Hussey Copper, Ltd. v. US

• Decision Date: 16 May 1994
• Docket Number: Court No. 91-12-00919. Slip Op. 94-81.
• Citation: 18 CIT 454,852 F. Supp. 1116
• Parties: HUSSEY COPPER, LTD., et al., Plaintiffs, v. UNITED STATES, Defendant, Wieland-Werke AG, et al., Defendant-Intervenors. WIELAND-WERKE AG, et al., Plaintiffs, v. UNITED STATES, Defendant, Hussey Copper, Ltd., et al., Defendant-Intervenors.
• Court: U.S. Court of International Trade

852 F. Supp. 1116

18 CIT 454

HUSSEY COPPER, LTD., et al., Plaintiffs, v. UNITED STATES, Defendant, Wieland-Werke AG, et al., Defendant-Intervenors.

WIELAND-WERKE AG, et al., Plaintiffs, v. UNITED STATES, Defendant, Hussey Copper, Ltd., et al., Defendant-Intervenors.

Court No. 91-12-00919. Slip Op. 94-81.

United States Court of International Trade.

May 16, 1994.

Collier, Shannon, Rill & Scott, David A. Hartquist, Jeffrey S. Beckington and David C. Smith, Jr., Georgetown Economic Services, Michael A. Hudak, Washington, DC, Consultant, for Hussey Copper, Ltd., et al.

Arnold & Porter, Richard A. Johnson and Susan G. Lee, Washington, DC, for Wieland-Werke AG, et al.

Frank W. Hunger, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civ. Div., U.S. Dept. of Justice, Mark E. Montalbine, U.S. Dept. of Commerce, David J. Ross, Washington, DC, of counsel, for defendant.

MEMORANDUM OPINION AND ORDER

DiCARLO, Chief Judge:

Before the court are the final results of redetermination by the Department of Commerce dated January 10, 1994, regarding the 1986-88 administrative review of the anti-dumping duty order on Brass Sheet and Strip From the Federal Republic of Germany, 56 Fed.Reg. 60,087 (Dep't Comm.1991) (final results), as amended, 57 Fed.Reg. 276 (Dep't Comm.1992). Commerce's redetermination was issued pursuant to the court's remand order in Hussey Copper, Ltd., et al. v. United States, 17 CIT ___, 834 F.Supp. 413 (1993), which instructed Commerce to (1) provide an explanation for its departure from its normal practice of making exact alloy matches in determining such or similar merchandise; (2) provide evidence justifying the use of the long-term interest rate for the consignment credit expense or, in the alternative, redetermine the interest rate to be used and, if necessary, redetermine credit expenses on consignment inventory so as to avoid any double counting; (3) correct the miscalculation in the deduction of home market commissions with respect to purchase price sales; (4) correct errors in its computer program with respect to inland freight insurance charges; (5) provide reasons for its finding that Wieland's constructed price on split-priced sales was unrepresentative of actual prices charged, and determine whether Commerce actually added the value of early payment discount and metal discount to non-split-priced sales and, if so, explain the reasons for so doing or correct the error if it was done by error; (6) reconsider its resort to the best information available (BIA) in calculating the imputed credit expenses or, in the alternative, provide further explanation for such application; and (7) correct the computer error in making the adjustment for merchandise further processed in the United States. Plaintiffs in this consolidated action, Hussey Copper, Ltd., et al. ("Hussey") and Wieland Werke AG, et al. ("Wieland"), submitted their comments on Commerce's redetermination, to which defendant United States filed its response.

DISCUSSION

This court shall uphold Commerce's final determination in an administrative review unless that determination is "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B) (1988). Substantial evidence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S.Ct. 456, 459, 95 L.Ed. 456 (1951) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 217, 83 L.Ed. 126 (1938)).

1. Matching Methodology

In order to determine which merchandise sold in the home market was most similar to that sold in the United States, Commerce established separate categories of most similar merchandise based on five primary characteristics of the merchandise: (1) form of material (sheet or strip), (2) coating (tinned or non-tinned), (3) grade (alloy composition), (4) gauge, and (5) width. To match the merchandise on the basis of alloy composition, Commerce divided the merchandise into two groups according to whether it contained more than 75% copper and, after the grouping, made adjustments for differences in alloys within each group. By adopting the alloy grouping method, however, Commerce departed from its prior practice of using exact alloy matches in brass cases. The court requested Commerce to explain its reasons for the departure.

