Alhambra Foundry Co., Ltd. v. US

• Decision Date: 27 April 1988
• Docket Number: Court No. 86-04-00484.
• Citation: 685 F. Supp. 1252,12 CIT 343
• Parties: ALHAMBRA FOUNDRY CO., LTD., et al., Plaintiffs, v. UNITED STATES, Defendant, and Kejriwal Steel and Iron Works, et al., Defendant-Intervenors.
• Court: U.S. Court of International Trade

685 F. Supp. 1252

12 CIT 343

ALHAMBRA FOUNDRY CO., LTD., et al., Plaintiffs, v. UNITED STATES, Defendant and Kejriwal Steel and Iron Works, et al., Defendant-Intervenors.

Court No. 86-04-00484.

United States Court of International Trade.

April 27, 1988.

COPYRIGHT MATERIAL OMITTED

Collier, Shannon, Rill & Scott, Paul C. Rosenthal and Carol A. Mitchell, Washington, D.C., for plaintiffs.

John R. Bolton, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, U.S. Dept. of Justice, Platte B. Moring, III, U.S. Dept. of Commerce, Office of the Deputy Chief Counsel for Import Admin., Washington, D.C., Duane W. Layton, for defendant.

Kaplan, Russin & Vecchi (Dennis James, Jr.), Washington, D.C., for defendant-intervenors.

MEMORANDUM OPINION AND ORDER

DiCARLO, Judge:

The International Trade Administration of the United States Department of Commerce (Commerce) investigated four exporters of iron construction castings from India and determined that one exporter was dumping merchandise, that one exporter was not dumping, and that two other exporters were dumping at only de minimis levels. Certain Iron Construction Castings from India; Final Determination of Sales at Less Than Fair Value, 51 Fed.Reg. 9,486 (Mar. 19, 1986). The Indian exporter found to be dumping challenged that finding in Serampore Indus. v. United States, 11 CIT ___, 675 F.Supp. 1354 (1987). In this action United States producers of iron construction castings challenge Commerce's other findings of zero and de minimis dumping margins.

This Court has jurisdiction pursuant to 19 U.S.C. § 1516a(a)(2) (Supp. IV 1986) and 28 U.S.C. § 1581(c) (1982). Plaintiffs move under Rule 56.1 of the Rules of this Court for judgment on the agency record and ask the Court to remand to Commerce for certain recalculations. Commerce concedes that it erred in making some of the challenged calculations and asks the Court to remand in part. The Court affirms in part and remands in part.

Background

The Municipal Castings Fair Trade Council and fifteen domestic producers of iron construction castings filed a petition with Commerce under 19 U.S.C. § 1673a(b) (1982) and 19 C.F.R. § 353.36 (1985), alleging that iron construction castings from India are being sold in the United States at less than fair value, and that these imports are materially injuring or threatening material injury to a United States industry. Commerce selected four Indian exporters of iron construction castings to be the respondents in this action: RSI India Pvt. Ltd. (RSI), Kejriwal Iron & Steel Works (Kejriwal), Kajaria Castings Pvt. Ltd. (Kajaria), and Serampore Industries Pvt. Ltd. (Serampore). Iron Construction Castings From India: Preliminary Determination of Sales at Less Than Fair Value, 50 Fed.Reg. 43,595, 43,595-96 (Oct. 28, 1985).

In its final determination of sales at less than fair value, Commerce found a zero percent dumping margin for RSI, a 0.39 percent margin for Kejriwal, and a 0.03 percent margin for Kajaria. 51 Fed.Reg. at 9,490. In the final determination and subsequent antidumping duty order, Commerce excluded the results for Kejriwal and Kajaria as having only de minimis margins of dumping. Id.; Antidumping Duty Order; Iron Construction Castings From India, 51 Fed.Reg. 17,221 (May 9, 1986). No antidumping duties were assessed against RSI, Kejriwal or Kajaria. The domestic producers filed an action in this Court to challenge Commerce's results for RSI, Kejriwal and Kajaria. Complaint a at 4.

Scope of Review

In reviewing final Commerce determinations in antidumping duty investigations, the Court will hold unlawful those determinations 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) (1982); Luciano Pisoni Fabbrica Accessori Instrumenti Musicali v. United States, 837 F.2d 465, 467 (Fed. Cir.1988). Under the substantial evidence standard for review of agency determinations, the Court will affirm the agency's findings if they are supported in the record by such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Federal Trade Comm'n v. Indiana Fed'n of Dentists, 476 U.S. 447, 454, 106 S.Ct. 2009, 2015, 90 L.Ed.2d 445 (1986); Atlantic Sugar, Ltd. v. United States, 2 Fed.Cir. (T) 130, 136, 744 F.2d 1556, 1562 (1984). The Court must also accord substantial weight to an agency's interpretation of a statute it administers. American Lamb Co. v. United States, 4 Fed.Cir. (T) 47, 54, 785 F.2d 994, 1001 (1986). An agency's statutory interpretation need not be the only reasonable interpretation, or the one which the Court views as the most reasonable. ICC Indus. v. United States, 812 F.2d 694, 699 (Fed.Cir. 1987); Consumer Prods. Div., SCM Corp. v. Silver Reed America, 3 Fed.Cir. (T) 83, 90, 753 F.2d 1033, 1039 (1985). However, "the traditional deference courts pay to agency interpretation is not to be applied to alter the clearly expressed intent of Congress." Board of Governors of the Fed. Reserve Sys. v. Dimension Fin. Corp., 474 U.S. 361, 368, 106 S.Ct. 681, 686, 88 L.Ed.2d 691 (1986).

