Apex Frozen Foods Private Ltd. v. United States , 862 F.3d 1322 ( 2017 )

United States Court of Appeals
for the Federal Circuit
______________________
APEX FROZEN FOODS PRIVATE LIMITED,
ANANDA AQUA APPLICATIONS, ANANDA AQUA
EXPORTS (P) LIMITED, ANANDA FOODS, ASVINI
FISHERIES PRIVATE LIMITED, AVANTI FEEDS
LIMITED, BLUEPARK SEAFOODS PRIVATE LTD.,
BMR EXPORTS, CHOICE CANNING COMPANY,
CHOICE TRADING CORPORATION PRIVATE
LIMITED, DEVI FISHERIES LIMITED, SATYA
SEAFOODS PRIVATE LIMITED, USHA SEAFOODS,
DEVI MARINE FOOD EXPORTS PRIVATE LTD.,
KADER EXPORTS PRIVATE LIMITED, KADER
INVESTMENT AND TRADING COMPANY PRIVATE
LIMITED, LIBERTY FROZEN FOODS PVT. LTD.,
LIBERTY OIL MILLS LTD., PREMIER MARINE
PRODUCTS, FALCON MARINE EXPORTS
LIMITED, K.R. ENTERPRISES, FIVE STAR
MARINE EXPORTS PRIVATE LIMITED, GVR
EXPORTS PRIVATE LIMITED, JAGADEESH
MARINE EXPORTS, JAYALAKSHMI SEA FOODS
PRIVATE LIMITED, KADALKANNY FROZEN
FOODS, DIAMOND SEAFOOD EXPORTS,
EDHAYAM FROZEN FOODS PRVT. LTD., THEVA &
COMPANY, MANGALA MARINE EXIM INDIA PVT.
LTD., NEKKANTI SEA FOODS LIMITED, NILA SEA
FOODS PRIVATE LIMITED, PENVER PRODUCTS
PRIVATE LIMITED, SAGAR GRANDHI EXPORTS
PRIVATE LIMITED, SAI MARINE EXPORTS PVT.
LTD., SAI SEA FOODS, SANDHYA MARINES
LIMITED, SPRINT EXPORTS PVT. LTD., STAR
ARGO MARINE EXPORTS PRIVATE LIMITED,
SURYAMITRA EXIM PVT. LTD., WELLCOME
FISHERIES LIMITED, UNIVERSAL COLD
2 APEX FROZEN FOODS PRIVATE LTD. v. UNITED STATES
STORAGE PRIVATE LIMITED,
Plaintiffs-Appellants
v.
UNITED STATES, AD HOC SHRIMP TRADE
ACTION COMMITTEE,
Defendants-Appellees
______________________
2016-1789
______________________
Appeal from the United States Court of International
Trade in No. 1:14-cv-00226-CRK, Judge Claire R. Kelly.
______________________
Decided: July 12, 2017
______________________
ROBERT L. LAFRANKIE, Crowell & Moring, LLP, ar-
gued for plaintiffs-appellants. Also represented by
MATTHEW R. NICELY, Hughes Hubbard & Reed LLP,
Washington, DC.
JOSHUA E. KURLAND, Commercial Litigation Branch,
Civil Division, United States Department of Justice,
Washington, DC, argued for defendant-appellee United
States. Also represented by BENJAMIN C. MIZER, JEANNE
E. DAVIDSON, PATRICIA M. MCCARTHY; SCOTT DANIEL
MCBRIDE, HENRY JOSEPH LOYER, United States Depart-
ment of Commerce, Washington, DC.
WHITNEY MARIE ROLIG, Picard Kentz & Rowe LLP,
Washington, DC, argued for defendant-appellee Ad Hoc
Shrimp Trade Action Committee. Also represented by
NATHANIEL RICKARD, ANDREW WILLIAM KENTZ, ROOP
BHATTI, MEIXUAN LI.
APEX FROZEN FOODS PRIVATE LTD. v. UNITED STATES 3
______________________
Before NEWMAN, CLEVENGER, and TARANTO, Circuit
Judges.
CLEVENGER, Circuit Judge.
Plaintiffs appeal the decision of the Court of Interna-
tional Trade (“CIT”) affirming the U.S. Department of
Commerce’s (“Commerce”) final results in the eighth
administrative review of the antidumping duty order on
certain frozen warmwater shrimp from India. Apex
Frozen Foods Private Ltd. v. United States, 144 F. Supp.
3d 1308 (Ct. Int’l Trade 2016); see also Certain Frozen
Warmwater Shrimp from India, 79 Fed. Reg. 51,309(Dep’t Commerce Aug. 28, 2014) (final administrative
review). Using the “average-to-transaction” methodology
with zeroing, Commerce assessed mandatory respondent
Devi Fisheries Limited (“Devi”) with a 1.97 percent duty
for entries between February 1, 2012, and January 31,
2012. Using a “mixed alternative” methodology, which
blends both the average-to-transaction and average-to-
average methodologies, Commerce assessed the second
mandatory respondent Falcon Marine Exports Lim-
ited/K.R. Enterprises (“Falcon”) with a 3.01 percent duty
for the same time period. Non-mandatory respondents
(including Apex Frozen Foods Private Limited (“Apex”))
were assessed with a simple-averaged antidumping duty
of 2.49 percent.
