Case: 19-2395 Document: 93 Page: 1 Filed: 12/03/2020
United States Court of Appeals
for the Federal Circuit
______________________
DILLINGER FRANCE S.A.,
Plaintiff-Appellant
v.
UNITED STATES, SSAB ENTERPRISES LLC,
NUCOR CORPORATION,
Defendants-Appellees
______________________
2019-2395
______________________
Appeal from the United States Court of International
Trade in No. 1:17-cv-00159-GSK, Judge Gary S.
Katzmann.
______________________
Decided: December 3, 2020
______________________
MARC EDWARD MONTALBINE, Dekieffer & Horgan,
PLLC, Washington, DC, argued for plaintiff-appellant.
Also represented by JAMES KEVIN HORGAN, GREGORY S.
MENEGAZ, ALEXANDRA H. SALZMAN.
KELLY A. KRYSTYNIAK, Commercial Litigation Branch,
Civil Division, United States Department of Justice, Wash-
ington, DC, argued for defendant-appellee United States.
Also represented by JEFFREY B. CLARK, JEANNE DAVIDSON,
TARA K. HOGAN; AYAT MUJAIS, Office of the Chief Counsel
for Trade Enforcement and Compliance, United States
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2 DILLINGER FRANCE S.A. v. UNITED STATES
Department of Commerce, Washington, DC.
CYNTHIA CRISTINA GALVEZ, Wiley Rein, LLP, Washing-
ton, DC, argued for defendant-appellee Nucor Corporation.
Also represented by ALAN H. PRICE, STEPHANIE MANAKER
BELL, TESSA V. CAPELOTO, MAUREEN E. THORSON,
CHRISTOPHER B. WELD.
ROGER BRIAN SCHAGRIN, Schagrin Associates, Wash-
ington, DC, for defendant-appellee SSAB Enterprises LLC.
Also represented by NICHOLAS J. BIRCH, CHRISTOPHER
CLOUTIER, GEERT M. DE PREST, ELIZABETH DRAKE, WILLIAM
ALFRED FENNELL, PAUL WRIGHT JAMESON, LUKE A.
MEISNER, KELSEY RULE.
______________________
Before NEWMAN, DYK, and HUGHES, Circuit Judges.
DYK, Circuit Judge.
Defendant Dillinger France S.A. (“Dillinger”) appeals a
decision of the United States Court of International Trade
(“Trade Court”). That decision affirmed the final anti-
dumping determination of the U.S. Department of Com-
merce (“Commerce”) for certain carbon and alloy steel cut-
to-length plate from France. We affirm in part, vacate in
part, and remand.
BACKGROUND
“Dumping occurs when a foreign firm sells a product in
the United States at a price lower than the product’s nor-
mal value.” Home Prods. Int’l, Inc. v. United States, 633
F.3d 1369, 1372 (Fed. Cir. 2011). Commerce is required to
impose antidumping duties on imported merchandise that
is being sold, or is likely to be sold, in the United States at
less than fair value to the detriment of a domestic industry.
19 U.S.C. § 1673.
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DILLINGER FRANCE S.A. v. UNITED STATES 3
On April 28, 2016, Commerce initiated an antidumping
duty investigation into certain carbon and alloy steel cut-
to-length plate from France. Commerce chose Dillinger, a
European producer of cut-to-length plate, as one of the
mandatory importer respondents.
Commerce assigned Dillinger a 6.15% antidumping
margin. See Certain Carbon and Alloy Steel Cut-To-Length
Plate from France, 82 Fed. Reg. 24,096, 24,098 (Dep’t of
Commerce May 25, 2017). Dillinger appealed to the Trade
Court, which initially sustained most of Commerce’s deter-
mination but remanded to Commerce issues that are not
involved in this appeal. The Trade Court then sustained
Commerce’s remand results and the 6.15 percent duty. Dil-
linger appeals the Trade Court’s judgment, contending
that Commerce erred in the antidumping determination.
We have jurisdiction under 28 U.S.C. § 1295(a)(5).
