Pakfood Public Co. Ltd. v. United States

Slip Op. 10-99

UNITED STATES COURT OF INTERNATIONAL TRADE

PAKFOOD PUBLIC COMPANY

LIMITED, et al.,

Plaintiffs, Before: Pogue, Judge

– v – Consol. Court No. 09-00430

THE UNITED STATES, et al.,

Defendants.

OPINION

[Granting in part and denying in part Plaintiffs’ Motions for

Judgment on the Agency Record, and remanding in part to

Department of Commerce]

Dated: September 1, 2010

Trade Pacific PLLC (Robert G. Gosselink and Jonathan M.

Freed) for Plaintiffs and Defendant-Intervenors Pakfood Public

Co., Ltd.; Asia Pacific (Thailand) Co., Ltd.; Chaophraya Cold

Storage Co., Ltd.; Okeanos Co., Ltd.; Okeanos Food Co., Ltd.; and

Takzin Samut Co., Ltd.

White & Case LLP (Walter J. Spak and Jay C. Campbell) for

Consolidated Plaintiffs and Defendant-Intervenors Andaman Seafood

Co., Ltd.; Chanthaburi Frozen Food Co., Ltd.; Chanthaburi

Seafoods Co., Ltd.; Phatthana Seafood Co., Ltd.; Phatthana Frozen

Food Co., Ltd.; Thailand Fishery Cold Storage Public Co., Ltd.;

Thai International Seafoods Co., Ltd.; Sea Wealth Frozen Food

Co., Ltd.; and Rubicon Resources, LLC.

Akin Gump Strauss Hauer & Feld LLP (Warren E. Connelly and

Jarrod M. Goldfeder) for Consolidated Plaintiffs and Defendant-

Intervenors Thai Union Frozen Products Public Co., Ltd. and Thai

Union Seafood Co., Ltd.

Picard Kentz & Rowe LLP (Andrew W. Kentz and Nathaniel J.

Maandig Rickard) for Consolidated Plaintiff and Defendant-

Intervenor Ad Hoc Shrimp Trade Action Committee.

Stewart and Stewart (Geert M. De Prest and Elizabeth J.

Consol. Court No. 09-00430 Page 2

Drake) and Leake & Andersson, LLP (Edward T. Hayes) for

Consolidated Plaintiff-Intervenor and Defendant-Intervenor The

Domestic Processors.

Tony West, Assitant Attorney General; Jeanne E. Davidson,

Director; Patricia M. McCarthy, Assistant Director, Commercial

Litigation Branch, Civil Division, United States Department of

Justice (Stephen C. Tosini), and, of counsel, Jonathan M.

Zielinski, Attorney, Office of the Chief Counsel for Import

Administration, Department of Commerce, for Defendant United

States.

Pogue, Judge: This consolidated action1 challenges four

determinations made by the United States Department of Commerce

(“Commerce” or the “Department”) in the final results of the

third administrative review of an antidumping (“AD”) duty order

on frozen warmwater shrimp from Thailand.2 Two of the four

challenges come from Plaintiff Ad Hoc Shrimp Trade Action

Committee (“AHSTAC”), and two come from the two mandatory

respondents selected by the Department for individual examination

in this review, the “Rubicon Group”3 and “Pakfood”4 (collectively

1

The actions consolidated herein include Court Nos. 09-

00443, 09-00445, and 09-00447.

2

See Certain Frozen Warmwater Shrimp from Thailand, 74 Fed.

Reg. 47,551 (Dep’t Commerce Sept. 16, 2009) (final results and

partial rescission of AD duty administrative review) (“Final

Results”) and accompanying Issues & Decision Mem., A-549-822, ARP

07-08 (Sept. 8, 2009), Admin. R. Pub. Doc. 281 (“I & D Mem.”).

The period of review (“POR”) was February 1, 2007 through January

31, 2008. Final Results, 74 Fed. Reg. at 47,552.

3

Throughout the remainder of this opinion, the “Rubicon

Group” or “Rubicon” refers to Andaman Seafood Co., Ltd.

(“Andaman”), Wales & Co. Universe Ltd., Chanthaburi Frozen Food

Co., Ltd. (“CFF”), Chanthaburi Seafoods Co., Ltd. (“CSF”),

(continued...)

Consol. Court No. 09-00430 Page 3

the “Respondent Plaintiffs”5).

Plaintiff AHSTAC contests: (I) the Department’s exclusive

reliance on “type 3” entry data6 obtained from United States

Customs and Border Protection (“CBP entry data”) in selecting

respondents for individual examination in this review; and (II)

Commerce’s determination – underlying the agency’s grant of a

constructed export price (“CEP”) offset to Rubicon’s normal value

(“NV”) – that the level of trade (“LOT”) of Rubicon’s CEP sales

3

(...continued)

Intersia Foods Co., Ltd. (formerly Y2K Frozen Foods Co., Ltd.),

Phattana Seafood Co., Ltd. (“PTN”), Phattana Frozen Food Co.,

Ltd. (“PFF”), S.C.C. Frozen Seafood Co., Ltd., Thailand Fishery

Cold Storage Public Co., Ltd. (“TFC”), Thai International

Seafoods Co., Ltd. (“TIS”), and Sea Wealth Frozen Food Co., Ltd.

(“Sea Wealth”). Final Results, 74 Fed. Reg. at 47,551. The group

consists of affiliated firms, collapsed for AD analysis pursuant

to 19 C.F.R. § 351.401(f) (2009).

4

Throughout the remainder of this opinion, “Pakfood” refers

to Plaintiffs Pakfood Public Co., Ltd. and its subsidiaries, Asia

Pacific (Thailand) Co., Ltd., Chaophraya Cold Storage Co., Ltd.,

Okeanos Co., Ltd., Okeanos Food Co., Ltd., and Takzin Samut Co.,

Ltd. Final Results, 74 Fed. Reg. at 47,551. Like Rubicon, this

group consists of affiliated firms, collapsed for AD analysis

pursuant to 19 C.F.R. § 351.401(f).

5

The following entities were included within the Rubicon

Group in this review but are not named Plaintiffs in this action:

Wales & Co. Universe Ltd.; Intersia Foods Co., Ltd.; and S.C.C.

Frozen Seafood Co., Ltd. Final Results, 74 Fed. Reg. at 47,551.

(See Compl., Andaman Seafood Co. v. United States, No. 09-00047

(Nov. 9, 2009).) Plaintiff Rubicon Resources, LLC, is the

Rubicon Group’s U.S. affiliate, and is included within all

references to the “Respondent Plaintiffs” throughout the

remainder of this opinion.

6

Type 3 refers to consumption entries of merchandise

subject to AD duties.

Consol. Court No. 09-00430 Page 4

was less advanced than the LOT of its NV sales. The Respondent

Plaintiffs in turn contest: (III) Commerce’s refusal to accept

Pakfood’s contractual exchange rate data after the expiration of

the Department’s party-initiated submission deadline; and (IV)

the Department’s refusal to offset interest earned on long-term

deposits, used to secure access to lines of credit, against the

costs of production and constructed value of two of Rubicon’s

affiliates.

The court has jurisdiction over this matter pursuant to

Section 516A(a)(2) of the Tariff Act of 1930, as amended,

19 U.S.C. § 1516a(a)(2) (2006)7 and 28 U.S.C. § 1581(c).

As explained more fully below, the court concludes that (I)

because the Department, without adequate explanation, treated

this case materially differently from similarly situated

proceedings, Commerce’s exclusive reliance on CBP entry data in

selecting the mandatory respondents for this review was arbitrary

and not in accordance with law; (II) Commerce did not arbitrarily

deviate from precedent in determining, on the record of this

review, that the LOT of Rubicon’s CEP sales was less advanced

than the LOT of its NV sales, and the agency’s LOT determination

was supported by substantial evidence on the record of this

review; (III) because Pakfood failed to exhaust its

7

All further citations to the Tariff Act of 1930, as

amended, are to Title 19 of the U.S. Code, 2006 edition.

Consol. Court No. 09-00430 Page 5

administrative remedies with respect to the issue of its

contractual exchange rates, Pakfood failed to preserve this issue

for review; and (IV) Commerce acted in accordance with its

established practice in denying an interest offset to Rubicon for

interest earned on long-term deposits, and the Department’s

determination to deny the offset was supported by substantial

evidence.

Accordingly, the court remands to Commerce solely on the

issue of the agency’s methodology for selecting mandatory

respondents in this review, and Plaintiffs’ requests for judgment

on the agency record with regard to the remaining three

challenges at issue here are each denied.8

8

In the interest of judicial economy, and despite the

court’s conclusion that a remand is necessary on the issue of

Commerce’s methodology for choosing mandatory respondents in this

review, the court will nevertheless consider each of Plaintiffs’

remaining challenges to Commerce’s treatment of the mandatory

respondents in this review, because the Respondent Plaintiffs

will likely remain mandatory respondents regardless of whether or

not the Department continues on remand to rely exclusively on CBP

entry data in supporting its choices. See Certain Frozen

Warmwater Shrimp from Thailand, 73 Fed. Reg. 12,088, 12,089

(Dep’t Commerce Mar. 6, 2008) (preliminary results and

preliminary partial rescission of AD duty administrative review)

(“Based upon our consideration of the responses to the Q&V

questionnaire received and the resources available to the

Department, we determined that it was not practicable to examine

all exporters/producers of subject merchandise for which a review

was requested. As a result, . . . we selected the four largest

producers/exporters of certain frozen warmwater shrimp from

Thailand during the POR, [including] Pakfood, [and] the Rubicon

Group, . . . as the mandatory respondents in this proceeding.”

(emphasis added)) (unchanged in final results, see Certain Frozen

(continued...)

Consol. Court No. 09-00430 Page 6

STANDARD OF REVIEW

Where, as here, an action is brought under 19 U.S.C.

§ 1516a(a)(2) (providing a cause of action for, inter alia,

challenges to final determinations by Commerce in administrative

reviews of AD duty orders), “[t]he 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).

Substantial evidence is “such relevant evidence as a

reasonable mind might accept as adequate to support a

conclusion.” Consol. Edison Co. of N.Y. v. NLRB, 305 U.S. 197,

229 (1938); Gallant Ocean (Thailand) Co. v. United States, 602

F.3d 1319, 1323 (Fed. Cir. 2010) (same).

A determination, finding, or conclusion is not in accordance

with law if, inter alia, it is arbitrary. See SKF USA Inc. v.

United States, 263 F.3d 1369, 1378, 1382 (Fed. Cir. 2001)

(reviewing a challenge brought under 19 U.S.C. § 1516a(a)(2) and

8

(...continued)

Warmwater Shrimp from Thailand, 73 Fed. Reg. 50,933, 50,934,

50,937 (Dep’t Commerce Aug. 29, 2008) (final results and final

partial rescission of AD duty administrative review)). In

addition, the court notes that the question of the Department’s

exclusive reliance on CBP data in selecting mandatory respondents

for this review remains live even if the use of a different

methodology would not alter the results of the selection process.

As explained below, the use of CBP data may affect determinations

of affiliation, and hence also the composition of the set of

companies assigned the mandatory respondents’ AD duty rates.

Consol. Court No. 09-00430 Page 7

holding Commerce’s determination to be not in accordance with law

under 19 U.S.C. 1516a(b)(1)(B)(i) because “it is well-established

that an agency action is arbitrary when the agency offers

insufficient reasons for treating similar situations differently”

(quotation and alteration marks and citation omitted)); Nat’l

Fisheries Inst. v. United States, __ CIT __, 637 F. Supp. 2d

1270, 1282 (2009) (noting the court’s holding that Commerce’s

decision was “arbitrary . . . and therefore contrary to law”).

DISCUSSION

I. Commerce’s Use of CBP Entry Data to Select Mandatory

Respondents in this Review

A. Background

In its Notice of Initiation for the instant administrative

review,9 the Department announced that it would be exercising its

discretion under 19 U.S.C. § 1677f-1(c)(2) to limit the number of

respondents selected for individual investigation. See Notice of

Initiation, 73 Fed. Reg. at 18,765. Relying solely on CBP entry

data, the Department identified Pakfood and Rubicon as the two

largest producers/exporters of the subject merchandise, and

accordingly selected these entities as mandatory respondents in

this review. See id.; Certain Frozen Warmwater Shrimp from

9

Certain Frozen Warmwater Shrimp from Brazil, Ecuador,

India, and Thailand, 73 Fed. Reg. 18,754 (Dep’t Commerce Apr. 7,

2008) (notice of initiation of AD reviews) (“Notice of

Initiation”).

Consol. Court No. 09-00430 Page 8

Thailand, 74 Fed. Reg. 10,000, 10,001 (Dep’t Commerce Mar. 9,

2009) (“Prelim. Results”) (unchanged in final results, see Final

Results, 74 Fed. Reg. at 47,553); I & D Mem. Cmt. 2.

