Glycine & More, Inc. v. United States
880 F.3d 13335 (Fed. Cir. 2018)
Authored by Amber Mulcare
Statement of Facts: The Department of Commerce (“Commerce”) oversees the issuance of antidumping orders. Antidumping orders impose a special duty for foreign merchandise sold for less than fair value within the United States that may materially injure US industries. If Commerce receives a request for administrative review of a previously issued antidumping order, they must conduct at least one annual review. In 1997, Commerce re-promulgated rules for evaluating any withdrawals of administrative review requests, indicating that the Secretary will rescind administrative reviews when the requestor withdraws the request within 90 days of the notice of initiation of the requested review and “[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 2011, Commerce published a “Notice” stating that it would not consider extending the 90-day deadline unless the requestor demonstrated an “extraordinary circumstance” that would prevent timely filing of a withdrawal request. 880 F.3d at 1340. Commerce noted that the guidance would apply to all future requests for extensions, whereby Commerce would no longer grant extensions for untimely withdrawals based on the criteria documented in the comments of the 1997 final rule.
On March 1, 2012, Commerce notified interested parties of the opportunity to request an administrative review regarding its 1995 Antidumping Duty Order: Glycine from the People’s Republic of China. These parties included producers of glycine: GEO Specialty Chemicals, Inc. (“GEO”) (defendant-appellant and a U.S. producer of glycine) and Baoding Mantong Fine Chemistry Co., Ltd. (“Baoding Mantong”) (a Chinese producer and exporter of glycine.) GEO and Baoding Mantong separately replied on April 30, 2012 to request an administrative review. On April 30, 2012, Commerce published notice that it had initiated an administrative review.
On July 10, 2012, Commerce selected Baoding Mantong as one of two mandatory respondents and issued a questionnaire to the company. On July 30, 2012, GEO submitted what was determined to be its timely withdrawal. On August 7, 2012—after the 90-day period had ended—Baoding Mantong asked Commerce for an extension of the 90-day period in which to file its withdrawal, and an extension of the deadline for its questionnaire response. On August 22, 2012, Commerce informed Baoding Mantong that Commerce was considering its request, and that it did not have to respond to Commerce’s questionnaire. Subsequently, Commerce informed Baoding Mantong that it was rejecting its untimely withdrawal and instructed Baoding Mantong to respond to the questionnaire. Baoding Mantong responded, informing Commerce that it would not participate in the administrative review or respond to the questionnaire.
On December 6, 2012, Commerce published its Preliminary Results and proposed a 453.79% dumping duty margin. On December 17, 2012, the plaintiff-appellee Glycine & More, a third-party, entered an appearance before Commerce and objected to 1) Commerce’s rejection of Baoding Mantong’s request to withdraw; and 2) the dumping duty margin. Glycine & More is an affiliate of Baoding Mantong and imports glycine manufactured by Baoding Mantong. On April 8, 2013, Commerce published its Final Results, confirming the same dumping margin.
Procedural History: On April 26, 2013, Glycine & More filed a complaint with the United States Court of International Trade (“CIT”) stating that Commerce had violated its own regulation regarding the 90-day period. Glycine & More moved for judgment on the agency record. Commerce and GEO opposed the motion.
CIT held that Commerce’s interpretation of its antidumping duty order regulation was unreasonable and its rejection of Baoding Mantong’s untimely withdrawal was improper. CIT remanded for Commerce to re-decide whether the extension should be granted, instructing Commerce to reach its decision in accordance with the purpose of the 1997 regulation. In its instructions, CIT noted that Commerce must consider the circumstances around Baoding Mantong’s request and that it was likely that only new and compelling circumstances, not previously identified by Commerce, would support Commerce’s previous decision. In addition, CIT clarified that “although this regulation grants [Commerce] discretion over whether to extend the 90-day period, the compelling circumstances giving rise to this case, when viewed according to the purpose of the regulation, would call into question any decision on remand reinstating the previous, challenged decision to deny the extension.” Glycine & More, Inc. v. United States, 107 F. Supp. 3d 1356, 1370 (Ct. Int’l Trade 2015).
After remand, Commerce filed its redetermination decision in favor of Baoding Mantong; extending, under protest, the withdrawal deadline. In that same decision, Commerce asserted that the CIT’s decision improperly nullified Commerce’s discretion under the statute. CIT issued a judgement and opinion affirming Commerce’s redetermination and granted Glycine & More’s motion for judgement on the agency record. CIT emphasized that it was not affirming all statements in Commerce’s redetermination decision, as CIT believed that its decision did not nullify the agency’s discretion.
GEO appealed the CIT’s affirmation decision to the Federal Circuit, arguing that CIT failed to give proper deference to Commerce’s interpretation of its own regulation and improperly directed Commerce’s findings on remand. Neither Commerce nor the United States joined the appeal.
Questions Presented: First, can an agency regulation, previously adopted by formal notice-and-comment rulemaking pursuant to the Administrative Procedure Act (“APA”), be amended by an informal guidance document that is not enacted in accordance with the APA? Second, was the 2011 guidance “Notice” ambiguous? Third, were CIT’s remand instructions improper?
Holdings: First, agency guidance intended to effectively override the substantive meaning of an existing regulation, without following formal rulemaking requirements required by the APA, is improper. Second, the 2011 guidance “Notice” was not ambiguous. Third, the CIT’s instructions for remand were proper. The Federal Circuit affirmed the judgement of the CIT.
Reasoning: The Federal Circuit reviewed the CIT’s factual determinations for clear error and the CIT’s grant of judgement upon the record and legal determinations without deference.
As a threshold issue, the court examined whether Commerce’s 2011 Notice’s meaning is plain and unambiguous. The court held that the explanation given by the text of the notice itself left little room for doubt of the agency’s intent to change the language of the original rule; furthermore, Commerce’s application of the 90-day provision indicated that it did so with an understanding of its decision. Prior to the Notice, the regulation provided the Secretary with wide discretion to determine the facts, circumstances, and reasonableness of a request to extend the withdrawal notice deadline.
Affirming the CIT’s holding, the Federal Circuit stated that the 2011 Notice narrowed the Secretary’s discretion to only cases where extraordinary circumstances were proven by the applicant; thus, representing an incompatible departure from the clear meaning of the original statute. Agencies cannot make substantial amendments or revisions to the original, unambiguous text of a regulation under the guise of agency interpretation. Christensen v. Harris County., 529 U.S. 576, 588 (2000).
Here, the court held that for the 2011 Notice to have the force of law, Commerce was required to engage in notice-and-comment rulemaking and failed to do so. Under the APA formal rulemaking procedures, the Notice had no legal standing and therefore did not provide the basis upon which the Secretary could make his decision. The CIT order required Commerce to re-determine the extension decision using criteria in the only legally applicable standard, that which was set out in § 351.213(d)(1). Therefore, CIT properly instructed remand and properly granted Baoding Mantong’s extension in its affirmation judgement.