Aramide Maatschappij VoF v. US, Slip Op. No. 95-147. Court No. 94-07-00424.

• Decision Date: 18 August 1995
• Docket Number: Slip Op. No. 95-147. Court No. 94-07-00424.
• Citation: 19 CIT 1094,901 F. Supp. 353
• Parties: ARAMIDE MAATSCHAPPIJ V.o.F. and Akzo Fibers Inc., Plaintiffs, v. UNITED STATES, Defendant, and E.I. Du Pont de Nemours & Company, Inc., Defendant-Intervenor.
• Court: U.S. Court of International Trade

901 F. Supp. 353

19 CIT 1094

ARAMIDE MAATSCHAPPIJ V.o.F. and Akzo Fibers Inc., Plaintiffs, v. UNITED STATES, Defendant and E.I. Du Pont de Nemours & Company, Inc., Defendant-Intervenor.

Slip Op. No. 95-147. Court No. 94-07-00424.

United States Court of International Trade.

August 18, 1995.

Adduci, Mastriani, Schaumberg, Meeks & Schill, L.L.P. (Tom M. Schaumberg, Barbara A. Murphy and Gregory C. Anthes), for plaintiffs.

Frank W. Hunger, Assistant Attorney General, David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Harold D. Lester, Jr.), Boguslawa B. Thoemmes, Attorney Advisor, Office of the Chief Counsel for Import Administration, United States Department of Commerce, of counsel, for defendant.

Wilmer, Cutler & Pickering (John D. Greenwald and Ronald I. Meltzer) for defendant-intervenor.

OPINION

RESTANI, Judge:

This matter is before the court on a motion for judgment upon the agency record pursuant to USCIT Rule 56.2. The motion has been brought by Aramid Products V.o.F. (formerly Aramide Maatschappij V.o.F.) and Akzo Nobel Fibers Inc. (formerly Akzo Fibers Inc.) (collectively "Aramide"), challenging the determination of the International Trade Administration of the United States Department of Commerce ("Commerce") in Aramid Fiber Formed of Poly-Phenylene sic Terephthalamide from the Netherlands, 59 Fed.Reg. 23,684 (Dep't Comm.1994) (final determ. of LTFV sales) ("Final Det."), and in Aramid Fiber Formed of Poly-Phenylene sic Terephthalamide from the Netherlands, 59 Fed.Reg. 32,678 (Dep't Comm.1994) (antidumping duty order and amended final determ. of LTFV sales) ("Amended Final Det.").

Background

On July 2, 1993, E.I. Du Pont de Nemours & Company, Inc. ("petitioner" or "Du Pont") filed a petition with Commerce, alleging that an industry in the United States was materially injured or threatened with material injury by reason of less than fair value ("LTFV") imports of poly para-phenylene terephthalamide aramid fiber ("PPD-T aramid fiber") from the Netherlands. Du Pont is the sole U.S. producer of PPD-T aramid fiber, which is a high-performance synthetic fiber with special characteristics that include high strength, resistance to deformation from stretch, high thermal stability, fire resistance, and chemical resistance. See Aramid Fiber Formed of Poly Para-Phenylene Terephthalamide from the Netherlands, USITC Pub. 2783, Inv. No. 731-TA-652, at I-6 (June 1994) (affirmative final determ.). PPD-T aramid fiber is available in a variety of forms, such as filament yarn, staple fiber, pulp, floc, chopped fiber, and nonwovens. Final Det. at 23,685.

Commerce determined that the product under investigation consisted of a "single class or kind of merchandise":

PPD-T aramid in the form of filament yarn (including single and corded), staple fiber, pulp (wet or dry), spun-laced and spun-based nonwovens, chopped fiber and floc. Tire cord fabric is excluded from the class or kind of merchandise under investigation.

Id. For price comparison purposes, Commerce found three "such or similar" product categories: yarn, staple fiber and pulp. Id.; see 19 U.S.C. § 1677(16) (1988) (definition of such or similar merchandise) (current version at 19 U.S.C.A. § 1677(16) (West Supp.1995)).

Subsequent to its antidumping duty investigation for the period January 1 through June 30, 1993, Commerce issued its final determination on May 6, 1994, concluding that PPD-T aramid fiber imports from the Netherlands were being, or were likely to be, sold in the United States at LTFV. Final Det. at 23,684. Aramide, the sole respondent involved in the investigation, challenges certain portions of Commerce's determination. Defendant and petitioner oppose Aramide's motion.

Standard of Review

In reviewing final determinations in antidumping duty investigations, the court will hold unlawful those determinations by Commerce 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) (1988) (current version at 19 U.S.C.A. § 1516a(b)(1)(B)(i) (West Supp. 1995)).

