Sucocitrico Cutrale Ltda. v. United States ( 2012 )


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  •                                                             Slip Op. 12-71
    UNITED STATES COURT OF INTERNATIONAL TRADE
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    SUCOCITRICO CUTRALE LTDA.                                    :
    AND CITRUS PRODUCTS INC.,                                    :
    Plaintiffs, :
    :
    v.                                                           :    Before: Richard W. Goldberg, Senior Judge
    :    Court No. 10-00261
    :
    UNITED STATES,                                               :    PUBLIC VERSION
    Defendant, :
    :
    and                                                          :
    :
    FLORIDA CITRUS MUTUAL,                                       :
    CITRUS WORLD, INC., SOUTHERN                                 :
    GARDENS CITRUS                                               :
    PROCESSING CORPORATION, and                                  :
    A. DUDA & SONS, INC.,                                        :
    :
    Defendant-Intervenors. :
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    OPINION
    [Plaintiff’s Motion for Judgment on the Agency Record under USCIT Rule 56.2 is granted in
    part and denied in part.]
    Dated: June 1, 2012
    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.
    Court No. 10-00261                                                                    Page 2
    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 in
    Court No. 10-00261                                                                     Page 3
    administrative 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 in
    Court No. 10-00261                                                                  Page 4
    the 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 holding
    Court No. 10-00261                                                                   Page 5
    inventory 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 applies
    Court No. 10-00261                                                                                 Page 6
    here.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.; see also 
    19 U.S.C. § 1677
    (35) (charging Commerce with calculating
    the dumping margin in both investigations and administrative reviews). The court reasoned that
    “[a]lthough 
    19 U.S.C. § 1677
    (35) is ambiguous with respect to zeroing and Commerce plays an
    1
    Two other exceptions apply here as well and discussed in Dongbu Steel Co. v. United States, 43 CIT__, 
    677 F. Supp. 2d 1353
     (2010). In Dongbu Steel, the court held that the doctrine of exhaustion of administrative remedies
    did not preclude consideration of the merits of plaintiffs’ zeroing claim because: (1) the question involved was a
    pure question of law and (2) raising the question of zeroing at the administrative agency would have been futile.
    
    677 F. Supp. 2d at
    1360–62. Here, these same exceptions apply, in addition to the intervening judicial interpretation
    exception discussed above.
    Court No. 10-00261                                                                      Page 7
    important role in resolving this gap in the statute, Commerce’s discretion is not absolute.” 
    635 F.3d at 1372
    . Thus, the court remanded the case for Commerce to either satisfactorily “explain
    its reasoning” for the inconsistent interpretation or to “choose a single consistent interpretation of
    the statutory language” in both phases of the proceeding. 
    Id. at 1373
    . In a subsequent case also
    addressing the zeroing issue, the Federal Circuit noted that Commerce had “failed to address the
    relevant questions—why is it a reasonable interpretation of the statute to zero in administrative
    reviews, but not in investigations?” JTEKT Corp. v. United States, 
    642 F.3d at 1384
    .
    Therefore, the Court remands Commerce’s determination and directs Commerce to
    reconsider this issue in accordance with the decisions of the Federal Circuit. See also Union
    Steel v. United States, 35 CIT ___, 
    804 F. Supp. 2d 1356
    , 1367 (2011) (concluding that, despite
    earlier cases approving of the use of zeroing, it is now appropriate to “direct Commerce to
    provide the explanation contemplated by the Court of Appeals in Dongbu and JTEKT Corp”).
    II.      Commerce properly excluded excess revenue that Cutrale received for port
    charges and other expenses
    Cutrale argues that Commerce improperly under-calculated Cutrale’s CEP by excluding
    revenue Cutrale received for its U.S. sales. The CEP is “the price at which the subject
    merchandise is first sold . . . in the United States . . . by or for the account of the producer or
    exporter . . . .” 19 U.S.C. § 1677a(b). Commerce calculates U.S. price by using a CEP that is
    “net of any price adjustment . . . reasonably attributable to the subject merchandise,” 
    19 C.F.R. § 351.401
    (c), including deductions for movement expenses under 19 U.S.C. § 1677a(c)(2)(A) and
    
    19 C.F.R. § 351.401
    (e).