Plaintiffs include Apex, Devi, Falcon, and other ex-
porters subject to Commerce’s antidumping duties on
frozen warmwater shrimp from India (collectively,
“Apex”). Apex challenges the methodology used by Com-
merce to calculate the antidumping duties on a number of
grounds related to Commerce’s decision to use the aver-
age-to-transaction methodology and zeroing. For the
reasons that follow, we affirm the CIT’s decision and
sustain Commerce’s results.
4 APEX FROZEN FOODS PRIVATE LTD. v. UNITED STATES
BACKGROUND
I
“Dumping,” in international trade parlance, is a prac-
tice where international exporters sell goods to the United
States at prices lower than they are sold in their home
markets, in order to undercut U.S. domestic sellers and
carve out market share. To protect domestic industries
from goods sold at less than “fair value,” Congress enacted
a statute allowing Commerce to assess remedial “anti-
dumping duties” on foreign exports. 19 U.S.C. § 1673; see
also Viet I-Mei Frozen Foods Co. v. United States, 839
F.3d 1099, 1101 (Fed. Cir. 2016) (“The antidumping
statute provides for the assessment of remedial duties on
foreign merchandise sold in the United States at less than
fair market value that materially injures or threatens to
injure a domestic industry.”).
“Sales at less than fair value are those sales for which
the ‘normal value’ (the price a producer charges in its
home market) exceeds the ‘export price’ (the price of the
product in the United States) . . . .” Union Steel v. United
States, 713 F.3d 1101, 1103 (Fed. Cir. 2013). Commerce
performs this pricing comparison, and the concomitant
antidumping duty calculation, using one of three method-
ologies:
(1) Average-to-transaction [“A-T”], in which Com-
merce compares the weighted average of the nor-
mal values to the export prices (or constructed
export prices) of individual transactions.
(2) Average-to-average [“A-A”], in which Com-
merce compares the weighted average of the nor-
mal values to the weighted average of the export
prices (or constructed export prices).
(3) Transaction-to-transaction [“T-T”], in which
Commerce compares the normal value of an indi-
APEX FROZEN FOODS PRIVATE LTD. v. UNITED STATES 5
vidual transaction to the export price (or con-
structed export price) of an individual transaction.
Id. (citation omitted).
Previously, Commerce’s general practice was to use
the A-T methodology for both investigations and adminis-
trative reviews. Id. at 1104. With the adoption of the
Uruguay Rounds Agreement Act in 1995, Congress re-
quired that the A-A or T-T methods be the presumed
defaults for investigations, with the A-T method only to be
used in certain circumstances. Id.; see also 19 U.S.C.
§ 1677f-1(d)(1). Yet “Commerce continued to use average-
to-transaction comparisons as its general practice in
administrative reviews,” in the absence of any governing
statutory authority. Union Steel, 713 F.3d at 1104. Over
time, Commerce unified its procedures through regula-
tion, stating, “[i]n an investigation or review, the Secre-
tary will use the average-to-average method unless the
Secretary determines another method is appropriate in a
particular case,” 19 C.F.R. § 351.414(c)(1) (2012), and
began applying the investigations statutory framework to
guide its administrative reviews as well.
The investigations statute provides that, in general,
antidumping duties are to be calculated using the A-A
method—“comparing the weighted average of the normal
values to the weighted average of the export prices (and
constructed export prices) for comparable merchandise.” 1
19 U.S.C. § 1677f-1(d)(1)(A)(i). The statute, however,
contemplates an exception to this general rule:
The administering authority may determine
whether the subject merchandise is being sold in
the United States at less than fair value by com-
1 The statute also supports using the T-T method,
but the parties are in agreement that the T-T method is
not at issue here. 19 U.S.C. § 1677f-1(d)(1)(A)(ii).
6 APEX FROZEN FOODS PRIVATE LTD. v. UNITED STATES
paring the weighted average of the normal values
to the export prices (or constructed export prices)
of individual transactions for comparable mer-
chandise, if—
(i) there is a pattern of export prices (or
constructed export prices) for comparable
merchandise that differ significantly
among purchasers, regions, or periods of
time, and
(ii) the administering authority explains
why such differences cannot be taken into
account using a method described in para-
graph (1)(A)(i) or (ii).
19 U.S.C. § 1677f-1(d)(1)(B). In other words, the A-T
method can be used, provided two preconditions are met:
(1) a pattern of significant price differences, and (2) an
inability of the A-A method to “account” for these differ-
ences.
The statutory exception exists to address “targeted” or
“masked” dumping. Union Steel, 713 F.3d at 1104 n.3.
Under the A-A methodology, sales of low-priced “dumped”
merchandise would be averaged with (and offset by) sales
of higher-priced “masking” merchandise, giving the im-
pression that no dumping was taking place and frustrat-
ing the antidumping statute’s purpose. See Koyo Seiko
Co. v. United States, 20 F.3d 1156, 1159 (Fed. Cir. 1994).
The A-T method addresses this concern because, “[b]y
using individual U.S. prices in calculating dumping
margins, Commerce is able to identify a merchant who
dumps the product intermittently—sometimes selling
below the foreign market value and sometimes selling
above it.” Id. The driving rationale behind the statutory
exception is that targeted dumping is more likely to be
occurring where there is a “pattern of export prices . . . for
comparable merchandise that differ significantly among
purchasers, regions, or periods of time.” See 19 U.S.C.
