Thai Plastic Bags Indus. Co. v. United States

• Decision Date: 11 February 2013
• Docket Number: Slip Op. 13–21.,Court No. 11–00086.
• Parties: THAI PLASTIC BAGS INDUSTRIES CO., LTD., Plaintiff, v. UNITED STATES, Defendant, and Polyethylene Retail Carrier Bag Committee, Hilex Poly Co., LLC, and Superbag Corporation, Defendant–Intervenors.
• Court: U.S. Court of International Trade

895 F.Supp.2d 1337

THAI PLASTIC BAGS INDUSTRIES CO., LTD., Plaintiff,

v.UNITED STATES, Defendant,andPolyethylene Retail Carrier Bag Committee, Hilex Poly Co., LLC, and Superbag Corporation, Defendant–Intervenors.

Slip Op. 13–21.

Court No. 11–00086.

United States Court of

International Trade.

Feb. 11, 2013.

Irene H. Chen, Chen Law Group LLC, of Rockville, MD, and Mark B. Lehnardt, Lehnardt & Lehnardt, LLC, of Liberty, MO, for Thai Plastic Bags Industries, Co., Ltd.

Joseph W. Dorn, Stephen A. Jones, and Daniel L. Schneiderman, King & Spalding LLP, of Washington, DC, for Polyethylene Retail Carrier Bag Committee, Hilex Poly Co., LLC, and Superbag Corporation.

Vincent D. Phillips and Ryan M. Majerus, Trial Attorneys, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendant. Also on the brief were Stuart F. Delery, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Scott D. McBride, Senior Attorney, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of Washington, DC.

OPINION

POGUE, Chief Judge:

Before the court is a determination by the United States Department of Commerce (“Commerce”) in response to a previously ordered remand.¹ In prior proceedings, the court granted Commerce's request for a voluntary remand on two grounds: 1) to allow Commerce to provide additional explanation for its decision to assign a dumping margin of zero to all U.S. sales where export price was greater than normal value (referred to as “zeroing”) when calculating respondents' weighted-average dumping margins during the antidumping duty review at issue; and 2) to allow Commerce to consider the parties' comments and to review Commerce's application of the “transactions disregarded” cost adjustment when constructing a normal value in this review. Thai Plastic Bags I, ––– CIT at ––––, 853 F.Supp.2d at 1277–79.

For the reasons below, Commerce's Remand Results will be affirmed.

STANDARD OF REVIEW

This court will uphold Commerce's antidumping determinations if they are in accordance with law and supported by substantial evidence. 19 U.S.C. § 1516a(b)(1)(B)(i). Where the antidumping statute does not directly specify a method for its application, the court will defer to Commerce's statutory construction if it is reasonable. Timken Co. v. United States, 354 F.3d 1334, 1342 (Fed.Cir.2004) (relying on 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)).

DISCUSSION

I. Zeroing

When comparing respondents' export prices to the merchandise's normal value in this review, Commerce treated sales made at or above normal value as not dumped; Commerce therefore did not aggregate the (negative) normal-to-export price differences of such sales with the (positive) normal-to-export price differences of the dumped sales made at prices below normal value. I & D Mem. cmt. 4 at 21.² Plaintiff Thai Plastic Bags Industries Company, Limited (“TPBI”), a respondent in this review, argued that Commerce acted contrary to law as articulated in the jurisprudence of the World Trade Organization (“WTO”). See id. at 20–21. Commerce rejected TPBI's WTO-based challenge on the ground that WTO jurisprudence per se is not a source of legal authority in the United States unless and until specifically implemented pursuant to the procedures established by the Uruguay Round Agreements Act. Id. at 22 (citing NSK Ltd. v. United States, 510 F.3d 1375, [1380] (Fed.Cir.2007); Corus Staal BV v. United States, 502 F.3d 1370, 1375 (Fed.Cir.2007); Corus Staal BV v. Dep't of Commerce, 395 F.3d 1343, 1347–49 (Fed.Cir.2005)).³

In this action, TPBI argued for remand because Commerce's refusal to aggregate all of the normal-to-export price differences of TPBI's U.S. sales, regardless of whether normal value exceeded the individual export prices, was inconsistent with Commerce's approach to aggregating price differences when calculating weighted-average dumping margins in initial dumping investigations. Thai Plastic Bags I, ––– CIT at ––––, 853 F.Supp.2d at 1277. Commerce requested a voluntary remand to explain its reasoning. Id. Noting two recent Court of Appeals decisions requiring further explanation for Commerce's apparently inconsistent application of the antidumping law in initial dumping investigations and subsequent administrative reviews, the court granted Commerce's request for a voluntary remand of this issue. Id. at n. 17 (citing Dongbu Steel Co. v. United States, 635 F.3d 1363, 1372–73 (Fed.Cir.2011); JTEKT Corp. v. United States, 642 F.3d 1378, 1384 (Fed.Cir.2011)).

