POGUE, Judge.
In this action, producers/exporters Thai Plastic Bags Industries Co., Ltd., Apec Film Ltd., and Winner's Pack Co., Ltd. (collectively "TPBG" or Plaintiffs) challenge the cost calculation methodology used to determine their dumping margin in the final results of the U.S. Department of Commerce's ("Commerce" or "the Department") administrative review
The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) and 19 U.S.C. § 1516a(a).
Because Plaintiffs' main challenges here contradict their arguments as presented before the agency in the administrative review, and because other challenges were not presented to the agency at all, as is more fully explained below, the court denies Plaintiffs' motion.
This action involves the fourth administrative review of the original 2004 AD investigation of the subject merchandise.
TPBG requested this fourth administrative review, on September 2, 2008, see Polyethylene Retail Carrier Bags from Thailand: Request for Administrative Review, A-549-821, POR: 8/1/07-7/31/08 (Sept. 2, 2008), Admin. R. Pub. Doc. 2, and Commerce then initiated the review. Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part, 73 Fed. Reg. 56,795, 56,796 (Dep't Commerce Sept. 30, 2008). Commerce's preliminary determination followed, in August 2009. Polyethylene Retail Carrier Bags from Thailand, 74 Fed.Reg. 39,928 (Dep't Commerce Aug. 10, 2009) (preliminary results of antidumping duty administrative review) ("Preliminary Results").
In the Preliminary Results Memorandum, incorporated by reference in the Preliminary Results, Commerce matched U.S. models to foreign-market models in order to make the appropriate price of sales comparisons.
Preliminary Mem. at 3-4 (citations omitted). Accord Preliminary Results, 74 Fed.Reg. at 39,932. The adjusted costs were then used in Commerce's computation of the cost of production ["COP"] and CV of those matched foreign models.
Relevant to the litigation here, TPBG then contested Commerce's preliminary determination, arguing that Commerce should use TPBG's reported costs, without Commerce's adjustments, because "[t]he TPBG cost methodology correctly allocates additional costs to those products which require additional time to process, with products which require less time to process having fewer costs allocated to those products." Thai Plastic Bags Group ("TPBG") Case Brief, A-549-821, ARP 8/1/2007-7/31/2008 (Sept. 9, 2009), Admin. R. Conf. Doc. 1489, ("Pls.' Case Br.") at 1. TPBG stated that it "based its reported costs on actual cost and production records maintained in the ordinary course of business." Id. at 2.
Decision Mem. at 3-4 (footnote omitted).
Finally, Commerce reasoned that "although TPBG might have used its actual [period of review ("POR")] and production records that it maintains in its normal course of business as a basis for allocating its conversion costs, TPBG has acknowledged that its allocation methodology, which was developed for dumping purposes, is a departure from its normal cost-accounting system." Id. at 4-5. Thus, Commerce concluded, "[Commerce's] adjustment does not represent a departure from TPBG's normal books and records." Id. at 5.
In calculating the normal value of subject merchandise originating from a market economy country, such as Thailand, Commerce must follow the rules laid out in 19 U.S.C. § 1677b(a)(b), (d)-(f).
In its calculation of the price of the foreign like product, Commerce will discard certain of a respondent's reported sales. Relevant to this matter, if Commerce determines that sales of the foreign like product "were made at less than cost of production,"
According to statute and regulations, Commerce uses the same method to calculate "costs" for both COP and CV. Commerce
Commerce must attempt to calculate COP and CV as accurately as possible and, to this end, Commerce is authorized to make adjustments to cost allocations. Commerce's regulations instruct that "[i]n determining the appropriate method for allocating costs among products, [Commerce] may take into account production quantities, relative sales values, and other quantitative and qualitative factors associated with the manufacture and sale of the subject merchandise and foreign like product." 19 C.F.R. § 351.407(c). Accord AD Manual 71 ("We review various qualitative and quantitative factors to determine whether a representative measure of the materials, labor, overhead and other costs have been allocated to the foreign like product". We should specifically review the allocation methods (e.g., production quantities and relative sales values) to determine whether an appropriate portion of common costs have been allocated to the product.") (emphasis added). See also SAA at 834-35, reprinted in 1994 U.S.C.C.A.N. at 4172. Specifically, if Commerce "determines that costs [as submitted by a respondent ... have been shifted away from production of the subject merchandise, or the foreign like product," then "[Commerce] will adjust costs appropriately, to ensure they are not artificially reduced." SAA at 835, reprinted in 1994 U.S.C.C.A.N. at 4172.
Once Commerce computes price or CV, Commerce must then make certain "adjustments" pursuant to statute. 19 U.S.C. § 1677b(a)(6),(8). Relevant here, the "price" "shall be":
19 U.S.C. § 1677b (a)(6)(C). Commerce's regulations implementing Section 1677b (a)(6)(C), provide for this "DIFMER" adjustment.
In their brief before the court, Plaintiffs argue that:
Applying the familiar standard for reviewing Commerce's decision, the court "shall hold unlawful any determination, finding, or conclusion found ... to be unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a (b)(1)(B)(i). See also United States v. Eurodif S.A., 555 U.S. 305, 129 S.Ct. 878, 886, 172 L.Ed.2d 679 (2009).
