Far Eastern New Century Corp. v. United States , 867 F. Supp. 2d 1309 ( 2012 )

Slip Op. 12- 110
UNITED STATES COURT OF INTERNATIONAL TRADE
FAR EASTERN NEW CENTURY CORP.,
Before: Donald C. Pogue,
Plaintiff, Chief Judge
v. Court No. 11-00415
UNITED STATES,
Defendant.
OPINION
[Plaintiff’s motion for judgment on the agency record GRANTED in
part and DENIED in part].
Dated: August 29, 2012
Peter J. Koenig, Squire Sanders LLP, of Washington, DC,
for Plaintiff.
Ryan M. Majerus, Trial Attorney, Commercial Litigation
Branch, Civil Division, U.S. Department of Justice, of
Washington, DC, for Defendant. With him on the brief were Stuart
F. Delery, Acting Assistant Attorney General, Jeanne E. Davidson,
Director, and Claudia Burke, Assistant Director. Of counsel on
the brief was Whitney Rolig, Attorney, Office of the Chief
Counsel for Import Administration, U.S. Department of Commerce,
of Washington, DC.
Court No. 11-00415 Page 2
Pogue, Chief Judge: In this action, Plaintiff Far
Eastern New Century Corp. (“FENC”), challenges the United States
Department of Commerce’s (“Commerce” or “the Department”)
determination in its administrative review of an antidumping duty
order on certain polyester staple fibers (“PSF”) from Taiwan.1
Specifically, FENC challenges: 1) Commerce’s stated revision of
FENC’s Selling, General, and Administrative expenses (“G&A
expenses”);2 and 2) Commerce’s use of its “zeroing” methodology
in calculating the relevant dumping margin. For the reasons
discussed below, the court will remand to Commerce on the first
issue and sustain Commerce’s determination on the second issue.
BACKGROUND
Commerce initiated an administrative review of the
antidumping duty order concerning PSF from Taiwan in June 2010.
During the review, FENC submitted a G&A ratio calculation for
Commerce’s use in its calculation of normal value in August,
1
Certain Polyester Staple Fiber From Taiwan, 76 Fed. Reg.
57,955 (Dep’t Commerce Sept. 19, 2011) (final results of
antidumping duty administrative review) (“Final Results”), and
accompanying Issues & Decision Memorandum, A-583-833, ARP 09-10
(Sept. 19, 2011), Admin. R. Pub Doc. 8, available at
http://ia.ita.doc.gov/frn/summary/TAIWAN/2011-24010-1.pdf (last
visited August 28, 2012) (“I & D Mem.”) (adopted in Final
Results, 75 Fed. Reg. at 57,955).
2
G&A expenses are also known collectively as “financial
ratios[.]” See, e.g., Dorbest Ltd. v. United States, 30 CIT 1671,
1674, 462 F. Supp. 2d 1262, 1266 (2006).
Court No. 11-00415 Page 3
2010, Prelim. Results Analysis Mem., A-583-833, ARP 09-10, (Apr.
14, 2011), Admin R. Con. Doc. 8 [Pub. Doc. 35], (“Analysis
Mem.”), and, in December, 2010, a revised G&A ratio which
reflected the Taiwan Generally Accepted Accounting Principles
(“GAAP”). Def.’s Resp. to Pl.’s Mot. for J. on Agency R., ECF No.
44, at 2 (“Def.’s Br.”); FENC Supp. Questionnaire, A-583-833, ARP
09-10 (Dec. 21, 2010), Admin. R. Con. Doc 3 [Pub. Doc. 23].
Commerce published its preliminary results of the administrative
review in April of 2011. See Certain Polyester Staple Fiber From
Taiwan (preliminary results of antidumping duty administrative
review), 76 Fed. Reg. 22,366 (Dep’t Commerce Apr. 21, 2011)
(“Preliminary Results”). In calculating FENC’s cost of
production for the Preliminary Results, Commerce used FENC’s
August G&A ratio instead of the revised December ratio. Analysis
Mem. at 11. Also in the Preliminary Results, Commerce employed
its zeroing methodology in calculating FENC’s dumping margin.3
3
Zeroing is the practice of “treat[ing] transactions [or
sales] that generate ‘negative’ dumping margins (i.e., a dumping
margin with a value less than zero) as if they were zero.”
Timken Co. v. United States, 354 F.3d 1334 at 1338 (Fed. Cir.
2004) (holding that 19 U.S.C. § 1677(35) is ambiguous and that
zeroing is a reasonable interpretation). Under this approach,
only sales at less than normal value contribute to the
calculation of the dumping margin. In contrast, when using
offsetting, “sales made at less than fair value are offset by
those made above fair value. This means that some of the dumping
margins used to calculate a weighted-average dumping margin will
be negative.” U.S. Steel Corp. v. United States, 621 F.3d 1351 at
1355 (Fed. Cir. 2010) (holding that 19 U.S.C. § 1677(35)(A) is
ambiguous and that offsetting is also a reasonable
interpretation).
