Court Opinion

ID: 819255
Source: CourtListenerOpinion
Date Created: 2013-02-05 02:36:45.53782+00
Date Added: 2024-06-11T12:42:44.967858
License: Public Domain

Slip Op. 01-140

           UNITED STATES COURT OF INTERNATIONAL TRADE

BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
________________________________________
                                        :
FABRIQUE DE FER DE CHARLEROI S.A.,      :
                                        :
               Plaintiff,               :
                                        :
               v.                       :
                                        :
THE UNITED STATES,                      :
                                        :       Court No.
               Defendant,               :       98-02-00359
                                        :
               and                      :
                                        :
BETHLEHEM STEEL CORPORATION and         :
U.S. STEEL GROUP, A UNIT OF             :
USX CORPORATION,                        :
                                        :
               Defendant-Intervenors.   :
________________________________________:

[Commerce’s Remand Results are affirmed in their entirety. Case
dismissed.]

     Barnes, Richardson & Colburn (Gunter von Conrad and Michael J.
Chessler) for plaintiff, Fabrique de Fer de Charleroi S.A.,
currently Usinor Industeel, SA.

     Robert D. McCallum, Jr., Assistant Attorney General; David M.
Cohen, Director, Commercial Litigation Branch, Civil Division,
United States Department of Justice (Velta A. Melnbrencis,
Assistant Director); of counsel: Robert L. LaFrankie, Office of the
Chief Counsel for Import Administration, United States Department
of Commerce, for the United States.

     Dewey Ballantine LLP (Michael H. Stein, Bradford L. Ward and
Rory F. Quirk) for defendant-intervenor Bethlehem Steel Corporation
and defendant-intervenor U.S. Steel Group, a Unit of USX
Corporation, currently United States Steel LLC.

                                           Dated: December 4, 2001
Court No. 98-02-00359                                                      Page 2

                                    JUDGMENT

I.    Standard of Review

      The Court will uphold Commerce’s redetermination pursuant to

the   Court’s   remand   unless     it   is   “unsupported    by    substantial

evidence on the record, or otherwise not in accordance with law.”

19 U.S.C. § 1516a(b)(1)(B)(i) (1994).               Substantial evidence is

“more than a mere scintilla.        It means such relevant evidence as a

reasonable mind might accept as adequate to support a conclusion.”

Universal Camera Corp. v. NLRB, 340 U.S. 474, 477 (1951) (quoting

Consolidated    Edison   Co.   v.    NLRB,    305   U.S.   197,    229   (1938)).

Substantial evidence “is something less than the weight of the

evidence,   and    the   possibility      of    drawing     two    inconsistent

conclusions from the evidence does not prevent an administrative

agency’s finding from being supported by substantial evidence.”

Consolo v. Federal Maritime Comm’n, 383 U.S. 607, 620 (1966).

II.   Background

      This case concerns Final Results of Redetermination Pursuant

to Court Remand on Certain Cut-to-Length Carbon Steel Plate from

Belgium (“Remand Results”), Fabrique de Fer de Charleroi S.A. v.

United States (“Fabrique”), 25 CIT ___, 155 F. Supp. 2d 801 (2001),

ensuing from Final Results of Antidumping Duty Administrative

Review of Certain Cut-to-Length Carbon Steel Plate From Belgium

(“Final Results”), 63 Fed. Reg. 2959 (Jan. 20, 1998), issued by the
Court No. 98-02-00359                                              Page 3

United    States   Department    of   Commerce,   International     Trade

Administration (“Commerce”).       The Final Results, in turn, ensue

from the antidumping duty order on cut-to-length carbon steel plate

imported to the United States from Belgium during the 1995-96

period of review (“POR”).

     During the review, Commerce: (1) determined that the United

States sale of the cut-to-length carbon steel plate by Fabrique de

Fer de Charleroi S.A. (“FAFER”) was a constructed export price

(“CEP”) sale, that is, a sale for which price had to be adjusted

under subsections (c) and (d) of 19 U.S.C. § 1677a (1994) to

account for FAFER’s various direct and indirect selling expenses,

see Fabrique, 25 CIT at ___, 155 F. Supp. 2d at 805; and (2) issued

questionnaires to FAFER, seeking data on FAFER’s indirect selling

expenses related to FAFER’s United States sale.         In its responses

to Commerce’s questionnaires, FAFER stated that there were no

indirect selling expenses incurred by FAFER in the United States

or, alternatively, that all indirect selling expenses had been

allocated based on information in FAFER’s response.           See id., 25

CIT at ___, 155 F. Supp. 2d at 804.         Missing the information on

FAFER’s   indirect   selling    expenses,   Commerce,   in   reaching   the

applicable determination, resorted to facts available, see id., 25

CIT at ___, 155 F. Supp. 2d at 805, specifically to the commission

rate FAFER normally paid FAFER’s United States affiliates.              See
Court No. 98-02-00359                                              Page 4

Final Results, 63 Fed. Reg. at 2962-63.