Essentially, Plaintiffs challenge two aspects of Commerce's final determination. First, TPBG contends that Commerce improperly applied the "physical differences" test, associated with the DIFMER adjustment, to the sales-below-cost test and the constructed value calculation.
The court will address each of Plaintiffs' challenges in turn.
Plaintiffs' argument on this issue is barred by judicial estoppel. "[W]here a party assumes a certain position in a legal proceeding, and succeeds in maintaining that position, he may not thereafter, simply because his interests have changed, assume a contrary position, especially if it be to the prejudice of the party who has acquiesced in the position formerly taken by him." New Hampshire v. Maine, 532 U.S. 742, 749, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001) (quoting Davis v. Wakelee, 156 U.S. 680, 689, 15 S.Ct. 555, 39 L.Ed. 578 (1895)). See also Trs. in Bankr. of N. Am. Rubber Thread Co. v. United States, 593 F.3d 1346, 1353-54 (Fed.Cir.2010); Scarano v. Cent. R. Co., 203 F.2d 510, 513 (3d Cir.1953).
The Federal Circuit has made it clear that "[j]udicial estoppel applies just as much when one of the tribunals is an administrative agency as it does when both tribunals are courts." Trs. in Bankr. of N. Am. Rubber Thread Co., 593 F.3d at 1353-54 (citing Lampi Corp. v. Am. Power
Three non-exclusive factors frame the application of judicial estoppel. New Hampshire, 532 U.S. at 750-51, 121 S.Ct. 1808. First, "a party's later position must be clearly inconsistent with its earlier position." Id. at 750, 121 S.Ct. 1808 (citations and quotation marks omitted). Second, the court considers whether a party has "succeeded in persuading a court to accept that party's earlier position, so that judicial acceptance of an inconsistent position in a later proceeding would create the perception that either the first or the second court was misled[.]" Id. (citations and quotation marks omitted). Third, the court considers "whether the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped." Id. at 750-51, 121 S.Ct. 1808 (citations omitted). See also Scarano v. Cent. R. Co., 203 F.2d 510, 513 (3d Cir.1953) ("A plaintiff who has obtained relief from an adversary by asserting and offering proof to support one position may not be heard later in the same court to contradict himself in an effort to establish against the same adversary a second claim inconsistent with his earlier contention. Such use of inconsistent positions would most flagrantly exemplify that playing `fast and loose with the courts' which has been emphasized as an evil the courts should not tolerate.").
Application of the Supreme Court's three factors weighs in favor of applying judicial estoppel in this case. First, TPBG's position before this court is "directly" and "clearly" contrary to its position before Commerce during the administrative review. Below, Plaintiffs argued that the same concerns—the need for cost differences to be based upon physical differences—underlie the DIFMER, the sales below cost, and the CV calculations. Pls.'s Rebuttal Br. at 1-4, 6. This argument was made directly in response to the petitioners' request that Commerce use TPBG's reported costs for COP and CV, while using adjusted costs for DIFMER. Decision Mem. at 3. Currently, before the court, Plaintiffs argue that Commerce improperly "applied the wrong legal standard in making [its] decision [that TPBG's costs were `distorted' for purposes of the sales below cost test and CV] (i.e., Commerce applied the DIFMER `physical differences' test)." (Mem. in Supp. Of Pls.' Mot. for J. on the Agency R. ("Pls.' Mem.") at 2.) But before the agency, Plaintiffs claimed that if the agency revised costs for DIFMER purposes, it must do so for all purposes, including COP and CV. Basically, before the court, TPBG argues that Commerce cannot take physical differences into account when determining whether to accept reported costs for the purposes of COP and CV, and may only address those physical differences in the DIFMER adjustment; at the same time, TPBG argued before Commerce that when calculating COP, CV, and DIFMER, Commerce should use the same costs adjusted to reflect cost differences attributable to physical differences in the merchandise.
Second, Plaintiffs succeeded in its argument before Commerce. See Decision Mem. at 3-4 ("We disagree with petitioners' argument, however, that we should use TPBG's reported costs for the purposes of the sales-below-cost test and the calculation of constructed value.... Therefore, for the final results, to limit the distortive effect of cost differences that are unrelated to differences in physical characteristics, we have continued to ... use the adjusted cost for the sales-below-cost test, the [DIFMER] adjustment, and constructed-value calculations."). Id. at 3-4.
Third, TPBG would "derive an unfair advantage or impose an unfair detriment" on the government if allowed to switch their position on this issue here. For these reasons, Plaintiffs claim on this issue is barred.
TPBG argued below that Commerce should use TPBG's reported costs because (1) TPBG has been using the same cost system from Thailand since 2004 and even the European Commission has verified the costs, and (2) "TPBG based its reported costs on actual cost and production records maintained in the ordinary course of business," i.e., TPBG's reported cost methodology "correctly allocates additional costs to those products which require additional time to process, with products which require less time to process having fewer costs allocated to those products." Pls.' Case Br. at 1-2.