AHSTAC argues, inter alia, that Commerce’s exclusive

reliance on CBP entry data in selecting the mandatory respondents

for this review was contrary to law because it is both

inconsistent with prior practice (i.e. arbitrary and

capricious10) and an abuse of discretion.11 (See Mem. of Law in

Supp. of Pl. [AHSTAC]’s Rule 56.2 Mot. for J. on Agency R.

(“AHSTAC’s Br.”) 13.) In response, Commerce contends that it

reasonably relied on CBP entry data in selecting the largest

exporters/producers for individual examination, and that such

reliance is not arbitrary or capricious because, “although [the

Department] has relied upon [data from] quantity and value [“Q &

V”] questionnaires in certain proceedings, . . . Commerce’s

10

See Consol. Bearings Co. v. United States, 348 F.3d 997,

1007 (Fed. Cir. 2003) (Commerce acts arbitrarily and capriciously

when it “consistently follow[s] a contrary practice in similar

circumstances and provide[s] no reasonable explanation for the

change in practice”).

11

“Arbitrary, capricious, or an abuse of discretion review

. . . is now routinely applied by the courts as one standard

under the heading of ‘arbitrary and capricious’ review. And it

encompasses both review of the factual basis of an agency’s

action, and review of an agency’s reasoning as distinguished from

its factfinding.” Eagle Broad. Grp. v. FCC, 563 F.3d 543, 551

(D.C. Cir. 2009) (internal quotation and alteration marks

omitted) (citing Citizens to Preserve Overton Park, Inc. v.

Volpe, 401 U.S. 402, 416 (1971); Bownman Transp., Inc. v. Ark.-

Best Freight Sys., Inc., 419 U.S. 281, 285-86 (1974)).

Consol. Court No. 09-00430 Page 9

‘current practice is to select respondents using CBP [entry]

data.’” (Def.’s Opp’n to Pls.’ Mots. for J. Upon Admin. R.

(“Def.’s Br.”) 8 (quoting I & D Mem. Cmt. 2 at 9-10).)

B. Commerce’s Exclusive Reliance on CBP Entry Data to

Select Mandatory Respondents in this Review Was

Arbitrary and Therefore Not in Accordance with Law.

Contrary to the Department’s claims, Commerce does not

employ a consistent practice, supported with adequate reasoning,

for selecting mandatory respondents based on import volume,

pursuant to 19 U.S.C. § 1677f-1(c)(2). While the Department has

used CBP entry data to select mandatory respondents in some

administrative reviews initiated prior to the review under

consideration here,12 the Department has also continued the

12

See, e.g., Wooden Bedroom Furniture from the People’s

Republic of China, 73 Fed. Reg. 12,392, 12,392 (Dep’t Commerce

Mar. 7, 2008) (notice of initiation of administrative review of

the AD duty order) (“For this administrative review, the

Department intends to select respondents based on [CBP entry]

data for U.S. imports during the [POR]. . . . The Department

invites comments regarding the CBP [entry] data and the selection

of respondents within seven days of the publication of this

Federal Register notice.”). The Department has also used CBP

entry data to select mandatory respondents in some investigations

of sales at less than fair value (“LTFV”) initiated prior to the

AD proceeding at issue here. See, e.g., Lemon Juice from

Argentina, 72 Fed. Reg. 20,820, 20,821 (Dep’t Commerce Apr. 26,

2007) (preliminary determination of sales at LTFV and affirmative

preliminary determination of critical circumstances) (“Based on

our analysis of import data obtained from [CBP], we selected two

producers/exporters . . . as the mandatory respondents in this

investigation because they were the largest [] producers/

exporters of [subject merchandise].”). In other AD proceedings,

the Department has also used a combination of CBP entry data and

company-specific export data. See, e.g., Prestressed Concrete

(continued...)

Consol. Court No. 09-00430 Page 10

practice of selecting mandatory respondents on the basis of Q & V

questionnaires.13 Without explanation, Commerce continues to use

12

(...continued)

Steel Wire Strand from the Republic of Korea, 68 Fed. Reg.

42,393, 42,394 (Dep’t Commerce July 17, 2003) (notice of

preliminary determination of sales at LTFV) (“[B]ecause there

were numerous producers/exporters of subject merchandise during

the period of investigation (POI), we examined company-specific

export data and [CBP] import data for the POI and selected as

mandatory respondents the two companies that accounted for the

majority of subject imports from [the relevant countries].”).

13

See Wooden Bedroom Furniture from the People’s Republic

of China, 74 Fed. Reg. 8,776, 8,777 (Dep’t Commerce Feb. 26,

2009) (initiation of AD duty administrative review) (“In the

event that the Department limits the number of respondents for

individual examination in the administrative review of wooden

bedroom furniture, the Department intends to select respondents

based on information obtained from the companies requested for

review . . . . Therefore, . . . we will be requiring all parties

for whom a review has been requested to respond to a Q&V

questionnaire.”) (subsequently using Q & V questionnaires to

select mandatory respondents, 75 Fed. Reg. 5,952, 5,953 (Dep’t

Commerce Feb. 5, 2010) (preliminary results of AD duty

administrative review and intent to rescind review in part)

(“[U]sing Q&V data[,] the Department limited the number of

companies to be individually examined . . . .”)); Polyethylene

Retail Carrier Bags from the People’s Republic of China, 73 Fed.

Reg. 52,282, 52,283 (Dep’t Commerce Sept. 9, 2008) (preliminary

results of AD duty administrative review) (“Based upon responses

to the Q&V questionnaires, the Department selected [two

companies] for individual examination in this administrative

review . . . .”). See also Certain Polyester Staple Fiber from

the People’s Republic of China, 74 Fed. Reg. 32,125, 32,125

(Dep’t Commerce July 7, 2009) (preliminary results of AD duty

administrative review and extension of time limit for final

results) (“On October 1, 2008, the Department sent out a [Q & V]

questionnaire to all 27 companies for which a review was

requested because a significant amount of the volume in the CBP

[entry] data was unclear.”).

The Department has also used Q & V questionnaires in

combination with CBP entry data. Wooden Bedroom Furniture from

the People’s Republic of China, 75 Fed. Reg. 9,869, 9,870 (Dep’t

(continued...)

Consol. Court No. 09-00430 Page 11

Q & V questionnaires in some administrative proceedings –

including reviews, such as the review under consideration in this

case, of AD duty orders with at least two prior completed

reviews14 – and to use CBP entry data in others.

As AHSTAC correctly points out (AHSTAC’s Br. 10), because

CBP entry data do not contain information with respect to company

affiliations, where the Department relies exclusively on such

data, it is forced to use affiliation-related information

obtained in the course of prior proceedings.15 Such affiliation-

related data may or may not remain accurate with regard the POR

at issue. Unlike cases in which Commerce issues and verifies Q &

V questionnaires, when the Department uses CBP entry data to

select mandatory respondents, disclosure of accurate affiliation

information for the relevant POR becomes discretionary for the

13

(...continued)

Commerce Mar. 4, 2010) (initiation of administrative review of

the AD duty order) (“[T]he Department has decided to send Q&V

questionnaires to the 20 companies for which reviews were

requested with the largest total values of subject merchandise

imported into the United States during the POR according to CBP

data.”).

14

See Wooden Bedroom Furniture from the People’s Republic

of China, 74 Fed. Reg. at 8,777 (fourth review).

15

See Mem. Re. Selection of Respondents for Individual

Review, A-549-822, ARP 07-08 (May 27, 2008), Admin. R. Pub.

Doc. 67, at 7 (“[W]e have developed considerable information

regarding the affiliations of the requested companies during the

previous segments . . .. [W]e will continue to treat any

affiliated companies found to be collapsible in previous segments

of the proceeding as a single entity in the current segment.”).

Consol. Court No. 09-00430 Page 12

producers/exporters. To the extent that producers/exporters see

benefit in correcting outdated information, they may do so; to

the extent, however, that the producers/exporters do not view

correction of outdated information as beneficial, the burden to

discover and correct any inaccuracies now falls on petitioners

who, unlike the producers/exporters, are not likely to be in

possession of the relevant information.16 As a result, the

domestic producers of some merchandise bear the burden of

analyzing and correcting potentially outdated affiliation

information (when CBP entry data are used) in administrative

reviews of AD duty orders imposed on their foreign counterparts,

whereas the domestic producers of other merchandise bear no

similar burden (when Q & V questionnaires are issued and

verified).17

16

The Notice of Initiation gave interested parties ten days

from the date of its publication to submit comments on the CBP

entry data. Notice of Initiation, 73 Fed. Reg. at 18,766.

Because the CBP entry data were not received by interested

parties until after the Notice of Initiation was published, the

parties were afforded less than one week to analyze and comment

on any inaccuracies found in the CBP entry data. See Letter from

Dewey & Le Boeuf, LLP, A-549-822, ARP 07-08 (Apr. 17, 2008),

Admin. R. Pub. Doc. 44, at 10; see also Notice of Initiation,

73 Fed. Reg. at 18,765 (“We intend to release the CBP [entry]

data . . . within five days of publication of this Federal

Register notice . . . .”).

17

Compare, e.g., Lemon Juice from Argentina, 72 Fed. Reg.

at 20,821 (use of CBP entry data to select mandatory respondents)

with Wooden Bedroom Furniture from the People’s Republic of

China, 74 Fed. Reg. at 8,777 (use of Q & V questionnaires).

Consol. Court No. 09-00430 Page 13

As mentioned above, where an agency is afforded a measure of

discretion in administering a statute, the exercise of that

discretion is not in accordance with law if it is arbitrary, such

as where the agency treats like cases differently. See, e.g.,

Martin v. Franklin Capital Corp., 546 U.S. 132, 139 (2005)

(“Discretion is not whim, and limiting discretion according to

legal standards helps promote the basic principle of justice that

like cases should be decided alike.” (citation omitted)); SKF,

263 F.3d at 1382 (“[I]t is well-established that an agency action

is arbitrary when the agency offers insufficient reasons for

treating similar situations differently.” (quotation and

alteration marks and citation omitted)).

By using CBP entry data in some reviews and Q & V

questionnaires in others, Commerce is, without explanation,

placing a higher burden on producers of some merchandise than on

producers of other merchandise. Regardless of the reasonableness

of using CBP entry data to select mandatory respondents,

therefore, the Department’s apparently arbitrary and inconsistent

employment of this methodology is not, without more adequate

explanation, consistent with basic principles of the rule of law.

See, e.g., Green Country Mobilephone, Inc. v. FCC, 765 F.2d 235,

237 (D.C. Cir. 1985) (“We reverse the [agency] not because the

strict rule it applied is inherently invalid, but rather because

the [agency] has invoked the rule inconsistently. We find the

Consol. Court No. 09-00430 Page 14

[agency] has not treated similar cases similarly.”); Nakornthai

Strip Mill Pub. Co. v. United States, __ CIT __, 587 F. Supp. 2d

1303, 1307 (2008) (“Agencies have a responsibility to administer

their statutorily accorded powers fairly and rationally, which

includes not treating similar situations in dissimilar ways.”

(quotation and alteration marks and citation omitted)).

The court accordingly concludes that a remand is necessary

on the issue of the Department’s methodology for selecting

mandatory respondents in this review. On remand, Commerce must

either provide an adequately reasoned explanation distinguishing

the present case from apparently similar cases in which the

Department has employed and continues to employ a materially

different methodology, or else apply a methodology consistent

with those similarly situated cases. The chosen methodology must

comport with a reasonable interpretation of the AD statute.18

18

Because neither the AD statute nor any of Commerce’s

regulations directly address the methodology by which the

Department is to arrive at the number of “exporters and producers

accounting for the largest volume of the subject merchandise from

the exporting country that can be reasonably examined,” 19 U.S.C.

§ 1677f-1(c)(2)(B), the court will uphold Commerce’s methodology

if it is reasonable, see Chevron U.S.A. Inc. v. Natural Res. Def.

Council, Inc., 467 U.S. 837, 843 (1984), and is not arbitrarily

applied. See, e.g., Caribbean Ispat Ltd. v. United States, 450

F.3d 1336, 1340 (Fed. Cir. 2006) (denying Chevron deference where

the statutory interpretation advanced by the agency “d[id] not

represent the [agency]’s considered, consistent, or formal

interpretation of [the statute]” and particularly where the

agency, in a case similar to that under consideration, employed a

methodology contrary to that being challenged). See also Bowen v.

(continued...)