     The Court affirmed Commerce’s use of facts available, see

Fabrique, 25 CIT at ___, 155 F. Supp. 2d at 808, but ordered

Commerce to choose another facts available substitute for FAFER’s

indirect   selling   expenses   because   the   record   indicated   that

Commerce had determined that no commission was actually paid on the

United States sale in question.      See id., 25 CIT at ___, 155 F.

Supp. 2d at 809-10.    The Court noted that

     [it] share[d] FAFER’s bewilderment about Commerce’s
     choice to use the only piece of data admittedly unrelated
     to the transaction at issue as a proxy for FAFER’s
     indirect selling expenses. There could be no rational
     relationship between a matter and . . . data that
     expressly does not apply to that matter under the
     particular facts of the case.

Id. (internal citations omitted).

     In accordance with the Court’s remand, Commerce recalculated

CEP resorting to another facts available, namely, selling, general

and administrative expenses (“SG&A”) of FAFER’s United States

subsidiary, Charleroi USA (“Charleroi”).        See Remand Results at 3-

4.

III. Contentions of the Parties

     FAFER asserts that Charleroi’s SG&A are unrelated to indirect

selling expenses actually incurred by FAFER.         See Pl.’s Comments

Final   Results   Redetermination    Pursuant     Ct.    Remand   (“Pl.’s
Court No. 98-02-00359                                                    Page 5

Comments”)    at    2-3;     Pl.’s    Rebuttal     Comments   Final     Results

Redetermination     Pursuant    Ct.    Remand    (“Pl.’s   Rebuttal”)    at   2.

Specifically, FAFER contends that Charleroi’s SG&A: (1) bear no

rational relationship to the actual expenses incurred by FAFER; (2)

cannot be representative of the sale transaction that took place in

1996 because Charleroi’s statement covers the 1995 calendar year;

(3) is preempted by the data provided by FAFER in FAFER’s responses

to Commerce’s questionnaires. See generally, Pl.’s Comments, Pl.’s

Rebuttal.    Therefore, FAFER concludes that Commerce’s decision to

use Charleroi’s SG&A as a substitute for FAFER’s United States

indirect selling expenses is a violation of this Court’s remand

order in Fabrique, 25 CIT at ___, 155 F. Supp. 2d at 813.                 FAFER

further asserts that FAFER’s indirect selling expenses, if any,

were minimal.      See Pl.’s Rebuttal at 4.

     Commerce contends that Commerce’s use of Charleroi’s SG&A as

a facts-available proxy for FAFER’s United States indirect selling

expenses was in accordance with the Court’s remand in Fabrique, 25

CIT at ___, 155 F. Supp. 2d at 813.              See Remand Results at 3-5,

Def.’s   Rebuttal    Pl.’s    Comments    Final    Results    Redetermination

Pursuant Ct. Remand (“Def.’s Rebuttal”) at 4-8.               Bethlehem Steel

Corporation and U.S. Steel Group support Commerce’s reliance on

Charleroi’s SG&A and point out that the case was remanded to

Commerce “for one-–and only one–-purpose: ‘to examine the record to
Court No. 98-02-00359                                              Page 6

determine what data should be used as a substitute for FAFER’s

indirect selling expenses’” and not to “relitigate the merits of

[Commerce’s]    underlying   determination   regarding   FAFER’s    U.S.

indirect   selling   expenses.”     See   Def.-Intervenors’   Rebuttal

Comments Pl.’s Comments Final Results Redetermination Pursuant Ct.

Remand (“Def.-Intervenors’ Rebuttal”) at 4.

III. Analysis

     A.    Reasonableness of Facts Available

     The main argument presented by FAFER is that: (1) the facts

available chosen by Commerce “bear[] no rational relationship to

[the] expenses actually incurred,” Pl.’s Rebuttal at 2 (emphasis in

original); and (2) the only reasonable facts available that could

be used in the given case “is the amount originally calculated in

the Sales Verification Report.”     Id. at 4.

