Opinion ID: 208510
Heading Depth: 2
Heading Rank: 2

Heading: Commerce Had Good Reason for Its Change of Policy

Text: We also agree with Commerce that it had good reason for changing its methodology. When it changes a past practice, an agency must also show that there are good reasons for its new policy. See Fox Television, 129 S.Ct. at 1811; Nippon Steel Corp. v. U.S. Int'l Trade Comm'n, 494 F.3d 1371, 1378 n. 5 (Fed. Cir.2007) ([T]he Supreme Court requires us to give deference to agency decisions that embody policy changes. When an agency decides to change course, however, it must adequately explain the reason for a reversal of policy. (internal citations omitted)). Sometimes an agency must provide a more detailed justification than what would suffice for a new policy created on a blank slate, such as when its new policy rests upon factual findings that contradict those which underlay its prior policy; or when its prior policy has engendered serious reliance interests that must be taken into account. Fox Television, 129 S.Ct. at 1811. Here, Commerce stated that it changed its methodology to improve accuracy. Improving accuracy is generally a good reason for a change in methodology. See SKF USA, Inc. v. United States, 537 F.3d 1373, 1380 (Fed.Cir.2008) (affirming a new methodology that was changed to improve accuracy and stating that, [w]ith respect to Commerce's decision to revise [its] methodology after 14 annual reviews utilizing [a different] methodology, we have specifically affirmed changes to ... methodologies by Commerce where reasonable); Fujian Mach. & Equip. Imp. & Exp. Corp. v. United States, 178 F.Supp.2d 1305, 1327 (Ct. Int'l Trade 2001) (Commerce is free to discard one methodology in favor of another, the better to calculate more accurate dumping margins.). Although Commerce need not show that its reasons for the new policy are better than the reasons for the old one, Fox Television, 129 S.Ct. at 1811, here, Commerce stated its reasons for the new policy as improving accuracy. Thus, we address whether substantial evidence supported Commerce's belief that including a constructed market price in the major input rule would improve the accuracy of the value. We agree with the government that Commerce's belief was reasonable. For the same reasons that we discussed above with respect to 19 U.S.C. § 1677e(b) and (c), Commerce reasonably believed that its constructed market price would improve the accuracy of the value. As market price is reasonably defined in the circumstances of this case as the sum of the cost of production and a profit margin, Commerce reasonably believed that it could accurately estimate market price, given that Huvis provided both cost of production and profit margin. Commerce also reasonably believed the supplier's average profit margin adequately represented the profit margin for each specific product, as Huvis offered no evidence to the contrary. Commerce further reasonably believed that including a market price measure in the comparison would improve the accuracy of the value, given the statute's requirement of a comparison of all three measures. Finally, Huvis's argument concerning the relative market prices of qualified-grade and middle-grade acids is unavailing for the reasons discussed above, viz., that the market prices of the two acids do not necessarily reflect their relative purities. We also agree with the government that Huvis did not detrimentally rely on Commerce's old methodology used in multiple preceding reviews. See Fox Television, 129 S.Ct. at 1811; Fujian, 178 F.Supp.2d at 1327 (Commerce may not make minor but disruptive changes in methodology where a respondent demonstrates its specific reliance on the old methodology used in multiple preceding reviews.); Shikoku Chems. Corp. v. United States, 795 F.Supp. 417 (Ct. Int'l Trade 1992) (overturning Commerce's use of a slightly improved methodology when the respondent demonstrated that it had set its prices in reliance on the old methodology). As the Court of International Trade found, Huvis did not and could not show that it had detrimentally relied on any consistent prior practice. Huvis did not report market price data to Commerce because Huvis was powerless to force its affiliated supplier to provide such data, or at least Huvis represented as much to Commerce. Therefore, the absence of market price data from the record was not the result of Huvis's reliance on Commerce's prior practice; rather, it was due to its affiliated supplier's intransigence. Huvis II, 2008 WL 2977890, at , 2008 Ct. Intl. Trade Lexis 82, at . We therefore agree with the government that Commerce's change in methodology was reasonable and adequately explained and that no further explanation was required, such that Commerce was free to change its methodology. Commerce has therefore shown that its new methodology of constructing a market price was permissible under the statute and that it had good reasons for the new methodology. We have considered Huvis's remaining arguments and find them unpersuasive.