Papierfabrik August Koehler AG v. United States

• Decision Date: 25 March 2014
• Docket Number: Court No. 11–00147.,Slip Op. 14–31.
• Citation: 971 F.Supp.2d 1246
• Parties: PAPIERFABRIK AUGUST KOEHLER AG, Plaintiff, v. UNITED STATES, Defendant, and Appleton Papers Inc., Defendant–Intervenor.
• Court: U.S. Court of International Trade

971 F.Supp.2d 1246

PAPIERFABRIK AUGUST KOEHLER AG, Plaintiff,

v. UNITED STATES, Defendant,andAppleton Papers Inc., Defendant–Intervenor.

Slip Op. 14–31. Court No. 11–00147.

United States Court of International Trade.

March 25, 2014.

F. Amanda DeBusk, Matthew R. Nicely, Eric S. Parnes, and Robert L. LaFrankie, Hughes, Hubbard & Reed, LLP, of Washington, DC, for plaintiff Papierfabrik August Koehler SE.

Joshua E. Kurland, Trial Attorney, Commercial Litigation Branch, U.S. Department of Justice, of Washington, DC, argued for defendant United States. With him on the brief were Stuart F. Delery, Assistant Attorney General, Jeanne E. Davidson, Director, and Reginald T. Blades, Assistant Director. Of counsel on the brief was Jessica M. Forton, Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, DC.

Gilbert B. Kaplan, King & Spalding LLP, of Washington, DC, argued for defendant-intervenor. With him on the brief was Daniel L. Schneiderman and Joseph W. Dorn.

OPINION AND ORDER

STANCEU, Judge:

Plaintiff Papierfabrik August Koehler SE contests the final determination (“Final Results”) issued by the International Trade Administration, U.S. Department of Commerce (“Commerce” or the “Department”) to conclude the first administrative review of an antidumping duty order on certain lightweight thermal paper (the “subject merchandise”) from the Federal Republic of Germany (“Germany”). See Lightweight Thermal Paper From Germany: Notice of Final Results of the First Antidumping Duty Admin. Review, 76 Fed. Reg. 22,078, 22,079 (Apr. 20, 2011) (“ Final Results ”). The first administrative review period covers entries of subject merchandise made from November 20, 2008 through October 31, 2009 (“period of review” or “POR”). Id.

Before the court is plaintiff's USCIT Rule 56.2 motion for judgment on the agency record, Pls.' Rule 56.2 Mot. for J. on the Agency R. (Nov. 15, 2011), ECF No. 26 (“Pls.' 56.2 Mot.”), which both defendant United States and defendant-intervenor Appvion, Inc. (“Appvion”) ¹ oppose, Def.'s Mem. in Opp'n to Pls.' Rule 56.2 Mot. for J. upon the Agency R. (Mar. 6, 2012), ECF No. 39 (“Def.'s Opp'n”); Resp. in Opp'n to Pls.' Rule 56.2 Mot. for J. on the Agency R. (Mar. 7, 2012), ECF No. 42 (“Def.-intervenor's Opp'n”).

Plaintiff brings two claims. First, plaintiff claims that the Department's decision in the Final Results not to make downward adjustments in Koehler's home market sales prices to account for certain rebates made on a monthly basis is not supported by substantial evidence and is otherwise not in accordance with law. First Am. Compl. ¶¶ 24–25 (May 20, 2013), ECF No. 83 (“Am. Compl.”). Second, plaintiff claims that Commerce unlawfully denied Koehler an opportunity to respond to certain correspondence between U.S. Senators and Representatives and the Secretary of Commerce that was placed on the record on the last day of the agency proceeding giving rise to this action. Id. ¶¶ 22–23.

Concluding that the contested determination was contrary to law, the court remands the Final Results for further proceedings.

I. Background

Plaintiff Papierfabrik August Koehler SE (“Koehler”) is a German producer and exporter of lightweight thermal paper.² Compl. 1 (May 13, 2011), ECF No. 6. Koehler and its U.S. affiliate, Koehler America, Inc., participated as respondents in the first administrative review.³Lightweight Thermal Paper From Germany: Notice of Prelim. Results of Antidumping Duty Admin. Review, 75 Fed. Reg. 77,831, 77,831 (Dec. 14, 2010) (“ Prelim. Results ”).

In the antidumping investigation, Commerce determined a 6.5% antidumping duty margin for Koehler, the only producer/exporter investigated. Lightweight Thermal Paper from Germany: Notice of Final Determination of Sales at Less Than Fair Value, 73 Fed. Reg. 57,326, 57,328 (Oct. 2, 2008). Commerce issued an antidumping duty order on certain lightweight thermal paper from Germany (the “Order”) on November 24, 2008.⁴Antidumping Duty Orders: Lightweight Thermal Paper from Germany & the People's Republic of China, 73 Fed. Reg. 70,959, 70,959–60 (Nov. 24, 2008). In response to requests by Koehler and Appvion, the petitioner in the antidumping investigation, Commerce initiated the first administrative review of the Order on December 23, 2009. Prelim. Results, 75 Fed. Reg. at 77,831.

During the first administrative review, Koehler, the sole respondent in that review,⁵ reported having made rebates to customers in Germany, its home market, on monthly, quarterly, and annual bases. Koehler's Supplemental Sections A–C Questionnaire Resp. 15 (Apr. 15, 2010) (Admin. R. Doc. No. 44). In the preliminary results of the review (“Preliminary Results”), Commerce, in determining the normal value of Koehler's subject merchandise according to Koehler's sales of the foreign like product in Germany, made adjustments to the home market sales prices for all of the reported rebates and preliminarily assigned Koehler a de minimis antidumping duty margin. Prelim. Results, 75 Fed. Reg. at 77,835–87.

