Slip Op. 99-128
UNITED STATES COURT OF INTERNATIONAL TRADE
_________________________________
:
GSA, S.R.L., :
:
Plaintiff, :
:
v. :
: Court No. 98-01-00112
THE UNITED STATES, :
: Public Version
Defendant, :
:
and :
:
BORDEN FOODS CORPORATION, :
HERSHEY PASTA AND GROCERY GROUP, :
AND GOOCH FOODS, INC. :
:
Defendant- :
Intervenors :
________________________________ :
[Commerce’s decision to terminate New Shipper Review sustained.]
Dated: December 3, 1999
Riggle and Craven (David J. Craven and David A. Riggle) for
plaintiff.
David W. Ogden, Acting Assistant Attorney General, David M.
Cohen, Director, Velta A. Melnbrencis, Assistant Director,
Attorney, Commercial Litigation Branch, Civil Division, United
States Department of Justice (Deborah Y. Ho), and Patrick V.
Gallagher, Attorney, Office of Chief Counsel for Import
Administration, United States Department of Commerce, of counsel,
for defendant.
OPINION
RESTANI, Judge: This matter is before the court on the
motion of plaintiff, GSA, S.r.l. (“GSA”), for judgment upon the
Court No. 98-01-00112 Page 2
agency record, pursuant to USCIT Rule 56.2. GSA seeks a remand
to the International Trade Administration of the Department of
Commerce (“Commerce”) to reconsider certain determinations made
in the termination of GSA’s new shipper review.1 Certain Pasta
from Italy: Termination of New Shipper Antidumping Duty
Administrative Review, 62 Fed. Reg. 66,602, 66,602-03 (Dep’t
Commerce 1997) [hereinafter “Review Termination”].
Specifically, GSA alleges that Commerce violated its due
process rights by failing to provide it with a hearing, decided
to terminate the new shipper review without substantial evidence,
and failed to follow its own procedures for antidumping duty
investigations. The court will address each of these arguments
in turn.
Jurisdiction And Standard of Review
The court has jurisdiction pursuant to 28 U.S.C. § 1581(c)
(1994). New shipper review determinations are judicially
1
New shippers are defined under the Uruguay Round
Agreements Act (“URAA”) as exporters or producers who demonstrate
in a request for a new shipper review that they: (i) did not
export merchandise to the United States (or in the case of a
regional industry, the region concerned) during the original
period of investigation; and (ii) are not affiliated with any
exporter or producer who did export merchandise to the United
States (or the region concerned) during that period, including
those not examined during that period. Statement of
Administrative Action (“SAA”) accompanying the URAA, H.R. Rep.
No. 103-826(I), 656, 875, reprinted in 1994 U.S.S.C.A.N. 3773,
4203 (1994).
Court No. 98-01-00112 Page 3
reviewable pursuant to 19 U.S.C. § 1516a(a)(2)(B)(iii) (1994).
The court will hold unlawful those determinations which are
unsupported by substantial evidence or otherwise not in
accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i) (1994).
I. Commerce Did Not Violate GSA’s Due Process Rights By
Terminating The New Shipper Review Without A Hearing
Background
GSA is a trading company in Italy. Review Termination, 62
Fed. Reg. at 66,602. GSA receives orders from its customers,
arranges for the production of pasta at a factory or factories
and then arranges for transportation to the appropriate customer.
See Questionnaire Response to Section A (Mar. 26, 1997), at 9,
C.R. Doc. 2, Def.’s App., Ex. 23, at 3. On January 31, 1997, GSA
requested that Commerce conduct a new shipper review on certain
pasta from Italy. Review Termination, 62 Fed. Reg. at 66,602.
Accordingly, on February 27, 1997, Commerce initiated a new
shipper administrative review for the period from July 1, 1996
through January 31, 1997. Certain Pasta From Italy: Initiation
of New Shipper Antidumping Duty Administrative Review, 62 Fed.
Reg. 8,927 (Dep’t Commerce 1997).
In its response to Commerce’s questionnaire, GSA related
that it made sales to the United States through its U.S.
affiliate, JCM, Ltd. (“JCM”). Questionnaire Response to Section
Court No. 98-01-00112 Page 4
A (Mar. 27, 1997), at 17, P.R. Doc. 16, Pl.’s App., Ex. 15, at 2.
GSA identified one and only one unaffiliated producer (“Company
A”)2 from which it purchased pasta during the period of review
(“POR”). Commerce Memorandum (June 13, 1997), at 1-2, C.R. Doc.
8, Def.’s App., Ex. 24, at 1-2. GSA stated that neither GSA nor
JCM disclosed to the producer the destination of its products.
Questionnaire Response to Section A (Mar. 27 1997), at 17, Pl.’s
App., Ex. 15, at 2.
