Navneet Publications (India) Ltd. v. United States , 32 Ct. Int'l Trade 169 ( 2008 )

Slip Op. 08-22
UNITED STATES COURT OF INTERNATIONAL TRADE
___________________________________
:
NAVNEET PUBLICATIONS (INDIA) :
LIMITED, :
:
Plaintiff, :
:
v. : Before: Richard K. Eaton,
: Judge
UNITED STATES, :
: Court No. 06-00401
Defendant, :
and : Public Version
:
ASSOC. OF AMERICAN SCHOOL PAPER :
SUPPLIERS, :
:
Defendant-Intervenor. :
___________________________________:
OPINION
[United States International Trade Commission’s Final
Determination sustained.]
Dated: February 26, 2008
deKieffer & Horgan (Gregory S. Menegaz and John J. Kenkel), for
plaintiff Navneet Publications (India) Limited.
James M. Lyons, General Counsel, United States International
Trade Commission; Andrea C. Casson, Assistant General Counsel for
Litigation, United States International Trade Commission (Peter
L. Sultan), for defendant.
Wiley Rein LLP (Alan H. Price, Timothy C. Brightbill, and Maureen
E. Thorson), for defendant-intervenor Association of American
School Paper Suppliers.
Court No. 06-00401 Page 2
Eaton, Judge: Before the court is the motion for judgment
upon the agency record of plaintiff Navneet Publications (India)
Limited (“Navneet”). See Pl.’s R. 56.2 Mem. Supp. Mot. J. Agency
R. (“Pl.’s Mem.”). Defendant the United States International
Trade Commission (“ITC” or the “Commission”) and defendant-
intervenor the Association of American School Paper Suppliers
(the “Association”) oppose Navneet’s motion. See ITC’s Opp’n
Pl.’s Mot. J. Agency R. (“ITC’s Opp’n”); Association’s Revised
Resp. Br. (“Ass’n.’s Resp.”).
By its motion, Navneet challenges the ITC’s final
determination that imports into the United States of certain
lined paper school supplies (“CLPSS”) from India are causing or
threaten to cause material injury to the United States CLPSS
industry. See CLPSS from China, India, and Indonesia, 71 Fed.
Reg. 55,804 (ITC Sept. 25, 2006) (notice of final determination);
CLPSS from China, India, and Indonesia (Final), USITC Pub. 3884,
Inv. Nos. 701-TA-442-443 and 731-TA-1095-1097 (Sept. 2006)
(“Final Determination”) (final determination of material injury
to an industry by reason of imports of CLPSS from India and
Indonesia that were subsidized and of material injury or threat
of material injury by reason of imports of CLPSS from China,
India, and Indonesia due to sales at less than fair value).
Jurisdiction lies pursuant to 28 U.S.C. § 1581(c) (2000) and 19
U.S.C. § 1516a (a)(2)(B)(i). For the reasons that follow, the
Court No. 06-00401 Page 3
court denies plaintiff’s motion.
BACKGROUND
Navneet is an exporter of CLPSS from India. Compl. ¶ 3.
The subject CLPSS
are used primarily for taking notes and
typically sold as school supplies. CLPSS
encompass three main products: hole-punched
filler paper, spiral-bound or wireless
notebooks (with or without pockets and/or
dividers), and composition books. Typically,
the paper is lined with blue and/or red ink,
wide ruled or college ruled, and white in
color. The color of notebook and composition
book covers varies from plain to those that
display fashion graphics.
Final Determination at 3 (footnotes omitted).
On September 9, 2005, the Association1 filed petitions with
both the United States Department of Commerce (“Commerce”) and
the ITC. Final Determination at 3. Following its
investigations, Commerce determined that imports into the United
States of CLPSS from India were being sold in the United States
at less than fair value (“LTFV” or “dumped”) and also found that
imports were subsidized by the government of India. See Certain
Lined Paper Products from India, 71 Fed. Reg. 45,012 (Dep’t of
Commerce Aug. 8, 2006) (notice of final determination of sales at
1
The Association is comprised of MeadWestvaco
Corporation, Norcom, Inc., and Top Flight, Inc. Final
Determination at 3.
Court No. 06-00401 Page 4
less than fair value and negative determination of critical
circumstances); Certain Lined Paper Products from India, 71 Fed.
Reg. 45,034 (Dep’t of Commerce Aug. 8, 2006) (notice of final
affirmative countervailing duty determination and final negative
critical circumstances determination).
For its part, the ITC instituted a material injury
investigation for the period from July 1, 2004 through June 30,
2005 for LTFV sales, (71 Fed. Reg. 45,012), and for the period
from April 1, 2004 through March 31, 2005 for subsidization (71
Fed. Reg. 45,034). At the conclusion of this investigation the
Commissioners determined that “an industry in the United States
is materially injured by reason of subject imports of CLPSS from
India and Indonesia that are found to be subsidized, and by
reason of subject imports of CLPSS from China, India, and
Indonesia that are found to be sold in the United States at
LTFV.” Final Determination at 49.
