Daido Corp. v. US

• Decision Date: 13 June 1995
• Docket Number: Slip Op. No. 95-108. Court No. 93-06-00311.
• Citation: 893 F. Supp. 43
• Parties: DAIDO CORPORATION, Daido Kogyo Co., Ltd. & Enuma Chain Manufacturing Co., Ltd., Plaintiffs, v. UNITED STATES, Defendant, and American Chain Association, Defendant-Intervenor.
• Court: U.S. Court of International Trade

893 F. Supp. 43

DAIDO CORPORATION, Daido Kogyo Co., Ltd. & Enuma Chain Manufacturing Co., Ltd., Plaintiffs, v. UNITED STATES, Defendant and American Chain Association, Defendant-Intervenor.

Slip Op. No. 95-108. Court No. 93-06-00311.

United States Court of International Trade.

June 13, 1995.

Arent Fox Kintner Plotkin & Kahn, Washington, DC (Patrick F. O'Leary), for plaintiffs.

Frank W. Hunger, Asst. Atty. Gen., David M. Cohen, Director, Civ. Div., Commercial Litigation Branch, U.S. Dept. of Justice (Jeffrey M. Telep), and Patrick V. Gallagher, Jr., Attorney-Advisor, Office of the Chief Counsel for Import Admin., U.S. Dept. of Commerce, Washington, DC, of counsel, for defendant.

Covington & Burling (David R. Grace), and David E. McGiffert, Washington, DC, for defendant-intervenor.

OPINION

CARMAN, Judge:

Defendant-Intervenor American Chain Association (ACA) moves for judgment upon the agency record pursuant to Rule 56.2 of this Court. ACA contests the Department of Commerce's (Commerce) calculation of plaintiff Enuma Chain Manufacturing Company Ltd.'s final dumping margin pursuant to Commerce's April 1, 1990, through March 31, 1991, administrative review. See Roller Chain, Other Than Bicycle, From Japan, 58 Fed.Reg. 30,769 (Dep't Comm.1993) (final results) (Final Results).¹ The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1581(c) (1988).

BACKGROUND

Plaintiffs Enuma Chain Manufacturing Company, Ltd. (Enuma) and Daido Kogyo Company, Ltd. (Daido) are Japanese manufacturers of roller chain. Plaintiff Daido Corporation imports the roller chain Enuma and Daido manufacture. Defendant-Intervenor ACA is a trade association, a majority of whose members manufacture roller chain in the United States.

At ACA's request, Commerce began an administrative review of the outstanding antidumping duty order with respect to plaintiffs Enuma and Daido. See Roller Chain, Other Than Bicycle, From Japan, 57 Fed. Reg. 41,471, 41,471 (Dep't Comm.1992) (prelim. results). The period of review was April 1, 1990, through March 31, 1991. Enuma, however, submitted certain home market sales data corresponding to its June 1, 1990, through May 31, 1991, fiscal year. See Final Results, 58 Fed.Reg. at 30,770. Specifically, although Enuma did submit a home market sales listing including all sales made during the period of review, Enuma's home market price adjustments were derived from Enuma's June 1, 1990, through May 31, 1991, fiscal year data rather than from the April 1, 1990, through March 31, 1991, period of review. Id.

ACA urged Commerce to reject Enuma's home market response in its entirety and assign Enuma a margin based on the best information available (BIA) because "while Enuma's home market sales listing included all sales within the review period, the deductions and charges were based on Enuma's fiscal year and, therefore, included data from sales outside the period of review." Id. ACA also requested Commerce treat Enuma as an "uncooperative" party and apply an adverse BIA margin to the final results. Id. Furthermore, ACA argued, even if Commerce were "to use Enuma's home market response for the final results, it should assign a value of zero as BIA to all adjustments to Enuma's home market transactions for the months of April and May 1990 because the costs and adjustments associated with such transactions were not included in Enuma's calculation of its claimed adjustments." Id.

Commerce rejected ACA's contention that Commerce must reject Enuma's home market response in its entirety. Commerce explained ACA had correctly observed

that Enuma's home market price adjustments were derived from June 1, 1990-May 31, 1991, fiscal year data, rather than from April 1, 1990-March 31, 1991, review period data, but this does not justify rejection of Enuma's home market response. Enuma's fiscal year differs from the administrative review period by only two months, and all of Enuma's adjustments are calculated using fiscal data allocated to all sales. The adjustments are not specific to sales, models, or even months. The deductions in question are constant costs that generally vary little over time. Given our knowledge of the roller chain industry, we have no evidence from which to conclude that basing the price adjustments in question on fiscal year data rather than review period data would significantly affect the adjustments. In addition, ACA has provided no evidence, and we discovered no such evidence during verification, to invalidate this conclusion.... We have followed this approach in the past.