DISCUSSION
We review the Trade Court’s decision to sustain Com-
merce’s final results and remand redeterminations de
novo. See U.S. Steel Corp. v. United States, 621 F.3d 1351,
1357 (Fed. Cir. 2010). We will affirm Commerce unless its
decision is “unsupported by substantial evidence on the
record, or otherwise not in accordance with law.” 19 U.S.C.
§ 1516a(b)(1)(B)(i).
I
Dillinger raises three issues on appeal. We first ad-
dress Dillinger’s argument that, in calculating normal
value, Commerce improperly allocated costs between Dil-
linger’s non-prime and prime products based on Dillinger’s
books and records, which allocate cost based on likely sell-
ing price rather than actual cost. 1 Because Dillinger’s
1 It is unclear from Commerce’s final determination
and brief whether Commerce’s calculation of normal value
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4 DILLINGER FRANCE S.A. v. UNITED STATES
books and records did not reasonably reflect the costs asso-
ciated with the production and sale of the merchandise as
required by 19 U.S.C. § 1677b(f), we vacate and remand for
further proceedings on this issue.
Dillinger sells plates designated as prime and non-
prime. Non-prime plates are plates that are rejected after
the production process for not meeting the standards for
prime plate. Prime plate is sold with a warranty, whereas
non-prime plate is not and thus cannot be used in applica-
tions that require a warranty. In reporting costs to Com-
merce, Dillinger reported the cost of non-prime plate as
equal to the average actual cost of all plate because, accord-
ing to Dillinger, “non-prime plate undergoes the same pro-
duction process as prime plate and . . . is not less costly to
produce simply because it cannot be sold at full price.”
J.A. 1346.
Commerce did not dispute that prime and non-prime
plate undergo the same production process, but Commerce
noted that Dillinger’s accounting system uses a different
approach, valuing “non-prime plate at the likely selling
price based on current market conditions and uses this
amount to offset the cost of prime plates.” J.A. 1347. Com-
merce accordingly adjusted Dillinger’s reported costs for
non-prime plate “to reflect the sales values recorded in [Dil-
linger’s] normal books and records” and allocated the dif-
ference to the costs for Dillinger’s prime plate. Id. at 968,
involved determining constructed value (determining the
sum of “the cost of materials and fabrication or other pro-
cessing of any kind employed in producing the merchan-
dise” and other factors under 19 U.S.C. § 1677b(e)), or
involved determining cost of production so as to exclude
home market sales made below cost of production under
§ 1677b(b)(3). In either event, § 1677b(f) applies, and the
alleged errors would affect either calculation. See id.
§ 1677b(f).
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DILLINGER FRANCE S.A. v. UNITED STATES 5
1347. In doing so, Commerce reduced the cost of non-prime
plate and allocated a greater portion of cost to prime plate
based on the selling price of non-prime plate. Dillinger ar-
gues that Commerce’s reliance on Dillinger’s books and rec-
ords was improper because the books and records were not
based on the costs associated with the production of its
products.
The applicable statutory provision, 19 U.S.C.
§ 1677b(f)(1)(A), provides that “[f]or purposes of subsec-
tions (b) [sales at less than cost of production] and (e) [con-
structed value] . . . , [c]osts shall normally be calculated
based on the records of the exporter or producer of the mer-
chandise, if such records are kept in accordance with the
generally accepted accounting principles [(“GAAP”)] of the
exporting country (or the producing country, where appro-
priate) and reasonably reflect the costs associated with the
production and sale of the merchandise.” Id. (emphasis
added). Section 1677b(f)(1)(A) thus requires “that reported
costs must ‘normally’ be used” only if (1) “they are ‘based
on the records . . . kept in accordance with the [GAAP]’”
and (2) “‘reasonably reflect’ the costs of producing and sell-
ing the merchandise.” Thai Plastic Bags Indus. Co. v.
United States, 746 F.3d 1358, 1365 (Fed. Cir. 2014) (quot-
ing 19 U.S.C. § 1677b(f)(1)(A)).
The dual nature of the test seems apparent from the
face of the statute and is clear as well from our prior deci-
sions and the legislative history. Before § 1677b(f), our
case law had established that, “[a]s a general rule, an
agency may either accept financial records kept according
to [GAAP] in the country of exportation, or reject the rec-
ords if accepting them would distort the company’s true
costs.” Thai Pineapple Pub. Co. v. United States, 187 F.3d
1362, 1366 (Fed. Cir. 1999)).
