Opinion ID: 210161
Heading Depth: 2
Heading Rank: 4

Heading: Commerce's Inclusion of NTN's Small-Volume, High-Profit Sales

Text: NTN challenges Commerce's decision to include certain small-volume, high-profit home market sales in its value calculations. According to NTN, this ignores the statutory requirement that antidumping calculations only include sales made in the usual commercial quantities and in the ordinary course of trade. At issue are certain home market sales, such as sales for maintenance and repair and sales to research and development facilities for testing or evaluation, that NTN claims were aberrational in that they involved smaller quantities and yielded higher profits than the majority of its other home market sales. Accordingly, NTN requested that Commerce exclude them from its value calculations. Commerce, however, denied NTN's request, explaining that high profits by themselves are not sufficient for [Commerce] to determine that the sales are outside the ordinary course of trade and that extraordinary characteristics must be present which would make them unrepresentative of the home market. NSK I, 416 F.Supp.2d at 1343. NTN appealed to the Court of International Trade, which initially concluded that Commerce failed to provide adequate reasoning for its denial of NTN's claim that certain sales were outside the ordinary course of trade in light of the substantial evidence and precedent supporting NTN's position. Id. at 1344. However, after remanding the issue to Commerce for it to further explain why NTN's evidence was insufficient, the Court of International Trade affirmed Commerce's remand determination to deny NTN's request to exclude its small-volume, high-profit sales from Commerce's value calculations. NSK II, 462 F.Supp.2d at 1260. According to the Court of International Trade, Commerce had properly examined whether NTN's sales were outside the ordinary course of trade by analyzing the frequency of high profit sales, the quantity of high profit sales relative to other sales, whether certain types of sales were in the ordinary course of trade, and whether the high profit sales were sold in abnormally low quantities. Id. As a result, the Court of International Trade found that the only factor distinguishing NTN's high profit sales from its other sales was the high profit itself. Id. According to the Court of International Trade, that NTN was able to charge higher prices on these sales did not make the sales extraordinary. Id. We agree. Generally, the party requesting a price adjustment bears the evidentiary burden of proving whether sales used in Commerce's calculations are outside the ordinary course of trade. See Torrington Co. v. United States, 127 F.3d 1077, 1081 (Fed.Cir.1997). Absent adequate evidence to the contrary, Commerce may treat the sales as within the ordinary course of trade. Id. In the present case, NTN contends that the sales at issue were aberrational in that they involved much smaller quantities and much higher profit margins than the majority of NTN's home market sales. That the sales in question may have been miniscule compared to the majority of NTN's home market sales, however, does not mean that the sales were outside the ordinary course of trade or made in unusual quantities. In fact, before the Court of International Trade, NTN described these small-volume, high-profit sales as being made in the general course of business . . . [and] on a fairly regular basis. NSK I, 416 F.Supp.2d at 1342-43. Nor does the fact that NTN was able to reap such high profits on these sales take them outside of the ordinary course of trade. Small-volume sales often yield higher profit margins than large-volume sales, as small-volume customers are typically unable to command volume discounts. NTN, by its own admission, routinely made these small-volume, high-profit sales in the general course of business. The sales may have represented a small fraction of NTN's business, but they were a regular part of its business nonetheless. Accordingly, Commerce's inclusion of NTN's small-volume, high-profit sales in its value calculations is affirmed.