Consol. Court No. 09-00430 Page 15

II. Commerce’s Grant of a CEP Offset to the Rubicon Group

A. Background

An AD duty is based upon the difference between the NV,

i.e., the price charged for the subject merchandise in its home

or third country comparison market,19 and the “export price”

(“EP”), i.e., the price charged for such merchandise in the

United States, or, where, as here, a foreign producer sells to an

affiliated purchaser in the United States, the CEP. Micron Tech.,

Inc. v. United States, 243 F.3d 1301, 1303 (Fed. Cir. 2001).

To ensure a fair comparison of the NV to the appropriate

U.S. price, Commerce is required to establish the NV “to the

extent practicable, at the same [LOT] as the [EP] or [CEP].”

18

(...continued)

Georgetown Univ. Hosp., 488 U.S. 204, 212 (1988) (“We have never

applied [Chevron deference] to agency litigating positions that

are wholly unsupported by regulations, rulings, or administrative

practice.”).

19

A third country market price will be the basis for the NV

in a dumping margin calculation when Commerce determines that

“the aggregate quantity (or, if quantity is not appropriate,

value) of the foreign like product sold in the exporting country

is insufficient to permit a proper comparison with the sales of

the subject merchandise to the United States.” 19 U.S.C.

§ 1677b(a)(1)(C)(ii). In this case, because the Rubicon Group’s

aggregate volume of home market sales of the foreign like

products of the subject merchandise was insufficient to permit a

proper comparison with the U.S. CEP sales, the Department used

the Rubicon Group’s sales to Canada, its largest third-country

market, as the basis for comparison-market sales, in accordance

with 19 U.S.C. § 1667b(a)(1)(C) and 19 C.F.R. § 351.404. See

Prelim. Results, 74 Fed. Reg. at 10,003.

Consol. Court No. 09-00430 Page 16

19 U.S.C. § 1677b(a)(1)(B)(i).20 While the phrase “same [LOT]”

is left undefined by both the statute and the Statement of

Administrative Action (“SAA”),21 the Department’s regulations

provide that “sales are made at different [LOTs] if they are made

at different marketing stages (or their equivalent).” 19 C.F.R.

§ 351.412(c)(2).22

In determining whether sales are made at different LOTs in

the U.S. and comparison markets, the Department “analyze[s] [the

exporter/producer’s] selling functions to determine if [LOTs]

identified by a party are meaningful[;] [i]n situations where

some differences in selling activities are associated with

different sales, whether that difference amounts to a difference

in the [LOTs] [is] evaluated in the context of the seller’s whole

scheme of marketing.” Antidumping Duties; Countervailing Duties,

20

See also Micron, 243 F.3d at 1313 (“[T]he overarching

purpose of the [AD] statute is to permit a ‘fair, ‘apples-to-

apples’ comparison between foreign market value and United States

price . . . .’” (quoting Torrington Co. v. United States, 68 F.3d

1347, 1352 (Fed. Cir. 1995))); 19 U.S.C. § 1677b(a) (“[A] fair

comparison shall be made between the [EP] or [CEP] and [NV].”).

21

See generally 19 U.S.C. §§ 1677, 1677b(a)(1)(B); SAA,

H.R. Doc. No. 103-316, 103d Cong., 2d Sess. (1994), reprinted in

1994 U.S.C.C.A.N. 4040. Accord Micron, 243 F.3d at 1305.

22

See also Micron, 243 F.3d at 1305 (“[W]e understand the

term [‘same LOT’] to mean comparable marketing stages in the home

and United States markets . . . . [Requiring comparison of CEP

and NV to be, to the extent practicable, at the same LOT]

ensures, for example, that a [NV] wholesale price will not be

compared to a United States CEP retail price.”); Prelim. Results,

74 Fed. Reg. at 10,003 (relying on 19 C.F.R. § 351.412(c)(2)).

Consol. Court No. 09-00430 Page 17

62 Fed. Reg. 27,296, 27,371 (Dep’t Commerce May 19, 1997) (final

rule). “Each more remote [LOT] must be characterized by an

additional layer of selling activities, amounting in the

aggregate to a substantially different selling function.” Id.

Accord Micron, 243 F.3d at 1314 (same). See also SAA at 829

(characterizing “difference in the [LOT]” as “a difference

between the actual functions performed by the sellers at the

different [LOTs] in the two markets,” and noting that “Commerce

will require evidence from the foreign producers that the

functions performed by the sellers at the same [LOT] in the U.S.

and foreign markets are similar, and that different selling

activities are actually performed at the allegedly different

[LOTs]”).

If the Department determines that a respondent’s NV and CEP

sales were at different LOTs, and if “the difference in [LOT]

. . . is demonstrated to affect price comparability, based on a

pattern of consistent price differences between sales at

different [LOTs] in the country in which [NV] is determined,”

19 U.S.C. § 1677b(a)(7)(A)(ii), the Department is required to

make an LOT adjustment to NV. Id. However, where the record does

not contain data sufficient to make an LOT adjustment,23 and

23

See SAA at 830-31 (“In some circumstances, the data may

not permit Commerce to determine the amount of the [LOT]

adjustment. For example, there may be no, or very few sales of a

(continued...)

Consol. Court No. 09-00430 Page 18

where the NV is established at an LOT that is more remote from

the factory than that of the CEP,24 the Department may grant a

capped CEP offset to NV pursuant to 19 U.S.C. § 1677b(a)(7)(B).25

23

(...continued)

sufficiently similar product by a seller to independent customers

at different [LOTs]. This could be the case where there is only

one foreign respondent and all sales are to affiliated

purchasers. Also, there could be restrictive business practices

which result in too few appropriate sales to determine a price

effect. Similarly, the data could indicate a clearly

contradictory result, for example contradictory patterns during

different periods. In such situations, although an adjustment

might have been warranted, Commerce may be unable to determine

whether there is an effect on price comparability. In such

situations, although there is a difference in [LOTs], Commerce

may be unable to quantify the adjustment. Where this occurs,

Commerce will make a capped ‘[CEP] offset’ adjustment under

[19 U.S.C. § 1677b(a)(7)(B)], in lieu of the [LOT] adjustment

that would be warranted under [19 U.S.C. § 1677b(a)(7)(A)].”).

24

See SAA at 831 (“The [CEP] offset adjustment will be made

only where [NV] is established at a [LOT] more remote from the

factory than the [LOT] of the [CEP]; i.e., where adjustment under

[19 U.S.C. § 1677b(a)(7)(A)], if it could have been quantified,

would likely have resulted in a reduction of the [NV].”).

25

See also 19 C.F.R. § 351.412(f)(3) (“Where available data

permit [Commerce] to determine . . . whether the difference in

[LOT] affects price comparability, [Commerce] will not grant a

[CEP] offset. In such cases, . . . [Commerce] will make a [LOT]

adjustment.”); Antidumping Duties; Countervailing Duties, 62 Fed.

Reg. at 27,370 (noting that 19 C.F.R. § 351.412(f) “clarifies

that the Department will grant a CEP offset only where a

respondent has succeeded in establishing that there is a

difference in the [LOTs], but, although the respondent has

cooperated to the best of its ability, the available data do not

permit the Department to determine whether that difference

affects price comparability”); Micron, 243 F.3d at 1305 (“In some

instances, the [LOT] in the home [or third country comparison]

market will constitute a more advanced stage of distribution than

the [LOT] in the United States, yet Commerce will lack sufficient

data regarding the sales in the two markets to make a [LOT]

(continued...)

Consol. Court No. 09-00430 Page 19

The grant of a CEP offset reduces the respondent’s NV by the

lesser of the indirect selling expenses (“ISEs”) incurred on

sales of the foreign like product in the country in which NV is

determined or the expenses incurred on U.S. sales by the U.S.

affiliate which are deducted from the CEP under 19 U.S.C.

§ 1677a(d)(1)(D). See 19 U.S.C. § 1677b(a)(7)(B); Micron, 243

F.3d at 1305 (“The effect [of a CEP offset] is to reduce the

price of the more advanced [LOT] by ‘indirect selling expenses’

that have been included in the price on the apparent theory that

such costs would not have been incurred if the sale had been made

on a less advanced [LOT]. However, the ‘CEP offset’ may not

exceed ‘the amount of such expenses for which a deduction is made

under section 1677a(d)(1)(D).’” (quoting 19 U.S.C.

§ 1677b(a)(7)(B))).26

25

(...continued)

adjustment, that is, it will be unable to determine how much to

reduce the foreign sale price to arrive at a price comparable to

the U.S. price. In those cases, the statute provides for the

award of a [CEP offset], i.e., a reduction in [NV] equal to ‘the

amount of indirect selling expenses incurred in the country in

which [NV] is determined on sales of the foreign like product

. . . .’” (quoting 19 U.S.C. § 1677b(a)(7)(B))).

26

See also Micron, 243 F.3d at 1314 (“[T]he [LOT]

comparison is to be made at the [LOT] that most nearly

corresponds to EP – i.e., a sale to an unaffiliated importer and

at the [LOT] which will be used in the duty calculation. This is

the [LOT] reflected in adjusted CEP. Admittedly, Commerce’s

methodology results in comparison of adjusted CEP with unadjusted

[NV]. However, [] the very purpose of the comparison is to

determine whether an adjustment should be made to [NV]. That

(continued...)

Consol. Court No. 09-00430 Page 20

In this case, “[i]n order to determine whether the

comparison-market sales and CEP sales were made at different

marketing stages, [Commerce] compared the various selling

activities performed by [Rubicon] for sales to unaffiliated

customers in Canada to the selling activities performed for

[Rubicon]’s sales to [its] U.S. affiliate, Rubicon Resources.” I

& D Mem. Cmt. 8 at 27. “In contrast to the many selling

activities performed by the [Rubicon Group] for sales to Canada,

[the Department] confirmed at verification the limited selling

functions that the [Rubicon Group] perform[ed] for sales to

Rubicon Resources.” Id. (citing Mem. to File, Verification of the

Sales Responses of [CFF] and Rubicon Resources LLC [] in the [AD]

Review of Certain Frozen Warmwater Shrimp from Thailand, A-549-

822, ARP 07-08 (May 8, 2009), Admin. R. Pub. Doc. 252).

Specifically:

In comparing the Canadian LOT to the CEP LOT,

[Commerce] found that the selling activities performed

by the Thai packers27 for CEP sales were significantly

fewer than the selling activities that were performed

for the Canadian sales. The Thai packers provided the

following selling functions: sales forecasting; market

research; sales promotion; advertising; trade shows;

inventory maintenance; order input/processing; freight

26

(...continued)

adjustment itself results in comparability.”).

27

The following companies in the Rubicon Group produced

subject merchandise during the POR and are collectively referred

to as the “Thai packers”: Andaman, CSF, CFF, PTN, PFF, TFC, TIS,

and Sea Wealth.

Consol. Court No. 09-00430 Page 21

and delivery arrangements; visits, calls and

correspondence to customers; development of new

packaging and new markets (with customer); packing; and

after-sales services for Canadian sales. The only

selling functions that the Thai packers provided for

CEP sales were inventory maintenance, order

input/processing, freight and delivery arrangements,

and packing. Therefore, the Thai packers provided many

more selling functions for Canadian sales than they

provided for CEP sales, thus making the Canadian LOT

more advanced than the CEP LOT.

Prelim. Results, 74 Fed. Reg. at 10,004-05 (emphasis added)

(unchanged in Final Results, 74 Fed. Reg. 47,551, see I & D Mem.

Cmt. 8).28

Having found the LOT of Rubicon’s third country market NV

comparison sales to be more advanced than the LOT of Rubicon’s

CEP sales in the U.S., “because the data available did not form

an appropriate basis for making a [LOT] adjustment but the

28

See also Prelim. Results, 74 Fed. Reg. at 10,005 (“The

Rubicon Group provided evidence on the record of this review

supporting its contention that the selling activities that the

Thai packers performed for Canadian customers were much more

extensive than those performed for U.S. sales to its affiliate

Rubicon Resources. While sales to Canada consumed a great deal

of the Thai packers’ time and resources, the interaction between

the Thai packers and Rubicon Resources appeared to be

perfunctory, consuming very little of the Thai packers’ time and

resources.” (citing Response of Rubicon Group to the Department’s

Supplemental Sections A, B, and C Questionnaire, A-549-822,

ARP 07-08 (Oct. 29, 2008), Admin. R. Pub. Doc. 152)). Further,

the Department noted that “[t]he record of this review also

contain[ed] information concerning Wales & Co. Universe Ltd.’s

(Wales’) [a member of the Rubicon Group] activities with respect

to sales made by the Thai packers to Rubicon Resources.

According to Wales, it had limited communications with Rubicon

Resources on behalf of the Thai packers because the Thai packers

did not communicate directly with Rubicon Resources regarding

U.S. sales made during the POR.” Id. (footnote omitted).