Discussion

The domestic producers assert that Commerce's final antidumping determination includes numerous factual and legal errors which had the effect of substantially understating the weighted-average dumping margins for the companies investigated. The domestic producers thus contend that Commerce's final determination violates the antidumping laws and regulations and is unsupported by substantial evidence on the record.

1. CONSTRUCTED FOREIGN MARKET VALUE CALCULATIONS

When Commerce is unable to determine the foreign market value (FMV) of imported merchandise under 19 U.S.C. § 1677b(a)(1)(A) (1982), Congress allows Commerce to construct a FMV to compare to the United States price (USP) and thus determine whether merchandise is being dumped in the United States. 19 U.S.C. § 1677b(a)(2) (1982). Congress has directed that Commerce construct FMV by adding the costs of materials, fabrication or processing, general expenses, profit, and the cost of containers for shipping to the United States. 19 U.S.C. § 1677b(e)(1) (1982 & Supp. III 1985); Timken Co. v. United States, 11 CIT ___, 673 F.Supp. 495, 506 (1987). The domestic producers conceded at oral argument that Commerce was correct in using a constructed FMV. However, they challenge Commerce's calculations of (a) the cost of materials, (b) general expenses, and (c) profit.

a. Cost of Materials

The record shows that in September of 1983, Indian pig iron prices increased significantly as compared to the prices for pig iron from other nations, R. 1345-46, and that the Indian government used an International Price Reimbursement Scheme (IPRS), a system of payments to offset the difference between the cost of pig iron in India and an ostensible world price for pig iron. This Court recently reviewed the IPRS program for pig iron in the context of countervailing duties. RSI (India) Pvt. Ltd. v. United States, 12 CIT ___, 687 F.Supp. 605 (1988). See also Sawhill Tubular Div. Cyclops Corp. v. United States, 11 CIT ___, 666 F.Supp. 1550, 1551 (1987) (IPRS payments for steel).

The domestic producers assert that Commerce's constructed foreign market value calculations improperly failed to exclude IPRS payments. Commerce and the Indian exporters reply that the domestic producers did not raise this issue during the administrative proceedings and thus argue that the Court should apply the doctrine of exhaustion of administrative remedies and not consider this issue.

Exhaustion of administrative remedies is an absolute requirement in the Court of International Trade only in classification actions, with a limited exception for preimportation classification rulings. See 28 U.S.C. § 2637 (1982). In all other civil actions before this Court, Congress has directed only that "the Court of International Trade shall, where appropriate, require the exhaustion of administrative remedies." 28 U.S.C. § 2637(d) (1982) (emphasis added). The judicial determination of whether to require exhaustion of remedies in non-classification actions is thus individual to the circumstances of each case, with each exercise of judicial discretion in not requiring litigants to exhaust administrative remedies characterized as "an exception to the doctrine of exhaustion." See Timken Co. v. United States, 10 CIT ___, 630 F.Supp. 1327, 1334 (1986).

The Court of International Trade has found exceptions to the exhaustion doctrine when requiring exhaustion would be futile or an insistence on a useless formality. See, e.g., Rhone Poulenc, S.A. v. United States, 7 CIT 133, 135, 583 F.Supp. 607, 610 (1984). The Court has also declined to require that plaintiffs pursue channels which could not lead to relief or pursue "manifestly inadequate" remedies. United States Cane Sugar Refiners' Ass'n v. Block, 3 CIT 196, 201, 544 F.Supp. 883, 887, aff'd, 69 CCPA 172, 683 F.2d 399 (1982); Luggage and Leather Goods Mfrs. of Am. v. United States, 7 CIT 258, 266-67, 588 F.Supp. 1413, 1420-21 (1984). The "manifestly inadequate" standard is a limited one, however, because "mere allegations of financial harm, or assertions that an agency failed to follow a statute, do not make the remedy established by Congress manifestly inadequate." National Corn Growers Ass'n v. Baker, 840 F.2d 1547, 1557 (Fed.Cir.1988) (quoting Miller & Co. v. United States, 824 F.2d 961 (Fed.Cir.1987), cert. denied, ___ U.S. ___, 108 S.Ct. 773, 98 L.Ed.2d 859 (1988)).

The Court of International Trade has also recognized an exception to the exhaustion doctrine where judicial interpretations of existing law are made after the contested administrative determination was published, and the new interpretation might have materially altered the agency result. See Timken Co. v. United States, 10 CIT ___, 630 F.Supp. 1327, 1334 (1986); Rhone Poulenc, S.A. v. United States, 7 CIT 133, 134-35, 583 F.Supp. 607, 609-10 (...