Washington Red Raspberry Com'n v. U.S.

• Decision Date: 13 October 1988
• Docket Number: 88-1107,Nos. 88-1076,s. 88-1076
• Citation: 859 F.2d 898
• Parties: WASHINGTON RED RASPBERRY COMMISSION, Red Raspberry Committee of the Oregon Caneberry Commission, Red Raspberry Committee of the Northwest Food Processors Association, Red Raspberry Member Group of the American Frozen Food Institute, Radar Farms, Ron Roberts, Shuksan Frozen Foods, Inc., Washington Red Raspberry Growers Association, and North Willamette Horticultural Society, Plaintiffs/Appellants, v. The UNITED STATES, United States Department of Commerce, and the Honorable Malcolm Baldridge, Secretary, United States Department of Commerce, Defendants/Cross-Appellants, and Abbotsford Growers Co-operative Union and Chilliwack Fruit Growers Co-operative, Defendants.
• Court: U.S. Court of Appeals — Federal Circuit

Page 898

859 F.2d 898

10 ITRD 1753

WASHINGTON RED RASPBERRY COMMISSION, Red Raspberry Committee

of the Oregon Caneberry Commission, Red Raspberry Committee

of the Northwest Food Processors Association, Red Raspberry

Member Group of the American Frozen Food Institute, Radar

Farms, Ron Roberts, Shuksan Frozen Foods, Inc., Washington

Red Raspberry Growers Association, and North Willamette

Horticultural Society, Plaintiffs/Appellants, v. The UNITED STATES, United States Department of Commerce, and the Honorable Malcolm Baldridge, Secretary, United

States Department of Commerce,

Defendants/Cross-Appellants,

and

Abbotsford Growers Co-operative Union and Chilliwack Fruit

Growers Co-operative, Defendants.

Nos. 88-1076, 88-1107.

United States Court of Appeals, Federal Circuit.

Oct. 13, 1988.

Michael D. Reynolds, Asst. Sol. Gen., State of Or., argued for plaintiffs/appellants. With him on the brief were Dave M. Martha Ries, Commercial Litigation Branch, Dept. of Justice, Washington, D.C., argued for defendants/cross-appellants. With her on the brief were John R. Bolton, Asst. Atty. Gen., David M. Cohen, Director and Velta A. Melnbrencis, Asst. Director. Also on the brief was Lisa B. Koteen, Acting Senior Counsel for Intern. Trade, Office of the Deputy Chief, Counsel for Import Admin., U.S. Dept. of Commerce, of counsel. William K. Ince and Gregory J. Bendlin, Cameron, Hornbostel & Butterman, Washington, D.C., were on the brief for defendants.

Frohnmayer, Atty. Gen. and Virginia Linder, Sol. Gen. Also on the brief were Ken Eikenberry, Atty. Gen., Maureen Hart, Asst. Atty. Gen., State of Wash., Joseph W. Dorn and Walter E. Spiegel, Kilpatrick and Cody, Washington, D.C.

Before SMITH and NEWMAN, Circuit Judges and SKELTON, Senior Circuit Judge.

EDWARD S. SMITH, Circuit Judge.

In this antidumping case, appellants, Washington Red Raspberry Commission and other domestic raspberry growers ¹ (collectively WRRC), appeal the decision and order of the United States Court of International Trade, dated September 8, 1987, sustaining an antidumping determination by the United States International Trade Administration (ITA) on certain red raspberries imported from Canada. ² The United States (Government) cross-appeals. We affirm. ³

Issues

On appeal, we address the following issues:

1. Whether the Court of International Trade erred by sustaining the ITA's final determination excluding Abbotsford from its antidumping duty order on the basis of the ITA's finding that Abbotsford's dumping margin was de minimis;

2. Whether the ITA, in converting the foreign currency for purposes of making price comparisons in the investigation, erred by using the exchange rates in effect at the time of United States sales of red raspberries; and

3. Whether the Court of International Trade erred by determining that the pails and drums in which the raspberries are packed formed an integral part of the merchandise, and that the cost of these items be included as a cost of materials within the constructed value definition.

Background

On July 3, 1984, WRRC filed an antidumping petition with the ITA alleging sales at less than fair value of fresh and frozen red raspberries imported into the United States from Canada. On July 23, 1984, the ITA initiated its antidumping investigations and, on December 18, 1984, preliminarily determined that red raspberries from Canada were being, or were likely to be, sold in the United States at less On May 10, 1985, the ITA published its final determination, assessing antidumping duties on certain red raspberries imported from Canada by East Chilliwack Fruit Growers Co-Operative (ECFG), Jesse Processing Ltd. (Jesse), and Mukhtiar and Sons Packers Ltd. (Mukhtiar). ⁵ In its final determination, the ITA used the "constructed value" method to compute foreign market value for two of the Canadian red raspberry exporters, namely ECFG and Jesse, because substantially all of their home market sales were below the cost of producing the raspberries. For the other two Canadian red raspberry exporters, Mukhtiar and Abbotsford, the foreign market value was based on home market sales. Abbotsford was excluded from the antidumping duty order because Abbotsford's weighted-average dumping margin of 0.19 percent was considered de minimis.

