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Glycine & More, Inc. v. United States

United States Court of Appeals, Federal Circuit

January 23, 2018

GLYCINE & MORE, INC., Plaintiff-Appellee
v.
UNITED STATES, Defendant GEO SPECIALTY CHEMICALS, INC., Defendant-Appellant

         Appeal from the United States Court of International Trade in No. 1:13-cv-00167-TCS, Chief Judge Timothy C. Stanceu.

          Ronald Mark Wisla, Kutak Rock LLP, Washington, DC, argued for plaintiff-appellee. Also represented by Lizbeth Robin Levinson.

          David M. Schwartz, Thompson Hine LLP, Washington, DC, argued for defendant-appellant.

          Before Moore, Plager, and Chen, Circuit Judges.

          Plager, Circuit Judge.

         This case turns on an important principle in administrative law, involving a basic tenet of the Administrative Procedure Act (hereafter "APA"), to which the defendant agency, the Department of Commerce, is subject. See generally 5 U.S.C. §§ 551 et seq. The question presented is-can an agency regulation, previously adopted by formal notice-and-comment rulemaking procedure pursuant to the APA, be amended by a guidance document that is not so enacted? The case comes to us on appeal from a decision of the United States Court of International Trade ("CIT").

         Defendant-appellant GEO Specialty Chemicals, Inc. ("GEO") appeals the CIT's judgment. That judgment affirmed a decision by the United States Department of Commerce ("Commerce").[1] Commerce's decision, on remand from an earlier CIT order, extended the deadline for plaintiff-appellee Glycine & More, Inc. ("Glycine & More") to withdraw a request for an administrative review of an antidumping order, accepted the withdrawal, and rescinded the review.

         Commerce made its decision under protest. The CIT in a prior order had invalidated Commerce's change of methodology for evaluating such time-extending petitions, announced in a "Notice, " and ordered Commerce to re-evaluate its original denial of the withdrawal request pursuant to the court's understanding of the governing regulation, 19 C.F.R. § 351.213(d)(1).

         Identifying more fully the parties to this litigation may be helpful since their roles evolve as the case develops. The proceedings before Commerce at issue were requested by two parties. One of those two parties was Baoding Mantong Fine Chemistry Co., Ltd. ("Baoding Mantong"), a Chinese producer and exporter of glycine. The other party was GEO Specialty Chemicals, Inc. ("GEO"), the defendant-appellant, a U.S. producer of glycine. A third party, plaintiff-appellee Glycine & More, filed a notice of appearance in the proceedings and participated in the review. Glycine & More is a U.S. importer of glycine manufactured by Baoding Mantong and an affiliate of Baoding Mantong.

         Though the United States is listed as a party defendant, and despite the fact that what is at issue is the Commerce Department's understanding of its own regulations, neither Commerce nor the United States government have participated in the appeal.

         On appeal, GEO argues that the first CIT decision in the case forced Commerce to adopt an erroneous interpretation of its regulation and thus forced Commerce in its later decision to reach an erroneous result. Glycine & More argues to uphold the decisions of the CIT. For the reasons we shall explain, we agree with the CIT's action and affirm its judgment.

         Background

         Administrative Reviews Initiated by Request

         Under the law, Commerce may determine whether foreign merchandise is being sold or is likely to be sold in the United States at less than its fair value. See 19 U.S.C. §§ 1673, 1677. The International Trade Commission ("ITC") separately determines whether an industry in the United States is materially injured or threatened with material injury by the import, sales, or likelihood of sales of that foreign merchandise. Id. When the ITC has so determined, Commerce then issues what is called an antidumping order, and imposes a special duty on the import of such products. See id.

         If Commerce thereafter receives a request for an administrative review of a previously issued antidumping duty order, Commerce must conduct such a review at least once during each 12-month period beginning on the anniversary date of the publication of the antidumping duty order. See 19 U.S.C. § 1675(a)(1). Although Congress in the governing legislation required that Commerce engage in such a review if properly requested, Congress did not provide for the situation at hand-how Commerce should proceed if a request, once made, is withdrawn.

         To address this scenario, the Commerce Department proposed and adopted a regulation. In the adopted regulation, Commerce set forth rules for evaluating timely and untimely withdrawals:

(d) Rescission of administrative review-(1) Withdrawal of request for review. The Secretary will rescind an administrative review under this section, in whole or in part, if a party that requested a review withdraws the request within 90 days of the date of publication of notice of initiation of the requested review. The Secretary may extend this time limit if the Secretary decides that it is reasonable to do so.

19 C.F.R. § 351.213(d)(1); see also id. § 351.102(b)(44) (defining "Secretary" as "the Secretary of Commerce or a designee").

         In 2012 Baoding Mantong and GEO each requested review of an antidumping order that Commerce had imposed on imports of glycine from the People's Republic of China. Later, just at the end of the 90-day period after Commerce had published notice that it was initiating a review, GEO filed a notice of withdrawal of its petition for review. Shortly thereafter, Baoding Mantong filed its notice of withdrawal of its request for review, accompanied by a request for extension of time to file its withdrawal; the notice of withdrawal was filed after the 90-day period provided in the regulation had expired.

         Under the final sentence in the regulation, "[t]he Secretary may extend this time limit if the Secretary decides that it is reasonable to do so." 19 C.F.R. § 351.213(d)(1). In response to the Baoding Mantong notice and request, the Secretary declined to extend the 90-day time limit for a withdrawal, thus causing the notice of withdrawal to be ineffective.

         That final sentence had remained unchanged since the publication of predecessor rules years earlier, and upon which the current rule, § 351.213(d)(1), was based. Further, as we shall explain, Commerce's understanding and application of that regulatory sentence remained essentially consistent over the years-until 2011.

         In 2011, Commerce announced in a published guidance document a view of that sentence that dramatically changed its meaning.[2] The question raised in this appeal is whether the Secretary's refusal, pursuant to the 2011 guidance document, to extend the time limit was legally proper. Was it made consistent with the requirements set forth in the governing regulation, specifically with the criterion in the final sentence of that regulation?

         History of 19 C.F.R. § 351.213(d)(1)

         The current regulation was published as a Final Rule in 1997. However, as proposed in 1996, the regulation did not allow for untimely withdrawals. Instead, the proposed regulation only allowed for timely withdrawals- and even that was discretionary:

(d) Rescission of administrative review. (1) Withdrawal of request for review. The Secretary may rescind an administrative review under this section, in whole or in part, if a party that requested a review withdraws the request not later than 90 days after the date of publication of notice of initiation of the requested review.

Antidumping Duties; Countervailing Duties, 61 Fed. Reg. 7308, 7365 (emphasis added) (proposed Feb. 27, 1996).

         The omission of any language allowing for untimely withdrawals in the proposed regulation was a puzzle. 19 C.F.R. Part 351 was, in part, a consolidation of existing regulations. See id. at 7308 (discussing consolidation in context of proposed rule). See also Antidumping Duties; Countervailing Duties, 62 Fed. Reg. 27, 296, 27, 296 (May 19, 1997) (discussing consolidation in context of final rule). Both of those then-existing regulations included identical language allowing for untimely withdrawals: "The Secretary may extend ...


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