Thai Plastic Bags Industries Co., Ltd. v. United States

THAI PLASTIC BAGS INDUSTRIES
CO., LTD.,
Plaintiff,
v.
UNITED STATES,
Defendant,
and
POLYETHYLENE RETAIL CARRIER BAG
COMMITTEE, HILEX POLY CO., LLC,
and SUPERBAG CORPORATION,
Defendant-Intervenors.
Slip Op. 13 -
UNITED STATES COURT OF INTERNATIONAL TRADE
OPINION
[affirming in part and remanding in part the Department of
Commerce’s final results of antidumping duty administrative
review]
Dated: March 19, 2013
Irene H. Chen, Chen Law Group LLC, of Rockville, MD,
and Mark B. Lehnardt, Lehnardt & Lehnardt, LLC, of Liberty, MO,
for Thai Plastic Bags Industries, Co., Ltd, Master Packaging,
Inc., and Inteplast Group, Ltd.
Joseph W. Dorn, Stephen A. Jones and Daniel L.
Schneiderman, King & Spalding LLP, of Washington, DC, for
Polyethylene Retail Carrier Bag Committee, Hilex Poly Co., LLC,
and Superbag Corporation.
Vincent D. Phillips, Trial Attorney, Commercial
Litigation Branch, Civil Division, U.S. Department of Justice,
of Washington, DC, for Defendant. 	Also on the brief were Stuart
F. Delery, Acting Assistant Attorney General, Jeanne E.
Davidson, Director, and Patricia M. McCarthy, Assistant
Director. 	Of counsel on the brief was Scott D. McBride, Senior
PUBLIC VERSION
Before: Donald C. Pogue,
Chief Judge
Consol. Court No. 11-00408
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Attorney, Office of the Chief Counsel for Import Administration,
U.S. Department of Commerce, of Washington, DC.
Pogue, Chief Judge: 	This consolidated action seeks review
of five determinations by the United States Department of
Commerce (“Commerce”) in the sixth administrative review of the
antidumping duty order on polyethylene retail carrier bags from
Thailand. 1 Specifically, Plaintiffs Thai Plastic Bags Industries
Company, Limited (“TPBI”) – a respondent in this review – and
two importers of subject merchandise who participated in this
review – Master Packaging, Incorporated, and Inteplast Group,
Limited (collectively the “Importers”) – challenge 1) Commerce’s
zeroing of, rather than deducting, negative normal-to-export
price comparisons in the calculation of respondents’ dumping
margins; and 2) Commerce’s decision, when calculating TPBI’s
general and administrative expenses, not to deduct income
received from an export-conditional government rebate. 2 In
1 See Polyethylene Retail Carrier Bags from Thailand,
76 Fed. Reg. 59,999 (Dep’t Commerce Sept. 28, 2011) (final
results of antidumping duty administrative review), amended by
76 Fed. Reg. 68,137 (Dep’t Commerce Nov. 3, 2011) (amended final
results of antidumping duty administrative review), amended by
76 Fed. Reg. 70,965 (Dep’t Commerce Nov. 16, 2011) (correction
to the amended final results of antidumping duty administrative
review) (collectively the “Final Results”) and accompanying
Issues & Decision Mem., A-549-821, ARP 09-10 (Sept. 21, 2011)
(“I & D Mem.”).
2 See Pls.’ Rule 56.2 Mem. of L. in Supp. of Mot. for J. on
the Agency R., ECF No. 48 (“TPBI & Importers’ Br.”).
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addition, Plaintiffs Polyethylene Retail Carrier Bag Committee,
Hilex Poly Company, LLC, and Superbag Corporation – members of
the domestic like product industry who participated in this
review (collectively the “Domestic Producers”) – challenge 3)
Commerce’s decision, when calculating TPBI’s general and
administrative expenses, to include a particular gain from
TPBI’s sale of assets; 4) Commerce’s adjustment of the surrogate
financial statements used to construct respondent Landblue
(Thailand) Company, Limited (“Landblue”)’s normal value to
reduce the reported selling expenses in proportion to Landblue’s
own direct to indirect selling expense ratio for export sales;
and 5) Commerce’s decision, when calculating Landblue’s
constructed profit, to use publicly available surrogate
financial statements, rather than confidential information from
TPBI. 3
The court has jurisdiction pursuant to 19 U.S.C.