APEX FROZEN FOODS PRIVATE LTD. v. UNITED STATES 7
§ 1677f-1(d)(1)(B); Union Steel, 713 F.3d at 1104 n.3; see
also H.R. Rep. No. 103-826, pt. 1, at 99 (1994) (“[The
exception] provides for a comparison of average normal
values to individual export prices . . . in situations where
an average-to-average . . . methodology cannot account for
a pattern of prices that differ significantly among pur-
chasers, regions, or time periods, i.e., where targeted
dumping may be occurring.”).
Commerce also devised the practice of “zeroing” when
compiling a weighted average dumping margin—“where
negative dumping margins (i.e., margins of sales of mer-
chandise sold at nondumped prices) are given a value of
zero and only positive dumping margins (i.e., margins for
sales of merchandise sold at dumped prices) are aggregat-
ed.” Union Steel, 713 F.3d at 1104. Commerce has dis-
continued its use of zeroing when applying the A-A
methodology, but zeroing remains part of Commerce’s
calculus when compiling a weighted average dumping
margin under the A-T methodology. Id. at 1104–05, 1109
(“Commerce’s decision to use or not use the zeroing meth-
odology reasonably reflects unique goals in differing
comparison methodologies. . . . When examining individu-
al export transactions, using the average-to-transaction
comparison methodology, prices are not averaged and
zeroing reveals masked dumping.”); see also U.S. Steel
Corp. v. United States, 621 F.3d 1351, 1363 (Fed. Cir.
2010).
II
Commerce initiated the eighth administrative review
of its antidumping duty covering frozen warmwater
shrimp from India (“AR8”) in April 2013—the review
period covered entries of merchandise that occurred
between February 1, 2012, and January 31, 2013. Com-
merce selected Devi and Falcon as mandatory respond-
ents.
8 APEX FROZEN FOODS PRIVATE LTD. v. UNITED STATES
Commerce published the final results of AR8 in Au-
gust 2014, along with an Issues and Decision Memoran-
dum explaining its methodology and results. By
regulation, Commerce typically “use[s] the A-A method
unless the Secretary determines another method appro-
priate in a particular case.” 19 C.F.R. § 351.414(c)(1).
Commerce noted that, despite the statutory silence re-
garding administrative reviews, the “analysis that has
been used in [less-than-fair-value] investigations [is]
instructive for purposes of examining whether to apply an
alternative comparison in this administrative review.”
Joint Appendix at 1395. As such, following 19 U.S.C.
§ 1677f-1(d)(1)(B), Commerce considered (1) whether
Devi’s and Falcon’s sales exhibited a pattern of significant
price differences among purchasers, regions, or periods of
time; and (2) whether “such differences can be taken into
account using” the A-A method.
Commerce applied a “differential pricing” analysis 2 to
determine if there was a pattern of significant price
2 A high-level summary of the differential pricing
analysis is sufficient for our purposes, as the parties do
not dispute the use and results on appeal. First, Com-
merce uses a statistical test referred to as the “Cohen’s d”
test, “a generally recognized statistical measure of the
extent of the difference between the mean of a test group
and the mean of a comparison group.” Joint Appendix at
1438. The Cohen’s d test yields a coefficient that may be
situated within fixed thresholds: small, medium, or large.
“The large threshold provides the strongest indications
that there is a significant difference between the means of
the test and comparison groups . . . .” Id. As such, target-
ed test groups “pass” the Cohen’s d test if they yield
coefficients equal to or exceeding the “large” threshold.
Second, Commerce considers the ratio of the sales in
the targeted groups found to have passed the Cohen’s d
APEX FROZEN FOODS PRIVATE LTD. v. UNITED STATES 9
differences between Devi’s and Falcon’s purchasers,
regions, or periods of time. 3 Commerce found that 73.3
percent of Devi’s sales passed the Cohen’s d test (more
than 66 percent), therefore theoretically warranting the
use of the A-T methodology on all of Devi’s sales. In
contrast, Commerce found 65.31 percent of Falcon’s sales
passed the Cohen’s d test (between 33 and 66 percent),
therefore theoretically warranting the use of the mixed
alternative: the A-T methodology for only those sales
test to the exporter’s total sales. If the “passing” sales
make up 33 percent or less of the exporter’s total sales,
the results suggest that an alternative methodology is not
justified and the traditional A-A methodology for all sales
is adequate. If the passing sales make up 66 percent or
greater, the results support the application of the alterna-
tive A-T methodology to the entirety of the exporter’s
sales. Finally, if the passing sales make up between 33
and 66 percent, the results support a “mixed” alternative
methodology, wherein the A-T methodology is applied
only to those sales found to have passed the Cohen’s d
test, but the A-A methodology is still used for sales not
passing the test.
3 In previous administrative reviews, Commerce
applied what was known as the Nails test to assess ex-
porters’ pricing differences. See Mid Continent Nail Corp.
v. United States, 712 F. Supp. 2d 1370, 1376–79 (Ct. Int’l
Trade 2010); see also Apex Frozen Foods Private Ltd. v.
United States, No. 15-2085, slip op. at 8 & n.2 (Fed. Cir.
July 12, 2017) (discussing the Nails test used in Com-
merce’s seventh administrative review (“AR7”) of certain
frozen warmwater shrimp from India). Commerce ex-
plained its reasoning for the change in methodology in
Differential Pricing Analysis; Request for Comments, 79
Fed. Reg. 26,720 (May 9, 2014). The propriety of Com-
merce’s change to its differential pricing analysis is not at
issue on appeal.
10 APEX FROZEN FOODS PRIVATE LTD. v. UNITED STATES
passing the Cohen’s d test, with the A-A methodology
being applied to the non-passing sales.
