Ad Hoc Shrimp Trade Action Committee v. U.S.

• Decision Date: 02 March 2010
• Docket Number: No. 2009-1375.,2009-1375.
• Citation: 596 F.3d 1365
• Parties: AD HOC SHRIMP TRADE ACTION COMMITTEE, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee, and Thai I-Mei Frozen Foods Co., Ltd., Defendant.
• Court: U.S. Court of Appeals — Federal Circuit

596 F.3d 1365

AD HOC SHRIMP TRADE ACTION COMMITTEE, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee, and Thai I-Mei Frozen Foods Co., Ltd., Defendant.

No. 2009-1375.

United States Court of Appeals, Federal Circuit.

March 2, 2010.

Nathaniel M. Rickard, Picard, Kentz & Rowe LLP, of Washington, DC, argued for plaintiff-appellant. Of counsel were Andrew W. Kentz and Kevin O'Connor.

Stephen C. Tosini, Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee. With him on the brief were Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director.

Before RADER, ARCHER, and PROST, Circuit Judges.

Opinion for the court filed by Circuit Judge ARCHER.Dissenting opinion filed by Circuit Judge PROST.

ARCHER, Circuit Judge.

Ad Hoc Shrimp Trade Action Committee ("AHSTAC") appeals the United States Court of International Trade's affirmance of the Department of Commerce's ("Commerce") determination in Certain Frozen Warmwater Shrimp from Thailand: Final Results and Final Partial Rescission of Antidumping Duty Administrative Review, 72 Fed.Reg. 52,065 (Sept. 12, 2007) ("Final Results"). Ad Hoc Shrimp Trade Action Committee v. United States, 616 F.Supp.2d 1354 (Ct. Int'l Trade 2009). Specifically, AHSTAC challenges the court's approval of Commerce's determination that the multinational corporation provision, 19 U.S.C. § 1677b(d) ("MNC Provision"), does not apply in the situation when the non-exporting country is a nonmarket economy¹ and normal value is based on a factors-of-production methodology under 19 U.S.C. § 1677b(c). Because Commerce's interpretation of the MNC Provision was reasonable, we affirm.

I

A

After completing the first administrative review of an antidumping order covering certain warmwater shrimp from Thailand, Commerce published its final results. See Final Results. AHSTAC filed an action with the Court of International Trade challenging, among other things, Commerce's determination that the MNC Provision did not apply to Thai I-Mei Foods Co., Ltd. ("Thai I-Mei"), a company with affiliates in the People's Republic of China ("PRC") and Vietnam, both nonmarket economies. The court determined that Commerce had correctly declined to apply the MNC Provision, because AHSTAC failed to show that element two of the MNC Provision applied to Thai I-Mei. Ad Hoc Shrimp Trade Action Committee, 616 F.Supp.2d at 1364. The court further determined that Commerce's interpretation of the MNC Provision was reasonable. Id. at 1365.

AHSTAC appeals the Court of International Trade's affirmance of Commerce's determination that "Congress did not intend [the MNC Provision to apply] when the non-exporting country is [a nonmarket economy] and [normal value] is based on a factors-of-production methodology." "Issues and Decision Memorandum" accompanying Final Results at 37. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(5).

B

The MNC Provision is a special rule for calculating the normal value (home market price) of goods for multinational corporations. It generally provides that if a respondent is affiliated with a company in another country and if that respondent has no viable home market for purposes of calculating normal value, then Commerce uses the affiliate's normal value as the normal value for the respondent if the affiliate's normal value is higher than the respondent's normal value.

The MNC Provision itself states:

(d) Special rule for certain multinational corporations

Whenever, in the course of an investigation under this subtitle, the administering authority determines that—

(1) subject merchandise exported to the United States is being produced in facilities which are owned or controlled, directly or indirectly, by a person, firm, or corporation which also owns or controls, directly or indirectly, other facilities for the production of the foreign like product which are located in another country or countries,

(2) subsection (a)(1)(C) of this section applies, and

(3) the normal value of the foreign like product produced in one or more of the facilities outside the exporting country is higher than the normal value of the foreign like product produced in the facilities located in the exporting country,

it shall determine the normal value of the subject merchandise by reference to the normal value at which the foreign like product is sold in substantial quantities from one or more facilities outside the exporting country. The administering authority, in making any determination under this paragraph, shall make adjustments for the difference between the cost of production (including taxes, labor, materials, and overhead) of the foreign like product produced in facilities outside the exporting country and costs of production of the foreign like product produced in facilities in the exporting country, if such differences are demonstrated to its satisfaction. For purposes of this subsection, in determining the normal value of the foreign like product produced in a country outside of the exporting country, the administering authority shall determine its price at the time of exportation from the exporting country and shall make any adjustments required by subsection (a) of this section for the cost of all containers and coverings and all other costs, charges, and expenses incident to placing the merchandise in condition packed ready for shipment to the United States by reference to such costs in the exporting country.