In IPSCO, Inc. v. United States, 965 F.2d 1056 (Fed.
Cir. 1992), we held a method that “calculat[ed] costs for
both limited-service and prime products on the basis of
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6 DILLINGER FRANCE S.A. v. UNITED STATES
their relative prices” to be “an unreasonable circular meth-
odology” because it “contravened the express requirements
of the statute which set forth the cost of production as an
independent standard for fair value.” Id. at 1061; see also
id. at 1060 (“The legislative history confirms the statute’s
unambiguous intent to provide cost of production as an in-
dependent yardstick for deciding whether home and export
sales prices are suitable for fair value comparisons.”). We
relied on section 1677b(e), the provision that “expressly co-
vers actual production costs,” for computing constructed
value, and section 1677b(b), which “disregards, under spec-
ified circumstances, home or export market sales at less
than the cost of production.” Id. at 1059 (citing 19 U.S.C.
§ 1677b(b), (e) (1988)). Here, there is no dispute that Com-
merce relied on the likely selling price of non-prime plate
in its determination of cost. Thus, if IPSCO governs, Com-
merce’s reliance on Dillinger’s books and records was im-
permissible.
Commerce argues that IPSCO should not govern be-
cause the Tariff Act was amended to add § 1677b(f). When
Congress added § 1677b(f), Congress did not repeal
§§ 1677b(b) or (e), the sections we relied on in IPSCO,
which still require determination of “the cost of materials
and fabrication or other processing of any kind,” id.
§ 1677b(e), 2 and there is no indication that Congress in-
tended for the addition of section 1677b(f) to overrule
IPSCO. “Section 224 of [the Uruguay Round Agreements
Act] add[ed] new section 773(f) to the [Tariff] Act to
2 Subsection (b) at the time of our decision in IPSCO
required determination of “cost of producing the merchan-
dise,” IPSCO, 965 F.2d at 1060 (quoting 19
U.S.C. § 1677b(b) (1988)), and has since been amended to
require determination of “the cost of materials and of fab-
rication or other processing of any kind.” 19 U.S.C.
§ 1677b(b)(3)(A).
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DILLINGER FRANCE S.A. v. UNITED STATES 7
incorporate the provisions of the [Antidumping Agree-
ment 3] regarding the calculation of costs. In addition, sec-
tion 773(f) harmonize[d] the methods of calculating cost for
purposes of examining sales below cost and determining
constructed value.” H.R. Rep. No. 103-826, pt. 1, at 91
(1994). The legislative history indicates Congress’s clear
intent for Commerce to “continue its current practice of cal-
culating costs,” id., and that such costs should “accurately
reflect the resources actually used in the production of the
merchandise in question,” S. Rep. No. 103-412, at 75
(1994).
In codifying this rule, Congress noted that “[u]nder
[then-]existing U.S. law and practice, Commerce normally
calculate[d] costs on the basis of records kept by the ex-
porter or producer of the merchandise, provided such rec-
ords [were] kept in accordance with [GAAP] of the
exporting (or producing) country and reasonably reflect[ed]
the costs associated with the production and sale of the
merchandise” and that “[u]nder new section [1677b(f)],
Commerce [would] continue its current practice.” H.R.
Rep. No. 103-826, pt. 1, at 90–91.
Congress also concluded that “[c]osts shall be allocated
using a method that reasonably reflects and accurately
captures all of the actual costs incurred in producing and
selling the product under investigation or review.” State-
ment of Administrative Action (“SAA”), H.R. Rep. 103-316
(1994), as reprinted in 1994 U.S.C.C.A.N. 4040, 4172. Con-
gress “expect[ed] [Commerce], in determining whether a
producer’s or exporter’s records reasonably reflect the costs
associated with the production and sale of the product in
3 The Antidumping Agreement means the Agree-
ment on Implementation of Article VI of the General Agree-
ment on Tariffs and Trade 1994. Uruguay Round
Agreements Act §§ 121(9), 101(d)(7), PL 103–465, Decem-
ber 8, 1994, 108 Stat 4809.
