Floral Trade Council v. U.S., Slip. Op. 99-10.

Citation41 F.Supp.2d 319
Decision Date27 January 1999
Docket NumberCourt No. 97-11-01988.,Slip. Op. 99-10.
PartiesFLORAL TRADE COUNCIL, Plaintiff, v. UNITED STATES, Defendant, and Asociacion Colombiana de Exportadores de Flores, et al., Defendant-Intervenors.
CourtU.S. Court of International Trade

William A. Fennell, and Mara M. Burr) for Plaintiff.

Frank W. Hunger, Assistant Attorney General of the United States; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice; Lucius B. Lau, Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice; Of Counsel, Mildred E. Steward, Office of the Chief Counsel for Import Administration, United States Department of Commerce, for Defendant.

Arnold & Porter, (Michael T. Shor and Kevin T. Traskos) for DefendantIntervenors.

OPINION

POGUE, Judge.

This matter is before the Court on the separate motions of Plaintiff, Floral Trade Council ("FTC"), and Defendant-Intervenors, Asociacion Colombiana de Exportadores de Flores, et al. ("Asocoflores"), for judgment on the agency record pursuant to U.S. CIT Rule 56.2. The parties filed separate actions challenging various aspects of the Department of Commerce's ("Commerce") final results of the ninth administrative review1 of the antidumping duty order on certain fresh cut flowers from Colombia. See Certain Fresh Cut Flowers From Colombia, 62 Fed.Reg. 53,287 (Dep't Commerce, Oct. 14, 1997)(final determination)("Final Results"). The actions were consolidated.

The Court has jurisdiction pursuant to 28 U.S.C. § 1581(c)(1994) and 19 U.S.C. § 1516a(a)(2)(B)(iii)(1994).

The ninth administrative review covers a total of 351 Colombian producers and/or exporters of standard carnations, miniature (spray) carnations, standard chrysanthemums, and pompon chrysanthemums during the period March 1, 1995 through February 29, 1996 ("the period of review"). See Final Results at 53,288. Given the large number of producers and/or exporters, Commerce narrowed its examination to the thirteen respondents accounting for the largest volume of subject flowers in accordance with § 777A(c)(2)(B) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1677f-1(c)(2)(B)(1994).2 See Certain Fresh Cut Flowers From Colombia, 62 Fed.Reg. 16,772 (Dep't Commerce, Apr. 8, 1997)(preliminary results).

FTC challenges: (1) Commerce's decision not to deduct commissions paid to affiliated consignment agents from constructed export price and (2) Commerce's decision not to collect third-country sales prices from the respondents in the review ("respondents") to determine whether third-country prices could be used as a basis for normal value.3 See Pl.'s Mot. for J. on the Agency R. at 2.

Asocolfores challenges: (1) Commerce's rejection of the constructed value "profit cap" in calculating constructed value, see Initial Br. of Def.-Intervenors in Supp. of Rule 56.2 Mot. for J. on the Agency R. ("Asocolfores Br.") at 2; (2) Commerce's determination to deduct credit expenses from U.S. price but not from constructed value, see id. at 3; (3) Commerce's determination to exclude antidumping surcharges from constructed export price, see id. at 4; (4) Commerce's decision not to include the net monetary correction in calculating constructed value, see id. at 5; (5) Commerce's issuance of erroneous questionnaire instructions and subsequent penalization of respondents for complying with such instructions,4 see id. at 6; (6) Commerce's calculation and application of the constructed export price profit ratio, see id. at 7; (7) Commerce's decision to impute a consolidated general and administrative expense rate for all farms of the HOSA Group in calculating the cost of production, see id. at 8; and (8) Commerce's determination not to allocate any production costs to second quality subject flowers.5 See id.

Standard of Review

The Court will uphold a Commerce determination in an administrative review unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance with law[.]" 19 U.S.C. § 1516a(b)(1)(B)(i)(1994).

The issues presented here primarily require the Court to determine whether Commerce's interpretations of the antidumping statute are permissible. In determining whether Commerce's interpretation and application of the antidumping statute is in accordance with law, the Court applies the two-step analysis articulated in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), as applied and refined by the Court of Appeals for the Federal Circuit ("Federal Circuit").