     FAFER misreads the purpose of the Court’s remand in Fabrique,

25 CIT at ___, 155 F. Supp. 2d at 813, as well as the purpose and

gist of the term “facts available.”          Facts available are, by

definition, a proxy figure used by an agency when the agency lacks

actual data necessary for the calculation.1     Indeed, if the agency

     1

     “In general[,] [i]f . . . necessary information is not
available on the record, or . . . an interested party or any other
person . . . fails to provide such information . . . in the form
and manner requested . . . or . . . provides such information but
Court No. 98-02-00359                                       Page 7

had the actual figure and failed to use it, such action would be a

violation of the agency’s statutory duty.      Conversely, if the

agency lacks the actual figure, a reading of the statute as a

requirement to use “facts available” that should be, de facto,

actual data would render the statutory purpose of 19 U.S.C. § 1677e

obsolete.   Indeed, it would be anomalous to require the agency to

use the “de facto actual data” where the agency has none; such

scheme would serve as an incentive to members of the regulated

industry to conceal the actual data and obtain a premium if they

could succeed in obstructing the agency’s operation while keeping

a cooperative disguise.    In sum, reliance on “facts available”

inherently implies the usage, wholly or partly, of surrogate data

that is not actual.     Consequently, in the case at bar, if “the

amount originally calculated in the Sales Verification Report,”

Pl.’s Rebuttal at 4, does not include all of FAFER’s possible

indirect selling expenses in the given transaction,2 Commerce must

the information cannot be verified . . . , [Commerce] shall . . .
use the facts otherwise available in reaching the applicable
determination . . . .” 19 U.S.C. § 1677e(a) (1994).
     2

     FAFER asserts “[t]he amount that should serve as a proxy for
[FAFER’s United States] indirect selling expenses is zero because
of the circumstances of the sale in question.” Pl.’s Rebuttal at
4. In support of this position, FAFER points out that during the
transaction at issue “FAFER did not follow [FAFER’s] general
practices,” and Commerce verified the fact that “the particular
sale in question [is] not . . . a normal sale, since it was a
single sale.” Pl.’s Comments at 1-2. FAFER further adds that the
transaction at issue was unique because of the fact that Charleroi
had minimal participation in the sale. Id. at 2.
Court No. 98-02-00359                                       Page 8

resort to facts available, that is, data necessarily other than the

amount designated in the Sales Verification Report.

     The issue, therefore, is what facts available would constitute

reasonable surrogate data.   Admittedly, there cannot be a bright-

line test or all-inclusive definition.   Rather, the issue shall be

     This very last claim was disputed by Commerce which noted that

     [Commerce] has determined that [Charleroi] did act as
     more than a processor of sales documents and a
     communications link between the unaffiliated U.S.
     customer and FAFER . . . . Although FAFER sets minimum
     list prices, [Charleroi] negotiates the sale with the
     customer. . . . [Charleroi] essentially negotiates all
     sales in accordance with FAFER's minimum price list and
     the sales take place in the United States, not in
     Belgium.

Preliminary Results of Antidumping Duty Administrative Review of
Cut-to-Length Carbon Steel Plate From Belgium, 62 Fed. Reg. 48,213,
48,215 (Sep. 15, 1997) (citations omitted).

     Thus, Commerce determined that Charleroi’s “participation was
actually so significant as to warrant classifying the sale as a CEP
sale.”    Remand Results at 6.      Consequently, Commerce issued
questionnaires to FAFER and, missing the information on FAFER’s
indirect selling expenses, resorted to the facts available.

     While the Court does not share Bethlehem and U.S. Steel
Group’s opinion that FAFER is attempting to relitigate the
applicability of facts available (indeed, facts available equal to
zero would yield the same net result as the decision that facts
available do not apply), the Court finds that FAFER is not
assailing the reasoning but rather the result reached by Commerce,
which is outside the Court’s standard of review.        It is the
province of an agency and not the Court to examine the record and
reach a conclusion on the issue whether the particular sale
involves indirect selling expenses. See Writing Instrument Mfrs.
Ass’n, Pencil Section v. United States, 21 CIT 1185, 1195, 984 F.
Supp. 629, 639 (1997).
Court No. 98-02-00359                                              Page 9

decided on a case-by-case basis.        The Court, however, pointed out

that reasonable surrogate data is “‘the most reasonable estimate,’

. . . that is, the estimate most rational under the circumstances

. . . .” among the entire data available on the record.        Fabrique,

25 CIT at ___ n.4, 155 F. Supp. 2d at 810 n.4 (emphasis omitted).

Moreover, “[t]he mere possibility that [a random figure chosen]

could be an amount near the amount [that would be] arrived [at] on

the basis of [reasonable surrogate data]” cannot validate that

random figure. Id. Therefore, the Court holds that: (1) surrogate

data does not have to be necessarily related to the data missing;

and (2) it is permissible to analogize the missing item to an item

from the groups that are probably present in the transaction but

not to an item from the groups that are admittedly not a part of

the transaction.     Indeed, any conclusion otherwise would be a

perfect sophism; Commerce, then, would be required to derive

surrogate data from the very data missing, wholly or partly, in

other words, to fasten Commerce’s calculations to a vacuum.

