Bergerac, N.C. v. United States

Slip Op. 00-71

UNITED STATES COURT OF INTERNATIONAL TRADE

:
BERGERAC, N.C., :
:
Plaintiff, :
:
v. :
:
UNITED STATES, :
: Court No. 98-10-03045
Defendant, : BEFORE: CARMAN, CHIEF JUDGE
:
and :
:
HERCULES, INC., :
:
Defendant-Intervenor. :
:

Plaintiff, Bergerac, N.C. (Bergerac), moves for Judgment Upon An Agency Record
pursuant to U.S. CIT R. 56.2, challenging the U.S. Department of Commerce’s (Commerce)
refusal to exclude certain home market sales as sample sales outside the ordinary course of trade
in the final results of Commerce’s antidumping administrative review in Industrial
Nitrocellulose From France, 63 Fed. Reg. 49,085 (Sept. 14, 1998) (final results of antidumping
administrative review) (Final Results). In making its final determination, Commerce found
Bergerac had not met its burden of proof in demonstrating that the sales in question were outside
the ordinary course of trade as required by statute. Defendant, United States, and defendant-
intervenor, Hercules, Inc., oppose the motion stating the challenged determination is supported
by substantial evidence and is otherwise in accordance with law.

Held: Plaintiff’s motion for Judgment Upon An Agency Record is denied. The Court
finds Commerce’s Final Results are supported by substantial evidence on the record and are
otherwise in accordance with law and sustains them in their entirety. This action is dismissed.

Date: June 21, 2000

Ablondi, Foster, Sobin & Davidow, P.C. (James Taylor, Jr.), Washington, D.C., for
plaintiff.

David W. Ogden, Acting Assistant Attorney General of the United States; David M.
Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of
Justice (Lucius B. Lau); Mark A. Barnett, Office of the Chief Counsel for Import Administration,
United States Department of Commerce, of Counsel, for defendant.
 Court No. 98-10-03045

Miller Thomson Wickens & Lebow LLP (Edward M. Lebow and Beverly D. Ross),
Washington, D.C., for defendant-intervenor.

OPINION

CARMAN, CHIEF JUDGE: This matter is before the Court on plaintiff’s, Bergerac,

N.C. (Bergerac), motion for Judgment Upon An Agency Record pursuant to U.S. CIT R. 56.2.

Plaintiff asserts the U.S. Department of Commerce’s (Commerce) refusal to exclude certain

home market sales as sample sales outside the ordinary course of trade in the final results of

Commerce’s antidumping administrative review in Industrial Nitrocellulose From France, 63

Fed. Reg. 49,085 (Sept. 14, 1998) (final results of antidumping administrative review) (Final

Results), is not supported by substantial evidence and is not otherwise in accordance with law.

Plaintiff requests this Court remand the action to Commerce with instructions to exclude

Bergerac’s home market sales of priced samples from the margin calculation and to articulate

meaningful standards from which a respondent may discern whether its home market sample

sales will be regarded as sales in the ordinary course of trade. Defendant, United States, and

defendant-intervenor, Hercules, Inc. (Hercules), oppose the motion stating the Final Results are

supported by substantial evidence and are otherwise in accordance with law.

This Court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (1994). For the reasons

which follow, plaintiff’s motion for Judgment Upon An Agency record is denied, Commerce’s

Final Results are sustained in their entirety, and this action is dismissed.

BACKGROUND

On September 25, 1997, Commerce initiated an administrative review of antidumping
 Court No. 98-10-03045 Page 3

duty orders and findings of certain industrial nitrocellulose from, among other countries, France.

See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 62 Fed. Reg.

50,292 (Sept. 25, 1997). Bergerac is a producer in France of industrial nitrocellulose, the

merchandise at issue in the review. In response to Commerce’s initial questionnaire requesting

detailed information on U.S. and home market sales, plaintiff claimed it “often sends samples to

customers for approval” and that “[s]ample sales . . . are outside the ordinary course of trade . . . .”

(Bergerac Questionnaire Responses, Plaintiff’s Appendix Pursuant to CIT Rule 56.2 (App.),

Public Document (Pub. Doc.) 14, at A-12 and B-12.)

Commerce requested in a supplemental questionnaire information concerning Bergerac’s

“zero-value transactions (samples and prototypes)” to determine whether the reported

transactions “were outside the ordinary course of trade.” (Bergerac Supplemental Questionnaire,

App., Pub. Doc. 20, at 17.) Specifically, Commerce requested Bergerac:

a) describe how the orders for these sales were communicated;

b) indicate the documents available to demonstrate that these sale[s] are in fact
samples and prototypes;

c) explain whether the customer in question purchased these particular items before
the date of the claimed sample sale and, if so, indicate how many were purchased;

d) contrast the prices and quantities involved in these purchases with normal sales of
these items, if any, to other customers and subsequent sales to the same customer;

e) indicate the ultimate disposition of this merchandise, explain whether title was
passed to the recipient of the merchandise, and indicate whether the merchandise
was tested and destroyed during the trial application;

f) describe any non-monetary payment and/or consideration made by your customer
for the transactions.

(Id. (emphasis in original).) Bergerac responded by providing information regarding both priced
Court No. 98-10-03045 Page 4

and zero-value transactions including information concerning free samples and priced samples.

Bergerac filed its response the same date as the statutory deadline for submissions of unsolicited

factual information, January 20, 1998. See 19 C.F.R. § 351.301(b)(2) (1998)1.

In its April 17, 1998, decision memo, Commerce stated it did not consider plaintiff’s

priced sample sales to be outside the ordinary course of trade and, therefore, such sales were not

excluded by Commerce in its margin calculation. Specifically, Commerce stated, “[Bergerac]

did not provide adequate evidence that any of these sales were unique or unusual and, therefore,

outside the ordinary course of trade.” (Analysis Methodology Used to Determine Dumping

Margins for Bergerac, N.C., App., Pub. Doc. 31, at 5.)

