Slip Op. 07-96
UNITED STATES COURT OF INTERNATIONAL TRADE
____________________________________
:
LOUIS DREYFUS CITRUS INC., :
:
Plaintiff, :
: Before: WALLACH, Judge
v. : Court No.: 06-00122
:
UNITED STATES, : PUBLIC VERSION
:
Defendant, :
and :
:
FLORIDA CITRUS MUTUAL et al., :
:
Defendant-Intervenors. :
____________________________________:
[Plaintiff’s Rule 56.2 Motion for Judgment Upon the Agency Record is DENIED and the
Agency’s Determination is AFFIRMED.]
Dated: June 19, 2007
Dewey Ballantine LLP, (Kevin M. Dempsey, David A. Bentley and Christophe F. Guibert de
Bruet) for Plaintiff Louis Dreyfus Citrus Inc.
Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director, Commercial Litigation
Branch, Civil Division, U.S. Department of Justice (Michael J. Dierberg); and Mildred E.
Steward, Office of Chief Counsel for Import Administration, U.S. Department of Commerce, of
Counsel, for Defendant United States.
Barnes, Richardson & Colburn, (Matthew T. McGrath, Stephen W. Brophy and James B. Doran)
for Defendant-Intervenors Florida Citrus Mutual, A. Duda & Sons, Inc. (d/b/a Citrus Belle),
Citrus World, Inc., and Southern Gardens Citrus Processing Corporation (d/b/a Southern
Gardens).
OPINION
Wallach, Judge:
I
Introduction
This case comes before the court on a Motion for Judgment Upon the Agency Record
pursuant to USCIT Rule 56.2 brought by Louis Dreyfus Citrus Inc. (“Plaintiff” or “Louis
Dreyfus”). Plaintiff claims it has suffered injury in fact from an order imposing antidumping
duties (“AD”) on frozen concentrated orange juice for further manufacture (“FCOJM”) produced
and exported by Plaintiff. Complaint ¶ 7; Antidumping Duty Order: Certain Orange Juice from
Brazil, 71 Fed. Reg. 12,183 (March 9, 2006) (“AD Order”). Plaintiff challenges, inter alia, (1)
the authority of the United States Department of Commerce (“Commerce” or “the Department”)
to initiate an investigation prior to the revocation of an order covering identical merchandise, (2)
the producer-specific scope of the investigation, and (3) aspects of Commerce’s Final
Determination in Notice of Final Determination of Sales at Less Than Fair Value and
Affirmative Final Determination of Critical Circumstances: Certain Orange Juice from Brazil, 71
Fed. Reg. 2,183 (January 13, 2006) (“Final Determination”), as amended by 71 Fed. Reg. 8,841
(February 21, 2006) (“Amended Final Determination”). Memorandum of Law in Support of
Plaintiff’s Rule 56.2 Motion for Judgment Upon the Agency Record (“Plaintiff’s Motion”) at 2-
3; Notice of Initiation of Antidumping Duty Investigation: Certain Orange Juice From Brazil, 70
Fed. Reg. 7,233 (February 11, 2005) (“Initiation of OJ AD Inv.”).
For the reasons set forth herein, Plaintiff’s Motion is DENIED.
2
II
Background
Plaintiff is an importer of frozen concentrated orange juice (“FCOJ”)1 and the parent
company of Coinbra-Frutesp, S.A. (“Coinbra-Frutesp”), a Brazilian producer of FCOJ.
Complaint ¶ 10. On March 18, 2004, the United States Customs and Border Protection (“CBP”
or “Customs”) issued a Notice of Action concerning an entry made by Coinbra-Frutesp on
November 17, 2003 in which it determined that exports of orange juice manufactured by
Coinbra-Frutesp were subject to the “all others” rate under a 1987 order on frozen concentrated
orange juice from Brazil. Letter from Christopher Dunn, Willkie Farr & Gallagher LLP to
Donald L. Evans, Sec’y of Commerce, U.S. Dep’t of Commerce (August 4, 2004) (“LDCI CCR
Request”) at 4-5, Confidential Record (“C.R.”) at 5-6 (request for changed circumstances
review). Customs also required that deposits be made on entries until Commerce confirmed
Coinbra-Frutesp’s exclusion from the order in a changed circumstances review. Id. at 5, C.R. at
6; see also Antidumping Duty Order; Frozen Concentrated Orange Juice From Brazil, 52 Fed.
Reg. 16,426 (May 5, 1987) (“1987 FCOJ AD Order”).
In August 2004, Louis Dreyfus requested a changed circumstances review wherein
Plaintiff stated that “Louis Dreyfus, through its virtually wholly-owned subsidiaries, is the
successor in interest to both Frutesp and Frutropic,” both companies that had previously been
revoked from the 1987 FCOJ AD Order. LDCI CCR Request 5-6, C.R. at 6-7. The successor-in-
interest relationship between Plaintiff and Coinbra-Frutesp was outlined by Plaintiff as follows.
1
FCOJ and FCOJM are identical merchandise. See, e.g., Frozen Concentrated Orange
Juice from Brazil, USITC Pub. 3760, Inv. Nos. 731-TA-326, I-11 (March 2005) (“Second FCOJ
Sunset Review”).
3
In 1988, Frutropic S.A. (“Frutropic”) was purchased by Comércio e Indústrias Brasileiras
Coinbra S.A. (“Coinbra”), a wholly-owned subsidiary of Louis Dreyfus. Id. at 3, C.R. at 4. In
October of 1992, Frutropic ceased to exist as a legal entity when it was formally dissolved. Letter
from Christopher Dunn, Willkie Farr & Gallagher LLP to Carlos Gutierrez, Sec’y of Commerce,
U.S. Dep’t of Commerce (March 25, 2005) (“LDCI Additional Info. Letter”) at 1, C.R. at 42. On
April 7, 1993, Frutropic notified Commerce that the company had been incorporated into
Coinbra and that its named had changed to Coinbra or Frutropic/COINBRA. LDCI CCR Request
at 3-4, C.R. 4-5. Frutropic was at the time of purchase subject to the 1987 FCOJ AD Order from
which it was revoked in 1994 under the name Frutropic/COINBRA. Id; see also Frozen
Concentrated Orange Juice From Brazil; Final Results of Antidumping Duty Administrative
Review and Revocation of Order in Part, 59 Fed. Reg. 53,137 (October 21, 1994) (“1994 FCOJ
Final Results”). Coopercitrus Industrial Frutesp, S.A. (“Frutesp”) was purchased by Plaintiff in
1993 after which “the assets, management and employees of Frutesp were transferred to the
control of Louis Dreyfus and subsumed by it.” LDCI CCR Request at 6, C.R. at 7. The 1987 AD
order for Frutesp had already been revoked in 1991. Id. at 2, C.R. at 3; Frozen Concentrated
Orange Juice From Brazil; Final Results and Termination in Part of Antidumping Duty
Administrative Review; Revocation in Part of the Antidumping Duty Order, 56 Fed. Reg. 52,510
(October 21, 1991) (“1991 FCOJ Final Results”). In 1994 the name of the merged company was
changed to Coinbra-Frutesp. LDCI CCR Request at 6, C.R. at 7. As a result of the outlined
transactions, by 1994, Louis Dreyfus had acquired all assets of both Frutesp and Frutropic, and
since the revocation of the antidumping duty order on Frutropic/COINBRA, has exported FCOJ
to the United States exclusively under the name Coinbra-Frutesp. Id. at 4, C.R. at 5.
