Federal-Mogul Corp. v. United States

Opinion

Tsoucalas, Judge: Plaintiff-intervenor, The Torrington Company (“Torrington”), moves pursuant to Rules 1 and 7 of the Rules of this Court for modification of this Court’s decision in Federal-Mogul Corp. v. United States, 17 CIT 1015, Slip Op. 93-180 (Sept. 14, 1993), askingthis Court to remand this case to the Department of Commerce, International Trade Administration (“ITA”), to recalculate all antidumping duty margins without allowing a deduction for pre-sale inland freight in the calculation of foreign market value (“FMV”) pursuant to the United States Court of Appeals for the Federal Circuit’s (“Federal Circuit”) decision in Ad Hoc Comm. of AZ-NM-TX-FL Producers of Gray Portland Cement v. United States, No. 93-1239 (Fed. Cir. Jan. 5, 1994). Motion of The Torrington Company for Modification of Judgment and for Order of Remand (“Torrington’s Motion”) at 1-2.

Background

In Federal-Mogul, 17 CIT at 1018, Slip Op. 93-180 at 7, this Court stated that:

The ITA’s decision to compare U.S. price to home market price at a contemporaneous point in the chain of commerce is reasonable. Torrington Co. v. United States, 17 CIT 199, 215, 818 F. Supp. 1563, 1576 (1993). In this case, the ITA has chosen an ex-factory price as the contemporaneous point in the chain of commerce. In order to make this comparison, certain expenses need to be removed from both U.S. and home market prices. This Court finds nothingunrea-sonable in the ITA’s removal of pre-sale movement expenses from both U.S. and home market prices as measured from the same point in the chain of commerce, in this case ex-factory. Id.; Ad Hoc Comm., 16 CIT at 118-19, 787 F. Supp. at 211-13. This method of treating pre-sale home market movement expenses has also been specifically upheld by this court in a well reasoned opinion in Nihon Cement Co. v. United States, 17 CIT 400, 415-17, Slip Op. 93-80 at 30-34 (May 25, 1993).
Therefore, this Court affirms the ITA’s deduction of pre-sale movement expenses from FMV

*162Discussion

The Federal Circuit in Ad Hoc Comm, stated:

In the circumstances of this case, we believe that had Congress intended to deduct home-market transportation costs from FMV it would have made that intent clear. FMV and USP [United States price] are intimately related concepts, given full meaning only by their relationship to one another. The Antidumping Act revolves around the difference between the two. See 19 C.F.R. § 353.2(f)(1) (1993) (defining dumping margin with reference to USP and FMV). In slightly different forms, the USP provision, 19 U.S.C. § 1677a, and the FMV provision, 19 U.S.C. § 1677b, were passed together as part of the original Antidumping Act, 1921, ch. 14, 42 Stat. 11 (1921). From the Act’s beginning, therefore, it is likely Congress has considered one only with reference to the other and has been well aware of any differences between them. That Congress included a deduction for transportation costs from USP but not from FMV leads us to conclude that Congress did not intend pre-sale home-market transportation costs to be deducted from FMV

Ad Hoc Comm., No. 93-1239 at 7-8 (footnote omitted).

Torrington argues that the Federal Circuit’s decision in Ad Hoc Comm, “held that the Department of Commerce lacks authority under the circumstance-of-sale provision (19 U.S.C. § 1677b(a)(4)) to adjust foreign market value for pre-sale inland freight expense. ” Torrington’s Motion at 2. Therefore, Torrington argues that this Court’s decision affirming the ITA’s grant of an adjustment to FMV for pre-sale inland freight was in error and this Court should modify its decision on this issue and remand this case back to the ITA ordering the ITA to recalculate all antidumping duty margins without allowing a deduction for pre-sale inland freight in the calculation of FMV Id.