Consol. Court No. 09-00430 Page 22

Canadian LOT was at a more advanced stage of distribution than

the CEP LOT, [Commerce] made a CEP offset to NV in accordance

with [19 U.S.C. § 1677b(7)(B)].” I & D Mem. Cmt. 8 at 21.29

AHSTAC contests the Department’s finding that the Canadian

LOT was at a more advanced stage of distribution than the CEP LOT

(AHSTAC’s Br. 14-20), see also I & D Mem. Cmt. 8 at 22, arguing

that the Department’s grant of a CEP offset to Rubicon’s NV in

this review was both contrary to established practice and

unsupported by substantial evidence on the record of the third

review.30

B. Commerce Did Not Act Contrary to Precedent In Granting

a CEP Offset to Rubicon’s NV in This Review.

AHSTAC first argues that, “[a]lthough Commerce makes

determinations in a review based on the record developed in that

proceeding, the agency has an established practice of giving

weight to previous determinations made in prior proceedings

29

In accordance with 19 U.S.C. § 1677b(a)(7)(B), Commerce

calculated the CEP offset to be “the lesser of: (1) the [ISEs]

incurred on the third-country sales, or (2) the [ISEs] deducted

from the starting price in calculating the CEP [i.e., expenses

for which a deduction is made under section 1677a(d)(1)(D)].”

Prelim. Results, 74 Fed. Reg. at 10,005 (unchanged in final

results).

30

AHSTAC does not contest the Department’s finding that the

data available on this record do not provide an appropriate basis

to calculate an LOT adjustment under 19 U.S.C. § 1677b(a)(7)(A).

(See generally AHSTAC’s Br.)

Consol. Court No. 09-00430 Page 23

regarding whether a CEP offset is appropriate,”31 and that the

Department should have therefore given more weight to its

31

(AHSTAC’s Br. 16; see also id. at 16-17 (quoting Issues &

Decision Mem., A-351-840, ARP 07-08 (Aug. 11, 2009), available at

http://ia.ita.doc.gov/frn/summary/BRAZIL/E9-19223-1.pdf (last

visited Sept. 1, 2010) (incorporated by reference in Certain

Orange Juice from Brazil, 74 Fed. Reg. 40,167, 40,167 (Dep’t

Commerce Aug. 11, 2009) (final results of AD duty administrative

review)) Cmt. 2 at 10 (“There is no meaningful change in the

selling functions provided by [the respondent] in both the home

market and the U.S. market between the last review and the

current review . . . .”); Issues & Decision Mem., A-351-840, ARP

05-07 (Aug. 5, 2008), available at

http://ia.ita.doc.gov/frn/summary/BRAZIL/E8-18479-1.pdf (last

visited Sept. 1, 2010) (incorporated by reference in Certain

Orange Juice from Brazil, 73 Fed. Reg. 46,584, 46,585 (Dep’t

Commerce Aug. 11, 2008) (final results and partial rescission of

AD duty administrative review)) Cmt. 5 at 18 (“Our analysis in

this administrative review is consistent with the analysis

performed in the LTFV investigation, and we disagree with [the

respondent] that the evidence on the record here is any more

probative than it was in the past.”); Certain Orange Juice from

Brazil, 73 Fed. Reg. 18,773, 18,776 (Dep’t Commerce Apr. 7, 2008)

(preliminary results and partial rescission of AD duty

administrative review) (denying CEP offset “because no compelling

evidence exists that [the respondent]’s sales process changed

during the POR of this administrative review”); Issues & Decision

Mem., A-580-834, ARP 04-05 (Jan. 23, 2007), available at

http://ia.ita.doc.gov/frn/summary/KOREA-SOUTH/E7-1462-1.pdf (last

visited Sept. 1, 2010) (incorporated by reference in Stainless

Steel Sheet and Strip in Coils from the Republic of Korea,

72 Fed. Reg. 4,486, 4,489 (Dep’t Commerce Jan. 31, 2007) (final

results and rescission of AD duty administrative review in part))

Cmt. [1] at 8-9 (denying CEP offset after granting one in a

previous proceeding where the records in the respective

proceedings were “inherently different”), and citing Issues &

Decision Mem., A-549-822, ARP 06-07 (Aug. 29, 2008), available at

http://ia.ita.doc.gov/frn/summary/THAILAND/E8-20165-1.pdf (last

visited Sept. 1, 2010) (incorporated by reference in Certain

Frozen Warmwater Shrimp from Thailand, 73 Fed. Reg. 50,933,

50,937 (Dep’t Commerce Aug. 29, 2008) (final results and final

partial rescission of AD duty administrative review))(“2d AR I &

D Mem.”) Cmt. 5 at 15).)

Consol. Court No. 09-00430 Page 24

determinations in the LTFV investigation underlying this AD

order, as well as the second administrative review of this order,

where Commerce declined to grant Rubicon a CEP offset. (AHSTAC’s

Br. 16-17.)

In response, the Department asserts that “Commerce makes

determinations based upon the record of the relevant segment of

the proceeding, not previous segments, and [that] the record of

this review supports Commerce’s determination.” (Def.’s Br. 12;

see also id. at 13 (noting that “the Court has rejected

explicitly the contention that denial of a [CEP] offset in an

early segment of the proceeding, even if the facts were

identical, should control Commerce’s decision in a subsequent

review” (citing Alloy Piping Prods., Inc. v. United States, No.

08-00027, 2009 WL 983078, at *6 (CIT 2009) (“Even assuming

Commerce’s determinations at issue are factually identical, as a

matter of law a prior administrative determination is not legally

binding on other reviews before this court. Thus, the court is

not persuaded by Plaintiffs’ suggestion to follow the analysis in

[a prior review] given that Commerce has demonstrated with

substantial evidence, and in accordance with law, that a CEP

offset is proper under the facts of the present case.” (citing

Timken U.S. Corp. v. United States, 434 F.3d 1345, 1352 (Fed.

Cir. 2006)))).)

While it is true that “[a]n agency is obligated to follow

Consol. Court No. 09-00430 Page 25

precedent,” M.M. & P. Mar Advancement, Training, Educ. & Safety

Program v. Dep’t Commerce, 729 F.2d 748, 755 (Fed. Cir. 1984),

“Commerce [nevertheless] has ‘discretion to . . . adapt its views

and practices to the particular circumstances of the case at

hand, so long as the agency’s decisions are explained and

supported by substantial evidence on the record.’” Nakornthai, __

CIT at __, 587 F. Supp. 2d at 1307 (quoting Trs. in Bankr. of N.

Am. Rubber Thread Co. v. United States, __ CIT __, 533 F. Supp.

2d 1290, 1297 (2007)). Accord Alloy Piping, 2009 WL 983078, at

*6.

In this case, the Department determined that, unlike the

evidence presented to the agency in the LTFV investigation and

the second review, “[t]he verified record evidence supports

Rubicon’s [CEP] offset.” (Def.’s Br. 10.) See I & D Mem. Cmt. 8

at 29 (“[B]ased on the facts on the record of the current review,

. . . we find it appropriate to [] grant a CEP offset to the

Rubicon Group . . . .”). The question before the court is thus

whether this determination was adequately explained and supported

by substantial evidence on the record.32 See Nakornthai, __ CIT

32

AHSTAC’s contention that “the agency’s established

practice is to require not only that the respondent seeking a[]

CEP offset bear the burden of demonstrating that such an

adjustment is warranted, but, where a CEP offset was denied in

the past, the respondent has also been required to demonstrate

how the record in the current proceeding differs from previous

records through ‘compelling evidence’” (AHSTAC’s Br. 17) is

(continued...)

Consol. Court No. 09-00430 Page 26

at __, 587 F. Supp. 2d at 1307-08; Alloy Piping, 2009 WL 983078,

at *6.

AHSTAC essentially argues that Commerce has failed to

adequately distinguish the record evidence of the third review

from that of the second review and LTFV investigation, and that

the agency must accordingly follow its past precedent in those

prior segments. (See AHSTAC’s Br. 17-18.) The court disagrees.

In the LTFV investigation underlying this AD duty order, the

Department explained that, to show entitlement to a CEP offset,

“[a] respondent must first demonstrate that substantial

differences in selling functions exist between the third country

[NV] and CEP [LOTs].” Issues & Decision Mem., A-549-822,

Investigation (Dec. 23, 2004), available at

http://ia.ita.doc.gov/frn/summary/thailand/04-28171-1.pdf (last

visited Sept. 1, 2010) (incorporated by reference in Certain

Frozen and Canned Warmwater Shrimp from Thailand, 69 Fed.

Reg. 76,918, 76,919 (Dep’t Commerce Dec. 23, 2004) (notice of

final determination of sales at LTFV and negative final

determination of critical circumstances)) (“LTFV I & D Mem.”)

Cmt. 5 at 21. Commerce then determined, on the record of that

segment, that a CEP offset for Rubicon was not warranted, because

32

(...continued)

simply a reformulation of the well-established rule that agencies

must treat similar situations similarly or else explain their

failure to do so. E.g., M.M. & P. Mar, 729 F.2d at 755.

Consol. Court No. 09-00430 Page 27

it found that Rubicon “performed essentially the same selling

functions for its third country/EP transactions and for its sales

to the U.S. affiliate.” Id. at 20.

Similarly, in the second administrative review of the

resulting AD duty order (the next time that the Rubicon Group was

selected for individual examination33) Commerce again “analyzed

the selling functions that the Rubicon Group performed through

each [channel of] distribution [] for sales to Canada, as well as

the selling functions it performed to sell to its U.S. EP

customers and to Rubicon Resources,” 2d AR I & D Mem. Cmt. 5 at

12, and determined that a CEP offset for Rubicon was not

warranted on the record of that review, because the Department

found that “the Rubicon Group performed essentially the same

selling functions for its third country/EP transactions and for

its sales to the U.S. affiliate.” Id. at 15 (citation omitted).34

With regard to the evidence on the record before the agency in

33

The Rubicon Group was not selected for individual

examination in the first administrative review of this AD duty

order. See Certain Frozen Warmwater Shrimp from Thailand, 72 Fed.

Reg. 10,669, 10,670 (Dep’t Commerce Mar. 9, 2007) (preliminary

results and partial rescission of AD duty administrative review).

34

See also id. (noting that “[i]n order for the Department

to grant a CEP offset, the respondent must first demonstrate that

substantial differences in selling functions exist between the

third country and CEP LOTs, in accordance with 19 C.F.R.

§ 351.412(c)(2).” (citing Roller Chain, Other Than Bicycle, from

Japan, 61 Fed. Reg. 64,322, 64,326 (Dep’t Commerce Dec. 4, 1996)

(final results of AD duty administrative review, and

determination not to revoke in part))).

Consol. Court No. 09-00430 Page 28

the second review, the Department noted that, “although the

Rubicon Group provided evidence of Rubicon Resources’ interaction

with its U.S. customers in this review, it provided very little

detail concerning the activities performed by the Thai packers

for sales to Rubicon Resources and no evidence of these

activities.” Id. at 16. Commerce accordingly concluded that,

because, “based on information gathered in the LTFV

investigation, at a minimum, the Thai packers regularly

provide[d] sales forecasting in the form of shipment schedules to

Rubicon Resources,” id., and because Rubicon had “neither argued

nor provided evidence that this activity was no longer performed

by the Thai packers during the time period covered by this

review,” id., “substantial differences in selling activities” did

not exist between Rubicon’s Canadian sales and its sales to its

U.S. affiliate. Id. (noting that “the standard articulated in the

regulations [] requires the Department to find ‘substantial

differences in selling activities’ before determining that there

is a difference in the stage of marketing” (quoting 19 C.F.R.

§ 351.412(c)(2))).

The third review, however, was different. In the third

review – the subject of this action – Commerce determined that

Rubicon had provided sufficient verified evidence that its

selling functions with respect to sales to its U.S. affiliate

were at a substantially lesser stage of marketing than its

Consol. Court No. 09-00430 Page 29

selling functions with regard to its NV sales. I & D Mem. Cmt. 8

at 27. Unlike the LTFV investigation, where Rubicon reported,

and Commerce verified, essentially identical sales activities

with regard to its Canadian sales as with regard to its sales to

its U.S. affiliate,35 and unlike the second administrative

review, where Rubicon “provided very little detail concerning the

activities performed by the Thai packers for sales to Rubicon

Resources [the U.S. affiliate] and no evidence of these

activities,”36 in the third review, the Department emphasized

that Rubicon reported, and Commerce verified, significantly more

selling functions for its Canadian sales than for its sales to

35

Compare Certain Frozen and Canned Warmwater Shrimp from

Thailand, 69 Fed. Reg. 47,100, 47,106 (Dep’t Commerce Aug. 4,

2004) (notice of preliminary determination of sales at LTFV,

postponement of final determination, and negative critical

circumstances determination) (“LTFV Prelim. Results”) (“[F]or

direct sales (i.e., EP [and Canadian] sales), the Rubicon Group

reported the following selling functions: sales

forecasting/market research, sales promotion/trade shows/

advertising, inventory maintenance, order processing/invoicing,

freight and delivery arrangements, and direct sales personnel.”)

with id. (“For sales to the U.S. affiliate, the Rubicon Group

reported the following selling functions: sales promotion/trade

shows/advertising, inventory maintenance, order processing/

invoicing, freight and delivery arrangements, and direct sales

personnel.”). Accordingly, “[a]fter analyzing the selling

functions performed for each sales channel, [the Department]

[found] that the distinctions in selling functions [were] not

material.” Id.