In its case brief filed June 10, 1998, and at a public hearing held on June 18, 1998,

Bergerac attempted to provide additional information concerning its priced samples. Commerce

rejected such information, finding that it was untimely because Commerce had not specifically

solicited the additional information after January 20, 1998.

On September 14, 1998, Commerce issued its final results stating it disagreed with

Bergerac that it should exclude certain home market sales because they were outside the ordinary

course of trade. Specifically, regarding priced samples, Commerce stated, “[W]hile it is clear

1
The applicable regulations are those found at 19 C.F.R. Part 351, as Commerce stated,
in its papers before the Court, that a request for investigation was filed with Commerce after the
effective date of the new regulations as identified in 19 C.F.R. § 351.701 (1998). (Defendant’s
Memorandum in Opposition to Plaintiff’s Motion for Judgment on the Agency Record Pursuant
to CIT Rule 56.2, at 2 n.1.)
Court No. 98-10-03045 Page 5

that the invoices for these sales indicated that they were sample sales, such indication is not

sufficient to demonstrate that the sale is unique or unusual or otherwise outside the ordinary

course of trade.” Final Results, 63 Fed. Reg. at 49,087. Commerce further stated, “Bergerac’s

argument that these sales were at a high price to cover the high cost of shipping small packages

does not address the Department’s ‘unique or unusual’ standard concerning ordinary course of

trade.” Id. Accordingly, Commerce found Bergerac had not met its burden of proof in

demonstrating that the sales in question were outside the ordinary course of trade. See id. at

49,087-88. Bergerac timely filed a summons in this action on October 13, 1998.

CONTENTIONS OF THE PARTIES

A. Plaintiff

Plaintiff argues it met its burden of demonstrating that the sales in question were sales of

sample merchandise outside the ordinary course of trade. Plaintiff points to the commercial

definition of the term “sample” that is defined as a “small quantity” that is “presented for

inspection or examination.” BLACK’S LAW DICTIONARY 1203 (5th ed. 1979). Plaintiff asserts it

provided probative evidence that its priced sample sales were contemporaneously identified as

priced samples in normal business records, generally smaller in quantity and higher in price than

normal commercial sales, and generally tested and destroyed. Taking the evidence as a whole,

Bergerac argues it satisfied its burden of proof that the sales in question were priced sample sales

not in the ordinary course of trade.

Plaintiff argues Commerce’s reference to certain agency decisions is inapposite because

in the cases cited the challenging parties only provided evidence regarding higher prices or
Court No. 98-10-03045 Page 6

higher profits or smaller quantities in support of their claims that certain sales were outside the

ordinary course of trade. See, e.g., Large Newspaper Printing Presses and Components Thereof,

Whether Assembled or Unassembled, From Germany, 61 Fed. Reg. 38,166 (July 23, 1996);

Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France, et

al., 62 Fed. Reg. 54,043, at 54,065-66 (Oct. 17, 1997) (final results of antidumping duty

administrative reviews). Here, however, plaintiff contends the sample sales should have been

considered outside the ordinary course of trade because their character as samples for testing

purposes in non-commercial quantities placed them outside the ordinary course of trade.

Further, plaintiff argues, Commerce’s reference to these cases in the Final Results

demonstrates Commerce failed to consider the totality of the evidence before it and, in particular,

overlooked key evidence provided by Bergerac—namely, that the samples were for testing

purposes. In the past, Commerce has excluded home market sales of test samples on the grounds

that they were outside the ordinary course of trade. See, e.g., Granular Polytetrafluoroethylene

Resin From Japan, 58 Fed. Reg. 50,343, at 50,345 (Sept. 27, 1993) (final).

Bergerac further contends, in as much as it satisfied its burden of proof, Commerce failed

to meet its burden of rebutting the evidence. Bergerac states that Commerce did not point to any

inconsistencies or contradictions in the information provided but rather stated that “‘Bergerac did

not respond as to whether the customer had purchased these particular items previously.’” (Brief

in Support of Plaintiff’s Motion for Judgment on the Agency Record Pursuant to CIT Rule 56.2,

at 18 (Plaintiff’s Br.) (quoting Final Results, 63 Fed. Reg. at 49,088).) Bergerac argues,

however, it did provide such information. According to Bergerac, it stated in its case brief that
Court No. 98-10-03045 Page 7

“[s]amples are sold to customers.” (Bergerac’s Case Brief, App., Pub. Doc. 47, at 2 n.1.)

Moreover, Bergerac contends, whether the samples were sold to existing customers is irrelevant

to whether the sample sales are outside the ordinary course of trade.

Bergerac additionally argues that although Commerce found Bergerac failed to

demonstrate the priced sample sales were “unique or unusual,” there is no body of case law nor

any regulation which defines “unique or unusual” as a separate standard or identifies factors

relevant to such a standard.

Bergerac also criticizes Hercules’s and defendant’s arguments as inadequate. Bergerac

argues Hercules’s suggestion that Commerce was warranted in presuming the answers to

Commerce’s questions would not have supported Bergerac’s claimed exclusion is unwarranted

because Commerce did not apply a “facts available” test in this case. Bergerac also argues

defendant’s post hoc rationalization that since sample sales are a “‘common occurrence,’” they

are by definition “‘a condition or practice that [is] normal for this particular trade,’” should not

be considered by this Court as it is not the rationale stated by the agency in its administrative

determination. (Reply Brief in Support of Plaintiff’s Motion for Judgment on the Agency

Record Pursuant to CIT Rule 56.2, at 8 (quoting Defendant’s Memorandum in Opposition to

Plaintiff’s Motion for Judgment on the Agency Record Pursuant to CIT Rule 56.2, at 28 (Def.’s

Br.)).) Further, Bergerac contends the defendant’s assertion that Bergerac should be estopped

from arguing its priced samples were not sold in commercial quantities is false. Rather, Bergerac

argues, the small quantities involved in the priced sample sales were an essential part of its

argument in favor of the exclusion of such sales.
Court No. 98-10-03045 Page 8

Bergerac also contends Commerce improperly denied Bergerac the opportunity to

provide additional information concerning the priced sample sales. According to Bergerac,

Commerce did not identify alleged deficiencies in Bergerac’s questionnaire responses concerning

the priced sample sales until after the preliminary determination, and when Bergerac attempted to

provide additional information, Commerce refused it as untimely. Bergerac contends, however,

if Commerce believed Bergerac’s questionnaire responses were deficient, Commerce was

required by law to provide Bergerac an opportunity to remedy the alleged deficiency. As

Commerce failed to provide such an opportunity, plaintiff asserts, the Court should remand this

case to Commerce with instructions to exclude the sample sales.

