Daewoo Electronics Co., Ltd. v. International Union of Electronic Elec., Technical, Salaried and Mach. Workers, AFL-CIO

• Decision Date: 30 September 1993
• Docket Number: AFL-CI,I,P,Nos. 92-1558,s. 92-1558
• Citation: 6 F.3d 1511
• Parties: DAEWOO ELECTRONICS CO., LTD. and Daewoo Electronics Corp. of America, Inc., and Samsung Electronics Co., Ltd. and Samsung Electronics America, Inc., and Goldstar Co., Ltd. and Goldstar Electronics International, Inc., Plaintiffs-Appellants, v. INTERNATIONAL UNION OF ELECTRONIC, ELECTRICAL, TECHNICAL, SALARIED AND MACHINE WORKERS,nternational Brotherhood of Electrical Workers of America, Independent Radionic Workers of America and Industrial Union Department,laintiffs-Appellants, v. ZENITH ELECTRONICS CORP., Plaintiff-Appellee, v. The UNITED STATES, Defendant-Appellant. to 92-1562.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1511

6 F.3d 1511

DAEWOO ELECTRONICS CO., LTD. and Daewoo Electronics Corp. of

America, Inc., and Samsung Electronics Co., Ltd. and Samsung

Electronics America, Inc., and Goldstar Co., Ltd. and Goldstar Electronics International, Inc., Plaintiffs-Appellants, v. INTERNATIONAL UNION OF ELECTRONIC, ELECTRICAL, TECHNICAL,

SALARIED AND MACHINE WORKERS, AFL-CIO, International

Brotherhood of Electrical Workers of America, Independent

Radionic Workers of America and Industrial Union Department, AFL-CIO, Plaintiffs-Appellants, v. ZENITH ELECTRONICS CORP., Plaintiff-Appellee, v. The UNITED STATES, Defendant-Appellant.

Nos. 92-1558 to 92-1562.

United States Court of Appeals Federal Circuit.

Sept. 30, 1993.

Rehearing and Suggestion for Rehearing

In Banc Denied Nov. 18, 1993.

David A. Gantz, Reid & Priest, Washington, DC, argued, for plaintiffs-appellants, Daewoo Electronics Co., Ltd. and Daewoo Electronics Corp. of America, Inc. With him on the brief, were Elizabeth H. Lefebvre and Jennifer Karas.

Warren E. Connelly, Akin, Gump, Hauer & Feld, L.L.P., Washington, DC, argued, for plaintiffs-appellants, Samsung Electronics Co., Ltd. and Samsung Electronics America, Inc. With him on the brief, was P. Bryan Christy, III.

Michael P. House, Donovan, Leisure, Rogovin & Schiller, Washington, DC, argued, for plaintiffs-appellants, Goldstar Co., Ltd. and Goldstar Electronics International, Inc. With him on the brief, were R. Will Planert and John R. Brautigam.

Paul D. Cullen, Collier, Shannon, Rill & Scott, Washington, DC, argued, for plaintiffs-appellants, International Union of Electronic, Elec., Technical, Salaried and Machine Workers, AFL-CIO, Intern. Brotherhood of Elec. Workers of America, Independent Radionic Workers of America and Indus. Union Dept., AFL-CIO. With him on the brief, were Jeffrey S. Beckington, David C. Smith, Jr. and Stephen A. Jones.

John D. McInerney, Deputy Chief Counsel for Import Admin., argued, for defendant-appellant, the U.S. With him on the brief, was Robert E. Nielsen, Sr. Atty., Office of the Chief Counsel for Import Admin. Also on the brief, were Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director and Velta A. Melnbrencis, Asst. Director, Commercial Litigation Branch, Dept. of Justice, Washington, DC.

Frederick L. Ikenson, Frederick L. Ikenson, P.C., Washington, DC, argued, for plaintiff-appellee, Zenith Electronics Corp. With him on the brief, was J. Erick Nissley.

Noel Hemmendinger and William J. Clinton, Wilkie Farr & Gallagher, Washington, DC, were on the brief, for Amicus Curiae, American Ass'n of Exporters and Importers.

Bruce Mark Mitchell and David L. Simon, Grunfeld, Desiderio, Lebowitz & Silverman, Washington, DC, were on the brief, for amicus curiae, Emerson Radio Corp.

Before NIES, Chief Judge, RICH, Circuit Judge, and SKELTON, Senior Circuit Judge.

NIES, Chief Judge.

These appeals challenge the antidumping duties imposed on color television receivers from Korea imported between October 19, 1983 and April 30, 1984. The decisions from the Court of International Trade to be reviewed are Daewoo Electronics Co. v. United States, 712 F.Supp. 931 (Ct. Int'l Trade 1989) ("Daewoo I "); Daewoo Electronics Co. v. United States, 760 F.Supp. 200 (Ct. Int'l Trade 1991) ("Daewoo II "); and Daewoo Electronics Co. v. United States, 794 F.Supp. 389 (Ct. Int'l Trade 1992) ("Daewoo III "). We affirm in part, reverse in part, vacate the judgment and remand for entry of a judgment in accordance with this decision.

