Gsa, S.R.L. v. U.S.

• Decision Date: 03 December 1999
• Docket Number: Slip Op. 99-128.,Court No. 98-01-00112.
• Citation: 77 F.Supp.2d 1349
• Parties: GSA, S.R.L., Plaintiff, v. The UNITED STATES, Defendant, and Borden Foods Corporation, Hershey Pasta and Grocery Group, and Gooch Foods, Inc., Defendant-Intervenors
• Court: U.S. Court of International Trade

77 F.Supp.2d 1349

GSA, S.R.L., Plaintiff, v. The UNITED STATES, Defendant and Borden Foods Corporation, Hershey Pasta and Grocery Group, and Gooch Foods, Inc., Defendant-Intervenors

Slip Op. 99-128.

Court No. 98-01-00112.

United States Court of International Trade.

December 3, 1999.

Riggle and Craven (David J. Craven and David A. Riggle) for plaintiff.

David W. Ogden, Acting Assistant Attorney General, David M. Cohen, Director, Velta A. Melnbrencis, Assistant Director, Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice (Deborah Y. Ho), and Patrick V. Gallagher, Attorney, Office of Chief Counsel for Import Administration, United States Department of Commerce, of counsel, for defendant.

OPINION

RESTANI, Judge.

This matter is before the court on the motion of plaintiff, GSA, S.r.l. ("GSA"), for judgment upon the agency record, pursuant to USCIT Rule 56.2. GSA seeks a remand to the International Trade Administration of the Department of Commerce ("Commerce") to reconsider certain determinations made in the termination of GSA's new shipper review.¹ Certain Pasta from Italy: Termination of New Shipper Antidumping Duty Administrative Review, 62 Fed.Reg. 66,602, 66,602-03 (Dep't Commerce 1997) [hereinafter "Review Termination"].

Specifically, GSA alleges that Commerce violated its due process rights by failing to provide it with a hearing, decided to terminate the new shipper review without substantial evidence, and failed to follow its own procedures for antidumping duty investigations. The court will address each of these arguments in turn.

Jurisdiction And Standard of Review

The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (1994). New shipper review determinations are judicially reviewable pursuant to 19 U.S.C. § 1516a(a)(2)(B)(iii) (1994). The court will hold unlawful those determinations which are unsupported by substantial evidence or otherwise not in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i) (1994).

I. Commerce Did Not Violate GSA's Due Process Rights By Terminating The New Shipper Review Without A Hearing

Background

GSA is a trading company in Italy. Review Termination, 62 Fed.Reg. at 66,602. GSA receives orders from its customers, arranges for the production of pasta at a factory or factories and then arranges for transportation to the appropriate customer. See Questionnaire Response to Section A (Mar. 26, 1997), at 9, C.R. Doc. 2, Def.'s App., Ex. 23, at 3. On January 31, 1997, GSA requested that Commerce conduct a new shipper review on certain pasta from Italy. Review Termination, 62 Fed. Reg. at 66,602. Accordingly, on February 27, 1997, Commerce initiated a new shipper administrative review for the period from July 1, 1996 through January 31, 1997. Certain Pasta From Italy: Initiation of New Shipper Antidumping Duty Administrative Review, 62 Fed.Reg. 8,927 (Dep't Commerce 1997).

In its response to Commerce's questionnaire, GSA related that it made sales to the United States through its U.S. affiliate, JCM, Ltd. ("JCM"). Questionnaire Response to Section A (Mar. 27, 1997), at 17, P.R. Doc. 16, Pl.'s App., Ex. 15, at 2. GSA identified one and only one unaffiliated producer ("Company A")² from which it purchased pasta during the period of review ("POR"). Commerce Memorandum (June 13, 1997), at 1-2, C.R. Doc. 8, Def.'s App., Ex. 24, at 1-2. GSA stated that neither GSA nor JCM disclosed to the producer the destination of its products. Questionnaire Response to Section A (Mar. 27 1997), at 17, Pl.'s App., Ex. 15, at 2.

GSA informed Commerce that a P-1 certificate was required for shipment to the United States, and submitted a copy of such a certificate, but explained that the certificate did not prohibit the shipment of pasta to other locations.³ Questionnaire Response to Section A (Mar. 26, 1997), at 10, Def.'s App., Ex. 23, at 4. The P-1 certificate is imprinted at the top with the following statement: "For Certificate IPR Exports of Pasta to the USA." Commerce Memorandum, at 2, Def.'s App., Ex. 24, at 2. GSA also stated that Company A obtained the P-1 and P-2 certificates for pasta GSA sold through JCM because JCM warehouses all of its pasta in the United States, regardless of the final destination. Supplemental Questionnaire Response to Section A (May 6, 1997), at 3, Def.'s App., Ex. 7, at 7.

Based on this information, Commerce questioned whether Company A knew or had reason to know the pasta sold to GSA was destined for export to the United States. Commerce Memorandum, at 2, Def.'s App., Ex. 24, at 2. Commerce therefore requested additional information from GSA regarding the packaging and the presence of the P-1 certificate. Letter from Commerce to GSA (Apr. 25, 1997), at 2, P.R. Doc. 24, Def.'s App., Ex. 6, at 2. GSA responded that its merchandise was "packaged and labeled at the time of production" and that "the `label' is an integral part of the bag into which the product is put at the time of production." Supplemental Questionnaire Response to Section A, at 1, Def.'s App., Ex. 7, at 5.

