Slip Op. 04-18

United States Court of International Trade

NEW WORLD PASTA COMPANY, 

 Plaintiff, 

 v. 

UNITED STATES, 

 Defendant, 

 and 

PASTIFICIO GAROFALO S.p.A. and 

PASTIFICIO GUIDO FERRARA, S.r.L., 

 Defendant-Intervenors.

Before: Pogue, Judge 

Court No. 03-00105

[Plaintiff’s motion for judgment on the agency record denied; 

judgment entered for Defendant.] 

 

 

Decided: March 1, 2004 

Collier Shannon Scott, PLLC (Jennifer E. McCadney, Paul C. 

Rosenthal, David C. Smith, Jr.) for Plaintiff New World Pasta 

Company. 

Peter D. Keisler, Assistant Attorney General, David M. Cohen, 

Director, Jeanne E. Davidson, Deputy Director, Ada Bosque, Trial 

Attorney, Commercial Litigation Branch, Civil Division, U.S. 

Department of Justice, Marisa Beth Goldstein, Attorney, Office 

of the Chief Counsel for Import Administration, U.S. Department 

of Commerce, Of Counsel, for Defendant United States. 

Hunton & Williams LLP (Richard P. Ferrin, Douglas J. Heffner, 

William Silverman) for Defendant-Intervenor Pastificio Garofalo 

S.p.A. 

Law Offices of David L. Simon (David L. Simon) for DefendantIntervenor Pastificio Guido Ferrara, S.r.L.
Court No. 03-00105 Page 2

OPINION 

 POGUE, Judge: In an administrative appeal, Plaintiff 

challenges aspects of decisions made by the Department of 

Commerce (“Commerce”) concerning two of the investigated 

companies in Certain Pasta From Italy, 68 Fed. Reg. 6,882, 

6,882-84 (Dep’t Commerce Feb. 11, 2003) (notice of final results 

of antidumping duty administrative review and determination not 

to revoke in part) (“Final Determination”).1 With regards to the 

first company, Pastificio Garofalo S.p.A. (“Garofalo”), 

Plaintiff challenges Commerce’s decision not to “collapse” 

 1

Commerce’s Final Determination incorporates by reference 

the agency’s Issues and Decision Memorandum. Final 

Determination, 68 Fed. Reg. at 6,883 (citing Dep’t of Commerce 

Mem. from Bernard T. Carreau, Deputy Assistant Sec’y for Imp. 

Admin., to Faryar Shirzad, Assistant Secretary for Imp. Admin., 

Issues and Decisions for the Final Results of the Fifth 

Antidumping Duty Administrative Review, P.R. Doc. No. 134, Pl.’s 

Pub. Ex. 2. (Feb. 3, 2003) (“Decision Memorandum”)). The 

Decision Memorandum, in turn, incorporates by reference a prior 

memorandum. Decision Memorandum, P.R. Doc. No. 134, Pl.’s Pub. 

Ex. 2 at 9 (citing Dep’t of Commerce Mem. from The Team, to 

Melissa G. Skinner, Director, Office of AD/CVD Enforcement VI, 

Whether to Collapse Pastificio Garofalo S.p.A. (Garofalo) and 

Pastificio Antonio Amato & C. S.p.A. (Pastificio Amato) in the 

Final Results, C.R. Doc. No. 59, Pl.’s Conf. Ex. 8 (February 3, 

2003) (“Final Collapsing Memo”)). The Final Collapsing Memo 

incorporates by reference still another memorandum. Final 

Collapsing Memo, C.R. Doc. No. 59, Pl.’s Conf. Ex. 8 at 1-3 

(citing Dep’t of Commerce Mem. from The Team, to Melissa G. 

Skinner, Dir., Office of AD/CVD Enforcement VI, Whether to 

Collapse Garofalo S.p.A. (Garofalo) and Pastificio Antonio Amato 

& C. S.p.A. (Amato) in the Preliminary Results, C.R. Doc. No. 

45, Pl.’s Conf. Ex. 7 at 4-5 (July 31, 2002) (“Preliminary 

Collapsing Memo”)). 
Court No. 03-00105 Page 3

Garofalo with an affiliate,2 and its decision not to use adverse 

facts available in making its determination. With regards to 

the second company, Pastificio Guido Ferrara, S.r.L. 

(“Ferrara”), Plaintiff challenges Commerce’s decision to add a 

product-matching criterion for die-type in defining the “foreign 

like product”3

 for Ferrara, but not for other companies in the 

same review. This matter is before the Court on Plaintiff’s 

motion for judgment upon the agency record. The Court has 

jurisdiction under 28 U.S.C. § 1581(c) (2000). For the reasons 

discussed below, the Court denies Plaintiff’s motion and grants 

judgment for Defendant. 

BACKGROUND 

 To provide a context for the Court’s review of Commerce’s 

decisions, the Court first summarizes aspects of the agency’s 

administrative proceedings. Insofar as they are at issue here, 

these proceedings began in August 2001, when the Department of 

Commerce published a notice of initiation of the fifth 

antidumping duty review for certain pasta from Italy, covering 

 2

Commerce may, pursuant to 19 C.F.R. § 351.401(f) (2003), 

treat two affiliated companies as a single entity, i.e., 

“collapse” the two companies. For the full text of the 

regulation, see infra note 7. 

3

For the statutory definition of “foreign like product,” see 

infra note 18. 
Court No. 03-00105 Page 4

the period from July 1, 2000 to June 30, 2001. Initiation of 

Antidumping and Countervailing Duty Administrative Reviews and 

Requests for Revocation in Part, 66 Fed. Reg. 43,570, 43,571 

(Dep’t Commerce Aug. 20, 2001); see also Final Determination, 68 

Fed. Reg. at 6,882. Eight days after publishing the notice of 

initiation of the antidumping review, Commerce sent out initial 

questionnaires to the companies under review. Def.’s Opp’n to 

Mot. J. Agency R. at 3 (“Def.’s Br.”) (citations omitted). Both 

Garofalo and Ferrara replied. The Court summarizes relevant 

parts of each response in turn. 

 In Garofalo’s response, the company disclosed a family 

relationship between its majority shareholder and the majority 

shareholders of another pasta company, Antonio Amato & C. S.p.A. 

(“Amato”),4

 as well as certain intercompany transactions between 

the two. Response of Pastificio Lucio Garofalo S.P.A. to 

Section A of the Department’s Antidumping Questionnaire, C.R. 

Doc. No. 1, Pl.’s Conf. Ex. 10 at A7-A8 (Oct. 25, 2001) 

 4

The Court notes that there is great inconsistency in the 

record as to Amato’s proper or legal name. However, on its own 

financial report, the company refers to itself as Antonio Amato 

& C. Molini e Pastifici. See Amato’s 2000 Financial Statement, 

Garofalo Verification Ex. 6(e), C.R. Doc. No. 38, Fiche 124 at 

Frame 45 (July 22, 2002). 
Court No. 03-00105 Page 5

(“Garofalo’s First Response”).5 However, Garofalo claimed that 

the two companies were not affiliates as defined by 19 U.S.C. § 

1677(33),6 and did not provide detailed information on Amato. 

 5

Documents existing only in the confidential administrative 

record are referred to as “C.R. Doc. No.” followed by their 

document number, and the fiche and frame at which they appear. 

Documents existing only in the public administrative record are 

referred to as “P.R. Doc. No.” followed by their document 

number, and the fiche and frame at which they appear. Documents 

in the parties’ confidential exhibits to their briefs are 

referred to by “C.R. Doc. No.” followed by the document number, 

“[Party Name]’s Conf. Ex.” and the number of the exhibit. 

Documents in the parties’ public exhibits to their briefs are 

referred to by “P.R. Doc. No.” followed by the document number, 

“[Party Name]’s Pub. Ex.” and the number of the exhibit.

6

The text of 19 U.S.C. § 1677(33) is as follows: 

(33) Affiliated persons 

 The following persons shall be considered to be "affiliated" or 

 “affiliated persons": 

(A) Members of a family, including brothers and sisters 

(whether by the whole or half blood), spouse, ancestors, and 

lineal descendants. 

(B) Any officer or director of an organization and such 

organization. 

(C) Partners. 

(D) Employer and employee. 

(E) Any person directly or indirectly owning, controlling, 

or holding with power to vote, 5 percent or more of the 

outstanding voting stock or shares of any organization and such 

organization. 

(F) Two or more persons directly or indirectly controlling, 

controlled by, or under common control with, any person. 

(G) Any person who controls any other person and such other 

person. 

