508 F.3d 1024 (Fed. Cir. 2007), 2007-1011, Agro Dutch Industries Ltd. v. United States

Docket Nº:2007-1011.
Citation:508 F.3d 1024
Party Name:AGRO DUTCH INDUSTRIES LIMITED, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee, and Coalition for Fair Preserved Mushroom Trade, Defendant-Appellee.
Case Date:November 20, 2007
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit
 
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Page 1024

508 F.3d 1024 (Fed. Cir. 2007)

AGRO DUTCH INDUSTRIES LIMITED, Plaintiff-Appellant,

v.

UNITED STATES, Defendant-Appellee,

and

Coalition for Fair Preserved Mushroom Trade, Defendant-Appellee.

No. 2007-1011.

United States Court of Appeals, Federal Circuit.

November 20, 2007

         Appealed from: United States Court of International Trade Senior Judge R. Kenton Musgrave

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       Lizbeth R. Levinson, Garvey Schubert Barer, of Washington, DC, argued for plaintiff-appellant. With her on the brief was Ronald M. Wisla.

         Claudia Burke, Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee, United States. On the brief were Peter D. Keisler, Acting Attorney General, Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, and Richard P. Schroeder, Attorney. Of counsel on the

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brief was Matthew D. Walden, Attorney, Office of the Chief Counsel for Import Administration, United States Department of Commerce, of Washington, DC.

         Michael J. Coursey and Adam H. Gordon, Kelley, Drye, Collier, Shannon, LLP, of Washington, DC, for defendant-appellee, Coalition for Fair Preserved Mushroom Trade.

         Before MICHEL, Chief Judge, MOORE, Circuit Judge, and COTE, District Judge.[*]

         COTE, District Judge.

         Plaintiff Agro Dutch Industries Limited ("Agro") appeals from a decision of the United States Court of International Trade affirming the Department of Commerce's ("Commerce") finding of duty absorption during the fourth administrative review of an antidumping duty order governing the importation of certain preserved mushrooms from India. Agro Dutch Indus., Ltd. v. United States, No. 04-493, 2006 WL 785463 (Ct. Int'l Trade Mar. 28, 2006). Agro contends that Commerce did not have authority to make such a finding because Agro did not sell merchandise subject to the antidumping order "through an importer who is affiliated with" Agro, as required by 19 U.S.C. § 1675(a)(4), but rather acted as its own importer of record for the relevant sales. Commerce counters by arguing that (1) Agro failed to exhaust its remedies on this issue because it did not raise this argument during the proceedings before Commerce, and (2) where a foreign producer or exporter acts as its own importer of record, it is "affiliated" with itself within the meaning of § 1675(a)(4). The court below held that Agro's appeal on this subject presented a "pure question of law" that could be heard on the merits despite Agro's failure to exhaust, but affirmed Commerce's interpretation of § 1675(a)(4) and its finding of duty absorption. Agro Dutch, 2006 WL 785463, at *10-14. Agro appeals the latter ruling, and we reverse.

         BACKGROUND

         The following facts are not disputed. Agro is a producer and exporter of certain preserved mushrooms subject to an antidumping order issued on February 19, 1999. Notice of Amendment of Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Certain Preserved Mushrooms From India, 64 Fed. Reg. 8311 (Feb. 19, 1999) ("Antidumping Order"). On February 3, 2003, Commerce published a notice of opportunity to request an annual administrative review of the Antidumping Order. Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review, 68 Fed. Reg. 5272 (Feb. 3, 2003). By a letter dated February 28, 2003, defendant Coalition for Fair Preserved Mushroom Trade ("Coalition") requested, pursuant to 19 C.F.R. § 351.213, that Commerce conduct an annual review of the Antidumping Order at issue here, and further requested, pursuant to 19 C.F.R. § 351.213(j), that Commerce determine whether antidumping duties had been absorbed by Agro and several other companies subject to the Antidumping Order.