GSA informed Commerce that a P-1 certificate was required
for shipment to the United States, and submitted a copy of such a
certificate, but explained that the certificate did not prohibit
the shipment of pasta to other locations.3 Questionnaire
Response to Section A (Mar. 26, 1997), at 10, Def.’s App., Ex.
23, at 4. The P-1 certificate is imprinted at the top with the
following statement: “For Certificate IPR Exports of Pasta to the
USA.” Commerce Memorandum, at 2, Def.’s App., Ex. 24, at 2. GSA
2
The producer (“Company A”) GSA identified was [ ].
Commerce Memorandum (June 13, 1997), at 2, C.R Doc. 8, Def.’s
App., Ex. 24, at 2.
3
GSA explained that P-1 and P-2 certificates were
required for entry into the United States to comply with the
agreement between the United States and the European Community on
pasta subsidies. Supplemental Questionnaire Response to Section
A (May 6, 1997), at 2, P.R. Doc. 26, Def.’s App., Ex. 7, at 6.
The P-1 certificate is for pasta made from wheat subject to the
inward processing regime and the P-2 certificate is for pasta
made from other wheat. Id.
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also stated that Company A obtained the P-1 and P-2 certificates
for pasta GSA sold through JCM because JCM warehouses all of its
pasta in the United States, regardless of the final destination.
Supplemental Questionnaire Response to Section A (May 6, 1997),
at 3, Def.’s App., Ex. 7, at 7.
Based on this information, Commerce questioned whether
Company A knew or had reason to know the pasta sold to GSA was
destined for export to the United States. Commerce Memorandum,
at 2, Def.’s App., Ex. 24, at 2. Commerce therefore requested
additional information from GSA regarding the packaging and the
presence of the P-1 certificate. Letter from Commerce to GSA
(Apr. 25, 1997), at 2, P.R. Doc. 24, Def.’s App., Ex. 6, at 2.
GSA responded that its merchandise was “packaged and labeled at
the time of production” and that “the ‘label’ is an integral part
of the bag into which the product is put at the time of
production.” Supplemental Questionnaire Response to Section A,
at 1, Def.’s App., Ex. 7, at 5.
GSA attached a photocopy of sample packaging for pasta
imported into the United States that had “Imported By: Racconto,
Melrose Park, IL 60160" imprinted upon it.4 Supplemental
4
The response included a document labeled “Exhibit S-1,
Sample Package Label,” with an attachment containing a photocopy
of packaging for pasta imprinted with such information as
“RACCONTO” brand, “16 oz (1 lb) 453g,” “IMPORTED BY: RACCONTO,
(continued...)
Court No. 98-01-00112 Page 6
Questionnaire Response (July 18, 1997), at Ex. S-1, P.R. Doc. 38,
Def.’s App., Ex. 10, at 7. Different name brands appeared on the
packaging for U.S. and Canadian sales.5 Supplemental
Questionnaire Response to Section A (May 6, 1997), at 2, Def.’s
App., Ex. 7, at 6. GSA sold the pasta to the United States in
one package size and to Europe in another package size.6 Letter
from GSA to Commerce (July 18, 1997), at 4, C.R. Doc. 15, Def.’s
App., Ex. 27, at 5.
Based upon GSA’s responses, Commerce recommended terminating
the new shipper review with respect to GSA. Commerce Memorandum,
at 1, Def.’s App., Ex. 24, at 1. Commerce determined that
Company A knew that the merchandise was destined for the United
States at the time it sold the merchandise to GSA because it had
to obtain the P-1 certificates for all shipments entering the
United States. Id. at 4, Def.’s App., Ex. 24, at 4. Commerce
4
(...continued)
MELROSE PARK, IL 60160" as well as nutritional information and
cooking instructions. Supplemental Questionnaire Response (July
18, 1997), at Ex. S-1, Def.’s App., Ex. 10, at 7.
5
The brand sold in Canada is [ ]. Supplemental
Questionnaire Response to Section A (May 6, 1997), at 2, C.R.
Doc. 5. The brand sold in the United States is Racconto.
Supplemental Questionnaire Response to Section A (May 6, 1997),
at 2, Def.’s App., Ex. 7, at 6.
6
GSA explained that, while it sold pasta in Europe in
500 gram bags, it sold pasta in the United States in 453 gram, or
1 pound bags. Letter from GSA to Commerce (July 18, 1997), at 4,
Def.’s App., Ex. 27, at 5.
Court No. 98-01-00112 Page 7
requested comments from GSA on the recommendation to terminate.
