Union Camp Corp. v. United States

SLIP OP. 99-40

UNITED STATES COURT OF INTERNATIONAL TRADE

UNION CAMP CORPORATION, :
:
Plaintiff, :
: BEFORE: Wallach, Judge
v. : Consol. Court No. 97-03-00483
:
THE UNITED STATES, : PUBLIC VERSION
:
Defendant, :
:
and :
:
DASTECH INTERNATIONAL, INC., et al., :
:
Defendant-Intervenors. :
:

[Remanded in part.]
Decided: April 29, 1999

Fenwick & West, LLP (Roger M. Golden and Phyllis E. Andes) for Plaintiff.

David Ogden, Acting Assistant Attorney General; David M. Cohen, Director; U.S. Department
of Justice, Civil Division, Commercial Litigation Branch, (Lucius B. Lau); Keun Ho Bae, Office
of the Chief Counsel for Import Administration, U.S. Department of Commerce, Of Counsel, for
Defendant.

Williams, Mullen, Christian & Dobbins, P.C., (William E. Perry and W. David Snead) for
Defendant-Intervenors.
Consol. Court No. 97-03-00483 Page 2

OPINION

I

INTRODUCTION

At issue in this case is the proper surrogate value for octanol-2, a subsidiary product of
the sebacic acid production process, that is to be used by the International Trade Administration
of the U.S. Department of Commerce ("ITA" or "Commerce") in its first administrative review
of antidumping duties on sebacic acid from the People's Republic of China ("PRC"). See
Sebacic Acid from the People's Republic of China; Final Results of Antidumping Duty
Administrative Review, 62 Fed. Reg. 10,530 (1997) ("First Administrative Review"). This case
is before the Court for the second time, following the Court's Memorandum and Order of March
27, 1998, ("Remand Memorandum" and "Remand Order"), directing Commerce, inter alia, to
"value octanol-2 based on an appropriate cost (which may be the U.S. cost but which may not be
based solely on similar molecular structure without any additional evidence) of crude octanol-2,
and then recalculate the by-product/co-product determination with the correct value." Union
Camp Corp. v. United States, 8 F. Supp.2d 842, 853 (CIT 1998). Commerce issued its remand
determination on June 25, 1998. See Remand Determination: Union Camp Corporation v.
United States (Consol. Court No. 97-03-00483) ("Remand Determination"). The parties
subsequently submitted their respective comments on the Remand Determination, and
Defendant-Intervenors' submitted a motion asking the Court to reconsider its Remand Order
("Motion To Reconsider").

For the reasons stated herein, the Court agrees with Defendant-Intervenors and finds that
its Remand Order was ambiguous, in so far as Commerce interpreted the Remand Order as
preventing it from considering record evidence of market prices in valuing the octanol-2 that
results from the sebacic acid production process. Accordingly, the Court grants Defendant-
Intervenors' Motion To Reconsider and remands this case for further consideration consistent
with this opinion. In doing so, however, the Court takes judicial notice of the fact that in its third
administrative review of antidumping duties on sebacic acid from the PRC, Commerce, on the
basis of a letter from the editor of the Chemical Weekly (India), reversed its previous position
and found that the "octanol" quote from this publication did not refer to octanol-1. See Sebacic
Acid From The People's Republic of China; Final Results of Antidumping Duty Administrative
Review, 63 Fed. Reg. 43,373, 43,374-75 (1998) ("Third Administrative Review"). Having taken
judicial notice of this fact, the Court directs Commerce to consider the letter from the editor of
the Chemical Weekly (India) in choosing an appropriate surrogate value on remand.

Finally, the Court further instructs Commerce that it is to consider whether it should
accept new evidence concerning the comparability of 2-ethylhexanol and octanol-2. Should
Commerce come to the conclusion that it should accept such evidence, Commerce may do so
and, if appropriate, use that evidence as a basis for justifying its use of the Chemical Weekly
Consol. Court No. 97-03-00483 Page 3

(India) value for "octanol" as a surrogate value.

II

BACKGROUND

The relevant facts of this case are described in Union Camp Corp. v. United States, 8 F.
Supp.2d 842 (CIT 1998), and familiarity with them is presumed. Only the facts relevant to the
disposition of Defendant-Intervenors' Motion To Reconsider are repeated.

On March 7, 1997, Commerce issued its First Administrative Review, covering
shipments of sebacic acid from the PRC to the United States during the period July 13, 1994,
through June 30, 1995. First Administrative Review, 62 Fed. Reg. at 10,530. Because the PRC
is a nonmarket economy, Commerce determined the "normal value" of the sebacic acid using a
constructed value pursuant to 19 U.S.C. § 1677b(c)(1) (1994), which provides that, where
appropriate, Commerce "shall determine the normal value of the subject merchandise on the
basis of the value of the factors of production utilized in producing the merchandise." In valuing
the factors of production, Commerce is to use, where possible, "prices or costs . . . in one or
more market economy countries" that are at a comparable level of economic development and
that are "significant producers of comparable merchandise." 19 U.S.C. § 1677b(c)(4) (1994)

For the First Administrative Review, Commerce used surrogate values from India to
construct the normal value of the sebacic acid. See First Administrative Review, 62 Fed. Reg. at
10,533. In doing so, Commerce used a published price for "octanol" from the Chemical Weekly
(India) to value the octanol-2 that is produced, as a subsidiary product, through the sebacic acid
production process. See id. at 10,534-35. Although the "octanol" quote from the Chemical
Weekly (India) does not make clear whether it refers to octanol-2 or another type of octanol,
Commerce assumed that this price was for octanol-1 and concluded that octanol-1 was a
comparable product to octanol-2. See id. at 10,534. Commerce's only explanation as to how the
two products were comparable, however, was that they have similar molecular formulae. See id.

Before this Court, Plaintiff challenged Commerce's conclusion concerning the
comparability of octanol-1 and octanol-2, arguing that the decision was not supported by
substantial evidence on the record and not otherwise in accordance with law. See Brief In
Support Of Union Camp Corporation's Rule 56.2 Motion For Judgment Upon The Agency
Record, dated September 5, 1997, at 19-21. On March 27, 1998, the Court agreed with Plaintiff
and found that Commerce's interpretation of the word "comparable" in 19 U.S.C. § 1677b(c)(4)
(1994), to mean similar molecular structure, was not a reasonable interpretation of the statute.
Union Camp, 8 F. Supp.2d at 849. The Court stated that Commerce "must either provide an
Consol. Court No. 97-03-00483 Page 4

explanation for how octanol-1 is comparable to octanol-2 based on some acceptable standard
[value or use] or it must offer a reasonable explanation of why it is changing its legal standard for
such determinations." Id. In regard to Commerce's conclusion also being unsupported by
substantial evidence, the Court stated:

Commerce discussed its reason for selecting the Indian value of octanol-2, i.e., the
similar molecular formulae. It also discussed why it rejected Union Camp's
internal cost of octanol-2 based on Commerce's preference for public, published
information. Commerce failed to discuss, or apparently consider, however, the
U.S. value of octanol-2 placed on the record by Dastech or Union Camp's
submission regarding an adjustment of that U.S. value to reflect that Dastech 's
submission reflected the value of refined octanol-2. . . . Thus, Commerce's failure
here to consider the other surrogate values placed on the record results in its
valuation of octanol-2 using the Indian value of octanol-1 being unsupported by
substantial evidence on the record.

Id. at 850 (citation omitted).

In light of these findings, the Court remanded this case to Commerce with the following
instructions:

[I]t is hereby . . . ORDERED ADJUDGED AND DECREED that this case is
remanded to [Commerce] with instructions to value octanol-2 based on an
appropriate cost (which may be the U.S. cost but which may not be based solely
on similar molecular structure without any additional evidence) of crude octanol-
2, and then recalculate the by-product/co-product determination with the correct
value . . . .

