AD Petitioner Seeks Full Court Rehearing at CAFC Over PMS Adjustment to Sales-Below-Cost Test

The entire U.S. Court of Appeals for the Federal Circuit should consider the question of whether the Commerce Department can make a particular market situation adjustment to the sales-below-cost test when calculating normal value in antidumping duty proceedings, defendant-appellant Welspun Tubular said in a Feb. 8 petition for rehearing en banc (Hyundai Steel Company v. United States, Fed. Cir. #21-1748).

The December 2021 Federal Circuit ruling Welspun wants reconsidered held that the statute -- namely, a portion of the 2015 Trade Preferences Extension Act -- only permits a PMS adjustment for constructed value (see 2112100039). Welspun said that the decision in the case, Hyundai Steel Company v. U.S., was wrongly decided considering that Commerce's interpretation of the AD statute is entitled to "special deference" and that ordinary canons of statutory construction in administrative law contexts has reduced force and cannot satisfy step one of the Chevron deference test.

Welspun says Commerce was entitled to three levels of deference. The first comes from the standard Chevron decision, the second derives from a 1996 Federal Circuit opinion establishing that the court owes "tremendous deference to the expertise of the Secretary of Commerce" in AD proceedings due to the agency's technical expertise, and the third comes from the agency's heightened deference when interpreting a new law.

This third leg was established by the U.S. Court of Appeals for the D.C. Circuit, which in 1984 said that the court "must abide the principle that the construction of a statute by those charged with its execution should be followed unless there are compelling indications that it is wrong." Welspun said that this same scenario is at play in its case, as the TPEA was passed in 2015 and Commerce's PMS adjustment decision is one of its first interpretations of the new statute.

Welspun further relied on the D.C. Circuit when it argued that the Federal Circuit improperly relied on the expressio unius canon that holds no weight in administrative law. "The Court’s reliance on the expressio unius canon was in error. The decision creates considerable uncertainty regarding the standards that govern review of administrative agency interpretations in this Circuit," the brief said. "Indeed, if the Hyundai Steel decision stands, Commerce -- and other administrative agencies subject to both this Court’s and the D.C. Circuit’s jurisdiction -- will be subject to conflicting standards of review." In fact, this was a misrepresentation of Chevron itself, the company said.

There is a large and pressing need to clarify the "fundamental principles of administrative law," Welspun said, pushing the court to engage in a full court rehearing of the case. "At a minimum, both the D.C. Circuit’s and this Court’s precedents recognize that a grant of authority in one provision and silence in another requires at least a Chevron step two analysis," Welspun said. "The full Court should review this issue to decide whether this Circuit will break with the D.C. Circuit approach, as Hyundai Steel has, or give effect to the well-established principles of heightened deference that apply in this case."