STANDARD OF REVIEW
When reviewing an agency’s final determination, the court
will hold unlawful agency determinations, findings, or
conclusions that are “unsupported by substantial evidence on the
record or otherwise not in accordance with law . . . .” 19
U.S.C. § 1516a(b)(1)(B)(i). “As long as the agency’s methodology
and procedures are reasonable means of effectuating the statutory
Court No. 06-00401 Page 5
purpose, and there is substantial evidence in the record
supporting the agency’s conclusions, the court will not impose
its own views as to the sufficiency of the agency’s investigation
or question the agency’s methodology.” Ceramica Regiomontana,
S.A. v. United States, 10 CIT 399, 404-5, 636 F. Supp. 961, 966
(1986), aff’d, 810 F.2d 1137 (Fed. Cir. 1987) (citations
omitted).
DISCUSSION
I. Legal Framework: The ITC’s Negligibility Determination
Under the unfair trade laws, Commerce determines whether
foreign imports into the United States are either being dumped or
subsidized (or both). It is for the ITC to determine whether
these dumped or subsidized imports are causing material injury to
a domestic industry in the United States. See 19 U.S.C.
§§ 1673(1) & (2), 1671(a)(1) & (2). If the Commission determines
that imports from a particular country are negligible, however,
it terminates its investigation without reaching the injury
question. See 19 U.S.C. §§ 1673b(a)(1) (preliminary dumping
determination), 1673d(b)(1) (final dumping determination),
1671b(a)(1) (preliminary subsidization determination),
1671d(b)(1) (final subsidization determination). It is
plaintiff’s claim that this is what should have happened here.
Negligibility is addressed in 19 U.S.C. § 1677(24)(A), which
Court No. 06-00401 Page 6
provides that “imports from a country of merchandise
corresponding to a domestic like product identified by the
Commission are ‘negligible’ if such imports account for less than
3 percent of the volume of all such merchandise imported into the
United States” during a defined twelve-month period2 in an
antidumping or countervailing duty investigation. 19 U.S.C.
§ 1677(24)(A)(i). Importantly, in countervailing duty
investigations involving merchandise from “developing countries,”
such as India, the imports will be found to be negligible if they
account for less than four percent of the volume of all such
merchandise imported into the United States.3 19 U.S.C.
§ 1677(24)(B).
In computing import volumes for purposes of determining
whether imports are negligible, “the Commission may make
reasonable estimates on the basis of available statistics.” 19
U.S.C. § 1677(24)(C); see also Uruguay Round Agreements Act
2
Pursuant to the statute, merchandise is measured as it
was imported in the year prior to the filing of the petition (or
the initiation of the investigation if initiated by the
administering authority). 19 U.S.C. § 1677(24)(A)(i). To make
its negligibility finding with respect to India, the ITC measured
the volume of Indian imports into the United States between
September 2004 through August 2005. Final Determination at 16-
17.
3
A “developing country” is “a country designated as a
developing country by the [United States] Trade Representative.”
19 U.S.C. § 1677(36)(A). The United States Trade Representative
has designated India as a developing country. See 15 C.F.R.
§ 2013.1 (2005).
Court No. 06-00401 Page 7
Statement of Administrative Action, accompanying H.R. Rep. No.
103-316 656 835 (1994), reprinted in 1994 U.S.C.C.A.N. 3773, 4188
(recognizing that the “Commission may not have access to either
complete questionnaire data or official import statistics
conforming exactly to the Commission’s like product(s)
designations”).
II. The ITC’s Negligibility Determination With Respect to
Imports of CLPSS from India
A. The ITC’s Use of a Quantity-Based Measure of Volume
In this investigation, the ITC used a quantity-based measure
to determine the volume of Indian CLPSS imports for purposes of
determining negligibility. Specifically, the ITC measured volume
by “units”4 or pieces, rather than using a value-based measure of
volume, i.e., dollar value of imports. Final Determination at 19
n. 144. In doing so, the ITC explained that it typically uses
quantity-based measures “because value-based measures can be
skewed by changes of product mix and the fact that, for subject
imports, the unit values are of merchandise sold at LTFV.” Id.In other words, using a value-based measure could be distortive
4
A unit refers to “an individual product unit, such as a
notebook or a package of filler paper.” Pl.’s Mem. 10 (“A ‘unit’
is not an equilibrating unit of measure; rather it reflects the
absence of uniformity or commonality of measurement.”) (citation
omitted); Final Determination at 16 n. 123 (noting a unit is
known as an “each” in industry parlance).