The first step is to investigate a matter of law — "whether Congress's purpose and intent on the question at issue is judicially ascertainable." Timex V.I., Inc. v. United States, 157 F.3d 879, 881 (Fed.Cir.1998)(citing Chevron, 467 U.S. at 842-43 & n. 9, 104 S.Ct. 2778). "To ascertain whether Congress had an intention on the precise question at issue, [the Court] employ[s] the `traditional tools of statutory construction.'" Id. at 882, 104 S.Ct. 2778 (citing Chevron, 467 U.S. at 843 n. 9, 104 S.Ct. 2778). If the statute's plain language answers the question, "that is the end of the matter." Id. (citing Muwwakkil v. Office of Personnel Management, 18 F.3d 921, 924 (Fed.Cir.1994)). Beyond the statute's text, the tools of statutory construction include the statute's legislative history, the statute's structure, and the canons of statutory construction.6 See id.

If, after employing the first prong of Chevron, the Court determines that the statute is silent or ambiguous with respect to the specific issue, the Court proceeds to the second step. See Chevron, 467 U.S. at 843, 104 S.Ct. 2778. The second step concerns an issue of policy. Because Congress intended to delegate policymaking to Commerce, the Court must defer to Commerce's reasonable interpretation. See Koyo Seiko Co., Ltd. v. United States, 36 F.3d 1565, 1573 (Fed.Cir.1994). "In determining whether Commerce's interpretation is reasonable, the Court considers, among other factors, the express terms of the provisions at issue, the objectives of those provisions[,] and the objectives of the antidumping scheme as a whole." Mitsubishi Heavy Industries, Inc. v. United States, 22 CIT ___, 15 F.Supp.2d 807, 813 (1998).

Discussion

Commerce calculates an antidumping duty by comparing an imported product's price in the United States to its normal value ("NV")(i.e., the price of comparable merchandise in the exporting country). The dumping margin is the amount by which the normal value exceeds the United States price. See 19 U.S.C. § 1673 (1994).

The United States price is calculated as either the "export price" ("EP") or the "constructed export price" ("CEP"). See 19 U.S.C. § 1677a. Typically, Commerce uses EP when the foreign exporter sells directly to an unrelated U.S. purchaser. See 19 U.S.C. § 1677a(a). Commerce uses CEP when the foreign exporter sells through a related party in the United States. See 19 U.S.C. § 1677a(b).

NV is the price of the merchandise in the producer's home market or its export price to countries other than the United States. See 19 U.S.C. § 1677b(a)(1). Where Commerce cannot compute the home market price, Commerce may base NV on a constructed value ("CV"), see 19 U.S.C. § 1677b(a)(4), which is calculated pursuant to § 1677b(e).

I. Commerce's Decision Not to Deduct Commissions Paid to Affiliated Con-

signment Agents from CEP7

In a consignment arrangement, the exporter (the consignor) delivers merchandise to an agent in the United States (the consignee) under agreement that the agent will sell the merchandise for the account of the exporter. See EDWARD G. HINKELMAN, DICTIONARY OF INTERNATIONAL TRADE 44 (1994). The consignor retains title to the goods sold, and the consignee sells the goods for commission, remitting the net proceeds to the consignor. See id.; see also BLACK'S LAW DICTIONARY 307 (6th ed.). Here, certain Colombian exporters were engaged in consignment arrangements during the period of review, paying commissions to both affiliated and unaffiliated consignees. See Def.'s Mem. in Opp'n to Pl.'s Mot. for J. on the Agency R. ("Def.'s Mem. in Opp'n to Pl.") at 11.

The statute provides for the deduction of certain expenses from CEP, including commissions:

[T]he price used to establish constructed export price shall also be reduced by —

(1) the amount of any of the following expenses generally incurred by or for the account of the producer or exporter, or the affiliated seller in the United States, in selling the subject merchandise (or subject merchandise to which value has been added)

(A) commissions for selling the subject merchandise in the United States;

(B) expenses that result from, and bear a direct relationship to, the sale, such as credit expenses, guarantees and warranties;

(C) any selling expenses that the seller pays on behalf of the purchaser; and

(D) any selling expenses not deducted under subparagraph (A), (B), or (C)[.]

19 U.S.C. § 1677a(d)(1)(1994).

For the unaffiliated consignees, Commerce deducted the commissions paid by the exporters from the CEP. See Def.'s Mem. in Opp'n to Pl. at 11. For the affiliated consignees, however, Commerce explained that it did not deduct commissions paid by exporters from the CEP because to do so would have led to "double-counting." See Final Results at 53,294. Commerce argues that the commissions paid to affiliated consignees reimburse them for expenses that Commerce already deducts as indirect selling expenses under § 1677a(d)(1)(D). See Def.'s Mem. in Opp'n to Pl. at 14. Therefore, deducting both the commissions paid to affiliated consignees and indirect selling expenses would double-count the expenses. See id. In contrast, double-counting does not arise from the deduction of commissions for the unaffiliated consignees because the statute does not...

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