Fabrique De Fer De Charleroi S.A. v. United States

Slip Op. 01-140
UNITED STATES COURT OF INTERNATIONAL TRADE
BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
________________________________________
:
FABRIQUE DE FER DE CHARLEROI S.A., :
:
Plaintiff, :
:
v. :
:
THE UNITED STATES, :
: Court No.
Defendant, : 98-02-00359
:
and :
:
BETHLEHEM STEEL CORPORATION and :
U.S. STEEL GROUP, A UNIT OF :
USX CORPORATION, :
:
Defendant-Intervenors. :
________________________________________:
[Commerce’s Remand Results are affirmed in their entirety. Case
dismissed.]
Barnes, Richardson & Colburn (Gunter von Conrad and Michael J.
Chessler) for plaintiff, Fabrique de Fer de Charleroi S.A.,
currently Usinor Industeel, SA.
Robert D. McCallum, Jr., Assistant Attorney General; David M.
Cohen, Director, Commercial Litigation Branch, Civil Division,
United States Department of Justice (Velta A. Melnbrencis,
Assistant Director); of counsel: Robert L. LaFrankie, Office of the
Chief Counsel for Import Administration, United States Department
of Commerce, for the United States.
Dewey Ballantine LLP (Michael H. Stein, Bradford L. Ward and
Rory F. Quirk) for defendant-intervenor Bethlehem Steel Corporation
and defendant-intervenor U.S. Steel Group, a Unit of USX
Corporation, currently United States Steel LLC.
Dated: December 4, 2001
Court No. 98-02-00359 Page 2
JUDGMENT
I. Standard of Review
The Court will uphold Commerce’s redetermination pursuant to
the Court’s remand unless it is “unsupported by substantial
evidence on the record, or otherwise not in accordance with law.”
19 U.S.C. § 1516a(b)(1)(B)(i) (1994). Substantial evidence is
“more than a mere scintilla. It means such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion.”
Universal Camera Corp. v. NLRB, 340 U.S. 474, 477 (1951) (quoting
Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).
Substantial evidence “is something less than the weight of the
evidence, and the possibility of drawing two inconsistent
conclusions from the evidence does not prevent an administrative
agency’s finding from being supported by substantial evidence.”
Consolo v. Federal Maritime Comm’n, 383 U.S. 607, 620 (1966).
II. Background
This case concerns Final Results of Redetermination Pursuant
to Court Remand on Certain Cut-to-Length Carbon Steel Plate from
Belgium (“Remand Results”), Fabrique de Fer de Charleroi S.A. v.
United States (“Fabrique”), 25 CIT ___, 155 F. Supp. 2d 801 (2001),
ensuing from Final Results of Antidumping Duty Administrative
Review of Certain Cut-to-Length Carbon Steel Plate From Belgium
(“Final Results”), 63 Fed. Reg. 2959 (Jan. 20, 1998), issued by the
Court No. 98-02-00359 Page 3
United States Department of Commerce, International Trade
Administration (“Commerce”). The Final Results, in turn, ensue
from the antidumping duty order on cut-to-length carbon steel plate
imported to the United States from Belgium during the 1995-96
period of review (“POR”).
During the review, Commerce: (1) determined that the United
States sale of the cut-to-length carbon steel plate by Fabrique de
Fer de Charleroi S.A. (“FAFER”) was a constructed export price
(“CEP”) sale, that is, a sale for which price had to be adjusted
under subsections (c) and (d) of 19 U.S.C. § 1677a (1994) to
account for FAFER’s various direct and indirect selling expenses,
see Fabrique, 25 CIT at ___, 155 F. Supp. 2d at 805; and (2) issued
questionnaires to FAFER, seeking data on FAFER’s indirect selling
expenses related to FAFER’s United States sale. In its responses
to Commerce’s questionnaires, FAFER stated that there were no
indirect selling expenses incurred by FAFER in the United States
or, alternatively, that all indirect selling expenses had been
allocated based on information in FAFER’s response. See id., 25
CIT at ___, 155 F. Supp. 2d at 804. Missing the information on
FAFER’s indirect selling expenses, Commerce, in reaching the
applicable determination, resorted to facts available, see id., 25
CIT at ___, 155 F. Supp. 2d at 805, specifically to the commission
rate FAFER normally paid FAFER’s United States affiliates. See
Court No. 98-02-00359 Page 4
Final Results, 63 Fed. Reg. at 2962-63.
