Floral Trade Council v. US
| Citation | 16 CIT 654,799 F. Supp. 116 |
| Decision Date | 30 July 1992 |
| Docket Number | Court No. 91-07-00536. |
| Parties | FLORAL TRADE COUNCIL, Plaintiff, v. The UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Stewart & Stewart, Eugene L. Stewart, Terence P. Stewart, James R. Cannon Jr. and Jimmie V. Reyna, Washington, D.C., for plaintiff.
Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, U.S. Dept. of Justice, Civ. Div., Jane E. Meehan, Office of Chief Counsel for Import Admin., U.S. Dept. of Commerce, Washington, D.C., Patrick V. Gallagher, Jr., Vienna, Va., of counsel, for defendant.
This is a challenge to the final results of an administrative review of an antidumping order. Certain Fresh Cut Flowers From Mexico, 56 Fed.Reg. 29,621 (Dep't Comm. 1991) (final admin. review). Plaintiff challenges the zero rate of duties for future entries assigned "all other" producers, that is, those not investigated.
For the six producers named in the administrative review conducted pursuant to 19 U.S.C. § 1675 (1988), ITA found margins of dumping on the basis of verified data for the period under review or based on the "best information otherwise available" ("BIA") where data was not submitted or was not verifiable. See 19 U.S.C. § 1677e(c) (1988). The results of the investigations for the six producers were as follows:
Company Rate Method
Florex 264.43 Verified data for current period
Rancho el Aguaje 0 Verified data for current period
Rancho el Toro 0 Verified data for current period
Rancho Mision el Descanso 24.33 BIA rate based on verified rate from
original investigation
Tzitzic Tareta 39.95 BIA rate based on verified rate from
earlier review
Visaflor 29.40 BIA rate based on BIA rate from original
investigation
For original "less than fair value" ("LTFV") investigations, ITA's past practice has been to use a weighted average of all of the positive rates, both verified and BIA, to calculate an "all other" rate. This general methodology has been approved by this court. Serampore Indus. Pvt. Ltd. v. U.S. Dep't of Commerce, 12 CIT 825, 827-29, 834, 696 F.Supp. 665, 668-69, 673 (1988). For companies not investigated in subsequent reviews, ITA's practice has been to apply the rate from the original investigation. See 19 C.F.R. § 353.22(e) (1991); Certain Fresh Cut Flowers From Mexico, 55 Fed.Reg. 12,696, 12,699 (Dep't Comm. 1990) (final admin. review). The theory is that dissatisfied parties may request a review to set a rate for actual assessment of duties. For new entrants into the market, also known as "new shippers," ITA has utilized the highest verified rate for the reviewed period. See Certain Fresh Cut Flowers From Mexico, 55 Fed.Reg. at 12,700. This apparently was the general practice. In this case, however, ITA rejected the highest verified rate because it was not considered representative. 56 Fed.Reg. at 29,623. That left the highest verified rate at zero. Plaintiff takes issue with that decision, but it also challenges the decision to apply the zero rate to future entries of all uninvestigated parties, that is, both old and new shippers.1
ITA arrived at its new approach through a series of choices. First, it decided that use of two general rates, one for past shippers and one for new shippers, presented administrative difficulties for Customs in carrying out the antidumping order. 56 Fed.Reg. at 29,623. Next it decided to use its previous new shipper methodology for past participants. Although this approach may present problems of fairness in a variety of circumstances, the issue before the court is whether this methodology is acceptable as applied in this case. See Ceramica Regiomontana, S.A. v. United States, 10 CIT 399, 404, 636 F.Supp. 961, 965 (1986), aff'd, 5 Fed.Cir. (T) 77, 810 F.2d 1137 (Fed.Cir.1987). The first issue to be addressed is whether ITA may use a single "all other" rate for "old" and "new" shippers. Apparently it is difficult for Customs to determine which producers are "new shippers." This industry is extremely fragmented and new producers enter the market frequently. Assuming that no statutory or regulatory barriers to use of a single rate exist, the practical decision to utilize a single rate appears justified.
Because the single rate chosen was the former "new shipper" rate, the court, sua sponte, raised the issue of whether 19 C.F.R. § 353.22(e)(2) prohibits ITA from applying new deposit rates to "old" participants not covered by the review. 19 C.F.R. § 353.22(e) reads as follows:
19 C.F.R. § 353.22(e) (1991). The government argues that "the cash deposits" in subsection (e)(2) does not refer to "the cash deposits previously ordered" despite the reference in subsection (e)(2) to subsection (e)(1), which contains such language. This does not appear to the court to be the best reading of the plain language of the regulation. Nonetheless, based on the arguments presented in this case, and in view of the need for a single "all other" rate in some instances and the possibility that some prior rates may be too old for application to new shippers (see Manifattura Emmepi S.p.A. v. United States, 16 CIT ___, ___ _ ___, 799 F.Supp. 110, 114-16 (1992)), the court has not been convinced that ITA's construction of its regulation is unreasonable.2 Accordingly, the court finds no error in Commerce's decision to use a single future deposit rate for both "old" uninvestigated companies and new entrants.
The next issue is whether the choice of the particular unified "all other" rate was reasonable. Several options were available: the original "all other" rate from the LTFV investigation; the new shipper rate; or a new rate which would compensate for the particular problems of this case caused by elimination of the highest verified rate. Commerce does not appear to have considered all of these options. It simply applied its formula for the "new shipper" rate to derive an "all other" rate, without explanation as to why it was the appropriate choice in this case.
As indicated, the past new shipper formula employed the highest verified rate. Use of this rate presents some concerns. Ordinarily, one would expect that, where a partial review is requested by an importer or producer, use of the highest verified rate as a unified "all other" rate may be unfair to domestic parties unless the domestic parties have enough information to request that parties known to be dumping be added to the review.3 Where the domestic party requests a review, one might expect some uninvestigated importers to be prejudiced by use of the highest verified rate. Obviously, parties request reviews they expect will give them better results than the LTFV or previous review margins. As the parties had no notice of ITA's new practice, both sides probably took action or inaction based on ITA's old practice. In this case, had ITA followed its new practice entirely, all uninvestigated importers would have received the highest verified rate of 264.43%, a high rate indeed. Unfairness to importers was eliminated in this case by rejecting the 264.43% rate.
The basis for exclusion of the 264.43% rate was unrepresentativeness. Florex's accumulated interest expenses from a separate line of business that never began operations skewed its cost of production figures and should not have been included in the review analysis. The fact that none of the other verified respondents carried a similar expense confirms that Florex's situation is atypical. Moreover, because Florex represents only a small fraction of the industry, ITA did not err in finding it would...
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