Sucocitrico Cutrale Ltd. v. United States

• Decision Date: 01 June 2012
• Docket Number: Slip Op. 12-71,Court No. 10-00261
• Court: U.S. Court of International Trade
• Parties: SUCOCITRICO CUTRALE LTDA. AND CITRUS PRODUCTS INC., Plaintiffs, v. UNITED STATES, Defendant, and FLORIDA CITRUS MUTUAL, CITRUS WORLD, INC., SOUTHERN GARDENS CITRUS PROCESSING CORPORATION, and A. DUDA & SONS, INC., Defendant-Intervenors.

SUCOCITRICO CUTRALE LTDA.

AND CITRUS PRODUCTS INC., Plaintiffs,

v.UNITED STATES, Defendant,and FLORIDA CITRUS MUTUAL, CITRUS

WORLD, INC., SOUTHERN GARDENS CITRUS

PROCESSING CORPORATION, and

A. DUDA & SONS, INC., Defendant-Intervenors.

Slip Op. 12-71

Court No. 10-00261

UNITED STATES COURT OF INTERNATIONAL TRADE

Dated: June 1, 2012

Before: Richard W. Goldberg, Senior Judge

PUBLIC VERSION

OPINION

[Plaintiff's Motion for Judgment on the Agency Record under USCIT Rule 56.2 is granted in part and denied in part.]

Christopher Allen Dunn and Matthew Paul McCullough, Curtis, Mallet-Prevost, Colt & Mosle LLP, of Washington, D.C., for plaintiffs.

Joshua Ethan Kurland, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for defendant. With him on the brief were Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, and Franklin E. White, Assistant Director. Of counsel on the brief was George Kivork, International Trade Administration, U.S. Department of Commerce, of Washington, D.C.

Matthew Thomas McGrath and Stephen William Brophy, Barnes, Richardson & Colburn, of Washington D.C., for defendant-intervenors Florida Citrus Mutual and Citrus World, Inc. Goldberg, Senior Judge: Plaintiffs Sucocitrico Cutrale Ltda. ("Cutrale") and its affiliated importer, Citrus Products, Inc. (CPI) (collectively, "Plaintiffs" or "Cutrale") contest the final results of the U.S. Department of Commerce's ("Commerce") antidumping duty determination. Plaintiffs challenge Commerce's factual findings and legal conclusions in the administrative review of the antidumping order on Certain Orange Juice from Brazil. See Certain Orange Juice from Brazil, 75 Fed. Reg. 50,999 (Dep't Commerce Aug. 18, 2010) (Final Results).

For the reasons discussed below, Plaintiffs' motion is granted in part and denied in part. The Court remands the Final Results to Commerce for reconsideration of its decision to zero when calculating Fischer's dumping margin. The Court affirms Commerce's decisions with respect to the remaining issues.

BACKGROUND

Cutrale is a Brazilian company that produces orange juice concentrate for the U.S. market. On April 27, 2009, pursuant to 19 U.S.C. § 1675 (a)(2)(B), Commerce initiated a review of its antidumping duty order concerning orange juice from Brazil for the period of March 1, 2008 to February 28, 2009. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation, 74 Fed. Reg. 19,042 (Dep't Commerce Apr. 27, 2009). On April 13, 2012 Commerce published the preliminary results of the review. See Certain Orange Juice from Brazil, 75 Fed. Reg. 18,794 (Dep't Commerce Apr. 13, 2010) (Preliminary Results).

On May 14, 2010, Cutrale filed an administrative case brief challenging, among other things, Commerce's decision to zero despite adverse World Trade Organization (WTO) rulings. However, at that time Cutrale did not specifically argue that Commerce's policy of zeroing inadministrative reviews, but not in investigations, was based on an impermissibly inconsistent statutory interpretation. Commerce rejected all of Cutrale's protests and issued the Final Results on August 18, 2010. See Final Results, 75 Fed. Reg. 50,999.

JURISDICTION AND STANDARD OF REVIEW

This Court has jurisdiction pursuant to section 201 of the Customs Court Act of 1980, 28 U.S.C. § 1581(c) (2006).

This Court must "uphold Commerce's determination unless it is 'unsupported by substantial evidence on the record, or otherwise not in accordance with law.'" Micron Tech., Inc. v. United States, 117 F.3d 1386, 1393 (Fed. Cir. 1997) (quoting 19 U.S.C. § 1516a(b)(1)(B)(i) (1994)). When reviewing agency determinations, findings, or conclusions for substantial evidence, this Court determines whether the agency action is reasonable in light of the entire record. See Nippon Steel Corp. v. United States, 458 F.3d 1345, 1350-51 (Fed. Cir. 2006). This Court affords Commerce's factual finding a tremendous amount of deference. See INS v. Elias-Zacarias, 502 U.S. 478, 483-84 (1992) (stating that in fact-intensive situations, agency conclusions should be reversed only if the record contains evidence "so compelling that no reasonable factfinder" could reach the same conclusion).