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8 DILLINGER FRANCE S.A. v. UNITED STATES
question, to examine the recorded production costs with a
view to determining as closely as possible the costs that
most accurately reflect the resources actually used in the
production of the merchandise in question.” S. Rep. No.
103-412, at 75. Thus, the legislative history of section
1677b(f), consistent with its plain meaning, indicates Con-
gress intended that Commerce rely on a producer’s or ex-
porter’s books and records if they are in accordance with
GAAP and reasonably reflect the costs of production.
Nonetheless, Commerce argues that our decision in
Thai Pineapple, decided after the Tariff Act was amended
to include section 1677b(f) (but deciding issues raised un-
der the pre-amended Tariff Act), supports Commerce’s po-
sition here. In Thai Pineapple, in determining costs of
production and constructed value, Commerce relied on a
producer’s allocation methodology for “material cost” for
pineapple fruit, which the producer used to make canned
pineapple products and juice products. 187 F.3d at 1366.
The producer’s books and records “allocate[ed] a range of
82 to 91% of the pineapple fruit costs to canned pineapple
fruit production, and 9 to 18% to production of juice prod-
ucts.” Id. “Commerce’s allocation of the cost of the raw
pineapple fruit between canned pineapple fruit and other
products was not based on the selling price or output value
of these products.” Id. at 1369.
“Thus, unlike [IPSCO], the selling price of the [subject]
products was not a factor in determining the cost of raw
material component in Commerce’s calculation of [costs of
production and constructed value].” Id. Instead, “Com-
merce’s methodology reflected the raw material allocations
of [the producer] as shown by their books and records.” Id.
We held that, “[t]o the extent that the records of [the pro-
ducer] reasonably reflect the costs of production, Com-
merce may rely upon them.” Id. at 1367. The government
relies on footnote 5 of Thai Pineapple, but that part of the
decision simply “note[d] that this rule is now codified in 19
U.S.C. § 1677b(f)(1)(A) (1996).” Id. at 1366 n.5. Thai
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DILLINGER FRANCE S.A. v. UNITED STATES 9
Pineapple is not inconsistent with IPSCO as to the deter-
mination of production costs. 4
The government also relies on PSC VSMPO-Avisma
Corp. v. United States, 688 F.3d 751 (Fed. Cir. 2012), but
that case does not support Commerce’s position. In PSC,
we affirmed Commerce’s method of basing the costs of chlo-
rine “upon what [the exporter] would have to spend to pur-
chase the chlorine necessary for its titanium production
process.” Id. at 757. Thus, PSC concerned the use of pur-
chase price to determine cost rather than using likely sell-
ing price of the end product to allocate costs as here.
There is no dispute that Dillinger’s records were kept
in accordance with GAAP. However, Dillinger’s records
that Commerce relied on for the cost of non-prime and
prime plate were based on “likely selling price” rather than
costs of producing and selling the merchandise. J.A. 1347.
Because Dillinger’s books and records were based on “likely
selling price” rather than cost of production, id., Commerce
erred in relying on them. A remand is required for Com-
merce to determine the actual costs of prime and non-prime
products.
4 To the extent that Thai Pineapple disagreed with
IPSCO, it was to distinguish Commerce’s use of a weight-
based methodology in IPSCO. In IPSCO, we sustained
Commerce’s weight-based allocation because “[t]he steel
pipe was manufactured from the same raw material and
underwent one production process,” but in Thai Pineapple,
we found that “pineapple fruit [was] not a homogeneous
raw material like the raw material used to make the pipe
in [IPSCO], and the production process [was] entirely dif-
ferent for the various pineapple products produced.” Thai
Pineapple, 187 F.3d at1369. Accordingly, we found that
Commerce’s determination not to use a weight-based meth-
odology was reasonable. Id.
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10 DILLINGER FRANCE S.A. v. UNITED STATES
II
We next consider Dillinger’s argument that Com-
merce’s use of the average-to-transaction method in deter-
mining the dumping margin was improper. The dumping
margin is the “amount by which the normal value exceeds
the export price or constructed export price of the subject
merchandise.” 19 U.S.C. § 1677(35)(A). To determine the
dumping margin, Commerce uses one of three methods: the
average-to-average method, the transaction-to-transaction
method, and the average-to-transaction method. 5 Here,
Commerce’s decision used the average-to-transaction
5 The average-to-average method compares the
weighted average of the normal values to the weighted av-
erage of the export prices. 19 U.S.C. § 1677f-1(d)(1)(A)(i).
