### Slip Op. 03- 79

UNITED ST ATES COURT OF INTE RNATIONAL T RADE

____________________________________ : DUPONT TEIJI

N FIL MS USA, LP, : MITSUBI SHI POLY

ESTER FIL

M OF : AMERICA, LLC, and : TORAY PLASTI CS (AMERICA), I NC., : : Plaintiff s, :

: v. : : Consol. Court No. 02-00463 UNITED STATES, : : Defend ant, :

: and : : POLYPLEX CORPORATION LI MITED, :

: Defendant-Inte

rvenor. : ____________________________________: [ITA’s antidumping duty

determination remanded.]
Dated: July 9, 2003 Wilmer, Cutler & Pickering ( John D. Gre enwald , Ronald I. Meltzer , Jason E. Kearns and Omari S. Simmons ) for pla

intiffs. Peter D. Keisler , Assistant Attorney Gene ral, David M. Cohen , Director, Lucius B. L au , Assistant Director, Commercial Litiga tion Branch, Civil Division, United States Department of Justice, ( Paul Kovac ), Scott D. McBride and David R. Mason , Office of the Chief Counsel for Impor t Administr

ation, Un ited State s Depar

tment of Co mmerce, of counse l, for de fendant

. Co ude rt B rot her s LLP ( Kay C. Geor gi and Mark P. Lunn ) for defendant-intervenor.C ONSOL
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. 02-00463 P AGE 2 OPINION RESTANI, Judge: This matter is before the court on a motion for judgment upon the ag ency re cord pursuant to USCIT Rule 56.2 by

Dupont Teijin Films USA, LP, Mitsubishi Polyester F ilm of America, LL C, and Toray Plastics (Ame rica), Inc. ( collectively “Plaintiffs”) , petitioners in the underlying antidumping duty (“A

D”) investigation. See Poly ethy lene Ter ephthala te Film, Sh eet, and

Strip From I ndia , 67 Fed. Reg. 34,899 (Dep’t Commerce Ma y 16, 2002) (final)

[hereinafter “ Final Determination ”]. In

its Final Determination , the Department of Commerce (“Commerce” ) found that polyethy

lene terephthalate film, sheet, and strip (“PET film”) from I ndia are being sold, or are likely to be sold, in the United States a t less than fair value (“L TFV”). Id. at 34,899. Plaintiffs challenge only

one aspect of the Final Determination : Commerce’s decision to exclude from the antidumping duty or der PET film produced in India by defendant-intervenor Poly plex Corporation Limited (“Poly plex”). JURISDIC TION & STAND ARD OF R EVIEW The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (2000) . The court will uphold Commerce’s determination in an antidumping duty investigation unless it is “unsupported by substantial evidence on the record, or otherwise not in ac cordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i) (2000).

FACTUAL & PROCEDURAL BACKG ROUND On May 17, 2001, Plaintiffs, domestic produce rs of PET film, simultaneously filed an antidumping duty petition ag ainst imports of PET film from India and Taiwan and a countervailing duty

petition against PET film from India. Commerce published

notice of itsC ONSOL
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1 The period of investigation was April 1, 2000, through Mar ch 31, 2001.

2 The statu

te defin es “expor

t price” as: the price at which

the subject merchandise is first sold (or agree d to be sold) before the date of importation by the produc er or exporter of the subje ct merchandise outside of the United States to an unaffiliated purchaser in the United States or to an unaffiliated purchaser for exportation to the United States, as adjusted . . . . 19 U.S .C. § 1677a (a) (20 00). In o ther w ords, Comm erce us es ex port p rice wh ere for eign producers sell merchandise directly to unaffiliated purchasers in the United States. See Prelim. Determ. , 66 Fed. Reg. at 65,895.

