JBF RAK LLC v. United States

Slip Op. 14-
UNITED STATES COURT OF INTERNATIONAL TRADE
JBF RAK LLC,
Plaintiff,
v. Before: Judith M. Barzilay, Senior Judge
UNITED STATES, Court No. 13-00211
Defendant,
and
MITSUBISHI POLYESTER FILM, INC.,
DUPONT TEIJIN FILMS and SKC, INC.,
Defendant-Intervenors.
OPINION
[Commerce’s final results are sustained.]
July , 2014
Jack D. Mlawski and John J. Galvin, Galvin & Mlawski, for Plaintiff.
Stuart F. Delery, Assistant Attorney General; Jeanne E. Davidson, Director; Patricia M.
McCarthy, Assistant Director, (Melissa M. Devine), Trial Counsel, Commercial Litigation
Branch, Civil Division, U.S. Department of Justice, of counsel, Devin S. Sikes, Office of the
Chief Counsel for Import Administration, U.S. Department of Commerce, for Defendant.
Ronald I. Meltzer, Patrick J. McLain, David M. Horn, and Jeffrey I. Kessler, Wilmer Cutler
Pickering Hale and Dorr LLP, for Defendant-Intervenors.
BARZILAY, Senior Judge: Before the court is Plaintiff JBF RAK LLC’s (“JBF RAK”)
motion for judgment on the agency record under USCIT Rule 56.2, challenging Defendant U.S.
Department of Commerce’s (“Commerce”) final results of the administrative review covering
Court No. 13-00211 Page 2
polyethylene terephthalate film (“PET Film”) from United Arab Emirates for the November 1,
2010 through October 31, 2011 period of review. See Polyethylene Terephthalate Film, Sheet,
and Strip From the United Arab Emirates, 78 Fed. Reg. 29,700 (Dep’t Commerce May 21, 2013)
(final results) (“Final Results”); Issues and Decision Memorandum for Polyethylene
Terephthalate Film, Sheet, and Strip from the United Arab Emirates, A-520-803 (May 13, 2013)
(“Issues and Decision Memorandum”), available at
http://enforcement.trade.gov/frn/summary/uae/2013-12086-1.pdf (last visited July 1, 2014).
Specifically, JBF RAK claims that (1) Commerce unlawfully applied its targeted dumping
methodology in the context of an administrative review; (2) Commerce improperly considered
petitioners’ allegation of targeted dumping; (3) Commerce unlawfully issued a post-preliminary
determination; (4) Commerce failed to consider certain facts about JBF RAK’s pricing practices
in its targeted dumping determination; (5) Commerce’s improperly applied its model matching
methodology; and (6) Commerce unlawfully applied its 15-Day Rule for issuing liquidation
instructions. The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) and (i). For the reasons
set forth below, the court sustains Commerce’s Final Results.
I. STANDARD OF REVIEW
When reviewing Commerce’s antidumping determinations under 19 U.S.C. §
1516a(a)(2)(B)(iii) and 28 U.S.C. § 1581(c), the U.S. Court of International Trade sustains
Commerce‘s determinations, findings, or conclusions unless they are “unsupported by substantial
evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i).
More specifically, when reviewing agency determinations, findings, or conclusions for
substantial evidence, the court assesses whether the agency action is “reasonable and supported
by the record as a whole.” Nippon Steel Corp. v. United States, 458 F.3d 1345, 1352 (Fed. Cir.
2006) (internal quotations and citation omitted). Substantial evidence has been described as
Court No. 13-00211 Page 3
“such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”
DuPont Teijin Films USA v. United States, 407 F.3d 1211, 1215 (Fed. Cir. 2005) (quoting
Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)). Substantial evidence has also been
described as “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. Fed. Mar. Comm'n, 383 U.S. 607,
620 (1966).
Separately, the two-step framework provided in Chevron, U.S.A., Inc. v. Natural Res.
Def. Council, Inc., 467 U.S. 837, 842-45 (1984) (“Chevron”), governs judicial review of
Commerce’s interpretation of the antidumping statute. See United States v. Eurodif S.A., 555
U.S. 305, 316 (2009) (Commerce’s “interpretation governs in the absence of unambiguous
statutory language to the contrary or unreasonable resolution of language that is ambiguous.”).
II. BACKGROUND
JBF RAK is a manufacturer and exporter of PET Film from the United Arab Emirates.
JBF RAK and other interested parties requested that Commerce conduct an administrative
review of the antidumping duty order on PET Film covering the November 1, 2010 through
October 31, 2011 period of review. After Commerce initiated the review, but before publishing
the preliminary results, petitioners filed an allegation of targeted dumping against JBF RAK.