Id. at 853.

On June 25, 1998, Commerce issued its Remand Determination, in which it used Union
Camp's internal cost for crude octanol-2 as a surrogate for the octanol-2 produced by Defendant-
Intervenors. Remand Determination at 3, 9-10. Even though Commerce identified and discussed
additional record evidence that supported its use of the Chemical Weekly (India) value of refined
octanol -- and commented that this value "is the best available information to effectuate the
Department's goal of determining the most accurate margin possible," Remand Determination at
6 -- it nevertheless stated that it felt constrained by the Court's Remand Order from using or
considering other possible surrogate values that were on the record. Commerce stated that:
Consol. Court No. 97-03-00483 Page 5

The Department is using the U.S. cost of crude octanol-2 to recalculate the
dumping margins because the court instructed us to value octanol-2 based on an
appropriate "cost" of crude octanol-2 and the only value on the record for "cost"
of crude octanol-2 is the petitioner's U.S. cost of crude octanol-2. The
Department's use of such a value necessitates a recalculation of the dumping
margins. However, the Department has also identified for the court additional
record evidence that octanol-1 and octanol-2 are comparable in use. It remains
the Department's position, as reflected in the determination on remand, that using
the petitioner's U.S. cost of crude octanol-2 is inappropriate because it results in
less accurate dumping margins.

Remand Determination at 10. See also Defendant's Response To The Comments Filed By Union
Camp And Dastech Regarding The Remand Determination Filed by The Department of
Commerce ("Defendant's Response") at 3 ("Commerce did not utilize the data contained in
Chemical Weekly (India) because this Court's remand order specifically instructed the agency to
'value octanol-2 based on an appropriate cost . . . .'"). In so finding, Commerce again did not
consider the U.S. prices from the Chemical Marketing Reporter (U.S.) for octanol-2 that were
placed on the record by Defendant-Intervenors. Presumably, Commerce concluded that, as the
value reported in the Chemical Marketing Reporter (U.S.) reflects a market price for refined
octanol-2, it was precluded from considering this figure by the Court's Remand Order. See
Remand Determination at 3, 8-10.1 In addition, although Commerce reasserted its position that
the Chemical Weekly (India) value for "octanol" is the "best available information," it also did
not identify any record evidence on remand to confirm exactly what product (octanol-1, octanol-
2 or some other product) was being referenced by this figure. See Remand Determination at 6
("[G]iven that the Chemical Weekly (India) does not specify a particular type of octanol, we
believe that evidence on the record suggests that the refined octanol price listed in the Chemical
Weekly (India) is a reasonable surrogate value for octanol-2.")

Using Union Camp's internal cost of crude octanol-2 (10.372 Indian rupees per kg / $0.15
per lb) as the surrogate, Commerce concluded that octanol-2 is a by-product of the sebacic acid

1
The only direct discussion of the Chemical Marketing Reporter (U.S.) values occurs on
pages 8 and 9 of the Remand Determination, where Commerce discussed Defendant-Intervenors'
contention that the 36 percent price difference between the octanol-1 and octanol-2 values in the
Chemical Marketing Reporter (U.S.) would reflect a similar price difference in the Indian
market. In response to this observation, Commerce simply reiterated that although it believed
the Chemical Weekly (India) value to be the most appropriate surrogate, it was nevertheless
using Union Camp's cost information to value octanol-2 "in accordance with the Court's
instructions." Remand Determination at 9.
Consol. Court No. 97-03-00483 Page 6

production process, "because the overall value of octanol-2 is insignificant relative to the value
of sebacic acid and the other subsidiary products." Remand Determination at 4. In so finding,
Commerce reversed its previous conclusion that, based on the Chemical Weekly (India) value for
octanol-1 of 76 Indian rupees per kg, octanol-2 should be treated as a co-product for cost
accounting purposes. See First Administrative Review, 62 Fed. Reg. at 10,533-35; Sebacic Acid
from the People's Republic of China; Preliminary Results of Antidumping Duty Administrative
Review ("Preliminary Results"), 61 Fed. Reg. 46,440, 46,443 (1996).2

Because Commerce claimed that the language of the Court's Remand Order
inappropriately constrained its consideration of appropriate surrogate values, on July 27, 1998,
Defendant-Intervenors submitted a motion asking this Court to reconsider its Remand Order.
According to Defendant-Intervenors, because either the Remand Order or Commerce's reading of
the Remand Order was "manifestly erroneous," "[Commerce] has issued an unfair and inaccurate
determination which is directly contrary to the statute, the legislative history, prior court cases
and generally accepted accounting principles." Defendant-Intervenors' Comments On The
Commerce Department's Remand Determination And Memorandum In Support Of Motion For
Reconsideration ("Reconsideration Memorandum") at 1, 33. In response, Plaintiff asserts that
Defendant-Intervenors' argument that a refined octanol value can be an appropriate surrogate is
untimely, that Union Camp has not manipulated its price of crude octanol-2, that Union Camp's
cost of crude octanol-2 is fair, that use of certain statements concerning the comparability of
octanol-1 and octanol-2 are unreliable, and that deference to Commerce supports sustaining the
Remand Determination. Plaintiff Union Camp Corporation's Rebuttal Comments And Response
In Opposition To Defendant-Intervenors' Motion For Reconsideration ("Plaintiff's Response") at
3-6. Plaintiff also argues that Defendant-Intervenors' Motion For Reconsideration is untimely

2
To determine the correct accounting treatment of a subsidiary product, Commerce
examines, in accordance with generally accepted accounting principles (GAAP), whether the
value of a subsidiary product is significant or insignificant relative to the other products that
result from a particular production process. See Remand Determination at 3-4; Preliminary
Determination of Sales at Less Than Fair Value and Postponement of Final Determination:
Sebacic Acid From the People's Republic of China, 59 Fed. Reg. 565, 569 (1994) ("By-products
are identified by their relatively insignificant sales value, whereas [co-products] . . . generally
have significant sales value relative to the product under investigation."); Elemental Sulphur
From Canada; Final Results of Antidumping Finding Administrative Review, 61 Fed. Reg.
8,239, 8,241-42 (1996) (identifying several factors Commerce examines to determine the relative
significance of a particular subsidiary product). For calculating normal value, Commerce
subtracts the sales revenues of by-products from the production costs of the main product. See
Preliminary Results, 61 Fed. Reg. at 46,443. In contrast, if Commerce determines that a
subsidiary product is a co-product, it will allocate production costs between the main product and
the co-product. See id.
Consol. Court No. 97-03-00483 Page 7

under USCIT R.59 and that Defendant-Intervenors have failed to state any substantive grounds
under USCIT Rs.59 and 60 that would justify granting the Motion For Reconsideration. Id. at 7-
13.

For its part, Defendant says that, "[a]s is apparent from the Remand Determination,
Commerce carefully examined this Court's remand order, concluded that the Court's use of the
word 'cost' was deliberate, and, as a result, valued octanol-2 based upon the 'cost' of crude
octanol-2." Defendant's Response at 2. Since Commerce complied with the Court's Remand
Order, Defendant argues, "the Court should sustain the remand results, enter final judgment, and
dismiss the action." Id. Defendant also notes, however, that Commerce "would be willing to
undergo another remand so that it may utilize the Chemical Weekly (India) price." Id. at 4.