3 “Construc

ted export

price” is the pric e at whic

h the subje ct merchandise is first sold (or agreed to besold) in the United States befo re o r after the date of importation by or for the account of the producer or exporter of such merchandise or by a seller affiliated with the producer or exporter, to a purchaser not affiliated with the producer or exporter, as adjusted . . . . 19 U.S.C. § 1 677a(b) . Commerc e thus ca lculates constructed export

price wh en sales

to unaffiliated purchasers take place after importation into the United States. See Prelim. De term. , 66 Fed. Reg. at 65,896. initiation of both investigations on June 13, 2001. 1 See Poly ethy lene Ter ephthala te Film, Sh eet, and Strip (PET Film) from India and Taiwa n , 66 Fed. Reg. 31,888 (Dep’t Commerce June 13, 2001) (in itiation) ; Poly ethy

lene Ter ephthala te Film, Sh eet, and

Strip (PET f

ilm) from I

ndia , 66 Fed. Reg . 31,892 (Dep’t Com merce Jun e 13, 2001 ) (initia tion). Comm erce pr

eliminar ily determined that PET film from India is being , or is likely to be, sold in the United States at LTFV. Poly ethy

lene Ter ephthala te Film, Sh eet, and

Strip from

India , 66 Fed. Reg. 65,893, 65,894 (Dep’t Commerce Dec. 21, 2001) (prelim.) [here inafter “ Preliminary Deter mination ”]. In the Preliminary Deter

mination , Commerce calculated the export price, 2 or, where appropriate, the constructed export price 3 for Polyplex’s exports in accordance with section 772(a) of the Tariff Act of 1930, 19 U.S.C. § 1677a. See id. at 65,895–96. Commerce then increased Polyple

x’s export price (sometimes referred to as “U.S. price”) “ by the amount of theC ONSOL
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4 The basic economic theory behind these types of a

djustments “is that in parallel AD and CVD investigations, if the Department finds that a respondent rec eived the benefits of an export subsidy progr

am, it is presumed the subsidy contributed to lower- priced sales of subject mercha ndise in th e United S tates mar ket by the amoun

t of any such expor

t subsidy .” I ssues & Decision Mem. for the Final Determ. in the Antidumping Duty Investigation of PET film from India at cmt. 1, 67 I TA Doc. 34,899, summarized at 67 Fed. Reg. 34,899 (May 16, 2002) [hereinafter “I ssues and

Decision Memoran

dum”]. The

offset is designe d to preve

nt the “do uble application” of duties when the subsidies and dumping are re lated. Id.

5 A “dumping margin” is “the amount by which the normal value exceeds the export price or constructed export price of the subject merchandise.” 19 U.S.C. § 1677(35)(A) (2000).

6 A “weighted averag e dumping margin” is “the perce ntage determined by

dividing the aggr egate dumping margins

determined for a

specific exporter or produc er by

the agg regat e export prices and constructed export prices of such exporter or produce r.” Id. § 1677(35)(B). export subsidy

found in the companion countervailing duty investigation on PET film from India.” 4 Id. at 65,896 (emphasis added). This adjustment caused Polyplex’s estimated dumping margin

5 to fa ll be lo w s ta tu to ry de minimis levels. Id. at 65,898 (reporting Polyplex’s weightedaverage dumping marg

in, 6 as adjust

ed, as 1. 38 perce

nt); see 19 U.S.C. § 1673b(b)(3) (2000) (requiring Commerce to “disreg ard any w eighted average dumping margin that is . . . less than 2 percent ad valorem or the equivalent spec ific rate for the subject merchandise.”) . Commerce therefore preliminarily

determined to exclude Polyplex from the antidumping duty order. See Prelim. De

term. , 66 Fed. Reg. at

65,898. A fter pub lishing it s Preliminary Deter mination , Commerce issued and received an additional supplemental questionnaire for respondent Polyplex, conducted a verifica tion of respondents’ questionnaire responses, reviewed c ase briefs and rebuttal briefs, and held a public hearing

. Final De term. , 67 Fed. Reg. at 34,899. In the Final Determination , Commerce again found that PET film from I ndia is being sold, or is likely to be sold, in the Unit

ed States at LT FV, but th e Depar

tment con tinued to exclude Polyplex from the affirmative deter mination. Id. Commerce had calculated a weig hted-C ONSOL
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7 After Co mmerce makes an a ffirmat ive fina l determi nation tha t subject m erchan

dise is being sold at LTFV, it orde rs the producers or exporters to pay cash deposits for estimated antid umpi ng dut ies on futur e entri es, wh ich are “based on th e esti mated weight ed aver age dumping margin.” Id. § 1673d(c)(1)(B) (2000).