Letter from Commerce to GSA (June 20, 1997), at 1, C.R. Doc. 10,
Def.’s App., Ex. 25, at 1. In particular, Commerce asked GSA to
address the possible involvement of a company (“Company B”) whose
name appeared on the sample packaging of pasta that GSA had
attached to its supplemental questionnaire.7 Id. at 1, Def.’s
App., Ex. 25, at 1. GSA responded stating that Company A owned
the assets and name of Company B. Letter from GSA to Commerce
(June 26, 1997), at 7, C.R. Doc. 11, Def.’s App., Ex. 26, at 4.
Commerce requested additional information from GSA regarding
JCM’s sales and distribution process, with a particular emphasis
on whether JCM had independently purchased pasta directly from
producers or trading companies other than GSA. Letter from
Commerce to GSA (July 11, 1997), at 1-2, P.R. Doc. 36, Def.’s
App., Ex. 9, at 1-2. GSA provided the names of other producers
from whom JCM had purchased pasta during Commerce’s original
investigation, including Company A.8 Letter from GSA to Commerce
7
Company B’s name is [ ], a manufacturer of pasta and
a respondent in the original antidumping duty investigation.
Letter from Commerce to GSA (June 20, 1997), at 1, Def.’s App.,
Ex. 25, at 1.
8
GSA identified four producers that were the subject of
the original antidumping duty investigation but did not receive
weighted-average dumping margins at that time: Company A, [ ].
Letter from GSA to Commerce (July 18, 1997), at 5, Def.’s App.,
Ex. 27, at 6.
Court No. 98-01-00112 Page 8
(July 18, 1997), at 5, C.R. Doc. 15, Def.’s App., Ex. 27, at 6.
GSA refused, though, to provide any cost information for Company
A because it did not control Company A or have access to that
information. Id., at 4, Def.’s App., Ex. 27, at 5.
Commerce remained unsure that the photocopies GSA had
previously submitted were from pasta GSA had actually purchased
from Company A9 during the POR. Letter from Commerce to GSA
(July 11, 1997), at 2, Def.’s App., Ex. 9, at 2. Commerce then
requested photocopies of sample packaging from the shipment of
GSA’s pasta purchased from Company A during the POR and sold to
the United States. Id. GSA submitted another supplemental
questionnaire response, explaining that GSA could not identify
JCM’s specific sales of pasta acquired directly from Company A.
Letter from GSA to Commerce (July 18, 1997), at 1, Def.’s App.,
Ex. 27, at 4.
Commerce also independently investigated Company A and its
relationship with Company B. Commerce Memorandum to File (Oct.
20, 1997), at 1, C.R. Doc. 25, Def.’s App., Ex. 31, at 1.
Company A confirmed that it owned the name and assets of Company
B and that its export officer was the same person formerly
9
Commerce wanted to know if Company A or B was the
producer because the original exhibit (Exhibit AS-2) submitted by
GSA in Supplemental Questionnaire Response to Section A (May 6,
1997), at Ex. AS-2, C.R. Doc. 5, had Company B’s name on the
sample packaging.
Court No. 98-01-00112 Page 9
employed by Company B. Id.; see also Commerce Memorandum to File
(Oct. 31, 1997), at 1, C.R. Doc. 29, Def.’s Ex. 33, at 1.
Finally, Commerce notified GSA that it had concluded that
Company A knew the pasta was destined for the United States and
that knowledge made it inappropriate for Commerce to review GSA’s
sales in a new shipper review. Letter from Commerce to GSA (Oct.
24, 1997), at 1-2, C.R. Doc. 26, Def.’s App., Ex. 32, at 1-2.
Commerce then terminated the new shipper review without holding a
hearing.
Discussion
In this matter, GSA contests Commerce’s termination of a new
shipper review pursuant to 19 U.S.C. § 1675(a)(2)(B) (1994). GSA
argues that Commerce violated its due process rights by failing
to hold a hearing. Additionally, GSA alleges that Commerce’s
decision to terminate the new shipper review is not supported by
substantial evidence.
A. Commerce Did Not Violate GSA’s Statutory Due Process
Rights
GSA alleges that it is entitled to a hearing pursuant to 19
U.S.C. § 1675(e) (1994)10 and 19 U.S.C. § 1677c(b)
10
The subsection “Hearings,” provides:
Whenever the administering authority or the Commission
conducts a review under this section, it shall, upon
the request of an interested party, hold a hearing in
(continued...)
Court No. 98-01-00112 Page 10
(1994).11 Both GSA and Commerce opine that GSA could not request
a hearing in this case because Commerce never published
preliminary results. See Def.’s Br. at 31-32; Pl.’s Br. at 8.
Nevertheless, GSA argues that the right to a hearing attached in
the initial stages of the investigation and that Commerce never
afforded it the opportunity to request a hearing. Pl.’s Br. at
10. Thus, GSA appeals the termination of the proceedings
directly to this court and challenges Commerce’s interpretation
of the statutory structure for hearings as set forth in 19 U.S.C.
§ 1675(e) and § 1677c(b).