The remaining arguments in Plaintiffs' brief before the court include: (1) "substantial evidence does not support Commerce's factual finding that physically similar products have significant cost differences," Pls.' Br. at 12-16, and (3) "Commerce wrongly concluded that Plaintiffs' cost differences are not attributable to the physical differences of the merchandise." id. at 20-23. The government argues, and the court agrees, that, because Plaintiffs did not make these arguments in their case briefs before Commerce, the arguments are not appropriately reviewed here because of the preference for administrative exhaustion.
The relevant statute reflects this preference. In civil actions challenging AD determinations, "the Court of International Trade shall, where appropriate, require the exhaustion of administrative remedies." 28 U.S.C. § 2637(d). "Simple fairness to those who are engaged in the tasks of administration, and to litigants, requires as a general rule that courts should not topple over administrative decisions unless the administrative body not only has erred but has erred against objection made at the time appropriate under its practice." United States v. L.A. Tucker Truck Lines, 344 U.S. 33, 37, 73 S.Ct. 67, 97 L.Ed. 54 (1952).
Exhaustion is "generally appropriate in the antidumping context because it allows the agency to apply its expertise, rectify administrative mistakes, and compile a record adequate for judicial review-advancing the twin purposes of protecting administrative agency authority and promoting judicial efficiency." Carpenter Tech. Corp. v. United States, 30 CIT 1595, 1597, 464 F.Supp.2d 1347, 1349 (2006).
Generally, parties are "procedurally required to raise the[ir] issue before Commerce at the time Commerce [is] addressing the issue." Dorbest Ltd. v. United States, 604 F.3d 1363, 1375 (Fed. Cir.2010) (citing Mittal Steel Point Lisas Ltd. v. United States, 548 F.3d 1375, 1383 (Fed.Cir.2008)). If Respondents "believed that the ... issue was relevant to the Final Results" following the adverse decision by Commerce in the Preliminary Results, they "needed to include that issue in [their] case brief, as required by the regulation." Dorbest Ltd. v. United States, ___ CIT ___, ___, 547 F.Supp.2d 1321, 1344 (2008) (quoting Carpenter Tech. Corp., 30
For the foregoing reasons, the court ORDERS that Plaintiffs' motion for judgment upon the agency record is denied.
Accordingly, judgment will be entered for the Defendant. See USCIT Rule 56.2(b).
Polyethylene Retail Carrier Bags from Thailand—Thai Plastic Bags Industries Group (TPBG), Preliminary Results Analysis Memorandum, A-549-821, AR 8/1/07-7/31/08 (Aug. 10, 2009), Admin. R. Conf. Doc. 29 ("Preliminary Mem.") at 2.
There were [[]] and, therefore, [[]]. (Def.-Intervenors' Opp'n to Pls.' Mot. for J. Upon the Agency R. ("Def.-Interventors' Mem.") 5 n. 4.)
Id. at 2-4, 6 (citations and footnote omitted). The reader will note that this position is directly contrary to TPBG's current position before the court. See infra.
Id. § 1677b(b)(3) (emphasis added).
Id. § 1677b(e) (emphasis added).
Id. § 1677b(f)(1)(A). Accord AD Manual 70. See also Statement of Administrative Action, H.R.Rep. No. 103-316, at 834-35 (1994) ("SAA"), reprinted in 1994 U.S.C.C.A.N. 4171-72,("The exporter or producer will be expected to demonstrate that it has historically utilized [its reported] allocations .... In determining whether to accept the cost allocation methods proposed by a specific producer,. . . Commerce will [] consider whether the producer historically used its submitted cost allocation methods to compute the cost of the subject merchandise prior to the investigation or review and in the normal course of its business operation.").
The SAA "represents an authoritative expression by the Administration concerning its views regarding the interpretation and application of the Uruguay Round agreements, both for purposes of U.S. international obligations and domestic law.... [S]ince this Statement will be approved by the Congress at the time it implements the Uruguay Round agreements, the interpretations of those agreements included in this Statement carry particular authority.... [T]he Statement describes the administrative action proposed to implement the particular agreement, explaining how the proposed action changes existing administrative practice and stating why the changes are required or appropriate to implement the agreement." SAA at 656, reprinted in 1994 U.S.C.C.A.N. at 4040.
19 C.F.R. § 351.411(b); see also AD Manual at 5 ("The statutory preference is to compare the subject merchandise sold in the United States to identical articles some in the [foreign] market. When this is not possible, [Commerce] will compare merchandise which is physically similar to the articles sold in the United States and adjust for any physical differences in the merchandise ([DIFMER]) being compared that affect the price of the merchandise....").
If the DIFMER adjustment for the foreign like product exceeds 20 percent of the total COP of the subject merchandise, Commerce will not use that foreign like product. AD Manual at 7. When Commerce "determine[s] that the [DIFMER] adjustment is too great, [Commerce] select[s] a different product as most similar or, if there is no similar match, use[s][CV] for the [normal value]." Id.