Independent from, and subsequent to, Commerce's First Administrative Review and the
Remand Determination, on August 13, 1998, Commerce published the final results of its Third
Administrative Review, covering the period July 1, 1996, through June 30, 1997. Third
Administrative Review, 63 Fed. Reg. at 43,373. In that review, the respondents submitted a
letter written by the editor of the Chemical Weekly (India) stating that the "octanol" value in the
Chemical Weekly (India) refers to 2-ethylhexanol. Id. at 43,374. Though apparently a type of
octanol, 2-ethylhexanol appears to be a distinct product from octanol-1 and octanol-2. Id. at
43,374-75. Based on this letter and other record evidence concerning similar uses, Commerce
concluded that 2-ethylhexanol and 2-octanol are comparable merchandise and, accordingly,
found that the Chemical Weekly (India) price for "octanol" is the most appropriate surrogate for
valuing octanol-2. Id. at 43,375.

III

DISCUSSION

A

Standard Of Review

The Court “shall hold unlawful any determination, finding, or conclusion found . . . to be
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 something more than a "mere
scintilla," and must be enough evidence to reasonably support a conclusion. Primary Steel, Inc.
v. United States, 17 CIT 1080, 1085, 834 F. Supp. 1374, 1380 (1993) (quoting Ceramica
Regiomontana, S.A. v. United States, 10 CIT 399, 405, 636 F. Supp. 961, 966 (1986), aff'd., 810
Consol. Court No. 97-03-00483 Page 8

F.2d 1137 (Fed. Cir. 1987)). "As long as the agency's methodology and procedures are
reasonable means of effectuating the statutory purpose, and there is substantial evidence in the
record supporting the agency's conclusions, the court will not impose its own views as to the
sufficiency of the agency's investigation or question the agency's methodology." Ceramica
Regiomontana, S.A., 10 CIT at 404-5, 636 F. Supp. at 966.

In reviewing an agency’s construction of the statute that the agency administers, the
Court's initial inquiry is to determine “whether Congress has directly spoken to the precise
question at issue." Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S.
837, 842 (1984). "If Congress has explicitly left a gap for the agency to fill, there is an express
delegation of authority to the agency to elucidate a specific provision of the statute by
regulation." Id. at 843-44. Consequently, “[t]he court will defer to the agency's construction of
the statute as a permissible construction if it ‘reflects a plausible construction of the plain
language of the statute[s] and does not otherwise conflict with Congress' express intent.’"
Torrington Co. v. United States, 82 F.3d 1039, 1044 (Fed. Cir. 1996) (citing Rust v. Sullivan,
500 U.S. 173, 184 (1991)).

B

The Court Grants Defendant-Intervenors' Motion For Reconsideration.

1

The Court Considers Defendant-Intervenors' Motion
For Reconsideration Under USCIT R. 59.

Although, on its face, USCIT R. 59 provides only for "[a] new trial or rehearing . . . in an
action tried without a jury or in an action finally determined," it has been well-recognized that
the concept of a new trial under this Rule is broad enough to cover a rehearing of any matter
decided by the Court. Nat'l Corn Growers Ass'n v. Baker, 9 CIT 571, 584, 623 F. Supp. 1262,
1274 (1985), rev'd on other grounds 840 F.2d 1547 (Fed. Cir. 1988) (quoting Timken Co. v.
United States, 6 CIT 76, 76, 569 F. Supp. 65, 67 (1983), (quoting 11 Charles Alan Wright &
Arthur R. Miller, Federal Practice and Procedure § 2804 at 35 (1973))). Accordingly, the Court
will consider Defendant-Intervenors' Motion For Reconsideration in light of USCIT R. 59.

As this Court has previously noted, the grant of a motion for reconsideration is within the
sound discretion of the Court. Union Camp v. United States, 963 F. Supp. 1212, 1213 (1997)
(citing Kerr-McGee Chem. Corp. v. United States, 14 CIT 582, 583 (1990)). "The purpose of a
Consol. Court No. 97-03-00483 Page 9

rehearing is not to relitigate a case," but to rectify a significant flaw in the conduct of the original
proceedings. Kerr-McGee, 14 CIT at 583 (citations omitted). Although specific grounds upon
which a court may grant such a motion are not listed in the Rule, it is well established that a
motion for reconsideration should be granted, and the underlying judgment or order modified,
when a movant demonstrated that the judgment is based on manifest errors of law or fact. See 11
Charles Alan Wright, Arthur R. Miller and Mary Kay Kane, Federal Practice and Procedure §
2810.1 at 125 (2nd ed. 1995) ("[T]he movant may demonstrate that the motion is necessary to
correct manifest errors of law or fact upon which the judgment is based.")

While a motion for reconsideration is to be considered under the standards of USCIT
R.59, it is clear that, in this instance, the time limit set out in USCIT R. 59(b) does not prevent
this Court from properly considering Defendant-Intervenors' Motion For Reconsideration. Under
USCIT R. 59(b), "[a] motion for a new trial or rehearing shall be served and filed not later than
30 days after the entry of judgment or order." Citing this Rule, Plaintiff argues that this Court
lacks jurisdiction to hear Defendant-Intervenors' Motion For Reconsideration, since it was filed
on July 27, 1998 -- 121 days after the Remand Order was entered and 91 days after the 30 day
time limit expired. Plaintiff's Response at 6-7.

Contrary to Plaintiff's claim, however, the 30 day time limit of USCIT R. 59(b) does not
render this Court without jurisdiction to hear the Motion For Reconsideration. As this Court and
others have held, the time limit set out in USCIT R. 59(b) and the corresponding rule of federal
civil procedure, Fed. R. Civ. P. 59(b),3 only apply to final judgments or orders. See Timken, 6
CIT at 78, 569 F. Supp. at 68; Bohack Corp. v. Iowa Beef Processors, Inc., 715 F.2d 703, 712
n.10 (2d Cir. 1983); Warner v. Rossignol, 513 F.2d 678, 684 n.3 (1st Cir. 1975); Manos v. Trans
World Airlines, Inc., 324 F. Supp. 470, 488 (N.D. Ill. 1971); Graci v. United States, 301 F. Supp.
947, 950 (E.D. La. 1969), aff'd 456 F.2d 20 (5th Cir. 1971). Cf. Garrett v. Blanton, 1993 WL
17697, at * 3 (E.D. La. 1993) (holding that "an interlocutory judgment on liability issues is not a
'judgment' for purposes of [Fed. R. Civ. P] 59"); O. Hommel Co. v. Ferro Corp., 659 F.2d 340,
353-54 (3d Cir. 1981) (finding that a judgment for purposes of Fed. R. Civ. P 50(b) is not final
until attorney's fees have been determined). In contrast, a motion for reconsideration of an
interlocutory order "is proper at any time prior to the final determination of the merits." Timken,
6 CIT at 78, 569 F. Supp. at 68 (quoting Graci, 301 F. Supp. at 950). As explained by Wright,
Miller and Kane:

3
USCIT R. 59(b) provides for a 30-day period within which to move for a new trial or
rehearing. In contrast, Fed. R. Civ. P. 59(b) provides only for a 10-day period. The lengthier
period is required by 28 U.S.C. § 2646 (1994), a statute only applicable to the Court of
International Trade.
Consol. Court No. 97-03-00483 Page 10

The reason for a short time limit on motions for a new trial is to promote finality of
judgments. That policy is not applicable to an interlocutory order, which by hypothesis is
not final and is subject to modification by the court at any time before judgment is
entered. Thus, it has been held that the time limits of Rule 59 do not apply to a motion
seeking a new trial in connection with an interlocutory judgment.