The court, in reviewing Commerce’s construction of the
statute which it administers, must first look to whether Congress
has directly spoken to the issue. Chevron U.S.A. Inc. v. Natural
Resources Defense Council, 467 U.S. 837, 842-43 (1984). “If the
10
(...continued)
accordance with section 1677c(b) of this title in
connection with that review.
19 U.S.C. § 1675(e) (1994).
11
The subsection “Procedures,” provides:
Any hearing required or permitted under this subtitle
shall be conducted after notice published in the
Federal Register, and a transcript of the hearing shall
be prepared and made available to the public. The
hearing shall not be subject to the provisions of
subchapter II of chapter 5 of Title 5, or to section
702 of such title.
19 U.S.C. § 1677c(b) (1994).
Court No. 98-01-00112 Page 11
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.
The statute at issue, 19 U.S.C. § 1675(e), clearly allows
any interested party to request a hearing whenever a review is
being conducted.12 19 U.S.C. § 1675(e). In order to claim
entitlement to a new shipper review, either the producer or
exporter of the merchandise at issue must satisfy the threshold
requirements set forth in 19 U.S.C. § 1675(a)(2)(B)(i)(I) and
(II) (1994).13 The statute specifically states if the
administering authority receives a request from the appropriate
party establishing the requirements set forth therein, then “the
administering authority shall conduct a review under this
subsection . . . for such exporter or producer.” 19 U.S.C. §
12
Both parties have agreed that the statute allows for a
hearing after a review is commenced. See Def.’s Br. at 31-32;
Pl.’s Br. at 8; see also 19 C.F.R. § 353.38(b) & (f) (1997).
13
The threshold requirements are as follows:
(I) such exporter or producer did not export the
merchandise that was the subject of an antidumping duty
or countervailing duty order to the United States . .
.during the period of investigation, and
(II) such exporter or producer is not affiliated
(within the meaning of section 1677(33) of this title)
with any exporter or producer who exported the subject
merchandise to the United States . . . during that
period.
19 U.S.C. § 1675(a)(2)(B)(i)(I) and (II).
Court No. 98-01-00112 Page 12
1675(a)(2)(B)(i) (emphasis added). The statute makes clear, by
its language, that the right to a review attaches only after the
correct party requesting the review has established that it is a
new shipper. The right to hearing would follow only after
Commerce commenced a review under 19 U.S.C. § 1675(a)(2)(B).
In this case, Commerce only conducted a preliminary
investigation to determine if GSA was the correct party to
request a review. Commerce never determined if GSA established
all the criteria to qualify as a new shipper entitled to a
review. As discussed further in the following section, Commerce
terminated the new shipper review without holding a hearing
because it determined that GSA was not the correct respondent.
Review Termination, 62 Fed. Reg. at 66,602-603. The question
remaining for the court to address is whether Commerce properly
concluded that GSA was not the correct party to request a new
shipper review.
B. Substantial Evidence Supports Commerce’s Termination of
the New Shipper Review
Commerce’s determination that GSA failed to establish that
it was the correct party before Commerce is supported by
substantial evidence and is in accordance with the law. To
commence a new shipper review, GSA had to establish that it, as
the exporter (and not the producer), was the correct party before
Court No. 98-01-00112 Page 13
Commerce. The court must therefore decide if Commerce reasonably
interpreted the term “exporter or producer” in determining the
proper party entitled to a new shipper review.
In 19 U.S.C. § 1675(a)(2)(B), it clearly states that the
request for a new shipper review must come from an “exporter or
producer.” The statute defines exporters and producers as
follows:
The term “exporter or producer” means the exporter of
the subject merchandise, the producer of the subject
merchandise, or both where appropriate. For purposes
of section 1677b of this title, the term “exporter or
producer” includes both the exporter of the subject
merchandise and the producer of the same subject
merchandise to the extent necessary to accurately
calculate the total amount incurred and realized for
costs, expenses, and profits in connection with
production and sale of that merchandise.
19 U.S.C. § 1677(28) (1994). The statute is silent as to what
constitutes an individual exporter or producer. AK Steel Corp.
v. United States, 34 F. Supp.2d 756, 764 (Ct. Int’l Trade 1998).
Where a statute is silent or ambiguous, the court defers to
Commerce’s reasonable interpretation of its statutory mandate.
Id. (citing Chevron, 467 U.S. at 842-43). The court concludes
that Commerce properly interpreted the term “exporter or
producer” in 19 U.S.C. § 1675(a)(2)(B) based on its export price
analysis.