The Court affirmed Commerce’s use of facts available, see
Fabrique, 25 CIT at ___, 155 F. Supp. 2d at 808, but ordered
Commerce to choose another facts available substitute for FAFER’s
indirect selling expenses because the record indicated that
Commerce had determined that no commission was actually paid on the
United States sale in question. See id., 25 CIT at ___, 155 F.
Supp. 2d at 809-10. The Court noted that
[it] share[d] FAFER’s bewilderment about Commerce’s
choice to use the only piece of data admittedly unrelated
to the transaction at issue as a proxy for FAFER’s
indirect selling expenses. There could be no rational
relationship between a matter and . . . data that
expressly does not apply to that matter under the
particular facts of the case.
Id. (internal citations omitted).
In accordance with the Court’s remand, Commerce recalculated
CEP resorting to another facts available, namely, selling, general
and administrative expenses (“SG&A”) of FAFER’s United States
subsidiary, Charleroi USA (“Charleroi”). See Remand Results at 3-
4.
III. Contentions of the Parties
FAFER asserts that Charleroi’s SG&A are unrelated to indirect
selling expenses actually incurred by FAFER. See Pl.’s Comments
Final Results Redetermination Pursuant Ct. Remand (“Pl.’s
Court No. 98-02-00359 Page 5
Comments”) at 2-3; Pl.’s Rebuttal Comments Final Results
Redetermination Pursuant Ct. Remand (“Pl.’s Rebuttal”) at 2.
Specifically, FAFER contends that Charleroi’s SG&A: (1) bear no
rational relationship to the actual expenses incurred by FAFER; (2)
cannot be representative of the sale transaction that took place in
1996 because Charleroi’s statement covers the 1995 calendar year;
(3) is preempted by the data provided by FAFER in FAFER’s responses
to Commerce’s questionnaires. See generally, Pl.’s Comments, Pl.’s
Rebuttal. Therefore, FAFER concludes that Commerce’s decision to
use Charleroi’s SG&A as a substitute for FAFER’s United States
indirect selling expenses is a violation of this Court’s remand
order in Fabrique, 25 CIT at ___, 155 F. Supp. 2d at 813. FAFER
further asserts that FAFER’s indirect selling expenses, if any,
were minimal. See Pl.’s Rebuttal at 4.
Commerce contends that Commerce’s use of Charleroi’s SG&A as
a facts-available proxy for FAFER’s United States indirect selling
expenses was in accordance with the Court’s remand in Fabrique, 25
CIT at ___, 155 F. Supp. 2d at 813. See Remand Results at 3-5,
Def.’s Rebuttal Pl.’s Comments Final Results Redetermination
Pursuant Ct. Remand (“Def.’s Rebuttal”) at 4-8. Bethlehem Steel
Corporation and U.S. Steel Group support Commerce’s reliance on
Charleroi’s SG&A and point out that the case was remanded to
Commerce “for one-–and only one–-purpose: ‘to examine the record to
Court No. 98-02-00359 Page 6
determine what data should be used as a substitute for FAFER’s
indirect selling expenses’” and not to “relitigate the merits of
[Commerce’s] underlying determination regarding FAFER’s U.S.
indirect selling expenses.” See Def.-Intervenors’ Rebuttal
Comments Pl.’s Comments Final Results Redetermination Pursuant Ct.
Remand (“Def.-Intervenors’ Rebuttal”) at 4.
III. Analysis
A. Reasonableness of Facts Available
The main argument presented by FAFER is that: (1) the facts
available chosen by Commerce “bear[] no rational relationship to
[the] expenses actually incurred,” Pl.’s Rebuttal at 2 (emphasis in
original); and (2) the only reasonable facts available that could
be used in the given case “is the amount originally calculated in
the Sales Verification Report.” Id. at 4.