Discussion

I. Profit Calculation for Constructed Value

For the three "such or similar categories" identified in the final determination, Commerce found that no viable home market sales existed for purposes of price comparisons. Final Det. at 23,685. Thus, for certain products within a such or similar category, Commerce based foreign market value ("FMV") upon third-country sales of the subject merchandise: Germany for yarn and staple fiber sales, and Japan for pulp sales.¹Id.; see also 19 U.S.C. § 1677b(a)(1)(B) (1988) (FMV may be based upon third-country sales) (current version at 19 U.S.C.A. § 1677b(a)(1)(B)(ii), (C) (West Supp.1995)). Where sales of certain products were not made above the cost of production ("COP"), Commerce based FMV on constructed value (or "CV"). Third country data was also used for constructed value. See, e.g., Certain Valves and Connections, of Brass, for Use in Fire Protection Systems from Italy, 55 Fed. Reg. 50,342, 50,343 (Dep't Comm.1990) (prelim. results of admin. review) (indicating that Commerce bases selling expenses and profit upon third-country data where no home market data is usable).

In making its constructed value calculation, Commerce is required to include

an amount for ... profit equal to that usually reflected in sales of merchandise of the same general class or kind as the merchandise under consideration which are made by producers in the country of exportation, in the usual commercial quantities and in the ordinary course of trade.

19 U.S.C. § 1677b(e)(1)(B) (1988) (current version at 19 U.S.C.A. § 1677b(e)(2) (West Supp.1995)). The profit amount included in constructed value may not be less than the statutory minimum of eight percent of the sum of cost of materials and general expenses. Id. § 1677b(e)(1)(B)(ii). Here, Commerce calculated Aramide's profit on a market-specific basis, using "one average profit for pulp sold in Japan and another for yarn and staple sold in Germany." Final Det. at 23,690. As a result, actual profit was used for Germany, and the statutory minimum of eight percent was used for Japan. Id. at 23,686.

Aramide contends that Commerce's calculation of profit on a market-specific basis is contrary to the statute, in that the statute requires the profit calculation to be based upon the "same general class or kind" of merchandise. Aramide asserts that a single weighted-average profit percentage derived from all of Aramide's third-country sales should have been used.

The court agrees that, in general, the statute permits an overall profit estimation based upon the "class or kind" of merchandise. 19 U.S.C. § 1677b(e)(1)(B). The issue is whether a single weighted-average profit percentage is required in all cases. As is now axiomatic, considerable weight is to be accorded Commerce's construction of a statutory scheme it is entrusted to administer. See PPG Indus., Inc. v. United States, 928 F.2d 1568, 1571-72 (Fed.Cir.1991) ("Courts must defer to an agency's interpretation of the statute an agency has been charged with administering provided its interpretation is a reasonable one."). Accordingly, the court must determine whether Commerce's market-specific approach is a reasonable and permissible application of the statute.

First, as indicated, Commerce is required to include in constructed value "an amount for ... profit equal to that usually reflected in sales of merchandise of the same general class or kind." 19 U.S.C. § 1677b(e)(1)(B) (emphasis added). Here, constructed value was based upon data for the subject merchandise in more than one third-country market. In this particular circumstance, Commerce reasoned that

it is appropriate to calculate all selling expenses and profit specific to the market in which the products in question were sold rather than average profit across two or more countries.

Final Det. at 23,690. The statute employs broad language and is drafted in terms which permit some adjustment to achieve accuracy in anomalous cases. In this atypical situation of multiple markets, Commerce determined that an accurate profit calculation would be derived by using market-specific data as opposed to data which obscured the link to sales in a particular market. Thus, two separate profit percentages were generated for the class or kind of merchandise.²

Second, assuming, arguendo, that a single profit percentage is required, there are a number of ways to derive a single profit figure for a class or kind of merchandise. Nothing in the statute requires a weighted-average profit figure derived from individual sales. In any case, the statute refers to a usual amount for the general class of merchandise. It does not say a single percentage for the class, and it assuredly does not say "a single weighted-average percentage." Thus, plaintiffs' challenge fails as to the profit calculation.

Aramide also contests Commerce's exclusion in the final determination of sales of second-quality merchandise and sales subject to German value-added tax ("VAT") from the profit calculation included in constructed value. Commerce, however, excluded these sales from the FMV calculation in the preliminary determination, reasoning that Aramide had not explained why U.S. sales of first-quality merchandise were appropriate for comparison to second-quality merchandise. Aramid Fiber Formed of Poly-Phenylene sic Terephthalamide from the Netherlands, 58 Fed.Reg. 65,699, 65,700 (Dep't Comm.1993) (prelim. determ.). Aramide raised no challenge to Commerce's calculation in this regard until after issuance of the final determination. Further, defendant indicates that the programming language providing for exclusion of these sales in the preliminary determination, and later disclosed to Aramide, did not change from the final determination. Def.'s Mem. in Opp'n to Pls.' Mot.J. Upon Agency R. at 30-31. As Aramide was on...