36

2d AR I & D Mem. Cmt. 5 at 16.

Consol. Court No. 09-00430 Page 30

its U.S. affiliate.37 Accordingly, relying on the AD statute and

the SAA, and explaining that the Department’s LOT analysis

involves a comparison of the respondent’s selling functions for

its various channels of distribution, the Department concluded,

on the record of the third review, that “the Thai packers

provided many more selling functions for Canadian sales than they

provided for CEP sales, thus making the Canadian LOT more

advanced than the CEP LOT.” Prelim. Results, 74 Fed. Reg. at

10,005 (unchanged in Final Results, 74 Fed. Reg. 47,551); see

also I & D Mem. Cmt. 8 at 27.

Thus, because “Commerce’s analysis includes an explanation

of the standards it applied[] and the analysis that led to its

conclusion, demonstrating a rational connection between the facts

on the record and the conclusions drawn,” Alloy Piping, 2009 WL

983078, at *5, the court concludes that Commerce’s LOT analysis

is supported by substantial evidence, and that the Department has

sufficiently distinguished the evidentiary record of the third

37

Compare Prelim. Results, 74 Fed. Reg. at 10,004 (“The

Thai packers provided the following selling functions [for

Canadian sales]: sales forecasting; market research; sales

promotion; advertising; trade shows; inventory maintenance; order

input/processing; freight and delivery arrangements; visits,

calls and correspondence to customers; development of new

packaging and new markets (with customer); packing; and after-

sales services . . . .”) with id. at 10,004-05 (“The only selling

functions that the Thai packers provided for CEP sales were

inventory maintenance, order input/processing, freight and

delivery arrangements, and packing.”).

Consol. Court No. 09-00430 Page 31

administrative review from that of the LTFV investigation and the

second administrative review. Accordingly, the agency’s

conclusions from those earlier segments do not serve as precedent

controlling its conclusions in the instant review. See

Nakornthai, __ CIT at __, 587 F. Supp. 2d at 1307.

C. Commerce’s Treatment of Rubicon’s ISE Ratios as Part of

its LOT Analysis Was Reasonable and Supported by

Substantial Evidence.

AHSTAC further contends that Commerce’s determination to

grant a CEP offset to Rubicon in this review is both arbitrary

(because contrary to established practice) and not supported by

substantial evidence, because the Department should have given

more weight to Rubicon’s reported ISE ratios as part of its LOT

analysis. (See AHSTAC’s Br. 18-19.).

First, the court cannot agree with AHSTAC that the

Department has an established practice of giving more weight to a

respondent’s ISEs as part of its LOT analysis than it did in this

case.

In support of their argument in this regard, AHSTAC points

to the results of an administrative review of an AD order on hot-

rolled flat-rolled carbon-quality steel from Japan and the LTFV

investigation underlying the AD order now at issue. (AHSTAC’s Br.

19.) In analyzing the LOTs involved in Steel from Japan, the

Department “examined the selling functions” of the respondent,

and noted that “[a] qualitative evaluation of the similarities

Consol. Court No. 09-00430 Page 32

and differences in selling functions suggest[ed] that the

differences may be substantial.” Issues & Decision Mem., A-588-

846, ARP 99-00 (Jan. 17, 2002), available at

http://ia.ita.doc.gov/frn/summary/japan/02-1268-1.txt (last

visited Sept. 1, 2010) (incorporated by reference in Hot-Rolled

Flat-Rolled Carbon-Quality Steel Products from Japan, 67 Fed.

Reg. 2,408, 2,409 (Dep’t Commerce Jan. 17, 2002) (final results

of AD duty administrative review)) (“Steel from Japan I & D

Mem.”) Cmt. 1 at 6. “As a rule of thumb check on the alleged

differences in selling functions, and subsequent to the

Preliminary Results, [Commerce] calculated the weighted-average

[ISEs], by channel of distribution, to help determine the extent

of selling activities performed for sales through each channel.”

Id. (emphasis added). “[B]ased on [its] qualitative analysis of

selling functions and the differences in selling expenses,

[Commerce] [found] that the differences in [the respondent’s]

selling activities were, collectively, ‘substantial.’” Id.

(emphasis added).

In the LTFV investigation underlying this AD duty order, as

noted above, the Department “examined the selling activities

performed [by Rubicon] for each channel [of distribution],” LTFV

Prelim. Results, 69 Fed. Reg. at 47,106, and, “[a]fter analyzing

the selling functions performed for each sales channel, [found]

that the distinctions in selling functions [were] not material.”

Consol. Court No. 09-00430 Page 33

Id. Based on this analysis, the Department concluded that

Rubicon’s sales to its U.S. affiliate were at the same LOT as its

sales to its Canadian customers. Id. In addition, having found

Rubicon’s claim that it performed additional and/or higher

intensity selling activities for sales to Canada than for those

to its U.S. affiliate to have been unsubstantiated by the record

evidence,38 the Department also “note[d] that the Rubicon Group

has reported a higher level of [ISEs] for sales made to Rubicon

Resources,” LTFV Prelim. Results, 69 Fed. Reg. at 47,106,

claiming this fact as additional support for the agency’s

38

LTFV I & D Mem. Cmt. 5 at 21 (“Regarding the additional

selling function[s] [claimed by Rubicon for its sales to Canada

but not to its U.S. affiliate], [Commerce] disagree[d] that the

Rubicon Group perform[ed] substantial marketing or sales

forecasting activities for sales to its third country customers.

[The Department] did not find at verification that the Rubicon

Group performed significant marketing or forecasting activities

for sales to Canada, nor did the Rubicon Group attempt to

demonstrate at verification the activities or expenses related to

this function. Therefore, [Commerce] [found] that the Rubicon

Group’s claim that it performed this selling function for sales

to Canada but not for CEP sales to be unsubstantiated.” (footnote

omitted)); see also id. at 21-22 (“Neither do we agree with the

Rubicon Group’s claim that record evidence shows that it

performed certain selling functions at such different levels of

intensity that the Department must conclude that it sold shrimp

at different marketing stages across markets. [. . .] While we

acknowledge that the selling functions performed for the

unaffiliated customer may have shifted from the Thai packers to

Rubicon Resources with the creation of the joint venture, we

disagree that this argument is persuasive because the focus of

the CEP offset analysis is selling functions performed to sell to

the U.S. affiliate. When we analyze the functions performed to

sell to Rubicon Resources, we find that the Thai packers perform

substantially the same functions as they do to sell to

unaffiliated customers.”).

Consol. Court No. 09-00430 Page 34

conclusion that the U.S. LOT for Rubicon’s CEP sales was not less

advanced than the LOT of its Canadian sales. Id. Nevertheless,

the Department emphasized that its decision was based primarily

on its analysis of Rubicon’s selling functions with respect to

sales to Canada and its U.S. affiliate,39 and that Rubicon’s

reported ISE ratios simply added support to Commerce’s LOT

analysis. LTFV I & D Mem. Cmt. 5 at 23.40

Contrary to AHSTAC’s contentions, therefore, the court finds

no basis in either Steel from Japan or the LTFV investigation

underlying this AD order to suggest that the Department’s

practice with regard to its LOT analysis is anything other than,

as the agency explained in the instant review, to “focus on [the

39

LTFV I & D Mem. Cmt. 5 at 21 (“[W]e find that the Rubicon

Group performed essentially the same selling functions when

selling in both Canada and the United States (for both the EP and

CEP sales). Therefore, we determine that these sales are at the

same LOT and no LOT adjustment is warranted.” (emphasis added)

(quoting LTFV Prelim. Results, 69 Fed. Reg. at 47,106)); see id.

at 21 (“We have not altered our decision from that stated in the

preliminary determination.”).

40

See id. (“We disagree with the [] implication that we

relied heavily on the reported value-based [ISE] ratios in

denying the CEP offset. Rather, we considered the ratios in

combination with the analysis of selling functions, in order to

determine if the ratios substantiated the narrative explanation

of selling functions, in accordance with our practice.” (citing

Brass Sheet and Strip from Canada, 62 Fed. Reg. 16,759, 16,760

(Dep’t Commerce Apr. 8, 1997) (final results of AD duty

administrative review); Hot-Rolled Steel from Japan Cmt. 1)). See

also id. at 24 (“[W]e determined that [Rubicon] is not entitled

to [a CEP offset] based on the evidence on this record that there

were no significant differences between the selling functions

performed for third country and affiliated party U.S. sales.”).

Consol. Court No. 09-00430 Page 35

respondent’s] selling activities.” I & D Mem. Cmt. 8 at 27.

Accord Alloy Piping, 2009 WL 983078, at * 5 (“[T]he focus of the

LOT adjustment analysis, which may ultimately lead to a CEP

offset, is on selling activities and not on expenses as the

Plaintiffs suggest.” (footnote omitted, emphasis in original)

(citing 19 U.S.C. § 1677b(a)(7)(A)(i); 19 C.F.R. § 351.412(c)(2);

SAA at 829; Antidumping Duties; Countervailing Duties, 62 Fed.

Reg. at 27,371))). Although the agency has in the past used a

respondent’s ISE ratios to corroborate its analysis of selling

functions, Steel from Japan I & D Mem. Cmt. 1 at 6; LTFV Prelim.

Results, 69 Fed. Reg. at 47,106, there are numerous subsequent

instances where the Department has not considered a respondent’s

selling expenses as part of its LOT analysis at all,41 and AHSTAC

41

See, e.g., Purified Carboxymethylcellulose from Finland,

74 Fed. Reg. 16,180, 16,184 (Dep’t Commerce Apr. 9, 2009) (notice

of preliminary results of AD duty administrative review)

(unchanged in final results, 74 Fed. Reg. 28,886 (Dep’t Commerce

June 18, 2009)); Certain Welded Carbon Steel Pipe and Tube from

Turkey, 74 Fed. Reg. 6,368, 6,370-71 (Dep’t Commerce Feb. 9,

2009) (notice of preliminary results of AD duty administrative

review) (unchanged in final results, 74 Fed. Reg. 22,883 (Dep’t

Commerce May 15, 2009)); Carbon and Certain Alloy Steel Wire Rod

from Canada, 73 Fed. Reg. 39,646, 39,649-50 (Dep’t Commerce

July 10, 2008) (notice of preliminary results of AD duty

administrative review) (unchanged in final results, 73 Fed.

Reg. 77,005 (Dep’t Commerce Dec. 18, 2008) and accompanying

Issues & Decision Mem., A-122-840, ARP 06-07 (Dec. 11, 2008),

available at

http://ia.ita.doc.gov/frn/summary/CANADA/E8-30090-1.pdf (last

visited Sept. 1, 2010) Cmt. 1 at 3 (“[N]or do differences in

reported [ISEs] for different sales channels necessarily reflect

different LOTs. Rather, pursuant to 19 C.F.R. § 351.412(c)(2),

(continued...)

Consol. Court No. 09-00430 Page 36

has not pointed the court to, and the court is not aware of, any

precedent where, rather than corroborating the Department’s

conclusions with regard to a respondent’s selling functions, the

respondent’s expenses have been used to reverse those

conclusions. (See generally AHSTAC’s Br.)

Accordingly, the court concludes that Commerce did not act

contrary to its established practice by not giving more weight to

Rubicon’s ISE ratios as part of its LOT analysis in this review.

Second, to the extent that AHSTAC’s argument is that the

agency’s finding with regard to Rubicon’s LOTs is unsupported by

substantial evidence because the Department should in any case

have given more weight to Rubicon’s expense ratios, it is not for

this Court to re-weigh the evidence or substitute its own

41

(...continued)

to determine whether comparison market sales were at a different

LOT than sales to the United States, we examine stages in the

marketing process and selling functions along the chain of

distribution between the producer and the unaffiliated (or arm’s

length) customers.”)). See also Arcelormittal USA Inc. v. United

States, No. 06-00085, 2008 WL 2223071, at *11 (upholding grant of

CEP offset where “Commerce reasonably relied on the evidence of

the selling functions performed by defendant-intervenors’ United

States affiliates in deciding to grant the companies a CEP

offset,” and making no mention of selling activities); Alloy

Piping, 2009 WL 983078, at *5 (“If Commerce, or this Court, in

reviewing an administrative determination, were to narrow the

focus of its LOT analysis to selling expenses, it could act

contrary to law and cause misleading results. Expenses do not

necessarily translate directly into activities, nor do they

capture the intensity of the activities. Moreover, expenses

related to several selling activities may fall under a single

expense field.”).