    Cutrale charges its customers a flat fee in order to cover the port charges and other
    expenses (“brokerage fees”) involved in bringing orange juice into the United States. The
    Court No. 10-00261                                                                     Page 8
    brokerage fees generally exceed, and are not directly related to, the actual amount of the
    expenses. Commerce disregarded revenues obtained from the brokerage fees that exceeded the
    actual amount of the expenses Cutrale incurred from brokerage services. Cutrale argues that
    Commerce should have followed its long-standing practice of including in the CEP all revenue
    received “in connection with” the sale of a product, even if that revenue is stated as a separate
    line item on the invoice. Plaintiff’s Br. at 11.
    However, the fees that Cutrale contests constitute a service charge rather than a charge
    for the subject merchandise. Commerce properly determined that it was inappropriate to treat
    the fees as adjustments to U.S. price under section 1677a(c) or Commerce’s regulations because
    these fees “related to the movement of subject merchandise and were attributable to the sale of
    movement services, not to the subject merchandise.” Gov’t Br. at 18. In contrast, “CEP is
    intended to be an approximation of ex-factory price and is used in place of export price when
    affiliated U.S. sellers, rather than the exporters, make the U.S. sales.” Fla. Citrus Mutual v.
    United States, 
    31 CIT 1461
    , 1465 & n.3, 
    515 F. Supp. 2d 1324
    , 1328 & n.3 (2007) (citing Thai
    Pineapple Canning Indus. v. United States, 
    23 CIT 286
    , 293 n.12 (1999).
    Thus, Commerce reasonably determined to include only an offset equal to the full amount
    of moving expenses that Cutrale actually incurred. Because this decision is supported by
    substantial evidence and is in accordance with law, this Court upholds Commerce’s decision.
    III.      Commerce properly determined that Cutrale is not entitled to a CEP offset
    In some cases, a company’s level of trade in the home market occurs at a more advanced
    stage of distribution than the level of trade in the United States. If Commerce does not have
    sufficient data on sales in the two markets, it will be unable to determine how much to reduce the
    Court No. 10-00261                                                                   Page 9
    foreign sale price to achieve a price comparable to the U.S. price. In such cases, Commerce may
    calculate a constructed export price offset (“CEP offset”). A CEP offset is a reduction in normal
    value equal to “the amount of indirect selling expenses incurred in the country in which the
    normal value is determined on sales of the foreign like product . . . .” Micron Tech., 
    243 F.3d at
    1305 (citing 19 U.S.C. § 1677b(a)(7)(B)). Cutrale argues that its sales in its home market of
    Brazil are conducted at a substantially more advanced level of trade than its sales in the United
    States, and that Commerce improperly failed to consider this different level of trade in refusing
    to grant it a CEP offset.
    A. COMMERCE’S STATUTORY INTERPRETATION IS IN ACCORDANCE WITH LAW
    The law requires that Commerce establish normal value “to the extent practicable, at the
    same level of trade as the export price or constructed export price.” Micron Tech., 
    243 F.3d 1301
    , 1304–05 (citing 19 U.S.C. § 1677b(a)(1)(B)(i)). Cutrale argues that, in determining
    whether to grant a CEP offset, Commerce impermissibly reads into the statute a requirement of a
    “substantial” difference between the level of selling activities in the two markets. Cutrale relies
    on the CEP offset provision, which states:
    When normal value is established at a level of trade which constitutes a more
    advanced stage of distribution than the level of trade of the constructed export
    price, but the data available do not provide an appropriate basis to determine
    under subparagraph (A)(ii) a level of trade adjustment, normal value shall be
    reduced by the amount of indirect selling expenses incurred in the country in
    which normal value is determined on sales of the foreign like product but not
    more than the amount of such expenses for which a deduction is made under
    section 1766a(d)(1)(D) of this title.
