United States Court of Appeals
for the Federal Circuit
__________________________
PAPIERFABRIK AUGUST KOEHLER AG
AND KOEHLER AMERICA, INC.,
Plaintiffs-Appellants,
AND
MITSUBISHI INTERNATIONAL CORPORATION,
MITSUBISHI HITEC PAPER FLENSBURG GMBH,
AND MITSUBISHI HITEC PAPER BIELEFELD
GMBH,
Plaintiffs,
v.
UNITED STATES,
Defendant,
AND
INTERNATIONAL TRADE COMMISSION,
Defendant-Appellee,
AND
APPLETON PAPERS INC.,
Defendant-Appellee.
__________________________
2010-1147
__________________________
Appeal from the United States Court of International
Trade in case no. 08-CV-0430, Judge Donald C. Pogue.
PAPIERFABRIK AUGUST v. US 2
ON PETITION FOR PANEL REHEARING AND
REHEARING EN BANC
__________________________
MARK A. BERNSTEIN, Attorney, Office of the General
Counsel, United States International Trade Commission,
of Washington, DC, filed a combined petition for panel
rehearing and rehearing en banc for defendant-appellee
International Trade Commission. With him on the peti-
tion were JAMES M. LYONS, General Counsel, and NEAL J.
REYNOLDS, Assistant General Counsel for Litigation.
RICHARD P. FERRIN, Drinker Biddle & Reath LLP, of
Washington, DC. filed a response to the petition for
plaintiffs-appellants. With him on the response was
WILLIAM SILVERMAN.
JOSEPH W. DORN, King & Spalding LLP, of Washing-
ton, DC, filed a response to the petition for defendant-
appellee Appleton Papers Inc. With him on the response
were ASHLEY C. PARRISH and STEVEN R. KEENER.
__________________________
Before RADER, Chief Judge, NEWMAN, LOURIE, BRYSON,
GAJARSA, LINN, DYK, PROST, MOORE, O’MALLEY, and
REYNA, Circuit Judges.
PER CURIAM.
REYNA, Circuit Judge, with whom NEWMAN and
O’MALLEY, Circuit Judges, join, dissents from the denial of
the petition for rehearing en banc.
ORDER
A combined petition for panel rehearing and rehear-
ing en banc was filed by Defendant-Appellee, Interna-
tional Trade Commission, and a response thereto was
3 PAPIERFABRIK AUGUST v. US
invited by the court and filed by Plaintiffs-Appellants and
Defendant-Appellee, Appleton Papers, Inc.
The petition for panel rehearing was considered by
the panel that heard the appeal, and thereafter the peti-
tion for rehearing en banc and responses were referred to
the circuit judges who are authorized to request a poll of
whether to rehear the appeal en banc. A poll was re-
quested, taken, and failed.
Upon consideration thereof,
IT IS ORDERED THAT:
(1) The petition of Defendant-Appellee for panel re-
hearing is denied.
(2) The petition of Defendant-Appellee for rehearing
en banc is denied.
(3) The mandate of the court will issue on May 26,
2011.
FOR THE COURT
May 19, 2011 /s/ Jan Horbaly
Date Jan Horbaly
Clerk
United States Court of Appeals
for the Federal Circuit
__________________________
PAPIERFABRIK AUGUST KOEHLER AG
AND KOEHLER AMERICA, INC.,
Plaintiffs-Appellants,
AND
MITSUBISHI INTERNATIONAL CORPORATION,
MITSUBISHI HITEC PAPER FLENSBURG GMBH,
AND MITSUBISHI HITEC PAPER BIELEFELD
GMBH,
Plaintiffs,
v.
UNITED STATES,
Defendant,
AND
INTERNATIONAL TRADE COMMISSION,
Defendant-Appellee,
AND
APPLETON PAPERS, INC.
Defendant-Appellee,
__________________________
2010-1147
__________________________
Appeal from the United States Court of International
Trade in Case No. 08-CV-0430, Judge Donald C. Pogue.
PAPIERFABRIK AUGUST v. US 2
REYNA, Circuit Judge, with whom NEWMAN and
O’MALLEY, Circuit Judges, join, dissenting from denial of
the petition for rehearing en banc.
__________________________
I respectfully dissent from the court’s denial of Appel-
lee’s Petition for Rehearing En Banc. The panel’s opinion
is a remarkable departure from binding precedent and
applicable law. It reflects confusion about the statutory
roles of the Department of Commerce (“Commerce”) and
the U.S. International Trade Commission (“Commission”)
in antidumping duty investigations, and it directs the
Commission to take action that is contrary to its estab-
lished, long-standing agency practice.