Id. (citation omitted). Accordingly, in its calculation of Enuma's margin, Commerce used the fiscal year home market price adjustment data Enuma submitted "as reasonable home market price adjustments." Id.

Commerce rejected ACA's other contentions relating to BIA as well. First, Enuma was not "uncooperative," Commerce explained, because Enuma responded to Commerce's questionnaire and all supplemental requests for information. Id. Commerce found Enuma's responses were not "substantially inadequate" as ACA alleged, and did not "significantly impede" Commerce's review. Id. Second, Commerce disagreed with ACA's contention that Commerce should assign a value of zero as BIA to all adjustments to Enuma's home market transactions in April and May 1990 because the costs and adjustments associated with those transactions were not included in Enuma's calculation of its claimed adjustments. Id. Commerce explained that "although Enuma's home market price adjustments are derived from fiscal year data ... Enuma has satisfied its burden of proof and is entitled to the adjustments" based on Commerce's analysis and verification of the information submitted. Id. at 30,771.

CONTENTIONS OF THE PARTIES

A. American Chain Association

ACA contends the final dumping margin calculated for Enuma is not supported by substantial evidence on the record and is otherwise not in accordance with law. In so doing, ACA presents three major arguments. First, ACA argues Commerce relied on flawed and incomplete data by using Enuma's substituted home market cost data from outside the period of review. Commerce's purported explanation for use of the substituted data, ACA maintains, "is premised upon the assumption that Enuma's home market costs and charges varied `little over time.'" (ACA's Br. in Supp. of Mot. for J. on Agency R. (ACA's Br.) at 20 (quoting Final Results, 58 Fed.Reg. at 30,770).) ACA asserts that Commerce, however, "had no information whatsoever as to cost levels in April and May 1990." (Id. (emphasis omitted).) Furthermore, ACA complains, Commerce's knowledge of the roller chain industry provides no justification for use of Enuma's substituted data because "prices, charges, and other costs vary from producer-to-producer. This is precisely why company-specific margins are calculated." (Id. at 21.)

Second, ACA argues that Commerce has a long-standing practice whereby a foreign respondent seeking a favorable fair market value adjustment bears the burden of proof in establishing the claim. Furthermore, "`the law does not permit a party to pick and choose information it wishes to present to the agency.'" (Id. at 17 (quoting Hussey Copper, Ltd. v. United States, 17 CIT ___, ___, 834 F.Supp. 413, 428 (1993) (citation omitted)) (further citations omitted).) ACA complains that in the present case, although ACA repeatedly requested Commerce seek the missing data and explore the issue at verification, "there is no evidence on the record that Commerce ever attempted to determine whether the costs during April and May 1990 were comparable to the fiscal year data reported by Enuma." (Id. at 19.) Instead, ACA claims, Commerce relied on Enuma's response and unilateral decision not to submit the requested information to the agency, thereby impermissibly shifting to ACA the burden of proof to invalidate Commerce's reliance on Enuma's data.

Finally, ACA argues Commerce is required to use adverse BIA when a respondent refuses or is unable to produce requested information in a timely manner. The BIA rule currently applied, ACA asserts, is a two-tier test. According to ACA, Commerce has occasionally deviated from the two-tier test, but always in a manner adverse to the noncomplying respondent. Commerce, ACA argues, has no latitude when a respondent refuses or is unable to supply relevant data to Commerce. ACA claims, therefore, that because Enuma did not supply the requested adjustment data for certain home market transactions, Commerce was required to use BIA. In light of the arguments presented, ACA requests this Court remand the Final Results to Commerce for a determination of whether Enuma is an "uncooperative" party and with instructions to issue a new final administrative determination in which Enuma is assigned a final margin based on BIA in accordance with Commerce's two-tier approach.²

B. The Department of Commerce

Commerce contends its decision to use Enuma's fiscal year expense data to allocate expense adjustments to Enuma's home market sales within the period of review is supported by substantial evidence and is otherwise in accordance with law. Specifically, Commerce argues its reliance on Enuma's questionnaire responses and verified fiscal year expense data in Commerce's allocation of Enuma's expenses and calculation of Enuma's dumping margin was a reasonable exercise of the agency's discretion. Under the applicable statute and regulations, Commerce reasons, adjustments to foreign market value are made when the party alleging entitlement thereto establishes entitlement to the satisfaction of the administering authority. Here, because Enuma was unable to supply sales-related expenses for April and May 1990, Commerce insists it either had to consider the validity of the fiscal year information supplied or use another proxy for Enuma's expense adjustments. Commerce alleges it reasonably chose the former because the fiscal year information...