Charles Alan Wright, Arthur R. Miller and Mary Kay Kane, Federal Practice and Procedure §
2812 at 143 (2d ed. 1995)

There is no debate as to the interlocutory nature of the Court's Remand Order. As the
Federal Circuit has made clear, as a general rule "an order remanding a matter to an
administrative agency for further findings and proceedings is not final." Cabot Corp. v. United
States, 788 F.2d 1539, 1542 (Fed. Cir. 1986) (remand to Commerce is not an appealable final
judgment); accord Badger-Powhatan, A Division Of Figgie Int'l, Inc. v. United States, 808 F.2d
823, 825 (Fed. Cir. 1986); Jeannette Sheet Glass Corp. v. United States, 803 F.2d 1576 (Fed. Cir.
1986). While it is true that "remands are not all of the same nature" and that a remand can be
considered a final judgment in certain circumstances, Travelstead v. Derwinski, 978 F.2d 1244,
1249 (Fed. Cir. 1992), nothing in the nature or terms of the Court's Remand Order made this a
final judgment. According to the terms of the Remand Order, after Commerce complied with the
Court's instructions, the parties were allowed to submit to the Court both initial and rebuttal
comments on Commerce's Remand Determination. See Union Camp, 8 F. Supp.2d at 853.
Further, upon reviewing these comments, this Court retained the discretion to either remand this
case for yet further consideration by Commerce or affirm the Remand Determination. Given
these facts, the Court's Remand Order is interlocutory and, as such, is subject to modification by
the Court notwithstanding the 30 day time limit of USCIT R. 59(b).4

4
In footnote 2 of its Response, Plaintiff notes that, "[w]hether the Order is a 'final
judgment' or not is irrelevant to application of USCIT R.59. The rule is not restricted to final
judgments or orders but applies to any judgments or orders." Plaintiff's Response at 7 n.2
(citation omitted). As the discussion above makes clear, this assertion is simply incorrect.
Because the authority cited by Plaintiff (Belfont Sales Corp. v. United States, 12 CIT 916, 698 F.
Supp. 916 (1988), aff'd 878 F.2d 1413 (Fed. Cir. 1989)), Plaintiff's Response at 7, involved a
final order in a classification case, the case is inapposite to the facts at bar.
Consol. Court No. 97-03-00483 Page 11

2

On Remand, Commerce May Use an Appropriate "Cost," "Value"
or "Price" for Octanol-2 in Making its By-Product /
Co-Product Determination.

As noted earlier, in the initial Remand Order the Court instructed Commerce, "to value
octanol-2 based on an appropriate cost . . . of crude octanol-2." Union Camp, 8 F. Supp.2d at
853 (emphasis added). In its Reconsideration Memorandum, Defendant-Intervenors essentially
argue that the Court's use of the word "cost" was manifestly erroneous, since it allowed
Commerce to claim it had to rely on Union Camp's internal, unverified cost for crude octanol-2
(the only "cost" value on the record) and ignore other, more appropriate, surrogate values that
were on the record. See Reconsideration Memorandum at 31-33, 36-38.

The Court grants Defendant-Intervenors' Motion For Reconsideration. In its Remand
Memorandum of March 27, 1998, the Court stated that one reason the First Administrative
Review was unsupported by substantial evidence was the fact that Commerce "failed to discuss,
or apparently consider," the Chemical Marketing Reporter (U.S.) value for octanol-2 put on the
record by Defendant-Intervenors. Union Camp, 8 F. Supp.2d at 850. Since the Chemical
Marketing Reporter (U.S.) value for octanol-2 was a market price for refined octanol, the obvious
implication of this finding was that Commerce could -- and, in fact, must -- consider both "costs"
and "prices" on the record in selecting an appropriate surrogate value for octanol-2. Similarly,
the implication of the Court's holding that Commerce's use of the Chemical Weekly (India) price
for "octanol" was unsupported by substantial evidence is that, should substantial evidence be
identified on remand, Commerce could use this market price for octanol on remand.

Despite the obvious implication of these findings, however, the Court's actual Remand
Order of March 27, 1998, stated that Commerce "was to value octanol-2 based on an appropriate
cost . . . of crude octanol-2." Union Camp, 8 F. Supp.2d at 853 (emphasis added). Simply put,
this Order was ambiguous. As specifically provided by statute, in valuing the factors of
production for constructing the "normal value" of merchandise in a non-market economy,
Commerce "shall utilize, to the extent possible, the prices or costs of factors of production" in a
comparable market economy. 19 U.S.C. § 1677b(c)(4) (1994) (emphasis added). In this case,
two market prices for octanol were placed on record by the parties and, in accordance with 19
U.S.C. § 1677b(c)(4) (1994), should have been evaluated along with Union Camp's internal
"cost" of crude octanol-2 as possible surrogate values. Commerce, however, chose to view the
Court's use of the word "cost" in a restrictive manner, and concluded that the Court's use of this
term limited its ability to consider market prices on remand. In so doing, Commerce rendered
Consol. Court No. 97-03-00483 Page 12

the Remand Order legally erroneous, since its interpretation led the Remand Order to directly
conflict with, and limit, Commerce's statutory discretion to consider prices.

Further, and again based on Commerce's restrictive interpretation, it appears that the
Court's use of the word "cost" may have prevented Commerce from using the "best available
information" in determining normal value for the sebacic acid. As required by 19 U.S.C. §
1677b(c)(1) (1994), in determining normal value in a non-market economy, "the valuation of the
factors of production shall be based on the best available information regarding the values of
such factors in a market economy . . . . " The purpose of such a requirement, of course, is to
achieve the most accurate dumping margins possible. See Tianjin Mach. Import & Export Corp.
v. United States, 16 CIT 931, 940, 806 F. Supp. 1008, 1018 (1992) ("Commerce's ability to
construct foreign market value from weighted alternatives advantageously serves the
antidumping statute's purpose of 'determining current margins as accurately as possible.'"). As
Commerce notes in its Remand Determination, however, Union Camp's internal cost for crude
octanol-2 is not the "best available information":

The Department believes that a more accurate margin results if subsidiary
products, such as octanol-2, are valued using publicly available information
reflecting actual market prices rather than the petitioner's internal cost. Thus, the
Department uses publicly available market prices whenever possible, because they
are more predictable and reliable. Publicly available values reflect actual
transactions between buyers and sellers and therefore are a more accurate
reflection of the market value of a subsidiary product. Internal cost values,
particularly those of a party in the current segment of a proceeding may be less
reliable and subject to manipulation. Moreover, in the present case, the
petitioner's internal cost information for crude octanol-2 is unverified.

Remand Determination at 4; see also id. at 6 ("[T]he Department maintains that the value for
refined octanol from The Chemical Weekly (India) is the best available information to effectuate
the Department's goal of determining the most accurate margin possible.")

Finally, Commerce's interpretation appears to place the Remand Order in conflict with
Asociacion Colombiana de Exportadores de Flores v. United States, 6 F. Supp.2d 865 (CIT
1998) and Asociacion Colombiana de Exportadores de Flores v. United States, 13 CIT 13, 704 F.
Supp. 1114 (1989), aff'd 901 F.2d 1089 (Fed. Cir. 1990). In both these cases, this Court accepted
Commerce's methodology, which used GAAP, of (a) using market values to help determine
whether a subsidiary product is a by-product or a co-product; and (b) after determining that the
subsidiary products were by-products, offsetting the total cost of production with revenues
Consol. Court No. 97-03-00483 Page 13

earned from the sale of these by-products. See Asociacion Colombiana, 6 F. Supp.2d at 881-82;
Asociacion Colombiana, 13 CIT at 26, 704 F. Supp. at 1125; see also IPSCO, Inc. v. United
States, 12 CIT 384, 388-89, 687 F. Supp. 633, 636-37 (1988), rev'd on other grounds 956 F.2d
1056 (Fed. Cir. 1992)5 (citing various ITA investigations that looked to relative sales value as a
factor in determining whether a product is a by-product or co-product). Because there appear to
be no material facts which would distinguish, and make Commerce's methodology inappropriate
for, the facts at bar, limiting Commerce's ability to consider market prices would constitute a
repudiation of Commerce's GAAP-based methodology and the opinions of this Court which have
approved it. That was not even hinted at in the Court's Remand Memorandum. The methodology
to be employed by Commerce in determining whether octanol-2 should be treated as a by-
product or a co-product for cost accounting purposes was not an issue that was before this Court.

