Mitsubishi Heavy Industries, Ltd. v. U.S., Slip Op. 00-45.

CourtU.S. Court of International Trade
Citation97 F.Supp.2d 1203
Docket NumberSlip Op. 00-45.,Court No. 96-10-02292.
PartiesMITSUBISHI HEAVY INDUSTRIES, LTD., and Tokyo Kikai Seisakusho, Ltd., Plaintiffs, v. UNITED STATES, Defendant, and Goss Graphics, Inc., Defendant-Intervenor.
Decision Date26 April 2000

Page 1203

97 F.Supp.2d 1203
MITSUBISHI HEAVY INDUSTRIES, LTD.,
and
Tokyo Kikai Seisakusho, Ltd., Plaintiffs,
v.
UNITED STATES, Defendant,
and
Goss Graphics, Inc., Defendant-Intervenor.
Slip Op. 00-45.
Court No. 96-10-02292.
United States Court of International Trade.
April 26, 2000.

Steptoe & Johnson LLP (Anthony J. LaRocca, Richard O. Cunningham, Eric C. Emerson, Gregory S. McCue) for Plaintiff Mitsubishi Heavy Industries, Ltd.; Perkins Coie LLP (Yoshihiro Saito, Mark T. Wadsen), for Plaintiff Tokyo Kikai Seisakusho, Ltd.

David W. Ogden, Acting Assistant Attorney General, David M. Cohen, Director, Commercial Litigation Branch, Velta A. Melnbrencis, Assistant Director, Commercial Litigation Branch, James H. Holl III, Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice; Robert J. Heilferty, Senior Attorney, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, for Defendants.

Wiley, Rein & Fielding (Charles Owen Verrill, Jr., Alan H. Price, John R. Shane, Timothy C. Brightbill), for Defendant-Intervenor.

Page 1204

OPINION

POGUE, Judge.


Presently before the Court is the U.S. Department of Commerce's ("Commerce") second remand determination ("Second Remand Determ.") of its antidumping investigation of large newspaper printing presses ("LNPPs") from Japan. The matter first arose when Plaintiffs Mitsubishi Heavy Industries, Ltd. ("MHI") and Tokyo Kikai Seisakusho, Ltd. ("TKS"), respondents in the underlying investigation, and Defendant-Intervenor Goss Graphic Systems, Inc. ("Goss"), petitioner in the underlying investigation, filed separate motions challenging various aspects of Commerce's determination in Large Newspaper Printing Presses and Components Thereof, Whether Assembled or Unassembled, From Japan, 61 Fed.Reg. 38,139 (Dep't Commerce, July 23, 1996) (final determ.) ("Japan Final"), amended by, 61 Fed.Reg. 46,621 (Dep't Commerce, Sept. 4, 1996) (antidumping duty order and amend. to final determ.).1 The motions were consolidated.

On June 23, 1998, this Court remanded certain aspects of Commerce's determination in Japan Final. See Mitsubishi Heavy Industries, Inc. v. U.S., 22 CIT ___, 15 F.Supp.2d 807 (1998) ("Mitsubishi I"). On December 21, 1998, Commerce issued its first remand determination ("First Remand Determ."). Because Commerce did not adequately explain its foreign like product determination on remand, the Court again remanded this issue to Commerce for further explanation or reconsideration. See Mitsubishi Heavy Indus., Ltd. v. United States, 23 CIT ___, ___, 54 F.Supp.2d 1183, 1197-98 (1999) ("Mitsubishi II"). Commerce issued its second remand determination on August 23, 1999.

Standard of Review

The Court will uphold a Commerce determination in an antidumping investigation unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance with law[.]" Section 516A(b)(1)(B)(i) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(b)(1)(B)(i)(1994).

Discussion

In making the dumping determination at issue here, Commerce based normal value on constructed value.2 See Japan Final at

Page 1205

38,146. Profit is a component of constructed value. See 19 U.S.C. § 1677b(e)(2). The statute prescribes four different methods for calculating constructed value profit. See id. In Mitsubishi I, "Commerce relied on 19 U.S.C. § 1677b(e)(2)(A), which states that [constructed value] profit is to be based upon `the actual amounts incurred and realized by the specific exporter or producer ... in connection with the production and sale of a foreign like product ....'" 22 CIT at ___, 15 F.Supp.2d at 828 (quoting 1677b(e)(2)(A)) (emphasis added).3

TKS argued that Commerce should not have relied on § 1677b(e)(2)(A) because the findings that led Commerce to rely on constructed value rather than home-market prices in calculating normal value constituted evidence that no foreign like product existed in the home market. See Mitsubishi I, 22 CIT at ___, 15 F.Supp.2d at 828-29. Because Commerce did not explain which of the three statutory foreign like product definitions it relied upon in classifying LNPPs sold in the home market as foreign like product, the Court remanded this issue for Commerce's reconsideration. See id. at ___, 15 F.Supp.2d at 829.

In its first remand determination, Commerce explained that it had relied upon the definition of foreign like product at § 1677(16)(C). See First Remand Determ. at 17. Commerce did not, however, explain the factual basis for its determination that the LNPPs sold in Japan and the United States could "reasonably be compared" under 19 U.S.C. § 1677(16)(C)(iii). See Mitsubishi II, 23 CIT at ___, 54 F.Supp.2d at 1197.

