Koenig & Bauer-Albert Ag v. U.S., Slip Op. 98-83.
| Citation | 15 F.Supp.2d 834 |
| Decision Date | 23 June 1998 |
| Docket Number | Court No. 96-10-02298.,Slip Op. 98-83. |
| Parties | KOENIG & BAUER-ALBERT AG, et al., Plaintiff, v. UNITED STATES, Defendant, and Goss Graphics, Inc., Defendant-Intervenor. |
| Court | U.S. Court of International Trade |
Shearman & Sterling, Washington, DC (Thomas B. Wilner, Jeffrey M. Winton, Michael J. Chapman), for Plaintiffs MAN Roland Druckmaschinen AG and MAN Roland Inc.; Kirkland & Ellis, Washington, DC (Kenneth G. Weigel, Carol A. Rafferty, Nancy Kao) for Plaintiffs Koenig & Bauer-Albert AG and KBA-Motter Corp.
Frank W. Hunger, Assistant Attorney General of the United States, David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice; Of Counsel, Boguslawa B. Thoemmes, Attorney, Office of the Chief Counsel for Import Administration, Department of Commerce, and Randi-Sue Rimerman, Attorney, Department of Justice, Civil Division, Commercial Litigation Branch, Washington, DC, for Defendants.
Wiley, Rein & Fielding, Washington, DC (Charles Owen Verrill, Jr., Alan H. Price, and Willis S. Martyn III) for Defendant-Intervenors.
Plaintiffs Koenig & Bauer-Albert AG ("KBA") and MAN Roland Druckmaschinen AG and MAN Roland Inc. ("MAN Roland"), respondents in the underlying investigation, and Plaintiff Goss Graphic Systems, Inc. ("Goss"), petitioner in the underlying investigation, filed separate motions challenging various aspects of the determination of the International Trade Administration of the United States Department of Commerce ("Commerce" or "ITA") regarding imports of large newspaper printing presses ("LNPP") from Germany. Large Newspaper Printing Presses and Components Thereof, Whether Assembled or Unassembled, from Germany, 61 Fed.Reg. 38,166 (Dep't Commerce 1996) (final det.)("Germany Final"). The motions were consolidated.
The antidumping investigation of LNPPs from Germany was conducted simultaneously with Commerce's investigation of sales of LNPPs from Japan. Issues common to both investigations were discussed in Germany Final. The Court affirmed Commerce's determinations with respect to common issues of scope and standing. Mitsubishi Heavy Indus. v. United States, 986 F.Supp. 1428 (1997). Familiarity with the Court's opinion on scope and standing issues is presumed.
MAN Roland challenges Commerce's refusal to accept amendments to the contract prices of two presses; Commerce's circumstance of sale adjustment for imputed credit expenses; Commerce's allocation of indirect selling expenses incurred by MAN Roland's U.S. subsidiary, MRU; Commerce's decision to rely on facts available in lieu of cost data supplied by MAN Roland; Commerce's choice of facts available; Commerce's choice of a variance to adjust MAN Roland's estimated overhead expenses to approximate actual expenses; Commerce's refusal to average MAN Roland's costs with those of MAN Roland's wholly owned subsidiary; Commerce's decision to include home-market sales with "abnormally high profits" in its profit calculation for constructed value; Commerce's treatment of certain U.S. sales as constructed export price ("CEP") sales; and Commerce's decision to treat MAN Roland's installation costs as further manufacturing costs. See Mem. Pls. MAN Roland Druckmaschinen AG and MAN Roland Inc. Support Mot. J. Agency Record Company-and Country-Specific Issues at 3-4 ("MAN Roland brief").
Goss challenges four aspects of Commerce's final determination. Two of Goss's objections, regarding Commerce's decision to deduct imputed interest from normal value and Commerce's allocation of indirect selling expenses incurred in Germany and Japan, are common to both the German and the Japan investigations. These are discussed in Mitsubishi Heavy Indus. v. United States, slip op. 98-82, 1998 WL 417423, 15 F.Supp. 807 (CIT June 23, 1998).