Following the statute, Commerce also determined
that the A-A methodology could not “account” for the
patterns of price differences in either Falcon’s or Devi’s
sales because “the difference[s] in the weighted-average
dumping margins computed using the A-to-A method and
the appropriate alternative method [were] meaningful.”
Joint Appendix at 1389 (footnote omitted); see also id. at
1439 (“In considering this question, the Department tests
whether using an alternative method . . . yields a mean-
ingful difference in the weighted-average dumping margin
as compared to that resulting from the use of the [A-A]
method only.”). Specifically, Commerce determined that
the ultimate margins for Devi and Falcon were zero using
the A-A methodology, whereas the margins were 1.97
percent and 3.01 percent, respectively, using the alterna-
tive methodologies. Commerce therefore adopted its
preliminary findings that, because the calculated margins
for both Devi and Falcon “move[d] across the de minimis
threshold when calculated using the [A-A] method and an
alternative method,” use of the respective alternative
methods for each was justified. Id. at 1439.
Consequently, Commerce assessed Devi with a 1.97
percent antidumping duty, calculated using the A-T
methodology for all sales; Commerce assessed Falcon with
a 3.01 percent antidumping duty, calculated using the
mixed methodology, with the A-T method applied to sales
passing the Cohen’s d test, and the A-A method applied to
the remainder. Exporters not selected for individual
review were assigned the simple average of the two rates:
2.49 percent.
Apex filed suit at the CIT, challenging Commerce’s fi-
nal results. On February 2, 2016, the CIT rejected Apex’s
claims and sustained the results of AR8 in full. Apex
Frozen Foods, 144 F. Supp. 3d 1308. Apex appeals the
APEX FROZEN FOODS PRIVATE LTD. v. UNITED STATES 11
CIT’s decision to this court. Apex contends that Com-
merce failed to justify sufficiently its conclusion that the
A-A methodology could not “account” for the observed
patterns of price differences. Apex also objects to Com-
merce’s antidumping margin calculation for the “mixed”
alternative methodology, which was applied to Falcon’s
sales.
We have jurisdiction under 28 U.S.C § 1295(a)(5).
STANDARD OF REVIEW
We review Commerce’s actions using the same stand-
ard applied by the CIT. Dongtai Peak Honey Indus. Co. v.
United States, 777 F.3d 1343, 1349 (Fed. Cir. 2015). As
such, we will sustain the agency’s decisions unless they
are “unsupported by substantial evidence on the record, or
otherwise not in accordance with law.” 19 U.S.C.
§ 1516a(b)(1)(B)(i). Notwithstanding the CIT’s “unique
and specialized expertise in trade law,” we review its
decision de novo. Union Steel, 713 F.3d at 1106; see also
Novosteel SA v. United States, 284 F.3d 1261, 1269 (Fed.
Cir. 2002) (“[W]e also give due respect to the informed
opinion of the [CIT].” (internal quotation marks omitted)).
Our review of an agency’s interpretation and imple-
mentation of a statutory scheme is governed by the Su-
preme Court’s holding in Chevron, U.S.A., Inc. v. Natural
Resources Defense Council, Inc., 467 U.S. 837 (1984).
Under Chevron’s two-part framework, we first ask
“whether Congress has directly spoken to the precise
question at issue.” Id. at 842. If yes, “that is the end of
the matter,” and we “must give effect to the unambiguous-
ly expressed intent of Congress.” Id. at 842–43. But, “if
the statute is silent or ambiguous with respect to the
specific issue, the question for the court is whether the
agency’s answer is based on a permissible construction of
the statute.” Id. at 843; see also Koyo Seiko, 36 F.3d at
1573 (“In a situation where Congress has not provided
clear guidance on an issue, Chevron requires us to defer to
12 APEX FROZEN FOODS PRIVATE LTD. v. UNITED STATES
the agency’s interpretation of its own statute as long as
that interpretation is reasonable.”).
DISCUSSION
Apex contends that Commerce unlawfully applied the
A-T methodology because it failed to explain adequately
why the price differences identified by the Cohen’s d test
could not be “taken into account” using the A-A methodol-
ogy, as required by statute. See 19 U.S.C. § 1677f-
1(d)(1)(B)(ii). Additionally, assuming it was proper to use
the mixed alternative methodology for Falcon’s sales,
Apex objects to Commerce’s ultimate antidumping duty
calculation under this approach. We address Apex’s
arguments in turn.
I
Apex does not challenge the results of Commerce’s
application of the Cohen’s d test—sales that illustrate a
pattern of significant price differences and that therefore
may be evidence of targeting or masked dumping. Ra-
ther, Apex contends that Commerce failed to adhere to
the statute’s requirement that “the administering author-
ity explains why such differences cannot be taken into
account using” the A-A methodology. 19 U.S.C. § 1677f-
1(d)(1)(B)(ii).
As noted above, Commerce’s justification for why the
A-A methodology was unable to account for the price
differences was based on its “meaningful difference” test,
which simply compared the ultimate antidumping duties
that would be applied under the A-A methodology versus
the alternative methodologies—the pure A-T methodology
for Devi’s sales, and the mixed methodology for Falcon’s
sales. Because the margins for both Devi and Falcon
“move[d] across the de minimis threshold”—going from
below 0.5 percent with the A-A methodology to above 0.5
percent with the alternative methodologies—Commerce
concluded that there was a meaningful difference between
APEX FROZEN FOODS PRIVATE LTD. v. UNITED STATES 13
the rates and that using an alternative methodology was
warranted. 4 Joint Appendix at 1439.