Court No. 98-01-00112 Page 14
Commerce concluded that it must assess the normal value and
export price or constructed export price before proceeding to
calculate the weighted average dumping margin for any subject
merchandise. 19 U.S.C. § 1675(a)(2)(A) (1994). In this case,
Commerce decided that export price and not constructed export
price would be used to establish the weighted-average dumping
margin. Def.’s Br. at 25. Export price is defined as follows:
The term “export price” means the price at which the
subject merchandise is first sold . . . before the date
of importation by the producer or exporter of the
subject merchandise outside of the United States to an
unaffiliated purchaser inside the United States or to
an unaffiliated purchaser for exportation to the United
States . . .
19 U.S.C. § 1677a(a) (1994)(emphasis added). GSA is the first
unaffiliated purchaser for exportation to the United States. To
use GSA’s sales price for exportation to the United States, GSA’s
producer (Company A) must not know that the merchandise was
destined for the United States.14 If Company A knew the pasta
14
Commerce has properly established that the producer’s
sale price shall be used if the producer knows the destination of
the merchandise is the United States. This requirement is
commonly known as the “knowledge test.” Congress anticipated the
knowledge test when it defined “purchase price” as the price the
producer charged for the goods if the “producer knew or had
reason to know the goods were for sale to an unrelated U.S.
buyer.” Statement of Administrative Action accompanying the
Trade Agreements Act of 1979, H.R. Rep. No. 4537, 388, 411,
reprinted in 1979 U.S.S.C.A.N. 665, 682. Since 1979, the statute
has been modified to change the term “purchase price” to “export
(continued...)
Court No. 98-01-00112 Page 15
was destined for the United States, then the sale which
determines the export price would be Company A’s sale to GSA.
Commerce determined that Company A knew that the pasta at
issue was destined for U.S. markets and was manufactured by a
respondent in a prior antidumping duty investigation that had its
own dumping margin. Commerce Memorandum Recommending Termination
(Nov. 23, 1997), at 2, C.R. Doc. 31, Def.’s App., Ex. 34, at 2;
see also Letter from Commerce to GSA (June 20, 1997), at 1,
Def.’s App., Ex. 25, at 1. There was sufficient evidence for
Commerce to reach that conclusion. First, Company A prepared the
P-1 certificate that stated “For Certificate IPR Exports of Pasta
to the USA.” Commerce Memorandum, at 2, Def.’s App., Ex. 24, at
2. Second, Company A manufactured the labeling and packaging for
the pasta with the information “Imported by Racconto, Melrose
Park, IL 60160" imprinted upon it. Supplemental Questionnaire
Response to Section A (May 6, 1997), at 1, Def.’s App. Ex.7, at
5; Supplemental Questionnaire Response (July 18, 1997), at Ex. S-
1, Def.’s App., Ex. 10, at 7. Third, two different package sizes
were used for the United States and Europe. Letter from GSA to
14
(...continued)
price,” to conform U.S. law to the URAA, without changing the
meaning or interpretation of the term. SAA accompanying the URAA
at 79, reprinted in 1994 U.S.S.C.A.N. at 3851 (“The change is
made to conform U.S. law more specifically to the provisions of
the Agreement”).
Court No. 98-01-00112 Page 16
Commerce (July 18, 1997), at 4, Def.’s App., Ex. 27, at 5.
Fourth, different brands were sold in the United States and
Canada. Supplemental Questionnaire Response (May 6, 1997), at 2,
Def.’s App., Ex. 7, at 6.
Finally, the packaging that GSA submitted as representative
of pasta sold for export to the United States and Canada
identified Company B as the producer. Supplemental Questionnaire
Response to Section A (May 6, 1997), at Ex. AS-2, C.R. Doc. 5.
Prior to Company A acquiring Company B’s name and assets, Company
B directly produced and packaged Racconto brand pasta for sale to
JCM, GSA’s U.S. affiliate, which was doing business as Racconto.
Commerce Memorandum Recommending Termination, at 4-5, Def.’s
App., Ex. 34, at 4-5. Company A, after acquiring Company B’s
assets and name, employed the same export-import officer used by
Company B at the same factory originally owned by Company B.15
Commerce Memorandum to File (Oct. 31, 1997), at 1, Def.’s App.,
Ex. 33, at 1. Thus, Company A learned that the pasta was
15
GSA attempts to cast doubt upon the conclusions drawn
from evidence that it submitted or that Commerce independently
investigated. Neither argument has merit. Additionally, even if
GSA succeeded in casting some doubt upon the conclusions, it
would not be a sufficient basis to overturn Commerce’s decision.
Nihon Cement Co. v. United States, 17 CIT 400, 407 (1993) (citing
Consolo v. Federal Maritime Comm’n, 383 U.S. 607, 620 (1966))
(“The possibility of drawing two inconsistent conclusions from
the evidence does not prevent the agency’s finding from being
supported by substantial evidence.”)
Court No. 98-01-00112 Page 17
destined for the United States from the packaging, obtaining the
P-1 or P-2 certificates for exporting the pasta, its acquisition
of Company B and its export-import officer and JCM’s independent
purchases from Company B under the same brand name used by GSA.