8 This practice, according to Commerce , “is a result of the practical administrative difficulties in applying the results of an ongoing CVD investigation to calc ulations in an ongoing AD investigation.” Issues & Decision Mem. at cmt. 1.

9 The Final Determination and acc ompany

ing I ssues and

Decision Memoran

dum both discuss and explain the methodology used to off set Polyplex’s figures for

the export subsidies as an adjustment to the cash deposit rate rather than U.S. price in ac cordance with longstanding Department practice. Both the Final Determination and the antidumping duty or der, however, contain a chart with the manufacturers/exporters of PET film and their c orresponding dumping (continued...) averag e dumping

margin of 10.34 p ercent

for Poly plex, but it “adjuste d the anti dumping d uty cash dep osits 7 for the export subsidies found in the companion countervailing investigation rather than adjusting net U.S. price .” Id. at 34,900–01 & n.2 (citing I ssues & Decision Mem. at cmt. 2) (emphasis added). The domestic industry, petitioners below a nd Plaintiffs here, had contested the methodology use d in the Preliminary Deter mination , arguing that the statute only authorizes Commerce

to incre ase a pr

oducer’ s U.S. pric e by

the amoun

t of count ervailin g duties “actua lly ‘imposed’ (i.e., assessed) on the subject merchandise” rather than by

the amount of estimated countervailable export subsidies. Issue s & Dec ision Mem. a t cmt. 1 (qu

oting Pet itioners’ Case Br. at 3). Commerce agre ed that its “longstanding practice in an investig ation is to offset the AD cash deposit rate by

the export subsidy cash deposit rate” rather than adjusting the dumping margin calculation. 8 Id. Nonethe less, Comme rce excl uded Poly plex from th e antidum

ping duty order, e xplaining that “[i]f th e Depar

tment’s c alculati ons in an in vestiga tion resu lt in a zero

cash deposit rate, then in reality , there exists no dumping upon which an affirmative determination could be based as to that particular respondent.” 9 Final De term. , 67 Fed. Reg. at

34,901; seeC ONSOL
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9 (...continued) margins. Next to Polyplex’s name, rather tha n listing the calculated dumping margin of 10.34 percent, five asterisks appear with a f ootnote explaining that Polyplex was excluded “because the rate for Polyplex is zero after a djusting the dumping margin for the export subsidies in the companion countervailing duty order.” Notice of

Amended

Final An tidumping

Duty Determination of Sales at Less Than F air Value and Antidumping Duty Order , 67 Fed . Reg. 44,175, 44,176 (Dep’t Commerce July 1, 2002) (e mphasis added) [hereinafter “ Antidumping Duty Order

”]. While this footnoted explanation directly conflicts with the stated reasoning in the Final Determination

and the detailed discussion on this point in the Issues and Decision Memoran dum, it is cl ear fr

om the re cord as a

whole tha

t Commerc e adjuste d the cas h deposit rate, not Polyplex’s export price or the dumping ma rgin, in excluding Polyplex from the antidumping duty order . Commerce conceded this point at oral argument in re sponse to the court’s questions. Antidumping Duty Orde

r , 67 Fed. Reg. at 44,176 (excluding Poly plex). This action followed. DISCUSSION The crux of Plaintiffs’ argument is that Poly plex must be included in the antidumping duty order be cause it has a dumping margin of 10.34 per cent, despite its cash deposit rate of zero. Plaintiff s argue that the statute, legislative history , agency regulations, and the Statement of Administrative Action (“SAA”) all support their view that an exclusion from an antidumping duty order is only

allowed if the producer has a de minimis dumping margin. Commerce arg ues that the statute is silent or ambiguous on this issue, its interpretation of the statute is reasonable, and that Co mmerce’ s decisio n to exclude Poly plex from th e antidum

ping duty order is entitled t o Chevrondeference. See Chevron, U.S.A., Inc. v. Natura l Res. Def. Council, Inc. , 467 U.S. 837, 842–43 (1 984) (hol ding tha t if a stat ute is sile nt or ambig