Apex takes issue with several aspects of Commerce’s
meaningful difference test as a mechanism for satisfying
the statute.
A
First, Apex challenges Commerce’s use of all sales
when conducting its meaningful difference analysis for
Devi and Falcon, instead of only those sales found to have
passed the Cohen’s d test. Apex argues that including all
sales is in direct contravention of the statute, which says
Commerce must explain “why such differences cannot be
taken into account using” the A-A methodology. See 19
U.S.C. § 1677f-1(d)(1)(B)(ii) (emphasis added). According
to Apex, “such differences” refers to the prior subsection’s
reference to a “pattern of export prices . . . that differ
significantly among purchasers, regions, or periods of
time,” i.e., targeted sales. § 1677d-1(d)(1)(B)(i). Apex
argues that applying the Cohen’s d test yields “two pools
of sales, one pool of all targeted sales and another pool of
all non-targeted sales. The [meaningful difference] test
which follows must then be conducted on ‘such differ-
ences,’ which in this case are differences related to the
targeted sales.” Apex Opening Brief at 35. Apex reasons
that, by using the entirety of Devi’s and Falcon’s sales in
the meaningful difference analyses, Commerce ran afoul
of Congress’s statutory directive and that we are obligat-
ed, under Chevron step one, to reverse. See Chevron, 467
4 “[Commerce] will treat as de minimis any
weighted-average dumping margin . . . that is less than
0.5 percent ad valorem, or the equivalent specific rate.”
19 C.F.R. § 351.106(c). In other words, Commerce disre-
gards antidumping margins that are less than 0.5 per-
cent.
14 APEX FROZEN FOODS PRIVATE LTD. v. UNITED STATES
U.S. at 842–43 (“If the intent of Congress is clear, that is
the end of the matter; for the court, as well as the agency,
must give effect to the unambiguously expressed intent of
Congress.”).
We disagree that the statutory language that Apex re-
lies on decides the “precise question at issue.” See id. at
842 (emphasis added). Under a plain reading of the
statute, the use of “such differences” does not, in itself,
manifest Congress’s intent to dictate how Commerce is to
make the determination whether the A-A methodology
can account for potential targeted or masked dumping.
See id. at 843 n.9 (explaining that courts are to use “tradi-
tional tools of statutory construction” to determine
whether “Congress had an intention on the precise ques-
tion at issue”). Chevron step one asks if Congress has
already spoken unambiguously on the course of conduct
the agency is to follow—we are not convinced Congress
has expressed any intent whatsoever as to the matter at
hand. Therefore, we reject Apex’s argument that this
issue may be resolved as a matter of Chevron step one. 5
“[I]f the statute is silent or ambiguous with respect to
the specific issue, the question for the court is whether
the agency’s answer is based on a permissible construc-
tion of the statute.” Id. at 843. An agency’s reasonable
5 We also note, again, that the statutory framework
of 19 U.S.C. § 1677f-1(d)(1), by its terms, only applies to
Commerce’s investigations, and not administrative re-
views. Indeed, § 1677f-1(d)(2) specifically contemplates
the continued use of the A-T methodology in reviews,
without elaborating on the appropriate circumstances for
doing so. As such, although Commerce has elected to
follow the investigations framework for its reviews as
well, we will defer to a reasonable agency interpretation,
given that Congress did not enact the statute to deal with
the issue we face.
APEX FROZEN FOODS PRIVATE LTD. v. UNITED STATES 15
interpretation “is ‘given controlling weight unless [it is]
arbitrary, capricious, or manifestly contrary to statute.’ ”
PSC VSMPO-Avisma Corp. v. United States, 688 F.3d
751, 763–64 (Fed. Cir. 2012) (alteration in original) (quot-
ing Chevron, 467 U.S. at 843–44). Apex maintains that,
even if Congress has not expressly spoken to the question
before us, Commerce’s implementation of the statutory
scheme is arbitrary, capricious, and clearly unreasonable
and should be set aside. See Changzhou Wujin Fine
Chem. Factory Co. v. United States, 701 F.3d 1367, 1374
(Fed. Cir. 2012). We disagree.
By statute, Commerce must explain why an observed
pattern of price differences “cannot be taken into account
using” the A-A methodology. 19 U.S.C. § 1677f-
1(d)(1)(B)(ii). As already established, the statute is silent
on how Commerce is to perform this analysis or even
what it means for the A-A methodology to take “account”
of price differences. Faced with a broad delegation of
authority, Commerce devised its meaningful difference
test, in which antidumping rates—as they would ulti-
mately be applied for the A-A methodology versus an
alternative—are compared, across all sales.
We find Commerce’s provided rationales in support of
its meaningful difference analysis to be reasonable. First,
we agree that the difference in the actual antidumping
rates that would be assessed—below de minimis when
calculated with the A-A methodology; above de minimis
when calculated with an alternative methodology—indeed
informs the question of whether the A-A methodology can
adequately account for a pattern of significant price
differences “because A-A masked the dumping that was
occurring as revealed by the A-T calculated margin.” See
Apex Frozen Foods, 144 F. Supp. 3d at 1333 n.24; see also
id. at 1334 (“It is reasonable for Commerce to judge
whether A-A is able to account for the price differences by
assessing its ability to do so against all sales, as it would
16 APEX FROZEN FOODS PRIVATE LTD. v. UNITED STATES
ultimately need to be able to do so when calculating the
dumping margin.”).