Commerce published its preliminary results and assigned JBF RAK a dumping margin of 5.31%
using its average-to-average comparison methodology. See Polyethylene Terephthalate Film,
Sheet, and Strip from the United Arab Emirates, 77 Fed. Reg. 73,010 (Dep’t Commerce Dec. 7,
2012) (preliminary results) (“Preliminary Results”). Commerce, though, indicated that it did not
have sufficient time to analyze the targeted dumping issue and therefore addressed it later in the
proceeding.
Court No. 13-00211 Page 4
Commerce published a post-preliminary determination addressing the issue of targeted
dumping on March 8, 2013. See 2010-2011 Administrative Review of the Antidumping Duty
Order on Polyethylene Terephthalate Film, Sheet, and Strip from the United Arab Emirates:
Post-Preliminary Analysis and Calculation Memorandum of JBF RAK LLC, A-520-803 (Dep’t
Commerce Mar. 8, 2013) (“Post-Preliminary Determination”). Commerce preliminarily
concluded that JBF RAK had engaged in targeted dumping and assigned a revised dumping
margin of 9.80% using its average-to-transaction comparison methodology. Commerce then
invited interested parties to comment on its targeted dumping analysis. In the Final Results,
Commerce continued to apply the average-to-transaction comparison methodology and assigned
JBF RAK a dumping margin of 9.80%. See Final Results, 78 Fed. Reg. 29,700.
III. DISCUSSION
A. Targeted Dumping in Administrative Reviews
JBF RAK argues that there is no statutory authority for Commerce to consider an
allegation of targeted dumping in the context of an administrative review. JBF RAK Br. 6. It
claims that 19 U.S.C. § 1677f-1(d) authorizes Commerce to apply its average-to-transaction
comparison method in the context of an investigation, but does not authorize Commerce to apply
that methodology in the context of a review. JBF RAK Br. 7-8. JBF RAK claims that
Commerce’s application of the average-to-transaction comparison methodology in the context of
a review violates the statute. JBF RAK Br. 8-9. The court disagrees.
In an administrative review, the statute requires Commerce to review and determine the
amount of any antidumping duty, 19 U.S.C. § 1675(a)(1)(B), by calculating the normal value and
export price (or constructed export price) of each entry of subject merchandise, and the dumping
margin of each such entry. § 1675(a)(2)(A). The term “dumping margin” is defined by statute as
“the amount by which normal value exceeds the export price or constructed export price of the
Court No. 13-00211 Page 5
subject merchandise. § 1677(35)(A). Section 1677f-1(d), in turn, establishes three different
methods by which Commerce may compare normal value with export price to determine whether
merchandise is being sold for less than fair value (i.e., dumping). See also H.R. Doc. No. 103-
316 vol. I (1994), reprinted in 19 U.S.C.C.A.N. 3373 (“SAA”). Although the statute places some
restrictions on Commerce’s selection of a particular methodology in investigations, see § 1677f-
1(d)(1), it is silent with respect to administrative reviews. See § 1677f-1(d)(2). Commerce,
therefore, has exercised its gap-filling discretion by applying a comparison methodology in
reviews that parallels the methodology used in investigations. See Antidumping Proceedings:
Calculation of the Weighted-Average Dumping Margin and Assessment Rate in Certain
Antidumping Proceedings, 77 Fed. Reg. 8,101, 8,102 (Dep’t of Commerce Feb. 14, 2012).
Commerce promulgated a regulation that codifies its approach in both investigations and
reviews. See 19 C.F.R. § 351.414. It states that in “an investigation or review, the Secretary will
use the average-to-average method unless the Secretary determines another method is
appropriate in a particular case.” Id. § 351.414(c)(1). This gives Commerce discretion to apply
its average-to-transaction methodology when the facts of a particular case justify using it rather
than the average-to-average methodology.
Contrary to JBF RAK’s claims, Commerce’s decision to apply its average-to-transaction
comparison methodology in the context of an administrative review is reasonable. As
Commerce explained,
The silence of the statute with regard to application of an alternative comparison
methodology in administrative reviews does not preclude the Department from
applying such a practice. Indeed, the Court of Appeals for the Federal Circuit
(Federal Circuit) has stated that courts “must, as we do, defer to Commerce’s
reasonable construction of its governing statute where Congress ‘leaves a gap in
the construction of the statute that the administrative agency is explicitly
authorized to fill or implicitly delegates legislative authority, as evidenced by the
agency’s generally conferred authority and other statutory circumstances.’”