In its Remand Results, Commerce has provided additional explanation for its determinationnot to aggregate the negative price margins of TPBI's non-dumped sales with the dumping margins of TPBI's dumped sales, notwithstanding the agency's approach to calculating weighted-average dumping margins in initial investigations. Remand Results at 2–13. TPBI continues to object to this determination. [TPBI]'s Comments on the Results of Redetermination Pursuant to Ct. Remand, ECF No. 98 (“TPBI's Br.”) at 1–10. As explained below, however, Commerce has provided an explanation that comports with a reasonable reading of its statutory authority. Accordingly, the Remand Results will be affirmed on this issue.

A. Background

Respondents in antidumping proceedings have long sought—and, until recently, Commerce has long declined—to offset the dumping margins of sales at less than fair value (“LTFV”) with the negative normal-to-export price margins of non-dumped sales. See, e.g., Serampore Indus. Pvt. Ltd. v. U.S. Dep't of Commerce, 11 CIT 866, 873–74, 675 F.Supp. 1354, 1360–61 (1987) (addressing this claim and holding that “[a] plain reading of the [antidumping] statute discloses no provision for Commerce to offset sales made at LTFV with sales made at fair value” and that Commerce's interpretation of the statute “to prevent a foreign producer from masking its dumping with more profitable sales” was reasonable). Rather than offset the dumping margins of sales made at LTFV with the negative normal-to-export price margins of non-dumped sales, Commerce historically has interpreted “dumping” to mean that any sale not made at LTFV was not “dumped” and therefore had a “dumping margin” of zero. See id.; 19 U.S.C. §§ 1677(34) (defining “dumped” and “dumping” to “refer to the sale or likely sale of goods at less than fair value”), 1677(35)(A) (defining “dumping margin” as “the amount by which the normal value exceeds the export price or constructed export price of the subject merchandise”). Commerce's policy of not permitting the dumping margins of dumped sales to be offset or negated by the negative normal-to-export price differences of non-dumped sales has accordingly come to be known, perhaps misleadingly, as zeroing.⁴

Responding to certain recommendations made by the WTO's Dispute Settlement Body,⁵ however, Commerce determined that, in certain contexts, it will begin to aggregate all normal-to-export price comparisons, including the results of price comparisons for sales made at prices above normal value. ⁶ Due to its expressly limited applicability, one effect of this modification was that Commerce was now aggregating negative normal-to-export price comparisons in some contexts but not others. See Dongbu, 635 F.3d at 1365. In Dongbu and JTEKT, the Court of Appeals held that the reasonableness of interpreting the antidumping statute to allow for such distinctions required more explanation than Commerce had then provided. Dongbu, 635 F.3d at 1373;JTEKT, 642 F.3d at 1384–85.

B. Analysis

In a number of decisions post-dating Dongbu and JTEKT, this Court has affirmed Commerce's decision to include both positive and negative normal-to-export price differences when calculating weighted average dumping margins in initialdumping investigations but not when doing so in administrative reviews.⁷ These holdings addressed Commerce's explanation regarding the inherent differences between the nature and goals of initial investigations and subsequent administrative reviews.⁸ Here, Commerce clarifies that the reasonableness of its current practice is additionally supported by the distinction between the various comparison methods that Commerce may employ when comparing normal values and export prices to calculate dumping margins. See Remand Results at 10–13.

The antidumping statute contemplates three distinct methods that Commerce may employ when comparing normal values and export prices to calculate dumping margins. See19 U.S.C. § 1677f–1(d). Commerce may 1) compare the weighted average of the normal values found during the relevant time period with the weighted average of contemporaneous export prices (the “average-to-average” comparison method), id. at § 1677f–1(d)(1)(A)(i); 2) compare the normal values of individual transactions to the export prices of individual transactions (the “transaction-to-transaction” comparison method), id. at § 1677f–1(d)(1)(A)(ii); or 3) compare the weighted average of the normal values to the export prices of individual transactions (the “average-to-transaction” comparison method), id. at §§ 1677f–1(d)(1)(B), 1677f–1 (d)(2). Commerce's recent policy modification is limited to the average-to-average comparison method.⁹

Commerce explains that when using the average-to-average comparison method, Commerce “does not determine dumping on the basis of individual, transaction-specific, U.S. prices, but rather makes the determination ‘on average’ for the averaging group [groupings are made by model and level of trade] within which higher prices and lower prices offset each other.” Remand Results at 11. Commerce then “aggregates the comparison results from each of the averaging groups to determine the aggregate weighted-average dumping margin for a specific producer or exporter[,] [and] ... by...