4
Prior to the commencement of Commerce’s investigation into Certain Orange Juice from
Brazil, the 1987 order on FCOJ underwent a sunset review. Initiation of Five-Year (“Sunset”)
Reviews, 69 Fed. Reg. 17,129 (Dep’t of Commerce April 1, 2004); Frozen Concentrated Orange
Juice From Brazil, 69 Fed. Reg. 17,230 (U.S. Int’l Trade Comm’n April 1, 2004) (“Initiation of
FCOJ Sunset Review”). In November 2004 interested domestic parties submitted a letter to
Commerce withdrawing any further interest in the 1987 order due to “its lack of any remaining
remedial effect.” Letter from Matthew T. McGrath et al., Barnes, Richardson & Colburn to
Donald L. Evans, Sec’y of Commerce, U.S. Dep’t of Commerce (December 27, 2004)
(“Petition”) at 3, C.R. at 13. The interested domestic parties considered the 1987 order to have
“small injury-mitigating effect” because only exporters Citrovita Agro Industrial, Ltda
(“Citrovita”) and Branco Peres Citrus were still known to be covered by the order. Id. at 4, C.R.
at 14. In addition, Citrovita was allegedly evading the order through tolling arrangements with a
party excluded from the order, rendering the order largely ineffective. Letter from Matthew T.
McGrath et al., Barnes, Richardson & Colburn to Donald L. Evans, Sec’y of Commerce, U.S.
Dep’t of Commerce (January 6, 2005) (“Petitioners’ Response to Request for Add’l Info. in
Support of Petition”) at 14, C.R. at 20. At the time of the sunset review most major producers
and/or exporters of FCOJM had either been revoked or excluded from the order and as a
consequence were outside the purview of the order. Petition at 3, C.R. at 13. Moreover, the 1987
order did not cover pasteurized single-strength orange juice not-from-concentrate (“NFC”),
which was a new product that had only been imported into the U.S. market subsequent to the
issuance of the 1987 order due to new and more cost-efficient means of transporting the
merchandise. Id; see also Certain Orange Juice from Brazil, USITC Pub. 3838, Inv. Nos. 731-
5
TA-1089 (March 2006) (“Final ITC Injury Determination”) at IV-1. On April 13, 2005,
Commerce revoked the 1987 order in its entirety. Revocation of Antidumping Duty Order:
Frozen Concentrated Orange Juice from Brazil, 70 Fed. Reg. 19,416 (April 13, 2005) (“FCOJ
Revocation”).
On December 27, 2004, Florida Citrus Mutual, A. Duda & Sons, Inc. (d/b/a Citrus Belle),
Citrus World, Inc., and Southern Garden Citrus Processing Corporation (d/b/a Southern Gardens)
(collectively “Defendant-Intervenors”), domestic producers of orange juice, filed an antidumping
duty petition with Commerce alleging that imports of FCOJM and NFC from Brazil were being
sold in the United States at less than fair value (“LTFV”), materially injuring the domestic
industry. Defendant’s Response to Plaintiff’s Motion for Judgment Upon the Agency Record
(“Defendant’s Motion”) at 3. Petitioners requested that reconstituted orange juice, frozen orange
juice for retail (“FCOJR”) and FCOJM produced by companies still subject to the old order be
excluded from the scope of the investigation. Petition at 42-43, C.R. at 15-16. As a result of the
petition, Commerce, on February 11, 2005, initiated a LTFV investigation on Certain Orange
Juice from Brazil. Initiation of OJ AD Inv., 70 Fed. Reg. at 7,234. Commerce crafted the scope
of the investigation specifically to not overlap with the 1987 FCOJ AD Order and therefore
included all orange juice not-from-concentrate, a class of merchandise not previously subject to
an order and FCOJM produced and/or exported only by Cargill Citrus Limitada, Citrosuco
Paulista S.A., Frutropic S.A., Montecitrus Industria e Comercio Limitada, and Sucocitrico
Cutrale S.A. (Cutrale), all of whom had been excluded or revoked from the old order. Id. at
7,234. Commerce stated that it had also commenced a changed circumstances review to
determine whether Frutesp and Frutropic, trading under the name of Coinbra-Frutesp, would be
6
subject to the investigation. Id. In its initiation notice Commerce stated that “should the
Department find Louis Dreyfus or COINBRA-Frutesp to be the successor-in-interest to [Frutesp
and Fruitropic], the successor company will be included as part of this proceeding.” Id.
On March 18, 2005, Louis Dreyfus withdrew its request for a changed circumstances
review and explained in a letter to Commerce on April 4, 2005, that for purposes of the new
investigation Coinbra-Frutesp could not be considered the successor-in-interest to either
Frutropic or Frutesp. Letter from Christopher Dunn, Willkie Farr & Gallagher LLP to Carlos
Gutierrez, Sec’y of Commerce, U.S. Dep’t of Commerce (March 18, 2005) (“LDCI Withdrawal
of CCR Resquest”) at 1-2, Plaintiff’s Appendix at Tab J; Letter from Christopher Dunn, Willkie
Farr & Gallagher LLP to Carlos Gutierrez, Sec’y of Commerce, U.S. Dep’t of Commerce (April
4, 2005) (“Scope Comments Letter”) 9-10, C.R. at 59-60. Louis Dreyfus claimed that Coinbra-
Frutesp’s relationship to Frutropic and Frutesp did not meet Commerce’s articulated standards by
which it evaluates whether an entity is a successor-in-interest to an exporter and therefore could
not lawfully be included within the scope of the investigation. Scope Comments Letter at 9-10,
C.R. at 59-60.
On April 13, 2005, Commerce issued a notice of rescission of the changed circumstances
review. Notice of Rescission of Changed Circumstances Antidumping Duty Administrative
Review: Frozen Concentrated Orange Juice from Brazil, 70 Fed. Reg. 19,417 (April 13, 2005)
(“Notice of Rescission”). Despite the rescission, Commerce’s proceeded with its successor-in-
interest determination as pertaining to the new investigation. See, e.g., Final Determination, 71
Fed. Reg. at 2,184. Commerce issued a final determination on January 13, 2006, in which it
deemed Coinbra-Frutesp the successor-in-interest to Frutropic and, consequently, that its
7
production and export of FCOJM fell within the scope of Commerce’s antidumping duty
investigation and within the purview of the resulting AD order on Certain Orange Juice from
Brazil. Id. at 2,183; AD Order, 71 Fed. Reg. 12,183. On March 9, 2006, Commerce published
the new antidumping duty order on Certain Orange Juice from Brazil. AD Order, 71 Fed. Reg.
12,183.
Plaintiff timely commenced this action under 19 U.S.C. § 1516a(a)(2)(A)(i)(II).
Complaint ¶ 5. The court has jurisdiction pursuant to 28 U.S.C. § 1581(c). Oral argument was
held on April 18, 2007.
III
Standard of Review
It is incumbent upon this court to sustain “any determination, finding, or conclusion” by
Commerce unless it is “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 Corus Staal BV v. United States,
395 F.3d 1343, 1346 (Fed. Cir. 2005). Substantial evidence is “such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion.” Consol. Edison Co. v.
NLRB, 305 U.S. 197, 229, 59 S. Ct. 206, 83 L. Ed. 126 (1938). The sufficiency of the evidence
is determined by “considering the record as a whole, including evidence that supports as well as
evidence that ‘fairly detracts from the substantiality of the evidence.’” Huaiyin Foreign Trade
Corp. v. United States, 322 F.3d 1369, 1374 (Fed. Cir. 2003) (citing Atl. Sugar, Ltd. v. United
States, 744 F.2d 1556, 1562 (Fed. Cir. 1984)).
In deciding whether the agency’s statutory interpretation and application was made in
accordance with law the court is guided by the two-step analytical framework set out in Chevron
8
U.S.A. Inc. v. Nat’l Res. Def. Council, Inc., 467 U.S. 837, 842-843, 104 S. Ct. 2778, 81 L. Ed.
