Luciano Pisoni Fabrica Accessori v. United States, 84-10-01435.

• Decision Date: 12 June 1986
• Docket Number: No. 84-10-01435.,84-10-01435.
• Citation: 640 F. Supp. 255
• Parties: LUCIANO PISONI FABBRICA ACCESSORI INSTRUMENTI MUSICALI and Enzo Pizzi, Inc., Plaintiffs, v. The UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

640 F. Supp. 255

LUCIANO PISONI FABBRICA ACCESSORI INSTRUMENTI MUSICALI and Enzo Pizzi, Inc., Plaintiffs, v. The UNITED STATES, Defendant.

No. 84-10-01435.

United States Court of International Trade.

June 12, 1986.

Klayman & Gurley, P.C. (Larry Klayman and John Gurley), Washington, D.C., for plaintiffs.

Richard K. Willard, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civil Div., Dept. of Justice (Elizabeth Seastrum; Edwin Madaj, Intern. Trade Com'n, Washington, D.C., of counsel), for defendant.

Mudge, Rose, Guthrie, Alexander & Ferdon (N. David Palmeter and Jeffrey Neeley) Washington, D.C., for amicus curiae Hyundai Steel Ind. Co., Ltd.

Dewey, Ballentine, Bushby, Palmer & Wood, (Alan Wm. Wolff, Jane Albrecht) and Akin, Gump, Strauss, Hauer & Feld, (Richard R. Rivers) Washington, D.C. for amicus curiae Lone Star Steel Co.

Memorandum Opinion and Order

DiCARLO, Judge:

Plaintiffs, an Italian producer of woodwind instrument pads and its United States importer, challenge final affirmative determinations of the United States Department of Commerce, International Trade Administration (Commerce), Pads for Woodwind Instrument Keys From Italy; Final Determination of Sales at Less Than Fair Value, 49 Fed.Reg. 28295 (1984), and the International Trade Commission (Commission), Pads for Woodwind Instrument Keys from Italy, Inv. No. 731-TA-152 (Final), USITC Pub. 1566 (1984), 49 Fed.Reg. 34313 (1984), that resulted in an order assessing an antidumping duty of 1.16% ad valorem on woodwind instrument pads from Italy. 49 Fed.Reg. 37137 (1984).

Plaintiffs make four arguments challenging Commerce's determination that woodwind instrument pads are being sold in the United States at less than fair value. Since the Court holds that Commerce unreasonably failed to make a merchandise adjustment under 19 C.F.R. § 353.16, and that a dumping margin may not be found to exist as a result of currency changes, the dumping margin may be eliminated following remand. Therefore the Court does not address plaintiffs' contention that the Commission improperly disregarded the size of the margin in its material injury determination.

I. Judicial Review

In reviewing an antidumping duty determination by Commerce, the standard of review is not de novo. Rather, the Court must hold unlawful any determination, finding, or conclusion 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) (1982). Under the substantial evidence standard for review of agency determinations, the Court must accept Commerce's findings if they are supported by "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Federal Trade Commission v. Indiana Federation of Dentists, ___ U.S. ___, ___, 106 S.Ct. 2009, 2014, 90 L.Ed.2d 445 (U.S.1986). Substantial deference is granted to the agency in both its interpretation of its statutory mandate and the methods it employs in administering the antidumping law. See American Lamb Co. v. United States, 785 F.2d 994 (Fed.Cir.1986); Carlisle Tire & Rubber Co. v. United States, 9 CIT ___, 622 F.Supp. 1071 (1985).

II. Commerce's Determination of Sales at Less than Fair Value

A. Commerce's Initiation of the Investigation

Plaintiffs allege that the antidumping petition did not contain required price information and therefore should have been rejected by Commerce.

A petition must contain "information reasonably available to the petitioner supporting the allegations" of the "elements necessary for the imposition" of antidumping duties. 19 U.S.C. § 1673a(b)(1), (c)(1). A Commerce regulation, 19 C.F.R. § 353.36(a)(7), says that petitions "shall contain":

All pertinent facts as to the price at which the foreign merchandise is sold or offered for sale in the United States and in the home market in which produced or from which exported ... and if appropriate, information regarding sales in third countries or the cost of producing the merchandise. Petitioners unable to furnish information on foreign sales or costs may present information concerning U.S. domestic producers' costs adjusted for differences in the foreign country in question from information publicly available.

The petition contained: (1) home market (Italian) price lists for plaintiffs' pads, in dollars, dated January 1, 1982; (2) export price lists for petitioner's pads, in lira, dated December 1, 1982; (3) estimated home market cost of production data based on petitioner's actual 1976 costs when it manufactured in Italy; and (4) petitioner's cost of production data, current to September, 1983.