Second, Commerce explained its view that considering
all sales is actually necessary to achieve the overall aim of
§ 1677f-1(d)(1)(B), which is to address masked dumping.
Specifically, Commerce stated in its final Issues and
Decision Memorandum:
Higher-priced sales and lower-priced sales do not
operate independently; all sales are relevant to
the analysis. Higher- or lower-priced sales could
be dumped or could be masking other dumped
sales—this is immaterial in the Cohen’s d test and
the question of whether there is a pattern of pric-
es that differ significantly, because this analysis
includes no comparisons with [normal values]. By
considering all sales, both higher-priced and low-
er-priced, the Department is able to analyze an
exporter’s pricing behavior and to identify wheth-
er there is a pattern of prices that differ signifi-
cantly. . . . Where the evidence indicates that the
exporter is engaged in a pricing behavior which
creates a pattern, there is cause to continue with
the analysis to determine whether masked dump-
ing is occurring.
Joint Appendix at 1412. We understand Apex to be
challenging Commerce’s position on this point, but we
cannot say that the methodology Commerce has chosen to
implement Congress’s statutory scheme is unreasonable,
even where its justification may be, as the CIT found,
“less than ideal.” See Apex Frozen Foods, 144 F. Supp. 3d
at 1333 n.24; see also PSC VSMPO-Avisma, 688 F.3d at
764 (“This court has recognized that the antidumping
statute reveals tremendous deference to the expertise of
the Secretary of Commerce in administering the anti-
dumping law. Antidumping and countervailing duty
determinations involve complex economic and accounting
APEX FROZEN FOODS PRIVATE LTD. v. UNITED STATES 17
decisions of a technical nature, for which agencies possess
far greater expertise than courts.” (quoting Fujitsu Gen.
Ltd. v. United States, 88 F.3d 1034, 1039 (Fed. Cir.
1996))); cf. FCC v. Fox Television Stations, Inc., 556 U.S.
502, 513–14 (2009) (“[A] court is not to substitute its
judgment for that of the agency, and should uphold a
decision of less than ideal clarity if the agency’s path may
reasonably be discerned.” (internal quotation marks and
citations omitted)).
Apex, however, raises two specific counterarguments,
as to why Commerce’s implementation of the statute is
unreasonable. According to Apex, the statute contem-
plates a “two-stage process”: Commerce only needs to
consider the entirety of an exporter’s sales when ascer-
taining a pattern of price differences; but when perform-
ing the meaningful difference analysis, Commerce “need
not consider all sales again.” Apex Opening Brief at 38.
Moreover, Apex draws a distinction between the meaning-
ful difference analysis, which goes to the threshold ques-
tion of whether an alternative methodology other than
A-A is appropriate, and the ultimate remedy—i.e., the
weighted-average antidumping margin calculation.
Whereas it may be reasonable to consider all sales when
calculating a final antidumping duty with the A-T meth-
odology, Apex argues it is not reasonable to do so at the
threshold “account” stage.
We see no merit to Apex’s first argument that Com-
merce, after considering all sales in conducting its “pat-
tern” analysis, should not consider all sales in its
meaningful difference analysis. See Apex Opening Brief
at 38 (“Logically, there is no need to consider ‘all
sales’ . . . during the second stage . . . .”). To the extent
Apex is arguing that Commerce’s meaningful difference
test is unreasonable because it is inconsistent with the
statute’s text, Apex’s argument rests on an artificially
rigid reading of the statute that we find unsupported. At
a minimum, even if Apex presented a plausible interpre-
18 APEX FROZEN FOODS PRIVATE LTD. v. UNITED STATES
tation of the statute, it does not necessarily follow that
Commerce’s differing interpretation would be unreasona-
ble or impermissible. See Chevron, 467 U.S. at 843 n.11
(“The court need not conclude that the agency construc-
tion was the only one it permissibly could have adopted to
uphold the construction, or even the reading the court
would have reached if the question initially had arisen in
a judicial proceeding.”). And as to whether Commerce
acted arbitrarily or capriciously, Apex’s own argument
seems to suggest that, while it did not need to consider all
sales, Commerce nonetheless could consider them. Thus,
Apex’s argument fails.
In addition, despite Apex’s urging to the contrary,
there is no basis (statutory or otherwise) for demanding a
distinction between the meaningful difference analysis
and the ultimate margin calculation. Nowhere is Com-
merce instructed how to perform a threshold “account”
determination or that it must be different from the reme-
dial margin calculation. A meaningful difference test is
not even required under the statute. And, as we have
already determined, Commerce has explained why a
comparison of the ultimate antidumping rates sheds light
on whether the A-A methodology can account for price
differences—an explanation the CIT found adequate and
reasonable, as do we. See Apex Frozen Foods, 144 F.
Supp. 3d at 1333 n.24 (“The court can discern from Com-
merce’s explanation that A-A cannot account for the
pattern of significant price differences because A-A
masked the dumping that was occurring as revealed by
the A-T calculated margin. Thus, the meaningful differ-
ence between the margins demonstrated that A-A is not
equipped to uncover the mandatory respondents’ dump-
ing.”).
We affirm Commerce’s decision to analyze all of Devi’s
and Falcon’s sales in conducting its meaningful difference
analysis as a reasonable exercise of its delegated authori-
ty.