2d 694 (1984). Absent the “unambiguously expressed intent of Congress” the court will
determine whether the agency’s interpretation of the antidumping statute is a “permissible
construction of the statute.” Chevron, 467 U.S. at 843. The court will accord deference to the
agency’s determination and thus “not impose its own views as to the sufficiency of the agency’s
investigation or question the agency’s methodology,” so long as such procedures are a
“reasonable means of effectuating the statutory purpose, and there is substantial evidence in the
record supporting the agency’s conclusions . . . .” Ceramica Regiomontana, S.A. v. United States,
10 CIT 399, 404-05, 636 F. Supp. 961 (1986), aff’d, 810 F.2d 1137 (Fed. Cir. 1987).
IV
Discussion
A
Commerce Lawfully Defined the Scope of the Investigation and Order
on a Producer-Specific Basis
When Commerce initiated the antidumping duty investigation on Certain Orange Juice
from Brazil it crafted the scope of the investigation to include only “orange juice for transport
and/or further manufacturing” produced in two different forms as either “(1) [f]rozen orange
juice in a highly concentrated form, sometimes referred to as frozen concentrated orange juice for
further manufacturing (FCOJM); and (2) pasteurized single-strength orange juice which has not
been concentrated, referred to as Not-From-Concentrate (NFC).” Initiation of OJ AD Inv., 70
Fed. Reg. at 7,233-34. Due to the 1987 AD order on FCOJ from Brazil still in effect, Commerce
specified the scope of the new investigation to cover “only FCOJM produced and/or exported by
those companies who were excluded or revoked from the existing antidumping order on FCOJ
9
from Brazil as of December 27, 2004.” Id. at 7,234. In its initiation notice Commerce identified
the FCOJM producers and exporters subject to the investigation as Cargill Citrus Limitada,
Citrosuco Paulista S.A., Frutropic S.A., Montecitrus Industria e Comercio Limitada, and
Sucocitrico Cutrale S.A. (Cutrale) and specified that Louis Dreyfus and Coinbra-Frutesp would
be subject to the investigation if either were deemed to be the successor-in-interest to Frutesp and
Frutropic, because both companies had been revoked from the 1987 FCOJ AD Order. Id.; see
also 1991 FCOJ Final Results, 56 Fed. Reg. 52,510; 1994 FCOJ Final Results, 59 Fed. Reg.
53,137.
Plaintiff argues that the scope of Commerce’s investigation was crafted contrary to statute
because it was producer-specific and yielded a discriminatory result. Plaintiff’s Motion at 14-15
(citing 19 U.S.C. § 1673 (2000)). Plaintiff contends that discrimination occurred when
Commerce subjected only revoked or excluded producers and exporters to AD duty liability
while exempting companies that were subject to the 1987 order prior to its revocation, but now
incur no AD duty liability. Id.; FCOJ Revocation, 70 Fed. Reg. 19,416. While the International
Trade Commission (“ITC”) undertook a full review of the 1987 order and in March 2005 issued
a negative injury determination, the domestic industry had already informed Commerce in
November 2004 that it no longer had any interest in the old order. Plaintiff’s Motion at 14;
Petition at 3, C.R. at 13. In this regard Plaintiff argues that Commerce should have halted the
investigation because it was aware of the impending revocation of the old order and that it could
result in a new order that would not encompass all Brazilian producers of FCOJM. Plaintiff’s
Motion at 14-15. Louis Dreyfus contends that the uneven application of antidumping duty laws
to producers and exporters of identical merchandise constitutes discrimination, which is contrary
10
to the AD statute. Id. Because the antidumping statute requires that (1) duties be imposed on “all
imports of the subject merchandise found to be dumped” and (2) exporters and producers not
investigated must be subject to the “all others” rate, Plaintiff argues that by crafting a producer-
specific scope Commerce acted contrary to its mandate. Id. at 15-16 (citing 19 U.S.C. §§ 1673,
1673d(c)). Reading the statute otherwise, Plaintiff contends, would impermissibly construe the
statute contrary to the United States’ international obligations. Id. at 16-17 (citing Murray v.
Schooner Charming Besty, 6 U.S. (2 Cranch) 64, 118, L. Ed. 208 (1804) (“[A]n act of Congress
ought never to be construed to violate the law of nations if any other possible construction
remains . . . .”)). In support of its argument Plaintiff cites Article 9.2 of the World Trade
Organization Anti-dumping Agreement (“WTO AD Agreement”) to which the United States is
party. Id. at 16. The agreement provides that the antidumping duties shall be collected “on a non-
discriminatory basis on imports of such product from all sources.” Id.; WTO AD Agreement, Art.
9.2. Plaintiff notes that the U.S. Trade Representative has argued before World Trade
Organization (“WTO”) that non-discrimination for purposes of Article 9.2 is achieved when
duties are properly imposed on a “product-specific [] basis, not a company-specific basis.”
Appellate Body Report, United States – Sunset Review of Anti-Dumping Duties on
Corrosion-Resistant Carbon Steel Flat Products from Japan, ¶ 48, 150, WT/DS244/AB/R
(December 15, 2003) (adopted January 9, 2004). Plaintiff also cites to the Statement of
Administrative Action to the Uruguay Round Agreements Act, which requires that LTFV
investigations be conducted on a country-wide basis, and therefore, it says, implicitly not on a
producer-specific basis. Plaintiff’s Motion at 17-18 (citing the Uruguay Round Agreements Act,
Statement of Administrative Action (“SAA”), H.R. Doc. 103-826 at 833, 875 (1994), reprinted
11
in, 1994 U.S.C.C.A.N. 4040). The policy reasons underlying these rules, Plaintiff contends, are
to avoid petitioners “cherry-pick[ing] which foreign producers/exporters would be subject to an
antidumping investigation and duties” and thus convert the antidumping legislation into one that
creates, rather than remedies, unfair trading conditions. Id. at 18. Plaintiff concedes that while
particular producers and exporters are regularly and legally excluded from AD duty liability
under orders pursuant to an investigation, it is not proper to exclude companies that have not
been investigated and found not to be dumping. Id. at 16-17 nn.7-8. Plaintiff suggests a number
of actions that Commerce could have taken in order to subsequently include remaining FCJOM
producers within the scope of the new investigation following the revocation of the old order. Id.
at 18-19. Plaintiff further argues that it was incumbent on Commerce to take action to “prevent
petitioners from ‘gaming’ the antidumping statute,” and because it was aware that its
antidumping investigation would produce “prejudicial and discriminatory results.” Id. at 19-20
n.12 (citing Gilmore Steel Corp. v. United States, 7 CIT 219, 223, 585 F. Supp. 670 (1984)).
Defendant contends that nothing in the antidumping statute bars it from crafting the scope
of an investigation on a company-specific basis where circumstances exist that warrant such a
measure. Defendant’s Motion at 12. Commerce asserts that the decision to include specifically
named producers within the scope of the investigation constitutes a reasonable exercise of its
discretion. Id. at 9.
As an initial matter, it is incumbent on Commerce to engage in statutory interpretation
where the “Congress has not directly addressed the precise question at issue.” See Chevron, 467
U.S. at 842. In such circumstances the role of the court is “not [to] conclude that the agency
construction was the only one it permissibly could have adopted to uphold the construction,” but
12
instead to determine whether the agency’s interpretation was “reasonable” in light of the record
evidence. Id. at 843 n.11, 844. Here, the antidumping statute does not prohibit Commerce from
crafting a company-specific scope, nor is “discrimination” contrary to the statutory regime. 19
U.S.C. § 1673. The Congressional intent underlying the antidumping statute is to “protect
domestic manufacturing against foreign manufacturers who sell at less than fair market value.”