§ 1516a(a)(2)(B)(iii) (2006) and 28 U.S.C. § 1581(c) (2006).
As explained below, Commerce’s Final Results are
sustained with respect to both of TPBI and the Importers’
challenges. 	With regard to the Domestic Producers’ challenges,
Commerce’s calculation of a constructed profit based on publicly
3 See Rule 56.2 Br. of the Polyethylene Retail Carrier Bag
Comm., Hilex Poly Co., LLC, and Superbag Corp. in Supp. of their
Mot. for J. on the Agency R., ECF No. 49 (“Domestic Producers’
Br.”).
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available surrogate financial statements is sustained, but
Commerce’s adjustment of these surrogate financial statements’
direct selling expense ratio is remanded. 	In addition,
Commerce’s inclusion of TPBI’s asset sale gain in TPBI’s general
and administrative expense calculation is also remanded.
STANDARD OF REVIEW
This court will uphold Commerce’s antidumping
determinations if they are in accordance with law and supported
by substantial evidence. 19 U.S.C. § 1516a(b)(1)(B)(i).
Substantial evidence refers to “such relevant evidence as a
reasonable mind might accept as adequate to support a
conclusion.” SKF USA, Inc. v. United States, 537 F.3d 1373, 1378
(Fed. Cir. 2008) (quoting Consol. Edison Co. v. NLRB, 305 U.S.
197, 229 (1938) (defining “substantial evidence”)). 	Moreover,
the substantiality of evidence is evaluated “on the record as a
whole, including [any evidence that] fairly detracts from its
weight.” Target Corp. v. United States, 609 F.3d 1352, 1358
(Fed. Cir. 2010) (internal quotation marks and citation
omitted). 	The “substantial evidence” standard of review can be
roughly translated to mean “is the determination unreasonable?”
Nippon Steel Corp. v. United States, 458 F.3d 1345, 1351 (Fed.
Cir. 2006) (internal quotation and alteration marks, as well as
citation, omitted).
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DISCUSSION
I. 	Zeroing
In their request for review of Commerce’s decision to
zero negative normal-to-export price comparisons in the
calculation of respondents’ dumping margins, TPBI and the
Importers make substantially the same arguments here as TPBI
made in the preceding review. Compare TPBI & Importers’ Br.
at 13-17 with Thai Plastic Bags Indus. v. United States, __ CIT
__, __ F. Supp. 2d __, No. 11-00086, 2013 WL 491520 (CIT
Feb. 11, 2013) (“Thai Plastic Bags II”) (adjudicating TPBI’s
challenge to Commerce’s decision to zero negative price
comparisons in the preceding review). 	Commerce similarly
provides the same explanation for its decision as that upheld by
this Court in response to TPBI’s challenge in that preceding
review. Compare I & D Mem. cmt. 6 at 17-18 with Thai Plastic
Bags II, __ CIT at __, __ F. Supp. 2d at __, 2013 WL 491520 at
*3-4. 	As the record of this review is not materially different
from that of the preceding review, Commerce’s decision not to
aggregate the price differences of TPBI’s above-normal value
sales with the dumping margins of TPBI’s dumped sales (while
employing the average-to-transaction comparison method in this
review) is affirmed on the grounds stated in Thai Plastic Bags
II. See Thai Plastic Bags II, __ CIT at __, __ F. Supp. 2d at
__, 2013 WL 491520 at *3-4.
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II. 	TPBI’s Export-Conditional Government Rebate Revenue
When calculating TPBI’s cost of production (“COP”) in
this administrative review, 4 Commerce rejected TPBI’s argument
that its general and administrative (“G&A”) expenses 5 should be
reduced by the value of a rebate that TPBI received from the
Thai government (referred to as the “Blue Corner Rebate” or “BCR
revenue”). See I & D Mem. cmt. 1 at 2, 5. 	TPBI and the
Importers claim that this decision was not supported by a
reasonable reading of the evidence in the record. TPBI &
Importers’ Br. at 9-13.