Court No. 06-00401 Page 8
because of differences in the value of similar merchandise. For
example, using a value-based measure, if some nations exported a
small number of high value items to the United States, and
others, such as the Indian exporters, sent a large number of low
cost items to the United States, the lower cost Indian
merchandise would make up a small percentage of the total
imports. As a result, the value measurement would fail to
accurately measure the high percentage volume (in terms of page
count) of the lower cost merchandise that was being imported into
the United States. A further distortion would occur when
merchandise is being sold at LTFV, because that merchandise would
necessarily represent an artificially lower percentage of all
CLPSS, if measured by import value. Because of the potential for
distortion when using value-based measures, quantity-based
measurement is the ITC’s standard practice, as both plaintiff and
defendant acknowledge. See ITC’s Opp’n 2; Tr. Conf. Oral
Argument (Jan. 4, 2008) at 4.
The ITC states that it departs from its usual practice only
where “there are such great variations among the products
involved that reliance on a quantity-based measure of volume
would be fundamentally distortive.” ITC’s Opp’n 2. In its Final
Determination, the Commission stated:
Although the Commission has relied
principally on value-based measurements in
rare instances, those investigations involved
Court No. 06-00401 Page 9
variations in value among articles within the
scope and/or domestic like product that were
much larger than those present here. In
those instances, measuring volume by units
was particularly problematic, because value
variations for different articles could
differ by factors of as much as 100.
Final Determination at 19 n. 144. Thus, Commerce has relied
heavily on price variation among the imported articles of
merchandise as the determining factor when abandoning its usual
practice. Put another way, in those cases where it has used
value-based measures, there has been a great variety of products,
and the value of the merchandise had variations of “factors of as
much as 100.” Final Determination at 19 n. 144 (citing, inter
alia, Ball Bearings from China, Inv. No. 731-TA-989 (Final),
USITC Pub. 3593 at 11 (Apr. 2003); Outboard Engines from Japan,
Inv. No. 731-TA-1069 (Final), USITC Pub. 3752 at 24-27 & n. 175
(Feb. 2005)).
Plaintiff, however, insists that it fits within the
exceptions made in previous ITC investigations. For Navneet, the
sheer variety of in-scope5 products makes its case.
5
Merchandise that is within the scope of an antidumping
review conducted by Commerce is referred to as “in-scope
merchandise;” merchandise that is not within the scope of the
antidumping review is termed out-of-scope merchandise. See SKF
USA Inc. v. Ina Walzlager Schaeffler KG, 180 F. 3d 1370, 1373
(Fed. Cir. 1999); Antidumping Manual Ch. 1 at 13 (Jan. 22, 1998)
(available at http://www.ia.ita.doc.gov) (“The [Department of
Commerce] also determines the scope of an investigation. The
scope of an investigation may also be referred to as the class or
(continued...)
Court No. 06-00401 Page 10
At the hearing, the Commission was presented
with samples and testimony by counsel for
Indonesian and Indian respondents of 150
sheet filler paper packs, 500 sheet filler
paper packs, 70 page one subject spiral
notebooks, and 250 sheet five subject
notebooks, 100 sheet composition books and
160 sheet composition books as well as an 800
page composition book. Obviously, this was
but a small demonstration of the variety of
types and dimensions of products included
with the scope of the investigations.
Pl.’s Mem. 10-11. Navneet also argues that its merchandise
showed a variation in price that necessitated a value-based
measurement.
Indeed, filler paper alone ranges from 30-
count to 500-count, which is a substantial
difference in weight. In addition, Public
[sic] testimony at the Hearing, which
included demonstrations and submissions of
samples to the Secretary of the Commission,
indicates that price is associated with the
cost of the paper, which is the
overwhelmingly most significant raw material
by weight. Therefore, it is reasonable to
infer that significant differences in unit
value indeed exist . . . .
Pl.’s Mem. 20.
In its Final Determination, the ITC stated that it would
employ its normal methodology: “Consistent with our customary
practice, we have relied on quantity-based measures of volume in
this investigation.” Final Determination at 19 n. 144. The ITC
5
(...continued)
kind of merchandise under investigation or the merchandise
subject to the investigation. A single investigation involves a
class or kind of merchandise.”)
Court No. 06-00401 Page 11
contrasted this case with other cases where there was a
“demonstrably wide variation among products” in volume or price.
See ITC’s Opp’n 12. The ITC states:
For example, in Ball Bearings from China, the
Commission noted that there was a “vast and
disparate grouping of items differing in
size, configuration, application, and
precision,” and that “it would present a
distorted picture of the market to consider a
commodity bearing costing less than one
dollar as equivalent to a precision bearing
costing hundreds or even thousands of
dollars.” In Outboard Engines from Japan,
the Commission explained that it relied on
value data to assess the volume of subject
imports “given the wide spectrum of engine
sizes covered by the investigation and the
wide variation in the unit value of engines
of different sizes.” It explained that the
manufacturer’s suggested retail prices for
outboard engines range from under $1,000 to
about $20,000.
ITC’s Opp’n 12 (citations omitted).
The court agrees with the ITC. In contrast to the cases
where the ITC has used value-based measurements, Navneet has not
shown that its products vary so widely in either variety or price
so as to create a substantial distortion. While the scope used
by Commerce in its investigation contained a variety of products,
the Indian respondents’ actual sales were concentrated in
relatively few products: (1) 70 count single subject notebooks;
(2) 150 count filler paper; and (3) 100 count composition books.