FAFER misreads the purpose of the Court’s remand in Fabrique,
25 CIT at ___, 155 F. Supp. 2d at 813, as well as the purpose and
gist of the term “facts available.” Facts available are, by
definition, a proxy figure used by an agency when the agency lacks
actual data necessary for the calculation.1 Indeed, if the agency
1
“In general[,] [i]f . . . necessary information is not
available on the record, or . . . an interested party or any other
person . . . fails to provide such information . . . in the form
and manner requested . . . or . . . provides such information but
Court No. 98-02-00359 Page 7
had the actual figure and failed to use it, such action would be a
violation of the agency’s statutory duty. Conversely, if the
agency lacks the actual figure, a reading of the statute as a
requirement to use “facts available” that should be, de facto,
actual data would render the statutory purpose of 19 U.S.C. § 1677e
obsolete. Indeed, it would be anomalous to require the agency to
use the “de facto actual data” where the agency has none; such
scheme would serve as an incentive to members of the regulated
industry to conceal the actual data and obtain a premium if they
could succeed in obstructing the agency’s operation while keeping
a cooperative disguise. In sum, reliance on “facts available”
inherently implies the usage, wholly or partly, of surrogate data
that is not actual. Consequently, in the case at bar, if “the
amount originally calculated in the Sales Verification Report,”
Pl.’s Rebuttal at 4, does not include all of FAFER’s possible
indirect selling expenses in the given transaction,2 Commerce must
the information cannot be verified . . . , [Commerce] shall . . .
use the facts otherwise available in reaching the applicable
determination . . . .” 19 U.S.C. § 1677e(a) (1994).
2
FAFER asserts “[t]he amount that should serve as a proxy for
[FAFER’s United States] indirect selling expenses is zero because
of the circumstances of the sale in question.” Pl.’s Rebuttal at
4. In support of this position, FAFER points out that during the
transaction at issue “FAFER did not follow [FAFER’s] general
practices,” and Commerce verified the fact that “the particular
sale in question [is] not . . . a normal sale, since it was a
single sale.” Pl.’s Comments at 1-2. FAFER further adds that the
transaction at issue was unique because of the fact that Charleroi
had minimal participation in the sale. Id. at 2.
Court No. 98-02-00359 Page 8
resort to facts available, that is, data necessarily other than the
amount designated in the Sales Verification Report.
The issue, therefore, is what facts available would constitute
reasonable surrogate data. Admittedly, there cannot be a bright-
line test or all-inclusive definition. Rather, the issue shall be
This very last claim was disputed by Commerce which noted that
[Commerce] has determined that [Charleroi] did act as
more than a processor of sales documents and a
communications link between the unaffiliated U.S.
customer and FAFER . . . . Although FAFER sets minimum
list prices, [Charleroi] negotiates the sale with the
customer. . . . [Charleroi] essentially negotiates all
sales in accordance with FAFER's minimum price list and
the sales take place in the United States, not in
Belgium.
Preliminary Results of Antidumping Duty Administrative Review of
Cut-to-Length Carbon Steel Plate From Belgium, 62 Fed. Reg. 48,213,
48,215 (Sep. 15, 1997) (citations omitted).
Thus, Commerce determined that Charleroi’s “participation was
actually so significant as to warrant classifying the sale as a CEP
sale.” Remand Results at 6. Consequently, Commerce issued
questionnaires to FAFER and, missing the information on FAFER’s
indirect selling expenses, resorted to the facts available.
While the Court does not share Bethlehem and U.S. Steel
Group’s opinion that FAFER is attempting to relitigate the
applicability of facts available (indeed, facts available equal to
zero would yield the same net result as the decision that facts
available do not apply), the Court finds that FAFER is not
assailing the reasoning but rather the result reached by Commerce,
which is outside the Court’s standard of review. It is the
province of an agency and not the Court to examine the record and
reach a conclusion on the issue whether the particular sale
involves indirect selling expenses. See Writing Instrument Mfrs.
Ass’n, Pencil Section v. United States, 21 CIT 1185, 1195, 984 F.
Supp. 629, 639 (1997).