4 See 19 U.S.C. § 1677b(b)(1) (“Whenever [Commerce] has
reasonable grounds to believe or suspect that sales of the
foreign like product under consideration for the determination
of normal value have been made at prices which represent less
than the cost of production of that product, [Commerce] shall
determine whether, in fact, such sales were made at less than
the cost of production. 	If [Commerce] determines that sales
made at less than the cost of production[] (A) have been made
within an extended period of time in substantial quantities, and
(B) were not at prices which permit recovery of all costs within
a reasonable period of time, such sales may be disregarded in
the determination of normal value. . . .”); Polyethylene Retail
Carrier Bags from Thailand, 76 Fed. Reg. 30,102, 30,104 (Dep’t
Commerce May 24, 2011) (preliminary results of antidumping duty
administrative review) (explaining that Commerce had “reasonable
grounds to believe or suspect” that TPBI’s Thai sales of foreign
like product may have been made at prices below COP because
Commerce found that TPBI made below-cost Thai sales in the most
recent prior administrative review) (unchanged in the Final
Results).
5 See 19 U.S.C. § 1677b(b)(3)(B) (providing that the cost of
production includes, inter alia, “an amount for selling,
general, and administrative expenses”).
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But in its decision, Commerce explained that it did
not deduct TPBI’s BCR revenue from the COP calculation because
the BCR revenue – which TPBI described as rebates received “upon
export of TPBI’s finished bags” 6 – “is related to export sales
rather than the COP” and thus “adjusting production costs (or
any component of the COP) with the BCR revenue [was] not
appropriate.” I & D Mem. cmt. 1 at 5. 	More generally, Commerce
reasonably concluded that the COP calculation concerns the
respondent’s home market, 7 whereas export-conditional rebates by
definition are not available when the foreign like product is
sold domestically. 	Accordingly, Commerce properly excluded the
export-conditional BCR revenue from the COP calculation when
determining TPBI’s normal value, consistent with Commerce’s
6 Case Brief of [TPBI] (June 23, 2011), Admin. R. Con. Doc.
45 [Pub. Doc. 88] (“TPBI’s Case Br.”) at 1 (citation omitted);
see also id. at 1-2 (“The Thai Government pays these BCR rebates
to refund import duties incurred in the manufacture of resin
used to produce plastic bags for export.”) & n.2 (explaining
that the export-conditional BCR revenue refunded a fee charged
to TPBI “by its domestic resin suppliers for the import duties
the resin suppliers themselves incurred to produce the resin
sold to TPBI”).
7 See 19 U.S.C. §§ 1677b(b)(1) (COP is calculated for “sales
of the foreign like product under consideration for the
determination of normal value”); 1677b(a)(1) (normal value is
preferably the price at which foreign like product is sold in
the exporting country).
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treatment of Thai BCR rebates in other proceedings. 8 Cf. Saha
Thai Steel Pipe (Public) Co. v. United States, 635 F.3d 1335,
1338 (Fed. Cir. 2011) (“[P]roducers remain subject to [an
export-conditional] import duty when they sell the subject
merchandise domestically, which increases home market sales
prices and thereby increases [normal value].”). 9
8 See, e.g., Polyethylene Retail Carrier Bags from Thailand,
75 Fed. Reg. 53,953, 53,955 (Dep’t Commerce Sept. 2, 2010)
(preliminary results of antidumping duty administrative review)
(“We adjusted TPBI’s reported [cost of manufacturing] to remove
an offset claimed by TPBI for revenue associated with the
Government of Thailand’s Blue Corner Rebate program.”)
(unchanged in the final results, 76 Fed. Reg. 12,700 (Dep’t
Commerce Mar. 8, 2011)).
9 Commerce noted that TPBI could have a sought an export
price adjustment for the BCR revenue, pursuant to the duty
drawback provision. See I & D Mem. cmt. 1 at 5; 19 U.S.C.