Koyo Seiko Co. v. United States, 20 F.3d 1156, 1159 (Fed. Cir. 1994). Commerce’s
interpretation of the statute led to the inclusion of producers revoked or excluded from a previous
order into a new investigation in which the scope was best delineated by producer.
Plaintiff’s contention that Commerce is prohibited from initiating investigations with a
company-specific scope covering revoked and excluded producers is not supported by binding
law. Commerce has periodically initiated investigations with company-specific scopes
pertaining both to revoked and excluded producers. See, e.g., Issues and Decision Memorandum
for the Antidumping Duty Investigation of Certain Orange Juice from Brazil from Stephen J.
Claeys, Deputy Assistant Sec’y for Import Admin. to David M. Spooner, Assistant Sec’y for
Import Admin., U.S. Dep’t of Commerce (January 6, 2005) (“Decision Memo”) at 6, C.R. at 70.
For example, in Commerce’s investigation of Woodwind Pads the petitioner requested an
investigation into woodwind instrument keys manufactured and exported by a single
manufacturer that had been revoked from a previous order on identical merchandise. Initiation of
Antidumping Duty Investigation; Pads for Woodwind Instrument Keys from Italy Manufactured
by Luciano Pisoni Accessori Strumenti Musicali A Fiato, 57 Fed. Reg. 54,220 (November 17,
1992) (“Woodwind Pads”). On the basis of the petition, Commerce launched a LTFV
investigation limiting the scope of the investigation to “pads for woodwind instrument keys,
13
which are manufactured by Pisoni.”2 Id.; see also Decision Memo at 6, C.R. at 70. Further, in
another investigation into Nylon Impression Fabric Commerce initiated an investigation into two
named producers that had previously been excluded from an existing order. Nylon Impression
Fabric From Japan: Initiation of Antidumping Duty Investigation, 50 Fed. Reg. 28,111 (July 10,
1985) (“Nylon Impression Fabric”). Commerce defined the scope of that investigation to include
only “nylon impression fabric from Japan, produced by or for the account of Asahi and
Shirasaki.” Id. Similarly in an investigation into tapered roller bearings from Japan, Commerce
defined the scope of the investigation to cover all tapered roller bearings and parts thereof
manufactured exclusively by NTN, a manufacturer that had previously been revoked from a pre-
existing order on identical merchandise. Final Determination of Sales at Less Than Fair Value;
Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan, 52 Fed. Reg.
30,700 (August 17, 1987) (“TRBs from Japan”). The scope of the investigation was crafted
specifically to prevent NTN from importing parts of the merchandise and assembling it in the
United States thereby circumventing the order. Decision Memo at 6-7, C.R. at 70-71.3 Plaintiff
2
The final determination covered two producers, but was still company-specific because
only two manufacturers and exporters of woodwind pads from Italy were identified. See Final
Determination; Antidumping Duty Investigation of Pads for Woodwind Instrument Keys From
Italy Manufactured by Music Center s.n.c. di Luciano Pisoni and Lucien s.n.c. di Danilo Pisoni &
C., 58 Fed. Reg. 42,295 (August 9, 1993).
3
Plaintiff’s contention that TRBs from Japan does not set precedent for Commerce’s use
of company-specific scopes is misplaced because the court’s concern in NTN Bearing Corp. of
Am. v. United States, 14 CIT 623, 747 F. Supp. 726 (1990) was that Commerce had crafted the
scope to conditionally include NTN merchandise in the event the merchandise would no longer
be subject to the preexisting order from which it had not yet been revoked. Id. In an earlier
decision, the court noted that Commerce impermissibly departed from its own practice by
including a category of merchandise in a new investigation which was already covered by an
existing antidumping duty order through conditional inclusion, but the court did not hold that
drafting a company-specific scope was contrary to law. NTN Bearing Corp. of Am. v. United
14
distinguishes these cases by arguing that the producers and exporters had received
“nondiscriminatory treatment” because the original order remained in place and therefore all
producers were subject to either the original order or the follow-up investigation and that “no
exporter was exempt from antidumping duties without having first been investigated and found
not to be dumping.” Plaintiff’s Motion at 17 n.8. However, all producers or exporters of FCOJM
have been recently investigated either as part of the sunset reviews of the old order or as part of
the new investigation. In fact, both Citrovita and Branco Peres Citrus, which Plaintiff cites to in
its brief as being exempted from AD liability while still dumping, were found in the final ITC
sunset determination to not cause material injury to the domestic industry, despite an earlier
affirmative injury determination. Frozen Concentrated Orange Juice From Brazil; Final Results
of the Expedited Sunset Review of the Antidumping Order, 69 Fed. Reg. 54,117 (Dep’t of
Commerce September 7, 2004) (“Final Results of Expedited FCOJ Sunset Review”); Second
FCOJ Sunset Review at 3. Therefore all producers and exporters were subject to AD duty
liability prior to the revocation of the 1987 order and when the new investigation was initiated.
Second FCOJ Sunset Review, at 3-5; FCOJ Revocation, 70 Fed. Reg. 19,416; Initiation of OJ
AD Inv., 70 Fed. Reg. 7,233. Furthermore, in keeping with the decision handed down in NTN
Bearing, 13 CIT 91, Commerce declined to craft a scope that conditionally included producers
and exporters still subject to the 1987 order and instead named all producers that at the time were
excluded or revoked from that order to be included in the new investigation. Initiation of OJ AD
Inv., 70 Fed. Reg. 7,233.
States, 13 CIT 91, 94, 705 F. Supp. 594 (1989), remanded on other grounds, 892 F.2d 1004 (Fed.
Cir. 1989).
15
Furthermore, Plaintiff argues that application of AD duties on a non-discriminatory basis
is implicit in 19 U.S.C. § 1673, which requires that duties are assessed on “merchandise” and not
on specific producers. Plaintiff’s Reply to Defendant’s and Defendant-Intervenors’ Responses to
Plaintiff’s Motion for Judgment Upon the Agency Record (“Plaintiff’s Reply”) at 2 (citing 19
U.S.C. § 1673; Jia Farn Mfg. Co., Ltd. v. United States, 17 CIT 187, 192, 817 F. Supp. 969
(1993)). Clearly antidumping laws are aimed at merchandise and not at specific foreign
producers, but this argument does not take into account the limited circumstances in which
Commerce has reason to craft a narrower scope. In addition, Plaintiff cites to 19 U.S.C. §
1673d(c)(1)(B) as requiring that an “all others” rate be set for producers not investigated, again
not recognizing that Commerce with respect to FCOJM was restrained in broadening the scope
of the investigation to avoid an overlap with the existing order. Plaintiff’s Reply at 2.
Plaintiff’s contention that a reading of the statute that permits Commerce to draft a
company-specific scope is contrary to the United States’ international obligations is also without
foundation. Whereas the Uruguay Round Agreements Act and Article 9.2 of the WTO AD
Agreement may refer to antidumping investigations as traditionally conducted and applied on a
country-wide basis, neither agreement, by implication or otherwise, prohibits Commerce from
conducting investigations or issuing orders pertaining to specific producers or exporters. SAA,
H.R. Doc. 103-826 at 833, 875; WTO AD Agreement, Art. 9.2. Here, Commerce acted
reasonably by crafting a scope that prevented an overlap with an existing order, and contrary to
Plaintiff’s contentions, did not engage in “cherry-picking” whereby producers and exporters
would be subject to the order. In fact, launching an investigation on the basis of a petition, as
required by statute, despite an existing order and an on-going sunset review process, did not
16
create unfair trading conditions, whereas permitting foreign producers to chose which
investigations and orders they would be subject to might very well do so.
Moreover, it was not incumbent on Commerce to refuse to initiate an investigation based
on merchandise already subject to an order, to rescind the investigation due to the on-going
sunset review of the old order, or to rescind the investigation when the 1987 order was revoked.