than fair value. ⁴

WRRC filed an action in the Court of International Trade, challenging the exclusion of Abbotsford from the final determination and alleging eight methodological errors by the ITA which resulted in lower dumping margins. The Court of International Trade, agreeing with WRRC's allegations, remanded the proceeding to the ITA (first remand) with instructions to recalculate the dumping margins. ⁶ On the first remand, the ITA calculated a weighted-average dumping margin for Abbotsford of 0.78 percent and, on that basis, concluded that Abbotsford should be included in the antidumping duty order.

Again before the Court of International Trade, Abbotsford objected to the ITA's determination on the first remand, alleging four clerical errors in the calculation of the dumping margins. The Court of International Trade was persuaded by Abbotsford's arguments and again remanded the matter to the ITA (second remand) with instructions to recalculate the dumping margins. ⁷ After correcting the four errors, the ITA found a 0.42 percent weighted-average dumping margin for Abbotsford, determined this amount de minimis, and excluded Abbotsford from the antidumping duty order. On September 8, 1987, the Court of International Trade sustained the ITA's determinations on the second remand and held that the ITA's determination to exclude Abbotsford from the antidumping duty order was supported by substantial evidence on the record and was otherwise in accordance with the law. ⁸

Analysis

A. Statutory Framework

Under the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979, ⁹ if foreign merchandise is sold or is likely to be sold in the United States at less than its fair value to the material injury of a United States industry, then an antidumping duty shall be imposed, "in an amount equal to the amount by which the foreign market value exceeds the United States price for the merchandise." ¹⁰ The statute provides for several different methods of computation of both the foreign market value and the United States price. Both figures are subject to cost adjustments in an attempt to derive values at a common point in the chain of commerce, so that the values reasonably The United States price is defined by statute as either the purchase price or the exporter's sales price, whichever is appropriate. ¹² Purchase price, used where the importer is not related to the foreign producer, is "the actual or agreed-to price between the foreign producer and the independent importer, prior to the time of importation." ¹³ Exporter's sales price, used where the importer is a related party, is "the price at which the goods are eventually transferred in an arm's length transaction, whether from the importer to an independent retailer or directly to the public." ¹⁴

can be compared on an equivalent basis. ¹¹

Generally, foreign market value is computed by one of the following three methods: ¹⁵ (1) home market sales, (2) third country sales, or (3) constructed value. ¹⁶ Although the home-market-sales method is preferred, the statute provides that either third country sales or constructed value may be used where there are no such home market sales. ¹⁷ The constructed value is the sum of (1) the cost of materials and fabrication, (2) an amount for general expenses and profit, and (3) the cost of all containers, coverings, and other expenses incidental to placing the merchandise in condition, packed, and ready for shipment to the United States. ¹⁸

The foreign market value and the United States price, once computed and adjusted by Commerce, are then compared. If the foreign market value exceeds the United States price for the merchandise, then an antidumping duty is imposed in the amount of the difference between the two values. ¹⁹

B. The Issues

1. The De Minimis Rule.

In the proceedings below, the ITA determined that the United States prices of fresh and frozen red raspberries from Canada, produced by Abbotsford, were less than the foreign market values of such or similar red raspberries. Abbotsford's weighted-average dumping margin finally was calculated by the ITA to be 0.42 percent. However, according to the ITA, because a dumping margin of 0.42 percent is de minimis, Abbotsford was excluded from the antidumping duty order. The Court of International Trade sustained the ITA's application of the de minimis rule, concluding that the ITA's determination was supported by substantial evidence on the record and otherwise was in accordance with the law. ²⁰

The appropriate standard of review of a final antidumping determination is limited to whether that determination is "unsupported by substantial evidence on the record, or otherwise not in accordance with law." ²¹ It is in view of this standard, that we review the determination before us.

WRRC argues that the ITA lacks statutory authority to ignore small dumping margins through its application of the de minimis rule. As support for its argument, WRRC contends that Congress has not expressly authorized the ITA to ignore de minimis or negligible dumping margins. We are not persuaded.

The de minimis concept ²² is well-established Although we are not bound by the case law precedent of the Court of International Trade, we are in complete agreement with, and adopt as our own, the holding in Carlisle Tire and Rubber Co. v. United States ²⁶ that the ITA may find that dumping margins less than 0.50 percent are de minimis, but only if the ITA explains the basis for its decision. ²⁷ Accordingly, we must affirm the Court of International Trade's decision sustaining the ITA's application of the de minimis rule if we determine both that the record contains substantial...