Further, the Court of International Trade has stated that this “silence has been
Court No. 13-00211 Page 6
interpreted as ‘an invitation’ for an agency administering unfair trade law to
‘perform its duties in the way it believes most suitable’ and courts will uphold
these decisions ‘{s}o long as the {agency}’s analysis does not violate any statute
and is not otherwise arbitrary and capricious.’” We find that the above discussion
of the extension of the statute with respect to investigations is a logical,
reasonable, and deliberative method to fill the silence with regard to
administrative reviews.
Further, the Department’s revision of its practice with regard to administrative
reviews, and to follow its World Trade Organization (WTO)-consistent practice
for investigations, was a deliberate decision on the part of the Executive Branch
pursuant to the authority provided in section 123 of the Uruguay Round
Agreements Act. Specifically, the Executive Branch solicited public comments,
consulted with the appropriate congressional committees, and issued a
preliminary and final determination. This decision was made in order to
implement several adverse WTO reports in which it was found that the United
States was not meeting its WTO obligations.
Issues and Decision Memorandum at 6.
Commerce has provided a legitimate explanation for applying its targeted dumping
methodology in this context. It is logical for Commerce to borrow the comparison
methodologies it uses to uncover dumping in investigations and apply those same methodologies
in administrative reviews. The fact that the statute is silent with regard to administrative reviews
does not preclude Commerce from filling gaps in the statute to properly calculate and assign
antidumping duties. In fact, this is precisely the type of the situation where Commerce would be
expected to establish comparison methodologies to apply in administrative reviews. This
deliberate policy choice by Commerce does not violate the statute or SAA. Moreover, it does
not violate any rules of statutory interpretation as suggested by JBF RAK. JBF RAK Br. 8. It is
therefore a reasonable exercise of Commerce’s gap-filling authority under 19 U.S.C. 1677f-1(d).
Indeed, this Court has already considered another case in which Commerce applied its targeted
dumping methodology in the context of an administrative review. See Timken Co. v. United
States, 38 CIT __, 968 F. Supp. 2d 1279 (2014) (“Timken”). Although this particular issue was
Court No. 13-00211 Page 7
never raised, Timken does imply that Commerce may lawfully apply its targeted dumping
methodology in reviews.
JBF RAK cites several court decisions to support its argument but, unfortunately, has
cherry-picked various quotes and mischaracterized the legal principles established in those
decisions to advance its preferred outcome. JBF RAK Br. 8 (citing FAG Italia S.p.A. v. United
States, 291 F.3d 806 (Fed. Cir. 2002), Nken v. Holder, 556 U.S. 418, 430 (2009), Brown v.
Gardner, 513 U.S. 115, 120 (1994)). Commerce explained, and the court agrees, that these cases
have no application here. See Issues and Decision Memorandum at 6-7 (“With respect to FAG
Italia, JBF mischaracterizes the Federal Circuit’s holding. In that case, and unlike the instant
review, the Federal Circuit determined that the statute unambiguously did not provide the
Department with the authority to take action because the ‘absence of a statutory probation cannot
be the source of agency authority.’ . . . [T]he Act provides the Department with the authority to
engage in comparisons between normal value and export price to calculate dumping margins;
however, as explained above, in the context of an administrative review, the Act does not state
explicitly which method the Department must use in so doing. The Department has reasonably
filled that gap to allow it to use the A-T comparison method when it encounters certain patterns
of export prices. Thus, FAG Italia is inapposite to the current proceeding. Similarly, in Brown,
the Supreme Court found the relevant statutory language at issue to include express terms that
resolved the inquiry. 513 U.S. at 120. However, as explained above, the provision at issue in this
proceeding does not expressly resolve the issue. Consequently, Brown does not support JBF’s
arguments. Finally, as to Nken, that case did not involve an interpretation of a statute under the
Chevron framework by which the Department also must interpret the Act and, thus, concerns a
different scenario than that faced by the Department in this proceeding.”). The court will
Court No. 13-00211 Page 8
therefore sustain Commerce’s decision to apply its average-to-transaction methodology in the
context of an administrative review as a permissible construction of the statute.
B. Timeliness of Targeted Dumping Allegation
JBF RAK also claims that Commerce improperly considered the targeted dumping
allegation because it was filed too late in the administrative proceedings. More specifically, JBF
RAK argues that petitioners failed to file their targeted dumping allegation at least thirty-days
before the preliminary determination as required by the old regulation, 19 C.F.R. § 351.301(d)(5)
(2007) (repealed). JBF RAK Br. 9-10. This argument implicates a secondary argument
concerning whether Commerce properly withdrew its targeting dumping regulations in 2008.
JBF RAK Br. 10 (citing Gold East Paper (Jiangsu) Co. v. United States, 37 CIT __, 918 F.