Commerce therefore did not err in denying petitioners’ request to include all Brazilian producers
of FCJOM within the scope of the order after revocation of the original order. See Letter from
Matthew McGrath, Barnes, Richardson & Colburn to Carlos Gutierrez, Sec’y of Commerce, U.S.
Dep’t of Commerce (March 31, 2005) (“Petitioners’ Request for Clarification of Scope”), C.R. at
53, P.R. 103; Letter from Louis Apple, Dir. AD/CVD Operations, U.S. Dep’t of Commerce to
Matthew T. McGrath, Barnes, Richardson & Colburn (June 27, 2005) (“Commerce’s Response
to Request for Scope Clarification”) at 1-2, Plaintiff’s Non-Confidential Appendix, Tab K.
Section 1673 provides that antidumping duties will be imposed if: (1) Commerce makes a
determination 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 International Trade Commission determines
that “an industry in the United States is materially injured, or is threatened with material injury . .
. by reason of imports of that merchandise or by reason of sales (or the likelihood of sales) of that
merchandise for importation.” 19 U.S.C. § 1673(1)-(2). Further, 19 U.S.C. § 1673a which
governs procedures for the initiation of antidumping duty investigations is silent on the matter of
initiating investigations with respect to excluded or revoked producers. 19 U.S.C. §1673a.
Regulations pertaining to the termination of an AD investigation and sunset reviews also do not
confer any obligations upon Commerce to terminate a review based on analogous circumstances
17
to those of this case. 19 C.F.R. § 351.207. As a result, Plaintiff’s contention that “antidumping
duties be applied to all subject imports from a country subject to an investigation, unless a
particular producer/exporter is investigated and found not to be dumping,” is unsupported by the
statutory scheme. Plaintiff’s Motion at 15. In addition, because Commerce is required to initiate
an antidumping investigation within a limited time after a properly filed petition, it did not have
the option of awaiting the outcome of the sunset review before launching and deciding the scope
of the new investigation. 19 U.S.C. § 1673a(b)-(c)(1)(A).4 Instead, Commerce had to craft a
scope that excluded producers and exporters already subject to an order in effect.5 Contrary to
Plaintiff’s contention, Commerce is not at liberty to “restart” an investigation. Statutorily,
Commerce may only terminate a continuing investigation in limited circumstances, such as
where petitioners withdraw their petition or the ITC determines that imports of the subject
merchandise are negligible. 19 U.S.C. §§ 1673c(a)(1)(A); 1673b(a)(1). In addition, the court has
held it appropriate to terminate an investigation “in order to correct a manifest error which taints
the proceeding,” Gilmore Steel, 7 CIT at 223, and if the “allegations essential to the fundamental
4
Commerce initiated the new investigation on February 11, 2005 and the ITC’s negative
injury determination was published in the Federal Register on March 29, 2005. Initiation of OJ
AD Inv., 70 Fed. Reg. 7,233; Frozen Concentrated Orange Juice from Brazil Determination, 70
Fed. Reg. 15,884 (ITC March 29, 2005) (“ITC FCOJ Notice”).
5
Petitioners filed a request for clarification of the scope investigation, seeking to include
producers/exporters of FCOJM previously subject to the 1987 order after revocation of the order.
Petitioners’ Request for Clarification of Scope. Commerce responded to this request that
petitioners should file an amended petition to include producers previously subject to the old
order. Commerce’s Response to Request for Scope Clarification at 2. Commerce noted in its
response to the scope clarification request that “it is the Department’s practice to accord the
petitioners’ scope description great weight in an investigation because the petitioners can best
determine from what imports they require relief.” Id. at 2. Petitioners did not file an amended
petition.
18
sufficiency of a petition are false,” Tung Fong Indus. Co. v. United States, 366 F. Supp. 2d 1308,
1316 (CIT 2005).
Here, Commerce properly crafted the scope to include all excluded and revoked Brazilian
exporters of FCOJM and all Brazilian exporters of NFC because at the time a valid order was
still in effect for FCOJ. Because Commerce is not precluded from crafting company-specific
scopes where necessary, and because Commerce crafted the scope so as to avoid an overlap with
an existing order, it did not commit a “manifest error” within the parameters of Gilmore Steel.6
Further, this court under Chevron is required to give deference to Commerce’s determination
where it is consistent with “the intent of the legislature or the guiding purpose of the statute.”
Ceramica Regiomontana, 10 CIT at 405 (citing Chevron, 467 U.S. at 843-844). In this instance,
Commerce’s initiation of the investigation and its scope determination constituted a reasonable
means of effectuating the applicable statutes, supported by substantial evidence in the record and
in accordance with Commerce’s “precedent, practice, and the law.” Id.; Decision Memo at 8,
C.R. at 72.
B
Commerce Lawfully Included Merchandise Produced and Exported by Coinbra-Frutesp
Within the Scope of the New Order
Plaintiff argues that Commerce crafted a scope in which there was an impermissible
overlap between the old order and the new investigation and order, and that Coinbra-Frutesp was
6
In Plaintiff’s Reply it argues that Gilmore conferred Commerce with the authority to
prevent a “discriminatory result” resulting from the exclusion of producers subject to the 1987
order, upon which it should have acted. Plaintiff’s Reply at 2. Plaintiff fails to show that
Commerce committed a “manifest error” under Gilmore or that any other legal authority compels
Commerce to terminate an investigation upon the subsequent revocation of an order which has
the effect of leaving some producers or exporters free of AD duty liability.
19
subject to both. Plaintiff’s arguments are unavailing because: (a) Commerce may conduct
investigations on producers that are revoked from an existing antidumping order, (b) Coinbra-
Frutesp was revoked from the old order before the petition for the new investigation was filed,
(c) Commerce has the authority to make a successor-in-interest determination at any time during
the investigation, and (d) Commerce did not expand the scope of the final determination by
including Coinbra-Frutesp in the new investigation.
1
Commerce May Conduct Investigations on Producers Revoked from an Existing
Antidumping Order
Plaintiff contends that Commerce may not initiate an antidumping investigation on
merchandise already covered by an order and acted contrary to law in its initiation of the
investigation of Certain Orange Juice from Brazil. Plaintiff’s Motion at 21. Plaintiff’s primary
cited authority is NTN Bearing, 13 CIT 91, 96, in which this court held that Commerce is
prohibited “from initiating a new investigation which includes within its purview a class of
merchandise that is already subject to an outstanding antidumping duty order.” The court,
however, arrived at its conclusion based on the rationale that Commerce would engage in
redundancy by launching multiple investigations of identical merchandise when such
investigations could only permissibly result in a single order. Id. at 95. In addition, the court
noted that “[a]n affirmative antidumping duty determination should only be based on a class of
merchandise which actually will be subject to a resulting antidumping duty order.” Id.
Defendant argues that it permissibly crafted the scope of the investigation so as to avoid
an overlap between the old order and the new investigation and that it has wide latitude in
20
defining the scope of an investigation and order. Defendant’s Motion at 33.
