Negev Phosphates, Ltd. v. US Dept. of Commerce

• Decision Date: 08 November 1988
• Docket Number: Court No. 87-09-00974.
• Citation: 699 F. Supp. 938,12 CIT 1074
• Parties: NEGEV PHOSPHATES, LTD., Plaintiff, v. UNITED STATES DEPARTMENT OF COMMERCE and United States International Trade Commission, Defendants, and FMC Corporation and Monsanto Company, Defendants-Intervenors.
• Court: U.S. Court of International Trade

699 F. Supp. 938

12 CIT 1074

NEGEV PHOSPHATES, LTD., Plaintiff, v. UNITED STATES DEPARTMENT OF COMMERCE and United States International Trade Commission, Defendants and FMC Corporation and Monsanto Company, Defendants-Intervenors.

Court No. 87-09-00974.

United States Court of International Trade.

November 8, 1988.

COPYRIGHT MATERIAL OMITTED

Kaplan, Russin & Vecchi, Dennis James, Jr. and Kathleen F. Patterson, Washington, D.C., for plaintiff.

John R. Bolton, Asst. Atty. Gen., David M. Cohen, Director, Civ. Div., Commercial Litigation Branch, U.S. Dept. of Justice, Platte B. Moring, III, Washington, D.C., for defendants.

Polina K. Smith, Washington, D.C., for U.S. Dept. of Commerce.

Lyn M. Schlitt, General Counsel, James A. Toupin, Asst. Gen. Counsel, and Mitchell Dale, Washington, D.C., for U.S. Intern. Trade Com'n.

Gibson, Dunn & Crutcher, Joseph H. Price and Josiah O. Hatch III, Washington, D.C., for defendants-intervenors.

DICARLO, Judge:

Negev Phosphates, Ltd. (Negev) of Israel moves pursuant to Rule 56.1 of the Rules of this Court for judgment on the record and asks the Court to vacate an antidumping order and a countervailing duty order on industrial phosphoric acid from Israel. 52 Fed.Reg. 31,057 (Aug. 19, 1987).

The Court has jurisdiction under 28 U.S. C. § 1581(c) (1982). The Court finds both the final affirmative dumping determination of the International Trade Administration of the United States Department of Commerce (Commerce), Final Determination of Sales at Less Than Fair Value; Industrial Phosphoric Acid From Israel, 52 Fed.Reg. 25,440 (July 7, 1987), and the affirmative material injury determination of the United States International Trade Commission (Commission), Industrial Phosphoric Acid From Belgium and Israel, Invs. No. 701-TA-286 (Final) and 731-TA-365 and 366 (Final), USITC Pub. 2000 (Aug.1987), to be supported by substantial evidence on the administrative record as a whole and according to law. The imposition of the antidumping and countervailing duty orders is affirmed and this action is dismissed.

BACKGROUND

A. The Merchandise

Industrial phosphoric acid (H3PO4) is a relatively pure form of phosphoric acid produced in four acid grades: technical, food, ACS-semi, and polyphosphoric. Each grade has distinct uses. Technical grade acid is used in cleaners, cement processing, leather tanning, fire brick manufacturing, varnishes, rubber, and in downstream production of soaps, detergents, and water treatment. Food grade phosphoric acid is used in cola beverages, sugar refining, jam and jelly flavorings, yeast nutrients, and cottage cheese production. ACS-semi grade acid is used as a reagent in analytical chemistry, semi-conductor manufacture, and processing applications requiring high purity and low residue levels. Polyphosphoric grade acid is used as a catalytic agent, a surfactant in oil drilling, and in manufacturing dyes and herbicides.

The imported industrial phosphoric acid is classifiable under item 416.30 of the Tariff Schedules of the United States. USITC Pub. 2000, at 1. Since January 1, 1987, the most-favored-nation column 1 duty rate has been "free." Imports of industrial phosphoric acid were previously eligible for duty-free entry under the Generalized System of Preferences (GSP) from January 1, 1976 to December 31, 1986. Israeli products received the GSP treatment prior to the granting of duty-free entry under the United States-Israel Free Trade Implementation Act of 1985. USITC Pub. 2000, at A-11.

B. The Petitions for Relief

FMC Corporation and Monsanto Company (the "domestic industry") filed petitions with Commerce and the Commission alleging that imports of industrial phosphoric acid from Israel and Belgium were being sold in the United States at less than fair value and were also subsidized by the governments of Israel and Belgium and that these imports were causing material injury to a United States industry.

C. Commerce's Findings

After full investigations, Commerce found that industrial phosphoric acid imported from Israel and Belgium was being sold in the United States at less than fair value. Final Determination of Sales at Less Value; Industrial Phosphoric Acid From Israel, 52 Fed.Reg. 25,440 (July 7, 1987); Final Determination of Sales at Less Than Fair Value; Industrial Phosphoric Acid From Belgium, 52 Fed.Reg. 25,436 (July 7, 1987). In the countervailing duty investigation, Commerce found that the Government of Israel was providing countervailable benefits to Israeli manufacturers, producers, or exporters of industrial phosphoric acid, Final Affirmative Countervailing Duty Determination; Industrial Phosphoric Acid From Israel, 52 Fed. Reg. 25,447 (July 7, 1987); but that the Kingdom of Belgium was not providing countervailable benefits to the Belgian industry, Final Negative Countervailing Duty Determination; Industrial Phosphoric Acid From Belgium, 52 Fed.Reg. 25,443 (July 7, 1987).