Commerce “will use the average-to-average method unless
[Commerce] determines another method is appropriate in
a particular case.” 19 C.F.R. § 351.414(c)(1) (2020).
The transaction-to-transaction method compares the
normal values of individual transactions to the export
prices of individual transactions. 19 U.S.C. § 1677f-
1(d)(1)(A)(ii). Commerce “will use the transaction-to-trans-
action method only in unusual situations, such as when
there are very few sales of subject merchandise and the
merchandise sold in each market is identical or very simi-
lar or is custom-made.” 19 C.F.R. § 351.414(c)(2).
The average-to-transaction method compares weighted
average of the normal values to the export prices of indi-
vidual transactions for comparable merchandise. 19
U.S.C. § 1677f-1(d)(1)(B). Commerce may use the average-
to-transaction method if “there is a pattern of export prices
. . . for comparable merchandise that differ significantly
among purchasers, regions, or periods of time,” and Com-
merce “explains why such differences cannot be taken into
account using [the average-to-average or transaction-to-
transaction methods].” Id. § 1677f-1(d)(1)(B)(i)–(ii).
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DILLINGER FRANCE S.A. v. UNITED STATES 11
method, which may be used if “there is a pattern of export
prices . . . for comparable merchandise that differ signifi-
cantly among purchasers, regions, or periods of time.”
19 U.S.C. § 1677f-1(d)(1)(B)(i). This provision addresses
situations “where targeted dumping may be occurring.”
SAA, 1994 U.S.C.C.A.N. at 4178. Targeted dumping occurs
where “an exporter may sell at a dumped price to particular
customers or regions, while selling at higher prices to other
customers or regions.” Id. at 4177–78.
To determine a pattern of export prices for comparable
merchandise that differ significantly among purchasers,
regions, or periods of time, Commerce used the Cohen’s d
test. The Cohen’s d coefficient is a “generally recognized
statistical measure” of the extent of the difference between
the weighted-average price of a test group and the
weighted-average price of a comparison group. J.A. 958.
Here, the test groups were export prices for a purchaser,
region, and time period, and the corresponding comparison
groups were all other export prices (i.e., the export sales to
all other purchasers, regions, or time periods). If the Co-
hen’s d coefficient is equal to or greater than 0.8, then Com-
merce considers the difference between the average prices
of the test group and the average prices of the comparison
group to be significant, and thus the test group passes the
Cohen’s d test.
Commerce next applied the “ratio test,” in which Com-
merce calculated the sales value for all test groups that
passed the Cohen’s d test. “If the value of sales to purchas-
ers, regions, and time periods that pass the Cohen’s d test
account for 66 percent or more of the value of total sales,
then the identified pattern of prices that differ significantly
supports the consideration of the application of the aver-
age-to-transaction method to all sales as an alternative to
the average-to-average method.” J.A. 959.
In its final determination, Commerce determined that
95.78 percent of Dillinger’s U.S. sales passed the Cohen’s d
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12 DILLINGER FRANCE S.A. v. UNITED STATES
test and that this “confirm[ed] the existence of a pattern of
prices that differ[ed] significantly among purchasers, re-
gions, or time periods.” Id. at 1306. Commerce accordingly
used the average-to-transaction method for all U.S. sales
to calculate the dumping margin.
Dillinger raises two challenges to Commerce’s determi-
nation of a pattern. First, Dillinger contends that Com-
merce’s use of the Cohen’s d test and the ratio test to
determine a pattern “ignor[ed] the word ‘pattern’ in section
1677f-1(d)(1)(B)(i).” Appellant’s Br. 15. Dillinger appears
to argue that Commerce’s ratio test improperly aggregated
sales across categories (purchasers, regions, or time peri-
ods) and that comparing aggregated sales across categories
cannot be done to establish a pattern. Id. at 21 (stating
Commerce’s methodology “does not analyze the categories
of purchasers, regions and time periods individually”).