         On March 25, 2003, Commerce initiated the fourth administrative review of the Antidumping Order. Initiation of Antidumping and Countervailing Duty Administrative Reviews, 68 Fed. Reg. 14,394 (Mar. 25, 2003). This review covered the

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period between February 1, 2002 and January 31, 2003 (the "POR"). On September 25, 2003, Commerce stated in a memorandum placed in the administrative record that, although it had initially determined that it would not conduct a duty absorption analysis in connection with the annual review because Agro (and several other companies subject to the Antidumping Order) made only export price sales to the United States, 1 it now concluded that because "they also act as importer of record for certain . . . of their U.S. sales . . . it is appropriate to conduct a duty absorption analysis with respect to these respondents in accordance with our past practice."

         Commerce notified Agro of this determination in a letter of September 30, 2003. In this letter, Commerce provided Agro an opportunity to place into the record, no later than January 9, 2004, proof that unaffiliated purchasers will ultimately pay the antidumping duties assessed during the POR on those sales for which Agro acted as the importer of record, and warned that Commerce would deem duty absorption to have occurred in the absence of such proof. Agro did not respond to the letter.

         On March 8, 2004, Commerce published the preliminary results of the fourth administrative review. Certain Preserved Mushrooms from India: Preliminary Results of Antidumping Duty Administrative Review, 69 Fed. Reg. 10,659 (Mar. 8, 2004) ("Preliminary Results"). In the Preliminary Results, Commerce reiterated the rationale offered in the September 25 memorandum for conducting a duty absorption inquiry under the facts presented here, with the addition of a citation to section 751(a)(4) of the Tariff Act of 1930 (codified at 19 U.S.C. § 1675(a)(4)). Id. at 10,661. After noting Agro's failure to provide any evidence in response to the letter of September 30, Commerce preliminarily found that Agro had absorbed antidumping duties during the POR on those sales for which it was the importer of record. Id.

         In response to the Preliminary Results, Agro submitted a case brief on June 10, 2004, challenging, inter alia, Commerce's duty absorption finding. At this stage, Agro's sole contention was that there was evidence in the record that Agro's customers often pay the antidumping duty directly to the Customs Service, even though Agro is the importer of record, and thus duty absorption did not take place during the POR. Finding this submission both untimely and insufficient, Commerce confirmed its preliminary duty absorption finding on August 20, 2004. Certain Preserved Mushrooms From India: Final Results of Antidumping Duty Administrative Review, 69 Fed. Reg. 51,630, 51,631 (Aug. 20, 2004) ("Final Results").

         Agro filed an appeal with the Court of International Trade on October 1, 2004, challenging Commerce's duty absorption finding, along with several other findings made in the Final Results. The Court of International Trade affirmed Commerce's absorption determination on the grounds noted above. Agro Dutch, 2006 WL 785463, at *10-14. This appeal followed. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(5).

         DISCUSSION

         The purpose of the antidumping statute is to prevent foreign goods from being sold at unfairly low prices in the United States to the injury of existing or potential United States producers. FAG Italia, S.p.A. v. United States, 291 F.3d 806, 808-09 (Fed. Cir. 2002).

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To that end, if Commerce and the International Trade Commission ("ITC") determine that a foreign exporter or producer has been or is likely to be selling goods in the United States at less than fair value to the detriment of United States producers, Commerce will issue an antidumping order assessing duties on that foreign exporter or producer. See 19 U.S.C. §§ 1673-1673d.

         Once an antidumping order has been issued, the statute requires that the order be periodically reviewed. First, if requested, Commerce will review the order annually to update the applicable duty. Id. § 1675(a)(1)(B). This is referred to as the "annual review." Second, the order is automatically terminated after five years unless, upon review in accordance with the procedures established under 19 U.S.C. § 1675a, Commerce determines that revocation of the duty "would be likely to lead to continuation or recurrence of dumping," and the ITC determines that revocation "would be likely to lead to . . . material injury" to the relevant United States industry. Id.§ 1675(c)(1). This is referred to as the "sunset review." Third, during...

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