PPG Industries, Inc. v. US

• Decision Date: 09 August 1990
• Docket Number: Court No. 86-12-01546.
• Citation: 746 F. Supp. 119,14 CIT 522
• Parties: PPG INDUSTRIES, INC., Plaintiff, v. UNITED STATES, Defendant, Vitro Flex, S.A. and Cristales Inastillables De Mexico, S.A., Defendant-Intervenors.
• Court: U.S. Court of International Trade

746 F. Supp. 119

14 CIT 522

PPG INDUSTRIES, INC., Plaintiff, v. UNITED STATES, Defendant Vitro Flex, S.A. and Cristales Inastillables De Mexico, S.A., Defendant-Intervenors.

Court No. 86-12-01546.

United States Court of International Trade.

August 9, 1990.

COPYRIGHT MATERIAL OMITTED

Stewart and Stewart, (Terence P. Stewart and David Scott Nance), for plaintiff.

Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civil Div., U.S. Dept. of Justice (Platte B. Moring, III), Craig L. Jackson, of counsel, Attorney-Advisor, Office of the Deputy Chief Counsel for Import Admin., U.S. Dept. of Commerce, for defendant.

Brownstein, Zeidman and Schomer, (Irwin P. Altschuler and David R. Amerine), for defendant-intervenors.

MEMORANDUM OPINION AND ORDER

CARMAN, Judge:

In this action PPG Industries, Inc. (PPG) contests certain aspects of the determination of the International Trade Administration, United States Department of Commerce (Commerce), in the final administrative review of the countervailing duty order covering fabricated automotive glass from Mexico for the period October 24, 1984 through December 31, 1985. Fabricated Automotive Glass From Mexico: Final Results of Countervailing Duty Administrative Review, 51 Fed.Reg. 44,652 (December 11, 1986). Commerce determined the total bounty or grant conferred on defendant-intervenors Vitro Flex, S.A. and Cristales Inastillables De Mexico, S.A.¹ in calendar year 1984 was 2.45% ad valorem and 0.17% ad valorem in 1985. Id. Commerce determined the benefit received in 1985 was de minimis and directed the Customs Service to waive the assessment of countervailing duties for all entries made during 1985 and to waive cash deposit of estimated countervailing duties on future shipments of merchandise. Id. at 44,655. PPG contests this determination and moves for judgment upon the administrative record under USCIT Rule 56.1. This Court has jurisdiction pursuant to 19 U.S.C. § 1516a(a)(2)(A)(i) (1982 & Supp. V 1987) and 28 U.S.C. § 1581(c) (1982).

After examination of the contentions of the parties, the statutes, case law and record as discussed below, the Court determines to remand this action to Commerce for the limited purpose of reexamining the benefits conferred by the FOMEX export loans for 1984 and 1985 and to make any appropriate adjustments to the total bounty or grant for the relevant period. As to all other issues the Court holds that Commerce's final determination is based upon substantial evidence on the record and is otherwise in accordance with law.

BACKGROUND

On January 14, 1985 pursuant to section 303 of the Tariff Act of 1930 as amended, 19 U.S.C. § 1303, Commerce published in the Federal Register a final affirmative countervailing duty determination and order finding that bounties or grants were provided to two manufacturers and exporters of fabricated automotive glass² from Mexico, Vitro Flex and Crinamex, in the amount of 4.68% ad valorem. Final Affirmative Countervailing Duty Determination and Countervailing Duty Order: Fabricated Automotive Glass From Mexico, 50 Fed.Reg. 1,906 (Jan. 14, 1985). This determination was substantially upheld by this Court in Vitro Flex, S.A. v. United States, 13 CIT ___, 714 F.Supp. 1229 (1989).³

Subsequently, on August 5, 1985, defendant-intervenors renounced any further participation in the programs determined by Commerce to be countervailable in its final countervailing duty determination. Administrative Record Document (A.R.) 29, Exhibit 7 (522, 523).⁴ On February 18, 1986, Commerce published notice of initiation of a countervailing duty administrative review covering fabricated automotive glass from Mexico. 51 Fed.Reg. 5,751. The review covered the period October 24, 1984 through December 31, 1985 and examined 22 programs alleged to be countervailable.

After substantial investigation Commerce published the preliminary results of its countervailing duty administrative review. 51 Fed.Reg. 25,380 (July 14, 1986). Commerce preliminarily determined that the net countervailable benefit conferred on the Mexican manufacturers and exporters, Crinamex and Vitro Flex, was 6.51% ad valorem during the period October 24, 1984 through December 31, 1984 and 0.12% ad valorem during calendar year 1985. Id.