19 U.S.C. § 1677b(d).²

The MNC Provision was intended to address the pricing practice of multinational corporations wherein a corporation would offset lower price home market sales with high priced third country sales, thereby masking the dumping of merchandise from the home market that is under investigation:

The Antidumping Act of 1921, in its present form, cannot be applied to discriminatory pricing by a multinational corporation which sells products made in a plant in one foreign country at low prices to the United States, while the same company or its subsidiary in another foreign country subsidizes those low-priced sales with high-priced sales of the same product to customers in its own market. The factory in the country producing for export (country A) may make insignificant or no sales to its home market. On the other hand, the factories in countries which sell at higher prices (countries B and C) may be primarily engaged in selling to their home market, and the profitability of the overall operation may be largely derived from the home market sales. In such a case, the low-priced export sales are effectively being supported by the higher-priced sales of the affiliated factories in the home market, which is often highly protected from outside competition. This practice is a form of price discrimination which could severely injure domestic producers.

S.Rep. No. 93-1298, at 174 (1974), reprinted in 1974 U.S.C.C.A.N. 7186, 7311.

II

"We review de novo whether Commerce's interpretation of a government statutory provision is in accordance with law, but we do so within the framework established by Chevron." Agro Dutch Indus. Ltd. v. United States, 508 F.3d 1024, 1029-30 (Fed.Cir.2007). The first step of the Chevron analysis is to determine "whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). "Under step two of Chevron, if an agency's statutory interpretation promulgated under the authority delegated it by Congress is `reasonable' it is `binding [o]n the courts unless procedurally defective, arbitrary or capricious in substance, or manifestly contrary to the statute.'" Wheatland Tube Co. v. United States, 495 F.3d 1355, 1360 (Fed.Cir.2007) (quoting Chevron, 467 U.S. at 844, 104 S.Ct. 2778).

Accordingly, Commerce's "interpretation governs in the absence of unambiguous statutory language to the contrary or unreasonable resolution of language that is ambiguous." United States v. Eurodif S.A., ___ U.S. ___, 129 S.Ct. 878, 886-87, 172 L.Ed.2d 679 (2009) (citing United States v. Mead Corp., 533 U.S. 218, 229-30, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001)). "`The whole point of Chevron is to leave the discretion provided by the ambiguities of a statute with the implementing agency.'" Nat'l Cable & Telecomm. Ass'n v. Brand X Internet Servs., 545 U.S. 967, 981, 125 S.Ct. 2688, 162 L.Ed.2d 820 (2005) (quoting Smiley v. Citibank (South Dakota) N.A., 517 U.S. 735, 742, 116 S.Ct. 1730, 135 L.Ed.2d 25 (1996)). Further, we "give Commerce's interpretation of antidumping laws significant deference because of its special expertise in administering antidumping duty law." Wheatland Tube, 495 F.3d at 1360 (Fed.Cir.2007).

III

A

The first step of Chevron asks the question whether "Congress has directly spoken to the precise question at issue." Chevron, 467 U.S. at 842, 104 S.Ct. 2778. "[I]f the statute is silent or ambiguous with respect to the specific issue," the answer is "no," and we proceed to step two of Chevron. Id. at 843, 104 S.Ct. 2778; see also SKF USA, Inc. v. United States, 537 F.3d 1373, 1379 (Fed.Cir.2008) ("[I]f a statute is silent or ambiguous with respect to a specific issue, we `must defer to an agency's reasonable interpretation of a statute even if [we] might have preferred another.'" (quoting Koyo Seiko Co. v. United States, 36 F.3d 1565, 1570 (Fed.Cir.1998))). Thus, we must first determine whether Congress has spoken directly to the issue of whether the MNC Provision is applicable when the non-exporting country is a nonmarket economy and normal value is based on a factors-of-production methodology.

The MNC Provision is silent regarding...