Supp. 2d 1317 (2013) (“Gold East”)). Alternatively, JBF RAK argues that if the old regulation
does not apply, then petitioners’ targeted dumping allegation is nevertheless untimely under 19
C.F.R. § 351.301(b)(1)(2) and 19 C.F.R. § 351.301(c)(1). JBF RAK Br. 11-14.
JBF RAK has failed to exhaust its administrative remedies on its claims involving 19
C.F.R. § 351.301(d)(5) (2007) and 19 C.F.R. § 351.301(b)(1)(2).
Requiring exhaustion can protect administrative agency authority and
promote judicial efficiency. McCarthy v. Madigan, 503 U.S. 140, 145, 112 S. Ct.
1081, 117 L.Ed.2d 291 (1992). The requirement can protect an agency’s interest
in being the initial decisionmaker in implementing the statutes defining its tasks.
Id. And it can serve judicial efficiency by promoting development of an agency
record that is adequate for later court review and by giving an agency a full
opportunity to correct errors and thereby narrow or even eliminate disputes
needing judicial resolution. Id. at 145–46, 112 S. Ct. 1081. At the same time, “the
interest of the individual in retaining prompt access to a federal judicial forum” is
taken into account in deciding when exhaustion is demanded in order to protect
“institutional interests.” Id. at 146, 112 S. Ct. 1081.
Itochu Bldg. Prods. v. United States, 733 F.3d 1140, 1145 (Fed. Cir. 2013).
JBF RAK did not present these arguments to Commerce when it had the opportunity. It
did not mention that 19 C.F.R. § 351.301(d)(5) and 19 C.F.R. § 351.301(b)(1)(2) prohibited
Court No. 13-00211 Page 9
Commerce from considering petitioners’ targeted dumping allegation. See JBF RAK Admin.
Case Br. 5; JBF RAK Resp. to Post-Prelim. Results 5. It could have raised these arguments in its
comments to the post-preliminary determination or its administrative case brief. Id. By not
presenting them at the appropriate time, JBF RAK deprived Commerce of the opportunity to
“apply its expertise, rectify administrative mistakes, and compile a record adequate for judicial
review-advancing the twin purposes of protecting administrative agency authority and promoting
judicial efficiency.” Carpenter Tech. Corp. v. United States, 30 CIT 1373, 1374-75, 452 F. Supp.
2d 1344, 1346 (2006).
JBF RAK contends that requiring exhaustion is not appropriate with respect to its
argument involving 19 C.F.R. § 351.301(d)(5) because Gold East represents intervening legal
authority (effectively reinstating the regulation) and therefore qualifies as an exception to the
exhaustion requirement. JBF RAK Reply Br. 11. This presents an interesting academic question
but it is one the court need not answer. Even if the court were to accept that the targeted
dumping regulations are somehow operative in this case, the government may waive its
procedural deadlines under general principles of administrative law. See, e.g., Am. Farm Lines v.
Black Ball Freight Service, 397 U.S. 532, 538 (1970) (“Thus there is no reason to exempt this
case from the general principle that ‘[i]t is always within the discretion of a court or an
administrative agency to relax or modify its procedural rules adopted for the orderly transaction
of business before it when in a given case the ends of justice require it. The action of either in
such a case is not reviewable except upon a showing of substantial prejudice to the complaining
party.”). The burden, therefore, is on JBF RAK to demonstrate that it was substantially
prejudiced by Commerce’s supposed violation of its regulatory deadlines. JBF RAK has made
no showing that it was substantially prejudiced by Commerce’s decision to review the targeted
Court No. 13-00211 Page 10
dumping allegation. It appears instead that JBF RAK is attempting to avoid application of the
targeted dumping remedy based on a technicality. This is ultimately a losing argument.
JBF RAK’s also challenges Commerce’s decision to consider the allegation of targeted
dumping under 19 C.F.R. § 351.301(a) & (c)(1).1 JBF RAK argues that the allegation of
targeted dumping constitutes rebuttal factual information under the regulation. JBF RAF Br. 13.
According to JBF RAK, Commerce should have rejected the allegation as untimely factual
information. JBF RAK Br. 13. This argument is not persuasive.
Section 351.301(a) provides:
The Department obtains most of its factual information in antidumping and
countervailing duty proceedings from submissions made by interested parties
during the course of the proceeding. This section sets forth the time limits for
submitting such factual information, including information in questionnaire
responses, publicly available information to value factors in nonmarket economy
cases, allegations concerning market viability, allegations of sales at prices below
the cost of production, countervailable subsidy allegations, and upstream subsidy
allegations. Section 351.302 sets forth the procedures for requesting an extension
of such time limits. Section 351.303 contains the procedural rules regarding filing,
format, translation, service, and certification of documents.