In its redetermination, Commerce states:

Our review of the record indicates that there is no reasonable explanation of why we departed from our traditional matching methodology for this particular case. Although we still believe this alternate approach is reasonable, we cannot find any unique circumstances in the record which justify this alternate approach to product matching. Accordingly, the Department has concluded that it should abandon the grouping methodology, and instead make matches on an exact alloy basis.

Redetermination, at 3. In order to apply the traditional alloy matching method, Commerce asks that it be permitted to request additional information from Wieland. Id.

Both Hussey and Wieland point out that Commerce already possesses the data of specific alloy CDA (Copper Development Association) designation necessary to match home market and U.S. sales on an exact alloy basis. To the extent that exact alloy matching is not feasible for certain sales, Hussey argues that Commerce should resort to BIA since Wieland failed to provide cost data for differences in alloys as Commerce had requested. Wieland, on the other hand, urges that if a re-opening of the record is necessary, it should be limited to the precise information necessary to make exact alloy matches.

In response to Hussey's argument for applying BIA, Commerce states that because its decision to make exact alloy matches was made late in the proceedings, the use of BIA will not be appropriate. Therefore, Commerce concludes that it is in the interest of fairness that Wieland be given one more opportunity to provide the information. The court agrees.

Accordingly, the issue is remanded to Commerce for it to conduct the product matching on an exact alloy basis. Commerce may request additional information from Wieland to the extent that such information is necessary to complete the product matching based on the revised methodology.

2. Credit Expense on Consignment Inventory

In computing home market price, Commerce deducted Wieland's credit expense for maintaining consignment inventory, which was calculated on the basis of Wieland's long-term borrowing rate. The court remanded this matter to Commerce to provide record evidence supporting the use of the long-term interest rate and to determine whether it had double counted Wieland's credit expense for consignment sales to the extent the credit expense covering the period of time from billing to payment was also included in Wieland's imputed credit expense calculated on the basis of a short-term interest rate.

In its redetermination, Commerce states that it is "unable to point to any evidence on the record that supports the use of a long-term interest rate other than that contained in a confidential memorandum ... which has been rejected by the court in this remand." Redetermination, at 4. In addition, Commerce concludes that "based on the record, we cannot determine whether credit expenses have been double counted for consignment sales." Id. Commerce requests, therefore, that it be permitted to obtain additional information to resolve these issues.

The court grants Commerce's request for obtaining additional information showing (1) the consignment sales during the period of review, (2) the shipping and payment dates for those sales, and (3) the method of calculating the long-term interest rate and applying it to the sales in question.

3. Computer Errors

The court instructed Commerce to correct three computer programming errors involving home market commissions, inland freight insurance charges, and further processed U.S. sales. Commerce states in its redetermination that the submission of new data by Wieland regarding exact alloy matching and credit expense on consignment inventory would moot the issue of existing computer errors to the extent that re-programming would be required.

The court directs Commerce to correct all the computer errors, if any, after it makes the necessary re-programming.

4. Split-Priced Sales

Wieland was unable to report actual metal prices charged to home market customers purchasing on a split-priced basis because it did not keep records of the metal prices for individual split-priced sales. In response to Commerce's request for actual prices charged, Wieland submitted a constructed price which consisted of the official German metal price in effect on the date of sale plus the fabrication price and minus the value of a metal discount and an early payment discount. Commerce rejected Wieland's constructed price and, as BIA, accepted petitioner's information with respect to the total sale price and added the value of the two discounts back into each home market sale. Commerce explained that it used the BIA because Wieland failed to provide the actual metal price charged and failed also to provide "an acceptable constructed price that was representative of actual prices charged." Final Results, 56 Fed.Reg. at 60,091 (Comment 12).

The court held that since Wieland was unable to produce the actual prices as requested, Commerce was required by the statute to use BIA in this situation, and that Commerce was not bound by the methodology verified and accepted in the LTFV investigation if it had reason to believe that a different methodology would permit a more accurate assessment of current margins. Hussey, 834 F.Supp. at 424-25. However, the court also found that it was unable to determine whether Commerce's rejection of Wieland's constructed price and its application of BIA were supported by substantial evidence on...