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Mid Continent Nail Corp. v. United States - 846 F.3d 1364 (Fed. Cir. 2017)


The Limiting Regulation provided that the agency would "normally limit the application of the average-to-transaction methodology to those sales that constitute targeted dumping." 19 C.F.R. § 351.414(f)(2) (2008). Thus, even if an agency had found a respondent to have engaged in targeted dumping--a condition precedent to the agency's use of the average-to-transaction methodology--under the Limiting Regulation, the Department of Commerce would "normally" limit the scope of the average-to-transaction methodology to the respondent's targeted sales--instead of all sales. 


In 2012, the Department of Commerce issued a final determination in an antidumping investigation of certain steel nails from the United Arab Emirates ("UAE"), finding that Precision Fasteners, LLC had engaged in targeted dumping and imposed a duty. In calculating Precision's dumping margin, Commerce declined to apply a regulation limiting the use of the average-to-transaction methodology to non-targeted sales because the agency asserted that the regulation had been withdrawn in 2008. 

The Court of International Trade ("Trade Court") held that Commerce had violated the Administrative Procedure Act ("APA") by withdrawing the regulation without providing notice and opportunity for comment. On remand, Commerce redetermined Precision's duty by applying the withdrawn regulation and found that no duty was owing. The Trade Court affirmed.


Did Commerce violate the APA?




The court held that the Department of Commerce's repeal of the Limiting Regulation, 19 C.F.R. § 351.414(f)(2) (2008) in Withdrawal Notice was not a logical outgrowth of Request for Comment and Proposed Methodology. The agency failed to provide adequate notice under the Administrative Procedure Act. Commerce's invocation of the good-cause exception did not support its decision to dispense with notice-and-comment rulemaking under the APA. Commerce's failure to comply with the APA was not a mere technical defect, but amounted to a complete failure to provide the adequate notice and opportunity for comment that the APA required. Commerce's failure to comply with notice-and-comment rulemaking could not be excused as harmless error. The argument that Commerce misapplied the Limiting Regulation in the agency's remand redetermination was without merit.

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