In response to the Preliminary Results, Appvion submitted a case brief that, inter alia, raised various challenges to the Department's preliminary decision to adjust normal value according to the reported monthly rebates. Pet'rs' Case Br. 2–36 (Jan. 27, 2011) (Admin.R.Doc. No. 91). Koehler submitted a rebuttal brief responding to Koehler's comments. Koehler's Rebuttal Br. 4–37 (Feb. 4, 2011) (Admin.R.Doc. No. 96). In the Final Results, issued on April 20, 2011, Commerce continued to adjust normal value for Koehler's reported quarterly and annual rebates but excluded the reported monthly rebates from the normal value calculation and assigned Koehler a 3.77% weighted average antidumping duty margin.⁶Final Results, 76 Fed. Reg. at 22,079; Issues & Decision Mem., A–428–840, ARP 10–09, at 21 (Apr. 13, 2011) (Admin.R.Doc. No. 109, available at http:// enforcement. trade. gov/ frn/ summary/ GERMANY/ 2011– 9574– 1. pdf (last visited Mar. 18, 2014) (“ Decision Mem.”)).

Plaintiff filed a summons on May 13, 2011 and a complaint on June 3, 2011. Summons 1, ECF No. 1; Compl. 1. With leave of the court, Order (May 20, 2013), ECF No. 82, plaintiff filed an amended complaint on May, 20, 2013,⁷ Am. Compl. 1. Plaintiff moved for judgment on the agency record on November 15, 2011, and defendant and defendant-intervenor each filed a brief in opposition on March 6, 2012 and March 7, 2012, respectively. Pls.' 56.2 Mot. 1; Br. in Supp. of Pls.' Mot. for J. on the Agency R. Under Rule 56.2 at 1 (Nov. 16, 2011), ECF No. 27 (“Pls.' 56.2 Mem.”); Def.'s Opp'n 1; Def.-intervenor's Opp'n 1. Plaintiff filed its reply to defendant and defendant-intervenor, Pls.' Reply Br., ECF No. 51 (Apr. 23, 2012) (“Pls.' Reply Br.”), and requested oral argument, Pls.' Unopposed Mot. for Oral Arg. & Req. for a Closed Hearing, (Apr. 27, 2012), ECF No. 55, which the court held on October 18, 2012, ECF No. 63. ⁸

At the oral argument, plaintiff requested leave to file additional briefing related to Christopher v. SmithKline Beecham Corp., 567 U.S. ––––, 132 S.Ct. 2156, 183 L.Ed.2d 153 (2012), a decision the U.S. Supreme Court issued after the parties filed all briefs in this action. Oral Tr. 143–47. Plaintiff argued that the decision could have a bearing on the outcome of this action if the court determines that the Department's regulations at issue in this matter are ambiguous. Oral Tr. 144–45. The court, upon the agreement of all parties, permitted supplemental briefing on this limited issue. Order, (Sept. 10, 2013), ECF No. 87. See also Def.-Intervenor's Supplemental Br. (Oct. 11, 2013), ECF No. 92 (“Def.-intervenor's Supplemental Br.”); Def.'s Supplemental Br. Regarding Deference Accorded to Commerce's Interpretation of its Own Regulations (Nov. 18, 2013), ECF No. 100 (“Def.'s Supplemental Br.”); Pl.'s Response to Supplemental Brs. (Dec. 9, 2013), ECF No. 101 (“Pl.'s Supplemental Br.”).

II. Discussion

The court exercises jurisdiction under section 201 of the Customs Courts Act of 1980, 28 U.S.C. § 1581(c), pursuant to which the court reviews actions commenced under section 516A of the Tariff Act of 1930 (“Tariff Act”), 19 U.S.C. § 1516a, including an action contesting the final results of an administrative review that Commerce issues under section 751 of the Tariff Act, 19 U.S.C. § 1675(a).⁹ When reviewing the final results of an administrative review, the court “shall hold unlawful any determination, finding, or conclusion found ... to be unsupported by substantial evidence on the record, or otherwise not in accordance with law....” 19 U.S.C. § 1516a(b)(1)(B)(i).

Commerce determines an antidumping duty margin by comparing the normal value of the subject merchandise to the export price (or constructed export price) at which the subject merchandise is sold in the United States. 19 U.S.C. § 1673. When Commerce determines normal value based on the price at which the foreign like product is sold in the home market, Commerce must use as its starting price “the price at which the foreign like product is first sold ... for consumption in the exporting country, in the usual quantities and in the ordinary course of trade ...,” id. § 1677b(a)(1)(B)(i), and then make certain statutorily-required adjustments, id. § 1677b(a)(6), (7). The Department's regulations provide for further adjustments. In pertinent part, the Department's regulation, 19 C.F.R. § 351.401(c), provides as follows:

Use of price net of price adjustments. In calculating export price, constructed export price, and normal value (where normal value is based on price), the Secretary will use a price that is net of any price adjustment, as defined in § 351.102(b), that is reasonably attributable to the subject merchandise or the foreign like product (whichever is applicable).

19 C.F.R. § 351.401(c). “ ‘Price adjustment’ means any change in the price charged for subject merchandise or the foreign like product,...