Slip Op. 24- 54

UNITED STATES COURT OF INTERN ATIONAL TRADE

Court No. 22-00107

SAHAMITR PRESSURE CONTAINER PLC., Plaintiff
, and WORLDWIDE DISTRIBUTION, LLLP, Plaintiff-Intervenor
,

v. UNITED STATES, Defendant
, and WORTHINGTON INDUSTRIES, Defendant-Intervenor.

Before: M. Miller Baker, Judge

OPINION
[Sustaining the Department of Commerce’s final determination.]

Dated: May 2, 2024

David E. Bond
, Ron Kendler , and Danica Harvey
, White & Case LLP of Washington, DC, on the briefs for Plaintiff.Ct. No. 22-00107 Page 2
Gregory S. Menegaz
, J. Kevin Horgan , and Alexandra H. Salzman , deKieffer & Horgan, PLLC, of Washington, DC, on the briefs for Plaintiff-Intervenor.

Brian M. Boynton , Principal Deputy Assistant Attorney General; Patricia M. McCarthy , Director; Tara K. Hogan , Assistant Director; and Alison S. Vicks , Trial Attorney, Commercial Litiga tion Branch, Civil Division, U.S. Department of Justice of Washington, DC, on the brief for Defendant. Of counsel on the brief was Spencer Neff , Attorney, Office of Chief Counsel for Trade Enforcement & Complian ce, U.S. Department of Commerce of Washington, DC.

Paul C. Rosenthal ; R. Alan Luberda ; David C. Smith, Jr. ; and Matthew G. Pereira , Kelley Drye & Warren LLP of Washington, DC, on the brief for DefendantIntervenor.

Baker , Judge: In this antidumping case, a foreign producer of propane canisters and a domestic importer challenge the Department of Commerce’s recalculation of the former’s proffe red sales expenses. Findingthe agency’s methodology supported by substantial evidence, the court sustains it.

I

This matter arises from a Commerce order imposing tariffs on propane canisters. Steel Propane Cylinders from the People’s Republic of China and Thailand: Amended Final De termination of Sales at Less Than Fair Value and Antidumping Duty Orders
, 84 Fed. Reg. 41,703 (Dep’t Commerce Aug. 15, 2019). Sahamitr Pressure Contai ner PLC, a Thai producerCt. No. 22-00107 Page 3
and exporter, and Worthington Industries, a domestic manufacturer, each requ ested an administrative review of that order as it pertains to Thailand. Appx1007; see also Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review
, 85 Fed. Reg. 47,167, 47,168 (Dep’t Commerce Aug. 4, 2020).

The Department obliged an d opened a review covering a 19-month peri od in 2019 and 2020. Initiation of Antidumping and Counte rvailing Duty Administrative Reviews , 85 Fed. Reg. 63,081, 63,085 (Dep’t Commerce Oct. 6, 2020). It sele cted Sahamitr as the sole respondent. Appx6013.

As relevant here, Comme rce requested that Sahamitr report sales costs us ing a transaction-specific method and cautioned that providing such information on an “allocated basis (e.g ., on an average basis)” was permissible only when thos e expenses co uld not “be tied to a specific sale.” Appx6027. The Department further warned that allocated reporting would be acceptable only if the company co uld “demonstrate that the allocation is calculated on as specific a basis as is feasible (e.g., on a customer-specific basis, product-specific basis, and/or mont hly-specific basis, etc.) and is not unreasonably distortive.” Id . (emphasis added).

Sahamitr nonetheless report ed its certification expenses 1 for U.S. sales on an al located basis by applying

1 Third parties test and certify the canisters as safe for use. See ECF 29-1, at 3.Ct. No. 22-00107 Page 4
a “certification-fee ratio” to “customers’ gross unit prices to calculate the [repor ted] per-unit certification expense.” Appx2352. The co mpany did not explain why it couldn’t disclose such costs using a transaction-specific system or why its me thod wasn’t distortive.

At Worthington’s prompt ing, Commerce directed Sahamitr to explain why it “cannot report the [certification] price adjustment or expense on a more specific basis” and why its “allocati on methodology does not cause inaccuracies or distortions.” Appx3450.

The company responded that it
pays its certification fees to outside vendors after [its] production and sale of the merchandise under review, [and] the company cannot attribute individual certificat ion-related expenses to individual sales invoices. The expense-allocation provided is the most ac curate basis on which [the company] is able to report [period-of-review] certification expenses using the books and records the company main tains in the normal course of business . . . .

Appx3654. Sahamitr also ob served that “the Department accepted this approach in the underlying . . . investigation.” Id . The company again, however, failed to explain why its allocation method did not cause distortions.