CLPSS from China, India, and Indonesia, Staff Report to the
Commission on Inv. Nos. 701-TA-442-443 and 731-TA-1095-1097
Court No. 06-00401 Page 12
(Final) (Aug. 15, 2006)(“Staff Report”) at Tables V-1, V-2, and
V-4. Other arguably in-scope items made up a relatively small
amount of the volume of merchandise exported to the United
States. Id. at Tables V-3 and V-6. Thus, with respect to what
was actually imported, plaintiff has not shown a particularly
wide variety of product.
Navneet also fails to show variety in terms of price. An
examination of the record evidence reveals that, while there was
some variation in price, it was within a relatively tight range.6
That is, the data on pricing products showed little difference in
price when adjusted for the product differences, i.e., size or
page-count. See Staff Report at Tables V-1, V-3 & V-6.
6
The ITC collected data on six pricing
products: a 70-count single-subject notebook,
a 150-count pack of filler paper, a 180-count
five-subject notebook, a 100-count marbled
composition book, an out-of-scope 50-count
legal pad, and an 80-count “fashion” notebook
(i.e., one with licensed artwork or other
unusual cover details, such as beadwork,
textiles, etc.). Across the five in-scope
products, the lowest price was [[ ]] for
the [[
]]. The highest prices were [[
]] and [[
]]. Among Indian merchandise, there was even
less variation: the lowest price was [[
]] and the highest price
was [[
]].
Ass’n.’s Resp. 6-7 (citations omitted).
Court No. 06-00401 Page 13
In addition, a value based measure would not give a true
picture of the amount of Indian paper that was entering the
United States. The record indicates that “fashion” notebooks,
which typically have artwork and special covers, have a much
greater value than a regular notebook having a similar page
count. See Staff Report at Tables IV-5, V-1, V-2. Therefore, in
a value based comparison, this difference in value among products
with similar paper count would overstate the proportion of
“fashion” notebooks while understating the proportion of plain
notebooks, even though the number of units imported might be the
same. See Final Determination at 19 n. 144 (“We typically rely on
quantity-based measures of volume because value-based measures
can be skewed by changes of product mix.”). As previously
noted, India exports to the United States relatively few higher
priced “fashion” notebooks, and thus a value-based measure would
tend to understate the amount of paper it introduces into the
United States market. See Staff Report at Table V-6; Ass’n.’s
Resp. 10.7
7
Contrary to Navneet’s argument that the Commission
precluded it from showing evidence of variability among CLPSS
products because it failed to request or require “further
‘evidence demonstrating how much volume variation among imports
exists,’”(Pl.’s Mem. 20), the record shows that the ITC invited
the parties to address this question at two separate points in
the administrative process. See CLPSS, Inv. Nos. 701-TA-442-443
and 731-TA-1095-1097 (Preliminary), USITC 3811 (Oct. 2005) at 25
n. 110 (Preliminary Determination); Tr. Final Phase Hearing
(continued...)
Court No. 06-00401 Page 14
The Commission is charged with the responsibility to
calculate import volumes for purposes of negligibility by making
“reasonable estimates on the basis of available statistics.” 19
U.S.C. § 1677(24)(C). Based on the foregoing, it cannot be said
that the Commission’s decision to use volume- rather than value-
based measures was unreasonable or that plaintiff has
demonstrated that valuation based on price would yield a more
accurate result than the ITC’s volume methodology. See, e.g.,
Koyo Seiko Co., Ltd. v. United States, 31 CIT __, __, 516 F.
Supp. 2d 1323, 1341 (2007) (“NTN did not satisfy its burden of
showing that its allocation method did not cause inaccuracies or
distortions.”); Shakeproof Assembly Components Div. of Ill. Tool
Works, Inc. v. United States, 30 CIT __, __, Slip Op. 06-129 at
15-16 (2006) (not reported in the Federal Supplement)
(“Defendant-Intervenor offers no compelling reason for why such a
constructed average would result in a more accurate valuation
here than simply using information taken directly from the period
of review.”) (footnote omitted). The court sustains the
Commission’s finding.
7
(...continued)
(“Hearing Transcript”) (July 25, 2006) at 189-190. Navneet had
ample opportunity to present its case.
Court No. 06-00401 Page 15
B. The ITC’s Use of a Conversion Factor
In conducting its investigation, the ITC found that one type
of imported product did not easily conform to the volume-based
(i.e., unit-based) methodology.8 Filler paper is imported under
a Harmonized Tariff Schedule of the United States (“HTSUS”)
subheading that measures imports by weight, not units. Thus, the
Commission converted the data from HTSUS statistical reporting
number 4811.90.90909 from kilograms to units using a conversion
factor, i.e., weight to pages.10
Navneet challenges the ITC’s use of the conversion factor:
8
As previously noted, plaintiff’s imports fell generally
into three categories: hole-punched filler paper; spiral-bound or
wireless notebooks; and composition books. See Final
Determination at 3. As a result of its investigation, the ITC
found that most covered merchandise was imported under
classification subheadings 4811.90.9090 and 4820.10.2050. Final
Determination at 18. Subheading 4820.10.2050, covering notebooks
and composition books, recorded entries on a unit basis. Entries
made under the tariff provision for filler paper, (subheading
4811.90.9090), however, recorded entries on a kilogram basis.