uous on a s

pecific issue, co urts must defer to the administrating agenc y’s permissible construction of it). The Department’s construction of the antidumping statute is a question of law, so the
court mus t first “d

etermine whether Congre ss’s purp ose and in tent on the

question a

t issue is judicially ascer

tainable.” Timex V.I. v. United States , 157 F.3d 879, 881 (Fed. Cir. 1998). TheC ONSOL
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court looks at the plain language of the sta tute, legislative history, a nd the canons of statutory construction in ascertaining the intent of Congress. See id. at 881–82 ; Dunn v. Com modity Futures Trading Comm’n , 519 U.S. 465, 470–79 (1997). “The expressed will or intent of Congress on a specific issue is dispositive.” Ilva L amiere E Tubi S.R.L. v. United States , 196 F. Supp . 2d 13 47, 13 49 (Ct . Int’l T rade 20 02) (ci ting Japan Whaling Ass’n v. Am. Cetacean Soc’y , 478 U.S. 221, 233–37 (1986)). Only if the c ourt concludes that the statute is vague or silent on an issue should the court reach the issue of Chevrondeference. See Bd. of Governors Fed. Reserve Sys. v. Dimension Fin. Corp. , 474 U.S. 3 61, 368 (1 986); Timex , 157 F.3d at 881–82. Under Chevron , the court will uphold Commerce’s interpretation of the antidumping laws if such an interpretation is reasonable given the e xpress terms of the provisions at issue, the objectives of those provisions, and the objectives of the antidumping scheme as a whole. See Pesquera Mares Australes Ltda. v. United States , 266 F .3d 13 72, 13 79–80 (Fed. C ir. 20 01) (af fordi ng Chevron defere nce to Comm erce’ s interpr etations o f ambig

uous statu

tory terms ar ticulate d in the co

urse of an ant idumping determination); Windmill Int’l Pte. v. United States , 193 F. Supp. 2d 1303, 1305– 06 (Ct . Int’l T rade 20 02) (ci ting Mitsubishi Heavy I ndus. v. United States , 22 CIT 541, 545, 15 F. Supp. 2d 807, 813 (1998)). In the present case , the law is clear that producers with dumping marg ins over two percent must be included in an affirmative final deter mination of sales at less than fair value. Under 19 U.S.C. § 1673d, Commerce engage s in a two-step process in making an antidumping determination in an initial investigation. First, Commerce must decide whether the subjec t merchandise is being, or is likely to be, sold in the United States at LTFV. 19 U.S.C. § 1673d(a)(1). To make this determination, Commerce compare s the normal value of theC ONSOL
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10 The limits of Commerce’s discretion in setting cash deposit rates is not at issue here. Plaintiffs do not challenge the zero cash deposit rate. They merely see

k to keep Polyplex subject

(continued...) merchandise in the home market to the export price of the same mer chandise. If the norma

l value exc eeds the

export pric e, the me

rchandi se is bein

g sold at LTF V and the

produce r is “dumping.” See id. § 1677(34 ) (defin ing “du mping” a s “the sa

le or like ly s ale of g oods at le ss than fai r value” ). Commer

ce is instr ucted to “ disreg ard any

weight ed aver age du mping ma

rgin that is de minimis.” Id. § 1673d(a)(4). A de minimis margin is one that is “less than 2 percent ad valorem or the equivalent specific rate for the subject merchandise.” Id. § 1673b(b )(3). Th us, producers with de minimis dumping margins must be excluded from an antidumping duty order. See id. § 1673d(a)(4); 19 C.F.R. § 351.204(e)(1) (explaining that a pr oducer with a de minimis dumping margin will be excluded from an affirmative f inal determination); Uruguay Round Agreements Act, SAA, H.R. Doc. No. 103-316 at 844 (1994) , reprinte d in 1994 U.S.C.C.A.N. 4040 (“Exporters or producers with de minimis margins will be excluded from any affirmative determination.”). If Co mmerce makes an a

ffirmat ive findin g that imp orts are

being so ld at L TFV, it mu st calculate the estimated weighted ave rage dumping marg in for each individually- investigated, determine the est

imated “a ll-other s rate”