DISCUSSION

Under the current antidumping law, Commerce imposes antidumping duties "on imported merchandise that is being sold, or is likely to be sold, in the United States at less than fair value to the detriment of a domestic industry." Micron Tech., Inc. v. United States, 243 F.3d 1301, 1303 (Fed. Cir. 2001) (citing 19 U.S.C. § 1673). The "dumping margin," which is the amount of the duty to be imposed, "is the amount by which the price charged for the subject merchandise inthe home market (the 'normal value') exceeds the price charged in the United States (the 'U.S. price')." Id. (citing 19 U.S.C. §§ 1673, 1677(25)(A)). Where, as here, the foreign producer sells directly to an affiliated purchaser in the United States, Commerce must calculate a constructed export price (CEP) to use as the U.S. price for purposes of comparison. 19 U.S.C. § 1677a(b). Thus, Commerce treated all of Cutrale's U.S. sales as constructed export price (CEP) sales because Cutrale sells directly to its U.S. affiliate CPI. 19 U.S.C. §1677a(b).

Cutrale produces only for export to the United States and does not sell goods in its home market. Thus, there is no "normal value" of goods in the home market or in any third country for Commerce to compare with the CEP. In this situation, Commerce calculates a "constructed value" of goods in the home market to compare with the CEP. 19 U.S.C. § 1677b(a)(4). Commerce must "consider all available evidence on the proper allocation of costs." Id. § 1677b(f)(1)(A). The statute does not provide specific guidance on the calculation of financial expenses. Therefore, Commerce has broad discretion to devise a method for calculating "general expenses." Am. Silicon Techs. v. United States, 334 F.3d 1033, 1037 (Fed. Cir. 2003).

Cutrale raises seven issues on appeal: (1) whether Commerce's decision to zero in this administrative review is unreasonable and not in accordance with law; (2) whether Commerce's determination to exclude excess revenue Cutrale received from fees charged for port charges and other expenses is in accordance with law; (3) whether Commerce improperly determined that, because there is not a "substantial difference" between Cutrale's in the level of trade between the home and U.S. markets, Cutrale is not entitled to a CEP offset; (4) whether Commerce improperly used brix levels calculated to the hundredth of a degree in determining sales prices and quantities; (5) whether Commerce improperly decided to calculate CPI's cost of holdinginventory in the United States based on the cost of financing in Brazil; (6) whether, in determining the cost of production, Commerce improperly valued oranges received by Cutrale from affiliated parties; and (7) whether Commerce improperly deducted byproduct sales revenue when calculating Cutrale's general and administrative financial expense ratios.

I. Commerce must change or explain its inconsistent policy with respect to zeroing

Cutrale challenges Commerce's decision to zero when it calculated Cutrale's constructed export price during the administrative review. Plaintiffs request that the Court either remand this case to Commerce to explain its inconsistent statutory interpretation or require recalculation of Cutrale's dumping margin zeroing.

As a preliminary matter, the Government contends that the Court should dismiss this claim because Cutrale did not make this precise argument in its case brief and thus failed to exhaust its administrative remedies. Under 28 U.S.C. § 2637(d), this Court "shall, where appropriate, require the doctrine of exhaustion of administrative remedies" in civil actions arising from Commerce's antidumping duty determinations. The doctrine of exhaustion generally requires that the parties exhaust all administrative remedies before this Court will consider the issue on appeal. Sandvik Steel Co. v. United States, 164 F.3d 596, 599 (Fed. Cir. 1998). In this case, enforcing the doctrine would mean that because Cutrale did not specifically challenge zeroing as arbitrary in its administrative case brief, it is barred from doing so now.

However, several exceptions to the exhaustion doctrine allow the Court to consider Cutrale's claim. Most importantly, the doctrine of intervening judicial interpretation applieshere.¹ Corus Staal BV v. United States, 30 CIT 1040, 1050 n.11 (2006). This exception allows the Court to consider an issue if "a judicial interpretation intervened since the remand proceeding, changing the agency results." Id. Prior to the Court of Appeals for the Federal Circuit's ("Federal Circuit") recent decisions in Dongbu Steel Co. v. United States, 635 F.3d 1363 (Fed. Cir. 2011) and JTEKT Corp. v. United States, 642 F.3d 1378 (Fed. Cir. 2011), it appeared to be settled law that Commerce could refuse to zero in original investigations while zeroing in administrative reviews. However, the Federal Circuit's recent decisions constitute an intervening interpretation that reversed the law as it had previously existed and therefore the Court will consider Cutrale's zeroing argument. See Grobest & I-Mei Industrial Co. v. United States, 36 CIT __, 815 F. Supp. 2d 1342, 1350 n.11 (2012) ("As the decision in Dongbu was not available prior to the final results in this administrative review, the court does not credit Commerce's exhaustion argument.")

In Dongbu Steel, the Federal Circuit questioned the reasonableness of Commerce's inconsistent practice of zeroing in administrative reviews, but not zeroing in investigations. 635 F.3d at 1373. The court held that it was arbitrary for Commerce to interpret the antidumping statute to prohibit zeroing in original investigations while interpreting it to permit zeroing in administrative reviews. Id.; ...