     This is exactly the point misinterpreted by FAFER.             FAFER

reads Fabrique, 25 CIT at ___, 155 F. Supp. 2d at 810, to mean that

the proxy   figure   shall   bear   a   “rational   relationship   to   any

indirect selling expenses actually incurred” by FAFER.              Pl.’s

Comments at 2 (emphasis in original). The Court, however, remanded

Fabrique, 155 F. Supp. 2d. 801, not because Commerce failed to use
Court No. 98-02-00359                                               Page 10

a surrogate figure related to the expenses actually incurred by

FAFER, but rather because Commerce chose to use a figure that

admittedly could not have been analogized with the data missing in

the transaction under review.      See id., 25 CIT at ___, 155 F. Supp.

2d 809-10.

     B.     Charleroi’s SG&A as Facts Available

     All FAFER’s United States sales or other operations are made

through Charleroi.     See Remand Results at 7, Comment 1 (quoting

FAFER’s Questionnaire Response at 3, Oct. 21, 1996).          Charleroi’s

financial statement covers the period from January 1, 1995, through

December 31, 1995, that is, the period overlapping with the POR at

issue.     In addition, Charleroi’s financial statement provides data

on Charleroi’s SG&A expenses, that is, the ratio of Charleroi’s

general expenses to the cost of manufacturing. See Magnesium Corp.

of Am. v. United States, 166 F.3d 1364, 1371 (Fed. Cir. 1999).

General expenses can encompass many items, including such common

ones as overhead and such occasional ones as financial losses or

domestic freight.     See, e.g., American Silicon Techs. v. United

States, 261 F.3d 1371 (Fed. Cir. 2001); SKF USA, Inc. v. United

States, 254 F.3d 1022 (Fed. Cir. 2001); Campbell Soup Co. v. United

States, 107 F.3d 1556 (Fed. Cir. 1997).

     The    missing   data   at   issue   is   FAFER’s   indirect   selling
Court No. 98-02-00359                                                 Page 11

expenses.     Indirect selling expenses may include salespersons’

salaries, warehousing, personnel assistance, pre-sale home-market

transportation      expenses,     expenses     incurred    by    a    foreign

manufacturer on behalf of its related United States importer, and

so on.   See generally, Torrington Co. v. United States, 68 F.3d

1347 (Fed. Cir. 1995); Torrington Co. v. United States, 44 F.3d

1572 (Fed. Cir. 1995); Asociacion Colombiana de Exportadores de

Flores v. United States, 901 F.2d 1089 (Fed. Cir. 1990).              In sum,

indirect selling expenses are the expenses that do not result from,

or   cannot   be   tied    directly   to   specific   sales,   but   that   may

reasonably    be   attributed    to   such   sales.     Therefore,    FAFER’s

indirect selling expenses could be analogized to general expenses

of Charleroi during the comparable time periods because: (1) FAFER

does all of its United States business through Charleroi (thus,

inclusive of the transaction at issue); (2) the expenses are of

comparable nature; and (3) there is no data on record verifying

that SG&A are admittedly not a part of the transaction.

      Based on the foregoing, the Court affirms the Remand Results

in their entirety.        The “[C]ourt will sustain the determination if

it is reasonable and supported by the record as a whole, including

whatever fairly detracts from the substantiality of the evidence.”

Negev Phosphates, Ltd. v. United States, 12 CIT 1074, 1077, 699 F.

Supp. 938, 942 (1988) (citations omitted, emphasis supplied).
Court No. 98-02-00359                                        Page 12

     Therefore, this Court concludes that Commerce has complied

with the Court’s remand, and it is hereby

     ORDERED that the Remand Results filed by Commerce on October

1, 2001, are affirmed in their entirety; and it is further

     ORDERED that since all other issues were previously decided,

this case is dismissed.

                                   ______________________________
                                        NICHOLAS TSOUCALAS
                                           SENIOR JUDGE

Dated:    December 4, 2001
          New York, New York