    19 U.S.C. § 1677b(a)(7)(B) (emphases added).
    Court No. 10-00261                                                                     Page 10
    However, this statute, when read in conjunction with Commerce’s regulations, clearly
    requires a substantial difference in selling functions in the two markets in order for Cutrale to
    obtain a CEP offset. Commerce’s regulation concerning the CEP offset states:
    Differences in levels of trade. The Secretary will determine that sales are made at
    different levels of trade if they are made at different marketing stages (or their
    equivalent). Substantial differences in selling activities are a necessary, but not
    sufficient, condition for determining that there is a difference in the stage of
    marketing.
    See 
    19 C.F.R. § 351.412
    (c)(2) (emphasis added). Thus, Commerce’s regulations, when read in
    conjunction with the statute Plaintiffs cite, clarifies that a CEP offset is available only when there
    are “substantial differences in selling activities” between the levels of trade in the two markets.
    See 19 U.S.C. § 1677b(a)(7)(B); 
    19 C.F.R. § 351.412
    (f)(iii). Therefore, Commerce’s
    interpretation is in accordance with law.
    B. COMMERCE’S FACTUAL DETERMINATION IS SUPPORTED BY SUBSTANTIAL EVIDENCE
    Cutrale alternatively challenges Commerce’s factual determination that there was not a
    substantial difference in the selling activities in two countries. Cutrale claims that the record
    evidence demonstrates that Cutrale’s sales to home-market customers are at a more advanced
    level of trade than its exports to affiliated U.S. importer and that it is therefore entitled to a CEP
    offset. However, the differences that Cutrale notes are not sufficient to warrant a CEP offset.
    Although Cutrale may perform more selling functions or may perform selling functions
    more intensely in its home market, these differences do not warrant a CEP offset. The CEP
    offset provision applies in situations in which there is a substantial difference in the level of
    trade. For example, the CEP offset provisions ensure “that a normal value wholesale price will
    not be compared to a United States CEP retail price.” Micron Tech., 234 F.3d at 1305.
    Court No. 10-00261                                                                     Page 11
    Commerce determined that Cutrale performed seven common selling functions at a
    similar level of intensity in both its home and U.S. markets, with “relatively minor differences”
    between the levels in the two markets. See Gov’t Br. at 27. Commerce also found that the one
    additional home market function Cutrale performed—advertising—was not significant.
    Although Commerce noted minor differences between the two markets, these differences to not
    rise to the level required by the statute, such as the difference between wholesale and retail. See
    Micron Tech., 234 F.3d at 1305. Thus, Commerce’s factual determination that there is not a
    substantial difference in the levels of trade in the two markets is reasonable and supported by
    substantial evidence. Therefore, this Court upholds Commerce’s decision that Cutrale is not
    entitled to a CEP offset.
    IV.      Commerce properly calculated prices and quantities of sales using brix levels
    calculated to a hundredth of a degree
    Cutrale argues that Commerce unlawfully calculated its normal value by using a price
    that does not accurately reflect the price paid for the subject merchandise in the home market.
    Normal value is “the price at which foreign like product is first sold . . . in the ordinary course of
    trade” in the home market. 19 U.S.C. §1677b(a)(1)(B). Cutrale’s home-market contracts set the
    price on a whole-degree brix basis. Therefore, Cutrale argues that the law requires that
    Commerce use Cutrale’s contractual whole-degree brix number because that is the “price at
    which the foreign like product is first sold” in the Brazilian market. Id.
    However, in order to compare prices in the two markets, Commerce requires a consistent
    unit of measurement. Cutrale employs different units of measurement for pricing in the home
    and U.S. markets. In the United States, Cutrale sells orange juice upon a per-pound solid basis
    using brix levels calculated to two decimal places. In contrast, in its home market, Cutrale sells
    Court No. 10-00261                                                                     Page 12
    orange juice in metric tons and contracts for whole-degree brix figures. However, for quality
    control purposes in its home market, Cutrale also measures the actual brix samples of juice sold
    and rounds this sample measurement to two decimal places. Thus, Commerce used Cutrale’s
    brix sample measurement (brix calculated to two decimal places) instead of the whole-degree
    brix listed on the contract.