I. Background

Appellants Daewoo Electronics Co. Ltd., Samsung Electronics Co., Ltd., and Goldstar Co., Ltd. (collectively "the Korean companies"), are leading importers of color television receivers into the United States from Korea. Petitions by the International Union of Electronic, Electrical, Technical, Salaried, and Machine Workers, AFL-CIO, the International Brotherhood of Electrical Workers of America, and the Independent Radionic Workers of America and Industrial Union Department, AFL-CIO (collectively "the Unions") and by Zenith Electronics Corp., resulted in an antidumping investigation into the Korean television receivers imported between October 19, 1983 and April 30, 1984. On December 28, 1984, the International Trade Administration of the Department of Commerce ("ITA") published the final determinations of its first administrative review, concluding that dumping margins of 14.88 percent, 12.23 percent and 7.47 percent existed on U.S. sales of Daewoo, Samsung, and Goldstar products respectively. ¹ Color Television Receivers from Korea; Final Results of Administrative Review of Antidumping Duty Order, 49 Fed.Reg. 50420, 50431 (1984). As a result of rulings of the Court of International Trade in the successive appeals and remands, the dumping duties were revised upward to 48.18 percent, 30.36 percent, and 33.95 percent for Daewoo, Samsung, and Goldstar, respectively which the trial court approved.

The Korean companies, the Unions, and the United States have each appealed from the judgment of the Court of International Trade raising numerous issues. We address the propriety of the following holdings in the Daewoo opinions: that 19 U.S.C. Sec. 1677a(d)(1)(C) of the antidumping law requires that ITA make an econometric analysis of tax incidence in foreign markets (Daewoo I ); that the ex factory price must be used for tax adjustments of the U.S. price (Daewoo II ); and that under 19 U.S.C. Sec. 1673f(a) a bond deposit may not cap the amount of liability for antidumping duties (Daewoo III ). The identical issue of the multiplier effect of 19 U.S.C. Sec. 1677a(d)(1)(C) raised in the Korean companies' appeal was rejected in the recently decided appeal, Zenith Electronics Corp. v. United States, 988 F.2d 1573, 1581 (Fed.Cir.1993), which is controlling here. In addition, our disposition of the tax incidence issue moots two other issues: first, the Korean Companies' appeal from the holding of Daewoo II, 760 F.Supp. at 204-07, rejecting the ITA's finding of full tax pass-through in the Korean receiver market; and second, the Unions' challenge of the ITA's use of best information available pursuant to 19 U.S.C. Sec. 1677e(c) to adjust the USP. Daewoo III, 794 F.Supp. at 391-92.

II. Adjustment for Taxes Levied On Home Country Sales Only

The antidumping statute, 19 U.S.C. Sec. 1677a(d)(1)(C) (1988), recognizes that many countries assess excise or commodity taxes upon goods sold for domestic consumption, but forgive such taxes on export sales. To prevent the creation of dumping margins merely because the country of exportation taxes home market sales but not exports, ² the antidumping law provides an offsetting adjustment to the sales price of the goods in the United States (the "U.S. price" or "USP"). Section 1677a(d)(1)(C) mandates that:

The purchase price and the exporter's sales price shall be adjusted by being ... increased by ... the amount of the taxes imposed in the country of exportation directly upon the exported merchandise or components thereof, which have been rebated, or which have not been collected, by reason of the exportation of the merchandise to the United States, but only to the extent that such taxes are added to or included in the price of such or similar merchandise when sold in the country of exportation.

In its original determination, the ITA interpreted section 1677a(d)(1)(C) as allowing the addition to the U.S. price of the full amount of the Korean taxes on television sets forgiven upon export. In this case the Korean taxing authority imposed a special excise tax, a defense tax and a value added tax that resulted in an aggregate commodity tax of 50.04 percent of the price of the television receivers. None of these taxes were assessed against the receivers exported to the United States. It is undisputed that the taxes had been added to Korean home market prices and had actually been paid by the Korean companies. The ITA concluded that these facts met the requirements of section 1677a(d)(1)(C) for adding the full amount of the forgiven commodity taxes to the USP. In ITA's view, the statute permits what it terms an "accounting" method of determining that taxes were added to or included in the price of merchandise sold in the home country.

In the first appeal of this determination, Daewoo I, 712 F.Supp. at 931, the trial court rejected the ITA's allowance of the full amount of these Korean taxes. ³ The trial court held that the final clause of section 1677a(d)(1)(C), allowing augmentation of USP "only to the extent that such taxes are added to or included in the price of such or similar merchandise when sold in the country of exportation," compelled the ITA to analyze the consumer tax incidence of the commodity taxes. Thus, instead of employing an accounting approach that allows USP to be increased by the full amount of a tax levied and paid on home market sales, the court reasoned that the ITA must undertake an econometric study of the Korean market to determine the tax incidence, or "pass through," of the commodity taxes upon consumers. ⁴ According to the court, only that amount of the commodity tax that consumers actually bore in an economic sense should be added to USP. In so doing, the court relied on its earlier decision in Zenith Electronics Corp. v. United States, 633 F.Supp. 1382 (Ct. Int'l Trade 1986), appeal dismissed as moot, 875 F.2d 291 (Fed.Cir.1989). Unimpressed by the ITA's reasoning that its accounting methodology was a long-standing agency practice, that an econometric analysis would place an impractical and extremely onerous burden on the agency and importers in almost every investigation, and that such an approach is imprecise and would artificially inflate dumping margins, ⁵ the court remanded to the ITA holding that its methodology was not in accordance with the law.

On remand, the ITA commissioned Dr. Paul Wachtel, an economist affiliated with New York University, to undertake the mandated tax incidence...