United States Court of International Trade

Commerce’s Final Results Affirmed

In Appvion, Inc. v. United States, Court No. 14-143, Slip Op. 15-104 (September 17, 2015), plaintiff, Appvion Inc., (“Appvion”) filed the instant suit disputing Commerce’s determination that certain sales were within the ordinary course of trade and that the application of Adverse Facts Available (“AFA”) was not warranted. This case concerned the Defendant United States Department of Commerce’s (“Commerce”) Final Results of the fourth administrative review (“AR4”) of the antidumping order on lightweight thermal paper (“LWTP”) from Germany. Lightweight Thermal Paper From Germany: Final Results of Antidumping Duty Administrative Review; 2011–2012,(“Final Results”) 79 Fed. Reg. 34,719 (June 18, 2014).  Appvion was a manufacturer of domestic like product and participated in the review that gave rise to the Final Results.  Papierfabrik August Koehler SE (“Koehler” or “Defendant-Intervenor”) was a foreign exporter/producer of LWTP in Germany, whose paper was subject to a 6.50% weighted average dumping margin pursuant to the Antidumping Duty Orders: Lightweight Thermal Paper From Germany and the People’s Republic of China, 73 Fed. Reg. 70,959, 70,959-60 (Nov. 24, 2008). Koehler sold LWTP through three sales channels to its German customers during AR4: Channel 1 (direct shipments), Channel 2 (transshipped sales), and Channel 3 (consignment sales). In the Final Results, even though Kohler disclosed that it made transshipments of LWTP to Germany, Commerce determined that Kohler’s sales were not outside the ordinary course of trade and concluded that Koehler did not make sales of subject merchandise at less than normal value. Accordingly, Commerce found that Koehler’s LWTP was subject to a zero percent weighted-average dumping margin for the POR, and found not basis to apply AFA.  Appvion filed the instant action disputing Commerce’s Final Results and a Motion for Judgment on the Agency Record.

In order for Commerce to include particular sales in its calculation of normal value, the sales must have been made in the ordinary course of trade. U.S. Steel Corp. v. United States, 37 CIT ____, 953 F.Supp.2d 1332, 1341 (2013). The court has held that “the statutory provision defining what is considered outside the ordinary course of trade is unclear.” Id. Accordingly, the Court found that Commerce has discretion to determine what sales are outside the ordinary course. Commerce contended that when the sales are disaggregated, it did not find “aberrationally low” profits earned on Channel 1 and 3 sales, rather, it found that variations in price and profitability were due to market factors as opposed to the transshipment scheme. Appvion did not point to any authority in questioning the reasonableness of Commerce’s decision to disaggregate the channels. Accordingly, the court found that Commerce’s decision to disaggregate the channels was reasonable given that Koehler identified them as separate sales channels.

Moreover, the court found that Commerce’s profitability analysis was reasonable.  Even assuming arguendo that the sales were made at abnormally low prices and profits, the sales were not necessarily outside the ordinary course of trade.  Abnormally low prices and profits is not enough to put sales outside of the ordinary course of trade, where Commerce examines all the circumstances particular to the sales in question. Further, none of the other factors associated with sales outside the ordinary course of trade were present, as there were no sales involving: off quality merchandise; merchandise produced according to unusual specifications; merchandise sold pursuant to unusual terms of sale; or merchandise sold to an affiliated party at a non-arm’s length price.

As for adverse facts available, in the third administrative review, Commerce found that Koehler failed to cooperate to the best of its ability and significantly impeded the review by not fully reporting its home market sales. Consequently, Commerce applied AFA in that review.  By comparison, in AR4, Koehler fully disclosed its home market sales information including the transshipment scheme, and Commerce confirmed this through verification. Koehler fully disclosed its home market sales information including the transshipment scheme, and Commerce confirmed this through verification. Thus, applying AFA was not necessary in this review. 

For the foregoing reasons, Plaintiff’s Motion for Judgment on the Agency Record was denied and Commerce’s Final Results are affirmed.