For purposes of this paragraph, a person shall be considered to 

control another person if the person is legally or operationally 

in a position to exercise restraint or direction over the other 

person. 
Court No. 03-00105 Page 6

Garofalo’s First Response, C.R. Doc. No. 1, Pl.’s Conf. Ex. 10 

at A7-A9. Commerce issued a supplemental questionnaire to 

Garofalo, inquiring further about its relationship with Amato, 

and later conducted an on-site verification. Letter from James 

Terpstra, Program Manager, Office of AD/CVD Enforcement VI, 

Int’l Trade Admin., to William Silverman, Hunton & Williams, 

Section A, B & C Supplemental Questionnaire, C.R. Doc. No. 18, 

Garofalo’s Conf. Ex. 8 at 2-3 (Apr. 19, 2002) (“Second Garofalo 

Questionnaire”); Dep’t of Commerce Mem. from Geoffrey Craig et 

al., Trade Analysts, Office of AD/CVD Enforcement VI, to James 

Terpstra, Program Manager, Office of AD/CVD Enforcement VI, 

Verification of the Sales Response of Pastificio Lucio Garofalo 

S.p.A. (Garofalo), C.R. Doc. No. 40, Garofalo’s Conf. Ex. 10 at 

2 (July 22, 2002) (“Verification Report”). 

 Information gathered from the supplemental questionnaire 

and the verification allowed Commerce to preliminarily decide 

that Garofalo and Amato were affiliated, but that they should 

not be collapsed. Certain Pasta from Italy, 67 Fed. Reg. 

51,827, 51,828 (Dep’t Commerce Aug. 9, 2002) (notice of 

preliminary results and partial rescission of antidumping duty 

administrative review and intent not to revoke in part) 

 

19 U.S.C. § 1677(33)(2000) (emphasis supplied). 
Court No. 03-00105 Page 7

(“Preliminary Results”); Preliminary Collapsing Memo, C.R. Doc. 

No. 45, Pl.’s Conf. Ex. 7 at 4-5. After Commerce issued the 

Preliminary Results, Plaintiff challenged Commerce’s decision 

not to collapse Garofalo with its affiliate as well as 

Commerce’s failure to use adverse facts available against 

Garofalo. Petitioner’s Case Brief Concerning Garofalo before 

the Int’l Trade Admin. of the U.S. Dep’t of Commerce, C.R. Doc. 

No. 54, Pl.’s Conf. Ex. 12 at 1-12 (Sept. 19, 2002). In its 

final results, however, Commerce maintained that although 

Garofalo was affiliated with Amato, Garofalo and Amato should 

not be collapsed. Decision Memorandum, P.R. Doc. No. 134, Pl.’s 

Pub. Ex. 2 at 9-11. 

Ferrara, in its response to Commerce’s initial 

questionnaire, requested that Commerce add a new productmatching criterion, reflecting the type of die used to extrude 

the pasta, in defining “foreign like product” for purposes of 

the antidumping review. Letter from David L. Simon and Ayla 

Önder, Law Offices of David L. Simon, to Sec’y of Commerce, 

Pasta from Italy: Pastificio Guido Ferrara s.r.l. Response to 

Sections A-C of the Questionnaire, C.R. Doc. No. 3, Fiche 58 at 

Frames 26-27 (Oct. 25, 2001) (“Ferrara’s First Response”). 

Commerce subsequently sent a supplemental questionnaire to 

Ferrara asking for a demonstration that the added criterion 
Court No. 03-00105 Page 8

would be valid. See Letter from David L. Simon and Ayla Önder, 

Law Offices of David L. Simon, to Sec’y of Commerce, Pasta from 

Italy; Pastificio Guido Ferrara s.r.l. Response to 2nd

Supplemental Questionnaire, C.R. Doc. No. 35, Fiche 94 at Frame 

7 (July 16, 2002) (“Ferrara’s Second Response”). Ferrara 

submitted a response, providing the verification report and the 

production cost verification documents from the previous 

antidumping review of Certain Pasta from Italy, wherein Commerce 

had added such a criterion for Ferrara, as well as certain new 

exhibits. Id. at Frames 7-11; see also Dep’t of Commerce Mem. 

from Frank Thomson and Mark Young, Case Analysts, Office of 

AD/CVD Enforcement VI, to James Terpstra, Program Manager, 

Office of AD/CVD Enforcement VI, Verification of the Sales 

Response of Pastificio Guido Ferrara s.r.l. (“Ferrara”) in the 

99/00 Antidumping Review of the Antidumping Duty Order of 

Certain Pasta from Italy, C.R. Doc. No. 35, Ferrara’s Conf. Ex. 

2 (July 16, 2002) (“Ferrara Verification Report”); Verification 

Ex. 20: Production Costs, C.R. Doc. No. 35, Ferrara’s Conf. Ex. 

3 (July 16, 2002); Production Control System Recipe Screenshots, 

C.R. Doc. No. 35, Ferrara’s Conf. Ex. 4 (July 16, 2002); 

Extracts from HM Database & Package Labelling, C.R. Doc. No. 35, 

Ferrara’s Conf. Ex. 5 (July 16, 2002). 
Court No. 03-00105 Page 9

Plaintiff challenged the addition of a fifth criterion in a 

case brief, but in the final results, Commerce maintained that 

the die-type product criterion was valid in relation to Ferrara, 

but that it should not be applied to the other respondents. 

Plaintiff’s Case Brief Concerning Pastificio Guido Ferrara, 

s.r.l before the Int’l Trade Admin. of the U.S. Dep’t of 

Commerce, C.R. Doc. No. 52, Fiche 107 at Frames 39-43 (Sept. 

19, 2002); see Decision Memorandum, P.R. Doc. No. 134, Pl.’s 

Pub. Ex. 2 at 23. 

 Plaintiff consequently filed for relief in this Court. 

STANDARD OF REVIEW

This Court reviews the actions of the government in 

antidumping duty proceedings to determine whether 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) 

(2000). 

DISCUSSION

 Four issues are before the Court, two relating to 

Commerce’s treatment of Garofalo, and two relating to Commerce’s 

treatment of Ferrara. 
Court No. 03-00105 Page 10

With respect to Garofalo, Plaintiff argues that Commerce 

acted without support of law or substantial evidence in refusing 

to collapse Garofalo with its affiliate, Amato, and in refusing 

to apply adverse facts available to Garofalo in making its 

collapsing determination. 

With respect to Ferrara, Plaintiff argues that Commerce 

acted without support of law or substantial evidence in adding a 

product-matching criterion for die-type to the definition of 

“foreign like product” for Ferrara, and in not adding the 

product-matching criterion for die-type to the definition of 

“foreign like product” for other companies in the same review. 

The Court will discuss the challenges to Garofalo and 

Ferrara in turn. 

 A. Challenges to the Determination Regarding Garofalo

 Plaintiff first argues that Commerce’s decision not to 

collapse Garofalo with its affiliate, Amato, was unsupported by 

law or substantial evidence. Principal Br. of Pl. New World 

Pasta Company at 7 (“Pl.’s Br.”). Second, Plaintiff argues that 

Commerce’s decision not to apply adverse facts available against 

Garofalo in making the collapsing decision was unsupported by 

law or substantial evidence. See Pl.’s Br. at 10-11. The Court 

discusses each argument in turn. 
Court No. 03-00105 Page 11

Commerce’s decision not to collapse Garofalo and Amato was 

based on Commerce’s application of its own regulations regarding 

“collapsing factors” and its interpretation of the evidence 

presented. 

Pursuant to 19 C.F.R. § 351.401(f)(1),7 Commerce will 

collapse two producers where they are affiliated, and “where 

those producers have production facilities for similar or 

identical products that would not require substantial retooling 

of either facility in order to restructure manufacturing 

priorities and [Commerce] concludes that there is a significant 

 7

The text of 19 C.F.R. § 351.401(f) is as follows: 

(f) Treatment of affiliated producers in antidumping 

proceedings—(1) In general. In an antidumping proceeding under 

this part, [Commerce] will treat two or more affiliated 

producers as a single entity where those producers have 

production facilities for similar or identical products that 

would not require substantial retooling of either facility in 

order to restructure manufacturing priorities and [Commerce] 

concludes that there is a significant potential for the 

manipulation of price or production. 

(2) Significant potential for manipulation. In identifying 

a significant potential for the manipulation of price or 

production, the factors [Commerce] may consider include: 

(i) The level of common ownership; 

 (ii) The extent to which managerial employees or board 

members of one firm sit on the board of directors of an 

affiliated firm; and 

 (iii) Whether operations are intertwined, such as through 

the sharing of sales information, involvement in production and 

pricing decisions, the sharing of facilities or employees, or 

significant transactions between the affiliated producers. 

19 C.F.R. § 351.401(f) (emphasis supplied). 
Court No. 03-00105 Page 12

potential for the manipulation of price or production.” 19 

C.F.R. § 351.401(f)(1). Commerce found the first two of the 

three collapsing factors satisfied here: affiliation and similar 

production facilities not requiring substantial retooling in 

order to change manufacturing priorities. 