In circumstances where the possibility of administering two proceedings arises,
Commerce has developed a policy to craft the scope of the latter proceeding to ensure that there
is no overlap. Decision Memo at 7, C.R. at 71 (citing Notice of Initiation of Antidumping Duty
Investigations: Magnesium Metal From the People’s Republic of China and the Russian
Federation, 69 Fed. Reg. 15,293, 15,294 n.2 (March 25, 2004); Notice of Final Determination of
Sales at Less Than Fair Value: Pure Magnesium in Granular Form From the People’s Republic of
China, 66 Fed. Reg. 49,345 (September 27, 2001)); see also Defendant-Intervenors’ Response in
Opposition to Rule 56.2 Motion for Judgment Upon the Agency Record (“Defendant-
Intervenors’ Motion”) at 24. In fact, Commerce considers avoiding double assessment of duties
a key element in crafting a scope. Id. (citing Color Television Receivers From Korea; Intention to
Review and Preliminary Results of Changed Circumstances Administrative Review and
Tentative Determination to Revoke Antidumping Duty Order, 52 Fed. Reg. 6,840 (March 5,
1987)). Here, Commerce acted consistently with prevailing law and with the holding in NTN
Bearing by legitimately initiating an investigation with a company-specific scope that did not
overlap with the existing order on the same merchandise, and by launching an investigation into
producers and exporters revoked or excluded from the old order. Acting on a petition aimed at
producers and exporters of FCOJM and NFC (an expanded class of merchandise) could only be
achieved by excluding companies already subject to an order on similar merchandise. Indeed, as
stated by the Government in its brief “the purpose of the company-specific scope in this case was
to address dumping by revoked and excluded producers in a way that did not overlap with the
1987 order.” Defendant’s Motion at 33. Moreover, initiating investigations on a class of
21
merchandise already subject to a pre-existing order is not contrary to past precedent. For
example, in Woodwind Pads and Nylon Impression Fabric, Commerce conducted investigations
of different producers on the same merchandise that had previously been investigated and been
subject to an order. Id. at 12; see Woodwind Pads, 57 Fed. Reg. 54,220; Nylon Impression
Fabric, 50 Fed. Reg. 28,111.
2
FCOJ Produced and Exported by Coinbra-Frutesp was Not Subject to the Old
Antidumping Order when the Petition for the New Investigation was Filed
Plaintiff asserts that Customs’ Notice of Action7 filed in March 2004 subjected Coinbra-
Frutesp to the old order and that Commerce as a result impermissibly included Plaintiff in the
new investigation based on its successor-in-interest determination. Plaintiff’s Motion at 22.
Louis Dreyfus also contends that the rescission of its requested changed circumstances review,
combined with the revocation of the 1987 order, automatically subjected Coinbra-Frutesp to the
old order and that Commerce consequently lost its opportunity to determine Coinbra-Frutesp’s
dumping liability when that was revoked. Id. at 29-30.
In Customs’ Notice of Action it stated that Coinbra-Frutesp were subject to payment of
cash deposits at a rate of 1.96% in the absence of a changed circumstances review confirming
Plaintiff’s right to exclusion from antidumping duty deposits. LDCI CCR Request at 4-5, C.R. at
7
Customs’ Notice of Action is not part of the administrative record of this case but is
periodically referred to in documents contained in the record and in the parties’ briefs. See, e.g.,
LDCI CCR Request at 4-5, C.R. at 5-6. Commerce rejected the inclusion of the notice in the
administrative record pursuant to 19 C.F.R. § 351.104(a)(2)(ii)(A) because it contained new
factual information and was untimely filed. Letter from Shawn Thompson, Program Manager,
AD/CVD Operations, U.S. Dep’t of Commerce to Christopher Dunn, Willkie Farr & Gallagher
LLP (November 2, 2005) (“Rejection Letter”), C.R. at 90.
22
5-6. In response, Louis Dreyfus filed a request for a changed circumstances review asking for
affirmation of its revoked status under the old order as the successor-in-interest to both Frutesp
and Frutropic. Id. at 5-6, C.R. at 6-7. In March 2005, Louis Dreyfus withdrew its request for the
changed circumstances review and asserted in a letter to Commerce that Coinbra-Frutesp is not
the successor-in-interest to Frutropic and Frutesp and therefore should “remain excluded from
this investigation.” LDCI Withdrawal of CCR Request 1-2, Plaintiff’s Appendix at Tab J; Scope
Comments Letter at 10, C.R. at 60.
Louis Dreyfus has maintained that it was the successor-in-interest to Frutesp and
Frutropic since the revocation of both companies from the 1897 AD order, in 1991 and 1994
respectively, and thus has not paid any duties under the old order. LDCI CCR Request at 3-4,
C.R. at 4-5. Customs’ Notice of Action appropriately requested that Plaintiff submit a changed
circumstances review request in order to affirm its exclusion from the 1987 order under the “all
others” rate based on the fact that Plaintiff was trading under the name Coinbra-Frutesp, a
company not in existence at the time of the original order, not subject to the original
investigation, and never revoked from the order in its own capacity. Plaintiff predictably
submitted a request for a changed circumstances review in which it reiterated the position that it
had taken for the duration of the period in which it owned and operated Frutesp and Frutropic,
namely that Coinbra-Frutesp was the successor-in-interest to both and therefore the revocation
from the order should apply to all entries of FCOJ by Coinbra-Frutesp. Id. at 5, C.R. at 6.
Plaintiff’s subsequent withdrawal of its request for review and its change in position would at
minimum render it liable for its omission to pay duties under the old order dating back almost a
decade.
23
Plaintiff argues that Custom’s Notice of Action was “final and conclusive” agency action
rendering Coinbra-Frutesp liable under the old order absent a request for a scope ruling or
changed circumstances review. Plaintiff’s Motion at 24-25 (citing Fujitsu Ten Corp. of Am. v.
United States, 21 CIT 104, 107, 957 F. Supp. 245 (1997), aff’d sub nom. Sandvik Steel Co. v.
United States, 164 F.3d 596 (Fed. Cir. 1998); Sandvik Steel Co. v. United States, 21 CIT 140,
142, 957 F. Supp. 276 (1997), aff’d 164 F.3d 596). Plaintiff also contends that Customs’ Notice
of Action is part of the record despite Commerce’s exclusion of the document from the
administrative record because it was untimely filed. Plaintiff’s Motion at 23 n.15; see Rejection
Letter at 1-2, C.R. at 90-91. Plaintiff’s argument fails to recognize that Commerce makes scope
decisions that are binding upon Customs, not vice versa. Indeed, Customs’ role in liquidating
entries subject to antidumping orders is “merely ministerial” and “follows Commerce’s
instructions in assessing and collecting duties.” Mitsubishi Elec. Am., Inc. v. United States, 44
F.3d 973, 977 (Fed. Cir. 1994). In Mitsubishi Elec., the Federal Circuit stressed that the statute
upon which Plaintiff also relies, “makes clear that Customs does not make any section 1514
antidumping decisions” and that “Customs cannot modify . . . [Commerce’s] determinations,
their underlying facts, or their enforcement.” Id. (internal citations omitted). Plaintiff’s proposed
reading of the statute would divest Commerce of its role of “issuing, interpreting and
implementing anti-dumping orders.” Defendant’s Motion at 39. The real effect of the statute’s
language is to prevent producers and exporters from retroactively challenging the scope of an
order once the entries are liquidated by Customs and the exporter did not request a scope
decision from Commerce at the time. See 19 U.S.C. § 1514(b). Further, Plaintiff’s reliance on
Sandvik Steel and Fujitsu Ten does not lend support to the proposition that Customs’ liquidation
24
is “final and conclusive;” in fact, nothing in these opinions suggest that Commerce is precluded
from making a scope determination that is contrary to Customs’ scope determination prior to the
liquidation of entries.
Customs’ Notice of Action did not become part of the record and therefore cannot be
relied upon as forming the basis for Plaintiff’s liability under the old order. According to
prevailing case law only “documents and materials directly or indirectly considered by agency
decision-makers” become part of the administrative record. Thompson v. United States, 885 F.2d
551, 555 (9th Cir. 1989). Plaintiff has not adequately demonstrated that Commerce considered
Customs’ Notice of Action in its investigation and therefore this court is similarly unable to base
a decision on a document which is not contained in the record, and upon which the agency’s
determination did not rely. This court held that “those documents at the agency which become
sufficiently intertwined with the relevant inquiry are part of the record, no matter how or when
they arrived at the agency.” Acciai Speciali Terni S.p.A. v. United States, 24 CIT 1064, 1071,
118 F. Supp. 2d 1298 (2000) (internal citations omitted). However, there Commerce used
significant portions of the administrative records in two separate proceedings to arrive at its
conclusion in both proceedings, therefore creating an overlap which necessitated that the court
was able to consider both records on review of the agency’s determination. Id. at 1072. This is
not the case here.
