Pesquera Mares Australes v. U.S.

Decision Date25 September 2001
Docket NumberNo. 00-1427,00-1427
Citation266 F.3d 1372
Parties(Fed. Cir. 2001) PESQUERA MARES AUSTRALES LTDA., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee. v. COALITION FOR FAIR ATLANTIC SALMON TRADE, Defendant-Appellee
CourtU.S. Court of Appeals — Federal Circuit

Michael T. Shor, Arnold & Porter, of Washington, DC, argued for plaintiff- appellant. With him on the brief was Kevin T. Traskos.

Lucius B. Lau, Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, of Washington, DC, argued for defendant-appellee, United States. With him on the brief was David M. Cohen, Director. Of counsel on the brief were John D. McInerney, Acting Chief Counsel; Berniece A. Browne, Senior Counsel; and Robert J. Heilferty, Senior Attorney, Office of Chief Counsel for Import Administration, Department of Commerce, of Washington, DC.

Michael J. Coursey, Collier Shannon Scott, PLLC, of Washington, DC, for defendant-appellee, Coalition for Fair Atlantic Salmon Trade. With him on the brief were David C. Smith, Jr., and John M. Herrmann.

Before MICHEL, SCHALL, and DYK, Circuit Judges.

DYK, Circuit Judge.

This case presents the question whether the Department of Commerce's ("Commerce") interpretation of the phrase "identical in physical characteristics" by reference to commercial practice is consistent with the antidumping statute (codified in pertinent part at 19 U.S.C. § 1677(16)(A)) and, if so, whether it is reasonable. We conclude that Commerce's use of commercial practice to inform its interpretation of the phrase is not foreclosed by the statute, nor has the appellant shown that such an approach is unreasonable. We accordingly defer - under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) - to Commerce's interpretation of the phrase "identical in physical characteristics," 19 U.S.C. § 1677(16)(A). We further hold that substantial evidence supports Commerce's decision to compare sales to Japan of "super- premium" salmon to sales to the United States of "premium" grade salmon when calculating the antidumping margin for Pesquera Mares Australes, Ltda. ("Mares Australes"), and that Commerce's decision has been adequately explained. We accordingly affirm the decision of the Court of International Trade in Pesquera Mares Australes, Ltda. v. United States, No. 98-08-02680, 2000 WL 766520 (Ct. Int'l Trade June 5, 2000) (unpublished disposition).

BACKGROUND

This particular case involves the determination of the dumping margin for imports of Atlantic fresh, farmed salmon from the Republic of Chile by Mares Australes.1

On July 2, 1997, Commerce, in response to a petition filed by appellee Coalition for Fair Atlantic Salmon Trade ("FAST") and its individual members, initiated an antidumping duty investigation to determine whether Chilean exporters of Atlantic fresh, farmed salmon were selling that subject merchandise in the United States at less than fair value. Initiation of Antidumping Duty Investigation: Fresh Atlantic Salmon from Chile, 62 Fed. Reg. 37,027 (July 10, 1997).

On August 26, 1997, Commerce determined that it could not individually examine all Chilean producers and exporters of Atlantic fresh salmon. As authorized by 19 U.S.C. § 1677f-1(c)(2), the agency accordingly limited its antidumping investigation to Mares Australes and four other leading Chilean salmon producers and exporters (collectively, "respondents"). See Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Fresh Atlantic Salmon from Chile, 63 Fed. Reg. 2,664, 2,664-5 (Jan. 16, 1998) ("Preliminary Results").

The purpose of an antidumping investigation is to determine whether dumping duties should be imposed on subject merchandise when it is imported into the United States. Under the antidumping statute, Commerce is required to impose antidumping duties on "subject merchandise"2 that "is being, or is likely to be sold in the United States at less than its fair value" to the detriment of a domestic industry. 19 U.S.C. § 1673.

Commerce determines those duties by first calculating the "dumping margin" for the subject merchandise, i.e., the total amount by which the price charged for a corresponding foreign like product in the home market or third-country market (the "normal value") exceeds the price charged for the subject merchandise in the United States (the "United States price"). 19 U.S.C. § 1677(35)(A); see also 19 U.S.C. § 1673(2)(B).3 In other words, to determine whether antidumping duties should be imposed, Commerce must make a "fair comparison" between the United States price charged for the subject merchandise (here, fresh Atlantic salmon) and the price charged for the corresponding foreign like product in the home market (the "normal value"). 19 U.S.C. § 1677b(a). To make this comparison Commerce must determine the normal value of the "foreign like product."

