PPG Industries, Inc. v. US

• Decision Date: 05 March 1992
• Docket Number: Court No. 90-03-00127.
• Citation: 787 F. Supp. 215
• Parties: PPG INDUSTRIES, INC., Plaintiff, v. UNITED STATES of America, Defendant, and Vitro Flotado, S.A. and Vidrio Plano de Mexico, S.A., Defendant-Intervenors.
• Court: U.S. Court of International Trade

787 F. Supp. 215

PPG INDUSTRIES, INC., Plaintiff, v. UNITED STATES of America, Defendant and Vitro Flotado, S.A. and Vidrio Plano de Mexico, S.A., Defendant-Intervenors.

Court No. 90-03-00127.

United States Court of International Trade.

March 5, 1992.

Stewart and Stewart (Eugene L. Stewart, Terence P. Stewart, David Scott Nance, and Amy S. Dwyer on the briefs, James R. Cannon, Jr., at oral argument), Washington, D.C., for plaintiff.

Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civil Div., U.S. Dept. of Justice, Jane E. Meehan and A. David Lafer, Diane M. McDevitt, of counsel, Atty.-Advisor, Office of the Chief Counsel for Import Admin., U.S. Dept. of Commerce, Washington, D.C., for defendant.

Brownstein, Zeidman, and Schomer, Irwin P. Altschuler, David R. Amerine, and Claudia G. Pasche, Washington, D.C., for defendant-intervenors.

MEMORANDUM OPINION AND ORDER

CARMAN, Judge:

Plaintiff PPG Industries, Inc. ("PPG") moves pursuant to Rule 56.1 of the Rules of this Court for judgment upon the agency record. The motion challenges several aspects of the final determination of International Trade Administration, United States Department of Commerce ("ITA" or "Commerce") in the second administrative review of the suspension agreement covering unprocessed float glass from Mexico. Unprocessed Float Glass from Mexico; Final Results of Countervailing Duty Administrative Review, 55 Fed.Reg. 5,870 (1990) ("Final Results"). The review covered shipments of the subject merchandise¹ entered during the period January 1, 1986, through December 31, 1986. The review covered two exporters, Vidrio Plano de Mexico, S.A. and Vitro Flotado, S.A. (hereinafter referred to individually as Vidrio Plano and Vitro Flotado, or collectively as "the signatories" or "Defendant-Intervenors"), the signatories to the suspension agreement.

Background

On February 28, 1984, the ITA published an agreement suspending a countervailing duty investigation on unprocessed float glass from Mexico. Unprocessed Float Glass from Mexico; Suspension of Countervailing Duty Investigation, 49 Fed. Reg. 7,264, 7,267 (1984). ("Suspension Agreement").² Thereafter, Commerce conducted the first administrative review covering the period February 1, 1984, through December 31, 1985; on December 10, 1986, Commerce determined that the signatories had complied with the terms of the suspension agreement. Unprocessed Float Glass from Mexico; Final Results of Countervailing Duty Administrative Review, 51 Fed.Reg. 44,503 (1986) ("First Administrative Review"). This Court sustained Commerce's determination in the 1984-85 administrative review in PPG Indus., Inc. v. United States, 13 CIT 297, 712 F.Supp. 195 (1989), appeal docketed, No. 89-1520 (Fed.Cir. June 1, 1989) ("PPG II").

On February 27, 1987, the Government of Mexico requested a second administrative review in accordance with 19 C.F.R. § 355.10 (1987), and also requested termination of the suspended investigation in accordance with 19 C.F.R. § 355.42 (1987). On December 30, 1988, Commerce published the preliminary results of its second administrative review of the suspension agreement and tentative determination to terminate the suspended investigation. Unprocessed Float Glass from Mexico; Preliminary Results of Countervailing Duty Administrative Review and Tentative Determination to Terminate Suspension Agreement, 53 Fed.Reg. 53,045-47 (1988) ("Preliminary Results").³ The final results of this administrative review were published on February 20, 1990, and are the subject of this action.

Plaintiff contends that the following aspects of Commerce's final determination are not based upon substantial evidence on the record and are not in accordance with law: (1) exports of unprocessed float glass had not benefitted from the payment of CEDIs; (2) the duty drawback program's rebates for import duties were not excessive; (3) the Mexican government had not exercised discretion in allowing specific companies to provisionally enroll debt in FICORCA;⁴ (4) the Mexican government had not exercised discretion in allowing the enrollment of non-bank debt in FICORCA; (5) no countervailable benefit accrued to Mexican firms that converted FICORCA debt into floating-rate notes and there was insufficient evidence that the Mexican government exercised discretion by preselecting firms for the conversion; (6) FICORCA benefits were not countervailable as a general matter; and (7) the signatories complied with the terms of the suspension agreement and thus the suspended investigation should be terminated. Plaintiff's Memorandum in Support of Motion for Judgment on the Agency Record ("Plaintiff's Brief") at 1-2.⁵

Defendant, United States, asks this Court to dismiss Plaintiff's motion and sustain Commerce's final results as based upon substantial evidence on the record and as otherwise in accordance with law.