§ 1677a(c)(1)(B) (“The price used to establish export price and
constructed export price shall be . . . increased by . . . the
amount of any import duties imposed by the country of
exportation which have been rebated, or which have not been
collected, by reason of the exportation of the subject
merchandise to the United States[.]”); Saha Thai Steel Pipe,
635 F.3d at 1338 (“[W]hen a duty drawback is granted only for
exported inputs, the cost of the duty is reflected in [normal
value] but not in [export price]. 	The statute corrects this
imbalance, which could otherwise lead to an inaccurately high
dumping margin, by increasing [export price] to the level it
likely would be absent the duty drawback.”) (citations omitted).
TPBI did not claim such adjustment and Commerce determined
that the record did not support a finding that the BCR revenue
satisfied the relevant criteria. I & D Mem. cmt. 1 at 5;
see Wheatland Tube Co. v. United States, 30 CIT 42, 47,
414 F. Supp. 2d 1271, 1276 (2006) (“Commerce explains that it
has a long-standing practice of evaluating claims for a duty
drawback adjustment . . . using a two-pronged test . . .
requir[ing] the respondent to establish that (1) the import
duties and rebates are directly linked to and are dependent upon
(footnote continued)
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Because the record reasonably supports Commerce’s
finding that TPBI’s BCR revenue was conditioned upon
exportation, 10 this finding is supported by substantial evidence.
See Consol. Edison, 305 U.S. at 229. 	And because rebates
conditional upon exportation are not applicable to merchandise
sold in the respondent’s home market, Commerce reasonably
determined that TPBI’s export-conditional BCR revenue was not
relevant to TPBI’s COP when calculating normal value for TPBI’s
merchandise. Cf. Saha Thai Steel Pipe, 635 F.3d at 1338.
one another, and (2) there are sufficient imports of raw
materials to account for the duty drawback received on exports
of the manufactured product.”) (citation omitted), rev’d on
other grounds, 495 F.3d 1355 (Fed. Cir. 2007). Cf. Polyethylene
Retail Carrier Bags from Thailand, Issues & Decision Mem., A-
549-821, ARP 08-09 (Mar. 1, 2011) cmt. 3 at 20 (“TPBI’s costs
include a ‘compensation fee’ charged by resin suppliers to
account for import duties in recognition of the fact that TPBI
will be rebated the duties upon export of the finished bags
under the BCR program. 	In other words, BCR revenues are import
duties imposed by Thailand which have been rebated, or which
have not been collected, by reason of the exportation of the
subject merchandise. Thus, BCR revenues are analogous to duty-
drawback revenues with the variant that there are three parties
involved (the input supplier, the producer/exporter, and the
foreign government) whereas, in a typical duty-drawback
situation, there are only two parties involved (the
producer/exporter and the foreign government).”) (footnote and
citation omitted) (denying duty drawback adjustment for BCR
revenues because TPBI failed to establish entitlement under the
two-pronged test); see also Circular Welded Carbon Steel Pipes
and Tubes from Thailand, 77 Fed. Reg. 20,782, 20,784 (Dep’t
Commerce Apr. 6, 2012) (preliminary results of antidumping duty
administrative review) (same).
10 See supra note 6.
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Commerce’s decision not to deduct TPBI’s BCR revenue from the
COP calculation is therefore affirmed.
III. TPBI’s Gain From the Sale of Assets
Next, the Domestic Producers challenge Commerce’s
decision to offset TPBI’s G&A expenses 11 with the value of a
particular gain from the sale of assets that was reflected in
TPBI’s financial statements. Domestic Producers’ Br. at 7-10;
see I & D Mem. cmt. 1 at 5-6. 12 It is Commerce’s practice to
include in the G&A expense calculation gains or losses incurred
on the routine disposition of fixed assets but to exclude non-
recurring income or losses that are not part of a company’s
normal production-related business operations. 13 Here, Commerce
decided to include TPBI’s asset sale gain in the G&A expense
11 See supra notes 4-5.
12 See also TPBI’s Case Br., Admin. R. Con. Doc. 45 [Pub.
Doc. 88], at 4 (claiming that “TPBI’s 2010 financial statements
demonstrate a gain of [[ 	]] baht on the sale of
assets”) (citing Ex. S3ABCD-1 to TPBI’s Submission of 2010
Financial Statements, A-549-821, ARP 09-10 (June 15, 2011),
Admin. R. Con. Doc. 40 [Pub. Doc. 79] (“TPBI’s Financial
Stmts.”) at 6 (showing [[ 	]] baht next to [[
]])).