In short, the Court's limiting use of the word "cost" in its initial Remand Order was
ambiguous and, accordingly, subject to an interpretation that would constitute an error of law
preventing Commerce from considering potentially appropriate price data in determining
Defendant-Intervenors' dumping margins. Rather than seeking to clarify the apparent ambiguity,
however, Commerce chose to interpret it in a fashion designed to render its decision erroneous.
For this reason, the Court remands this case to Commerce with instructions that it value the
octanol-2 that results from the sebacic acid production process based on an appropriate surrogate
value for this product, and then recalculate the by-product/co-product determination with this
correct value. This surrogate value may be a an appropriate foreign or U.S. cost or price for
comparable merchandise. As noted in the Court's Remand Memorandum and Remand Order,
however, Commerce may not determine that a particular product is "comparable merchandise"
for purposes 19 U.S.C. § 1677b (1994) based solely on a finding of similar molecular structure.
See Union Camp, 8 F. Supp.2d at 849, 853.

On this point, it should be stressed that no value Commerce chooses as a surrogate will be
deemed supported by substantial evidence until Commerce considers the Chemical Marketing
Reporter (U.S.) value for octanol-2 put on the record by Defendant-Intervenors and either (a)
adopts it as a surrogate value, or (b) explains why it is rejecting it for these purposes. As the

5
Ipsco, Inc. v. United States, 965 F.2d 1056 (Fed. Cir. 1992), reversed the trial court's
subsequent determination (at 13 CIT 402 (1989)) that Commerce should take sales values into
account in allocating sales between co-products. In Asociacion Colombiana, this Court made
clear that this holding should not be read as limiting Commerce's discretion to use market values,
or prices, in determining the proper cost accounting treatment for subsidiary products. See
Asociacion Colombiana, 6 F. Supp.2d at 881 ("IPSCO does not, however, as HOSA maintains,
limit Commerce's discretion to use value to distinguish between by-products and co-products.");
accord E.I. DuPont De Nemours & Co., Inc. v. United States, 932 F. Supp. 296, 302 (1996).
Consol. Court No. 97-03-00483 Page 14

Court specifically noted in its Remand Memorandum, in regard to Commerce's initial failure to
consider this value, "Commerce's failure here to consider the other surrogate values placed on the
record results in its valuation of octanol-2 using the Indian value of octanol-1 being unsupported
by substantial evidence on the record." Id. at 450; see also Olympia Industrial, Inc. v. United
States, 7 F. Supp.2d 997, 1001 (CIT 1998) ("Commerce has an obligation to review all data and
then determine what constitutes the best information available or, alternatively, to explain why a
particular data set is not methodologically reliable."). Accordingly, the Court further orders
Commerce, in seeking the best available information to use as a surrogate, to specifically
consider and address all alternative surrogate values that have been placed on the record --
including the Chemical Marketing Reporter (U.S.) Value for Octanol-2.6

3

If Appropriate, on Remand Commerce May Use an Unadjusted Value for "Refined"
Octanol as a Surrogate for the Octanol-2 Produced by Defendant-Intervenors.

An additional issue raised by the Remand Determination is whether Commerce may use a
value for refined octanol, without adjustment, as a surrogate for the octanol-2 produced by
Defendant-Intervenors. In its Remand Determination, Commerce stated:

The sebacic acid factors of production used to calculate normal value ("NV")
already incorporate the relatively few factors of production (labor and energy)
necessary to refine crude octanol-2. Production of sebacic acid results in the
production of crude octanol-2 as a subsidiary product. Given that the sebacic acid
factors of production already include the factors used to refine octanol-2, a more
accurate by-product/co-product analysis results by using the refined value of
octanol-2. There is no need to take a refined value of octanol-2 and then adjust it
to derive a value for crude octanol-2. Moreover, there is a publicly published
sales price on which we can base a value for refined octanol-2.

6
This does not mean that Commerce may not use Union Camp's internal cost in valuing
octanol-2. As indicated in the Remand Memorandum, Commerce must consider and address the
appropriateness of using this value, as well as the Chemical Marketing Reporter (U.S.) value for
octanol-2, in order to have its determination supported by substantial evidence on the record.
Union Camp, 8 F. Supp.2d at 849-50. Should Commerce determine that Union Camp's internal
cost for crude octanol-2 is the best available information, and that use of this figure is supported
by substantial evidence on the record, Commerce may use this figure as its surrogate value.
Absent such a conclusion, however, nothing in this or the Court's initial Remand Memorandum
and Remand Order should be read as either requiring or prohibiting the use of this value.
Consol. Court No. 97-03-00483 Page 15

Remand Determination at 5.

On the basis of this logic, Defendant-Intervenors argue extensively that Commerce erred
in its Remand Determination in using Union Camp's internal cost for crude octanol-2, since
"[t]he actual production experience of the Chinese producers is that the Chinese produce refined
octanol, not crude octanol, in their production process." Reconsideration Memorandum at 11.
Defendant-Intervenors essentially argue that since refined octanol is the actual product sold by
the Chinese producers, it is a surrogate value for this product, and not crude octanol-2, that
Commerce should use in determining whether a subsidiary product is a by-product or a co-
product. See id. at 7-18. Defendant-Intervenors observe that using such a value would be
consistent with both Commerce's prior practice and recognized accounting principles, which
provide that whether a product is by-product or a co-product is determined by the products' sales
value relative to that of the principal product or products produced (in this case, sebacic acid).
Id. at 12-18. In fact, Defendant-Intervenors even take exception to Commerce's general
characterization that the "[p]roduction of sebacic acid results in the production of crude octanol-2
as a subsidiary product." See id. at 9 (quoting Remand Determination at 5).

For its part, Plaintiff argues that both Commerce and Defendant-Intervenors should be
estopped from arguing for the use of a surrogate value for refined octanol, since this Court has
already determined that the product produced by the Chinese producers was crude octanol-2.
Plaintiff's Response at 3-4. To support its point, Plaintiff observes that neither Commerce nor
Defendant-Intervenors had earlier contested its argument to use a surrogate value for crude,
rather than refined, octanol-2. Id. at 3.

In light of these various comments, two separate issues confront the Court. The first is
whether Commerce may use an unadjusted value for "refined" octanol in valuing the octanol-2
that results from the sebacic acid production process. Because this case is being remanded to
Commerce for further consideration, it would be premature for this Court to examine whether
Commerce's preference for using an unadjusted, refined value for octanol is appropriate. This is
especially true in light of Section III (C) of this memorandum, which may preclude Commerce
from using the Chemical Weekly (India) price as a surrogate upon remand. That said, however,
it should be noted that nothing in either the initial Remand Memorandum or the Remand Order
should be interpreted as either requiring or prohibiting the use of an unadjusted, refined value as
a surrogate. Rather, the Court's Remand Memorandum simply indicates that, in order to be
affirmed by the Court, Commerce's choice of a surrogate value must be supported by substantial
evidence on the record and be based on a reasonable interpretation of the term "comparable
merchandise." See Union Camp, 8 F. Supp.2d at 848-50. If, upon remand, Commerce continues
to adhere to its position that an unadjusted, refined value is the best available information to use
Consol. Court No. 97-03-00483 Page 16

as a surrogate, the Court will uphold this determination so long as it meets these standards.