B. Defendant

Defendant, United States, argues that Commerce’s determination that Bergerac’s priced

sample sales were within the ordinary course of trade is supported by substantial evidence and is

otherwise in accordance with law. Initially, defendant argues, in as much as Congress has not

identified every instance in which sales are to be considered outside the ordinary course of trade,

see 19 U.S.C. § 1677(15) (1994), Commerce has broad discretion to establish its own

methodology for determining whether sales are outside the ordinary course of trade.

Commerce’s regulation, 19 C.F.R. § 351.102(b) (1998), articulates Commerce’s methodology.

Under this methodology, there is a presumption that all sales are within the ordinary course of

trade, and the party making the claim otherwise bears the burden of proving the sales are outside

the ordinary course of trade.

According to defendant, Bergerac failed to meet its burden of proof that its priced sample
Court No. 98-10-03045 Page 9

sales were outside the ordinary course of trade. First, defendant argues, Bergerac merely

identified the sales in question as “samples” and stated they were sold at a high price. Citing

Koyo Seiko Co., Ltd. v. United States, 20 CIT 772, 783, 932 F. Supp. 1488, 1498 (1996),

defendant argues the mere identification of sales as “samples” is insufficient to demonstrate that

the sales in question are outside the ordinary course of trade. Second, defendant argues the mere

existence of relatively high sales prices and smaller quantities is insufficient to demonstrate that

the sales are outside the ordinary course of trade. Third, defendant claims the statement that the

priced sample sales generally were tested and destroyed does not establish the sales in question

were tested and destroyed. Fourth, citing NTN Bearing Corp. of Am. v. United States, 19 CIT

1165, 1172, 903 F. Supp. 62, 69 (1995), defendant contends the fact that Bergerac filed

certifications as to the factual accuracy of its statements does not establish that the sales in

question were outside the ordinary course of trade. Finally, defendant contends, Bergerac did not

specifically answer Commerce’s question whether Bergerac’s customers had previously

purchased these types of sample sales. According to defendant, these findings show plaintiff

failed to meet its burden of proof and provide ample support for the agency’s conclusion that the

priced sample sales are within the ordinary course of trade.

To the extent plaintiff argues its priced samples should not be used for purposes of

calculating normal value because they were not made in “commercial quantities,” defendant

contends the argument should not be considered by this Court. According to defendant, Bergerac

never argued to Commerce that its priced samples were not made in the usual commercial

quantities, and to the extent that it does so now, the Court should not address the argument based

on Bergerac’s failure to exhaust its administrative remedies. See 28 U.S.C. § 2637(d) (1994).
Court No. 98-10-03045 Page 10

Defendant adds Bergerac now concedes that it is a “‘common occurrence’” for samples to

be sold to existing customers. (Def.’s Br. at 23 (quoting Plaintiff’s Br. at 19).) Defendant argues

this concession validates Commerce’s decision as such a fact makes the sample sales at issue

within the normal course of trade under consideration. Defendant also argues Bergerac’s

reference to the definition of “sample” in BLACK’S LAW DICTIONARY fails to support Bergerac’s

argument. Specifically, defendant contends while a dictionary definition may be helpful in

defining a statutory term, it is not helpful where, as here, the statute contains only illustrative

uses of the term, and the merchandise at issue is not on that list.

Defendant also argues Commerce acted within its discretion by not affording Bergerac

the opportunity to submit additional factual information after the January 20, 1998, deadline.

According to defendant, agency regulations, which have been upheld as reasonable by the courts,

state that unsolicited factual information submitted later than 140 days after the last day of the

anniversary month is considered untimely. See 19 C.F.R. § 351.301. As Bergerac submitted

new factual information in its case brief and at the administrative hearing in June 1998, well after

the January 20, 1998, deadline, Commerce properly rejected the information.

C. Defendant-Intervenor

Defendant-Intervenor, Hercules, argues sample sales are considered to be within the

ordinary course of trade unless the party asserting that the sales are outside the ordinary course of

trade proves otherwise. Here, according to defendant-intervenor, plaintiff failed to meet its

burden of proof as it did not answer Commerce’s specific request for information concerning a

comparison of prices, quantities, and customers for the products concerned in its questionnaire
Court No. 98-10-03045 Page 11

responses. Moreover, defendant-intervenor contends, plaintiff’s argument that its one-kilogram

sale was “almost six times higher than the normal market price” is, without more, insufficient to

prove the sale was outside the ordinary course of trade. Defendant-intervenor additionally

asserts plaintiff’s identifying sales as samples is equally insufficient, without more, to prove the

sales were outside the ordinary course of trade. Further, defendant-intervenor argues certifying

to the factual accuracy of a submission does not prove a sale is a sample sale outside the ordinary

course of trade. In light of the lack of information provided, defendant-intervenor contends

Commerce correctly considered the priced sample sales to be in the ordinary course of trade and

included them in the margin calculation. Defendant-intervenor additionally contends Commerce

properly excluded information provided by plaintiff in its case brief and at the hearing in June

1998 as untimely as it was submitted after the statutory deadline. Thus, defendant-intervenor

argues, plaintiff’s motion should be denied and Commerce’s determination affirmed.

STANDARD OF REVIEW

This Court will sustain a final determination 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) (1994). Substantial evidence is that which “a reasonable mind might accept as

adequate to support a conclusion.” Universal Camera Corp. v. NLRB, 340 U.S. 474, 477 (1951),

quoted in Matsushita Elec. Indus. Co., Ltd. v. United States, 750 F.2d 927, 933 (Fed. Cir. 1984).