Furthermore, the notice of rescission of the changed circumstances review did not state
that “CBP would continue to suspend liquidation of Coinbra-Frutesp’s entries of FCOJ.”
Plaintiff’s Motion at 28. It stated that Customs would continue to suspend liquidation “as
appropriate” of “FCOJ from Brazil,” because at the time of the notice of rescission the 1987
25
order was still in effect. Notice of Rescission, 70 Fed. Reg. 19,417. The fact that Commerce did
not issue a final determination in the changed circumstances review prior to rescission of the
review and the issue becoming moot after the revocation of the old order did not automatically
subject Coinbra-Frutesp to liability for duties under the “all others” rate of the old order.
As a result of the fact that Customs’ Notice of Action does not establish legally binding
antidumping duty liability upon Coinbra-Frutesp under the old order and because the Notice of
Action never became part of the administrative record underlying Commerce’s investigation that
led to the inclusion of Coinbra-Frutesp into the new investigation, Coinbra-Frutesp was not
subject to the old antidumping order on FCOJ from Brazil when the petition for the new
investigation was filed.
3
Commerce May Conduct a Successor-in-Interest Investigation to Decide Whether an Entity
Falls Within the Scope of the Antidumping Investigation
Louis Dreyfus contends that Commerce developed its successor-in-interest test to be able
to consider a company’s change in circumstances after an antidumping order is in place, but that
Commerce acted contrary to law by making its successor-in-interest determination after the order
to which it applied was revoked. Plaintiff’s Motion at 30-31 (citing Marine Harvest (Chile) S.A.
v. United States, 26 CIT 1295, 1310, 244 F. Supp. 2d 1364 (2002)). Plaintiff stresses that
Commerce in the past has only made successor-in-interest determinations in the context of orders
still in effect. Id. at 31 (citing Jia Farn Mfg., 17 CIT at 190).
Defendant argues that the successor-in-interest determination was made in the context of
the new investigation, and that Commerce may “lawfully address successor-in-interest issues as
26
necessary to define and interpret the scope of an investigation and order.” Defendant’s Motion at
28. Defendant further notes that Plaintiff is not contesting the merits of the successor-in-interest
determination, but the time and context in which it was made. Id.
Commerce examined the successor-in-interest issue both in the context of the 1987 order
and in the new investigation. In its initiation notice Commerce stated that “the Department will
also examine the successor-in-interest issues for both Frutesp and Frutropic in the context of this
proceeding” and further noted that “should the Department find Louis Dreyfus or COINBRA-
Frutesp to be the successor-in-interest to these companies, the successor company will be
included as part of this proceeding.” Initiation of OJ AD Inv., 70 Fed. Reg. at 7,234. Plaintiff’s
petition for the changed circumstances review addresses the successor-in-interest issue in the
context of the old order advocating that Coinbra-Frutesp and/or Louis Dreyfus be considered the
successor-in-interest to Frutesp and Frutropic so as to remain revoked from AD liability under
the old order. LDCI CCR Request at 3-4, C.R. at 4-5. Given the subsequent change in Plaintiff’s
position regarding its successor-in-interest relationship with Frutesp and Frutropic and
Commerce’s rescission of the changed circumstances review it remained incumbent upon
Commerce to determine whether Plaintiff was the successor-in-interest for purposes of the new
investigation. This determination could have affected liability under the old order, but this issue
was moot due to the revocation of the 1987 order prior to the issuance of the final determination.
1987 FCOJ AD Order, 52 Fed. Reg. 16,426; Notice of Rescission, 70 Fed. Reg. 19,417; Final
Determination, 71 Fed. Reg. 2,183. In response to Plaintiff’s contention that Commerce is
prohibited from performing a successor-in-interest determination under the Tariff Act in these
circumstances, Commerce in its Issues and Decisions Memorandum stated that “while the Act
27
does not expressly provide for this type of determination in an LTFV investigation, we find that
it does also not expressly prohibit it.” Decision Memo at 16, C.R. at 77. Coupled with Plaintiff’s
withdrawal of its petition for a changed circumstances review, this is sufficient to warrant
Commerce’s inclusion of the successor-in-interest issue in its final determination. Moreover,
Commerce’s scope determination merely affirmed Plaintiff’s stated position and long-standing
practice of not paying duties under the old order, in turn subjecting Louis Dreyfus to the new
investigation and subsequent order. Commerce has the discretion to define the scope of an
investigation and there is no law prohibiting it from applying its successor-in-interest test as a
mechanism to determine whether a certain producer should be included in the scope.8 Commerce
is entitled to deference in making its determination and acted consistently with its authority and
discretion in deciding that a successor-in-interest finding was an appropriate means of
determining the scope of the investigation and subsequent order. Chevron, 467 U.S. at 843.
4
Commerce Did Not Expand the Scope of the Investigation in its Final Determination by
Including Coinbra-Frutesp Within the Scope
According to Plaintiff, Commerce lacked the authority to include Coinbra-Frutesp within
the scope of the final determination because the ITC excluded merchandise produced and
exported by Plaintiff from the scope of its preliminary injury determination. Plaintiff’s Motion at
8
Contrary to Plaintiff’s assertions, Valkia Ltd. v. United States, Slip Op. 04-71, 2004 CIT
LEXIS 66 (CIT June 18, 2004) does not stand for the proposition that the only exception to when
Commerce may utilize the successor-in-interest test outside an administrative review or changed
circumstances review is “where there is a change of circumstances during a LTFV investigation
that would justify use of the successor-in-interest test.” Plaintiff’s Motion at 31 n.21 (emphasis in
original). In fact, the case is illustrative of the fact that Commerce has discretion to apply the test
outside of its conventional use when the need arises.
28
33. Plaintiff contends that while Commerce may clarify the scope of an investigation, it is
statutorily prohibited from expanding the scope. Id. (citing Royal Bus. Mach., Inc. v. United
States, 1 CIT 80, 87, 507 F. Supp. 1007 (1980)). The principal assertion made by Plaintiff is that
Commerce is prohibited from expanding the scope “mid-stream” because (1) Commerce’s final
determination may only apply to merchandise that served as the basis for the ITC’s affirmative
preliminary injury determination and, (2) the scope at each stage of the investigation must remain
unchanged. Id. at 34.
Defendant argues that because the scope from the outset of the investigation
contemplated the inclusion of Coinbra-Frutesp, Commerce’s subsequent inclusion of Plaintiff
constituted a mere clarification of the scope and not an expansion. Defendant’s Motion at 31-32.
Defendant furthermore distinguishes Plaintiff’s support for its proposition as relying exclusively
on cases in which there was a request to modify, as opposed to expand, the scope to include
merchandise not covered at the outset of the investigation. Id.