The second issue that appears to have been raised is whether the subsidiary product
produced by Defendant-Intervenors should be referred to as "refined" or "crude" octanol-2. In
regard to Commerce's First Administrative Review and the parties' respective motions for
judgment on the agency record, the Court notes that there was virtually no discussion of whether
the octanol-2 at issue should be characterized as "crude" or "refined" in nature. While it is true
that Plaintiff argued in its September 25, 1997, brief that the (presumably) large price difference
between refined octanol-1 and crude octanol-2 demonstrates the inappropriateness of using
octanol-1 to value octanol-2, Plaintiff simply assumed, without specifically arguing, that the
subsidiary product was "crude" octanol-2. See Brief In Support Of Union Camp Corporation's
Rule 56.2 Motion For Judgment Upon The Agency Record, dated September 5, 1997, at 18.
Further, since the characterization of the octanol-2 did not appear to be a point of contention
among the parties, the Court never specifically addressed the "crude" versus "refined" octanol-2
issue in its Remand Memorandum and Remand Order. Rather, the Court simply characterized
the product produced as "crude" octanol.

In light of the foregoing, it would be incorrect to say either that this "refined" versus
"crude" issue was previously litigated, or that the Court decided this issue in its initial Remand
Memorandum and Remand Order. At this point in the litigation, it appears that the
characterization of the subsidiary product produced by Defendant-Intervenors is a non-issue.
Whether characterized as "crude" or "refined" octanol-2, the main issue that Commerce needs to
decide is what record evidence constitutes the most appropriate surrogate value for this product.
Even assuming, without deciding, that the product produced by Defendant-Intervenors is best
described as "crude" octanol-2, there is no particular reason why Commerce could not use a
refined price or cost in valuing this product, subject to any necessary adjustments. The
appropriateness of such action, again, would depend on whether Commerce's choice of a
surrogate value can be supported by substantial evidence on the record and based on a reasonable
interpretation of the term "comparable merchandise."

C

Use of the Chemical Weekly (India) Value for Octanol-2 Is Still Not
Supported by Substantial Evidence on the Record.

As noted previously, on remand Commerce identified new evidence on common uses
between octanol-1 and octanol-2 to support its position that, notwithstanding the Court's Remand
Order, the Chemical Weekly (India) value for refined octanol was "the best available information
Consol. Court No. 97-03-00483 Page 17

to effectuate [Commerce's] goal of determining the most accurate margins possible." Remand
Determination at 6. In doing so, however, Commerce continued to assume, without verifying,
that the "octanol" value from the Chemical Weekly (India) was for octanol-1. Standing alone,
such an assumption undermines Commerce's use of this figure, since "octanol" is a generic
phrase which covers a full range of products. In this case, however, not only does the lack of
verification call Commerce's use of this figure into question, but evidence of which this Court
may take judicial notice seems to show that Commerce's assumption is, in fact, incorrect.

As discussed in Section II, in its Third Administrative Review, Commerce relied on a
letter from the editor of the Chemical Weekly (India) in finding that the "octanol" price from this
publication was not for octanol-1 or octanol-2, but was for a third product, 2-ethylhexanol. Third
Administrative Review, 63 Fed. Reg. at 43,374-75. This conclusion, of course, plainly
contradicts Commerce's repeated assertion that the "octanol" quote from the Chemical Weekly
(India) is for octanol-1, and it renders Commerce's evidence of overlapping uses and composition
between octanol-1 and octanol-2 superfluous. Given the apparent contradiction, and given the
likelihood that Commerce will continue to assert that the octanol price from the Chemical
Weekly (India) is the best available evidence, it is appropriate for this Court to take judicial
notice7 of the fact that Commerce, on the basis of the letter from the editor of the Chemical
Weekly (India), reversed its position in the Third Administrative Review and found that the
"octanol" quote did not refer to octanol-1. See Third Administrative Review, 63 FR 43,374-75
("Therefore, based on the above information, and absent any substantiated record evidence to the
contrary, the Department determines that the octanol value from Chemical Weekly is for 2-
ethylhexanol.").

Having taken judicial notice of that fact, the Court orders Commerce, on remand, to open
the administrative record and consider the letter from the editor of the Chemical Weekly (India)
in its choice of an appropriate surrogate value. While the Court notes that it is not ruling on the
accuracy or significance of this new evidence, see Borlem, 913 F.2d at 940 ("[A]ll we are doing
is recognizing that new data exists that the [agency] should evaluate."), it also observes that,
unless rebutted, the existence of this evidence appears to undermine Commerce's rationale for
using the Chemical Weekly (India) "octanol" value as a surrogate. Accordingly, unless
Commerce is able to identify substantial record evidence on remand which demonstrates that,
notwithstanding the letter from the editor of the Chemical Weekly (India), the "octanol" quote

7
The Court takes judicial notice pursuant to Fed. R. Evid. 201(c), which provides, in
relevant part, that "[a] court may take judicial notice, whether requested or not." See Borlem
S.A. - Empreedimentos Industriais v. United States, 913 F.2d 933, 940 (Fed. Cir. 1990)
(upholding judicial notice of "the fact that a new and different [margin] determination has been
made based on the premise that the earlier one was incorrect").
Consol. Court No. 97-03-00483 Page 18

from the Chemical Weekly (India) is actually a quote for octanol-1, Commerce may not continue
to argue for the use of this figure on the grounds that octanol-1 and octanol-2 are "comparable
merchandise."

In arriving at this result, the Court is mindful of the considerable deference that
Commerce enjoys in its administration of the antidumping laws. Such deference, however, is not
owed when credible evidence from outside the record indicates a significant error in Commerce's
determination. See, e.g., id. (upholding remand to ITC for reconsideration of its injury
determination in light of its reliance on an ITA dumping margin that was later corrected); D&L
Supply Co. v. United States, 113 F.3d 1220, 1224 (Fed. Cir. 1997) ("[W]hen the dumping
margin on which the BIA rate is based is invalidated [in another judicial proceeding] before the
BIA rate has become final, it is irrational to ignore the invalidity of the underlying rate and to
uphold the BIA rate as purportedly based on the 'best information available.'");
Tehnoimportexport v. United States, 15 CIT 250, 258-59, 766 F. Supp. 1169, 1178 (1991)
(holding that "if the error [in ITA's calculations] was so egregious and so obvious that the failure
to correct it was an abuse of discretion and undermined the interests of justice, the Court may
remand the case to the ITA for adjustment of calculations").

In this regard, the Court is guided by the Federal Circuit's opinion in Borlem S.A. -
Empreedimentos Industriais v. United States, 913 F.2d 933 (Fed. Cir. 1990). Borlem involved
an International Trade Commission ("ITC") injury determination that was based, in part, on
Commerce's finding of dumping by two Brazilian manufacturers. On remand, however,
Commerce changed its position and found that the dumping margins for one of the two producers
at issue was de minimis. Taking judicial notice of Commerce's new position, this Court
remanded the injury determination back to the ITC to consider amending its injury determination
in light of Commerce's amended antidumping determination. See Borlem S.A. -
Empreedimentos Industriais v. United States, 13 CIT 535, 718 F. Supp. 41 (1989), aff'd 913
F.2d 933 (Fed. Cir. 1990). On interlocutory appeal, the Federal Circuit upheld the Court's
decision, stating explicitly that "deference is not owed to a determination that is based on data
that the agency generating those data indicates are incorrect . . . . [t]he law does not require, nor
would it make sense to require, reliance on data which might lead to an erroneous result."
Borlem, 913 F.2d at 937. The Federal Circuit found that where significant events from outside
the record are properly brought to the Court's attention after the date of agency action, but before
the date of decision, it was proper for the Court of International Trade to take judicial notice of
such events and instruct the agency to reconsider its determination. Id. at 939. Such a result, the
Court held, is effectively "no different from a reversal and remand for reconsideration because a
fact relied on is unsupported by the evidence." Id. at 940.
Consol. Court No. 97-03-00483 Page 19