For the purposes of judicial review, the evidence is limited to the administrative record. See

Toyota Motor Sales, U.S.A., Inc. v. United States, 15 F. Supp. 2d 872, 877 (CIT 1998). Whether

Commerce properly excluded plaintiff’s information submitted after January 20, 1998, depends

on “whether Commerce complied with the statute defining the administrative record for review.”
Court No. 98-10-03045 Page 12

Kerr-McGee Chem. Corp. v. United States, 21 CIT 11, 18, 955 F. Supp. 1466, 1471 (1997).

In determining the lawfulness of an agency’s construction of a statute, we are guided by

the Supreme Court’s decision in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc.,

467 U.S. 837 (1984). Under Chevron, the first question is “whether Congress has directly

spoken to the precise question at issue.” Id. at 842. “If the intent of Congress is clear, that is the

end of the matter; for the court, as well as the agency, must give effect to the unambiguously

expressed intent of Congress.” Id. at 842-43.

If, however, the statute is “silent or ambiguous with respect to the specific issue, the

question for the court is whether the agency’s answer is based on a permissible construction of

the statute.” Id. at 843 (footnote omitted). Thus, the second element of Chevron directs the

Court to consider the reasonableness of an agency’s determination. To survive judicial scrutiny,

“an agency’s construction need not be the only reasonable interpretation or even the most

reasonable interpretation. Rather, a court must defer to an agency’s reasonable interpretation of a

statute even if the court might have preferred another.” Koyo Seiko Co., Ltd. v. United States, 36

F.3d 1565, 1570 (Fed. Cir. 1994) (citation omitted) (emphasis in original).

DISCUSSION

A. Supplemental Information

Plaintiff argues Commerce should have accepted supplemental information concerning

priced sample sales submitted after the statutory deadline for new information as Commerce did

not identify alleged deficiencies in plaintiff’s questionnaire responses until after the preliminary
Court No. 98-10-03045 Page 13

determination. Plaintiff’s argument lacks merit. Factual information for Commerce’s

consideration for the final results of an administrative review “is due no later than . . . 140 days

after the last day of the anniversary month . . . .” 19 C.F.R. § 351.301(b)(2). Previously, this

Court has sustained Commerce’s rejection of new factual information submitted untimely

pursuant to its regulations. See, e.g., Mukand, Ltd. v. United States, Court No. 98-04-00925,

1999 Ct. Int’l Trade LEXIS 34, *12-15 (CIT April 9, 1999); NSK Ltd. v. United States, 16 CIT

745, 749, 798 F. Supp. 721, 725 (1992). As the supplemental information was offered to

Commerce in June 1998, after the January 20, 19982, deadline for new factual information, this

Court finds Commerce’s rejection of the supplemental information as untimely was reasonable.

To the extent plaintiff argues Commerce had a separate obligation to provide plaintiff an

opportunity to remedy the alleged deficiencies, plaintiff’s argument must also fail. Section

1677m(d), defining an agency’s obligation for providing respondents an opportunity to remedy

alleged deficiencies in information submitted to it, states, in pertinent part3:

(d) Deficient submissions

If the administering authority . . . determines that a response to a request for
information under this subtitle does not comply with the request, the administering
authority . . . shall promptly inform the person submitting the response of the nature of

2
The anniversary month for this administrative review was in August 1997. See
Initiation of Antidumping and Countervailing Duty Administrative Reviews, 62 Fed. Reg. 50,292
(Sept. 25, 1997). January 18, 1998, was the 140th day from the last day in the anniversary month,
August 31, 1997. As January 18 fell on a Sunday and as the following day was a national
holiday, the deadline for submitting new factual information for the final results of the
administrative review at issue was on January 20, 1998.
3
Although plaintiff does not identify the statute under which Commerce would be
required to provide plaintiff an opportunity to remedy or explain deficiencies in its submissions,
it appears plaintiff is referring to 19 U.S.C. § 1677m(d) (1994).
Court No. 98-10-03045 Page 14

the deficiency and shall, to the extent practicable, provide that person with an opportunity
to remedy or explain the deficiency in light of the time limits established for the
completion of investigations or reviews under this subtitle.

19 U.S.C. § 1677m(d) (1994). In the case at bar, Commerce provided plaintiff an opportunity to

clarify its contention that the sample sales should be excluded from the margin calculation in the

supplemental questionnaire issued in December 1997. Thus, to the extent Commerce was

statutorily obligated to provide plaintiff an opportunity to remedy or explain the alleged

deficiencies, Commerce fulfilled its obligation. Therefore, the Court finds Commerce properly

rejected the June 1998 submissions as untimely.4

B. Ordinary Course of Trade

The antidumping duty laws of the United States allow Commerce to issue antidumping

duty orders upon imported merchandise which is being, or is likely to be, sold in the United

4
Plaintiff cites Olympic Adhesives, Inc. v. United States, 899 F.2d 1565 (Fed. Cir. 1990),
and Ta Chen Stainless Steel Pipe, Ltd. v. United States, Court No. 97-08-01344, 1999 Ct. Int’l
Trade LEXIS 110 (CIT Oct. 28, 1999), to support its argument. These cases, however, are
distinguishable from the case at bar as they concern an agency’s ability to use adverse facts.
Additionally, although the Ta Chen court found an agency’s use of a general questionnaire was
insufficient to satisfy the agency’s “statutory obligation to provide respondents with a chance to
remedy deficient submissions,” Ta Chen, 1999 Ct. Int’l Trade LEXIS 110, *41, its conclusion
was based on the fact that the agency never specifically requested the information against which
it applied adverse facts. As stated above, Commerce in the case at bar specifically requested
information concerning plaintiff’s sample sales in the supplemental questionnaire issued in
December 1997. Although Commerce’s framing of the question is less than a model of clarity,
e.g., asking for information concerning “zero-value transactions (samples and prototypes),”
Commerce’s specific questions indicated it was interested in a broader description of sample
sales than those without consideration, e.g., Commerce asked plaintiff to describe any
“consideration made by your customer for the transactions.” (Bergerac’s Supplemental
Questionnaire, Plaintiff’s Appendix Pursuant to CIT Rule 56.2 (App.), Public Document (Pub.
Doc.) 20, at 17.) Also, as plaintiff submitted information regarding zero-value and priced sample
sales, the Court finds plaintiff sufficiently had an opportunity to explain the alleged deficiencies
regarding the sample sales in question. Plaintiff’s reference to these cases is unpersuasive.
Court No. 98-10-03045 Page 15

