (citing F.lli De Cecco di Filippo Fara S. Martino

S.p.A. v. United States, 216 F.3d 1027, 1032 (Fed. Cir. 2000)). Nevertheless, its discretion is not

without bounds. “An adverse facts available rate must be ‘a reasonably accurate estimate of

respondent’s actual rate, albeit with some built-in increase intended as a deterrent to non-

compliance.’” Id. (quoting De Cecco, 216 F.3d at 1032). In this action, it is undisputed that the data

in the public versions of ALZ’s proprietary questionnaire responses were ranged, and at oral

argument counsel for defendant-intervenors demonstrated the high degree of variation in margins

that can result depending on the extent to which the numbers used in the calculation are adjusted up

or down. See Oral Argument Tr. at 37-39. Since these data were, by design, inaccurate, the Court

holds that Commerce’s decision not to use them in calculating an adverse facts available margin for

ALZ is supported by substantial evidence and in accordance with law.1

       As to the third issue, Allegheny argues that if the Court sustains Commerce’s use of updated



       1
          Allegheny also argues that it is unreasonable for Commerce to assign a 24.43 percent
margin to ALZ as adverse facts available when an analysis Allegheny performed on ALZ’s
proprietary data showed that ALZ’s margin of dumping was “in excess of 29 percent.” Pl.s’ Br. at
25. Commerce rejected the use of this information on the ground that it was impossible to determine
the accuracy of Allegheny’s calculations since the underlying documents were no longer part of the
record. See Commerce’s Memorandum regarding the Return or Destruction of ALZ, N.V. (“ALZ”)
Questionnaire Responses and (Dec. 19, 2000), Public R. Doc. 36, at 4-5; Commerce’s Issues and
Decisions Memorandum (Oct. 24, 2001), Public R. Doc. 52, at 10-11. Since the Court has upheld
Commerce’s decision to remove ALZ’s proprietary information from the record, there is nothing in
the administrative record to support Allegheny’s allegation that ALZ’s actual margin was “in excess
of 29 percent.”
Court No. 01-01091                                                                        Page 12


information from the petition to calculate the constructed value, the Court should also require

Commerce to update the net U.S. price to which the constructed value is compared. Pl.s’ Br. at 32-

33. As this would require Commerce to use the ranged public versions of ALZ’s proprietary data,

which are inaccurate, to update the U.S. price, the Court holds that this would be unlawful.



                                              Conclusion

       For the foregoing reasons, Allegheny’s Motion for Judgment Upon the Agency Record is

denied and the Final Results are sustained.




                                                   _______________________________________
                                                        R. KENTON MUSGRAVE, JUDGE


Dated: September 29, 2003
       New York, New York