APEX FROZEN FOODS PRIVATE LTD. v. UNITED STATES 19
B
Second, Apex objects to Commerce’s uneven use of ze-
roing in its meaningful difference analysis. As already
noted, when looking at whether there was a meaningful
difference between the A-A methodology and the A-T
alternatives, Commerce compared the antidumping
margins as they would be ultimately calculated in prac-
tice. Commerce does not use zeroing when applying the
A-A methodology, but does use zeroing with the A-T
methodology. See generally Union Steel, 713 F.3d at
1104–09. Apex contends that, contrary to the goal of the
statute, “Commerce is simply measuring differences in
[antidumping] margins caused by zeroing, rather than
measuring whether A-A can account for masked dumping
attributed to targeted sales.” Apex Opening Brief at 40.
Apex repeats many arguments discussed already in the
context of Commerce’s use of all sales. Apex argues that
the disparate use of zeroing is contrary to language of the
statute, which requires Commerce to determine whether
A-A can account for significant price differences, “not
differences in calculation methodologies attributable to
zeroing.” Id. Apex also argues that, regardless of how
zeroing is applied at the ultimate remedy stage, it should
be applied evenly at the threshold meaningful difference
analysis. Finally, Apex contends that, when zeroing is
used consistently, the differences between the A-A meth-
odology and the A-T alternatives are “miniscule,” demon-
strating that there is no meaningful difference between
the methodologies, except due to the distortive effects of
zeroing. Apex Opening Brief at 43.
Much of our analysis from the previous discussion ap-
plies with equal force to the question now presented. As
we held before, the statutory text of 19 U.S.C. § 1677f-
1(d)(1)(B)(ii) does not illustrate a clear Congressional
directive to Commerce. Certainly it does not demand
whether Commerce is to use zeroing in any particular
fashion. Therefore, we merely assess whether Com-
20 APEX FROZEN FOODS PRIVATE LTD. v. UNITED STATES
merce’s reading of the statute was permissible and
whether its implementation was otherwise arbitrary,
capricious, or unreasonable. See Chevron, 467 U.S. at843–44; Koyo Seiko, 36 F.3d at 1573.
We hold that Commerce’s meaningful difference anal-
ysis—comparing the ultimate antidumping rates result-
ing from the A-A methodology, without zeroing; and the
A-T methodology, with zeroing—was reasonable. Apex
argues Commerce can only measure masked dumping by
zeroing on both sides or not at all (“a true ‘apples-to-
apples’ comparison”). Apex Opening Brief at 48. But, as
we stated above, nothing in the statute demands invent-
ing a two-part analysis as Apex suggests—one calculation
for the meaningful difference test and a different calcula-
tion for the ultimate remedy. Commerce’s methodology
compares the A-A and A-T methodologies, as they are
applied in practice, and in a manner this court has ex-
pressly condoned. See Union Steel, 713 F.3d at 1109
(“Commerce’s decision to use or not use the zeroing meth-
odology reasonably reflects unique goals in differing
comparison methodologies.”); Apex Frozen Foods, 144 F.
Supp. 3d at 1335 (“The zeroing characteristic of A-T is
inextricably linked to the comparison methodology and its
effect in the meaningful difference analysis does not
render the approach unreasonable.”). Apex’s proposal for
the meaningful difference analysis would require artificial
comparators—either the A-T methodology without zero-
ing, or the A-A methodology with zeroing. We think, in
light of Commerce’s contrary practices and our precedent,
Apex’s preferred approach would provide a skewed per-
spective. At the very least, we cannot say that Com-
merce’s meaningful difference analysis is unreasonable—
intuitively, an analysis that compares the methodologies
as they would ultimately be applied “makes sense.” See
Commerce Brief at 48.
Moreover, like the CIT, we find it immaterial whether
the A-A and A-T margins would be nearly identical if
APEX FROZEN FOODS PRIVATE LTD. v. UNITED STATES 21
zeroing were applied evenly or not at all. See Apex Frozen
Foods, 144 F. Supp. 3d at 1335 (“While [Apex] may be
correct that the A-T and A-A margins would be nearly
identical if one were to either eliminate zeroing or zero on
both sides of the comparison, that fact does not present an
arguable issue . . . .”). The notion that Commerce’s chosen
methodology is unreasonable because it only measures
the effects of zeroing is misplaced. Notwithstanding some
controversy surrounding the use of zeroing, see Union
Steel, 713 F.3d at 1104, differences revealed by zeroing
are not inconsequential or to be ignored, as Apex seems to
suggest. “In [A-A] comparisons, . . . Commerce examines
average export prices; zeroing is not necessary because
high prices offset low prices within each averaging group.
When examining individual export transactions, using the
[A-T] comparison methodology, prices are not averaged
and zeroing reveals masked dumping.” Id. at 1109. In
other words, the effects of zeroing are precisely what 19
U.S.C. § 1677f-1(d)(1)(B) seeks to address. Apex argues
that the justifications for zeroing are only relevant to the
“remedy phase,” but, for the reasons already given, we
reject a clear division between the “account” analysis and
the “remedy” calculation.
While Commerce’s methodology may indeed be “re-
sults-oriented,” we cannot say that it preordains the use
of an A-T alternative methodology or that it is unreasona-
ble. Apex’s submitted approach may offer another rea-
sonable alternative, but “[w]hen a statute fails to make
clear ‘any Congressionally mandated procedure or meth-
odology for assessment of the statutory tests,’ Commerce
‘may perform its duties in the way it believes most suita-
ble.’ ” See JBF RAK LLC v. United States, 790 F.3d 1358,
1363 (Fed. Cir. 2015) (quoting U.S. Steel Grp. v. United
States, 96 F.3d 1352, 1362 (Fed. Cir. 1996)). We agree
that Commerce’s chosen methodology reasonably achieves
the overarching statutory aim of addressing targeted or
masked dumping.