Of course, unlike the situation in Borlem, in its Remand Determination Commerce did
not actually rely on potentially erroneous data in its Remand Determination. It appears not to
have done so, however, only because of ambiguity in the Court's Remand Order. As made clear
by both its use of the Chemical Weekly (India) value in the First Administrative Review and its
statements in the Remand Determination, Commerce's clear preference is to use this price in
determining the Chinese manufacturers' dumping margins, and to justify doing so on the basis of
comparability between octanol-1 and octanol-2. Given that background, it would be
inappropriate for the Court to wait until Commerce actually used the Chemical Weekly (India)
value for octanol before instructing it to consider the new evidence from the Third
Administrative Review. Such a result would needlessly put off until a later day, and another
remand, the question of whether the Court should take judicial notice of Commerce's conclusions
in the Third Administrative Review and order Commerce to consider the letter from the editor of
the Chemical Weekly (India) in this proceeding. Where possible and proper, the Court can,
should and prefers to avoid such a waste of administrative and judicial resources. See, e.g.,
Timken Co. v. United States, 1 F. Supp.2d 1390, 1393 (CIT 1998) (setting aside a remand order
where further investigation would "unnecessarily expend limited administrative resources to
conduct additional reviews"); United States v. Gordon, 11 CIT 192, 193 (1987) (denying a
motion to vacate on the grounds that "[r]equests to vacate interlocutory opinions and orders in
dismissed cases invite a waste of judicial resources"); EAC Engineering v. United States, 9 CIT
593, 595, 624 F. Supp. 569, 570-71 (1985) (retaining jurisdiction in a classification case on the
grounds that "it would be an unnecessary waste of judicial and administrative resources to
require Customs to reliquidate the merchandise, and the plaintiff to file a second protest and
commence a new action in order to obtain judicial review").

D

Commerce May Reopen The Administrative Record and Consider
New Evidence Concerning the Comparability of 2-Ethylhexanol and Octanol-2.

Ironically, although the letter from the editor of the Chemical Weekly (India) appears to
undermine Commerce's proffered rationale for using the Chemical Weekly (India) value for
"octanol," this and other evidence from the Third Administrative Review may provide
alternative grounds for using this figure as a surrogate. Specifically, and as discussed previously,
in the Third Administrative Review Commerce identified evidence concerning similar physical
characteristics and uses between 2-ethylhexanol and octanol-2 to support its conclusion that these
two products are "comparable merchandise." See Third Administrative Review, 63 Fed. Reg. at
43,375. On this basis, Commerce concluded that the Chemical Weekly value for "octanol" was
an appropriate surrogate and, accordingly, used it in its by-product/co-product determination. Id.
Consol. Court No. 97-03-00483 Page 20

Recognizing the existence of such evidence and the conclusions that might be drawn
from it, this Court is confronted with the issue of whether Commerce should be allowed, or even
ordered, to consider evidence concerning the comparability of 2-ethylhexanol and octanol-2 on
remand. Such a result would seem a natural corollary to the fact that this Court is already
ordering Commerce to consider the letter from the editor of the Chemical Weekly (India), and it
would give Commerce an opportunity to use a preferred form of evidence, publically available
information from a comparable, developing economy, in its final determination. See 19 CFR
353.52(b) (1997) (establishing a hierarchy of surrogates that is to be used in determining a
constructed value for the "normal price" of a product). Further, ordering Commerce to consider
this evidence would not constitute a waste of governmental resources, since this case is already
being remanded on other grounds, and much of the evidence that will need to be evaluated by
Commerce was the subject of its Third Administrative Review. Cf. Tehnoimportexport, 15 CIT
at 260, 766 F. Supp. at 1179 ("Since the case is being remanded for recalculation of packing
costs, the Court finds that this additional calculation [correcting an earlier error] will not
overburden the agency and will advance the interests of justice and yield a more accurate
result.").

Set against these reasons for allowing Commerce to consider new evidence on the
comparability of 2-ethylhexanol and octanol-2, however, are various considerations concerning
the timely submission of evidence. By ordering Commerce to open the administrative record and
consider the letter from the editor of the Chemical Weekly (India), the Court seeks to prevent
Commerce from relying on what appears to be an erroneous factual assumption. In contrast,
directing Commerce to consider new evidence concerning similar uses between 2-ethylhexanol
and octanol-2 would allow it to proffer a new explanation, based on evidence outside the original
record, as to why the Chemical Weekly (India) value for "octanol" is an appropriate surrogate.
Neither the letter from the editor of the Chemical Weekly (India), nor evidence of overlapping
uses between 2-ethylhexanol and octanol-2 were put on the record of this proceeding by
Defendant-Intervenors. Accordingly, should Commerce consider such evidence, Defendant-
Intervenors would stand to benefit from evidence that it did not submit during the relevant time
period of the First Administrative Review.

In light of these conflicting policy considerations, the Court, under the doctrine of
primary jurisdiction, finds it appropriate to let Commerce determine whether it should consider
evidence concerning the comparability of 2-ethylhexanol and octanol-2 on remand. Under the
primary jurisdiction doctrine, a court may refer certain matters involving agency expertise back
to the agency so that it may, in the first instance, apply its specialized knowledge and experience
to the question at hand. See Borlem S.A. - Empreedimentos Industriais v. United States, 13 CIT
231, 234, 701 F. Supp. 797, 800 (1989). In United States v. Western Pacific Railroad Co., 352
Consol. Court No. 97-03-00483 Page 21

U.S. 59, 64 (1956), the Supreme Court set out guidelines concerning the scope of this doctrine.
Although the Court stated that "[n]o fixed formula exists for applying the doctrine of primary
jurisdiction," it also made clear that "[i]n every case the question is whether the reasons for the
existence of the doctrine are present and whether the purposes it serves will be aided by its
application in the particular litigation." Id. at 64 (1956). Among the well-recognized reasons for
this doctrine, the Court noted, were the desire for administrative uniformity and respect for the
"expert and specialized knowledge" of agencies in their fields of competence. Id. at 64-65. As
the Court noted:

Uniformity and consistency in the regulation of business entrusted to a particular
agency are secured, and the limited functions of review by the judiciary are more
rationally exercised, by preliminary resort for ascertaining and interpreting the
circumstances underlying legal issues to agencies that are better equipped than
courts by specialization, by insight gained through experience, and by more
flexible procedure.

Id. at 64 (quoting Far East Conference v. United States, 342 U.S. 570, 575 (1952).

In Borlem, this Court further clarified that "it would be inappropriate to invoke the
doctrine of primary jurisdiction were the question before the Court entirely one of statutory
interpretation." Borlem, 13 CIT at 237, 710 F. Supp. at 802. See also Great Northern Railway
Co. v. Merchants Elevator Co., 259 U.S. 285, 291 (1922) ("To determine what rate, rule or
practice shall be deemed reasonable for the future is a legislative or administrative function. To
determine whether a shipper has in the past been wronged by the exaction of an unreasonable or
discriminatory rate is a judicial function.") Rather, primary jurisdiction is appropriately invoked
where the question at hand involves complicated issues of administrative policy, practice and
procedure that ought best to be resolved by the agency. Borlem, 13 CIT at 237, 710 F. Supp. at
802. As the Supreme Court noted in Western Pacific:

[T]he first question presented is whether effectuation of the statutory purposes of the
Interstate Commerce Act requires that the Interstate Commerce Commission should first
pass on the construction of the tariff in dispute here; this, in turn, depends on whether the
question raises issues of transportation policy which ought to be considered by the
Commission in the interests of a uniform and expert administration of the regulatory
scheme laid down by the Act.