9
The reporting number includes: “Paper, paperboard,
cellulose wadding and webs of cellulose fibers, coated,
impregnated, covered, surface-colored, surface-decorated or
printed, in rolls or rectangular (including square sheets, of any
size, other than goods of the kind described in heading 4803,
4809, or 4810)”. Staff Report at I-II, Table I-3; Navneet’s
Post-Hearing Br. Ex. 4a.
10
Of the products within the scope of these
investigations, the merchandise reported under HTSUS 4811.90.9090
includes filler packages, the most common being the 150-count
packages, and loose paper, for which volume is recorded in
kilograms. ITC’s Opp’n 18-19. Therefore, the conversion factor
was only applied to merchandise reported under HTSUS
4811.90.9090. Id.Court No. 06-00401 Page 16
There is no reasonable way to convert pieces
to kilograms or kilograms to pieces because
there is no information on this record other
than speculation that would provide a basis
to determine the exact nature of the [CLPSS]
or their material components (and thus their
weight) included in a “unit” or piece in the
official statistics.
Pl.’s Mem. 10.
The ITC converted the kilograms of paper under 4811.90.9090
to a unit basis, using a conversion factor based on the weight of
150-count filler paper, as provided by the Association in the
petition.11 Final Determination at 18 n. 139, IV-1 n. 6. No
other party submitted a potential conversion factor during the
investigation. See ITC’s Opp’n 19; Pl.’s Reply Br. 9; Ass’n.’s
Resp. 14-15.
Before the court, Navneet goes beyond questioning the use of
a conversion factor by insisting that a different conversion
factor be used. Pl.’s Mem. 12-14, Exs. 1, 2. Specifically,
Navneet argues that there is an “industry standard” formula for
11
The ITC stated:
We note that quantity data for statistical reporting
number 4811.90.9000 was converted from kilograms using
a conversion factor suggested by Petitioner, reflecting
the per-unit weight of what it identifies as the most
common filler paper package (150-count at 0.491262 kg).
Importers’ responses to the Commission’s questionnaire
confirm that the most common filler paper package
contains 150 sheets of paper.
Final Determination at 18 n. 139 (citations omitted).
Court No. 06-00401 Page 17
converting kilograms into units of paper. Pl.’s Mem. 12.
Plaintiff argues:
Since petitioners’ conversion ratio does not
correspond to the industry standard for
school filler paper – or the Commission’s
definition derived therefrom, and since
petitioners’ conversion appears to inflate
the quantity they used for the conversion
even for the product they describe, the Court
should strike their conversion ratio and
remand on this basis alone.
Pl.’s Mem. 14.
Plaintiff’s claims are unavailing. By translating the
weight of the filler packs and loose paper into “units” of the
“most common filler paper package (150-count),” the Commission
made a “reasonable estimate on the basis of available
statistics.” 19 U.S.C. § 1677(24)(C). The conversion factor was
not complex, but merely translated the weight of paper into units
in order to get a common basis for measurement. Moreover,
Navneet’s claim that “[t]he extensive choice and variety of in-
scope retail products in these categories [HTSUS 4820.10.2050 and
HTSUS 4811.90.9090] renders ‘conversion’ of each ‘unit’ into
kilograms . . . a highly speculative exercise[,]”12 is
unconvincing. Pl.’s Mem. 11. The conversion factor was not
applied to a variety of merchandise but only to filler paper.
12
Navneet inverts the phrasing here, but the court
assumes that it challenges the conversion of kilograms into units
as that was the conversion done by the ITC.
Court No. 06-00401 Page 18
ITC’s Opp’n 19. (“[O]nly filler paper packs and loose paper were
subject to the kilograms-to-units conversion, [such that]
application of the conversion factor would not have resulted in
any distortion at all.”)
There is nothing inherently unreasonable about determining
the weight of 150 pages of filler paper and then converting that
weight into units. While it is not impossible that the ITC
improperly determined the weight-to-page count ratio, plaintiff
failed to place any evidence on the record in the administrative
proceeding indicating that the ITC’s chosen conversion factor
yielded an inaccurate result.
Moreover, during the investigation Navneet failed to present
to the ITC any evidence regarding an alternative conversion
factor. That is, Navneet never suggested to the ITC its own
amount for the number of pages of filler paper per kilogram or
that an industry standard existed. Navneet’s sole reference to
the conversion factor made in the administrative proceedings was
in Navneet’s post-hearing brief where it stated, “there is simply
no reasonable way to convert . . . kilograms to pieces.”
Navneet’s Post-Hearing Br. 4. This argument is, of course,
undercut by plaintiff’s claim before the court that there is an
industry standard.