 With regards to the first factor, affiliation, under 19 

U.S.C. § 1677(33)(A), Commerce will consider persons (including 

corporations under 19 C.F.R. § 351.102(b)) affiliated where 

there is a family relationship between them. Under 19 U.S.C. § 

1677(33)(F), Commerce will consider persons affiliated when they 

are under common control. Because Amato’s major shareholders 

include a sister and a sister-in-law of Garofalo’s majority 

shareholder, Commerce found that the two companies were 

affiliated under 19 U.S.C. § 1677(33)(A). Preliminary 

Collapsing Memo, C.R. Doc. No. 45, Pl.’s Conf. Ex. 7 at 4. 

Commerce also found that a group of related individuals 

exercised common control over both Garofalo and Amato. Id. 

Hence, Commerce found the two companies affiliated under both 19 

U.S.C. § 1677(33)(A) and 19 U.S.C. § 1677(33)(F). Id. 

Plaintiff does not contest this finding. 

 As to the second factor, similar production lines, Commerce 

also found that Garofalo and Amato, as pasta companies, had 

similar production facilities that might not require substantial 
Court No. 03-00105 Page 13

retooling in order to restructure manufacturing priorities. 

Preliminary Collapsing Memo, C.R. Doc. No. 45, Pl.’s Conf. Ex. 7 

at 4. Plaintiff does not contest this finding. 

 Plaintiff does, however, challenge Commerce’s failure to 

find that the third collapsing factor, “significant potential 

for the manipulation of pricing or production,” was satisfied. 

See Pl.’s Br. at 12; 19 C.F.R. § 351.401(f)(1). This third 

factor itself has three sub-factors. See 19 C.F.R. § 

351.401(f)(2). These are (1) the level of common ownership, (2) 

the extent to which managerial employees or directors of one 

firm also sit on the board of the other firm, and (3) whether 

operations are intertwined. Id.

 Commerce found that none of the sub-factors were met. 

Decision Memorandum, P.R. Doc. No. 134, Pl.’s Pub. Ex. 2 at 10-

11. Plaintiff challenges the determinations as to all three 

sub-factors. 

In regards to the first sub-factor, common ownership, 

Plaintiff contends that Commerce originally found that this 

factor was met, and then arbitrarily retreated from the finding. 

Pl.’s Br. at 13-14. In the Preliminary Collapsing Memo, 

Commerce does state that the first sub-factor of 19 C.F.R. § 

351.401(f)(2), common ownership, is met because of the common 

control exerted over both Garofalo and Amato by the group of 
Court No. 03-00105 Page 14

related individuals. See Preliminary Collapsing Memo, C.R. Doc. 

No. 45, Pl.’s Conf. Ex. 7 at 4. However, in the Final Collapsing 

Memo and the Decision Memorandum, Commerce, while discussing the 

effect of a sale of stock in Amato by Garofalo’s major 

shareholder, which occurred before the period of review (“POR”), 

states that the factor of common ownership is not, in fact, 

satisfied. Final Collapsing Memo, C.R. Doc. No. 59, Pl.’s Conf. 

Ex. 8 at 3-4; Decision Memorandum, P.R. Doc. No. 134, Pl.’s Pub. 

Ex. 2 at 10-11 (“[A]lthough petitioners’ new argument implicates 

the first two criteria of 19 CFR 341.401(f)(2) [sic], based on 

the record facts and our interpretation of those facts, we have 

determined that neither criterion has been satisfied.”). 

While Commerce’s two statements could appear inconsistent, 

a review of the record leads the Court to conclude that any 

inconsistency does not render Commerce’s decision legally 

flawed. Under the collapsing regulation, 19 C.F.R. § 

351.401(f)(1), “the evidence required to justify a collapsing 

determination ‘goes beyond that which is necessary to find 

common control.’” Allied Tube and Conduit Corp. v. United 

States, 24 CIT __, __, 127 F. Supp. 2d 207, 222 (2000) (quoting 

Certain Welded Carbon Steel Pipes and Tubes from Thailand, 63 

Fed. Reg. 55,578, 55,583 (Dep’t Commerce Oct. 16, 1998) (final 

results of antidumping duty administrative review)). While 
Court No. 03-00105 Page 15

Commerce did not explain why it chose to regard the factor as 

unsatisfied in the final results, it did explain in the 

Preliminary Collapsing Memo that even were the factor of common 

ownership satisfied, the two parties should not be collapsed 

because common ownership would be based entirely on the finding 

of affiliation by common control under 19 U.S.C. § 1677(33)(F). 

See Preliminary Collapsing Memo, C.R. Doc. No. 45, Pl.’s Conf. 

Ex. 7 at 4. Therefore, even were the sub-factor of common 

ownership satisfied, it alone could not justify collapse; 

Commerce would still need to review the other two sub-factors. 

Commerce did so, and found them unsatisfied. 

 In regards to the second sub-factor, the extent to which 

managerial employees or directors of one firm also sit on the 

board of the other firm, Commerce explained that during the POR, 

no members of Garofalo’s board sat on Amato’s board, and there 

were no shareholders in common. Preliminary Collapsing Memo, 

C.R. Doc. No. 45, Pl.’s Conf. Ex. 7 at 5; see also Verification 

Report, C.R. Doc. No. 40, Garofalo’s Conf. Ex. 10 at 5-6, 10. 

At verification, Commerce examined the financial records of both 

Garofalo and Amato, Garofalo’s Libro Soci (which by Italian Law, 

must list shareholders), and the tax returns of Garofalo’s 

shareholders. Verification Report, C.R. Doc. No. 40, Garofalo’s 

Conf. Ex. 10 at 6-7; Garofalo’s Financial Statements, Garofalo 
Court No. 03-00105 Page 16

Verification Ex. 3, C.R. Doc. No. 38, Fiche 123 at Frames 9-12 

(July 22, 2002); Amato’s 2000 Financial Statement, Garofalo 

Verification Ex. 6(e), C.R. Doc. No. 38, Fiche 124 at Frames 45-

50 (July 22, 2002); Pages from Garofalo’s Shareholder’s Book, 

Garofalo Verification Ex. 4(c), C.R. Doc. No. 38, Fiche 123 at 

Frame 90-92 (July 22, 2002); Tax Returns, Garofalo Verification 

Ex. 16, C.R. Doc. No. 38, Fiche 126 at Frame 14-56 (July 22, 

2002). Moreover, Commerce examined a contract of sale whereby 

Garofalo’s majority shareholder had sold a minority interest in 

Amato previous to the POR, and found that all legal interest in 

Amato had passed from the majority shareholder prior to the POR. 

See Verification Report, Garofalo’s Conf. Ex. 10 at 7; Final 

Collapsing Memo, C.R. Doc. No. 59, Pl.’s Conf. Ex. 8 at 3-4. 

 In regards to the third sub-factor, whether operations are 

intertwined, Commerce verified the small level of intercompany 

transactions to which Garofalo had admitted in its questionnaire 

responses. Verification Report, C.R. Doc. No. 40, Garofalo’s 

Conf. Ex. 10 at 14-15; Completeness Test of Purchased Semolina 

Using Bolla Book, Garofalo Verification Ex. 13, C.R. Doc. No. 

38, Fiche 125 at Frames 65-66 (July 22, 2002); Completeness Test 

of Purchased Pasta Using Bolla Book, Garofalo Verification Ex. 

19, C.R. Doc. No. 38, Fiche 128 at Frame 1 (July 22, 2002). 

These involved the purchase by Garofalo of a very small amount 
Court No. 03-00105 Page 17

of finished pasta from Amato for resale during the POR, and the 

purchase of some semolina from Amato during the same period. 

Garofalo’s First Response, C.R. Doc. Nos. 1-2, Pl.’s Conf. Ex. 

10 at A8-A9; Letter from William A. Silverman et al., Hunton & 

Williams LLP, to Sec’y of Commerce, Certain Pasta From Italy, 

C.R. Doc. No. 11, Garofalo’s Conf. Ex. 7 at 8 (Mar. 26, 2002) 

(“Mar. 26 Letter”). Garofalo had described these transactions 

as being conducted at arm’s length. Garofalo’s First Response, 

C.R. Doc. Nos. 1-2, Pl.’s Conf. Ex. 10 at A7-A9; Letter from 

William A. Silverman et al., Hunton & Williams LLP, to Sec’y of 

Commerce, Certain Pasta From Italy, C.R. Doc. No. 22, Fiche 82 

at Frames 17-18 (May 17, 2002) (“Garofalo’s Second Response”). 

Garofalo provided to Commerce, previous to verification, a list 

of all semolina purchases made during fiscal year 2000. Mar. 26 

Letter, C.R. Doc. No. 11, Garofalo’s Conf. Ex. 7 at App. 1. At 

verification, Commerce examined Garofalo’s selected records of 

purchases of semolina and pasta during 2001, up until the end of 

the POR, compared amounts and prices, and concluded that the 

semolina transactions were made on the same basis as those being 

conducted with other, non-affiliated semolina producers, and 

that the pasta-transactions were both small and within standard 

business practices. See Preliminary Collapsing Memo, C.R. Doc 

No. 45, Pl.’s Conf. Ex. 7 at 5; Verification Report, C.R. Doc. 
Court No. 03-00105 Page 18

No. 40, Garofalo’s Conf. Ex. 10 at 14-15. Finally, Commerce did 

not find that either company was sharing sales data, customer 

information, or had any links other than the intercompany 

purchases of pasta and semolina. Preliminary Collapsing Memo, 

C.R. Doc. No. 45, Pl.’s Conf. Ex. 7 at 5. 