Once again at Worthington’s importuning, the Department then requested that Sahamitr “calculate a monthly, per unit, certificat ion expense for the [period of review] for the U.S., an d, separately, the homeCt. No. 22-00107 Page 5
market.” Appx5587. It responded with a calculation that showed wide fluctuatio ns in costs from month to month. Appx5607.

In its preliminary determination, Commerce found that Sahamitr’s (second) proffered allocation of its certification costs was distortive

due to timing differences between when [the company] produces and se lls cylinders and when it records the certificati on expenses associated with those sales. These timing differences create monthly fluctuations in [Sahamitr’s] reported certification[] expenses ( e.g. , two months of expenses allocated to a sing le month and no fee expenses allocated to other months).

Appx1025. Thus, the Depar tment “calculated a [period-of-review]-wide certificat ion expense ratio . . . rather than relying on [the company’s] reported allocation methods.” Id . Commerce carried over that analysis to its final determinatio n, Appx1323–1324, which (combined with other unchalle nged aspects of that decision) resulted in a du mping margin of 13.89%, Appx1630.

II
Invoking jurisdiction co nferred by 28 U.S.C. § 1581(c), Sahamitr sued under 19 U.S.C. § 1516a(a)(2)(B)(iii) to cha llenge Commerce’s final determination. ECF 2. Worldwide Distribution LLLP, a domestic importer of Sahamit r’s propane canisters, intervened as a plaintiff, ECF 23, and Worthington intervened in support of the government, ECF 18.Ct. No. 22-00107 Page 6
Sahamitr (ECF 29) and Wo rldwide (ECF 30) both moved for judgment on the agency record. See USCIT R. 56.2. The government (ECF 31) and Worthington (ECF 33) opposed. Sahamitr (ECF 58) and Worldwide (ECF 60) replied. The court decides the mo tions on the
papers.
In § 1516a(a)(2) actions such as this, “[t]he court shall hold unlawful any determination, finding, or conclusion found . . . to be un supported by substantial evidence on the record, or ot herwise not in accordance with law.” 19 U.S.C. § 15 16a(b)(1)(B)(i). That is, the question is not whether th e court would have reached the same decision on the same record—rather, it is whether the administrative re cord as a whole permits Commerce’s conclusion.

Substantial evidence has been defined as more than a mere scintilla, as such relevant evidence as a reasonable mind mi ght accept as adequate to support a conclusion. To determine if substantial evidence exists, we review the record as a whole, including evidence that supports as wellas evidence that fairly detracts from the substantiality of the evidence.

Nippon Steel Corp. v. United States , 337 F.3d 1373, 1379 (Fed. Cir. 2003) (cleaned up).

III

To determine whether merchandise is being dumped in the U.S., the Ta riff Act of 1930, as amended, requires Commerce to figure out the product’s “normal value,” 19 U.S. C. § 1677b(a)—the homeCt. No. 22-00107 Page 7
market price, see Hung Vuong Corp. v. United States
, 483 F. Supp. 3d 1321, 1334 n.6 (CIT 2020)—and then compare that figure to the “export price or constructedexport price” at which the product is sold to the importer, see id. at 1334 n.34 (explaining “export price” and “constructed export price”). The Act further directs the Department to ad just the normal value of such goods by the amount of “any difference” between that figure and the export p rice that “is established to the satisfaction” of the agency “to be wholly or partly due to . . . differences in the circumstances of sale.” Id. § 1677b(a)(6)(C)(iii).

As described above, Sahami tr sought such an adjustment for costs associated with obtaining the requisite safety certifications fo r its propane cylinders. The Department requires that ex penses be reported on a transaction-specific basis exce pt when doing so “is not feasible, provided th e Secretary is satisfied that the allocation method used does not cause inaccuracies ordistortions.” 19 C.F.R. § 351.401(g)(1). When a respondent uses an allocated, rather than transactionspecific, method, that party has the burden of showing that the “allocation is calcu lated on as specific a basis as is feasible” and “expla in[ing] why the allocation methodology used does not cause inaccuracies or distortions.” Id. § 351.401(g)(2).