352 U.S. at 65.
Consol. Court No. 97-03-00483 Page 22

Applying these principles to the question at hand, the Court finds that it is Commerce,
and not this Court, which is in the best position to initially decide whether it should consider new
evidence concerning the comparability of 2-ethylhexanol and octanol-2. It is a well-established
principle of administrative law that an agency is afforded broad discretion to fashion its own
administrative procedure, including the authority to establish and enforce time limits concerning
the submission of written information and data. Vermont Yankee Nuclear Power Corp. v.
Natural Resources Defense Council, Inc., 435 U.S. 519, 544-45 (1978). In accord with this
authority, Commerce has promulgated regulations which set forth time limits governing the
submission of factual information in antidumping investigations. For time limits generally, 19
CFR. § 353.31(a) (1997) requires that "submissions of factual information for the Secretary's
consideration shall be submitted not later than . . . seven days before the scheduled date on which
the verification is to commence." In addition, 19 CFR § 353.31(a)(2) (1997) allows any
interested party to "submit factual information to rebut, clarify, or correct factual information
submitted by an interested party . . . at any time prior to the deadline provided in this section for
submissions of such factual information or, if later, 10 days after the date such factual
information is served on the interested party . . . ."

The regulations further provide an exception to these time limits, however, for instances
where the Secretary requests or solicits factual information. 19 CFR § 353.31(b) (1997) states, in
part, that:

(1) Notwithstanding paragraph (a) of this section, the Secretary may request any
person to submit factual information at any time during a proceeding.

(2) In the Secretary's written request to an interested party for a response to a
questionnaire or for other factual information, the Secretary will specify the time
limit for response.

In applying these regulations to the investigations before it, Commerce regularly balances
its interest in conducting an efficient, uniform and expeditious administrative investigation
against its equally compelling interest in conducting accurate factfinding. Such a weighing of
competing interests involves choices of administrative practice and procedure which Commerce,
in its specialized role as administrator of antidumping investigations, is uniquely qualified to
make.8 For this reason, the Court finds the question of whether to accept new evidence

8
Of course, reflecting the significant deference and flexibility given to Commerce in its
conduct of antidumping investigations, this Court does not review Commerce's administrative
decisions de novo. Rather, 19 U.S.C. § 1516a(b)(1)(B) (1994) provides that the Court “shall
Consol. Court No. 97-03-00483 Page 23

concerning the comparability of 2-ethylhexanol and octanol-2 to be an issue relating to the
administration of antidumping investigations which, in the interest of a uniform and expert
administration of such investigations, ought to be considered by Commerce in the first instance.

Accordingly, upon remand, Commerce is instructed to consider, and express its views on,
whether it should accept new evidence concerning the comparability of 2-ethylhexanol and
octanol-2. Should Commerce come to the conclusion that it should accept such evidence,
Commerce may do so on remand and, if appropriate, use this evidence as a basis for justifying its
use of the Chemical Weekly (India) value for "octanol." In so doing, Commerce may, but need
not, limit its search for information to that submitted during the Third Administrative Review.
Similarly, Commerce, in its discretion, may also seek or request further information (in addition
to the letter from the editor of the Chemical Weekly (India) submitted for the Third
Administrative Review) concerning the true nature of the "octanol" quote from the Chemical
Weekly (India).9

IV

CONCLUSION

For the foregoing reasons, the Court grants Defendant-Intervenors' Motion For
Reconsideration. Accordingly, the Court further remands this case to Commerce with
instructions that Commerce:

1. value the octanol-2 that results from the sebacic acid production process based on
an appropriate surrogate value for this product, and then recalculate the by-
product/co-product determination in light of this surrogate value. This surrogate
value may be an appropriate foreign or U.S. price or cost for comparable
merchandise. In seeking the best available information to use as a surrogate,
Commerce is to specifically consider and address all alternative surrogate values
that have been placed on the record by the parties;

hold unlawful any determination, finding, or conclusion found . . . to be unsupported by
substantial evidence on the record, or otherwise not in accordance with law.”
9
It should be noted that, by invoking the doctrine of primary jurisdiction, the Court is not
abdicating its jurisdiction over these questions. Rather, "[u]pon completion of the remand
proceedings, this Court will review all the [agency's] actions to determine if they are based upon
substantial evidence and are in accordance with law." Borlem, 13 CIT at 237, 710 F. Supp. at
802.
Consol. Court No. 97-03-00483 Page 24

2. open the administrative record and consider the letter from the editor of the
Chemical Weekly (India). Unless Commerce is able to identify substantial record
evidence on remand which demonstrates that, notwithstanding the letter from the
editor of the Chemical Weekly (India), the "octanol" quote from the Chemical
Weekly (India) is actually a quote for octanol-1, Commerce may not continue to
argue for the use of this figure on the grounds that octanol-1 and octanol-2 are
"comparable merchandise;" and

3. consider, and express its views on, whether it should accept new evidence
concerning the comparability of 2-ethylhexanol and octanol-2. Should Commerce
come to the conclusion that it should accept such evidence, Commerce may do so
on remand and, if appropriate, use this evidence as a basis for justifying its use of
the Chemical Weekly (India) value for "octanol."

In addition, the Court observes that nothing in its Remand Memorandum or Remand
Order of March 27, 1998, should be interpreted as either requiring or prohibiting the use of an
unadjusted, refined value as a surrogate for octanol-2. Rather, if, upon remand, Commerce
continues to adhere to its position that an unadjusted, refined value is the best available
information to use as a surrogate, the Court will uphold this determination so long as its choice
of a surrogate is supported by substantial evidence on the record and is otherwise in accordance
with law. This will be true regardless of whether the octanol-2 produced by Defendant-
Intervenors is characterized as "crude" or "refined" in nature.

As a final note, the Court wishes to express its concern with the manner in which the
Department of Commerce conducted the Remand Determination. As discussed above, the Court
erred in its Remand Order of March 27, 1998, in stating that Commerce was to "value octanol-2
based on an appropriate cost." While not technically incorrect, the Court's failure to say "cost or
price," or use the more generic term "value," could, if read in isolation, be interpreted as limiting
Commerce to consider only record evidence of "costs" upon remand. To arrive at such a narrow
result, however, Commerce would have had to ignore the obvious implications of the Court's
findings in the Remand Memorandum, and it would have had to interpret the Court's Remand
Order as directly conflicting with its statutory obligations. That is exactly what Commerce did.
See infra, Section III (B)(2).

In so interpreting the Court's Remand Order, Commerce displayed what can best be
described as a lack of common sense. While Commerce certainly should pay great attention to
the particular language used in a court order, it is not to interpret the Court's language in a
Consol. Court No. 97-03-00483 Page 25

vacuum. Rather, if a slip opinion has been issued along with an order or judgment, Commerce
should use that document in resolving any questions that may arise. Similarly, Commerce
should avoid interpreting a court order in a way that creates a conflict with the discretion
conveyed to it by statute. A proper role of courts is to clarify the scope or meaning of any order
they issue, upon appropriate request. Had Commerce here sought such a clarification before
issuing its Remand Determination, much of the time and cost associated with the current
litigation, as well as the further remand, could have been avoided. All attorneys, especially those
employed by the government, are obliged to their clients, the judicial system, and society in
general, to maximize scarce resources and minimize waste. This Court should not have to again
remind Commerce and its attorneys of that obligation.

__________________________
Evan J. Wallach, Judge

Date: April 29, 1999
New York, New York