 Plaintiff argues nonetheless that Commerce’s decisions as 

to the three sub-factors were unsupported by law or substantial 

evidence. As to the first sub-factor, Plaintiff argues that 

Commerce’s unexplained decision to reverse its finding that 

common ownership was satisfied is arbitrary and unsupported by 

substantial evidence. See Pl.’s Br. at 13-14.8

 While the 

 8

The Court notes that Plaintiff’s arguments on this point 

are opaque, as Plaintiff mischaracterizes the language of the 

Preliminary Collapsing Memo. On page thirteen of its principal 

brief, Plaintiff states that: “[i]n the Preliminary Results, 

Commerce determined that the first criterion, the level of 

common ownership, was sufficient to find that the two companies 

should be collapsed because the agency found Garofalo and Amato 

to be under ‘common ownership.’” Pl.’s Br. at 13 (referring to 

the Preliminary Collapsing Memo when it mentions “the 

Preliminary Results”). Contrary to Plaintiff’s claim, while, in 

the Preliminary Collapsing Memo, Commerce found that the two 

companies were affiliated because of the operation of both 19 

U.S.C. § 1677(33)(A) and 19 U.S.C. § 1677(33)(F) (affiliation by 

common control), and that the sub-factor of common ownership was 

therefore satisfied, it did not decide that this sub-factor was 

sufficient for a finding of collapse. Preliminary Collapsing 

Memo, C.R. Doc. No. 45, Pl.’s Conf. Ex. 7 at 4-5. This 

mischaracterization made it difficult to discern the true nature 

of Plaintiff’s argument: that there had been an unexplained 

change in Commerce’s position on the issue of whether the common 

ownership sub-factor was satisfied, not in whether collapse was 

justified. 
Court No. 03-00105 Page 19

turnaround could appear troubling, as noted above, even were the 

factor found to be satisfied, it would not be possible to 

collapse Garofalo and Amato based on that sub-factor alone. See

Allied Tube & Conduit Corp., 24 CIT at __, 127 F. Supp. 2d at 

222. If Commerce was justified in finding that the other two 

sub-factors were unsatisfied, then any argument on this subfactor becomes moot, as its resolution one way or the other 

could not affect the collapsing decision. 

It is a “substantial evidence” argument that predominates 

in Plaintiff’s arguments as to the second and third sub-factors. 

On the issue of the second sub-factor, the extent to which 

managerial employees or directors of one firm also sit on the 

board of the other firm, Plaintiff advances the argument that 

Commerce is required by law to look to the future in evaluating 

the potential for manipulation. See Reply Br. of Pl. New World 

Pasta Company at 7 (“Pl.’s Reply Br.”). Therefore, Plaintiff 

argues, Commerce’s determination was unsupported by substantial 

evidence where Commerce relied on the state of affairs during 

the POR in finding a lack of significant potential for 

manipulation. Id. Plaintiff also claims that Commerce did not 

properly take into account Garofalo’s majority shareholder’s 

ability to “require” the purchase of the majority shareholder’s 

stock in Amato prior to the period of review. Pl.’s Br. at 17. 
Court No. 03-00105 Page 20

Plaintiff argues that this should weigh in favor of a finding of 

significant potential to manipulate. See id. Moreover, 

Plaintiff claims that the small, family-owned structure of 

Garofalo and Amato, supports a finding of significant potential 

for manipulation. See Pl.’s Br. at 16. 

 It is true that Commerce “will consider future 

manipulation” in evaluating the potential for manipulation. 

Antidumping Duties; Countervailing Duties, 62 Fed. Reg. 27,296, 

27,346 (Dep’t Commerce May 19, 1997) (final rule). However, 

during the POR there were in fact no board members or managerial 

employees in common at the two companies, nor was there any 

interlocking of managerial shareholders.9 Preliminary Collapsing 

Memo, C.R. Doc. No. 45, Pl.’s Conf. Ex. 7 at 5; Garofalo’s 

Second Response, C.R. Doc. No. 22, Fiche 82 at Frame 16; 

Verification Report, C.R. Doc. No. 40, Garofalo’s Conf. Ex. 10 

at 5-8; cf. Organizational Chart, Garofalo Verification Ex. 2, 

 9

Plaintiff argues that Commerce’s decision does not rest on 

substantial evidence because Commerce never learned the names of 

Amato’s directors nor the names of upper management. See Pl.’s 

Reply Br. at 8. However, Commerce obtained the names of Amato’s 

directors and management in the course of its verification, when 

it procured a copy of Amato’s publicly available financial 

report, which lists shareholders, directors, and identifies 

upper management. Amato’s 2000 Financial Statement, Garofalo 

Verification Ex. 6(e), C.R. Doc. No. 38, Fiche 124 at Frame 67 

(July 22, 2002). Cross-checking of this list against Garofalo’s 

organizational chart reveals no overlap. Organizational Chart, 

Garofalo Verification Ex. 2, C.R. Doc. No. 38, Fiche 123 at 

Frame 8 (July 22, 2002). 
Court No. 03-00105 Page 21 

C.R. Doc. No. 38, Fiche 123 at Frame 8 (July 22, 2002), with

Amato’s 2000 Financial Statement, Garofalo Verification Ex. 

6(e), C.R. Doc. No. 38, Fiche 124 at Frame 67 (July 22, 2002). 

While it is reasonable for Plaintiff to argue that common 

control shows a possibility of manipulation, it is just as 

reasonable for Commerce to conclude that the lack of board 

entwinement during the POR provides a reasonable basis for a 

finding of no likelihood of future manipulation, and Commerce’s 

reasonable interpretation of the evidence will be upheld under 

the standard of review applicable here. As for Garofalo’s 

majority shareholder’s contract to sell the shareholder’s 

interest in Amato, Commerce examined the contract and found 

that, despite certain monies still being owed during the POR, 

the material terms of sale were set before the POR. See

Verification Report, C.R. Doc. No. 40, Garofalo’s Conf. Ex. 10 

at 7; Sales Contract, Garofalo Verification Ex. 6(d), C.R. Doc. 

No. 38, Fiche 124 at Frames 35-44 (July 22, 2002). Commerce has 

explained that in antidumping reviews, its regulations specify 

that sales of “foreign like product” or subject merchandise are 

regarded as completed as of the date the material terms are set. 

See 19 C.F.R. § 351.401(i); Final Collapsing Memo, C.R. Doc. No. 

59, Pl.’s Conf. Ex. 8 at 3. While neither “foreign like 

product” nor subject merchandise was the subject of this sale, 
Court No. 03-00105 Page 22 

Commerce indicated that the date material terms are set should 

control. Final Collapsing Memo, C.R. Doc. No. 59, Pl.’s Conf. 

Ex. 8 at 3. While Commerce might have chosen to deal otherwise 

with such contracts, its choice is reasonable, and will be 

upheld. 

The family-owned nature of the two businesses is yet 

another fact that could be weighed differently by reasonable 

people. The family connections and relative simplicity of the 

businesses could facilitate manipulation, as Plaintiff contends, 

or could be completely irrelevant to manipulation, as Commerce 

appears to have found. The mere fact that two inconsistent 

conclusions can be drawn from a piece of evidence does not 

render an agency’s decision unsupported by substantial evidence. 

Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 620 (1966) (citation 

omitted). Therefore, despite the small, family-owned nature of 

the two companies, record evidence indicating that there was no 

overlap of directors, major shareholders, or managerial 

employees during the POR supports Commerce’s finding that the 

second factor of the significant potential for manipulation 

analysis is not met. 

 In regards to the third sub-factor, whether operations are 

intertwined, Plaintiff asserts that Commerce’s decision is 

unsupported by substantial evidence because the operations of 
Court No. 03-00105 Page 23 

the two companies are entwined in a way that makes for a 

significant potential for manipulation. See Pl.’s Br. at 18-20. 

The regulation describing entwinement of operations highlights 

such practices as sharing of sales information, sharing of 

facilities, and involvement in production and pricing 

transactions, none of which are present on this record. 19 

C.F.R. § 351.401(f)(2)(iii).10 The regulation also describes 

“significant transactions” between affiliated producers as cause 

to find the third sub-factor satisfied. Id. However, Commerce 

found the transactions here not to be significant, as the 

transactions did not amount to a majority of Garofalo’s 

purchases of either semolina or pasta, and moreover, appeared 

customary for the Italian Pasta industry.11 See Preliminary 

 10For the text of the regulation, see supra note 7.

11Commerce states in its Preliminary Collapsing Memo that 

the types of transactions that were conducted between Garofalo 

and Amato are common in the Italian pasta industry. Preliminary 

Collapsing Memo, C.R. Doc. No. 45, Pl.’s Conf. Ex. 7 at 4-5. 