Discussion

Commerce's determination must be upheld 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) (1988). Substantial evidence "means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Matsushita Elec. Indus. Co. v. United States, 3 Fed. Cir. (T) 44, 51, 750 F.2d 927, 933 (1984) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 217, 83 L.Ed. 126 (1938)).

Commerce's interpretations of the countervailing duty laws are accorded substantial deference and will be upheld as in accordance with law unless the interpretation is "`unreasonable and plainly inconsistent with the statute, and ... unless weighty reasons require otherwise.'" ICC Indus., Inc. v. United States, 5 Fed.Cir. (T) 78, 84, 812 F.2d 694, 699 (1987) (quoting Melamine Chem., Inc. v. United States, 2 Fed.Cir. (T) 57, 60-61, 732 F.2d 924, 928 (1984)). Commerce's "`interpretation of the statute need not be the only reasonable interpretation or the one which the court views as the most reasonable.'" ICC Indus., 5 Fed.Cir. (T) at 85, 812 F.2d at 699 (quoting Consumer Prod. Div., SCM Corp. v. Silver Reed America, Inc., 3 Fed.Cir. (T) 83, 90, 753 F.2d 1033, 1039 (1985) (emphasis in original)).

1. The CEDI Program

Commerce verified that the signatories to the suspension agreement had not received countervailable CEDIs directly and made the following determination:

The signatories to the suspension agreement accounted for more than 90 percent of the float glass exports to the United States during the period of review. We verified that the signatories did not receive CEDIs directly on the exports of float glass to the United States.

Final Results, 55 Fed.Reg. at 5,873. Plaintiff challenges this determination as unsupported by substantial evidence on the record.

In the first administrative review of the suspension agreement covering 1984 through 1985, Commerce found that the signatories to the suspension agreement, Vitro Flotado and Vidrio Plano, had not received countervailable benefits from CEDIs. First Administrative Review, 51 Fed.Reg. at 44,504. As noted earlier, that determination was upheld by this Court in PPG II, 13 CIT at 304, 712 F.Supp. at 201. During the second administrative review, as in the first, Plaintiff requested that Commerce investigate not only the possible direct receipt of CEDIs by the signatories, but also whether any company related to Vitro, S.A., the corporate parent of Vitro Flotado and Vidrio Plano, had received CEDIs. A.R.Doc. 15 at 2.⁶

Plaintiff contends that in the instant administrative review Commerce had before it "a great deal of information regarding the CEDI program not before the court in PPG II." Plaintiff's Brief at 15. A good portion of Plaintiff's argument that the signatories might have received countervailable benefits from the CEDI program rests upon an assumption that the Mexican government had previously misled Commerce regarding the status of the CEDI program—particularly, Plaintiff's assertion that "CEDIs had been paid after the alleged suspension of the program in 1982." Plaintiff's Brief at 17.

Because there appears to be some confusion regarding the 1982 suspension of the CEDI program, the Court finds it useful to clarify certain aspects of the program.

The CEDI program apparently contains more than one component. The acronym "CEDI" (Certificado de Devolucion de Impuesto) refers to a tax credit intended to rebate indirect taxes incurred during the manufacturing process of a product which is ultimately exported. See A.R.Doc. 31 at 5-6; see also A.R.Doc. 22 at 6. This portion of the CEDI program was discontinued by the Mexican government as of August 26, 1982; the CEDI program itself was not eliminated. A.R.Doc. 31 at 6.

The Court notes that part of the evidence relied upon by Plaintiff was submitted to ITA during the 1984-85 administrative review; this evidence, however, does not establish that the signatories received CEDI benefits at any time during the instant review covering 1986.⁷ The only new or additional information ITA received during the 1986 review consists of two documents — The 1986 Economic Report of the Government of Mexico, the official report of the President of Mexico ("Presidential Report") reflecting continued payments of CEDIs after 1982 and the 1986 annual report for the Vitro group, which allegedly indicates that it received CEDI benefits. A.R.Doc. 16 at 2-3.⁸ As discussed below, this evidence does not persuade the Court that the signatories received countervailable CEDI benefits during the period of review.

In its questionnaire response, the Mexican government stated that the particular CEDI which covers "the return of various taxes" was terminated on August 25, 1982. With respect to the 1986 Presidential Report showing the payment of CEDIs after 1982, the Mexican government explained that the document refers to the tax rebate which was available for exports made before August 25, 1982; and...