Consol. Court No. 09-00430 Page 37

judgment for that of the agency. E.g., Chia Far Indus. Factory

Co. v. United States, 28 CIT 1336, 1362, 343 F. Supp. 2d 1344,

1369 (2004). As the Department explained, the evidence submitted

by Rubicon and verified by Commerce in this review with regard to

Rubicon’s selling functions in both the U.S. and Canadian markets

was, unlike the evidence submitted in the LTFV investigation and

the second review, sufficient for the agency to determine that

Rubicon’s Canadian sales were at an LOT that was more remote from

the factory than the LOT of its sales to its U.S. affiliate. I &

D Mem. Cmt. 8 at 27. Accordingly, the court concludes that

Commerce’s determination in this regard was supported by

substantial evidence on the record of the third review. The

Department’s conclusion that more weight should not have been

given to Rubicon’s ISE ratios as part of Commerce’s LOT analysis

is reasonable in light of the record as a whole,42 and is neither

42

The Department explained that, “[i]n this case, a

quantitative analysis [was] inappropriate because it assumes that

the expense data reported by the Rubicon Group are an accurate

depiction of the level of intensity at which the selling

activities are performed,” I & D Mem. Cmt. 8 at 28, as well as

because “[s]elling expenses do not translate directly into

selling activities, nor do they always capture the degree to

which the activities are performed.” Id. The Department also

noted that the Rubicon Group had argued before it that “the ISE

ratios reported for the Thai packers’ sales to Rubicon Resources

[the U.S. affiliate] [were] inherently overstated,” id. at 25,

explaining that “[Rubicon] differentiated between ISEs for direct

sales to unaffiliated customers and ISEs for sales to Rubicon

Resources solely based on the accounts for marketing staff

salaries,” id., and that, “[u]sing this approach, . . . the

(continued...)

Consol. Court No. 09-00430 Page 38

contrary to the statute, see 19 U.S.C. § 1677b(a)(7)(A)(i), nor

to previous opinions from this Court. See, e.g., Arcelormittal,

2008 WL 2223071, at *11.

The court therefore concludes that Commerce’s determination

that Rubicon’s sales to its U.S. affiliate were at a lesser LOT

than its sales in the third country comparison market was

supported by substantial evidence on the record as a whole and

was not contrary to law.

III. Commerce’s Rejection of Pakfood’s Forward Contract Exchange

Rate Data

A. Background

After the publication of the Preliminary Results for this

review and after the expiration of the regulatory deadline for

party-initiated factual submissions,43 Pakfood, on March 13,

42

(...continued)

amounts for other ISE accounts also were mostly attributable to

the Thai packers’ sales to unaffiliated customers[;] [h]owever,

because there was no systematic or practicable way to attempt to

allocate each ISE account between sales to unaffiliated customers

and sales to Rubicon Resources, the Rubicon Group did not do so.”

Id. Under these circumstances, and in light of the substantial

evidence, discussed above, supporting Commerce’s determinations

regarding the differences in Rubicon’s selling functions in the

U.S. and Canada, the court concludes that it was reasonable for

the Department to give less weight to Rubicon’s reported ISE

ratios than to the verified evidence on the record regarding

Rubicon’s actual selling functions in both markets.

43

Under 19 C.F.R. § 351.301(b)(2), the deadline for

party-initiated submissions is 140 days after the last day of the

anniversary month – i.e., “the calendar month in which the

anniversary of the date of publication of an [AD duty] order

(continued...)

Consol. Court No. 09-00430 Page 39

2009, and for the first time in this proceeding, requested

permission to submit to Commerce its U.S. sales data reflecting

the exchange rates in its forward contracts. Letter from Trade

Pacific PLLC, A-549-822, ARP 07-08 (Mar. 13, 2009), Admin. R.

Pub. Doc. 226 (“First Request to Supp."). Although the statute

and Department’s regulations explicitly provide that if “a

currency transaction on forward markets is directly linked to an

export sale under consideration, [Commerce will use] the exchange

rate specified . . . to convert the foreign currency,” 19 U.S.C.

§ 1677b-1(a); 19 C.F.R. § 351.415(b), Pakfood argued that,

because the department had not previously requested data on

contractual exchange rates, “the need to provide this information

thus was not previously evident.” First Request to Supp. at 2.

Commerce denied Pakfood’s request, Letter to Trade Pacific

PLLC, A-549-822, ARP 07-08 (Mar. 16, 2009), Admin. R. Pub. Doc.

228, (“First Denial of Request to Supp."), explaining that:

[t]o properly consider this new information in its

margin calculations, the Department would require

significant additional time to analyze the data,

request clarification or supplemental information

. . ., and allow for comments . . . . Given that

[Pakfood’s] request was made at a late stage . . . the

43

(...continued)

. . . occurs.” Ass’n of Am. Sch. Paper Suppliers v. United

States, __ CIT __, 683 F. Supp. 2d 1317, 1321 (2010).

Accordingly, because the anniversary month in this case was

February 2008, see Notice of Inititation, 73 Fed. Reg. at 18,754,

the deadline for party-initiated factual submissions in this

review was July 18, 2008.

Consol. Court No. 09-00430 Page 40

Department would not be able to properly analyze the

data within the statutory timeframe . . . .

Id. Upon Pakfood’s request to reconsider this decision, Letter

from Trade Pacific PLLC, A-549-822, ARP 07-08 (Apr. 21, 2009),

Admin. R. Pub. Doc. 248, the Department reiterated its reasons

for denying Pakfood’s request. See Letter to Trade Pacific PLLC,

A-549-822, ARP 07-08 (Apr. 22, 2009), Admin. R. Pub. Doc. 250

(“2d Denial of Request to Supp.").

Following this exchange of letters, and in response to

Commerce’s Preliminary Results, which did not incorporate the

exchange rates from Pakfood’s forward contracts, see Prelim.

Results, 74 Fed. Reg. at 10,007, Pakfood submitted a case brief

that did not address the contractual exchange rates issue. See

generally Letter from Trade Pacific PLLC, A-549-822, ARP 07-08

(May 29, 2009), Admin. R. Pub. Doc. 261. As Pakfood did not

address this issue in its case brief, Commerce did not comment on

the issue in either the Final Results or the Issues and Decision

Memorandum. See generally Final Results, 74 Fed. Reg. 47,551; I &

D Mem.

B. Pakfood Failed to Exhaust its Administrative Remedies

and Therefore Failed to Preserve This Issue for

Judicial Review.

Commerce argues that Pakfood failed to exhaust its

administrative remedies regarding its exchange rate claim and

that Pakfood is therefore precluded from bringing this claim

Consol. Court No. 09-00430 Page 41

before the court. (Def.’s Br. 15-18.) Pakfood responds that its

failure to exhaust its administrative remedies should be excused

both because pressing its argument in its case brief at the

administrative level would have been futile and because Commerce

fully considered the exchange rate issue in this segment. (See

Resp’ts’ Joint Reply Br. (“Resp’t Pls.’ Reply”) 1-4.)

The court agrees with the Department that Pakfood’s failure

to exhaust its administrative remedies on this issue precludes

the issue’s review at this time. “[A]bsent a strong contrary

reason, the court should insist that parties exhaust their

remedies before the pertinent administrative agencies.” Corus

Staal BV v. United States 502 F.3d 1370, 1379 (Fed. Cir. 2007).44

44

The preference for exhaustion (1) prevents the “frequent

and deliberate flouting of administrative processes which could

weaken the effectiveness of an agency,” Randolph-Sheppard Vendors

of Am. v. Weinberger, 795 F.2d 90, 105 (D.C. Cir. 1986) (internal

quotation and alteration marks and citation omitted); see also

Luoyang Bearing Factory v. United States, 26 CIT 1156, 1186,

240 F. Supp. 2d 1268, 1297 (2002); (2) protects the autonomy and

efficiency of agency decisionmaking within the agency’s sphere of

expertise, Sandvik Steel Co. v. United States, 164 F.3d 596, 600

(Fed. Cir. 1998); (3) aids judicial review by encouraging the

development of factual issues pertinent to the legal dispute,

Carpenter Tech. Corp. v. United States, 30 CIT 1373, 1375, 452

F. Supp. 2d 1344, 1346-1347 (2006); and (4) promotes judicial

economy by ensuring that the court does not duplicate the

agency’s fact-finding function and providing the agency with the

chance to correct its errors, potentially obviating the need for

judicial review, Sandvik Steel, 164 F.3d at 600. See Carpenter

Tech., 30 CIT at 1597, 464 F. Supp. 2d at 1346 (“[E]xhaustion is

generally appropriate in the [AD] context because it allows the

agency to apply its expertise, rectify administrative mistakes,

and compile a record adequate for judicial review – advancing the

(continued...)

Consol. Court No. 09-00430 Page 42

Generally, the “prescribed remedy” for a party in disagreement

with Commerce’s Preliminary Results is to file a case brief, Ta

Chen Stainless Steel Pipe, Ltd. v. United States, 28 CIT 627, __,

342 F. Supp. 2d 1191, 1205 (2004), and that “case brief must

present all arguments that continue in the submitter’s view to be

relevant to [Commerce]’s final determination or final results

. . . .” 19 C.F.R. § 351.309(c)(2)(emphasis added).

Thus, in general, under the Department’s regulations,

requiring the inclusion within the case brief of all issues which

remain in controversy is “appropriate” in actions challenging the

results of AD duty order administrative reviews. See 28 U.S.C.

§ 2637(d) (“[T]he Court of International Trade shall, where

appropriate, require the exhaustion of administrative

remedies.”). See also Ad Hoc Shrimp Trade Action Comm. v. United

States, __ CIT __, 675 F. Supp. 2d 1287, 1300 (2009) (“It is

‘appropriate’ for litigants challenging [AD] actions to have

exhausted their administrative remedies by including all

arguments in their case briefs submitted to Commerce.” (quoting

28 U.S.C. § 2637(d))); id. (noting that, even where a party has

previously raised an issue with the agency, usually “[t]he

failure to include an argument in a case brief is a failure to

44

(...continued)

twin purposes of protecting administrative agency authority and

promoting judicial efficiency.” (citation omitted)).

Consol. Court No. 09-00430 Page 43

exhaust administrative remedies with respect to that argument

because it deprives Commerce of an opportunity to consider the

matter, make its ruling, and state the reasons for its action”

(internal quotation and alteration marks and citation omitted)).

In this case, Pakfood does not contest that it omitted its

request that Commerce use contractual exchange rates from its

case brief. (Mem. of Points & Auth. in Supp. of Mot. by [the

Resp’t Pls.] for J. Upon the Agency R. (“Resp’t Pls.’ Br.”) 13

n.6.) Nor does Pakfood contest that this omission constitutes a

failure to exhaust its administrative remedies. (Id. (“Pakfood

did not present this argument in its case brief before the

agency, and therefore did not exhaust its administrative

remedies.” (citing 28 U.S.C. § 2637(d); 19 C.F.R.

§ 351.309(c)(2))).)

It is true that a party’s failure to exhaust its

administrative remedies should not preclude judicial review of

its claims where the benefits of exhaustion are inapplicable or

outweighed by other concerns, Timken Co. v. United States,

10 CIT 86, 93, 630 F. Supp. 1327, 1334 (1986) (quoting Hormel v.

Helvering, 312 U.S. 552, 558 (1941) (“[The exhaustion doctrine]

should not be applied where the obvious result would be a plain

miscarriage of justice.”)). Moreover, this Court has recognized

Consol. Court No. 09-00430 Page 44

certain exceptions to the requirement.45 For example, Pakfood

correctly notes that the court has waived the exhaustion

requirement where it would have been futile for the party to

raise its argument at the administrative level, as well as where

the record indicates that - either as a result of other parties’

arguments or the agency’s decision-making process - the agency in

fact thoroughly considered the issue in question. (See Resp’t

Pls.’ Reply 2.) See, e.g., Asociacion Colombiana de Exportadores

de Flores v. United States, 916 F.2d 1571, 1575 (Fed. Cir. 1990)

(allowing waiver of exhaustion requirement on basis of futility);

Valley Fresh Seafood, Inc. v. United States, No. 06-00132,

2007 WL 4380137, at *5 (CIT Dec. 17, 2007) (waiver of exhaustion

requirement on ground that agency fully considered the issue)

(citing Holmes Prods. Corp. v. United States, 16 CIT 1101, 1104

(1992)).