Commerce repeats this statement in its Decision Memorandum and 

in its brief. Decision Memorandum, P.R. Doc. No. 134, Pl.’s 

Pub. Ex. 2 at 10; Def.’s Br. at 17. Commerce does not cite to 

the evidence that supports this contention. However, during 

Verification, Garofalo personnel explained that buying pasta for 

resale from other pastificios allowed Garofalo to round out its 

product line without reconfiguring its machinery, and that the 

practice was common. See Verification Report, C.R. Doc. No. 40, 

Pl.’s Conf. Ex. 11 at 14. This explains the practice as regards 

purchases of pasta, but not purchases of semolina. However, 

with regard to semolina, Commerce found that the purchases of 

semolina were conducted at market rates, and that during the 
Court No. 03-00105 Page 24 

Collapsing Memo, C.R. Doc. No. 45, Pl.’s Conf. Ex. 7 at 5; 

Verification Report, C.R. Doc. No. 40, Garofalo’s Conf. Ex. 10 

at 14-15; Completeness Test of Purchased Semolina Using Bolla 

Book, Garofalo Verification Ex. 13, C.R. Doc. No. 38, Fiche 125 

at Frame 65 (July 22, 2002); Garofalo Verification Ex. 19, 

Completeness Test of Purchased Pasta Using Bolla Book, C.R. Doc. 

No. 38, Fiche 128 at Frame 1 (July 22, 2002).12

 

POR, the majority of Garofalo’s semolina purchases were from 

providers other than Amato. Id.; see Completeness Test of 

Purchased Semolina Using Bolla Book, Garofalo Verification Ex. 

13, C.R. Doc. No. 38, Fiche 125 at Frame 65 (July 22, 2002); 

Mar. 26 Letter, C.R. Doc. No. 11, Garofalo’s Conf. Ex. 7 at App. 

1.

12Plaintiff also argues that Commerce’s decision regarding 

the third sub-factor is unsupported by substantial evidence in 

that Commerce, in reviewing Garofalo’s purchases of semolina and 

pasta, only had information on purchases from the first half of 

the POR. Pl.’s Reply Br. at 11. This claim is unsupported by 

the record. Garofalo provided to Commerce a list of fiscal year 

2000 semolina purchases. See Mar. 26 Letter, C.R. Doc. No. 11, 

Garofalo’s Conf. Ex. 7 at App. 1. Commerce, during 

verification, looked at selected purchases from fiscal year 2001 

to verify that purchases were at arms length and that the 

percentage of purchases from Amato remained more or less 

constant. Completeness Test of Purchased Semolina Using Bolla 

Book, Garofalo Verification Ex. 13, C.R. Doc. No. 38, Fiche 125 

at Frame 65 (July 22, 2002). Garofalo informed Commerce that 

purchases of pasta from Amato in fiscal year 2000 for resale 

accounted for only a small percentage of total pasta sales. 

Mar. 26 Letter, C.R. Doc. No. 11, Garofalo’s Conf. Ex. 7 at 8. 

In its verification report, Commerce noted the amount that 

Garofalo claimed, and appeared to find no discrepancies. 

Verification Report, C.R. Doc. No. 40, Garofalo’s Conf. Ex. 10 

at 14-15.
Court No. 03-00105 Page 25 

 Therefore, Commerce’s decision not to collapse Garofalo and 

Amato was supported by substantial evidence and in accordance 

with law. Commerce acted reasonably in deciding only to 

consider events occurring during the POR in evaluating the 

collapsing factors, and while it could have reasonably made 

different inferences from the facts, the ones it did make were 

reasonable and supported by the record. 

Having found that Commerce’s decision not to collapse 

Garofalo and Amato as a single entity was in accordance with law 

and supported by substantial evidence, the Court now turns to 

the second issue involving Garofalo: whether, in making its 

collapsing determination, Commerce’s decision not to apply facts 

available or adverse facts available13 to Garofalo was 

unsupported by law and substantial evidence. 

 13Plaintiff’s brief argues that Commerce acted improperly in 

not using adverse facts available against Garofalo, on the basis 

of what Plaintiff perceives of as significant omissions in 

Garofalo’s responses and cooperation. See Pl.’s Br. at 10. 

Plaintiff does not, however, argue for the use of facts 

available, a prerequisite to adverse facts available under 19 

U.S.C. § 1677e. Presumably, this is because the use of facts 

available, without adverse inferences, would have produced the 

same result as obtained in the administrative review: a finding 

of affiliation, but not of collapse. The Court’s discussion of 

the issue, however, deals with both the question of whether 

Commerce properly declined to use adverse facts available and 

whether it properly declined to use facts available. The text of 

19 U.S.C. § 1677e, which describes the use of both facts 

available and adverse facts available, is reproduced here: 
Court No. 03-00105 Page 26 

 

§ 1677e. Determinations on the basis of the facts available

(a) In general 

 

 If-- 

 (1) necessary information is not available on the record, or 

 (2) an interested party or any other person-- 

 (A) withholds information that has been requested by the 

 administering authority or the Commission under this 

 subtitle, 

 (B) fails to provide such information by the deadlines for 

 submission of the information or in the form and manner 

 requested, subject to subsections (c)(1) and (e) of section 

 1677m of this title, 

 (C) significantly impedes a proceeding under this 

 subtitle, or 

 (D) provides such information but the information cannot 

 be verified as provided in section 1677m(i) of this title, 

the administering authority and the Commission shall, subject 

to section 1677m(d) of this title, use the facts otherwise 

available in reaching the applicable determination under this 

subtitle. 

 

(b) Adverse inferences

 

 If the administering authority or the Commission (as the case 

may be) finds that an interested party has failed to cooperate 

by not acting to the best of its ability to comply with a 

request for information from the administering authority or the 

Commission, the administering authority or the Commission (as 

the case may be), in reaching the applicable determination under 

this subtitle, may use an inference that is adverse to the 

interests of that party in selecting from among the facts 

otherwise available. Such adverse inference may include 

reliance on information derived from-- 

 (1) the petition, 

 (2) a final determination in the investigation under this 

 subtitle, 

 (3) any previous review under section 1675 of this title or 

 determination under section 1675b of this title, or 

 (4) any other information placed on the record. 

19 U.S.C. § 1677e(a)-(b) (2000) (emphasis supplied).
Court No. 03-00105 Page 27 

 Application of adverse facts available is governed by 19 

U.S.C. § 1677e(b), which states that if Commerce finds that an 

interested party has not acted to the best of its ability to 

comply with a request for information, Commerce “may use an 

inference that is adverse to the interests of that party in 

selecting from among the facts otherwise available.” 19 U.S.C. 

§ 1677e(b). While 19 U.S.C. § 1677e(b) allows Commerce to apply 

adverse inferences where it feels that a party “has failed to 

cooperate by acting to the best of its ability to comply with a 

request for information,” use of adverse inferences is 

discretionary. Moreover, such inferences cannot be applied 

until and unless 19 U.S.C. § 1677e(a) is operative. 19 U.S.C. § 

1677e(a). 19 U.S.C. § 1677e(a) states, among other things, that 

Commerce “shall use the facts otherwise available” where a party 

withholds information or fails to submit it in the proper 

manner. Id.

 Thus, while Plaintiff’s arguments focus on the application 

of adverse inferences, Plaintiff’s argument might be better 

understood as an argument that “facts otherwise available” 

should have been applied against Garofalo.14 In addition, 19 

 14The mandatory language of the facts available provision –-

“shall”-- appears to remove from Commerce any discretion about 

whether to use facts available when there is a withholding of 

information or failure to submit in the proper form, and if read 
Court No. 03-00105 Page 28 

U.S.C. § 1677e(a) is subject to the dictates of 19 U.S.C. § 

1677m(d). That provision requires Commerce, if it finds a 

submission from a party to be deficient, to inform the party of 

the deficiencies and to allow for remedy or explanation. 19 

U.S.C. § 1677m(d).15 

 

strictly, could mandate the use of facts available wherever 

there is a slight discrepancy between question and answer. 

However, this Court has held that Commerce may not use facts 

available at least until Commerce issues a supplemental 

questionnaire. See Nippon Steel v. United States, 25 CIT __, 

__, 146 F. Supp. 2d 835, 837 (2001)(citing NTN Bearing Corp. v. 

United States, 25 CIT __, 132 F. Supp. 2d 1102 (2001); SKF USA 

Inc. v. United States, 24 CIT __, __ 116 F. Supp. 2d 1257, 1268 

(2000)) (rev’d on other grounds). This result obtains because 

of the dictates of 19 U.S.C. § 1677m(d) (reproduced below, note 

15), which require that Commerce give notice of a deficiency and 

opportunity to remedy the deficiency before applying facts 

available. 