Such aggregation is not inconsistent with the statute,
which requires that Commerce determine that there is “a
pattern of export prices . . . for comparable merchandise
that differ significantly among purchasers, regions, or pe-
riods of time.” 19 U.S.C. § 1677f-1(d)(1)(B)(i). The statute
is silent as to how Commerce must determine a “pattern.”
See id. §§ 1677, 1677f-1. “[I]f the statute is silent or ambig-
uous with respect to the specific issue, the question for the
court is whether the agency’s answer is based on a permis-
sible construction of the statute.” Chevron, U.S.A., Inc. v.
Nat. Res. Def. Council, Inc., 467 U.S. 837, 843 (1984). We
find that Commerce’s interpretation of pattern was reason-
able.
Dillinger relies on a determination from the World
Trade Organization (“WTO”), which reached the opposite
conclusion in interpreting Article 2.4.2 of the Anti-Dump-
ing Agreement. Appellate Body Report, United States –
Antidumping and Countervailing Measures on Large Resi-
dential Washers from Korea, WTO Doc. WT/DS464/AB/R,
at 25–31 (adopted Sep. 7, 2016). The WTO Appellate Body
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DILLINGER FRANCE S.A. v. UNITED STATES 13
determined that Commerce’s methodology of using the Co-
hen’s d test and the ratio test “is inconsistent” with deter-
mining “a pattern of export prices which differ significantly
among different purchasers, regions, or time periods” be-
cause the methodology “aggregates prices found to differ
among different purchasers, among different regions, and
among different time periods for the purposes of identify-
ing a single pattern.” Id. at 25, 31.
The WTO “oversee[s] the application of the various
WTO agreements and serve[s] as the framework for mem-
ber governments to conduct their trade relations under
those agreements.” SAA, 1994 U.S.C.C.A.N. at 4043.
“WTO decisions are ‘not binding on the United States,
much less this court.’” Corus Staal BV v. Dep’t of Com-
merce, 395 F.3d 1343, 1348 (Fed. Cir. 2005) (quoting Tim-
ken Co. v. United States, 354 F.3d 1334, 1344 (Fed. Cir.
2004)). 6
Dillinger’s other arguments regarding the interpreta-
tion of “pattern” are not adequately developed, and we de-
cline to consider them. See Agile Def., Inc. v. United States,
959 F.3d 1379, 1384 n.* (Fed. Cir. 2020) (because party
“fail[ed] to adequately develop [an] argument,” the court
“decline[d] to consider it on appeal”); SmithKline Beecham
Corp. v. Apotex Corp., 439 F.3d 1312, 1320 (Fed. Cir. 2006)
(declining to consider argument that “[did] not amount to a
developed argument”).
6 Dillinger also argues that Commerce’s application
of the Cohen’s d test applied “an irrebuttable presumption”
that a 0.8 Cohen’s d coefficient indicates that a price differ-
ence is significant. Appellant’s Br. 24. The record does not
indicate that Commerce’s use of the Cohen’s d test or its
thresholds is irrebuttable. To the contrary, Commerce con-
sidered Dillinger’s objections to its methodology and pro-
vided its reasons for rejecting them.
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14 DILLINGER FRANCE S.A. v. UNITED STATES
Second, Dillinger argues that Commerce’s use of the
Cohen’s d test to determine a pattern among export prices
was not in accordance with the law because Dillinger’s
products are custom-made. Thus, in Dillinger’s view, Com-
merce was not permitted to use the average-to-transaction
test and instead should have used the default average-to-
average test. 7 But there is nothing in § 1677f-1 or the reg-
ulations promulgated thereunder that requires Commerce
to consider custom products differently when determining
whether “there is a pattern of export prices . . . that differ
significantly among purchasers, regions, or periods of time”
so long as such comparison is made between “comparable
merchandise.” 19 U.S.C. § 1677f-1(d)(1)(B).