As the court will explain, however, neither of these

exceptions is applicable here.46

1. The Futility Exception to the Exhaustion

45

This Court is “authorized to determine proper exceptions

to the doctrine of exhaustion.” Luoyang Bearing, 26 CIT at 1186

n.26, 240 F. Supp. 2d at 1297 n.26 (citation omitted). For a

list of previously accepted exceptions to this Court’s exhaustion

requirement, see, e.g., Ta Chen, 28 CIT at 645 n.18, 342 F. Supp.

2d at 1206 n.18.

46

Pakfood does not contend that any additional exceptions

are applicable to the case at bar. (See generally Resp’t Pls.’

Reply 1-4.)

Consol. Court No. 09-00430 Page 45

Requirement is Not Applicable Here.

To show that an argument would be futile, “a party must

demonstrate that it would be required to go through obviously

useless motions in order to preserve its rights.” Mittal Steel,

548 F.3d at 1384 (internal quotation and alteration marks and

citation omitted). This exception applies in circumstances

where, for example, an agency is unable to provide an appropriate

remedy, PPG Indus., Inc. v. United States, 14 CIT 522, 542,

746 F. Supp. 119, 137 (1990) (futility applies where “the agency

has no power to provide the remedy sought, or where the remedy

would be manifestly inadequate” (citations omitted)), or where

“an agency has articulated a very clear position on the issue

which it has demonstrated it would be unwilling to reconsider,”

Randolph-Sheppard, 795 F.2d at 105. In the latter case, however,

the agency’s commitment to its position must be so strong as to

render requiring a party to raise the issue with the agency

“inequitable and an insistence of a useless formality,” Luoyang

Bearing, 26 CIT at 1186 n.26 (internal quotation marks and

citation omitted); PPG Indus., 14 CIT at 542, 746 F. Supp. at 137

(futility requires that exhaustion be a “clearly useless act[]”

(internal quotation marks and citation omitted)).

Pakfood argues that it would have been futile to press its

exchange rate issue in its case brief because Commerce had

dismissed the issue at an earlier stage, explaining that to do so

Consol. Court No. 09-00430 Page 46

would have caused delays. (Resp’t Pls.’ Br. 13 n.6.) But the

mere fact that Commerce rejected an argument at an earlier stage

of an administrative proceeding does not, without more, suffice

to render a party’s continued adherence to such argument an

exercise in futility. See PPG Indus., 14 CIT at 543, 746 F. Supp.

at 137 (“[T]hat a party to an administrative proceeding finds an

argument may lack merit, or had failed to prevail in a prior

proceeding based on different facts, does not, without more, rise

to the level of futility . . . .”). Even where it is likely that

Commerce would have rejected a party’s arguments without changing

course, “it would still [be] preferable, for purposes of

administrative regularity and judicial efficiency, for [the

party] to make its arguments in its case brief and for Commerce

to give its full and final administrative response in the final

results.” Corus Staal, 502 F.3d at 1380. By including arguments

in its case brief, even arguments Commerce has repeatedly

dismissed, a party ensures the full development of a factual

record that facilitates judicial review. See, e.g., Carpenter

Tech., 30 CIT at 1375-76, 452 F. Supp. 2d at 1346-47.

In this case, Pakfood’s communications with Commerce do not

justify Pakfood’s conclusion that pressing its exchange rate

issue in its case brief would have been futile. Commerce did not

demonstrate a complete unwillingness to reconsider its use of

market exchange rates, and no statute or regulation obligated

Consol. Court No. 09-00430 Page 47

Commerce to refuse Pakfood’s requests. To the contrary, both the

statute and Commerce’s regulations indicated that the Department

favored the use of timely-established contractual exchange rates.

See 19 U.S.C. § 1677b-1(a); 19 C.F.R. § 351.415(b).47 Had

Pakfood pressed this issue in its case brief, Commerce would have

been put on notice that Pakfood still considered the issue

relevant and would have had an opportunity to fully consider and

explain its exchange rate choices. In these circumstances,

requiring exhaustion of Pakfood’s administrative remedies is not

“inequitable and an insistence of a useless formality.” Luoyang

Bearing, 26 CIT at 1186 n.26, 240 F. Supp. 2d at 1297 n.26

(internal quotation marks and citation omitted).

Accordingly, in this case, because Pakfood’s omission of the

exchange rate claim from its case brief denied Commerce the

opportunity to fully consider the issue, thus failing to

establish an adequate record for judicial review,48 the court

47

See also Certain Frozen Warmwater Shrimp from India,

74 Fed. Reg. 9,991, 9,998 (Dep’t Commerce Mar. 9, 2009)

(preliminary results and preliminary partial rescission of AD

duty administrative review) (incorporating exchange rates from

respondents’ forward exchange contracts and citing 19 C.F.R.

§ 351.415(b)).

48

As mentioned, because Pakfood omitted the exchange rates

issue from its case brief, Commerce did not address the issue in

its final results or the accompanying issues and decision

memorandum. See Final Results, 74 Fed. Reg. 47,551; I & D Mem.

Instead, the only record evidence of Commerce’s reasoning

regarding exchange rates is contained in Commerce’s two

(continued...)

Consol. Court No. 09-00430 Page 48

concludes that the exhaustion requirement should not here be

waived for futility.

2. The Issue Was Not Fully Considered by Commerce.

Pakfood also argues that the court should waive the

exhaustion requirement because Commerce actually considered

Pakfood’s exchange rate issue in the administrative proceeding.

(Resp’t Pls.’ Reply 2 (“Commerce fully considered whether to

allow Pakfood to provide its forward contract exchange rate

information, and determined not once, but twice that it would not

accept the proffered data.”).) However, the sole fact that

“objections were previously communicated to Commerce does not

circumvent the exhaustion requirement.” Ad Hoc Shrimp, __ CIT __,

675 F. Supp. 2d at 1301. Accordingly, “[r]aising an issue . . .

in advance of case brief submission does not dispense with the

requirement for case brief inclusion.” Id. (citing Carpenter

Tech. Corp. v. United States, 30 CIT 1595, 1597-98, 464 F. Supp.

2d 1347, 1349 (2006)).

Pakfood’s exchange rate claim is not discussed in the Final

Results or in the accompanying Issues and Decision memorandum.

See generally Final Results, 74 Fed. Reg. 47,551; I & D Mem.

48

(...continued)

redundant, one-page rejections of Pakfood’s requests to submit

exchange rate data. First Denial of Request to Supp., Admin. R.

Pub. Doc. 228; 2d Denial of Request to Supp., Admin. R. Pub. Doc.

250.

Consol. Court No. 09-00430 Page 49

Compare Valley Fresh, 2007 WL 4380137, at *5 (excusing

plaintiff’s failure to raise argument in case brief before

Commerce where the issue had been given clear consideration in

the final results of the administrative review). Because it is

reasonable for the Department to have assumed that Pakfood’s

failure to raise this issue in its case brief meant that

Pakfood’s objections had been satisfied and that no further

resources needed to be devoted to the issue, see Mittal Steel,

548 F.3d at 1384, and because there is in fact no indication in

the Final Results and/or the Issues and Decision Memorandum that

the agency did indeed fully consider the issue, the court cannot

conclude that Pakfood’s failure to argue this point in its case

brief should be excused on the basis that Commerce nevertheless

had full and adequate opportunity to consider the objection in

the first instance.

Moreover, although the court may define new exceptions to

its exhaustion requirement where no previously established

exception applies, Luoyang Bearing, 26 CIT at 1186 n.26, 240

F. Supp. 2d at 1297 n.26, the court declines to do so here.

Pakfood has provided no compelling explanation for its failure to

exhaust its administrative remedies. It learned of Commerce’s

exchange rate decision from the Preliminary Results, twice

requested alternative treatment, twice received clear negative

responses from Commerce, and submitted a case brief that did not

Consol. Court No. 09-00430 Page 50

address the issue. Where a party is aware of an issue that

continues to be relevant to the final results and simply decides

not to pursue it based on prior interactions with Commerce,

“[w]hatever prejudice that may inure to [that party] from this

scenario [is] brought on by [the party’s] own acts,” PPG Indus.,

14 CIT at 543, 746 F. Supp. at 137, and therefore does not

counsel in favor of waiving any otherwise generally-applicable

requirements.

IV. Commerce’s Denial of Interest Income Offset to Rubicon

A. Background

In response to Commerce’s initial questionnaire, the Rubicon

Group proposed to offset the financial expenses of two of its

affiliates - CSF and PTN - with interest income from certain

deposits CSF and PTN placed in financial institutions.49 While

Rubicon classified these twelve-month term deposits as non-

current assets, it noted that the deposits were “maintained by

the respective financial institutions as guarantees on [the

affiliates’] revolving line[s] of credit,” Rubicon’s Resp. to

Supp. Sec. D Quest. 15, and were “required by [the afiliates’]

49

(Resp’t Pls.’ Br. 6 (citing Letter from White & Case LLP,

A-549-822, ARP 07-08 (Jan. 27, 2009), Admin. R. Con. Doc. 43

[Admin. R. Pub. Doc. 187] (“Rubicon’s Resp. to Supp. Sec. D

Quest.”) 15-16 & Exhs. 2d Supp. D-6 (itemizing interest income

reported as offset to financial expenses by CSF) & 2d Supp. D-7

(itemizing interest income reported by PTN)).) See also I & D

Mem. Cmt. 7 at 20.

Consol. Court No. 09-00430 Page 51

banks to secure their respective lines of credit.” Id. at 16.

Rubicon explained that the lines of credit were “necessary for

the general day-to-day operations of the compan[ies],” id., and

that the supporting funds were “not deposited for investing

purposes.” Id. at 15. Rubicon argued that, because Commerce had

established a “policy of offsetting interest expenses with income

associated with the general operations of the company and not

related to investing activities,” id., the interest income from

these deposits should be offset against its affiliates’ financial

expenses. Id. at 15-16.

The Department confirmed Rubicon’s explanation that these

deposits were required as a condition for obtaining credit, but

did not offset CSF and PTNs’ financial expenses with interest

from the twelve-month deposits. I & D Mem. Cmt. 7 at 20 (noting

that “it is the Department’s practice to allow a respondent to

offset financial expenses with short-term interest income

generated from a company’s current assets and working capital

accounts”). Commerce explained that, as the deposits “were

appropriately classified as non-current assets in the Rubicon

Group companies’ financial statements,” id., the Department

“[did] not consider these compensating balances to be liquid

working capital reserves which would be readily available for the

companies to meet their daily cash requirements . . . .” Id.

Consol. Court No. 09-00430 Page 52

Rubicon argues that Commerce acted unlawfully in rejecting

the request to offset CSF and PTN’s financial expenses with the

interest income earned on these deposits.50 Rubicon contends

that Commerce has established a practice of offsetting all

interest income demonstrably related to the general operations of

a respondent, even if the interest income derives from a long-

term asset, and argues that the Department acted arbitrarily by

failing to follow this practice in this case. (Resp’t Pls.’ Br.

17 (arguing that it is Commerce’s practice to allow offsets on

interest income from long-term assets “if there is a showing that

the interest income is related to the general operations of the

firm”(internal quotation marks omitted) (quoting Hyundai Elec.

Indus. Co. v. United States, 28 CIT 517, 539, 342 F. Supp. 2d

1141, 1161 (2004))); Rubicon’s Resp. to Supp. Sec. D Quest. 15

(arguing that an offset in this case would be consistent with

50

The AD statute requires Commerce to incorporate into its

calculations of cost of production and constructed value for

foreign like products the respondent’s “general” and

“administrative expenses,” “based on actual data pertaining to

production and sales of the foreign like product” for cost of

production, and “in connection with the production and sale of a

foreign like product, in the ordinary course of trade” for

constructed value. 19 U.S.C. § 1677b(b)(3)(B) (cost of

production); id. (e)(2)(A) (constructed value). The parties agree

that Commerce has consistently construed this statute to permit

respondents to offset their financial expenses with interest

income from short-term assets related to a company’s general

operations, but disagree as to the nature of Commerce’s practice

regarding long-term interest bearing accounts. (Compare Def.’s

Br. 24 with Resp’t Pls.’ Reply 6-7.)

Consol. Court No. 09-00430 Page 53

Commerce’s “policy of offsetting interest expenses with income

associated with the general operations of the company and not

related to investing activities”).