19 C.F.R. § 351.301(a) (2012). Section 351.301(c)(1) then states:
Any interested party may submit factual information to rebut, clarify, or correct
factual information submitted by any other interested party at any time prior to the
deadline provided in this section for submission of such factual information. If
factual information is submitted less than 10 days before, on, or after (normally
only with the Department’s permission) the applicable deadline for submission of
such factual information, an interested party may submit factual information to
rebut, clarify, or correct the factual information no later than 10 days after the date
such factual information is served on the interested party or, if appropriate, made
available under APO to the authorized applicant.
19 C.F.R. § 351.301(c)(1) (2012).
1
During the course of this review, Commerce modified subsections (a), (b) and (c) to 19 C.F.R.
§ 351.301. See Definition of Factual Information and Time Limits for Submission of Factual
Information, 78 Fed. Reg. 21,246 (Dep’t of Commerce Apr. 10, 2013). Those modifications did
not apply to the underlying review. The 2012 version of section 351.301 is available at
http://www.gpo.gov/fdsys/pkg/CFR-2012-title19-vol3/pdf/CFR-2012-title19-vol3-part351.pdf.
Court No. 13-00211 Page 11
In the Final Results, Commerce did not view petitioners’ allegation of targeted dumping
as “factual information” under § 351.301(c)(1). Commerce explained:
JBF’s arguments on the timeliness of the allegation are unpersuasive. While 19
C.F.R. § 351.301(c)(1) pertains to rebuttal factual information, Petitioners’
targeted dumping allegation cannot reasonably be characterized as rebuttal factual
information, as JBF claims. Rather, Petitioners used the information on the record
of this review for purposes of advocating that the Department consider using a
different method to compare normal value and export price (or constructed export
price). However, that does not transform Petitioners’ allegation into the
submission of facts, for the facts that served as the basis for Petitioners’ claim
already were on the record. In other words, Petitioners did not submit additional
facts to disprove anything that JBF previously submitted; instead, Petitioners
relied upon the very facts submitted by JBF to make an allegation. Moreover, in
its regulations, the Department explicitly has delineated factual submissions from
documents containing allegations similar to Petitioners’ targeted dumping
allegation. Because the nature of the filings listed in 19 C.F.R. § 351.301(d)
closely resemble Petitioners’ targeted dumping allegation, (and in fact the now-
withdrawn targeted dumping allegation was listed under that very provision), it
stands to reason that the Department properly considered Petitioners’ submission
as an allegation and not rebuttal factual information.
Issues and Decision Memorandum at 7-8.
Commerce reasonably rejected JBF RAK’s argument on this issue. Petitioners used
factual information already on the record (submitted by JBF RAK) as the basis for their targeted
dumping allegation. The allegation of targeted dumping cannot be characterized as rebuttal
factual information under § 351.301(c)(1). Cf. PSC VSMPO-Avisma Corp. v. United States, 688
F.3d 751, 760-61 (Fed. Cir. 2013) (“PSC VSMPO”). The 10-day deadline mentioned in the
regulation does not apply here. Allegations, such as an allegation of targeted dumping, are
covered by 19 C.F.R. § 351.301(d) (2012). The court’s understanding of the regulations is
consistent with Commerce’s own interpretation of its regulations, which is afforded “substantial
deference unless an alternative reading is compelled by the regulation’s plain language.” Mason
v. Shinseki, 743 F.3d 1370, 1374-75 (Fed. Cir. 2014) (internal quotations omitted) (quoting
Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994)).
Court No. 13-00211 Page 12
Moreover, even if the allegation was untimely under a given regulation, Commerce may
“relax or modify its procedural rules adopted for the orderly transaction of business before it
when in a given case the ends of justice require it.” PAM S.p.A. v. United States, 463 F.3d 1345,
1348 (Fed. Cir. 2006) (quoting Am. Farm Lines v. Black Ball Freight Service, 397 U.S. 532,
538–39 (1970)). Therefore, Commerce’s decision to review petitioners’ targeted dumping
allegation represents an acceptable exercise of agency discretion.
C. Post-Preliminary Determination
JBF RAK next argues that Commerce violated 19 U.S.C. § 1675(a)(2)(B)(iv) by issuing a
post-preliminary determination. JBF RAK claims that § 1675(a)(2)(B)(iv) only contemplates a
preliminary and final determination and therefore any additional determination issued by
Commerce is not authorized by the statute (or regulation). JBF RAK Br. 14-15. JBF RAK has
advanced a superficial legal argument that ignores general principles of administrative law.