Supplemental Questionnaire Response (July 18, 1997), at Ex. S-1,
Def.’s App., Ex. 10, at 7; Commerce Memorandum, at 2, Def.’s
App., Ex. 24, at 2; Commerce Memorandum Recommending Termination,
at 4-5, Def.’s App., Ex. 34, at 4-5; Letter from GSA to Commerce
(July 18, 1997), at 5, Def.’s App., Ex. 27, at 6.
Because Commerce properly concluded that Company A knew the
pasta was destined for the United States, the price it charged
GSA is the correct price for calculating export price. GSA is no
longer the correct respondent before Commerce. The price at
which GSA sold the pasta was irrelevant for the purposes of 19
U.S.C. § 1675(a)(2)(B). Thus, Commerce’s termination of the new
shipper review is supported by substantial evidence and is
affirmed for the reasons stated herein.
II. Commerce Did Not Fail to Comply With Its Procedures
Background
GSA made several procedural protests as Commerce
investigated GSA’s claimed new shipper status. GSA complained to
Commerce that Borden Foods Corporation, Hershey Pasta and Grocery
Group and Gooch Food, Inc. (the “domestic producers”) in a
Court No. 98-01-00112 Page 18
September 26, 1997 letter to Commerce included confidential
information without a request for confidential treatment pursuant
to 19 C.F.R. § 353.32(a) (1997). Letter from GSA to Commerce
(Oct. 9, 1997), at 2-3, P.R. Doc. 56, Def.’s App., Ex. 12, at 2-
3. Commerce responded that the submissions complained of
consisted of comments on GSA’s responses. Letter from Commerce
to GSA (Oct. 30, 1997), at 1, P.R. Doc. 66, Def.’s App., Ex. 17,
at 1. Furthermore, Commerce explained that once information had
been accorded proprietary treatment, those parties who are
subject to the administrative protective order (“APO”) may refer
to such information in their submissions as long as it is
properly bracketed and identified as proprietary information.
Id.
Commerce also held an ex parte meeting with the domestic
producers regarding their September 26, 1997 submission to the
agency. Commerce’s Memorandum to File (Oct. 22, 1997), at 1,
P.R. Doc. 59, Def.’s App., Ex. 13, at 1. GSA alleged that
Commerce inadequately documented this meeting by failing to state
the location of the meeting place and by failing to provide a
summary of the facts presented. Letter from GSA to Commerce
(Oct. 29, 1997), at 2-3, P.R. Doc. 63, Def.’s App., Ex. 14, at 2-
3. Commerce responded by identifying the meeting location as the
main Commerce building and by explaining that no facts were
Court No. 98-01-00112 Page 19
presented and that the topic of discussion was legal issues,
specifically, the “legal arguments concerning the appropriate
basis for calculating normal value and constructed export price
in this case.” Letter from Commerce to GSA (Nov. 23, 1997), at
1-2, P.R. Doc. 70, Def.’s App., Ex. 20, at 1-2.
On two occasions in the course of the new shipper review,
the domestic producers submitted comments without certificates of
accuracy.16 Letter from Borden to Commerce (July 10, 1997), P.R.
Doc. 35, Def.’s App., Ex. 8 (responding to GSA’s June 27, 1997
submission to Commerce regarding P-1 export certificates and
Canadian product labeling requirements); Letter from Borden to
Commerce (Oct. 29, 1997), P.R. Doc. 65, Def.’s App., Ex. 16
(responding to Commerce’s October 24, 1997 request for comments
on its decision to terminate GSA’s new shipper review). Commerce
responded that the domestic producers’ submissions were comments
on GSA’s responses to Commerce’s requests for information, that
the proprietary information belonged to GSA and that the domestic
producers therefore were not required to re-certify the
information pursuant to 19 C.F.R. § 353.32 for either of the
16
The parties do not contest the fact of these
submissions or that they were submitted without certificates of
accuracy. The certification requirements is set forth infra,
note 17.
Court No. 98-01-00112 Page 20
domestic producers’ submissions. Letter from Commerce to GSA
(Oct. 30, 1997), at 1-2, Def.’s App., Ex. 17, at 1-2.
On December 19, 1997, Commerce terminated the new shipper
review of GSA, citing the reasons previously expressed in its
letters and memorandum. Review Termination, 62 Fed. Reg. at
66,602.
Discussion
As indicated, GSA alleges several procedural violations: (i)
that Commerce failed to require the domestic producers to submit
certificates of accuracy; (ii) that Commerce failed to require
the domestic producers to comply with the requirements of
confidential treatment for proprietary information; and (iii)
that Commerce held improper ex parte meetings and failed to
properly document such meetings. The court will address each of
these arguments in turn.