15Title 19 U.S.C. § 1677m(d) is as follows: 

(d) Deficient submissions

If the administering authority or the Commission determines 

that a response to a request for information under this subtitle 

does not comply with the request, the administering authority or 

the Commission (as the case may be) shall promptly inform the 

person submitting the response of the nature of the deficiency 

and shall, to the extent practicable, provide that person with 

an opportunity to remedy or explain the deficiency in light of 

the time limits established for the completion of investigations 

or reviews under this subtitle. If that person submits further 

information in response to such deficiency and either-- 

 (1) the administering authority or the Commission (as the 

case may be) finds that such response is not satisfactory, or 

 (2) such response is not submitted within the applicable 

time limits, 
Court No. 03-00105 Page 29 

Assuming that Commerce’s issuance of a supplemental 

questionnaire to Garofalo was inherently a finding that 

Garofalo’s first questionnaire response failed to comply with 

Commerce’s request for information,16 under 19 U.S.C. § 1677m(d), 

Garofalo’s supplemental questionnaire response would merit use 

of facts otherwise available only if Commerce found that it, 

too, was deficient. 19 U.S.C. § 1677m(d). Commerce does not 

appear to have found Garofalo’s second questionnaire response 

unsatisfactory, as it did not attempt to apply facts available 

or adverse facts available in its review. Commerce’s decision 

not to apply facts otherwise available is therefore in 

accordance with law. 

However, Plaintiff argues that Commerce’s refusal to use 

adverse facts available against Garofalo was unsupported by 

substantial evidence. See Pl.’s Br. at 10. Plaintiff argues 

that because Commerce eventually found that Garofalo and Amato 

were affiliated, Garofalo’s failure to provide “a single 

 

then the administering authority or the Commission as the case 

may be) may, subject to subsection (e), disregard all or part of 

the original and subsequent responses. 

19 U.S.C. § 1677m(d) (emphasis supplied). 

16See, e.g., China Steel Corp. v. United States, 27 CIT __, 

__, 264 F. Supp. 2d 1339, 1356 (2003); Reiner Brach GmbH & Co. 

KG v. United States, 26 CIT __, __, 206 F. Supp. 2d 1323, 1332 

(2002); Bergerac, N.C. v. United States, 24 CIT __, __, 102 F. 

Supp. 2d 497, 504 (2000).
Court No. 03-00105 Page 30 

response that includes information, including financial 

statements, for all affiliates” in its questionnaire responses 

means that Garofalo failed to respond to the questionnaires 

adequately and that its submissions are therefore deficient. 

See id.17 Given the Court’s discussion of 19 U.S.C. § 1677m(d) 

above, this argument becomes a question of whether Commerce had 

substantial support for its finding that Garofalo’s first and 

second responses, taken together, constituted an adequate 

response to Commerce’s questionnaires, such that Commerce could 

reasonably decide not to apply facts available or adverse facts 

available. 

 In its initial questionnaire, Commerce required that 

Garofalo provide an organization chart and description of its 

legal structure, including any affiliated persons or companies. 

U.S. Dep’t of Commerce, Imp. Admin. Office of Antidumping and 

Countervailing Duty Enforcement, Request for Information, Italy, 

Certain Pasta, P.R. Doc. No. 19, Pl.’s Pub. Ex. 9 at A4 (Aug. 

28, 2001) (“Initial Questionnaire”). Garofalo’s response 

 17In its case brief before the agency, Plaintiff also argued 

that Garofalo’s failure to report the sale of Amato stock by 

Garofalo’s major shareholder before the POR rendered Garofalo’s 

responses deficient. See Petitioner’s Case Brief Concerning 

Garofalo before the Int’l Trade Admin. of the U.S. Dep’t of 

Commerce, C.R. Doc. No. 54, Pl.’s Conf. Ex. 12 at 3-7 (Sept. 19, 

2002). However, Plaintiff does not appear to pursue this 

argument in its briefs before the Court. See Pl.’s Br; Pl.’s 

Reply Br.
Court No. 03-00105 Page 31 

admitted that relatives of its majority shareholder owned 

another pasta company, Amato. Garofalo’s First Response, C.R. 

Doc. No. 1, Pl.’s Conf. Ex. 10 at A7. The response also 

disclosed that the two companies engaged in intercompany 

transactions; specifically, Garofalo had purchased from Amato 

during the POR a quantity of semolina and a small amount of 

finished pasta. Id. at A8-A9. Garofalo contended in its 

response, however, that Garofalo and Amato were not affiliates. 

Id. at A7-A9. 

 In its supplemental questionnaire, Commerce asked three 

questions relating to Garofalo’s relationship with Amato. See

Garofalo’s Second Response, C.R. Doc. No. 22, Fiche 82 at Frames 

16-17. Commerce first asked Garofalo to state whether Garofalo 

owned stock in Amato, provided loan or credit guarantees to 

Amato, or shared customer lists with Amato. Garofalo replied in 

the negative. See Garofalo’s Second Response, C.R. Doc. No. 22, 

Fiche 82 at Frame 16. Next, Commerce requested the names of 

Amato’s shareholders, and asked Garofalo to specify if there 

were any other companies that might be affiliated with both 

Garofalo and Amato, and with whom Garofalo dealt. Id. Garofalo 

revealed the names of Amato’s shareholders, as garnered from 

publicly available sources, and stated that it was not 

affiliated with any affiliates of Amato, and did not have any 
Court No. 03-00105 Page 32 

dealings with affiliates of Amato. See Garofalo’s Second 

Response, C.R. Doc. No. 22, Fiche 82 at Frames 16-17. Third, 

Commerce asked Garofalo to describe the terms and conditions of 

intercompany transactions between Garofalo and Amato, and to 

alert Commerce to any such transactions not described in 

Garofalo’s first questionnaire response. See Garofalo’s Second 

Response, C.R. Doc. No. 22, Fiche 82 at Frame 17. Garofalo 

described the transactions it had already revealed in its first 

response, and affirmed that there were no others. See

Garofalo’s Second Response, C.R. Doc. No. 22, Fiche 82 at Frames 

17-18. 

At verification Commerce discovered that Garofalo’s major 

shareholder had previously owned a minority interest in Amato, 

but found that the interest had been divested prior to the POR, 

and that it was therefore unnecessary for Garofalo to have 

reported on it. See Preliminary Collapsing Memo, C.R. Doc. No. 

45, Pl.’s Conf. Ex. 7 at 3-4; see also Verification Report, C.R. 

Doc. No. 40, Garofalo’s Conf. Ex. 10 at 6-7. No other 

discrepancies with Garofalo’s responses were noted. See

Verification Report, C.R. Doc. No. 40, Garofalo’s Conf. Ex. 10. 

Based on the three follow-up questions of the supplemental 

questionnaire, Commerce appears to have found the original 

response deficient in only a few respects. Garofalo was 
Court No. 03-00105 Page 33 

responsive to the questions in the supplemental questionnaire, 

and its responses were later successfully verified. 

Accordingly, the Court concludes that Commerce’s decision not to 

apply adverse facts available or facts available in making its 

affiliation and collapsing decisions was supported by 

substantial evidence. 

 

 B. Challenges to the Determination Regarding Ferrara

The remaining two issues in the case deal with Plaintiff’s 

challenges to Commerce’s treatment of Ferrara. Plaintiff first 

argues that Commerce acted in violation of law, and its decision 

was unsupported by substantial evidence, when it added a 

product-matching criterion for die-type in identifying Ferrara’s 

“foreign like product.” See Pl.’s Br. at 21. Plaintiff 

furthermore argues that Commerce acted in a manner contrary to 

law when it did not include this criterion in its analysis of 

the other firms under review. Id. The Court discusses the two 

issues in turn below. 

 First, Commerce’s decision to add a fifth product-matching 

criterion for die-type with regards to Ferrara was in accordance 

with law and supported by substantial evidence. Congress has 

delegated to Commerce the ability to choose product-matching 

criteria to identify the “foreign like product” to which 
Court No. 03-00105 Page 34 

domestic sales are compared in order to calculate the dumping 

margin. See Pesquera Mares Australes, Ltda. v. United States, 

266 F.3d 1372, 1384 (Fed. Cir. 2001); Koyo Seiko Co. v. United 

States, 66 F.3d 1204, 1209 (Fed. Cir. 1995). However, in 

defining “foreign like product,” Commerce is constrained both by 

statute and by its own past practice. Under 19 U.S.C. § 

1677(16)(A), Commerce must base product-matching criteria on 

“physical characteristics.” 19 U.S.C. § 1677(16)(A).18 In 

 18The text of 19 U.S.C. § 1677(16) is as follows: 

(16) Foreign like product

The term "foreign like product" means merchandise in the 

first of the following categories in respect of which a 

determination for the purposes of part II of this subtitle can 

be satisfactorily made: 

(A) The subject merchandise and other merchandise 

which is identical in physical characteristics with, and 

was produced in the same country by the same person as, 

that merchandise. 

(B) Merchandise— 

(i) produced in the same country and by the same 

person as the subject merchandise, 

(ii) like that merchandise in component material 

or materials and in the purposes for which used, and 

(iii) approximately equal in commercial value to 

that merchandise. 