Commerce enjoys considerable discretion in the conduct of its administrative
proceedings. The Federal Circuit has stated that “[a]bsent constitutional constraints or extremely
compelling circumstances the administrative agencies should be free to fashion their own rules
of procedure and to pursue methods of inquiry capable of permitting them to discharge their
multitudinous duties.” PSC VSMPO, 688 F.3d at 760 (quoting Vt. Yankee Nuclear Power Corp.
v. Nat. Res. Def. Counsel, Inc., 435 U.S. 519, 543-44 (1978)). Although § 1675(a)(2)(B)(iv)
establishes statutory deadlines for Commerce to publish its preliminary and final results, which
Commerce satisfied here, it does not prevent Commerce from fashioning procedures to properly
administer the antidumping statute. In the Final Results, Commerce explained:
[W]hile the Act and the regulations provide deadlines for preliminary and final
determinations in administrative reviews, the Department is not limited by any
statutory or regulatory provision to issuing only preliminary and final results in
such a proceeding. In this proceeding, the Department issued its Preliminary
Results by the applicable deadline and is issuing these final results by the
Court No. 13-00211 Page 13
applicable deadline. Moreover, the Department enjoys wide discretion in
conducting its proceeding, including the allocation of resources to develop
suitable approaches for new policies such as the Final Modification for Reviews.
Issuing a Post-Preliminary Analysis and providing all parties with an opportunity
to comment on that analysis embodies the principles of transparency and
openness underlying the Act and administrative law in general. For example,
when issues arise or information is submitted too late in a proceeding to be
considered for the preliminary results, issuing a Post-Preliminary Analysis
ensures that parties are aware of all issues before the Department releases final
results and that they have an adequate opportunity to provide comments to the
Department. Because all parties were provided an opportunity to comment on the
Post-Preliminary Analysis (the same opportunity they were provided to comment
on the Preliminary Results), JBF was not disadvantaged by this approach.
Issues and Decision Memorandum at 8.
Contrary to JBF RAK’s claim, Commerce’s decision to issue a post-preliminary
determination did not violate the statute. Commerce made a decision to consider petitioners’
allegation of targeted dumping in a separate determination because there was insufficient time to
consider the issue given the statutory deadline for publishing the preliminary determination.
Commerce gave the parties an opportunity to file comments on its Post-Preliminary
Determination and still managed to issue the Final Results within the statutory time-frame. JBF
RAK was not prejudiced by Commerce’s decision to modify the proceedings. This is a
reasonable exercise of agency discretion. See PSC VSMPO, 688 F.3d at 760. Indeed, Commerce
has issued post-preliminary determinations in the past without issue. See, e.g., Timken, 968 F.
Supp. 2d 1279. Commerce’s decision to issue a post-preliminary determination in this case was
reasonable.
D. Targeted Dumping Analysis
JBF RAK claims that Commerce’s targeted dumping analysis under 19 U.S.C. § 1677f-
1(d)(1)(B) failed to provide an explanation “as to why and how the alleged targeted customers,
and time periods were selected and thus allegedly resulted in targeted dumping.” JBF RAK Br.
15. According to JBF RAK, “such explanation is necessary for the Department to initiate a
Court No. 13-00211 Page 14
targeted dumping inquiry, because it is required to determine whether any observed pricing
pattern is the result of intentional targeted dumping strategy.” JBF RAK Br. 15. The court
disagrees.
Section § 1677f-1(d)(1)(B) provides:
The administering authority may determine whether the subject merchandise is
being sold in the United States at less than fair value by comparing the weighted
average of the normal values to the export prices (or constructed export prices) of
individual transactions for comparable merchandise, if—
(i) there is a pattern of export prices (or constructed export prices) for
comparable merchandise that differ significantly among purchasers,
regions, or periods of time, and
(ii) the administering authority explains why such differences cannot be
taken into account using [the A-A methodology or the transaction-to-
transaction methodology].
§ 1677f-1(d)(1)(B). The “‘pattern of export prices (or constructed export prices) for comparable
merchandise that differ significantly among purchasers, regions, or periods of time’ is what is
referred to as ‘targeted dumping.’” Timken, 968 F. Supp. 2d at 1282. Targeted dumping,
therefore, is a statutorily defined set of pricing patterns that permit Commerce to apply an
alternative comparison methodology in antidumping investigations and reviews.