Sahamitr and Worldwide ar gue that the former’s recalculation of its certific ation expenses (performed at Commerce’s request) was as specific as feasible given the company’s records. See ECF 29-1, at 10–11; ECF 30-1, at 4–5; see also 19 C.F.R. § 3 51.401(g)(3) (requiring the Department to ev aluate the feasibility ofCt. No. 22-00107 Page 8
transaction-specific report ing based on the “records maintained by the party in question in the ordinary course of its business”). Th ey also contend that the company’s recalculation of its expenses was more specific than the period-of-r eview-wide recalculation Commerce adopted, and th at the agency violated 19 C.F.R. § 351.401(g)(1)–(2 ) by choosing a less-specific calculation methodol ogy. ECF 29-1, at 10–11; ECF 30-1, at 4–5. 2

Sahamitr and Worldwide misapprehend the regulation, which requires the “ party seeking to report an expense . . . on an allocated basis” to do so “on as specific a basis as is feasible.” 19 C.F.R. § 351.401(g)(2) (emphasis added). Commerce , on the other hand, “is not required to accept [exp ense] adjustments on an allocated basis.” NSK Ltd. v. United States , 510 F.3d 1375, 1382 (Fed. Cir. 2007) (citing 19 C.F.R. § 351.401(g)(1)). Instead, as the “master of antidumping law,” the Department ha s wide discretion to “select[] and develop[] proper methodologies.” Thai Pineapple Pub. Co. v. United States , 187 F.3d 1362, 1365 (Fed. Cir. 1999) (quoting Daewoo Elecs. Co. v. United States , 6 F.3d 1511, 1516 (Fed. Cir. 1993)).

Here, the Department exerci sed that discretion by selecting an allocation meth od that provided Sahamitr

2 In its reply brief, Sahamitr argues for the first time thatit was unreasonable for the Department to reject the company’s initial expense calculation for this review as insufficiently specific when the agency previously accepted an identical methodology in its or iginal investigation. ECF 58, at 5–6, 9–10. The court declines to entertain this new argument.Ct. No. 22-00107 Page 9
the opportunity to obtain a price adjustment for certification expenses, while av oiding the distortions reflected in the company’s recalculation. See Appx1324 (explaining that Sahamitr’s recomputation “continues to fail to account for months in which certification expenses are overreported ( e.g. , the revised method continues to allocate mu ltiple months of expenses to a single month)”).

That brings us to the el ephant in the courtroom that neither Sahamitr’s no r Worldwide’s opening brief directly confronts—Comme rce’s finding that the former’s recalculated reporting was distorted because it resulted in months with zeroed-out certification expenses. Appx1025. That unchallenged determination is supported by subs tantial evidence. As the record shows, there were significant fluctuations in Sahamitr’s recalculated expenses from month to month, including some months with zero expenses. See Appx5607. The Department therefore reasonably applied a methodology that allowed Sahamitr’s export price to be properly adjuste d, but which did not feature those distortions. Appx1323–1324.

The closest Sahamitr’s opening brief comes to challenging the finding that th e company’s monthly-based calculation was distortive is the plaintive assertion that it’s “unclear why [Sah amitr’s] certification expenses—reported per the De partment’s instructions— were so unreasonab ly inaccurate that an alternate allocation methodology was warranted.” ECF 29-1, at 11. Commerce, howeve r, explained precisely why it found that calculation dist ortive: The “timing differences between when [Sahamitr] produces and sellsCt. No. 22-00107 Page 10
cylinders and when it reco rds the certification expenses associated with thos e sales . . . create monthly fluctuations in [the company’ s] reported certification[] expenses ( e.g. , two months of expenses allocated to a single month and no fee ex penses allocated to other months).” Appx1025. Sahamitr fails to articulate how or why that determination is unreasonable or otherwise not supported by substantial evidence.
The company’s more thorough reply brief argues that the finding that its monthly-based calculations were distortive, Appx1025, is unreasonable because fluctuations are inherent in such computations. ECF 58, at 6–7. Similarly, it maintains that the Department unreasonably rejected “an alternative allocation that [Sahamitr] proposed in its case brief to address the purported concer ns about ‘timing differences.’ ” Id . at 8. The company further contends that “the antidumping questionnaire itself presumes differences based on timing wh en it directs respondents to ‘demonstrate that the alloca tion is calculated on as specific a basis as is feas ible (e.g., on a customer-specific basis, product-specific basis, and/or monthlyspecific basis , etc.).’ ” Id . at 8–9 (boldface Sahamitr’s) (quoting Appx6027).

The court rejects these new arguments, not only because they’re untimely, but also because they’re wrong on the merits. The regulati on expressly authorizes Commerce to disregard a respondent’s allocated expense reporting, even if it is as specific as possible, if the Department concludes th at it “cause[s] inaccuracies or distortions.” 19 C.F. R. § 351.401(g)(1). Contrary to Sahamitr’s specificity–über alles reading, specificityCt. No. 22-00107 Page 11
in allocated report ing under the regula tion is merely a means to an end, no t an end in itself.

* * *
The court denies the motions for judgment on the agency record and sustains Commerce’s final determination. A separate judgment will issue. See USCIT R. 58(a).

Dated: May 2, 2024 /s/ M. Miller Baker New York, NY M. Miller Baker, Judge