Opinion ID: 765729
Heading Depth: 3
Heading Rank: 1

Heading: TIPCO et al.

Text: 16 TIPCO et al. contend that their allocation methodologies used in the normal course of their businesses do not account for fluctuations in relevant costs or prices, and are not based on any actual company experience. They assert that their allocation formulas have no basis in fact, or are based on rough estimates, averages, and standard numbers. 17 In reviewing the allocation methodologies of TIPCO et al., Commerce noted that their normal allocation methodologies were relatively consistent, allocating a range of 82 to 91% of the pineapple fruit costs to canned pineapple fruit production, and 9 to 18% to production of juice products, and thus recognized that some measure of value existed for the portion of the pineapple fruit used for juice production. Furthermore, the description of the production process provided to Commerce by TIPCO et al. reflects a distinction in the quality and portions of pineapple fruit used to produce canned pineapple fruit and juice that is consistent with the normal allocation in their books and records. 18 Commerce also found the books and records of TIPCO et al. to be reasonably reflective of their costs because their normal allocation methodologies were used for a number of years, accepted by independent auditors and historically relied upon to present important financial information to shareholders, lenders, tax authorities, auditors, and other third parties. In considering the contention that the normal allocation methodologies were designed to achieve certain managerial and tax goals, Commerce stated that records constructed for these reasons were not necessarily unreliable or unreasonable, especially in light of their acceptance by independent auditors. Finally, Commerce noted that the Thai producers did not provide any examples of companies that use weight-based fruit cost allocations as the basis for financial or managerial reporting. Final Determination at 29562. 19 TIPCO et al. argue further that Commerce's deviation from their records with respect to sugar costs, direct labor costs, fruit receiving and common processing costs, plantation overhead costs, animal feed, and asset sales is an indication of the unreasonableness of Commerce's reliance on their normal allocation methodologies. Commerce points out, however, that the Thai producers' records did not provide at all, or provided only minimally, for allocation of the above shared costs that it allocated between canned pineapple fruit and other pineapple products. Thus, Commerce had to allocate costs that were not already allocated, or were not deemed accurately allocated, between canned pineapple fruit and other products. Moreover, with respect to fruit receiving costs, TIPCO et al. requested that Commerce reallocate costs because their allocations assigned all these costs to canned pineapple fruit. 20 In making its determination, Commerce noted that 21 [it] generally prefers to rely on costs calculated in a manner consistent with the [Thai producers'] normal accounting methodologies and historically utilized by the company. This does not suggest[] that [Commerce] will rigidly adhere to each of [the Thai producers'] normal accounting practices, particularly when such practices are deemed inappropriate or imprecise for purposes of computing costs in an antidumping proceeding. In those circumstances, [Commerce] will make certain adjustments that capture more accurately the costs incurred by [the Thai producers'] during the period of investigation or review. 22 J. A. at 594 (Department of Commerce Concurrence Memorandum of May 26, 1995, at 38). To the extent that the records of TIPCO et al. reasonably reflect the costs of production, Commerce may rely upon them. See NTN Bearing Corp., 74 F.3d at 1206. Conversely, if the records are not reasonably reflective of cost, Commerce may appropriately deviate from them. See id. Commerce found it necessary to pursue the latter course when it deviated from the books and records with respect to the shared costs cited by TIPCO et al. 23 As to the raw material costs, however, the relative consistency of the allocation methodologies, the historical reliance by TIPCO et al. on their books and records, and the acceptance of these records by independent auditors support Commerce's determination to rely on the normal allocation methodologies of TIPCO et al. Antidumping investigations are complex and complicated matters in which Commerce has particular expertise and thus, Commerce's determinations are entitled to deference. See Chevron, 467 U.S. 837, 844. We conclude, therefore, that Commerce's reliance on the books and records of TIPCO et al. was reasonable and is supported by substantial evidence. 24 TIPCO et al. also argue that our decision in IPSCO III requires allocation of pineapple fruit costs to be made on the basis of weight and that the Court of International Trade's decision is, therefore, proper. This argument is also made by Dole. We discuss this issue in Section III below.