Commerce has established a methodology known as the Nails test to determine whether a
targeted dumping analysis is appropriate. See Certain Steel Nails from the People’s Republic of
China: Final Determination of Sales at Less than Fair Value and Partial Affirmative
Determination of Critical Circumstances, 73 Fed. Reg. 33,977 (Dep’t Commerce June 16, 2008);
Certain Steel Nails from the United Arab Emirates: Notice of Final Determination of Sales at
Not Less than Fair Value, 73 Fed. Reg. 33,985 (Dep’t Commerce June 16, 2008). The Nails test
involves a two-step analysis:
In the first stage of the test, the “standard-deviation test,” we determined the
volume of the allegedly targeted group’s (i.e., purchaser, region or time period)
Court No. 13-00211 Page 15
sales of subject merchandise (by sales volume) that are at prices more than one
standard deviation below the weighted- average price of all sales under review,
targeted and non-targeted. We calculated the standard deviation on a product-
specific basis (i.e., by CONNUM) using the weighted-average prices for the
alleged targeted group and the groups not alleged to have been targeted. If that
volume did not exceed 33 percent of the total volume of the respondent’s sales of
subject merchandise for the allegedly targeted group, then we did not conduct the
second stage of the Nails Test. If that volume exceeded 33 percent of the total
volume of the respondent’s sales of subject merchandise for the allegedly targeted
group, on the other hand, then we proceeded to the second stage of the Nails Test.
In the second stage, the “gap test,” we examined all sales of identical merchandise
(i.e., by CONNUM) sold to the allegedly targeted group which passed the
standard-deviation test. From those sales, we determined the total volume of sales
for which the difference between the weighted-average price of sales for allegedly
targeted group and the next higher weighted-average price of sales to the non-
targeted groups exceeds the average price gap (weighted by sales volume) for the
non- targeted groups. We weighted each of the price gaps between the non-
targeted groups by the combined sales volume associated with the pair of prices
for the non-targeted groups that defined the price gap. In doing this analysis, the
allegedly targeted group’s sales were not included in the non-targeted groups; the
allegedly targeted group’s average price was compared only to the average prices
for the non-targeted groups. If the volume of the sales that met this test exceeded
five percent of the total sales volume of subject merchandise to the allegedly
targeted group, then we determined that targeting occurred and these sales passed
the Nails Test.
Issues and Decision Memorandum at 9. The Court has upheld the Nails test as reasonable. See
Mid Continent Nail Corp. v. United States, 34 CIT __, __, 712 F. Supp. 2d 1370, 1376-80
(2010).
Here, Commerce determined that JBF RAK’s sales satisfied the Nails test and applied its
average-to-transaction comparison methodology to calculate JBF RAK’s dumping margin. See
Issues and Decision Memorandum at 9-10. Commerce, however, did not consider why JBF
RAK’s sales demonstrated a pattern of export prices that differ significantly among purchasers,
regions, or periods of time. See id. Commerce rejected JBF RAK’s argument suggesting that
Commerce must consider whether a given respondent intended to engage in targeted dumping to
satisfy the statute. See id. at 10. Commerce is correct.
Court No. 13-00211 Page 16
Section 1677f-1(d)(1)(B) does not require Commerce to investigate the various reasons
why a particular respondent’s U.S. sales demonstrate a pattern of targeted dumping. Rather, the
statute instructs Commerce to look at U.S. sales price only in making a determination of targeted
dumping. See id. The Nails test implements the statute by providing greater specificity on how
Commerce evaluates these prices across the targeted group’s sales of the subject merchandise.
See Issues and Decision Memorandum at 9. This constitutes a permissible construction of the
statute. JBF RAK, though, urges the court to read into the statute some sort of “intent”
requirement not mentioned in the text of the statute or legislative history. The court cannot adopt
such an interpretation. It would add a new element to the targeted dumping analysis, requiring
Commerce to also consider whether respondents intended to engage in targeted dumping. See
Viraj Group v. United States, 476 F.3d 1349, 1357-58 (Fed. Cir. 2007). This “would create a
tremendous burden on Commerce that is not required or suggested by the statute.” Id. at 1358.
E. Home Market Sales: Model Matching
JBF RAK next claims that Commerce erred by not comparing home market sales of non-
prime merchandise (grade B film) with United States sales of prime merchandise (grade A film).
JBF Br. 18-21. Unfortunately, though, JBF RAK has recycled its argument from its
administrative case brief (verbatim) without attempting to analyze Commerce’s findings and
conclusions against the operative standard of review. Compare JBR RAK Admin. Case Br. 10-
13, with JBF RAK Br. 18-21; see USCIT R. 56.2(c)(1) (“briefs . . . must include . . . the issues of
law presented together with the reasons for contesting or supporting the administrative
determination, specifying how the determination may be arbitrary, capricious, an abuse of
discretion, not otherwise in accordance with law, unsupported by substantial evidence; or, how
the determination may be unwarranted by the facts to the extent that the agency may or may not
have considered facts which, as a matter of law, should have been properly considered.”). JBF
Court No. 13-00211 Page 17
RAK attempted this same form of litigation in a previous proceeding, which this court
summarily rejected. See JBF RAK LLC v. United States, 38 CIT __, __, 961 F. Supp. 2d 1274,
1281 (2014). Arguments made before the administrative agency may, of course, be restated in a
judicial proceeding but must conform to the different requirements of each process. Here, JBF
RAK’s arguments do not. Therefore, the court will do the same as it did in the previous case and
deem the issue waived.