Court No. 11-00415 Page 4
In the Final Results, Commerce stated that it had
agreed with FENC and substituted the revised, corrected G&A ratio
in it final normal value calculations. Final Results, 76 Fed.
Reg. at 57,955. Commerce also maintained that its use of zeroing
was correct.
Claiming that Commerce had erred in implementing its
decision, FENC submitted a ministerial error allegation pursuant
to 19 C.F.R. § 351.224(c)(2)(i). FENC claimed that Commerce had
not properly incorporated the G&A ratio into the cost of
production calculation. Nonetheless, Commerce concluded that the
final cost of production did not contain errors. Allegation of
Ministerial Error, A-583-833, ARP 09-10 (Sept. 29, 2011), Admin.
R. Pub. Doc. 5. Accordingly, Commerce affirmed its revised
calculations and methodology.
FENC filed this action on October 18, 2011. The court has
jurisdiction pursuant to 28 U.S.C. § 1581(c).
Currently, Plaintiff submits that Commerce did not
revise the G&A ratio as intended, and that Commerce improperly
used zeroing in its administrative review. For the reasons
discussed below, the court will remand the first issue to
Commerce to consider the ministerial error, and will deny
Plaintiff’s motion on the second issue, as Commerce’s
determination to use zeroing in this matter was reasonable.
Court No. 11-00415 Page 5
STANDARD OF REVIEW
When reviewing the Department’s decisions made in
administrative reviews of antidumping duty orders, the Court
“shall hold unlawful any determination, finding, or conclusion
found. . .to be unsupported by substantial evidence on the
record, or otherwise not in accordance with law.” 19 U.S.C.
§ 1516a(b)(1)(B)(i).4
DISCUSSION
1. G&A Ratio Revision
In effect, Commerce and FENC are in agreement about an
alleged ministerial error made in the calculation of the G&A
ratio. Commerce stated its intent to revise the G&A ratio based
on updated data it received from FENC. (“We have examined the
record and have determined that we made an error in using the
original G&A ratio in the Preliminary Results . . . . [W]e
neglected to incorporate [the revised ratio] in our
calculations”). I & D Mem. Cmt. 2 at 5.
FENC challenges that the revised data was not
ultimately implemented, and Commerce admits that it “may not have
used the corrected normal value . . . in its calculation of the
final weighted-average dumping margin.” Def.’s Br. at 17.
4
Further citations to the Tariff Act of 1930 are to Title
19 of the United States Code, 2006.
Court No. 11-00415 Page 6
Ministerial errors, under 19 U.S.C. § 1675(h), include:
“errors in addition, subtraction, or other arithmetic function,
clerical errors resulting from inaccurate copying, duplication,
or the like, and any other type of unintentional error which
[Commerce] considers ministerial.” 19 U.S.C. § 1675(h). Commerce
has established administrative channels for the correction of
ministerial errors; but once an action has been filed with the
court, the court has jurisdiction and Commerce may not revise its
Final Determination without the court’s permission. See Zenith
Elecs. Corp. v. United States, 884 F.2d 556, 560–61 (Fed. Cir.
1989) (“[O]nce [the Court of International Trade's] exclusive
jurisdiction has been invoked, Commerce may correct clerical
errors only with the court's prior authorization.”).
Thus, Commerce may request a remand to correct a
ministerial error. The court will grant this request only when
so doing would not result in prejudice to any party. See 19
U.S.C. § 1675(h); 19 C.F.R. § 351.224. Here, because both
parties agree that the issue should be remanded, the court will
grant Commerce’s request and this issue is remanded to Commerce
for further consideration.
2. Zeroing Policy
Turning to Commerce’s zeroing methodology, this court
has recently determined that Commerce’s explanation regarding
Court No. 11-00415 Page 7
this same zeroing methodology has not been rejected by the
Federal Circuit. Grobest & I-Mei Indus. (Vietnam) v. United
States, 36 CIT __, 2012 WL 3104900, *1-6 (2012). In addition,
the court found that Commerce gave a reasonable interpretation of
an ambiguous statue. Id. at *3. As Commerce’s explanation here
is in line with its explanation in Grobest, as a matter of
efficiency this court will follow its recent opinion in Grobest
on the issue of zeroing and affirm Commerce’s explanation as
reasonable.
CONCLUSION
For the reasons discussed above, the court grants
Plaintiff’s motion regarding issue one and will remand to
Commerce on this issue. The Final Results are otherwise affirmed
in all respects.
Commerce shall have until October 15, 2012 to complete
and file its remand redetermination. Plaintiff shall have until
October 29, 2012 to file comments. Defendant shall have until
November 9, 2012 to file any reply.
It is SO ORDERED.
/s/ Donald C. Pogue
Donald C. Pogue, Chief Judge
Dated: August 29, 2012
New York, N.Y.