Here, Dillinger has not shown how Commerce failed to
use “comparable merchandise.” “Comparable merchan-
dise” was defined by product control numbers (“CON-
NUMs”), which have certain “physical characteristics” that
were subject to notification and comment during Com-
merce’s investigation. J.A. 958, 1310. In making its com-
parison, Commerce rejected Dillinger’s assertion that “its
made-to-order products are inferably so unique and em-
brace such a wide range of grades within a given
[CONNUM] that any comparison of U.S. prices on a
CONNUM basis must take into account these inter-
CONNUM variations.” Id. at 1309–10. We see no error in
Commerce’s determination.
7 Dillinger does not argue on appeal that Commerce
should have used the transaction-to-transaction method,
even though the regulations state that Commerce “will use
the transaction-to-transaction method only in unusual sit-
uations, such as when there are very few sales of subject
merchandise and the merchandise sold in each market is
identical or very similar or is custom-made.” 19 C.F.R.
§ 351.414(c)(2) (emphasis added).
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DILLINGER FRANCE S.A. v. UNITED STATES 15
III
Finally, we consider Dillinger’s argument that Com-
merce erred in determining that Dillinger’s factory sales
and sales from its affiliated service centers constituted a
single level of trade in France and thus concluding that a
level of trade adjustment was not warranted.
Commerce is required to establish normal value “to the
extent practicable, at the same level of trade as the export
price.” 19 U.S.C. § 1677b(a)(1)(B)(i). If Commerce is una-
ble to find sales in the foreign market at the same level of
trade as the sales in the United States, normal value shall
be “increased or decreased to make due allowance for any
difference (or lack thereof) between the export price . . . and
[normal value] that is shown to be wholly or partly due to
a difference in level of trade.” Id. § 1677b(a)(7)(A). “[T]he
level of trade adjustment is designed to ensure that the
normal value and U.S. price are being compared . . . at the
same level of trade, that is, at the same marketing stage in
the chain of distribution that begins with the manufac-
turer.” Micron Tech., Inc. v. United States, 243 F.3d 1301,
1314 (Fed. Cir. 2001). Commerce will grant a level of trade
adjustment where “there is a difference between the actual
functions performed by the sellers at the different levels of
trade in the two markets.” SAA, 1994 U.S.C.C.A.N. at
4168.
Dillinger makes sales directly from its factories to end
users and distributors and from affiliated service centers
to downstream customers. Dillinger argues that Com-
merce erred in determining that inventory maintenance
performed on service center sales did not require a finding
of a separate level of trade. “Substantial differences in sell-
ing activities are a necessary, but not sufficient, condition
for determining that there is a difference in the stage of
marketing.” 19 C.F.R. § 351.412(c)(2). Commerce deter-
mined that inventory maintenance alone did not make a
substantial difference between the selling activities
Case: 19-2395 Document: 93 Page: 16 Filed: 12/03/2020
16 DILLINGER FRANCE S.A. v. UNITED STATES
commonly performed by Dillinger’s factories and service
centers, and we find this determination to be supported by
substantial evidence and in accordance with law.
In addition to the selling functions performed by its fac-
tories, Dillinger’s affiliated service centers also perform
service center functions such as cutting, sawing, drilling,
and bending. Dillinger argues that Commerce “improperly
ignored processing activities such as cutting and sawing of
plate into smaller sizes for resale.” Appellant’s Br. 51.
Commerce agreed that Dillinger’s service centers per-
formed service center functions such as cutting and sawing
“to make downstream sales.” J.A. 1330. It also determined
that “these items (i.e., cutting, sawing, drilling[,] and[]
bending) are not selling functions . . . contained in the list
provided in [Commerce’s] standard section A question-
naire. . . . Instead, . . . these items are performed in con-
nection with the further processing of the merchandise,
which are part of the cost to produce the downstream prod-
uct.” Id. We see no error in Commerce’s refusal to consider
these processing activities to be selling functions.
CONCLUSION
We have considered the parties’ remaining arguments
and find them unpersuasive. We vacate the Trade Court’s
judgment sustaining Commerce’s decision to rely on Dil-
linger’s books and records to determine cost. We affirm the
Trade Court’s judgment sustaining Commerce’s determi-
nations of the pattern requirement of the average-to-trans-
action method and level of trade. We remand the case to
the Trade Court for Commerce to recalculate the dumping
margin consistent with this opinion.
AFFIRMED IN PART, VACATED IN PART, AND
REMANDED
COSTS
No costs.