Toyota Motor Sales, U.S.A., Inc. v. U.S.

• Decision Date: 02 July 1998
• Docket Number: Court No. 97-03-00415.,Slip Op. 98-95.
• Citation: 15 F.Supp.2d 872
• Parties: TOYOTA MOTOR SALES, U.S.A., INC., Plaintiff, v. UNITED STATES, Defendant, and NACCO Materials Handling Group, Inc., Independent Lift Truck Builders Union, International Association of Machinists AMD Aerospace Workers, International Union, Allied Industrial Workers of America (AFL-CIO), & United Shop and Service Employees, Defendant-Intervenors.
• Court: U.S. Court of International Trade

15 F.Supp.2d 872

TOYOTA MOTOR SALES, U.S.A., INC., Plaintiff, v. UNITED STATES, Defendant and NACCO Materials Handling Group, Inc., Independent Lift Truck Builders Union, International Association of Machinists AMD Aerospace Workers, International Union, Allied Industrial Workers of America (AFL-CIO), & United Shop and Service Employees, Defendant-Intervenors.

Slip Op. 98-95.

Court No. 97-03-00415.

United States Court of International Trade.

July 2, 1998.

Dorsey & Whitney LLP (John B. Rehm, Munford Page Hall, II, L. Daniel Mullaney, Robert W. Bras), Washington, DC, for Plaintiff.

Frank W. Hunger, Assistant Attorney General of the United States; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Lesleyanne Koch Kessler); Bernd Janzen, Office of the Chief Counsel for Import Administration, United States Department of Commerce, of counsel, Washington, DC, for Defendant.

Collier, Shannon, Rill & Scott, PLLC (Paul C. Rosenthal, Mary T. Staley ), Washington, DC, for Defendant-Intervenors.

OPINION

CARMAN, Chief Judge.

Before the Court is plaintiff's Motion for Judgment on the Agency Record pursuant to U.S. CIT R. 56.2. Plaintiff, Toyota Motor Sales, U.S.A., Inc., ("Plaintiff"or "Toyota") argues the Department of Commerce's (Department or Commerce) determination in Certain Internal-Combustion Forklift Trucks From Japan; Final Results of Antidumping Duty Administrative Review, 62 Fed.Reg. 5,592 (Feb. 6, 1997) (Final Results) is not supported by substantial evidence on the record and is not otherwise in accordance with law. Plaintiff raises three issues in challenging the Final Results. First, plaintiff argues Commerce improperly utilized facts otherwise available, specifically Toyota's United States credit revenue, to value Toyota's home market credit revenues. Second, plaintiff contends Commerce's rejection of verified direct and indirect selling expenses incurred by plaintiff in Japan is not supported by substantial evidence on the record and is not otherwise in accordance with law. Finally, plaintiff asserts Commerce's calculation of constructed export price (CEP) profit is not supported by substantial evidence on the record and is not otherwise in accordance with law because it is based on the combined profits from sales of large and small forklift trucks, which plaintiff contends are different foreign like products.

In response, defendant argues Commerce's determination is supported by substantial evidence on the record and is otherwise in accordance with law. Defendant contends Commerce properly resorted to adverse facts otherwise available, pursuant to 19 U.S.C. §§ 1677e(a) and (b), when it: (1). denied Toyota's claimed direct and indirect selling expenses as adjustments to normal value; (2). included the claimed selling expenses in the adjusted home-market price for purposes of constructed value (CV) and the sales-below-cost test; and (3). used the claimed selling expense in calculating the CEP profit in the case of the claimed direct advertising expense incurred from United States sales. Defendant contends Commerce properly applied the transaction-specific gross revenue earned by Toyota Motor Credit Corporation on relevant U.S. sales to the weighted-average home market price of matched sales. Defendant further maintains Commerce properly calculated a single CEP profit based upon all subject merchandise and foreign like product for forklift trucks.

Defendant-Intervenors, NACCO Materials Handling Group, Inc., Independent Lift Truck Builders Union, International Association of Machinists and Aerospace Workers, International Union, Allied Industrial Workers of America (AFL-CIO), and the United Shop and Service Employees, (collectively NACCO) oppose plaintiff's Motion for Judgment on the Agency Record and support defendant's position. Defendant-Intervenors argue because Toyota was unable at verification to provide documents to support claims made in its questionnaire responses, Commerce was required to apply facts otherwise available with respect to the claims which could not be verified. Defendant-Intervenors contend the Department reasonably determined that the statutory preference is a single CEP profit for all sales under consideration.