States at less than fair value. See 19 U.S.C. § 1673 (1994). In determining whether subject

merchandise is being, or is likely to be, sold at less than fair value in an antidumping duty

determination, a comparison is made between the price of the merchandise in the United States

(“export price” or “constructed export price”) and its price in a foreign market (“normal value”).5

See Huffy Corp. v. United States, 10 CIT 214, 215, 632 F. Supp. 50, 52 (1986). The “normal

value” is the price at which the foreign like product is first “sold” for consumption in the

exporting country “in the usual commercial quantities and in the ordinary course of trade.” 19

U.S.C. § 1677b(a)(1)(B)(i) (West Supp. 1999).6 Thus, the price of the merchandise is included in

5
In 1994, the Uruguay Round Agreements Act (URAA) substituted the term “export
price” for the term “U.S. price” and the term “normal value” for the term “foreign market value.”
See URAA, PUB. L. NO. 103-465, §§ 233(a)(1), (2)(A), 108 Stat. 4809, 4878 (Dec. 8, 1994).
6
The relevant section of the statute pertaining to the calculation of “normal value” states:

(a) Determination

In determining under this subtitle whether subject merchandise is being, or
is likely to be, sold at less than fair value, a fair comparison shall be made
between the export price or constructed export price and normal value. In order to
achieve a fair comparison with the export price or constructed export price,
normal value shall be determined as follows:

(1) Determination of normal value

(A) In general

The normal value of the subject merchandise shall be the price
described in subparagraph (B) . . .

(B) Price

The price referred to in subparagraph (A) is—

(i) the price at which the foreign like product is first
sold (or, in the absence of a sale, offered for sale) for
consumption in the exporting country, in the usual
Court No. 98-10-03045 Page 16

the margin calculation if, among other things, the merchandise is “sold” in the “ordinary course

of trade.” If it is not “sold” or not sold in the “ordinary course of trade,” the merchandise is

excluded from the margin calculation.

The Court of Appeals for the Federal Circuit has held that the term “sold” requires (1) a

transfer of ownership to an unrelated party; and (2) consideration. See NSK Ltd. v. United States,

115 F.3d 965, 975 (Fed. Cir. 1997). The parties do not dispute that there was consideration for

priced sample sales at issue here, and there was a transfer of ownership to unrelated parties.

Therefore, the priced sample sales at issue are considered “sold” for the purposes of the “normal

value” calculation under section 1677b(a)(1)(B)(i).

The phrase “ordinary course of trade” is defined by statute as “the conditions and

practices which, for a reasonable time prior to the exportation of the subject merchandise, have

been normal in the trade under consideration with respect to merchandise of the same class or

kind.” 19 U.S.C. § 1677(15).7 What is to be considered “outside the ordinary course of trade”

includes, “among others, . . . (A) Sales disregarded under section 1677b(b)(1) [below cost sales]

of this title; (B) Transactions disregarded under section 1677b(f)(2) [transactions between

affiliated parties] of this title.” 19 U.S.C. § 1677(15) (emphasis added).

commercial quantities and in the ordinary course of trade
and, to the extent practicable, at the same level of trade as
the export price or constructed export price . . . .

19 U.S.C. § 1677b(a)(1)(B)(i) (West Supp. 1999).
7
Commerce’s regulations define “ordinary course of trade” as having “the same meaning
as in section 771(15) of the Act [19 U.S.C. § 1677(15)].” 19 C.F.R. § 351.102(b) (1998).
Court No. 98-10-03045 Page 17

Determining whether a sale or transaction is outside the ordinary course of trade is a

question of fact. In making this determination, Commerce considers not just “one factor taken in

isolation but rather . . . all the circumstances particular to the sales in question.” Murata Mfg.

Co., Ltd. v. United States, 17 CIT 259, 264, 820 F. Supp. 603, 607 (1993) (citation omitted).

Commerce’s methodology for making this determination is codified in section 351.102(b) of

Commerce’s regulations. See 19 C.F.R. § 351.102(b)8; see also Antifriction Bearings (Other

Than Tapered Roller Bearings) and Parts Thereof From France, et al., 64 Fed. Reg. 35,590, at

35,620 (July 1, 1999) (final results of antidumping duty administrative review).

Bergerac criticizes Commerce’s methodology for determining whether certain sales or

transactions are outside the ordinary course of trade as being void of any meaningful standards

and failing to identify information that is necessary for Commerce to make its determination.

Consequently, Bergerac argues, it is inappropriate for Commerce to claim Bergerac has not met

its burden of proof that the sales in question were outside the ordinary course of trade.