Instead, Commerce referred to its twenty percent "difmer" guideline.4 Under the

Page 1206

difmer guideline, where the difmer adjustment to normal value exceeds twenty percent, Commerce does not make a finding that the home-market product is reasonably comparable to the exported good, unless it can explain how the comparison is nevertheless reasonable. See Policy Bulletin 92.2; see also Ad Hoc Comm. v. United States, 19 CIT 1398, 1401, 914 F.Supp. 535, 540 (1995); NTN Bearing Corp. v. United States, 19 CIT 1221, 1238-39, 905 F.Supp. 1083, 1097-98 (1995); Koyo Seiko Co., Ltd. v. United States, 19 CIT 1085, 1091-92, 898 F.Supp. 915, 921-22 (1995), aff'd in part, rev'd in part, 92 F.3d 1162 (Fed.Cir. 1996); Certain Stainless Steel Cooking Ware From the Republic of Korea, 58 Fed.Reg. 9,560, 9,561 (Dep't Commerce, Feb. 22, 1993) (final results admin. review) ("the Department normally does not consider merchandise to be reasonably comparable if the difmer adjustment is greater than 20 percent of the cost of manufacturing the product sold in the United States"); Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France, 57 Fed.Reg. 28,360, 28,367 (Dep't Commerce, June 24, 1992) (final results admin. review).

Based on language used by Commerce in its first remand determination, original final determination, and normal value memorandum, it appeared to the Court that Commerce had found that the difmer adjustment exceeded the twenty percent guideline. See Mitsubishi II, 23 CIT at ___, 54 F.Supp.2d at 1196-97 (citing First Remand Determ. at 15; Japan Final at 38,146; and Normal Value Mem. (Conf. Doc. 73) (Nov. 9, 1995) at 16-17). In maintaining on remand that its foreign like product determination was based on 19 U.S.C. § 1677(16)(C), however, Commerce did not explain the factual basis for its decision that the Japanese and U.S. LNPPs were nevertheless reasonably comparable. See id. at ___, 54 F.Supp.2d at 1197.5 Therefore, remanding for a second time, the Court ordered Commerce to either explain how the merchandise could still "reasonably be compared" under 19 U.S.C. § 1677(16)(C)(iii) or find that no foreign like product exists. See Mitsubishi II, 23 CIT at ___, 54 F.Supp.2d at 1197-98.

Page 1207

Now, in its second remand determination, Commerce clarifies that it did not in fact conduct a difmer analysis, "notwithstanding the agency's determination that price-to-price [(i.e., normal value to U. S. price)] comparisons between sales of Japanese and U.S. LNPP were not appropriate." Second Remand Determ. at 1. Instead, Commerce determined that it would "not be practicable" to apply the difmer adjustment to normal value. Id. at 4 (citing Normal Value Mem. (Conf.Doc. 73) (Nov. 9, 1995) at 16-17).6 Commerce explains that its "reference to its `difmer' practice [in the first remand determination] was by way of background and was not intended to suggest that [Commerce] made a determination in this case that the difmer adjustment would exceed the 20 percent guideline." Id. Because Commerce did not in fact find that the difmer adjustment exceeded twenty percent, Commerce did not make a presumptive finding that the Japanese and U.S. LNPPs were not reasonably comparable.

In addition, Commerce posits in its second remand determination that the "reasonably comparable" prong of the foreign like product definition, 19 U.S.C. § 1677(16)(C)(iii), must be interpreted within the context of the statutory provision to which it is being applied. See id. at 5. In other words, Commerce suggests that a finding that the difmer adjustment to normal value would exceed twenty percent for particular merchandise does not mean that that merchandise is presumptively not reasonably comparable for the purposes of other sections of the antidumping statute requiring a "foreign like product" (such as, viability under 19 U.S.C. § 1677b(a)(1)(C) and the calculation of constructed value profit under 19 U.S.C. § 1677b(e)(2)(A)).

The Court recognizes that Congress delegated to Commerce the authority to determine whether merchandise may reasonably be compared pursuant to 19 U.S.C. § 1677(16)(C)(iii). Moreover, we recognize that Commerce's practice is to apply the twenty percent difmer guideline solely to determine whether price-to-price comparisons are feasible. See Policy Bulletin 92.2.

Nevertheless, the Court declines to decide whether it is permissible to interpret the language "may reasonably be compared" differently depending on which specific provision of the antidumping statute is implicated. First, it seems unnecessary because in this case Commerce did not in fact find that the difmer adjustment would exceed twenty percent. Second, Commerce's twenty percent difmer guideline is flexible, allowing Commerce to find that merchandise is reasonably comparable even where the difmer adjustment exceeds twenty percent. See Policy Bulletin 92.2. Finally, to so hold could lead to the awkward result of allowing Commerce to determine that a "foreign like product" exists for the purposes of one part of the antidumping statute but not for another within the same investigation. "The Court presumes that the same words used twice in the same act have the same meaning." Floral Trade Council...

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