This Court has jurisdiction under 28 U.S.C. § 1581(c) (1994), and for the reasons set forth below, denies plaintiff's Motion for Judgment on the Agency Record, sustains Commerce's Final Results in their entirety, and dismisses this action.

BACKGROUND

On June 7, 1988, Commerce issued an antidumping duty order on certain internal-combustion, industrial forklift trucks from Japan. See Antidumping Duty Order and Amendment to Final Determination of Sales at Less Than Fair Value; Certain Internal-Combustion, Industrial Forklift Trucks From Japan, 53 Fed.Reg. 20,882 (Dep't Comm.1988). In June 1995, Commerce published a notice informing interested parties of their opportunity to request an administrative review of the antidumping duty order on forklift trucks from Japan. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 60 Fed.Reg. 29,821, 29,822 (Dep't Comm.1995). On August 16, 1995, pursuant to a request from the domestic producers, Commerce published a notice of its initiation of the fourth administrative review of forklift trucks from Japan exported by Toyota Motor Corporation (TMC) and two other respondents for the period June 1, 1994 to May 1, 1995. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part, 60 Fed.Reg. 42,500, 42,501 (Dep't Comm.1995). The products covered by the review are "certain internal-combustion industrial forklift trucks, with lifting capacity of 2,000 to 15,000 pounds" and are further described as "[a]ssembled, not assembled, and less than complete, finished and not finished, operator-riding forklift trucks powered by gasoline, propane, or diesel fuel internal-combustion engines of off-the-highway types used in factories, warehouses, or transportation terminals for short-distance transport, towing, or handling of articles." Final Results, 62 Fed. Reg. at 5,592.

In conducting its investigation in the fourth administrative review, Commerce forwarded to Toyota an antidumping questionnaire on July 31, 1995 and included the following instruction:

If you fail to provide accurately the information requested within the time frame provided, the Department may be required to base its findings on the facts available. If you fail to cooperate with the Department by not acting to the best of your ability to comply with a request for information, the Department may use information that is adverse to your interest in conducting its analysis.

(July 31, 1996 Antidumping Questionnaire to Toyota, reprinted in Def.'s App. to Mem. in Opp'n to Pl.'s Mot. for J. Upon Agency R. (Def.'s App.) at 2.) On October 16, 1995, Toyota submitted its principal questionnaire response.

On April 19, 1996, Commerce sent Toyota a supplemental questionnaire, informing it that Commerce had identified several areas in its October 1995 response that required further information or clarification. First, Commerce attempted to confirm whether Toyota accurately reported its claimed selling expenses for home market advertising and certain indirect selling expenses. Second, the Department attempted to confirm Toyota's claim that its related financing company in Japan, Toyota Finance Corporation (TFC), was not involved in any aspect of forklift truck sales made in the home market. Commerce requested additional information with respect to Toyota's credit expenses and stated

Please explain the apparent discrepancy between your statement that TMC had no short-term borrowing during the [period of review (POR) ] and your 1995 audited financial statements which indicate TMC did carry short-term debt. Please explain why you believe this does not constitute short-term borrowing for the POR. Please provide the equation you used to calculate credit expenses and a worksheet showing the calculation of your average short-term interest rate.

Is Toyota Finance Corporation (TFC) involved in any financing transactions between [Toyota Automatic Loomwork] or TMC and its affiliated and unaffiliated dealers? If so, please explain its involvement and the various programs available and utilized during the period of review.

(Letter from Laurie Parkhill, Office of Antidumping Compliance, to TMC of Apr. 19, 1996, reprinted in Def.'s App. at 25, 33.)

On May 1, 1996, Commerce informed Toyota of its intent to conduct verification of Toyota's factual submissions and forwarded a verification outline to Toyota, explaining that Commerce planned to examine certain source documents, including Toyota's financial statements covering the period of review. Commerce conducted on-site verification of Toyota's factual submissions and outlined eleven specific deficiencies, several of which are relevant to Toyota's challenges to the Final Results. For example, Commerce indicated Toyota was unable to provide documentation in support of some of its claimed indirect selling expenses and home market direct advertising expenses. Commerce explained

We could not verify TMC's indirect advertising and sales-promotion expenses and indirect selling expenses (wage & salary and general and administrative expenses). Therefore, we are denying them as adjustments to normal value....

We could not verify TMC's reported direct advertising expenses. Therefore, we are denying them as adjustments to normal value....

(Commerce's Preliminary Results Analysis Memorandum, dated July 26, 1996, reprinted in Def.'s App. at 52, 55.) Commerce also explained

Toyota could not go below the level of a semi-annual detail report to support certain of its claimed indirect selling expenses reported under its variable INDIRSH (Sales Promotion and Advertising, Wage &...