GSA attached a photocopy of sample packaging for pasta imported into the United States that had "Imported By: Racconto, Melrose Park, IL 60160" imprinted upon it.⁴ Supplemental Questionnaire Response (July 18, 1997), at Ex. S-1, P.R. Doc. 38, Def.'s App., Ex. 10, at 7. Different name brands appeared on the packaging for U.S. and Canadian sales.⁵ Supplemental Questionnaire Response to Section A (May 6, 1997), at 2, Def.'s App., Ex. 7, at 6. GSA sold the pasta to the United States in one package size and to Europe in another package size.⁶ Letter from GSA to Commerce (July 18, 1997), at 4, C.R. Doc. 15, Def.'s App., Ex. 27, at 5.

Based upon GSA's responses, Commerce recommended terminating the new shipper review with respect to GSA. Commerce Memorandum, at 1, Def.'s App., Ex. 24, at 1. Commerce determined that Company A knew that the merchandise was destined for the United States at the time it sold the merchandise to GSA because it had to obtain the P-1 certificates for all shipments entering the United States. Id. at 4, Def.'s App., Ex. 24, at 4. Commerce requested comments from GSA on the recommendation to terminate. Letter from Commerce to GSA (June 20, 1997), at 1, C.R. Doc. 10, Def.'s App., Ex. 25, at 1. In particular, Commerce asked GSA to address the possible involvement of a company ("Company B") whose name appeared on the sample packaging of pasta that GSA had attached to its supplemental questionnaire.⁷ Id. at 1, Def.'s App., Ex. 25, at 1. GSA responded stating that Company A owned the assets and name of Company B. Letter from GSA to Commerce (June 26, 1997), at 7, C.R. Doc. 11, Def.'s App., Ex. 26, at 4.

Commerce requested additional information from GSA regarding JCM's sales and distribution process, with a particular emphasis on whether JCM had independently purchased pasta directly from producers or trading companies other than GSA. Letter from Commerce to GSA (July 11, 1997), at 1-2, P.R. Doc. 36, Def.'s App., Ex. 9, at 1-2. GSA provided the names of other producers from whom JCM had purchased pasta during Commerce's original investigation, including Company A.⁸ Letter from GSA to Commerce (July 18, 1997), at 5, C.R. Doc. 15, Def.'s App., Ex. 27, at 6. GSA refused, though, to provide any cost information for Company A because it did not control Company A or have access to that information. Id., at 4, Def.'s App., Ex. 27, at 5.

Commerce remained unsure that the photocopies GSA had previously submitted were from pasta GSA had actually purchased from Company A⁹ during the POR. Letter from Commerce to GSA (July 11, 1997), at 2, Def.'s App., Ex. 9, at 2. Commerce then requested photocopies of sample packaging from the shipment of GSA's pasta purchased from Company A during the POR and sold to the United States. Id. GSA submitted another supplemental questionnaire response, explaining that GSA could not identify JCM's specific sales of pasta acquired directly from Company A. Letter from GSA to Commerce (July 18, 1997), at 1, Def.'s App., Ex. 27, at 4.

Commerce also independently investigated Company A and its relationship with Company B. Commerce Memorandum to File (Oct. 20, 1997), at 1, C.R. Doc. 25, Def.'s App., Ex. 31, at 1. Company A confirmed that it owned the name and assets of Company B and that its export officer was the same person formerly employed by Company B. Id.; see also Commerce Memorandum to File (Oct. 31, 1997), at 1, C.R. Doc. 29, Def.'s Ex. 33, at 1.

Finally, Commerce notified GSA that it had concluded that Company A knew the pasta was destined for the United States and that knowledge made it inappropriate for Commerce to review GSA's sales in a new shipper review. Letter from Commerce to GSA (Oct. 24, 1997), at 1-2, C.R. Doc. 26, Def.'s App., Ex. 32, at 1-2. Commerce then terminated the new shipper review without holding a hearing.

Discussion

In this matter, GSA contests Commerce's termination of a new shipper review pursuant to 19 U.S.C. § 1675(a)(2)(B) (1994). GSA argues that Commerce violated its due process rights by failing to hold a hearing. Additionally, GSA alleges that Commerce's decision to terminate the new shipper review is not supported by substantial evidence.

A. Commerce Did Not Violate GSA's Statutory Due Process Rights

GSA alleges that it is entitled to a hearing pursuant to 19 U.S.C. § 1675(e) (1994)¹⁰ and 19 U.S.C. § 1677c(b) (1994).¹¹ Both GSA and Commerce opine that GSA could not request a hearing in this case because Commerce never published preliminary results. See Def.'s Br. at 31-32; Pl.'s Br. at 8. Nevertheless, GSA argues that the right to a hearing attached in the initial stages of the investigation and that Commerce never afforded it the opportunity to request a hearing. Pl.'s Br. at 10. Thus, GSA appeals the termination of the proceedings directly to this court and challenges Commerce's interpretation of the statutory structure for hearings as set forth in 19 U.S.C. § 1675(e...