F. 15-Day Liquidation Policy
JBF RAK’s final claim is a challenge to Commerce’s 15-day liquidation policy. JBF
RAK Br. 21. JBF RAK argues, as it did in the previous proceeding, that the SKF cases render
Commerce’s 15-day liquidation policy unlawful as a matter of law. See JBF RAK LLC, 961 F.
Supp. 2d at 1279. It therefore argues that Commerce is ignoring the Court’s declaratory
judgment by continuing to apply its policy to other respondents involved in trade disputes before
the agency. Commerce, for its part, contends that the court lacks jurisdiction to review this issue
because JBF RAK did not suffer any harm and therefore does not have standing to challenge
Commerce’s 15-day policy. Def. Br. 35. Alternatively, Commerce argues that Commerce’s 15-
day liquidation policy is a reasonable interpretation of the statute. Def. Br. 38.
The court has already considered and rejected Commerce’s jurisdictional argument on
this issue in a previous proceeding. See JBF RAK LLC v. United States, Court No. 11-00141,
Docket Entry No. 30 (Oct. 12, 2011) (order denying motion to dismiss). In the court’s view, JBF
RAK has properly established jurisdiction under 28 U.S.C. § 1581(i) and may therefore
challenge Commerce’s 15-day liquidation policy. See Amended Compl. ¶¶ 2, 49, 50. The real
question here is whether JBF RAK has presented this issue in a manner suitable for judicial
review. The answer is no.
Court No. 13-00211 Page 18
JBF RAK has framed this issue as though the SKF decisions render Commerce’s 15-day
policy unlawful as a matter of law. JBF RAK Br. 20-23. As the court has already explained, see
JBF RAK LLC, 961 F. Supp. 2d at 1279, this is incorrect. The SKF decisions represent
persuasive authority. But there are other decisions by the Court that have held Commerce’s 15-
day liquidation policy to be a reasonable interpretation of the statute. See Mittal Steel Galati S.A.
v. United States, 31 CIT 1121, 1141, 502 F. Supp. 2d 1295, 1313 (2007); Mittal Steel Galati S.A.
v. United States, 31 CIT 730, 736, 491 F. Supp. 2d 1273, 1279 (2007); Mukand Int. Ltd. v.
United States, 30 CIT 1309, 1312, 452 F. Supp. 2d 1329, 1332 (2006). These decisions are also
persuasive authority. JBF RAK does not mention these other decisions as contrary authority, nor
does it attempt to distinguish them from this particular case.
JBF RAK also fails to apply the Chevron framework (as the court must do) to analyze the
many competing policy issues implicated by this legal question. See, e.g., Fine Furniture
(Shanghai) Ltd. v. United States, 2014 WL 1613883 at *3 (Fed. Cir. 2014). JBF RAK does not
address Commerce’s findings and conclusions on this issue in the Final Results. See Issues and
Decision Memorandum at 13-14. It simply quotes language from selected SKF decisions and
then states in conclusory terms that Commerce’s 15-day policy is unlawful. JBF RAK Br. 20-23.
If the court were to review the issue in this context, it would first have to assume the role of co-
plaintiff, reframe JBF RAK’s arguments under the Chevron framework, wrestle with the existing
decisions on this issue, and analyze Commerce’s 15-day policy under that framework. The court
would effectively be litigating the issue for JBF RAK, which is something it cannot do. See
United States v. Great Am. Ins. Co., 738 F.3d 1320, 1328 (Fed. Cir. 2013) (“It is well established
that arguments that are not appropriately developed in a party's briefing may be deemed
waived.”); MTZ Polyfilms, Ltd. v. United States, 33 CIT 1575, 1578, 659 F.Supp.2d 1303, 1308
(2009) (“‘[I]ssues adverted to in a perfunctory manner, unaccompanied by some effort at
Court No. 13-00211 Page 19
developed argumentation, are deemed waived. It is not enough merely to mention a possible
argument in the most skeletal way, leaving the court to do counsel’s work, create the ossature for
the argument, and put flesh on its bones.’”) (quoting United States v. Zannino, 895 F.2d 1, 17
(1st Cir. 1990)). Accordingly, the court deems the issue waived.
IV. CONCLUSION
For the foregoing reasons, Commerce’s Final Results are sustained. Judgment will be
entered accordingly.
Dated: July , 2014 _ /s/ Judith M. Barzilay ______
New York, New York Judith M. Barzilay, Senior Judge