The Department denies Rubicon’s characterization of its

practice, and argues that its practice is to offset financial

expenses solely with short-term interest income from a company’s

current assets and working capital accounts. (Def.’s Br. 24-25

(arguing that Commerce looks to “‘the underlying interest-bearing

asset that generated the income’” and grants an offset only where

the asset is a current operating expense (quoting Issues &

Decision Mem., A-331-802, ARP 06-07 (July 3, 2008), available at

http://ia.ita.doc.gov/frn/summary/ECUADOR/E8-15830-1.pdf (last

visited Sept. 1, 2010) (incorporated by reference in Certain

Frozen Warmwater Shrimp from Ecuador, 73 Fed. Reg. 39,945, 39,946

(Dep’t Commerce July 11, 2008) (final results and partial

rescission of AD duty administrative review)) (“Shrimp from

Ecuador I & D Mem.”) Cmt. 3 at 7)).) See also I & D Mem. Cmt. 7

at 20 (“[I]t is the Department’s practice to allow a respondent

to offset financial expenses with short-term interest income

generated from a company’s current assets and working capital

accounts.” (citing Chlorinated Isocyanurates from Spain, 70 Fed.

Reg. 24,506 (Dep’t Commerce May 10, 2005) (notice of final

determination of sales at LTFV) and accompanying Issues &

Decision Mem. Cmt. 10 (“Isocyanurates from Spain I & D Mem.”);

Consol. Court No. 09-00430 Page 54

Certain Frozen Warmwater Shrimp from Brazil, 73 Fed. Reg. 39,940

(Dep’t Commerce July 11, 2008) (final results and partial

rescission of AD duty administrative review))).

B. Rubicon Has Not Established that Commerce Followed a

Contrary Practice in Similar Circumstances, and the

Department’s Disallowance of Rubicon’s Long-Term

Interest Income Offset Was Supported by Substantial

Evidence.

First, regardless of the nature of Commerce’s practice with

respect to the grant or denial of interest income offsets in the

past,51 at the time of the instant review, Commerce had clearly

51

In support of their contention that Commerce has an

established practice of offsetting financial expenses by interest

income from long-term assets where it is shown that such income

relates to the general operations of the firm, Respondent

Plaintiffs cite to Dynamic Random Access Memory Semiconductors of

One Megabit or Above from the Republic of Korea, 64 Fed. Reg.

69,694, 69,707 (Dep’t Commerce Dec. 14, 1999) (final results of

AD duty administrative review and determination not to revoke the

order in part) (“DRAMS”) (granting offset for interest income

earned on long-term deposits because the deposits were “an

integral part of certain loans” and were “directly related to

specific loans,” but denying offset for severance deposits

maintained with insurance companies to finance current severance

and retirement payments, because these deposits were “only held

by [the respondent] as restricted deposits to allow [the

respondent] to claim a tax deduction”), and Hyundai Elecs. Indus.

Co. v. United States, 28 CIT 517, 539-40, 342 F. Supp. 2d 1141,

1161-1162 (2004) (affirming “Commerce’s decision not to treat

income interest generated from severance deposits as an offset to

Hyundai’s interest expense”). (Resp’t Pls.’ Br. 17-19.)

DRAMS was decided more than a decade ago and appears

inconsistent with the Department’s subsequent practice of

requiring that income interest be generated from current assets

and working capital accounts prior to granting an offset. See

infra note 52. See also Issues & Decision Mem., A-549-821, ARP

07-08 (Dec. 7, 2009), available at

http://ia.ita.doc.gov/frn/summary/thailand/E9-29597-1.pdf (last

(continued...)

Consol. Court No. 09-00430 Page 55

established a practice of allowing income expense offsets solely

for short-term income from current assets and working capital

accounts.52 As early as 2005,53 and as late as just eight months

51

(...continued)

visited Sept. 1, 2010) (incorporated by reference in Polyethylene

Retail Carrier Bags from Thailand, 74 Fed. Reg. 65,751, 65,751

(Dep’t Commerce Dec. 11, 2009) (final results of AD duty

administrative review)) Cmt. 4 at 9 (“We do not consider our

decision in [] DRAMS to be consistent with our normal practice of

only permitting an offset for short-term interest income

generated from a company’s current assets and working capital

accounts.”).

Although, in Hyandai, the court affirmed Commerce’s

determination in DRAMS with regard to interest income generated

from deposits used to make severance payments, the agency’s

decision regarding interest income earned on long-term deposits

was neither challenged by the plaintiff nor revisited by the

court. See 28 CIT at 539-40, 342 F. Supp. 2d at 1161-62.

Further, in discussing the sole issue with regard to interest

income raised in that case – whether interest income generated

from deposits used to make severance payments should have been

used to offset the respondent’s expenses, id. – the Hyuandai

court relied solely on Timken Co. v. United States, 18 CIT 1,

852 F. Supp. 1040 (1994), NTN Bearing Corp. v. United States,

19 CIT 1221, 905 F. Supp. 1083 (1995), and Gulf States Tube Div.

of Quanex Corp. v. United States, 21 CIT 1013, 981 F. Supp. 630

(1997). Timken and NTN presented challenges to Commerce’s

treatment of a respondent’s short-term interest income, and are

accordingly inapposite to the Respondent Plaintiffs’ argument,

Timken, 18 CIT at 9, 852 F. Supp. at 1048; NTN, 19 CIT at 1237,

905 F. Supp. at 1097, whereas Gulf States explicitly rejected the

plaintiff’s argument that “long-term interest income must also be

taken into account in calculating a respondent’s net interest

expense.” 21 CIT at 1038, 981 F. Supp. at 651.

Accordingly, DRAMS has been superceded by subsequent

practice and Hyuandai is inapposite to the Respondent Plaintiffs’

claim.

52

See, e.g., Issues & Decision Mem., A-351-806, ARP 03-04

(Feb. 3, 2006), available at

http://ia.ita.doc.gov/frn/summary/BRAZIL/E6-1987-1.pdf (last

visited Sept. 1, 2010) (incorporated by reference in Silicon

(continued...)

Consol. Court No. 09-00430 Page 56

prior to the publication of its Preliminary Results in this

review, for example, Commerce reiterated that its practice with

regard to the grant or denial of interest income offsets is “to

examine the underlying interest-bearing asset that generated the

income to determine whether or not the interest income is

considered short-term, as opposed to examining liabilities that

may or may not be associated with the interest income earned due

to the fungible nature of money.” Shrimp from Ecuador I & D Mem.

52

(...continued)

Metal from Brazil, 71 Fed. Reg. 7,517, 7,518 (Feb. 13, 2006)

(notice of final results of AD duty administrative review))

(“Silicon Metal from Brazil I & D Mem.”) Cmt. 4 at 7 (citing the

Department’s practice of excluding “income from long-term

financial assets because such income is related to investing

activities and is not associated with the general operations of

the company,” and refusing offsets where the respondent “did not

meet its burden of proof . . . [to] provide documentation

adequate to support the claim that [the] income [in question]

[wa]s short-term in nature . . . .”); Chlorinated Isocyanurates

from Spain I & D Mem. Cmt. 10 at 36 (citing “long-standing

practice [of] offset[ing] interest expense by short-term interest

income generated from a company’s working capital,” denying

offset because respondent “ha[d] not provided any record evidence

that the financial income received [] was related to short-term

interest bearing accounts,” and justifying the practice because

“a company must maintain a working capital reserve to meet its

daily cash requirements” and “companies normally maintain this

working capital reserve in interest bearing accounts.”); Issues &

Decision Mem., A-122-850, Investigation (Mar. 4, 2005), available

at http://ia.ita.doc.gov/frn/summary/canada/E5-1029-1.pdf (last

visited Sept. 1, 2010) (incorporated by reference in Live Swine

from Canada, 70 Fed. Reg. 12,181, 12,184 (Dep’t Commerce Mar. 11,

2005) (notice of final determination of sales at LTFV)) Cmt. 68

at 133 (“Because the non-operating and other income items in

question are either long-term in nature or relate to investments,

we have excluded [the items from the respondent’s offsets].”).

53

See supra note 52.

Consol. Court No. 09-00430 Page 57

Cmt. 3 at 7 (explaining that Commerce will “offset (i.e., reduce)

financial expenses with short-term interest income earned from a

respondent’s short term interest-bearing assets,” but will not

offset “the interest income earned by [the respondent] [that] is

the result of a long-term receivable” (citations omitted)). See

also Issues & Decision Mem., A-351-838, ARP 06-07 (July 3, 2008),

available at

http://ia.ita.doc.gov/frn/summary/BRAZIL/E8-15827-1.pdf (last

visited Sept. 1, 2010) (incorporated by reference in Frozen

Warmwater Shrimp from Brazil, 73 Fed. Reg. at 39,944) (“Shrimp

from Brazil I & D Mem.”) Cmt. 9 at 17 (citing practice of

permitting offsets for “financial expenses with short-term

interest income earned from its working capital accounts” and

allowing offsets “for only the income that . . . related to

short-term” assets).

Moreover, Commerce’s stated explanation for its practice –

the necessity of maintaining working capital to meet companies’

Consol. Court No. 09-00430 Page 58

daily cash requirements54 – is inconsistent with offsets for

long-term accounts that cannot serve daily cash needs.55

Accordingly, Commerce has shown that, under its established

methodology, the first crucial question in calculating an offset

is whether or not the interest income is short-term - i.e.

derived from current assets or working capital accounts. The

“burden of proof to substantiate and document [the nature of the

accounts] is on the respondent making a claim for [an] offset,”

Shrimp from Brazil I & D Mem. Cmt. 9 at 17 (citations omitted),

and Commerce will not allow an offset where a respondent cannot

demonstrate that the interest income in question is short-term in

nature. Id.

54

I & D Mem. Cmt. 7 at 20 (explaining that the assets at

issue were not offset against Rubicon’s financial expenses

because they were not “liquid working capital reserves which

would be readily available for the companies to meet their daily

cash requirements (e.g., payroll, suppliers, etc.)”);

Isocyanurates from Spain I & D Mem. Cmt. 10 at 36 (same). (See

also Def.’s Br. 24 (“[B]ecause short term assets are used for

current company operations, that is, the funds are readily

available and used for the company’s day-to-day cash

requirements, Commerce permits companies to offset the expense of

those assets by the interest earned upon them. Conversely,

Commerce does not permit company offsets for interest earned upon

long-term assets because [] the funds [] held [in] those accounts

are not readily available and are not used for day-to-day cash

requirements.” (citations omitted)).)

55

See, e.g., Silicon Metal from Brazil I & D Mem. Cmt. 4 at

7 (disallowing offset to financial expenses for “income [that]

has not been demonstrated to be short-term in nature,” and

explaining that “the Department’s practice [is] to exclude income

from long-term financial assets because such income . . . is not

associated with the general operations of the company”).

Consol. Court No. 09-00430 Page 59

In this case, the Department found that Rubicon failed to

demonstrate that the interest income at issue was short-term in

nature, and the agency accordingly concluded that an interest

income offset was therefore not warranted. I & D Mem. Cmt. 7

at 20 (explaining that “the interest income at issue is related

to certain long-term interest-bearing accounts, which were

appropriately classified as non-current assets in the Rubicon

Group companies’ financial statements”). Because the

Department’s decision with regard to the Rubicon Group’s interest

income is consistent with Commerce’s prior decisions restricting

offsets to short-term income, as well as with the agency’s

explanations that, because current assets and working capital

accounts are necessary to meet a company’s daily cash

requirements, the Department will grant offsets only where the

income in question derives from such assets, the court concludes

that Rubicon has failed to establish that Commerce “consistently

followed a contrary practice in similar circumstances.” Consol.

Bearings Co. v. United States, 412 F.3d 1266, 1269 (Fed. Cir.

2005) (internal quotation marks and citation omitted).

Further, Commerce had “such relevant evidence as a

reasonable mind might accept as adequate to support [the]

conclusion [that Rubicon failed to establish the short-term

nature of the assets at issue],” Universal Camera Corp. v. NLRB,

340 U.S. 474, 477 (1951) (internal quotation marks and citation

Consol. Court No. 09-00430 Page 60

omitted); Micron, 117 F.3d at 1393, and could “rationally draw

support for [its] finding [that the assets in question were long-

term in nature] from the relevant record evidence [indicating

that the accounts were non-current assets].” Penrod Drilling Co.

v. Johnson, 905 F.2d 84, 87 (5th Cir. 1990). Accordingly, the

court concludes that Commerce’s findings regarding Rubicon’s

claimed interest offset were supported by substantial evidence.

CONCLUSION

For all of the foregoing reasons, this matter is remanded to

the agency, for further consideration in accordance with this

opinion, solely on the issue of the methodology used to select

mandatory respondents in this review. Commerce shall have until

November 1, 2010 to complete and file its remand redetermination.

Plaintiffs shall have until November 22, 2010 to file comments.

Defendant and Defendant-Intervenors shall have until December 6,

2010 to file any reply.

It is SO ORDERED.

/s/ Donald C. Pogue

Donald C. Pogue, Judge

Dated: September 1, 2010

New York, N.Y.

60