When (as here) no satisfactory exporting country price is available, the antidumping statute authorizes Commerce to base normal value on the sales price of the foreign like product in a third-country market, that is, "the price at which the foreign like product is so sold (or offered for sale) for consumption in a country other than the exporting country or the United States . . . ." 19 U.S.C. § 1677b(a)(1)(B)(ii). In this case, Commerce based the normal value of the foreign like product sold by Mares Australes and two other respondents on those companies' sales of Atlantic fresh salmon to Japan, which Commerce determined was "the appropriate comparison market." Preliminary Results, 63 Fed. Reg. at 2,668.

In addition to determining the appropriate comparison market, Commerce must also identify the "foreign like product" that is to be compared to the subject merchandise exported to the United States. Section 1677(16) of the antidumping statute specifically defines "foreign like product," in turn, as:

[M]erchandise in the first of the following categories in respect of which a determination for the purposes of part II of this subtitle can be satisfactorily made:

(A) The subject merchandise and other merchandise which is identical in physical characteristics with, turn, and was produced in the same country by the same person as, that merchandise.

(B) Merchandise--

(i) produced in the same country and by the same person as the subject merchandise,

(ii) like that merchandise in component material or materials and in the purposes for which used, and

(iii) approximately equal in commercial value to that merchandise.

(C) Merchandise--

(i) produced in the same country and by the same person and of the same general class or kind as the subject merchandise,

(ii) like that merchandise in the purposes forth, turn, which used, and

(iii) which the administering authority determines may reasonably be compared with that merchandise.

19 U.S.C. § 1677(16) (emphasis added). That definition is applicable to 19 U.S.C. § 1677b(a)(1)(B). See SKF USA Inc., v. United States 263 F.3d 1369 (Fed. Cir. Aug. 24, 2001). In this case Commerce used the definition set forth in subsection (A) of § 1677(16) to define the "foreign like product." In other words, Commerce sought to identify salmon sold by Mares Australes to Japan that was "identical in physical characteristics" to salmon exported by that company to the United States. It is Commerce's interpretation of the phrase "identical in physical characteristics" that is at issue.

To determine Japanese "merchandise which is identical in physical characteristics," 19 U.S.C. § 1677(16)(A), to the subject merchandise sold in the United States, Commerce (with agreement of all parties) used three matching criteria based on the physical characteristics of the salmon: "form, grade, and weight band." Preliminary Results, 63 Fed. Reg. at 2,666. It is the second criterion - the "grade," or quality, of the salmon - that is relevant here.4 All parties agree that there are no uniform international or national grading standards or requirements for fresh Atlantic salmon. But the Association of Chilean Salmon and Trout Exporters ("Association"), of which Mares Australes is a member, has promulgated certain minimum grading criteria that its members are required to adopt. The Association recognizes (and Mares Australes during the review period adopted) four grades for fresh Atlantic whole salmon. In descending order of quality, there are: (1) super-premium; (2) premium; (3) grade one; (4) industrial. During the review period, Mares Australes sold super- premium and premium grade salmon to Japan, but did not sell super-premium grade salmon to the United States. And Mares Australes was "the only respondent to sell both super-premium and premium grade salmon to Japan" during the review period. Notice of Final Determination of Sales at Less Than Fair Value: Fresh Atlantic Salmon From Chile, 63 Fed. Reg. 31,411, 31, 414 (June 9, 1998) ("Final Results").

Before Commerce's issuance of its Preliminary Results, Mares Australes argued that the super-premium salmon it sold to Japan could not be considered "identical in physical characteristics," 19 U.S.C. § 1677(16)(A), to the premium grade salmon it sold to the United States. As evidence of this distinction, the company stressed that Association promulgated higher grading standards for super-premium than premium salmon; that certain physical defects (such as external lacerations to the salmon) were present in premium but not super-premium salmon; that super-premium salmon enjoyed a darker, redder color than premium salmon; and that its customers in Japan, recognizing these physical and color distinctions, paid higher prices for premium-grade salmon. The color differences were particularly emphasized by Mares Australes.

In a January 8, 1998, memorandum to the parties, Commerce preliminarily accepted Mares Australes'...

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