Defendant and defendant-intervenors, Koyo Seiko Co., Ltd. and Koyo Corporation of U.S.A. (“Koyo”) and NSK Ltd. and NSK Corporation (“NSK”), oppose Torrington’s motion. Specifically, defendant and Koyo argue that the Federal Circuit’s decision in Ad Hoc Comm, only applies to adjustments to FMV for pre-sale inland freight in situations where FMV has been calculated based upon purchase price.1 Defendant and Koyo point out that the Federal Circuit explicitly limited its decision on this issue to the calculation of FMV based upon purchase price and *163not when exporter’s sales price (“ESP”) is used to calculate FMV Defendant’s Opposition to Plaintiff’s Motion to Modify Judgment and for Order of Remand (“Defendant’s Opposition”) at 2; Response of Defendant-Intervenors Koyo Seiko Co., Ltd. and Koyo Corporation of U. S.A. to Plaintiff’s Motion for Modification of Judgment and for Order of Remand (“Koyo’s Response”) at 2.

Koyo points out that the vast majority of its sales during the period of review for this administrative review were ESP transactions and therefore not effected by Ad Hoc Comm. Koyo’s Response at 2-3.

Defendant and NSK also argue that the Federal Circuit’s decision on this issue was based on the ITA’s státed rationale for its decision, i.e., the ITA’s inherent authority to fill gaps in the statutory framework to achieve the purposes of the statute, and not on the circumstance of sale provision found at 19 U.S.C. § 1677b(a)(4)(B) (1988). Defendant’s Opposition at 2; Defendant-Intervenors’ Opposition to The Torrington Company’s Motion for Modification of Judgment and for Order of Remand at 2.

Finally, defendant argues that the ITA has not had an opportunity to consider its position on this issue in light of the Federal Circuit’s decision in Ad Hoc Comm. Defendant requests this Court to remand this issue to the ITA so it can “consider the appellate decision and its impact upon this case and whether other alternatives exist for treatment of pre-sale inland freight expenses.” Defendant’s Opposition at 2.

This Court finds that Torrington’s characterization of the Federal Circuit’s decision in Ad Hoc Comm, is incorrect on certain points. First, the Ad Hoc Comm, court specifically noted that it was not ruling on whether the ITA has authority to adjust FMV for pre-sale inland freight pursuant to the circumstance of sale provision at 19 U.S.C. § 1677b(a) (4)(B). AdHoc Comm., No. 93-1239 at 5 n.8. Second, the Ad Hoc Comm. court limited its decision to the calculation of FMV in purchase price situations only. Id. at 5. Therefore, this Court finds that there is no basis for remanding this case to the ITA in regard to situations where FMV was calculated based upon ESP

It is a cardinal rule of administrative law that an agency should be allowed to decide an issue for itself before a court addresses that issue. McKart v. United States, 395 U.S. 185, 194 (1968). This Court agrees with the ITA that it should be given the opportunity to address this issue first in light of the Federal Circuit’s decision in Ad Hoc Comm.

Therefore, this case is remanded to the ITA to allow the ITA to determine whether it has statutory authority to adjust FMV calculated using purchase price, for pre-sale inland freight in light of Ad Hoc Comm., No. 93-1239. Remand results are to be filed with this Court within sixty (60) days after the date of entry of this Court’s decision regarding the ITA’s remand results on the value added tax issue which is currently pending before this Court. Comments or responses by the parties are due within thirty (30) days thereafter. Any rebuttal comments are due within fifteen (15) days of the date responses or comments are due.

Purchase price and exporter’s sales price (“ESP”) are the two types of United States price. USE? purchase price and ESP are defined at 19 U.S.C. § 1677a (1988):

(a) United States price
[TJhe term “United States price” means the purchase price, or the exporter’s sales price, of the merchandise, whichever is appropriate.
(b) Purchase price
“[Pjurchase price” means the price at which merchandise is purchased, or agreed to be purchased, prior to the date of importation, from a reseller or the manufacturer or producer of the merchandise for exportation to the United States.
(c) Exporter’s sales price
" [Exporter's sales price” means the price at which merchandise is sold or agreed to be sold in the United States, before or after the time of importation, by or for the account of the exporter * * *.

The purchase price is normally used as USP where the transaction prior to importation is between unrelated parties, or at arm’s length. The exporter’s sales price will be used as the USP when the U.S. importer and the foreign seller are “related parties.” See 19 U.S.C. § 1677(13) (1988). The exporter’s sales price will be the price at which the merchandise is first sold to an unrelated purchaser in the United States. 19 U.S.C. § 1677a(c).