22 APEX FROZEN FOODS PRIVATE LTD. v. UNITED STATES
II
Apex finally argues that, even if Commerce were justi-
fied in determining that an alternative methodology
should be applied, Commerce’s calculation of the “mixed”
antidumping margin for Falcon was flawed.
As mentioned briefly already, 65.31 percent of Fal-
con’s sales passed the Cohen’s d test. Consequently,
following its differential pricing analysis, Commerce
applied the A-T methodology (with zeroing) to those sales
passing the test, and the A-A methodology (without
zeroing) for sales that did not pass, resulting in two
antidumping margins: an A-T margin and an A-A margin.
In this case, the A-A margin for Falcon’s sales was nega-
tive. In order to arrive at a final, weighted-average
antidumping margin under this mixed alternative meth-
odology, Commerce aggregated the two margins, but set
the negative A-A margin to zero, rather than allowing it
to offset the positive A-T margin. Apex argues that it was
arbitrary, capricious, or otherwise unreasonable to use
zeroing a second time, at the aggregation step, after
already using zeroing to derive the initial A-T antidump-
ing margin. According to Apex, this practice of “double
zeroing” defeats the purpose of the mixed alternative
methodology by undermining the A-A portion, which does
not use zeroing. Apex contends the use of double zeroing
resulted in a much higher (two-fold) ultimate antidump-
ing duty for Falcon’s sales because “significant negative”
A-A margins were zeroed, rather than offsetting positive
margins. Apex Opening Brief at 54.
Critically, Apex has not challenged the mixed alterna-
tive methodology itself—just Commerce’s chosen means of
administering it. At first glance, Apex’s complaint is not
entirely without merit. Commerce discontinued the
practice of zeroing in the A-A methodology context. See
U.S. Steel Corp., 621 F.3d 1351. Zeroing the negative A-A
margins would appear to “defeat the purpose” of using the
APEX FROZEN FOODS PRIVATE LTD. v. UNITED STATES 23
A-A methodology in the mixed calculation at all, as Apex
suggests. Yet Apex’s solution—that negative margins be
aggregated with positive margins to offset and dampen
the final, weighted average antidumping duty—runs into
a similar paradox, wherein Commerce would effectively
be performing “double offsetting” and “re-masking”
masked dumping revealed by the A-T methodology.
This tension is the result of Commerce’s decision to
merge the A-A and A-T methodologies into its mixed
alternative approach. “[T]he [A-A and A-T] comparison
methodologies compute dumping margins in different
ways and are used for different reasons.” Union Steel,
713 F.3d at 1104. It is therefore unsurprising that, in
seeking to combine the two methodologies to arrive at a
single antidumping rate, Commerce would be forced to
subordinate the policy goals of one to the other. As ex-
plained by the CIT:
Commerce had the option to aggregate the two
calculated margins by either providing for or not
providing for offsets where there was negative
dumping in the sales subject to A-A. Commerce
has made the discretionary decision not to provide
for offsets to calculate the weighted-average
dumping margin for a respondent whose dumping
has been assessed using more than one compari-
son method.
Apex Frozen Foods, 144 F. Supp. 3d at 1336. It is our role
merely to assess whether Commerce’s methodological
choice was reasonable. Like the CIT, we find that it was.
Having already concluded that the preconditions for
applying the statutory exceptions were satisfied, 19
U.S.C. § 1677f-1(d)(1)(B), Commerce chose to maximize
and preserve the extent of uncovered masked dumping.
This decision was consistent with the overall statutory
purpose.
24 APEX FROZEN FOODS PRIVATE LTD. v. UNITED STATES
Apex argues, without citation, that Commerce “was
arbitrary, capricious, and unreasonable for automatically
zeroing during the aggregation phase, and without con-
sideration of the facts and any impact on purported
‘masking.’ Commerce must consider the evidence to
understand the extent of any ‘masking’ on the target-
ed . . . sales.” Apex Opening Brief at 56. It is not appar-
ent on what authority Apex rests its challenge to
Commerce’s methodological choice. Moreover, Apex
seems to misunderstand the judiciary’s role when review-
ing agency action in circumstances such as this. “When a
challenge to an agency construction of a statutory provi-
sion, fairly conceptualized, really centers on the wisdom of
the agency’s policy, rather than whether it is a reasonable
choice within a gap left open by Congress, the challenge
must fail. In such a case, federal judges—who have no
constituency—have a duty to respect legitimate policy
choices made by those who do.” Chevron, 467 at 866; see
also PSC VSMPO-Avisma, 688 F.3d at 764 (“In examining
Commerce’s approach, we must be mindful that as the
‘master of antidumping law,’ Commerce is entitled to
substantial deference in its choice of . . . methodology.”
(quoting Thai Pineapple Pub. Co. v. United States, 187
F.3d 1362, 1365 (Fed. Cir. 1999)).
Commerce’s decision to preserve the maximum
amount masked dumping by zeroing the negative A-A
margin was a reasonable exercise of its delegated authori-
ty, to which we defer.
CONCLUSION
For the foregoing reasons, we affirm the decision of
the CIT, and Commerce’s final results in AR8 are sus-
tained.
AFFIRMED
COSTS
No costs.