I. Review of Case
Light weight thermal paper (“LWTP”) is a thin paper
with a thermal active coating, a mixture of dye and devel-
oper, that changes color upon contact with heat. LWTP
products are classified by weight, measured in grams per
square meter, and roll type, produced in either jumbo or
slit rolls.
In the underlying antidumping duty investigation,
Commerce established a single class or kind of merchan-
dise that included 48 gram LWTP. Although the parties
were afforded an opportunity to contest Commerce’s class
or kind determination, Koehler did not do so. See Light-
weight Thermal Paper from Germany: Notice of Final
Determination of Sales at Less Than Fair Value, 73 Fed.
Reg. 57,327-28 (Oct. 2, 2008). Hence, when Commerce
published its final antidumping duty margins, it set out a
single dumping rate applicable to all products that consti-
tuted the single class or kind merchandise, including the
48 gram LWTP. Id. at 57,328.
3 PAPIERFABRIK AUGUST v. US
Prior to the Commission making its final injury de-
termination, Koehler requested that the Commission
review certain computer printouts of intermediate anti-
dumping duty calculations for the 48 gram LWTP prod-
uct. Koehler requested that the Commission use the
intermediate dumping margins, or a variation thereof, in
place of the pricing data the Commission had developed
for the 48 gram LWTP product. The Commission denied
the request.
Koehler appealed the Commission’s denial to the
Court of International Trade. The Court of International
Trade affirmed the Commission. Papierfabrik August
Koehler AG v. United States, 675 F. Supp. 2d 1172, 1191-
92 (Ct. Int’l Trade 2009). Koehler appealed to this court,
and upon briefs and oral argument, a panel of this court
vacated and remanded the decision of the Court of Inter-
national Trade. Papierfabrik August Koehler AG v.
United States, No. 2010-1147, 2011 WL 96814, at *4 (Fed.
Cir. Jan. 11, 2011) (“Panel Op.”).
The Commission petitioned for rehearing, which was
denied by the panel. The Commission also petitioned for
en banc rehearing of the panel’s opinion, which also was
denied by the court. I dissent from the denial of en banc
review.
II. Standard of Review
The panel addressed a single issue: whether the
Commission erred when it refused Koehler’s request that
it take into account sales prices for sales of 48 gram
LWTP in the form of Commerce’s intermediate dumping
margin calculations. Panel Op. at *1.
This court reviews de novo the decisions of the Court
of International Trade. U.S. Steel Corp. v. United States,
621 F.3d 1351, 1357 (Fed. Cir. 2010). Like the Court of
PAPIERFABRIK AUGUST v. US 4
International Trade, we review the Commission’s findings
of fact for substantial evidence and its conclusions of law
de novo. Atl. Sugar, Ltd. v. United States, 744 F.2d 1556,
1559 n. 10 (Fed. Cir. 1984); see also 19 U.S.C. §
1516a(b)(1)(B) (1994). Substantial evidence is “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 Consol.
Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).
The question in this case is not whether we agree with
the Commission’s decision, nor whether we would have
reached the same result as the Commission had the
matter come before us for decision in the first instance.
Congress charged the Commission with the task of mak-
ing these complex determinations. This court reviews
those decisions for reasonableness. U.S. Steel Grp. v.
United States, 96 F.3d 1352, 1356-57 (Fed. Cir. 1996).
Considerable weight should be accorded to the Commis-
sion’s construction of a statutory scheme it is entrusted to
administer. Chevron, U.S.A., Inc. v. Natural Res. Def.
Council, Inc., 467 U.S. 837, 844 (1984). The principle of
administrative deference has been consistently followed
whenever a decision as to the meaning or reach of a
statute involves reconciling conflicting policies or depends
upon more than ordinary knowledge respecting the mat-
ters subjected to agency regulations. See Thai I-Met
Frozen Foods Co. v. United States, 616 F.3d 1300, 1305
(Fed. Cir. 2010) (citing Chevron, 467 U.S. at 844).
III. The Panel’s Confused Approach
The panel’s opinion reflects confusion about the dis-
tinct roles of Commerce and the Commission in antidump-
ing duty investigations. The respective roles of both
5 PAPIERFABRIK AUGUST v. US
agencies are clearly set out in the antidumping statute. 1
In pertinent part, this statute provides that an antidump-
ing duty order shall be imposed with respect to imports of
a class or kind of merchandise and that the Commission is
required to make its final injury determination on the
basis of imports or sales “of the merchandise with respect
to which the administrating authority has made an
affirmative determination” of sales at less-than-fair-value.
19 U.S.C. § 1673(b)(1) (1994). Put simply, Commerce
investigates dumping, the Commission investigates
injury, but the Commission’s final determination must be
based on the class or kind of merchandize reported by
Commerce as sold at less than fair value. See id. § 1673.