    It was reasonable for Commerce to do this for two reasons. First, although this is only a
    sample measurement, the measurement calculated to a hundredth of a degree is more accurate
    than a measurement calculated to the whole degree. Second, Commerce seeks a consistent unit
    of measurement to compare the prices in the home and U.S. markets. It is reasonable to use the
    more accurate measurement (calculated to a hundredth of a degree) when Cutrale has already
    recorded that measurement. Therefore, this Court upholds Commerce’s decision to use brix
    measurements calculated to two decimal places because it is reasonable, is supported by
    substantial evidence, and is in accordance with law.
    V.      Cutrale failed to exhaust its administrative remedies in regard to its claim that
    Commerce improperly calculated Cutrale’s carrying costs in the United States
    Cutrale argues that Commerce improperly used Cutrale’s home market short-term interest
    rate in calculating its U.S.-affiliate CPI’s inventory carrying costs. As a preliminary matter,
    Commerce urges the Court to decline to consider this issue because Cutrale failed to exhaust its
    administrative remedies with respect to this argument.
    Cutrale did not raise this claim in its administrative case brief. As discussed earlier, a
    party must exhaust its administrative remedies before bringing an action in this Court. 
    28 U.S.C. §2637
    (d); 
    19 C.F.R. §351.309
    (c)(2); Corus Staal, 
    502 F.3d 1370
    , 1379 (Fed. Cir. 2007). Unlike
    the zeroing issue discussed earlier, none of the exceptions to the doctrine of exhaustion apply
    Court No. 10-00261                                                                      Page 13
    here: this is not a pure legal question, raising the argument below would not have been futile, and
    there are no intervening judicial interpretations. See Corus Staal, 30 CIT at 1050 n.11 (noting
    exceptions to exhaustion doctrine). Moreover, Cutrale does not provide any grounds for the
    Court to consider this new claim under any of the exceptions to the exhaustion doctrine.
    Because Cutrale failed to challenge Commerce’s methodology for calculating inventory
    carrying costs during administrative proceedings, the Court declines to consider the issue.
    VI.      In determining the cost of production, Commerce properly valued the oranges
    that Cutrale received from affiliated parties
    Cutrale argues that Commerce improperly valued oranges that affiliated parties sold to
    Cutrale. Cutrale claims that Commerce compared the price of oranges received from affiliated
    parties exclusive of freight and harvesting costs, with the price of the input from unaffiliated
    parties that included freight and harvesting costs. Cutrale contends that this resulted in an
    excessive increase in the cost of production.
    However, contrary to Cutrale’s current claim, Cutrale stated in questionnaire responses to
    Commerce that both kinds of purchases included delivery costs. Oct. 21 QR at 20 (C.R. 34).
    Thus Cutrale’s claim that the orange prices Cutrale paid to unaffiliated suppliers included
    delivery, but its affiliated suppliers’ price did not, lacks a record basis. See Plaintiff’s Br. at 32–
    33.
    When calculating a respondent’s cost of production, Commerce’s long-standing practice
    is to determine whether inputs received from affiliated parties have been acquired for less than
    the value of those same inputs received from unaffiliated parties. Section 1677b(f)(2) authorizes
    Commerce to disregard a transaction that does not fairly reflect the market value of merchandise
    under consideration and instead to base the amount upon what it would have been if the
    Court No. 10-00261                                                                    Page 14
    transaction occurred between unaffiliated parties. 19 U.S.C. §1677b(f)(2). Thus, to the extent
    that the affiliated-party inputs have been received for less than the arm’s length price of those
    inputs, Commerce increases the value of the affiliated-party inputs equal to the average arm’s
    length price of those inputs. Cutrale supplied Commerce with charts that revealed that the
    average price Cutrale paid to its affiliated supplier was much less than that paid to its unaffiliated
    supplier. This pricing information supports Commerce’s determination that the purchases were
    not made at arm’s length and its decision to increase the value of the inputs equal to the average
    arm’s length value.