Bergerac’s argument lacks merit. Plaintiff’s criticism appears essentially to involve a question of

8
Section 351.102(b) of the regulation states, in part, “The Secretary may consider sales
or transactions to be outside the ordinary course of trade if the Secretary determines, based on an
evaluation of all of the circumstances particular to the sales in question, that such sales or
transactions have characteristics that are extraordinary for the market in question.” 19 C.F.R. §
351.102(b). Examples that might be considered outside the ordinary course of trade include: (1)
off-quality merchandise; (2) merchandise produced according to unusual product specifications;
(3) merchandise sold at aberrational prices or with abnormally high profits; (4) merchandise sold
pursuant to unusual terms of sale; or (5) merchandise sold to an affiliated party not at an arm’s
length transaction. See 19 C.F.R. § 351.102(b). The Statement of Administrative Action
accompanying the URAA contains similar language and identifies similar types of transactions
Commerce may consider to be outside the ordinary course of trade, including (1) sales
disregarded as being below-cost; and (2) transactions between affiliated persons. See H.R. DOC.
NO. 103-316, vol. 1, at 834 (1994), reprinted in 1994 U.S.C.C.A.N. 3773, 4171.
Court No. 98-10-03045 Page 18

statutory interpretation as Commerce’s methodology, codified at 19 C.F.R. § 351.102(b),

effectively interprets the statutory phrase “outside the ordinary course of trade.” 19 U.S.C. §

1677(15). In resolving questions of statutory interpretation, Chevron requires this Court first to

determine whether the statute is clear on its face.9 If the language of the statute is clear, then this

Court must defer to Congressional intent. See Chevron, 467 U.S. at 842-43. If the statute is

unclear, however, then the question for the Court is whether the agency’s answer is based on a

permissible construction of the statute. See id. at 843; see also Corning Glass Works v. United

States, 799 F.2d 1559, 1565 (Fed. Cir. 1986) (finding the agency’s definitions must be

“reasonable in light of the language, policies and legislative history of the statute”).

Here, the statutory provision defining what is considered outside the ordinary course of

trade is unclear. While the statute specifically defines “ordinary course of trade,” it provides

little assistance in determining what is outside the scope of that definition. The statute merely

identifies a non-exhaustive list of situations in which sales or transactions are to be considered

outside the “ordinary course of trade.” This Court finds the statute is ambiguous as to what

constitutes a sale outside the ordinary course of trade.

9
The Court notes the recent Supreme Court decision in Christensen v. Harris Co., 120 S.
Ct. 1655 (2000), does not apply. In Christensen, the Supreme Court held that Chevron deference
does not apply to an “opinion letter” issued by the Acting Administrator of the United States
Department of Labor’s Wage and Hour Division (Labor) because Labor’s interpretation of the
statute at issue was “not one arrived at after, for example, a formal adjudication or notice-and-
comment rulemaking.” Id. at 1662 (citing Chevron U.S.A. Inc. v. Natural Resources Defense
Council, Inc., 467 U.S. 837 (1984)). Unlike Christensen, this case examines an agency’s
regulation construing an ambiguous statute. In accordance with the Administrative Procedures
Act, 5 U.S.C. § 553 (1994), the regulation underwent a notice-and-comment process. See 5
U.S.C. § 553(b) & (c); see also Antidumping Duties; Countervailing Duties, 62 Fed. Reg.
27,296 (May 19, 1997) (revising regulations on antidumping and countervailing duty
proceedings). Consequently, Chevron deference applies.
Court No. 98-10-03045 Page 19

What Congress intended to exclude from the “ordinary course of trade” is also not

immediately clear from the statute’s legislative history, amended by the Uruguay Round

Agreements Act (URAA) in 1994. In the Statement of Administrative Action accompanying the

URAA, Congress stated that in addition to the specific types of transactions to be considered

outside the ordinary course of trade, “Commerce may consider other types of sales or

transactions to be outside the ordinary course of trade when such sales or transactions have

characteristics that are not ordinary as compared to sales or transactions generally made in the

same market.” H.R. DOC. NO. 103-826, vol. 1, at 834 (1994), reprinted in 1994 U.S.C.C.A.N.

3773, 4171. Congress also stated that as the statute does not provide an exhaustive list of

situations which qualify as being outside the ordinary course of trade, “the Administration

intends that Commerce will interpret section 771(15) [19 U.S.C. § 1677(15)] in a manner which

will avoid basing normal value on sales which are extraordinary for the market in question.” Id.

This Court finds the legislative history is also ambiguous as to what constitutes a sale outside the

ordinary course of trade.

Because neither the statutory language nor the legislative history explicitly establishes

what is considered to be outside the “ordinary course of trade,” the Court assesses the agency’s

interpretation of the provision as codified by the regulation to determine whether the agency’s

interpretation is reasonable and in accordance with the legislative purpose. See Chevron, 467

U.S. at 843. In determining whether Commerce’s interpretation is reasonable, the Court

considers, among other factors, the express terms of the provisions at issue, the objectives of

those provisions, and the objective of the antidumping scheme as a whole. See, e.g., Mitsubishi

Heavy Indus., Ltd. v. United States, 15 F. Supp. 2d 807, 813 (CIT 1998). This Court has stated
Court No. 98-10-03045 Page 20

that the purpose of the ordinary course of trade provision is “to prevent dumping margins from

being based on sales which are not representative” of the home market. See Monsanto Co. v.

United States, 12 CIT 937, 940, 698 F. Supp. 275, 278 (1988).

As stated above, the agency’s methodology for deciding when sales are outside the

“ordinary course of trade” has been to examine the totality of the circumstances surrounding the

sale or transaction in question to determine whether the sale or transaction is extraordinary.

Commerce’s regulation specifically states, “sales or transactions [may be considered] outside the

ordinary course of trade if . . . , based on an evaluation of all of the circumstances particular to

the sales in question, [] such sales or transactions have characteristics that are extraordinary for

the market in question.” 19 C.F.R. § 351.102(b). Commerce’s methodology allows it, on a case-

by-case basis, to examine all conditions and practices which may be considered ordinary in the

trade under consideration and to determine which sales or transactions are, therefore, outside the

“ordinary course of trade.” While such a methodology gives Commerce wide discretion in

deciding under what circumstances sales or transactions are outside the ordinary course of trade,

circumstances which will, by necessity, differ in each case, this Court finds, in light of the

statute’s legislative purpose, Commerce’s interpretation of the statute reasonable.10