13 See, e.g., Stainless Steel Sheet and Strip in Coils from
Mexico, Issues & Decision Mem., A-201-822, ARP 07-08 (Feb. 3,
2010) (“SSSS from Mexico”) cmt. 8 at 44. 	Commerce considers the
nature, significance and relationship of an activity to the
general operations of the company when determining whether or
not it is part of a company’s normal production-related business
operations. Id.
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calculation because Commerce found that this gain was
attributable to “the routine disposition of assets.” I & D Mem.
cmt. 1 at 5-6. 	As discussed below, however, this decision is
not supported by substantial evidence because Commerce did not
address record evidence that fairly detracts from its
conclusion. See Tudor v. Dep’t of Treasury, 639 F.3d 1362, 1366
(Fed. Cir. 2011) (quoting Univ. Camera Corp. v. NLRB, 340 U.S.
474, 488 (1951) (“The substantiality of evidence must take into
account whatever in the record fairly detracts from its
weight.”)).
As the Domestic Producers point out, “TPBI provided no
information regarding the type of assets sold, and it made no
claim or representation that sales of such assets were ‘routine’
or otherwise related to normal production operations.” Domestic
Producers’ Br. at 8; TPBI’s Case Br., Admin. R. Con. Doc. 45
[Pub. Doc. 88], at 4 (providing no detail regarding these asset
sales beyond the general description of a certain gain “on the
sale of assets”). 	Thus Commerce’s conclusion that these sales
were routine production-related dispositions was not supported
by substantial evidence because it was based on speculation. Cf.
Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1327 (Fed.
Cir. 2009) (“It is well established that speculation does not
constitute ‘substantial evidence.’”) (internal quotation marks
and citation omitted).
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Moreover, Commerce unreasonably concluded, without
explanation, that there was “no evidence on the record to
suggest that gains on the sales of assets reported in TPBI’s
audited financial statements are attributable to anything other
than the routine disposition of assets.” I & D Mem. cmt. 1 at 5-
6. 	On the contrary, the Domestic Producers present a reading of
the information contained in TPBI’s (confidential) financial
statements that fairly detracts from Commerce’s conclusion that
these asset sales were routine production-related dispositions. 14
14 Specifically, the size of the gain suggests it was not
from operating assets. 	TPBI’s financial statements list both
[[
]] and [[
]]. TPBI’s Financial Stmts., Admin.
R. Con. Doc. 40 [Pub. Doc. 79], at 3, 18-19. 	The statements
show that [[ 	]]
in 2010. Id. at 3, 18-19. 	With regard to [[ 	]],
the statements show that [[
]]. Id. at 18. 	With regard to [[
]] Id. at
19. 	Given these facts, Commerce’s conclusion that TPBI’s asset
sale gain was entirely attributable to the routine disposition
of production-related assets implies that TPBI sold assets at a
price nearly [[ 	]] the cost that it initially paid for
them, generating a gain of more than [[ 	]] times the assets’
depreciated book value. See Reply Br. of [the Domestic
Producers] in Supp. of their Mot. for J. on the Agency R., ECF
(footnote continued)
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Commerce’s explanation that TPBI’s asset sale gain was properly
included in the G&A expense calculation because the record
contains no evidence to suggest that these sales were unrelated
to general manufacturing operations does not adequately address
the evidence emphasized by the Domestic Producers. See I & D
Mem. cmt. 1 at 5-6. 15 Accordingly, Commerce’s explanation fails
to take into account evidence that fairly detracts from the
reasonableness of its conclusion; it is therefore not supported
by substantial evidence. See Univ. Camera, 340 U.S. at 488.