D. The Commission's Findings

The Commission majority determined that imports of industrial phosphoric acid from Israel found to be subsidized and sold in the United States at less than fair value, cumulated with the volume of industrial phosphoric acid from Belgium sold in the United States at less than fair value, are causing material injury to a domestic industry. Industrial Phosphoric Acid from Belgium and Israel, USITC Pub. 2000 (Aug.1987). Negev petitioned the Commission to reconsider its determination because the domestic industry announced price decreases shortly after the Commission issued its final affirmative injury determination. The Commission denied Negev's petition for reconsideration.

STANDARD OF REVIEW

The Court is directed to hold unlawful final affirmative determinations of Commerce or the Commission if either determination is not supported by substantial evidence on the record as a whole or is otherwise not in accordance with law. 19 U.S.C. § 1516a(b)(1)(B) (1982); Washington Red Raspberry Comm'n v. United States, 859 F.2d 898 (Fed.Cir.1988) (Commerce); Atlantic Sugar, Ltd. v. United States, 2 Fed.Cir. (T) 130, 132, 744 F.2d 1556, 1559 (1984) (Commission). Substantial evidence on the record as a whole does not mean a large or considerable amount of evidence but rather "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Pierce v. Underwood, ___ U.S. ___, 108 S.Ct. 2541, 2550, 101 L.Ed.2d 490 (1988). Substantial evidence is something less than the weight of the evidence, and the possibility of drawing two inconsistent conclusions from the evidence does not prevent the agency's finding from being supported by substantial evidence. Consolo v. Federal Maritime Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 1026, 16 L.Ed.2d 131 (1966); ICC Indus. v. United States, 812 F.2d 694, 699 (Fed.Cir. 1987). However, the traditional deference courts pay to an agency's interpretation of a statute is not to be applied to alter the clearly expressed intent of Congress, Board of Governors of the Fed. Reserve Sys. v. Dimension Fin. Corp., 474 U.S. 361, 368, 106 S.Ct. 681, 686, 88 L.Ed.2d 691 (1986); nor is the Court to defer to decisions which are based on inadequate analysis or reasoning, USX Corp. v. United States, 11 CIT ___, 655 F.Supp. 487, 492 (1987). It is not the court's function, however, to decide that it would have made another decision on the basis of the evidence. Matsushita Elec. Indus. Co. v. United States, 3 Fed.Cir. (T) 44, 54, 750 F.2d 927, 936 (1984). Rather, the court will sustain the determination if it is reasonable and supported by the record as a whole, including whatever fairly detracts from the substantiality of the evidence. Universal Camera Corp. v. National Labor Relations Bd., 340 U.S. 474, 488, 71 S.Ct. 456, 464, 95 L.Ed. 456 (1950); American Lamb Co. v. United States, 4 Fed.Cir. (T) 47, 54, 785 F.2d 994 (Fed.Cir.1986); Atlantic Sugar, Ltd. v. United States, 2 Fed.Cir. (T) 130, 136, 744 F.2d 1556, 1563 (1984).

DISCUSSION

Negev challenges (I) Commerce's refusal to make a circumstance of sale adjustment in its final determination of sales at less than fair value and (II) the Commission's (A) findings on volume of imports, (B) refusal to cumulate prices, and (C) acceptance of testimony on lost sales and underselling.

I. Commerce's Denial of a Circumstance of Sale Adjustment

Commerce denied Negev's claim for a circumstance of sale adjustment for payments made under an Exchange Rate Risk Insurance Scheme (EIS).

During the investigation, Commerce asked Negev to "explain the type of adjustment claimed for EIS rebates." R. 488 (supplemental questionnaire). Negev responded that:

On the U.S. sales reported, Negev received insurance rebates to account for differences in exchange rates vis a vis inflation. Sales to the local market are not included in the exchange rate insurance. Take out: Local sales which instead would have been exported would have received according to the actual results confidential positive payment. We do not want to show the confidential figure.

R. 520; Conf.R. 377 (emphasis added). Commerce also asked Negev:

How is the EIS rebate amount determined? Are any premiums paid by Negev accounted for? Will the EIS payment for the second necessarily be the same as the first on a per M/T metric ton basis? Explain fully.

R. 488. To these questions Negev responded:

The EIS rebate is determined by the difference between the movement of the exchange rate of a basket of currencies and local inflation.

Our calculations include are after deducting the premium paid.

On a per ton basis, the receipt would be the same for each sale to the U.S. during a time period when the results of the EIS are the same, and the price received is the same, the EIS received would be the same per ton.

R. 520 (emphasis added).

Commerce denied Negev's claimed adjustment for EIS receipts. Commerce's preliminary determination stated that "participation in the EIS is an overall management technique to safeguard...