Court No. 98-02-00359 Page 9
decided on a case-by-case basis. The Court, however, pointed out
that reasonable surrogate data is “‘the most reasonable estimate,’
. . . that is, the estimate most rational under the circumstances
. . . .” among the entire data available on the record. Fabrique,
25 CIT at ___ n.4, 155 F. Supp. 2d at 810 n.4 (emphasis omitted).
Moreover, “[t]he mere possibility that [a random figure chosen]
could be an amount near the amount [that would be] arrived [at] on
the basis of [reasonable surrogate data]” cannot validate that
random figure. Id. Therefore, the Court holds that: (1) surrogate
data does not have to be necessarily related to the data missing;
and (2) it is permissible to analogize the missing item to an item
from the groups that are probably present in the transaction but
not to an item from the groups that are admittedly not a part of
the transaction. Indeed, any conclusion otherwise would be a
perfect sophism; Commerce, then, would be required to derive
surrogate data from the very data missing, wholly or partly, in
other words, to fasten Commerce’s calculations to a vacuum.
This is exactly the point misinterpreted by FAFER. FAFER
reads Fabrique, 25 CIT at ___, 155 F. Supp. 2d at 810, to mean that
the proxy figure shall bear a “rational relationship to any
indirect selling expenses actually incurred” by FAFER. Pl.’s
Comments at 2 (emphasis in original). The Court, however, remanded
Fabrique, 155 F. Supp. 2d. 801, not because Commerce failed to use
Court No. 98-02-00359 Page 10
a surrogate figure related to the expenses actually incurred by
FAFER, but rather because Commerce chose to use a figure that
admittedly could not have been analogized with the data missing in
the transaction under review. See id., 25 CIT at ___, 155 F. Supp.
2d 809-10.
B. Charleroi’s SG&A as Facts Available
All FAFER’s United States sales or other operations are made
through Charleroi. See Remand Results at 7, Comment 1 (quoting
FAFER’s Questionnaire Response at 3, Oct. 21, 1996). Charleroi’s
financial statement covers the period from January 1, 1995, through
December 31, 1995, that is, the period overlapping with the POR at
issue. In addition, Charleroi’s financial statement provides data
on Charleroi’s SG&A expenses, that is, the ratio of Charleroi’s
general expenses to the cost of manufacturing. See Magnesium Corp.
of Am. v. United States, 166 F.3d 1364, 1371 (Fed. Cir. 1999).
General expenses can encompass many items, including such common
ones as overhead and such occasional ones as financial losses or
domestic freight. See, e.g., American Silicon Techs. v. United
States, 261 F.3d 1371 (Fed. Cir. 2001); SKF USA, Inc. v. United
States, 254 F.3d 1022 (Fed. Cir. 2001); Campbell Soup Co. v. United
States, 107 F.3d 1556 (Fed. Cir. 1997).
The missing data at issue is FAFER’s indirect selling
Court No. 98-02-00359 Page 11
expenses. Indirect selling expenses may include salespersons’
salaries, warehousing, personnel assistance, pre-sale home-market
transportation expenses, expenses incurred by a foreign
manufacturer on behalf of its related United States importer, and
so on. See generally, Torrington Co. v. United States, 68 F.3d
1347 (Fed. Cir. 1995); Torrington Co. v. United States, 44 F.3d
1572 (Fed. Cir. 1995); Asociacion Colombiana de Exportadores de
Flores v. United States, 901 F.2d 1089 (Fed. Cir. 1990). In sum,
indirect selling expenses are the expenses that do not result from,
or cannot be tied directly to specific sales, but that may
reasonably be attributed to such sales. Therefore, FAFER’s
indirect selling expenses could be analogized to general expenses
of Charleroi during the comparable time periods because: (1) FAFER
does all of its United States business through Charleroi (thus,
inclusive of the transaction at issue); (2) the expenses are of
comparable nature; and (3) there is no data on record verifying
that SG&A are admittedly not a part of the transaction.
Based on the foregoing, the Court affirms the Remand Results
in their entirety. The “[C]ourt will sustain the determination if
it is reasonable and supported by the record as a whole, including
whatever fairly detracts from the substantiality of the evidence.”
Negev Phosphates, Ltd. v. United States, 12 CIT 1074, 1077, 699 F.
Supp. 938, 942 (1988) (citations omitted, emphasis supplied).
Court No. 98-02-00359 Page 12
Therefore, this Court concludes that Commerce has complied
with the Court’s remand, and it is hereby
ORDERED that the Remand Results filed by Commerce on October
1, 2001, are affirmed in their entirety; and it is further
ORDERED that since all other issues were previously decided,
this case is dismissed.
______________________________
NICHOLAS TSOUCALAS
SENIOR JUDGE
Dated: December 4, 2001
New York, New York