(C) Merchandise-- 

(i) produced in the same country and by the same 

person and of the same general class or kind as the 

subject merchandise, 

(ii) like that merchandise in the purposes for 

which used, and 
Court No. 03-00105 Page 35 

addition, it is apparently Commerce’s past practice, to consider 

only “meaningful” or “significant” physical characteristics. 

Emulsion Styrene-Butadiene Rubber from Mexico, 64 Fed. Reg. 

14,872, 14,875 (Dep’t Commerce Mar. 29, 1999) (notice of final 

determination of sales at less than fair value) (applying a 

“meaningful” standard); Certain Hot-Rolled Lead and Bismuth 

Carbon Steel Products From the United Kingdom, 63 Fed. Reg. 

18,879, 18,881 (Dep’t Commerce Apr. 16, 1998) (final results of 

antidumping duty administrative review) (applying a 

“significant” standard). Commerce has defined what makes a 

physical characteristic “meaningful” or “significant” only by 

saying, in a notice applying the “meaningful” standard, that it 

looks to “both price differences in the marketplace and cost 

differences which may reflect different production processes.” 

Emulsion Styrene-Butadiene Rubber from Mexico, 64 Fed. Reg. at 

14,875; see also Certain Pasta from Italy, 67 Fed. Reg. 300, 302 

(Dep’t Commerce Jan. 3, 2002) (notice of final results of 

antidumping duty administrative review, partial rescission of 

antidumping duty administrative review and revocation of 

 

(iii) which the administering authority 

determines may reasonably be compared with that 

merchandise. 

19 U.S.C. § 1677(16) (emphasis supplied).
Court No. 03-00105 Page 36 

antidumping duty order in part);19 Certain Pasta from Italy, 64 

Fed. Reg. 6,615, 6,623-24 (Dep’t Commerce Feb. 10, 1999) (notice 

of final results and partial rescission of antidumping duty 

administrative review). 

 In the antidumping review at issue here, Commerce 

originally chose four criteria to use in identifying the foreign 

like product: pasta shape, wheat type, presence of additives, 

and presence of enrichment. Initial Questionnaire, P.R. Doc. 

No. 19, Pl.’s Pub. Ex. 9 at III-2. Ferrara, in answering its 

first questionnaire, requested that a fifth criterion be added, 

representing the type of die used to extrude the pasta. 

Ferrara’s First Response, C.R. Doc. No. 3, Fiche 58 at Frames 

26-27. In response to a supplemental questionnaire requesting 

explanation of why a fifth criterion should be added, Ferrara 

provided Commerce’s verification, from the review conducted a 

year previously, that the surface texture of bronze-die and 

Teflon-die pastas were noticeably different. Ferrara’s Second 

 19This final determination, Certain Pasta from Italy, 67 

Fed. Reg. at 300, incorporates by reference an Issues and 

Decision Memorandum discussing cost differences and production 

differences in terms of physical difference. Certain Pasta from 

Italy, 67 Fed. Reg. at 302; Dep’t of Commerce Mem. from Bernard 

T. Carreau, Deputy Assistant Sec’y for Imp. Admin. to Richard W. 

Moreland, Acting Assistant Sec’y for Imp. Admin., Issues and 

Decision Memorandum for the Fourth Antidumping Duty 

Administrative Review, Def.’s Conf. Ex. 7, at cmt. 2 (Jan. 3, 

2002) (“Fourth Review Decision Memorandum”).
Court No. 03-00105 Page 37 

Response, C.R. Doc. No. 35, Fiche 94 at Frames 7-9; Ferrara 

Verification Report, C.R. Doc. No. 35, Ferrara’s Conf. Ex. 2 at 

1 (July 16, 2002) (stating that Ferrara’s bronze-die pasta is 

“rougher on the surface” than Teflon-die pasta). This appears 

to satisfy the statutory requirement that some physical 

difference exist. 

 Other evidence that Ferrara provided related to the high 

cost differential between production of bronze-die and Teflondie pasta, the slight differences in recipe, and evidence that 

Amway, Ferrara’s customer for bronze-die pasta, paid a premium 

for pasta produced in that manner and prominently labeled the 

product as bronze-die pasta. Ferrara’s Second Response, C.R. 

Doc. No. 35, Fiche 94 at Frames 7-11; Verification Ex. 20: 

Production Costs, C.R. Doc. No. 35, Ferrara’s Conf. Ex. 3 (July 

16, 2002); Production Control System Recipe Screenshots, C.R. 

Doc. No. 35, Ferrara’s Conf. Ex. 4 (July 16, 2002); Extracts 

from HM Database & Package Labelling, C.R. Doc. No. 35, 

Ferrara’s Conf. Ex. 5 (July 16, 2002). Production cost and 

market price differences between pastas produced with the two 

die-types appear to satisfy Commerce’s own rule that the 

physical difference be “significant” or “meaningful.” 

 Plaintiff nevertheless argues that the fifth criterion 

impermissibly reflects a non-physical characteristic. Pl.’s Br. 
Court No. 03-00105 Page 38 

at 22-26. Plaintiff’s argument is that Commerce’s definition of 

“significant” or “meaningful” physical characteristics hinges on 

production cost and marketing price, in violation of 19 U.S.C. § 

1677(16)(A). Pl.’s Br at 24-25.20 The Court agrees that by 

 20The Court notes that neither Plaintiff nor Commerce use 

the term “physically significant” in their briefs, preferring 

the term “commercially significant,” although the Court cannot 

divine from the Federal Register that Commerce has stated a 

practice of looking for “commercially significant” physical 

characteristics, rather than merely “significant” or 

“meaningful” physical characteristics. While the term appears 

in some Federal Register notices, and is occasionally used by 

Commerce to describe characteristics worthy of their own product 

matching criteria, the Court has not found any document wherein 

Commerce has explained that “commercial significance” is its 

standard, nor what “commercially significant” physical 

characteristics would be. Plaintiff, however, argues that past 

practice requires Commerce to only consider “commercially 

significant” physical characteristics in creating product 

matching-criteria. Pl.’s Br. at 22-23. Plaintiff cites as 

proof of this practice the Federal Circuit’s decision in 

Pesquera Mares Australes. Pl.’s Br. at 23 n.70. 

In that case, Commerce asked the Federal Circuit to uphold 

as reasonable Commerce’s interpretation of the statutory phrase 

“identical in physical characteristics” in accord with 

commercial practice. Pesquera Mares Australes, Ltda. v. United 

States, 266 F.3d at 1372. The Court notes that the phrase 

“commercially significant” appears nowhere in that decision. 

See id. Rather, the Federal Circuit opined that the words 

“identical in physical characteristics” as used in 19 U.S.C. § 

1677(16)(A) could reasonably be held to mean “the same with 

minor differences,” rather than absolutely physically identical. 

Id. at 1383. This was in part due to the fact that there may be 

hundreds of small variations between any two given products, and 

Commerce would never be able to match an imported product with a 

“foreign like product” if it were required to evaluate every 

possible difference. Id. (citation omitted). Therefore, the 

Federal Circuit held that Commerce could ignore differences that 

were not “commercially recognized” in making product-matching 

criteria. Id. at 1384. This, however, is different from 
Court No. 03-00105 Page 39 

statute, Commerce is required to match only “physical” 

characteristics. 19 U.S.C. § 1677(16)(A). The statute, 

however, does not require that physical characteristics be 

significant and, generally, Commerce has wide latitude in 

choosing what physical characteristics to consider. Pesquera 

Mares Australes, Ltda. v. United States, 266 F.3d 1372 at 1384. 

Additionally, Commerce has established a practice of considering 

only “significant” or “meaningful” physical characteristics, 

defined in terms of cost and price differences, which appear to 

be non-physical attributes of a good. Consequently, Commerce’s 

practice could appear inconsistent with the statute; were 

Plaintiff able to demonstrate that the verified physical 

difference between bronze-die and Teflon-die pasta, i.e., 

surface texture, is actually inconsequential to the purchaser, 

it could claim that the cost difference is propelled by a 

consumer preference for the production method alone. In that 

case, Commerce’s findings here could be contrary to law, as the 

decision to create a fifth product-matching criterion would 

 

requiring Commerce to ignore commercially unrecognized 

differences, or, to put it another way, from requiring that 

Commerce prove that a difference is “commercially recognized” 

when choosing product-matching criteria. Pesquera Mares 

Australes does not so hold. Moreover, the case does not, in of 

itself, create a past practice of only relying on “commercially 

significant” characteristics, but rather states that it is 

reasonable for Commerce to ignore minor characteristics if it so 

chooses. 
Court No. 03-00105 Page 40 

appear to be based entirely on non-physical attributes. 