As to plaintiff’s insistence that there is an industry
standard that the ITC should have used as a conversion factor,
Court No. 06-00401 Page 19
that matter cannot be reviewed by this court. Navneet had its
opportunity to introduce its evidence of an industry standard
during the proceedings before the ITC and failed to do so. The
court’s review of the Commission’s determination must be based
solely on the agency record. See Titanium Metals Corp. v. United
States, 25 CIT 648, 663 n. 12, 155 F. Supp. 2d 750, 765 n. 12
(2001) (refusing to review two exhibits which were not part of
administrative record); Kerr-McGee Chem. Corp. v. United States,
21 CIT 1179, 1180-82, 985 F. Supp. 1162, 1163-64 (1997) (holding
that evidence on arguments not presented to or obtained by
Department of Commerce during course of administrative review
were not properly part of the record for review). Plaintiff has
therefore waived this argument. Holmes Prods. Corp. v. United
States, 16 CIT 1101, 1103 (1992) (finding plaintiff’s arguments
waived for failing to raise them before the agency). Therefore,
the court finds the ITC’s use of a conversion factor to be
reasonable and Navneet’s arguments and evidence regarding the
accuracy of the conversion factor to be outside of the record and
thus not reviewable by this court.
C. The ITC’s Choice of Harmonized Tariff Schedule of the
United States Statistical Reporting Categories for
Determining Volume
In order to measure the volume of CLPSS imports during the
September 2004 to August 2005 period, the ITC chose the HTSUS
Court No. 06-00401 Page 20
statistical reporting numbers that were actually used to enter
the merchandise by importers. Navneet contests this choice.
In the investigation, the ITC found that there were problems
with the data from questionnaire responses and with official
import statistics. The ITC stated that “[t]he questionnaire
responses yielded a low percentage of import coverage, as the
data submitted by responding importers for 2005 [was] equivalent
to 39 percent of the value of total U.S. imports of CLPSS.”
Final Determination at 17 (footnote omitted). There is no
dispute among the parties that there were problems with the
questionnaire responses. Pl.’s Mem. 9-10; see also Def.’s Mem.
6.
As a result, the ITC concluded, “In light of the
deficiencies in the questionnaire data, we rely on the official
import statistics.” Final Determination at 17. Having concluded
that it would rely on official statistics, the ITC was required
to decide “under which HTSUS statistical reporting numbers we
should measure subject merchandise.” Final Determination at 17.
The ITC determined that, rather than rely on all of the HTSUS
subheadings chosen by Commerce in its scope determination, it
would use the two subheadings under which a large majority of
merchandise was entered, i.e., HTSUS 4820.10.2050 and
4811.90.9000.
Specifically, the ITC stated
Court No. 06-00401 Page 21
The record indicates that all but four of the
32 responding firms reported importing CLPSS
under statistical reporting number
4820.10.2050 during the period of
investigation. Seven firms reported
importing CLPSS under number 4811.90.9090,13
while six firms reported importing CLPSS
under reporting number 4820.10.2020.14
Because statistical reporting number
4820.10.2020, covering “memorandum pads,
letter pads and similar articles,” contains
predominately non-subject note pads and
letter pads and the majority of responding
U.S. importers identified statistical
reporting numbers 4811.90.9000 and
4820.10.2050 more frequently, we find on
balance that the official import statistics
provided under those two statistical
reporting numbers (4820.10.2050 and
4811.90.9000) are a more comprehensive and
accurate measure of import volume.
Id. at 18 (footnote omitted). In other words, while additional
13
“Effective July 1, 2005, statistical reporting number
4811.90.9000 was divided into two numbers. The appropriate
statistical reporting number for filler paper after that date is
4811.90.9090.” Final Determination at 17 n. 133 (citation
omitted). The two numbers are referred to interchangeably in the
record and in this opinion.
14
One U.S. importer reported importing subject CLPSS
under HTSUS number 4810.2010. We also acknowledge that
five or fewer firms responding to our importers’
questionnaire indicated that they import subject CLPSS
under HTSUS statistical reporting numbers other than
the [sic] those identified by Commerce’s scope. As the
majority of responding importers do not use statistical
reporting number 4810.10.2010 as well as other
statistical reporting numbers not identified in
Commerce’s scope language, we conclude that they
contain mostly non-subject merchandise and do not
provide an accurate means of assessing subject import
volume.
Final Determination at 18 n. 138 (citations omitted).
Court No. 06-00401 Page 22
HTSUS subheadings were identified by Commerce as within the scope
of its investigation, HTSUS numbers 4820.10.2050 and 4811.90.9000
were used by most importers to classify the subject merchandise
upon actual importation during the period of investigation.
The Indian respondents argued, as does plaintiff here, that
the ITC should utilize all five statistical reporting numbers (or
some combination thereof) used by Commerce in the scope of its
investigation to analyze negligibility.15 It can be presumed
that the inclusion of these other subheadings would result in a
ratio favoring plaintiff’s negligibility claim.
