United States Court of International Trade

Differential Pricing Analysis Upheld

In The Stanley Works (Langfang) Fastening Systems Co. Ltd., et. al. v United States  Slip Op. 17-156, Court No. 14-00112 (November, 27 2017) the Court reviewed Commerce’s differential pricing analysis and its application in the fourth administrative review of nails from China. Plaintiffs argued that Commerce’s pricing test was an unlawful application of statutory authority given to Commerce, and even if lawful the application was unreasonable, and that the results contravene applicable regulations. For the following reasons the Court sustained Commerce’s Final Results in full.

To determine whether a class or kind of foreign merchandise is being sold in the United States at less than fair value to certain purchasers in certain regions or during certain periods of time, also known as targeted dumping, Commerce uses the average to transaction (“A to T”) method, where it compares averaged values to the values of individual transactions. In order to analyze the presence of targeted dumping of goods sold in the United States, Commerce has developed three differential price analysis tests: the ratio test, Cohen’s d test (CDT), and the meaningful difference test. Of the many claims made by plaintiffs, plaintiffs argued that the CDT was unlawfully applied because the test was not designed to be used in antidumping or pricing scenarios and that CDT is an estimation tool to be used for evaluating the size of a value in a sample of data.

To review whether Commerce’s interpretation and application of the statute was in accordance with the law, the Court applied the parameters set forth in Chevron U.S.A, Inc. v. Natural Res. Def. Council, Inc., 467 U S. 837, 842–43 (1984).  First, the Court questioned if there is an ambiguity in the authorizing statute delegating certain powers to an agency, then if the agency’s regulation was a reasonable interpretation of such delegation. The Court found that Commerce has not specifically instructed Commerce on how to measure targeted dumping. The Court also found that the test was valid because Commerce had “adequately explained on the record the choices it made in employing that methodology.” Id. at 19.  The Court also held that the application of the CDT in this scenario was valid because it was used to “assess the presence and significance of differences of United States sales prices among purchasers, regions, or periods of time” Id. at 21. The Court held that Stanley had failed to exhaust its administrative remedies in regards to arguments about the meaningful difference test because no such claims were made in briefs to the agency during the administrative process. Finally, the Court held that 19 C.F.R. § 351.414(f) does not apply to administrative reviews at issue here.

EAJA Fees were Not Available Where Customs Substantiated its Protest Denial

In Consolidated Fibers Inc. v United States Slip Op. 17-157, Court No. 14-00222 (November, 27 2017) the Court reviewed plaintiff’s application for attorney fees under the Equal Access to Justice Act (EAJA). Plaintiff filed this case to protest Commerce’s re-liquidation of imported fiber to include increased antidumping duties. Previously, plaintiff followed the proper administrative process to protest the re-liquidation. After discovery, defendants moved for a judgment on confession regarding the duties. Afterwards, plaintiff filed EAJA petition for $30,000 in attorney fees. For the following reasons the Court denied the application and does not award any fees.

When a party files suit against the United States in a civil matter Court’s must award attorney fees when “the claimant is a prevailing party “or when “the government’s position was not substantially justified.” Id. at 4.  Because in this case the defendant sought to “conclude litigation by satisfying plaintiff’s claim”, the Court will take judicial notice of the legal arguments presented by Customs in the administrative process. Id. at 5. In this case, Customs considered the legal arguments raised and denied plaintiff’s protest, arguing that because of an amendment in the law, re-liquidation was available if done within 90 days of the bulletin notice of the original liquidation. The protest denial laid out valid legal arguments and proved the government’s argument was substantially justified. Plaintiff also argued that attorney fees were available because the government unnecessarily delayed litigation, but the Court did not find any convincing evidence of this on the record.