CAFC Upholds Commerce Methodology in Atar Case on Pasta Dumping
The Court of Appeals for the Federal Circuit upheld the original calculations by the Department of Commerce of the profit cap applicable under 19 U.S.C. § 1677b(e)(2)(B)(iii) to merchandise sold by Italian exporter Atar S.r.l. ("Atar") in the ninth administrative review of an antidumping duty order directed to certain Italian pasta products, it said in a Sept. 11 decision. The Court of International Trade had rejected those calculations, causing Commerce to revise its determination, eventually including above--and below--cost sales made by profitable and unprofitable respondents in the prior administrative review to satisfy the trade court's remand orders. The CAFC concluded that Commerce's original profit cap calculation was reasonable.
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In 1996, Commerce decided certain pasta products from Italy were being sold in U.S. at less than fair value. Some years later, Commerce conducted its ninth administrative review of that antidumping duty order, covering the period of July 1, 2004, through June 30, 2005, setting an antidumping duty margin of 18.18% for Atar. Commerce decided it could not assess normal value by reference to Atar's proffered home-market or third-country sales data, so it approximated the normal value of Atar's subject goods using a constructed value approach.
In 2007, Atar sued in the trade court to challenge that decision. The trade court upheld Commerce's decision to use a constructed value approach but said the agency had not employed a "reasonable method" for calculating the constructed value and rejected Commerce's decision to exclude data representing sales made outside the ordinary course of trade.
Commerce recalculated Atar's constructed value using above- and below-cost sales data obtained from respondents in the eighth administrative review and devised an amended antidumping duty margin of 14.45%. The trade court remanded again, concluding that Commerce's revised method for determining Atar's constructed value profit was deficient for failing to separately and independently calculate the statutory profit cap.
Commerce issued its second remand redetermination in 2010, continuing using data from the two profitable respondents in the prior administrative review to establish a profit cap, contending that "the weighted average profit rate of the two [profitable] respondents ... establishe[d] a reasonable profit cap" and concluded that its preexisting margin of 14.45% complied with statutory requirements.
Once again, the trade court remanded, saying Commerce had misinterpreted the statute and misapplied the available facts. In addition, the court concluded that Commerce's limited focus on the two profitable respondents "ignored home market sales data [by the unprofitable producers] that were material and probative of the general conditions in the home market of Italy. Commerce issued its third remand redetermination Dec. 6, 2011. Under protest, Commerce adopted a lower profit cap to comply with the trade court's remand instructions, and set a new antidumping duty margin applicable to Atar of 11.76%. The trade court affirmed Commerce's third remand redetermination.
In its review of the trade court's decision, the CAFC said it "must defer to Commerce's reasonable construction of its governing statute where Congress 'leaves a gap in the construction of the statute that the administrative agency is explicitly authorized to fill.'" It said the government argued that Commerce followed its normal approach to constructed value profit determinations by excluding below-cost sales from its profit cap calculation.
CAFC said "Commerce is entitled to substantial deference in its choice of accounting methodology, and, as a reviewing court, we may not substitute one reasonable approach for another according to our own preferences." As a result, "we conclude that Commerce acted reasonably in excluding below-cost sales data from the prior administrative review."