for expor ters and produce rs not indiv

idually investigated, and order the producer s or exporters to post an “appropriate” cash deposit or bond, which is “based on the estimated weighted aver age dumping margin.” 19 U .S.C. § 1673d(c )(1)(B ); see Auto Telecom Co. v. United States , 15 CIT 231, 233, 765 F. Supp. 1094, 1097 (1991) (emphasizing the two distinct inquires in (1) making a dumping dete rmination and (2) ordering a cash deposit rate ). 10 After Commerce makes its antidumping determination, if theC ONSOL
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10 (...continued) to the discipline of an antidumping duty or der, which may

require future periodic reviews and ultimately the assessment of duties. United Sta

tes I nternat ional Tra de Commission makes a

n affirm ative fin

ding of material

injury to the domes tic industr

y by reason o f dumped i

mports, Com

merce mu st issue an

antidumpin

g duty order. See 19 U.S.C. §§ 1673d(c )(2) & 1673e. Th e AD orde

r is ministe

rial in na ture, “t he first step in the mandatory a ssessment of antidumping duty.” Royal Business Mac hines, Inc. v. United States , 1 CIT 80, 86, 507 F. Supp. 1007, 1012–13 (1980). As discussed, Commerce’s dumping margin deter mination is distinct from its later order of cash d eposits fo r subjec t entries . In th

is determ ination, h owever , Commerc e collap sed these two inquir

ies when it imprope

rly excluded Po lyp lex based o n a zero c ash depo sit rate w hen its dumping margin was grea ter than de minimis . There is no statutory a uthority to exclude an exporter because its cash deposit rate, but not its dumping margin, is zero. See 19 U.S.C. § 1673d. The

refore , Commerc e’s dec ision to excl ude Poly plex from th e AD orde

r on that b asis is not in accordance with law. The antidumping statute requires the Department make a final determination of whether the subject merchandise is being sold at L TFV and to “disregard” pr oducers with de minimis dumping margins . Commerc e canno t disreg ard a pr oducer b ased only

on a zero c ash depo sit
rate. Upon remand, Commerce must calculate Poly plex’s dumping margin after making the adjustmen

ts to export price re quired by 19 U.S.C. § 1 677a and

Commerce ’s reas onableC ONSOL
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11 At oral argument on March 27, 2003, the court f ocused on the applicability of 19 U.S.C. § 1677a(c)(1)(C), which requires Commerce to incr ease the price used to establish export pr ic e b y “t he am ou nt of

an y countervailing duty

imposed on the subject me

rchandi se . . . to offset an export subsidy,” and the meaning of the emphasized terms. The parties agree d that the provision applies during AD investigations, but disputed whether the provision allows Commerce to adjust Polyplex’s U.S. price here. Plaintiffs maintaine d that the statute only allows Commerce to increase U.S. price for CVD duties ac tually assessed so as to avoid double liability

. Commerce argued that the statute was silent or ambig uous on the question of whether an offset was allowed for countervailable subsidies found in a companion CVD investig ation but not yet finally assesse d and, the

refore , that its in

terpretation all owing th e offset would be entitled t o deference. The court orde red additional briefing by the parties on this issue but has determined that, bec ause Comme

rce did n ot apply this provis ion in its Final Determination to offset for the export subsidies, but instead adjusted the cash deposit rates, the issue is not ripe for review. On remand, Commerce may

set forth its new interpretation of the disputed statutory terms. Plaintiffs will have an oppor tunity to voice t heir vie ws on the a

dministra tive rec ord, and

Commerce

will have to c onsider t

heir ar guments and addr ess them in

its redet erminati on. Commer

ce must follow the statute and provide a reasoned analy sis for the ultimate methodology it adopts. interpretations thereof. 11 If Commerce continues to ca lculate a dumping margin of 10.34 perc ent for Polyplex, Poly

plex must be subject to the antidumping duty order, whe ther or not it is given a cash deposit rate of zero because of expected offsetti ng coun tervaili ng dutie s. CONCLUSION Accordingly , Plaintiffs’ motion for judgment on the agency record is granted and the Final Determination

is remanded for further consideration consistent with the cour t’s opinion.

_______________________ Jane A. Restani Judge DATED: New York, New York This 9 th of July, 2003.