    Commerce’s decision to adjust the cost of oranges Cutrale purchased from an affiliated
    supplier was reasonable, in accordance with its standard practice, and consistent with statutory
    directives. Because Commerce’s decision is reasonable and supported by substantial evidence
    the Court upholds Commerce’s decision.
    VII.   Commerce properly deducted byproduct sales revenue in calculating Cutrale’s
    general and administrative expense ratios
    Commerce calculates General and Administrative (G&A) and financial cost components
    of a company’s cost of production using a ratio of the company’s total G&A or financial costs to
    the company’s total cost of goods sold (COGS). Cutrale argues that Commerce improperly
    deducted from Cutrale’s COGS revenue received from the sale of byproducts, while not
    deducting the G&A or financial costs incurred with respect to the sale of those byproducts.
    However, Commerce properly adjusted its calculation of Cutrale’s G&A and financial
    expense ratios. In its calculation, Commerce deducted byproduct revenue that Cutrale had
    similarly deducted from the cost of manufacturing to which the ratios applied. This method was
    consistent with Commerce’s standard practice and ensured that the ratios were arithmetically
    Court No. 10-00261                                                                Page 15
    correct and produced more accurate results. Because the methodology Commerce used to
    calculate Cutrale’s total cost of producing the subject merchandise was both mathematically
    correct and a reasonable exercise of its statutory discretion, this Court upholds Commerce’s
    decision.
    CONCLUSION AND ORDER
    For the foregoing reasons, the Plaintiff’s Motion for Judgment on the Agency Record is
    granted in part and denied in part. The Court AFFIRMS Commerce’s decisions on issues II, III,
    IV, VI, and VII. The Court declines to consider issue V because Cutrale failed to exhaust its
    administrative remedies with respect to this issue.     The Court REMANDS this matter for
    reconsideration of Commerce’s zeroing policy, and such proceedings shall be consistent with the
    opinions of this Court and the Federal Circuit.
    Upon consideration of all papers and proceedings herein, it is hereby
    ORDERED that the final determination of the United States Department of Commerce,
    published as Certain Orange Juice from Brazil, 
    75 Fed. Reg. 50,999
     (Dep’t Commerce Aug. 18,
    2010) (the “Final Results”), be, and hereby is, AFFIRMED IN PART and REMANDED to
    Commerce for redetermination as provided in this Opinion and Order; it is further
    ORDERED that Plaintiffs’ Rule 56.2 Motion for Judgment on the Agency Record be,
    and hereby is, GRANTED IN PART and DENIED IN PART as provided in this Opinion and
    Order; it is further
    ORDERED that Commerce, on remand, shall reconsider its decision to apply its zeroing
    methodology in the Final Results and change that decision or, alternatively, provide an
    explanation for its inconsistent construction of 
    19 U.S.C. § 1677
    (35) with respect to antidumping
    duty investigations and administrative reviews; it is further
    ORDERED that Commerce shall redetermine Plaintiffs’ weighted-average dumping
    margins, as appropriate, complying with this Opinion and Order; and it is further
    ORDERED that Commerce shall have ninety days from the date of this Opinion and
    Order in which to file its redetermination upon remand (“Second Remand Redetermination”),
    Court No. 10-00261                                                                  Page 16
    which shall comply with all directives in this Opinion and Order; that the Plaintiffs shall have
    thirty days from the filing of the Second Remand Redetermination in which to file comments
    thereon; that Commerce shall have thirty days from the filing of Plaintiffs’ comments to file
    comments.
    /s/ Richard W. Goldberg
    Richard W. Goldberg
    Senior Judge
    Dated: June 1, 2012
    New York, New York