With regard to the Germany investigation, Goss objects to Commerce's allocation of costs for two of MAN Roland's U.S. sales, and Commerce's inclusion of Canadian warranty expenses in estimating MAN Roland's U.S. warranty expenses. Brief Support Goss Graphic Sys., Inc. Rule 56.2 Mot. J. Agency Record Comp./Country Specific Issues ("Goss brief").
KBA challenges Commerce's choice of facts available in calculating its dumping margin. See Brief of Pls. Koenig & BauerAlbert AG and KBA-Motter Corp. Support Mot. J. Agency Record (KBA brief).
Commerce calculated MAN Roland's dumping margin based on sales of two complete Geoman presses1, to The Rochester Chronicle and Democrat ("Rochester") and The Times Leader of Wilkes Barre ("Wilkes Barre") and two sales of German components for U.S.-made presses or additions. A fifth sale, of parts and subcomponents, was excluded from Commerce's final analysis because Commerce determined that it was outside the scope of its investigation. See Germany Final at 38,172.
Several months after Goss filed its antidumping petition, MAN Roland amended its contracts for the Rochester and Wilkes-Barre presses. In the final determination, Commerce refused to accept the price adjustments and calculated U.S. price based on the original contract prices of the two sales. MAN Roland challenges this decision.
According to the statute, United States price is to be based on "the price at which the subject merchandise is first sold (or agreed to be sold)" to an unaffiliated purchaser in the United States. 19 U.S.C. § 1677a(a), (b) (1994). The statute does not discuss the treatment of price amendments made after the period of investigation. Therefore, the Court must defer to Commerce's interpretation of the statute if that interpretation is reasonable. See Chevron, U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 843, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984) ( ) (footnotes omitted); see also Koyo Seiko Co. v. United States, 36 F.3d 1565, 1570 (Fed.Cir. 1994) ().
MAN Roland argues that Commerce's refusal to accept the price amendments was inappropriate because "[t]here was no evidence in this case that the prices were being manipulated to avoid a dumping finding." MAN Roland brief at 5. However, MAN Roland's implicit statement of the relevant legal standard is inaccurate. Commerce was not looking for evidence of manipulation. Commerce's rejection of the price amendments was based upon the potential for manipulation, not evidence of actual manipulation.
In past cases, the Department [Commerce] has stated that its standard practice is not to accept price adjustments instituted after the filing of a petition.... [W]e have held that we are cautious in accepting price increases ... so as to discourage potential manipulation of potential dumping margins, and have determined the original contract price which pre-dated the filing of the petition as the proper basis for U.S. price.
Commerce's decision to reject price amendments that present the potential for price manipulation was a permissible interpretation of the statute. See Mitsubishi Elec. Corp. v. United States, 12 CIT 1025, 1046, 700 F.Supp. 538, 555 (1988) ( ), aff'd 8 Fed. Cir. (T) 45, 898 F.2d 1577 (1990); see also Dastech Int'l, Inc. v. ITC, 21 CIT ____, 963 F.Supp. 1220, 1229 (1997) ().
Commerce's decision also was supported by substantial evidence. The price amendments themselves, made after the initiation of the investigation, constitute evidence that manipulation may occur, as does the fact that Commerce was unable to verify the amendments. See Def.'s Mem. Opp. Mot. MAN Roland Druckmaschinen AG and MAN Roland Inc. J. Agency Record Country and Company-Specific Issues at 7-8 ("Commerce brief") ("ITA could not conclude that MRD's amendment was bona fide, where the amendment pertained to a contract in connection with an unfinished press, the payment of which would not occur (and, thus, could not be verified) until after the investigation had ended.").
MAN Roland also argues that because "there was no factual basis for concluding that the price amendments at issue ... were in any way fictitious or manipulated ... the Department's determination can only be sustained if there is, in fact, a per se rule requiring the Department to automatically disregard any prices negotiated after the petition was filed." MAN Roland brief at 7. MAN Roland concludes that Commerce does not operate under such a rule and therefore, Commerce erred in excluding the post-petition price amendments.2
MAN Roland is mistaken. The Court need not find that Commerce has a per se rule in order to uphold its decision. As explained above, Commerce's rejection of MAN Roland's price amendments was in accordance with law and supported by substantial evidence. Therefore, the Court will not disturb Commerce's decision. See 19 U.S.C. § 1516a(b)(1) ().
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