The ITC states that it “does not dispute that some subject
merchandise might have been entered (whether through correct or
incorrect tariff classification by importers) under the
additional tariff subheading[s] listed in Commerce’s scope.”
15
The five statistical reporting numbers identified by
Commerce were: 4810.22.5044 (hole-punched looseleaf paper and
paper coated with clay or other inorganic materials),
4811.90.9090 (filler paper and loose paper), 4820.10.2010
(diaries and address books), 4820.10.2020 (memorandum pads,
letter pads and similar articles), 4820.10.2050 (notebooks). See
Final Determination at 17 (footnotes omitted); Navneet’s Post-
Hearing Br. Ex. 4a.
Indian Respondents proposed four additional HTSUS
statistical reporting numbers for inclusion in the ITC’s
analysis: 4820.10.4000 (registers and account books, of paper or
paperboard), 4802.62.6040 (products containing unlined paper),
4820.30.0020 (looseleaf binders, (other than book covers), of
paper or paperboard), and 4820.30.0040 (binders (other than book
covers), except looseleaf, folders and file covers, of paper or
paperboard). See Final Determination at 17-18 (footnotes
omitted); Navneet’s Post-Hearing Br. Ex. 4a.
Court No. 06-00401 Page 23
ITC’s Opp’n 25 (footnote omitted).
The fact that some within-scope products
might occasionally be entered under a tariff
subheading does not justify including all
imports under that subheading in the
computation of the volume of subject imports,
where the evidence shows that the tariff
subheading applies predominantly to out-of-
scope products. Including all imports under
such tariff category would have been
inconsistent with the Commission’s mandate to
make “reasonable estimates on the basis of
the available statistics.”
Id. (footnote omitted).
As the Commission notes, it is charged with making
“reasonable estimates on the basis of the available statistics.”
19 U.S.C. § 1677(24)(C). In addition, the statute indicates that
the Commissioners are to make an independent determination as to
what imports are to be considered.16 See 19 U.S.C. § 1677(24)(A)
16
Navneet also argued that the ITC erred because “the
Commission normally accepts the tariff numbers identified by
Commerce as setting the boundaries of the negligibility data.”
Pl.’s Mem. 21. The ITC, however, need not apply each tariff
number listed in Commerce’s scope determination:
The Commission certainly begins each domestic
like product analysis with Commerce’s
description of the scope of the
investigation. As in the preliminary Views
of these investigations, the Commission does
not, as a matter of practice, apply each
tariff number included in that description to
measure subject import volume. Rather, the
Commission makes “reasonable estimates on the
basis of available statistics” of pertinent
import levels for purposes of deciding
negligibility. Moreover, by Commerce’s
(continued...)
Court No. 06-00401 Page 24
(“[I]mports from a country of merchandise corresponding to a
domestic like product identified by the Commission are
‘negligible’ if such imports account for less than 3 percent of
the volume of all such merchandise imported into the United
States in the most recent 12-month period for which data are
available . . . .”)(emphasis added).
Moreover, the inclusion of some within-scope merchandise
under a tariff subheading that predominantly applies to out-of-
scope products does not undermine the reasonableness of the ITC’s
determination not to use those subheadings in its analysis. The
ITC determined that, on balance, a more accurate estimate could
be reached by excluding tariff subheadings that included mostly
out-of-scope and only some in-scope products. The court cannot
find that this was unreasonable. See Nippon Steel Corp. v.
United States, 458 F. 3d 1345, 1352 (Fed. Cir. 2006) (“[The
court] must affirm a Commission determination if it is reasonable
and supported by the record as a whole, even if some evidence
detracts from the Commission’s conclusion.”)(citations and
16
(...continued)
admission, the six HTSUS statistical
reporting numbers are merely reflective of
the typical headings under which subject
merchandise is imported and are not
dispositive.
Final Determination at 18-19 n. 140 (citations omitted). See
also Wooden Bedroom Furniture from China, Inv. No. 731-TA-1058
(Final), USITC Pub. 3743 at 18-20, IV-1 n.4 (Dec. 2004).
Court No. 06-00401 Page 25
quotation omitted).
D. The ITC’s Decision Not to Make a Downward Adjustment to
Official Import Statistics in Measuring the Volume of
Indian Imports
Finally, Navneet takes issue with the ITC’s denial of its
request that the official import statistics be adjusted downward
“to remove the volume of non-subject merchandise [exported from
India] from the total volume reported” under HTSUS subheadings
4820.10.2050 and 4811.90.9000. Final Determination at 18
(footnote omitted). According to plaintiff, the adjustment would
provide a more accurate result.
Plaintiff’s “proposed reductions were based on an estimate
in an email from an executive at ‘American Scholar,’ a U.S.
producer of CLPSS that also has production operations in India.”