It is well established that Commerce must show caution in expanding the scope of an
investigation to cover merchandise that was either not included or specifically excluded at the
outset of an investigation. See, e.g., Smith Corona Corp. v. United States, 16 CIT 562, 565, 796
F. Supp. 1532 (1992). Plaintiff also provides persuasive authority that supports the notion that
Commerce may only include in its final determination merchandise that served as a basis for
ITC’s preliminary injury determination. Plaintiff’s Motion at 34 (citing 19 U.S.C. §§ 1677(25),
1673b(a)(1)). However, case law suggests that Commerce has broad authority to modify the
scope of an investigation so long as it is supported by substantial evidence and does not have a
prejudicial effect. Torrington Co. v. United States, 14 CIT 507, 511 n.3, 745 F. Supp. 718 (1990),
29
aff’d, 938 F.2d 1276 (Fed. Cir. 1991). Here, Frutropic, Frutesp and Coinbra-Frutesp were
specifically mentioned in the initiation notice as conditionally subject to the investigation and
were clearly producers and exporters of the “class or kind of merchandise” under investigation.
Initiation of OJ AD Inv., 70 Fed. Reg. at 7,234; 19 U.S.C. § 1677. In Commerce’s Issues and
Decision Memorandum, the Department noted that “[i]n both our notice of initiation and the
preliminary determination, we stated that we intended to make a successor-in-interest finding
with respect to Coinbra-Frutesp in order to determine whether its exports of FCOJM are subject
to this proceeding.” Decision Memo at 12, C.R. at 73. Commerce did not suspend liquidation of
entries of Coinbra-Frutesp’s FCOJM simply because it is prohibited from imposing provisional
measures on imports upon which the ITC did not make a preliminary injury determination. Id. at
19, C.R. at 80 (citing 19 U.S.C. § 1673). Plaintiff’s contention that the merchandise was
excluded ab initio is therefore without merit. Additionally, Commerce was not undertaking a
scope determination nor does the inclusion of a successor-in-interest to a party already within the
scope of the investigation act to expand it. Indeed, had Coinbra-Frutesp been excluded from the
scope in the final determination, this may have served to alter the scope. Plaintiff’s conditional
inclusion into the investigation did not cause prejudice, and although Plaintiff was not
specifically mentioned in the ITC’s preliminary determination, Coinbra-Frutesp was mentioned
in its final determination. Final ITC Injury Determination at IV-1. The inclusion of Coinbra-
Frutesp was therefore reflected in both agencies’ actions throughout the investigation, and the
scope of the investigation was not unlawfully expanded by the inclusion of Plaintiff.
30
C
Coinbra-Frutesp Could Lawfully be Subject to the New Investigation Because it was
Revoked from the Old Order
Plaintiff argues that Commerce’s investigation was unlawfully commenced upon revoked
producers and exporters because producers that are revoked from an order remain conditionally
subject to the order from which they have been revoked. Plaintiff’s Motion at 36-37. Plaintiff
contends that the statutory scheme which imposes reinstatement of AD liability on revoked
producers that resume dumping subjects the revoked producers to conditional liability for the
life-span of the order. Id. (citing 19 U.S.C. § 1675(d); 19 C.F.R. § 351.222(b)(2)(i)(B)).
Here, Commerce’s new investigation covered an expanded class of goods, namely
FCOJM and NFC. The statute to which Plaintiff refers merely authorizes the revocation of a
specific producer from an AD order but does not preclude Commerce from initiating a new
investigation where dumping is alleged in an expanded class of goods. Plaintiff contends that
“incorporating into a new investigation merchandise that is already subject to an antidumping
duty order, albeit revoked, is not a permissible remedial measure to determine whether there has
been a resumption of sales at less than fair value.” Plaintiff’s Motion at 37 (citing NTN Bearing,
13 CIT at 94). In opposition to Plaintiff’s analysis, Defendant-Intervenors note that Commerce’s
authority to reinstate revoked producers under Asahi Chem. Indus. Co. v. United States, 13 CIT
987, 990, 727 F. Supp. 625 (1989) remains limited because the court found that “the revocation
determination of Commerce quashes the effect of an antidumping order, notwithstanding the
language in the regulation implying that the revoked order may be reinstated.” Defendant-
Intervenors’ Motion at 37. Furthermore, Plaintiff’s argument that in Sebacic Acid from the
People’s Republic of China, Commerce concluded that a party that is conditionally revoked from
31
an order is still subject to the order. Plaintiff’s Motion at 39 (citing Sebacic Acid From the
People’s Republic of China: Preliminary Results of Changed Circumstances Review and Intent
To Reinstate the Antidumping Duty Order, 69 Fed. Reg. 68,879 (November 26, 2004) (“Sebacic
Acid”)). Plaintiff’s argument is not without merit, but fails to show that in the event that
dumping of an expanded group of merchandise recurs, Commerce is compelled to proceed
against the revoked producers by conducting a changed circumstances review and reinstating an
old order, as opposed to launching a new investigation. Here, Commerce acted reasonably by
initiating a new investigation. Plaintiff was not procedurally disadvantaged by a new proceeding
in lieu of a reinstatement proceeding because Commerce as part of a new investigation is
required to make an affirmative injury determination and impose a more liberal de minimis
margin standard. See Defendant-Intervenors’ Motion at 39. Furthermore, whereas Commerce in
Sebacic Acid experienced a short time between the revocation of the order and resumption of
dumping, here, the old order went into effect in 1987, leaving an extended gap between
revocations and resumption of dumping activity. Production, market and monetary conditions
changed during that time and NFC, a new product, was added to the market since the old order
was put in place. As a result, reinstatement would not have adequately provided for the changes
in market conditions. In Sebacic Acid, however, Commerce reasonably subjected only one
producer to reexamination and reinstated that producer because extensive dumping was occurring
through a single exporter that was distorting the market. Here, almost all producers were
revoked from the old order and absent any statutory barriers to launching a new expanded
investigation, Commerce reasonably exercised its discretion in initiating an investigation
including revoked and excluded producers.
32
V
Conclusion
For the foregoing reasons, Commerce’s final determination in Notice of Final
Determination of Sales at Less Than Fair Value and Affirmative Final Determination of Critical
Circumstances: Certain Orange Juice from Brazil, 71 Fed. Reg. 2,183 (January 13, 2006) is
affirmed.
___/s/ Evan J. Wallach___
Evan J. Wallach, Judge
Dated: June 19, 2007
New York, New York
33
UNITED STATES COURT OF INTERNATIONAL TRADE
____________________________________
:
LOUIS DREYFUS CITRUS INC., :
:
Plaintiff, :
: Before: WALLACH, Judge
v. : Court No.: 06-00122
:
UNITED STATES, :
:
Defendant, :
and :
:
FLORIDA CITRUS MUTUAL et al., :
:
Defendant-Intervenors. :
____________________________________:
ORDER AND JUDGMENT
This case having come before the court upon the Rule 56.2 Motion for Judgment Upon
the Agency Record filed by Louis Dreyfus Citrus Inc. (“Plaintiff’s Motion”); the court having
reviewed all pleadings and papers on file herein, having heard oral argument by each party, and
after due deliberation, having reached a decision herein; now, in conformity with said decision, it
is hereby
ORDERED ADJUDGED AND DECREED that Plaintiffs’ Motion is DENIED; and it is
further
ORDERED ADJUDGED AND DECREED that the decision of the U.S. Department of
Commerce (“Commerce”) in Notice of Final Determination of Sales at Less Than Fair Value and
Affirmative Final Determination of Critical Circumstances: Certain Orange Juice from Brazil, 71
Fed. Reg. 2,183 (January 13, 2006) is hereby SUSTAINED; and it is further
ORDERED that all parties shall review the court’s Opinion in this matter and notify the
court in writing on or before Tuesday, June 26, 2007. whether any information contained in the
Opinion is confidential, identify any such information, and request its deletion from the public
version of the Opinion to be issued thereafter. The parties shall suggest alternative language for
any portions they wish deleted. If a party determines that no information needs to be deleted, that
party shall so notify the court in writing on or before June 26, 2007.
_/s/ Evan J. Wallach_______
Evan J. Wallach, Judge
Dated: June 19, 2007
New York, New York