1 19 U.S.C. 1673 (1994) provides that:
If—
(1) the administering authority determines that a
class or kind of foreign merchandise is being, or is likely
to be, sold in the United States at less than its fair value,
and
(2) the Commission determines that—
(A) an industry in the United States—
(i) is materially injured, or
(ii) is threatened with material injury, or
(B) the establishment of an industry in the United
States is materially retarded,
by reason of imports of that merchandise or by reason
of sales (or the likelihood of sales) of that merchandise for
importation,
then there shall be imposed upon such merchandise
an antidumping duty, in addition to any other duty im-
posed, in an amount equal to the amount by which the
normal value exceeds the export price (or the constructed
export price) for the merchandise. For purposes of this
section and section 1673d (b)(1) of this title, a reference to
the sale of foreign merchandise includes the entering into
of any leasing arrangement regarding the merchandise
that is equivalent to the sale of the merchandise.
PAPIERFABRIK AUGUST v. US 6
The panel improperly mixes the distinct statutory roles of
Commerce and the Commission by requiring that the
Commission ignore Commerce’s class or kind determina-
tion. The statute does not provide that the Commission
may disassemble Commerce’s class or kind determination
to select which products it will use in rendering its final
determination. Yet, that precisely is what the panel has
ordered the Commission to do.
IV. Departure from Precedent
The panel primarily relies on a single authority to
support its holding that the Commission “must” use the
dumping margins calculated by Commerce, Algoma Steel
Corp. v. United States, 865 F.2d 240, 241 (Fed. Cir. 1989).
See Panel Op. at *3-4.
The panel misapplies Algoma to this case. In Algoma,
counsel for Algoma procured computer printouts that
were purported to show that a high percentage of a prod-
uct under investigation was sold at more-than-fair-value.
Algoma, 865 F.2d at 241. The Commission refused Al-
goma’s request to consider these printouts in its injury
determination. Id. at 242. This court affirmed the Com-
mission’s refusal. The court noted that there may be
special circumstances when the Commission may decide
to use such data, but no such circumstances were present
in the case. Id. at 243.
The panel apparently accepted Koehler’s proposition
that this case is unique and presents special circum-
stances that were lacking in Algoma. See Panel Op. at *3-
4. This belief, however, is not supported by the record or
applicable law. While the record indicates that the Com-
mission did not review the computer sheets in the context
of its final injury determination, the panel failed to review
whether the Commission’s decision not to use the print-
outs was reasonable. Contrary to the applicable standard
7 PAPIERFABRIK AUGUST v. US
of review, the panel steps into the Commission’s shoes
and asserts its own wisdom as to what it would have done
in this case. See Panel Op. at *4; Chevron, 467 U.S. at
844. On that basis alone, the opinion should be vacated.
The panel further mischaracterizes the roles of Com-
merce and the Commission in antidumping duty investi-
gations. The panel states that the Commission and
Commerce “jointly commenced an investigation to deter-
mine whether the domestic LWTP industry was materi-
ally injured or threatened with material injury.” Panel
Op. at *1. This is incorrect. Under the statute, Com-
merce is not involved in the injury determination. 19
U.S.C. § 1677(35)(C)(ii) (1996). The panel notes that the
Commission “is statutorily required to make the final
dumping determination.” Panel Op. at *1. This is incor-
rect. The Commission is statutorily charged only to
conduct an injury determination. Citing § 1677(35)(C)(ii),
the panel states that “[w]hen making a final determina-
tion Commerce uses ‘the dumping margin or margins
most recently published by [Commerce] prior to the
closing of the Commission’s administrative record.’”
Panel Op. at *1 (emphasis added). This is incorrect. The
statute cited by the panel provides that the Commission,
not Commerce, uses Commerce’s published dumping
margins to make an injury determination. The panel
notes that the Commission’s like product determination
demonstrates the Commission’s “ability to manipulate
and subjectively evaluate parts of Commerce’s dumping
margin determination, including evaluating the underly-
ing prices products are sold at, without changing the
dumping margin calculation used.” Panel Op. at *3. This
is incorrect. The Commission’s like product determina-
tion bears no such relation to Commerce’s dumping mar-
gins and the statute does not provide a door through
which the Commission may manipulate or subjectively
PAPIERFABRIK AUGUST v. US 8
evaluate Commerce’s dumping margins for purposes of
making its injury determination. See 19 U.S.C. §
1673a(c)(4) (1996). The panel’s decision should be vacated
to correct the misstatements of law.