A. Failure to Require Certificates of Accuracy is Harmless
Error
GSA claims Commerce erroneously accepted and relied upon
factual material submitted without the required certificates of
accuracy, pursuant to 19 C.F.R. § 353.31(i) (1997).17 There is
17
Under the heading, “Certifications,” the regulation
provides as follows:
Any interested party which submits factual information
to the Secretary must submit with the factual
(continued...)
Court No. 98-01-00112 Page 21
no dispute among the parties that the regulations require
certificates of accuracy to accompany factual submissions to the
agency. The parties differ, though, as to whether the
submissions at issue contained factual material requiring
certification. In reviewing the two submissions by the domestic
producers, the court finds that the domestic producers primarily
provided comments on GSA’s submissions, as Commerce contends.
See Letter from Borden to Commerce (July 10, 1997), Def.’s App.,
Ex. 8; Letter from Borden to Commerce (October 29, 1997), Def.’s
App., Ex. 16; and Def.’s Br. at 36-37.
Nevertheless, the domestic producers made two independent
factual submissions without certifications of factual accuracy.
First, the domestic producers proffered the “Guide to Food
Labelling [sic] and Advertising prepared in March 1996 by
Agriculture and Agri-Food Canada.” Letter from Borden to
Commerce (July 10, 1997), at 2, Def.’s App., Ex. 8, at 2.
Second, the domestic producers asserted that “the Racconto brand
is a brand name exclusively used by GSA in the United States [and
17
(...continued)
information the certification in paragraph (i)(1) and,
if the party has legal counsel or another
representative, the certification in paragraph (i)(2)
of this section.
19 C.F.R. § 353.31(i) (1997). The subsections following provide
form language to be used in such certifications.
Court No. 98-01-00112 Page 22
that] GSA’s sales in the Italian market, and in other third-
country markets, are under brand names other than Racconto.”
Letter from Borden to Commerce (October 29, 1997), at 3, Def.’s
App., Ex. 16, at 3. Clearly these fact statements require
certification as set forth in 19 C.F.R. § 353.31(i).
In reviewing Commerce’s failure to require certification,
the court notes that “[i]t is well settled that principles of
harmless error apply to the review of agency proceedings.”
Intercargo Ins. Co. v. United States, 83 F.3d 391, 394 (Fed. Cir.
1996); Sea-Land Serv., Inc. v. United States, 14 CIT 253, 257,
735 F. Supp. 1059, 1063 (1990) (it is “well settled that courts
will not set aside agency action for procedural errors unless the
errors ‘were prejudicial to the party seeking to have the action
declared invalid’”) (citations omitted), aff’d and adopted, 923
F.2d 838 (Fed. Cir. 1991). In this case, Commerce based its
decision to terminate the new shipper review on the facts
submitted by GSA and the facts determined by its own
investigation. Commerce Memorandum Recommending Termination, at
2-3, Def.’s App., Ex. 34, at 2-3. It appears none of the facts
submitted by the domestic producers were considered by Commerce
in drawing its conclusions. Id. Commerce only mentioned the
domestic producers to say that they concurred with its
conclusion. Id. at 4, Def.’s App., Ex. 34, at 4. Furthermore,
Court No. 98-01-00112 Page 23
GSA failed to allege that such information was actually used in
Commerce’s decision or even that GSA was somehow prejudiced. See
Pl.’s Br. at 16-17. The court concludes that Commerce’s error
was harmless.
GSA further argues that the Commerce’s failure to return the
improper submissions should result in a reversal of Commerce’s
decision. Pl.’s Br. at 17. GSA incorrectly relies on 19 C.F.R.
§ 353.32(d) (1997), which requires the return of information for
which a submitter’s request for proprietary treatment is not
granted.18 19 C.F.R. § 353.32(d) (1997). The submissions that
GSA objected to contained no information for which proprietary
treatment was requested. See Letter from Commerce to GSA (Oct.
30. 1997), at 1-2, Def.’s App., Ex. 17, at 1-2. Therefore, the
regulation is inapplicable.
B. Commerce Treated Confidential Submissions Properly
GSA complains that the domestic producers should have
requested confidential treatment for information in its
18
The Code of Federal Regulations requires the return of
information as a result of a nonconforming request for
proprietary treatment:
The Secretary may return to the submitter any factual
information for which the submitter requested
proprietary treatment when the request does not conform
to the requirements of this section and in any event
will not consider the information.