However, Plaintiff has adduced no such evidence; the record 

contains no evidence whatsoever on whether the surface texture, 

standing alone, and unaided by cost or production method, is 

significant to consumers or not.21 However, the record does 

disclose a verified physical difference between bronze-die and 

Teflon-die pasta, and that the two are markedly different in 

terms of price and cost to produce. That being so, it appears 

that Commerce has satisfied both the requirements of 19 U.S.C. § 

1677(16)(A) and the requirement of its own practice of relying 

only on “meaningful” or “significant” physical characteristics. 

 The next question is whether Commerce’s decision was 

supported by substantial evidence. Responding to the second 

supplemental questionnaire, Ferrara produced the verification 

report and exhibits from the review conducted a year earlier 

regarding treatment of Ferrara on the same issue, and in which 

Commerce added a fifth matching criterion for die-type. See

Ferrara’s Second Response, C.R. Doc. No. 35, Fiche 94 at Frames 

7-9. In the verification conducted during the fourth review, 

 21Ferrara has introduced evidence that its customer for 

bronze-die pasta, Amway, prominently advertises the product as 

such, but this does not inform us as to whether it is the bronze 

die process, or the resulting physical differences that Amway 

finds attractive. See Extracts from HM Database & Package 

Labelling, Ferrara’s Second Response Ex. 4, C.R. Doc. No. 35, 

Ferrara’s Conf. Ex. 5 (July 16, 2002). 
Court No. 03-00105 Page 41 

Commerce found and verified an actual physical difference 

between bronze-die and Teflon-die pasta; i.e., surface texture.22 

 22Commerce also argues that record evidence shows throughput 

rates and line speeds differ for bronze-die and Teflon-die 

pasta, and that this makes for a physical difference. See Def.’s 

Br. at 23; see also Decision Memorandum, P.R. Doc. No. 134, 

Pl.’s Pub. Ex. 2 at 23 (implicating throughput rate and line 

speeds in either a physical or cost difference, or both); Fourth 

Review Decision Memorandum, Def.’s Conf. Ex. 7 at cmt. 2. 

Record evidence shows that throughput rates and line speeds for 

bronze-die pasta are slower than those for Teflon pasta. See,

e.g., Ferrara Verification Report, C.R. Doc. No. 3, Ferrara’s 

Conf. Ex. 2 at 15. 

 While Commerce does not explain how line speed or 

throughput rates implicate a physical difference in either the 

Decision Memorandum or the Fourth Review Decision Memorandum, it 

does cite to past pasta reviews in which a fifth matching 

criterion was added. Decision Memorandum, P.R. Doc. No. 134, 

Pl.’s Pub. Ex. 2 at 23 (citations omitted); Fourth Review 

Decision Memorandum, Def.’s Conf. Ex. 7, at cmt. 2 (citing 

Certain Pasta from Italy, 64 Fed. Reg. 6,615 (Dep’t Commerce 

Feb. 10, 1999) (notice of final results and partial rescission 

of antidumping duty administrative review); Certain Pasta from 

Turkey, 65 Fed. Reg. 77,857 (Dep’t Commerce Dec. 13, 2000) 

(final results of antidumping duty administrative review)). One 

of these cases appears to indicate that in past reviews, 

Commerce used line speed as a descriptor for pasta shape, as it 

is the different speeds at which pastas are run through the die 

that give them their different lengths and thicknesses. Certain 

Pasta from Italy, 64 Fed. Reg. at 6,623-24. There is also 

other evidence on the record that appears to show that line 

speed is a shorthand for shape. See, for example, Initial 

Questionnaire, P.R. Doc. No. 19, Pl.’s Pub. Ex. 9 at III-3, 

which asks respondents to support shape classifications with 

line speed, and Letter from Paul C. Rosenthal et al., to Sec’y 

Commerce, Re: Certain Pasta From Italy, C.R. Doc. No. 32, Fiche 

92 at Frames 36-37, 52, 61-63, and 65-67 (Jun. 7, 2002), 

explaining that line speeds reflect the shape and size of pasta. 

Therefore, it may be that in addition to the surface texture, 

bronze-die pasta differs from Teflon-die pasta in its length and 

thickness, and that it is this fact Commerce is trying to 

describe in its discussions of line speed and throughput rates. 
Court No. 03-00105 Page 42 

Ferrara Verification Report, C.R. Doc. No. 3, Ferrara’s Conf. 

Ex. 2 at 1. It also verified the different costs of production 

and different market prices. Id. While Plaintiff claims that 

Commerce should not rely on evidence that was not produced in 

response to the particular review at hand, the Court cannot say 

that Commerce’s decision was unsupported by substantial 

evidence, or that it is unreasonable for Commerce to rely on 

 

There is language from Commerce in a review previous to the one 

at issue in this case, however, that seems to indicate that 

throughput rates and line speeds do not reflect a physical 

difference so much as a cost difference: 

The fact that a long or short artiginal pasta [bronze 

die pasta made with coarse semolina] cut takes up to 

20 times longer to produce than the comparable 

industrial long or short pasta cut is sufficiently 

significant to warrant the creation of a special shape 

category for artiginal pasta long or short cuts for 

the same reason that led [Commerce] to create 

speciality [sic] long and short shapes for industrial 

pasta long or short cuts; in other words, the 

production cost for artiginal pasta is significantly 

influenced by the slower line speeds required to 

produce the same long or short industrial pasta cut. 

Certain Pasta from Italy, 64 Fed. Reg. at 6,624. 

The record before the Court here is unclear on whether line 

speed in this case primarily affects shape and, in turn, cost, 

or whether it is primarily a matter of cost that does not 

reflect a different pasta shape. 

 Be that as it may, there is at least one verified physical 

difference between Ferrara’s bronze-die and Teflon-die pasta -- 

texture. Ferrara Verification Report, C.R. Doc. No. 3, Ferrara’s 

Conf. Ex. 2 at 1. This difference was verified and, on this 

record, provides a reasonable basis for fulfilling the statutory 

requirement that product-matching be based on physical 

characteristics. See 19 U.S.C. § 1677(16)(A). 
Court No. 03-00105 Page 43 

evidence prepared by its own personnel only a year before. 

Moreover, Ferrara provided certain new evidence relating to 

production recipes and Amway’s promotion of the bronze-die 

product to support its bid for a fifth product-matching 

criterion. Production Control System Recipe Screenshots, C.R. 

Doc. No. 35, Ferrara’s Conf. Ex. 4 (July 16, 2002); Extracts 

from HM Database & Package Labelling, C.R. Doc. No. 35, 

Ferrara’s Conf. Ex. 5 (July 16, 2002) 

 The final issue in the case is whether Commerce acted with 

support of law and substantial evidence when, having added the 

die-type criterion to the “foreign like product” with regards to 

Ferrara, it did not add it for the other companies under review. 

In support of the argument that this decision was not in 

accordance with law, Plaintiff appears to cite inapposite cases. 

Pl.’s Br. at 21 n.63. The cases deal not with variations in 

product-matching criteria between reviewed companies in an 

investigation, but with Commerce’s having given the phrase 

“foreign like product,” as it appears in various places in the 

dumping statutes, different meanings without explanation. See

RHP Bearings Ltd. v. United States, 288 F.3d 1334, 1346-47 (Fed. 

Cir. 2002); SKF USA Inc. v. United States, 263 F.3d 1369, 1382-

83 (Fed. Cir. 2001). These cases do no more than defend a basic 

canon of statutory construction, and factually, do not appear to 
Court No. 03-00105 Page 44 

have application to the issues here, which involve the use of 

criteria to define a certain category of pasta, rather than a 

shifting meaning of the phrase “foreign like product” across 

statutory sections. Moreover, with regard to substantial 

evidence, Plaintiff appears to render its own argument moot when 

it admits that none of the other companies ever reported the use 

of bronze dies. Pl.’s Br. at 26. Requiring companies to report 

on a characteristic that their pasta does not have would be 

superfluous indeed.23 The Court’s review of the applicable 

statutes and regulations does not reveal any reason why Commerce 

should be barred from using a product-matching criterion solely 

in relation to the one company under review to which it has 

application. 

 23Any argument that the other reviewed companies may also 

have been making bronze-die pasta, but were unaware of their 

ability to request a product-matching criterion is undermined by 

the fact that Commerce has added a fifth product-matching 

criterion for die-type for certain companies in past pasta 

reviews. For example, in the Fourth Antidumping Review of 

Certain Pasta from Italy, Commerce added a die-type criterion 

solely for Ferrara, the same company at issue here. See Fourth 

Review Decision Memorandum at cmt. 2. Similar results were 

obtained in an earlier pasta review, where a fifth criterion was 

added for just one respondent. See Certain Pasta from Italy, 64 

Fed. Reg. at 6,623-24. 
Court No. 03-00105 Page 45 

CONCLUSION 

 Because Commerce’s review of both Garofalo and Ferrara was 

in accordance with law and supported by substantial evidence, 

the Court will deny Plaintiff’s motion for judgment upon the 

agency record, and enter judgment for Defendant. 

 /s/ Donald C. Pogue

 Donald C. Pogue 

 Judge 

Dated: New York, New York 

 March 1, 2004