10
Bergerac also argues Commerce failed to articulate adequately a standard for
determining whether a sale or transaction is “unique or unusual” as applied in the case at bar.
Bergerac’s argument lacks merit. While Commerce used the words “unique or unusual” in its
“ordinary course of trade” analysis at issue here, see Industrial Nitrocellulose From France, 63
Fed. Reg. 49,085, at 49,087 (Sept. 14, 1998) (final results of antidumping administrative review),
the Court finds, upon review of the determinations in which Commerce has used “unique” or
“unusual,” the words do not constitute a separate methodology but rather represent circumstances
Commerce considers in applying its totality of the circumstances methodology to determine
whether the sales or transactions in question are outside the ordinary course of trade. See, e.g.,
Polyvinyl Alcohol From Taiwan, 61 Fed. Reg. 14,064, at 14,068 (March 29, 1996) (final
Court No. 98-10-03045 Page 21

Bergerac, in its papers before the Court, principally objects to Commerce’s inclusion of

certain priced sample sales in the margin calculation that Bergerac claims were made outside the

ordinary course of trade.11 To justify its claimed exclusion, Bergerac argues it provided

probative evidence that its priced sample sales were sample sales outside the ordinary course of

trade. Specifically, Bergerac asserts it provided evidence that the priced sample sales were

contemporaneously identified as priced samples in the normal business record, sold in small

quantities, sold at high prices, generally tested and destroyed, and Bergerac provided

certifications of factual accuracy regarding this information. Bergerac also contends that

Commerce, in the Final Results, overlooked key elements of the evidence provided by Bergerac,

such as the fact that the samples were provided for testing purposes, as Commerce neither

mentioned nor specifically cited cases dealing with samples which have been tested and

destroyed. Bergerac maintains that the inclusion of these priced sample sales in calculating

determination of sales at less than fair value) (finding no evidence existed that the sales in
question were “unusual or extraordinary” for the market and therefore the sales were not outside
the ordinary course of trade); Gray Portland Cement and Clinker From Mexico, 62 Fed. Reg.
17,148, at 17,154 (April 9, 1997) (final results of antidumping duty administrative review)
(stating failure to exclude certain sales from the normal value calculation would violate the intent
of the Statement of Administrative Action because normal value would be based on sales which
were “unusual and unrepresentative”). The Court notes the term “unusual” is oft repeated as a
qualifying adjective describing examples of sales that the Secretary might consider as being
outside the ordinary course of trade under Commerce’s definition of “ordinary course of trade” in
its regulations. See 19 C.F.R. § 351.102(b) (“Examples of sales that the Secretary might
consider as being outside the ordinary course of trade are sales or transactions involving . . .
unusual product specifications . . . [or] . . . unusual terms of sale . . . .”). Moreover, the Court
finds the words “unique” and “unusual” are synonymous with the term “extraordinary,” see
WEST’S LEGAL THESAURUS/DICTIONARY 773, 779 (1985) (listing “extraordinary” as a synonym
for both “unique” and “unusual”), expressed as part of the totality of the circumstances
methodology now codified in Commerce’s regulation, 19 C.F.R. § 351.102(b), herein found to
be a reasonable interpretation of the statute. Thus, Begerac’s argument fails as a matter of law.
11
The sales contested on appeal are limited to priced sample sales.
Court No. 98-10-03045 Page 22

foreign market value erroneously increased its total potential dumping duties. Bergerac seeks

their exclusion and recalculation of its dumping margins.

In the Final Results, Commerce explained its reasons for including the sales in question

as home market sales in the ordinary course of trade:

Regarding priced samples, while it is clear that the invoices for these sales indicated that
they were sample sales, such indication is not sufficient to demonstrate that the sale is
unique or unusual or otherwise outside the ordinary course of trade. See Antifriction
Bearings (Other Than Tapered Roller Bearings[)] and Parts Thereof from France,
Germany, Italy, Japan, Singapore, and the United Kingdom, Final Results of
Antidumping Duty Administrative Reviews, 62 FR 2081 (January 15, 1997) (where,
although we verified that certain sales were designated as samples in a respondent’s
records, we determined this was insufficient to find them outside the ordinary course of
trade since such evidence “merely proves that respondent identified sales recorded as
samples in its own records”). Such evidence does not indicate that the sales were made
outside the ordinary course of trade for purposes of calculating normal value in this
review. Bergerac’s argument that these sales were at a high price to cover the high cost
of shipping small packages does not address the Department’s “unique or unusual”
standard concerning ordinary course of trade. See Large Newspaper Printing Presses and
Components Thereof, Whether Assembled or Unassembled From Germany (61 FR
38166, July 23, 1996) as discussed in Antifriction Bearings (Other Than Tapered Roller
Bearings) and Parts Thereof from France, et. al.; Final Results of Antidumping Duty
Administrative Reviews (62 FR 54043, at 54065-54066, October 17, 1997).

....

Regarding both priced samples and trial transactions, Bergerac failed to provide
certain information which we requested in a supplemental questionnaire specifically in
order to determine whether these transactions were outside the ordinary course of trade.
For example, regarding both types of sales at issue, Bergerac did not respond as to
whether the customer had purchased these particular items previously. For these reasons,
the record is incomplete as to whether sales of these products were made to these
customers prior to the dates of the claimed sample and trial transactions and we have
retained them for use in our calculation of normal value.

Final Results, 63 Fed. Reg. at 49,087-88.

This Court has stated that Commerce cannot exclude sales allegedly outside the ordinary
Court No. 98-10-03045 Page 23

course of trade from a “normal value” calculation unless there is a complete explanation of the

facts which establish the extraordinary circumstances in which the particular sales are outside the

ordinary course of trade. See, e.g., NTN Bearing Corp. of Am. v. United States, 19 CIT 1221,

1229, 905 F. Supp. 1083, 1091 (1995). As stated previously, in determining whether certain

home market sales are outside the ordinary course of trade, Commerce considers not just one

factor in isolation but all the circumstances particular to the sales in question. See CEMEX, S.A.

v. United States, 19 CIT 587, 589 (1995) (citing Murata, 820 F. Supp. at 607 (quoting Certain

Welded Carbon Steel Standard Pipes and Tubes from India, 56 Fed. Reg. 64,753, at 64,755

(1991))); see also 19 C.F.R. § 351.102(b). Moreover, an analysis of these factors should be

guided by the purpose of the ordinary course of trade provision which is to prevent dumping

margins from being based on sales which are not representative of the home market. Monsanto,

698 F. Supp. at 278. Factors Commerce has considered in the past, which this Court has upheld,

include, among others, home market demand, volume of home market sales, duration of

production, profit margin, and purpose. See, e.g., CEMEX, 19 CIT at 589-93. In sum, “ordinary

course of trade is determined on a case-by-case basis by examining all of the relevant facts and

circumstances.” Id. at 593. The task, then, is to discern whether Commerce’s determination was

supported by substantial evidence.