V. Absurd Results
The panel vacated the decision of the Court of Inter-
national Trade and remanded to that court with instruc-
tions that it remand to the Commission for
reconsideration. Panel Op. at *4. The panel, however,
did not provide instructions on what the Commission is
supposed to do on remand. The panel’s opinion hints at
several scenarios. Given its reliance on Algoma, the panel
seems to order the Commission to exclude consideration of
48 gram LWTP from its injury analysis if it finds that
sales of 48 gram LWTP were made at more-than-fair-
value, an action that would terminate the investigation
and cause the withdrawal of the antidumping duty order.
See Panel Op. at *4. The panel also references the Com-
mission’s ability to “manipulate” the dumping margins to
arrive at pricing data different from the pricing data it
received in questionnaire responses submitted during the
investigation. See Panel Op. at *3-4.
Read broadly, the panel’s opinion will have a profound
and troubling effect on how antidumping duty investiga-
tions are conducted. The Commission argued before the
panel that any requirement that it must consider inter-
mediate dumping margins in making its final injury
determination would represent a departure of over 20
years of agency practice. Br. for Defendant-Appellee at
42-43. This court has held that long-standing agency
practice should be respected. Koyo Seiko Co. v. United
States, 36 F.3d 1565, 1570 (Fed. Cir. 1994); see also En-
tergy Corp. v. Riverkeeper, 129 S. Ct. 1498, 1505 (2009)
(agency interpretation governs even if it is not the one
9 PAPIERFABRIK AUGUST v. US
courts deem “most reasonable”). The Commission’s long-
standing practice should not be disturbed by the mere
wave of a judicial hand.
The opinion opens the doors for mischief in trade
cases and will likely result in outcomes prohibited by
statute. Commerce’s class or kind determinations are
often fiercely litigated by the parties in antidumping
cases, particularly as the make-up of class or kind can
have a direct effect on the magnitude and reach of dump-
ing orders as well as the exclusion or inclusion of products
and companies in an investigation. In this case, there is
no evidence on record that Koehler contested Commerce’s
inclusion of 48 gram LWTP in the class or kind of mer-
chandise subject to the investigation. See 73 Fed. Reg.
192 at 57,327-28. I find this factor compelling. Litigants
often seek to include a product that is heavy in more-
than-fair-value sales in Commerce’s determination of
class or kind merchandise because this may result in
lower overall weighted average dumping margins. Here,
Koehler was satisfied with Commerce’s class or kind
determination, but once privy to the preliminary results,
Koehler proffered printouts of the intermediate dumping
calculations that showed sales of 48 gram product at
more-than-fair-value and cried foul before the Commis-
sion. Notably, the counsel that argued before the panel in
this case apparently represented Algoma over twenty
years ago. What failed to work in Algoma twenty years
ago unfortunately works today.
Reliance on intermediate data has its inherent pit-
falls. Subsequent to the panel’s opinion, Commerce
published its final determination in the first administra-
tive review on LWTP which shows that Koehler used an
illegitimate monthly post-sale rebate program that low-
ered its home market price. Once Commerce disallowed
the rebate, the incidence of dumping increased. Light-
PAPIERFABRIK AUGUST v. US 10
weight Thermal Paper from Germany: Notice of Final
Results of the First Antidumping Duty Administrative
Review, 76 Fed. Reg. 22,078, 22,079 (Apr. 20, 2011); see
also Memorandum from Christian Marsh, Deputy Assis-
tant Secretary for Antidumping and Countervailing Duty
Operations, Final Results of the First Administrative
Review of the Antidumping Duty Order on Lightweight
Thermal Paper from Germany (Apr. 13, 2011), available
at http://ia.ita.doc.gov/frn/summary/GERMANY/2011-
9574-1.pdf. This development undercuts arguments
Koehler made to the panel that the administrative review
would show that it was not dumping 48 gram LWTP
during the review period, arguments apparently intended
to bolster its claim that all sales of the 48 gram LWTP
product during the period of investigation were at more-
than-fair-value. Oral Argument at 10:03, Papierfabrik
August Koehler AG, v. United States, 2011 WL 96814 (No.
2010-1147), available at
http://oralarguments.cafc.uscourts.gov/Audiomp3/2010-
1147.mp3. The information renders the intermediate
dumping calculations suspect and casts doubt on their
validity and utility in a new injury determination. The
information further challenges the panel’s stated reasons
as to why it believes this case is unique, that 48 gram
LWTP was not dumped. On this basis alone, the court
should have granted en banc review and reversed the
opinion of the panel.
In an opinion labeled as non-precedential, the panel
departs from its own long-standing precedent and ignores
applicable Supreme Court precedent. It has forced the
Commission to take steps that will likely land it in a
quicksand of statutory prohibitions. Whether preceden-
tial or non-precedential, this court’s opinions must be
grounded in law. The panel’s opinion in this case was not,
and for those reasons I respectfully dissent.