Plaintiffs say the price lists were not a sufficient basis to initiate the investigation because they were "out-of-date, not in effect, and clearly inapplicable to the U.S. and Italian markets as alleged." Plaintiffs' Reply Brief at 6. Plaintiffs contend that the fact that the Italian prices were listed in dollars and the United States prices were listed in lira particularly rendered the price lists an insufficient basis to initiate the investigation.

Commerce says that although the price lists submitted by the petitioner were suspect (Commerce later determined the price lists were mislabeled), they provided an adequate basis to proceed since prices on both lists were less than petitioner's cost of production. Commerce also argues it was reasonable to initiate an investigation on the basis of a comparison of price lists allegedly from 1982 with petitioner's 1983 cost of production data.

Commerce interprets the statutory requirement that the petition contain only information "reasonably available to the petitioner" as permitting Commerce to accept petitions from small businesses with less information than would be acceptable in petitions from large businesses. The Court finds this interpretation consistent with the intent of Congress. See S.Rep. No. 96-249, 96th Cong., 1st Sess. 47, reprinted in 1979 U.S.Code Cong. & Ad. News 433.

Also, Commerce has some discretion in deciding whether to initiate an investigation; Commerce is permitted to assess the sufficiency of the petition "in light of its own knowledge and expertise" and facts capable of judicial notice. United States v. Roses, Inc., 1 Fed.Cir. 39, 46, 706 F.2d 1563, 1568-69 (1983). However, Commerce may not, as plaintiffs argue, accept a letter from plaintiffs' counsel arguing against initiating the investigation. Roses prohibits Commerce from considering such communications during the 20-day period Commerce has to decide whether to begin an investigation after the filing of the petition under 19 U.S.C. § 1673a(c). Plaintiffs' suggestion that Gilmore Steel Corp. v. United States, 7 CIT 219, 585 F.Supp. 670 (1984), "limits" Roses is in error, since Gilmore does not address preinitiation communications.

The Court holds that Commerce's decision to initiate the investigation was a "sufficiently reasonable" interpretation of the statute, American Lamb Co. v. United States, 4 Fed.Cir. ___, 785 F.2d 994, 995 (1986), and was in accordance with law.

B. Commerce's Continuation of the Investigation

Plaintiffs argue that Commerce should have rescinded the notice initiating the investigation when it learned that the petitioner failed to provide accurate price information. During the investigation, Commerce determined that one of the price lists furnished by petitioner was effective from 1976 to early 1980 instead of 1982, as alleged. Plaintiffs argue that once this information was discovered there was no longer any basis to conduct the investigation, and the notice of initiation should have been rescinded.

The statutory scheme offers no basis for plaintiffs' position that Commerce is required to rescind a notice of initiation of an investigation upon discovering inaccuracies in a petition. Once Commerce has commenced an investigation, it is obligated to "make a determination, based upon the best information available to it at the time of the determination, of whether there is a reasonable basis to believe or suspect that the merchandise is being sold, or is likely to be sold at less than fair value." 19 U.S.C. § 1673b(b)(1) (1982). If the best information available, including the petition, affords no such reasonable basis, Commerce must make a negative preliminary determination of sales at less than fair value.

In making a final determination in an investigation, Commerce must verify all information on which it relies. 19 U.S.C. § 1677e (1982 & Supp. II 1984). Corrections to petitioners' data are the very point of verification procedures. It is therefore proper for Commerce to complete an investigation commenced after a petition is filed by an interested party even when a petition is found to contain inaccuracies. Since Commerce is authorized to commence an antidumping duty investigation sua sponte whenever it determines that an investigation is warranted based upon available information, 19 U.S.C. § 1673a(a) (1982), it would be unreasonable to require that Commerce terminate an investigation commenced after the filing of a petition by an interested party when, despite inaccuracies contained in the petition, it finds evidence of sales at less than fair value.

Plaintiffs' reliance on Gilmore Steel Corp. v. United States, 7 CIT 219, 585 F.Supp. 670 (1984) is misplaced. In that case the domestic plaintiff challenged Commerce's authority to terminate an investigation after initiation. Two months after issuing an affirmative preliminary determination, Commerce said that it believed plaintiff did not have standing to file a petition on behalf of a United States industry, and that the investigation should not have been initiated. The Court affirmed the power of Commerce to terminate investigations where such a fundamental defect in the petition comes to its attention after expiration of the 20-day review period. The Court did not hold, as plaintiffs claim, that Commerce has an obligation to...