19 C.F.R. § 353.32(d) (1997).
Court No. 98-01-00112 Page 24
submissions. Pl.’s Br. at 18-23. Commerce counters that GSA
submitted the information with a request for proprietary
treatment and that the domestic producers therefore did not need
to request proprietary treatment. Def.’s Br. at 38-40. As the
proprietary information had already been submitted to the agency
with a request for confidential treatment, and its subsequent
submission conformed to the procedures for referring to
information protected by administrative order, the court affirms
the agency’s decision not to reject the submission.19
In deciding that its regulation did not preclude
consideration of the submitted material in this case, Commerce
was not, as GSA suggests, promoting a definition of the term
“submitter” that is absurd or at odds with other uses of the term
within the agency’s regulations. Pl.’s Br. at 21. Commerce
defined submitter in the context of 19 C.F.R. § 353.32(a) as the
one who first submits the factual material with a request for
confidential treatment. Letter from Commerce to GSA (Oct. 30,
19
Under the heading, “Request for proprietary treatment
of information,” the regulation provides, in relevant part,
(a) Submission and content of request.
(1) Any person who submits factual information to the Secretary
in connection with a proceeding may request that the Secretary
treat that information, or any specified part, as proprietary.
19 C.F.R. § 353.32(a)(1) (1997). Subsections § 353.32(a)(2) and
(3) detail the procedures to be followed with regard to such
submissions.
Court No. 98-01-00112 Page 25
1997), at 1, Def.’s App., Ex. 17, at 1. The court looks to the
administrative construction of the regulation and accepts such
construction as controlling unless it is plainly erroneous or
inconsistent with the regulation. Udall v. Tallman, 380 U.S. 1,
16-17 (1965) (citation omitted).
Commerce simply read the term in the context of the
regulation and acted consistently with the plain meaning and
purpose of the regulation. Moreover, Commerce has not acted
unreasonably in effectively choosing to require only the party
first submitting confidential information to request confidential
treatment. A contrary interpretation would unduly burden the
agency with repetitive requests upon successive references to the
same information. The court therefore affirms Commerce’s
interpretation of the term “submitter.”
C. Commerce Interpreted C.F.R. § 353.35 Reasonably
GSA objected to Commerce having heard legal arguments at an
ex parte meeting with the domestic producers. Commerce admits
having done so but defends the practice. In 19 C.F.R. § 353.35
(1997), the regulations provide that Commerce must maintain a
record of ex parte meetings in which factual information is
gathered.20 The regulation does not refer to the ex parte
20
The regulation provides:
(continued...)
Court No. 98-01-00112 Page 26
entertainment of legal arguments. Commerce interprets this
silence as a license to hear ex parte legal arguments in the
course of its review. Def.’s Br. at 34. Because the Code of
Federal Regulations is silent on the question, the court defers
to this reasonable interpretation by Commerce of its statutory
mandate. See Udall, 380 U.S. at 16-17.
GSA argues that the provisions of the Administrative
Procedure Act (the “APA”) govern where Commerce’s regulations are
either unclear or silent. Pl.’s Reply Br. at 11-12. Contrary to
GSA’s assertion, the APA does not apply to antidumping
administrative proceedings. First, hearings in antidumping
matters are not governed by the APA. See 19 U.S.C. § 1677c(b)
(providing that an administrative hearing “shall not be subject
to the provisions of subchapter II of chapter 5 of title 5, or to
section 702 of [the APA]").21 Second, Commerce’s position is
20
(...continued)
The Secretary will prepare for the official record a
written memorandum of any ex parte meeting between any
person providing factual information in connection with
a proceeding . . . The memorandum will include the
date, time, and place of the meeting, the identity and
affiliation of all persons present and a public summary
of the factual information presented.
19 C.F.R. § 353.35 (1997).
21
Nonetheless, the statutory scheme provides a framework
for fair decisionmaking and had GSA not been provided an
(continued...)
Court No. 98-01-00112 Page 27
bolstered by the nature of the proceedings, which are largely
investigative, not adjudicatory. SAA accompanying the URAA at
892, reprinted in 1994 U.S.S.C.A.N. at 4215-216 (1994)
(“[A]ntidumping and countervailing proceedings . . . are
investigatory in nature.”); see also Monsanto Co. v. United
States, 12 CIT 937, 947, 698 F. Supp. 275, 283 (1988) (noting
that “agency actions which are being reviewed might be best
described as quasi-adjudicatory, quasi-investigatory” and finding
that if Commerce acts in an investigatory capacity,
“constitutional due process concepts seem out of place”). Thus,
the rights granted in the course of an adjudicatory proceeding do
not necessarily attach when Commerce is engaged in the
investigatory stages of a proceeding. The court concludes that
Commerce interpreted its regulation reasonably.
21
(...continued)
opportunity to present its own arguments, the court might compel
Commerce to consider them, but the ex parte meetings did not
interfere with GSA’s opportunity to make its case.
Court No. 98-01-00112 Page 28
Conclusion
The court sustains Commerce’s decision to terminate GSA’s
new shipper review.
_________________________
Jane A. Restani
Judge
DATED: New York, New York
This day of December, 1999.