ITC’s Opp’n 26 (citing Hearing Transcript at 234).17 The email
stated that, based on the writer’s experience with the subject
merchandise, there was a percentage of in-scope products within
the chosen tariff numbers that could be estimated fairly and
accurately.18 Navneet insists that the email provides the basis
17
See also [[
]] (“Aug. 25 E-mail”).
18
The email read as follows:
[[
(continued...)
Court No. 06-00401 Page 26
for determining the amount of out of scope merchandise in each
HTSUS subheading. The email thus constituted a proposal by
Navneet to reduce the import data under HTSUS statistical numbers
4820.10.2050 and 4811.90.9000 by the writer’s estimated
percentages of subject and non-subject merchandise.
The Commission received the proposal to reduce the volume
under the two selected HTSUS reporting numbers on the day the
record closed. Final Determination at 18-19.19 According to the
ITC, because of the record closing, it was impossible for the ITC
staff to verify the accuracy of the proposed reductions, which in
any event were submitted without an explanation of the
methodology employed. Id. Moreover, the ITC stated that
“subject imports from India and Indonesia still are not
18
(...continued)
]]
Aug. 25 E-mail. According to this proposal, Navneet sought to
reduce the import data under HTSUS statistical number
4820.10.2050 by [[ ]] and under HTSUS statistical number
4811.90.9090 by [[ ]]. See Id.19
The proposal was sent via email at 4:04 p.m. on Friday,
August 25, 2006, the day the record closed. ITC’s Opp’n 26; Aug.
25 E-mail.
Court No. 06-00401 Page 27
negligible when the HTSUS statistical reporting numbers are
reduced by the highest, middle, and lowest proposed percentages.”
Final Determination at 19 n. 142 (citations omitted).
Plaintiff objects that the Commission unreasonably refused
to “take into account record evidence clearly indicating that the
HTSUS numbers under consideration were not composed exclusively
of subject merchandise.” Pl.’s Mem. 23-24 (footnote omitted).
Plaintiff further claims that the Commission itself “often” puts
new information on the record at the close of an investigation.
Pl.’s Mem. 25. In support of its position that the other parties
would not be prejudiced “even when critical information is placed
on the record and disclosed to parties on the last day that the
record was open,” plaintiff cites to Sichuan Changhong Elec. Co.,
Ltd. v. United States, 30 CIT ___, 466 F. Supp. 2d 1323 (2006)
(“Sichuan”), stating that the case upheld the ITC’s decision to
put information on the record on the day it closed because
respondents had the opportunity to provide final comments a few
days later. Pl.’s Mem. 25.
Sichuan is distinguishable from this case. As the
Commission points out, in Sichuan:
the computations that were placed on the
record shortly before its closing (the one-
page digest of the domestic industry’s
financial information) were based on data
that had been submitted earlier; and there
was no suggestion that the data had been
submitted without any explanation, or that
Court No. 06-00401 Page 28
the Commission staff had been unable to
verify the accuracy of the data. In short,
the circumstances were quite different from
those surrounding the American Scholar email
in the CLPSS investigations.
ITC’s Opp’n 29 (citations omitted).
The ITC has surely received new evidence late in other
proceedings, but in this case it reasonably excluded the
submission. See Gen. Motors Corp. v. United States, 17 CIT 697,
702-03, 827 F. Supp. 774, 780-781 (1993) (“Given the lateness of
the plaintiffs’ allegations, ITC’s decision not to conduct a
supplemental investigation was reasonable.”). First, Navneet
submitted its proposed reductions without any explanation or
description of the methodology by which they were reached. As a
result, in order to render the methodology useful, the Commission
would have been required to reopen the record to verify the
accuracy of the proposed reductions and provide the other parties
the opportunity to submit any analysis or new factual information
in response. The antidumping statute requires time for public
comment:
Information that is submitted on a timely
basis to the administering authority or the
Commission during the course of a proceeding
under this subtitle shall be subject to
comment by other parties to the proceeding
within such reasonable time as the
administering authority or the Commission
shall provide. The administering authority
and the Commission, before making a final
determination . . . shall cease collecting
information and shall provide the parties
Court No. 06-00401 Page 29
with a final opportunity to comment on the
information obtained by the administering
authority or the Commission (as the case may
be) upon which the parties have not
previously had an opportunity to comment.
Comments containing new factual information
shall be disregarded.
19 U.S.C. § 1677m(g). Had the ITC accepted the proposal without
offering time for the other parties to comment, it would have
contravened the statute.
Most tellingly, however, the subject imports would not be
negligible even if the proposed percentages were used to reduce
the reporting numbers. Final Determination at 19 n. 142.
Therefore, the Commission’s refusal to adjust the import data per
Navneet’s proposal was reasonable, supported by substantial
evidence, and otherwise in accordance with law.
Court No. 06-00401 Page 30
CONCLUSION
For the foregoing reasons, the court sustains the findings
of the International Trade Commission. Plaintiff’s motion for
judgment upon the agency record is denied. Judgment shall be
entered accordingly.
__/s/__Richard K. Eaton_____
Richard K. Eaton
Dated: February 26, 2008
New York, New York