Prior to the issuance of the final results of the administrative review, Commerce received comments from interested parties and conducted a hearing at PPG's request. A.R. 65 (1175), 59 (712), 61 (827). On the basis of these and other comments and further investigation, Commerce revised its preliminary determination and concluded that the total net bounty or grant received by defendant-intervenors in 1984 was 2.45% ad valorem and 0.17% ad valorem for the 1985 calendar year and that the latter figure was de minimis. 51 Fed.Reg. 44,652. The total benefit was determined to derive entirely from defendant-intervenors' participation in the FOMEX program. PPG seeks review of this determination.

PPG asserts four broad arguments in support of its contention that Commerce's final administrative review determination substantially undervalued the countervailable benefit conferred upon defendant-intervenors: (1) Commerce failed to properly calculate the benefit conferred by the FOMEX program;⁵ (2) Commerce improperly determined that the FICORCA program⁶ was not countervailable; (3) Commerce improperly determined that Mexico's policy concerning the pricing of natural gas was not countervailable, and; (4) Commerce failed to adequately investigate whether benefits were conferred by the CEDI program.⁷ PPG asserts Commerce's conclusions were not supported by substantial evidence on the record and were otherwise contrary to law.

In response, Commerce admits to committing certain errors in calculating a portion of the benefit conferred by the FOMEX program and requests a limited remand to make appropriate corrections and perform any necessary recalculations of the total bounty or grant. As to the remaining contentions, Commerce requests they be rejected and the remaining portions of the final determination be upheld based upon substantial evidence on the record. Defendant-intervenors assert the final determination should be sustained in its entirety, arguing that a remand is not necessary.

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)(A) (1982). 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)).

As a general rule this Court will accord substantial deference to Commerce's implementation of its statutory mandate, since an agency's interpretation of a statute it is authorized to administer will be upheld as in accordance with law "`unless unreasonable and plainly inconsistent with the statute, and ... unless weighty reasons require otherwise.'" ICC Indus. v. United States, 5 Fed. Cir. (T) 78, 84, 812 F.2d 694, 699 (1987) (quoting Melamine Chemicals, Inc. v. United States, 2 Fed. Cir. (T) 57, 60-61, 732 F.2d 924, 928 (1984)). Furthermore, "an agency's `interpretation of the statute need not be the only reasonable interpretation or the one which the court views as the most reasonable.'" Id. 5 Fed. Cir. (T) at 85, 812 F.2d at 699 (quoting Consumer Products Div., SCM Corp. v. Silver Reed America, Inc., 3 Fed. Cir (T) 83, 90, 753 F.2d 1033, 1039 (1985)) (emphasis in original). Where there is substantial evidence on the record, and conflicting conclusions can be drawn therefrom, this Court will defer to the judgment of the agency, even if the agency's decision is not in accord with the decision the court would have adopted had it reviewed the record de novo. American Lamb Co. v. United States, 4 Fed.Cir. (T) 47, 54, 785 F.2d 994, 1001 (1986).

I. FOMEX Program

PPG contends that Commerce failed to calculate the full benefit provided to Mexican autoglass producers by FOMEX loans and improperly allocated the benefits over an arbitrarily chosen time period.

A. FOMEX Valuation

The FOMEX loan program includes pre-export loans paid out in pesos, and export loans paid out in dollars or other foreign currency. PPG contends Commerce made significant errors in determining the value of both categories of loans.

1. FOMEX Pre-Export Loans

In determining whether a countervailable subsidy had been conferred by FOMEX pre-export loans at preferential rates, and the amount of any subsidy, Commerce compared the FOMEX loan interest rate with a benchmark national average interest rate. The benchmark rate purportedly reflected the loan interest rate a Mexican company could have obtained through private channels. In determining the benchmark rate for 1984, Commerce used the effective interest rates published by the Bank of Mexico in the publication Indicadores Economicos (I.E.) for that year. 51 Fed.Reg. at 44,653.

Since the Bank of Mexico did not publish I.E. rates for 1985, Commerce calculated the benchmark rate for 1985 by using the Costo Porcentual Promedio (CCP). The CCP, relied on by the Bank of Mexico in calculating the I.E. rates, represented the average cost of funds to a sample of Mexican banks plus a spread to reflect a risk premium. To construct a benchmark rate for 1985, Commerce used the average CCP rate for 1985 and added to it the average spread between the CCP and the I.E. effective rates for the period 1982-84.

Commerce explained the rationale underlying its approach:

The effective I.E. interest rates are based on data received from a sample of companies representing a cross-section of the economy. These effective rates include finance charges, e.g., commissions, fees for opening a line of credit, fees for credit

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