The plaintiff bears the burden of demonstrating the sales in question that Commerce

included in its calculations were outside the ordinary course of trade. See, e.g., Koyo Seiko, 932

F. Supp. at 1497; see also NTN Bearing, 903 F. Supp. at 68-69.

This Court is persuaded that substantial evidence supports Commerce’s determination
Court No. 98-10-03045 Page 24

that Bergerac failed to meet its burden of proof that the alleged sample sales were outside the

ordinary course of trade. In NTN Bearing Corp. of Am. v. United States, 20 CIT 508, 924 F.

Supp. 200 (1996), the Court upheld Commerce’s ruling that sample sales identified as sample or

prototype sales alone does not support the sales classification as outside the ordinary course of

trade for the purposes of antidumping calculations. See id. at 207. Similarly here, evidence that

the sales were marked as sample sales is insufficient to support Bergerac’s claim. The Court has

also affirmed Commerce’s refusal to exclude “infrequent sales of small quantities of certain

models or sales of models at a high price to only a few customers” from the ordinary course of

trade. See id. (quoting Tapered Roller Bearings and Parts Thereof, Finished and Unfinished,

From Japan, et al., 58 Fed. Reg. 64,720, at 64,732 (final results antidumping duty administrative

review)). Thus, sales, like those at issue here, sold in small quantities12 and at high prices are

insufficient to establish that they are outside the ordinary course of trade.

Additionally, Bergerac’s argument that Commerce erred because it overlooked and failed

to articulate in the Final Results key elements of the evidence provided by Bergerac, such as the

fact that the samples were generally tested and destroyed, is without merit. Although an

12
Defendant contends Bergerac failed to argue to Commerce that its priced sample sales
were not made in the usual commercial quantity, and therefore, to the extent it does so now, the
argument should not be considered by this Court. Plaintiff rebuts that the Court should consider
this argument as small quantities involved in the priced samples were an essential part of its
argument before Commerce. Although it is unclear to the Court whether Bergerac made the
specific argument that the sample sales in question were not of the “usual commercial quantity,”
Bergerac stated in its response to Commerce’s supplemental questionnaire that “[s]amples that
are sold are purchased at prices that cover the high cost of handling small shipments.” (Bergerac
Supplemental Questionnaire, App., Pub. Doc. 20, at 18.) To the extent plaintiff’s argument
suggests the sales in question were shipped in small quantities, the Court will consider
Bergerac’s argument as being properly before it.
Court No. 98-10-03045 Page 25

administrative agency must generally explain the reasons for its decision in order for the

reviewing court to ascertain the path of reasoning which led to the final outcome, see Bowman

Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 285-86 (1974); see also

Asociacion Colombiana de Exportadores v. United States, 12 CIT 1174, 1177, 704 F. Supp.

1068, 1071 (1988), a court may “‘uphold [an agency’s] decision of less than ideal clarity if the

agency’s path may reasonably be discerned.’” Ceramica Regiomontana, S.A. v. United States,

810 F.2d 1137, 1139 (Fed. Cir. 1987) (quoting Bowman Transp., 419 U.S. at 286).

In this case, while Commerce’s reasoning may not be a model of clarity, its decision is

obvious in light of the determination as a whole. Bergerac does not identify, nor can the Court

find, any evidence supporting Bergerac’s contention that the sample sales in question actually

were tested and destroyed. Bergerac merely states that the samples of industrial nitrocellulose

are outside the ordinary course of trade because they “generally” are “tested and destroyed.”

(Bergerac Supplemental Questionnaire, App., Pub. Doc. 20, at 18.) Bergerac does not

demonstrate that the sample sales in question in fact were tested and destroyed. See, e.g., Koyo

Seiko, 932 F. Supp. at 1498 (denying consideration of plaintiff’s claim that samples were

negotiated separately from normal sales where record did not demonstrate, more than through an

announcement, that prices for plaintiff’s samples were negotiated separately from normal sales).

Without more, this factor is unpersuasive. Here, Commerce’s path may be reasonably discerned;

it included the sample sales because Bergerac failed to prove the samples were not sold in the

ordinary course of trade. Consequently, a remand for further explanation is not necessary.

Additionally, Bergerac’s argument that it filed certifications of factual accuracy with its
Court No. 98-10-03045 Page 26

submissions does not establish its sales were outside the ordinary course of trade. See NTN

Bearing, 903 F. Supp. at 68-69 (stating a certification requirement does not displace substantive

burdens of proof which remain with the party who has access to the information).

Finally, by not responding to Commerce’s question whether Bergerac’s customers had

previously purchased the priced samples in question, Bergerac prevented Commerce from having

sufficient facts necessary to make its determination. Commerce’s decision to require additional

evidence to demonstrate that the sales were outside the ordinary course of trade was consistent

with the statutory scheme and was a reasonable construction of the provision at issue. See

Koenig & Bauer-Albert AG v. United States, 15 F. Supp. 2d. 834, 850 (CIT 1998).

As Bergerac inadequately substantiated its claim, Commerce properly declined to exclude

from the “normal value” calculation certain sales identified by Bergerac as sample sales made

outside the ordinary course of trade. The Court sustains Commerce’s decision as supported by

substantial evidence and in accordance with law.

CONCLUSION

For the reasons stated above, Bergerac’s motion for Judgment Upon An Agency Record is

denied in all respects, and the Final Results are affirmed. This case is hereby dismissed.

______________________________
Gregory W. Carman, Chief Judge
Dated: June 21, 2000
New York, New York