Because Commerce’s decision to include TPBI’s asset
sale gain in the G&A expense calculation (based on a finding
that this gain was attributable to the routine disposition of
production-related assets) was not supported by substantial
No. 75, at 5-7. 	As the Domestic Producers suggest, the
reasonableness of this conclusion is fairly undermined by the
greater likelihood that the [[ 	]] baht gain was
generated almost entirely from the sale of [[
]]. See id. 	As Commerce has previously
explained, gains on sales of assets that do not correspond to a
company’s manufacturing or selling capabilities – such as gains
or losses from the sale of land or other investments – are not
included in the G&A expense calculation. See, e.g., Polyethylene
Terephthalate Film, Sheet, and Strip from Korea, Issues &
Decision Mem., A-580-807, ARP 08-09 (Nov. 19, 2010) cmt. 3 at 6.
15 As this gain was not included in the G&A expense
calculation prior to the filing of administrative case briefs
below, both Commerce and the Domestic Producers were first
apprised of TPBI’s request to include this gain from TPBI’s case
brief. See TPBI’s Case Br., Admin. R. Con. Doc. 45 [Pub. Doc.
88], at 4. 	Thus this issue may have been under-developed in the
administrative proceeding below.
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evidence, it is remanded for further consideration, consistent
with this opinion.
IV. 	Landblue’s Constructed Selling Expenses
The Domestic Producers also object to Commerce’s
selling expense calculation when constructing a normal value for
Landblue, another respondent in this review. Domestic Producers’
Br. at 10-15. 16 Specifically, although the surrogate financial
statements used to construct Landblue’s selling expenses did not
separately report direct and indirect selling expenses, Commerce
decided to treat these surrogate statements as though they were
comprised of the same ratio of direct to indirect selling
16 Because Commerce found that Landblue had no viable home
or third-country market, see I & D Mem. cmt. 5 at 13, Commerce
constructed a normal value for Landblue’s merchandise. See id.;
19 U.S.C. §§ 1677b(a)(4), 1677b(e). 	When constructing normal
value pursuant to Section 1677b(e), Commerce includes, inter
alia, an amount for selling expenses “in connection with the
production and sale of a foreign like product, in the ordinary
course of trade, for consumption in the foreign country.”
19 U.S.C. § 1677b(e)(2)(A). 	Where, as here, actual data with
respect to this amount are not available, Commerce is authorized
to use (i) the respondent’s selling expenses in connection with
the production and sale of “merchandise that is in the same
general category of products as the subject merchandise”; (ii)
“the weighted average of the actual amounts incurred and
realized by exporters or producers that are subject to the
investigation or review”; or (iii) “the amounts incurred and
realized for selling . . . expenses . . . based on any other
reasonable method.” Id. at § 1677b(e)(2)(B). 	Here, Commerce
decided to use selling expense data derived from another
company’s publicly available financial statements. I & D Mem.
cmt. 5 at 13.
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expenses as Landblue’s actual experience. I & D Mem. cmt. 5 at
14. 17
Relying on its “longstanding practice not to make
adjustments that may introduce unintended distortions into the
data rather than achieving greater accuracy,” 18 Commerce
concluded that disaggregating and excluding a presumed portion
of the surrogate’s expenses from Landblue’s selling expense
calculation would avoid distortion and thereby achieve greater
accuracy. See I & D Mem. cmt. 5 at 13-14. 19 Commerce decided
that it was reasonable to assume that the nature and proportion
of the surrogate’s direct and indirect selling expenses were
17 See I & D Mem. cmt. 5 at 13 (“[I]t is [Commerce]’s
practice to exclude direct selling expenses in the calculation
of selling expenses [when constructing normal value].”); Oil
Country Tubular Goods (‘OCTG’), Other Than Drill Pipe, from
Korea, Issues & Decision Mem., A-580-825, ARP 03-04 (Feb. 27,
2007) cmt. 2 at 7 (excluding surrogate’s freight and “various
types of movement expenses” from a respondent’s constructed
selling expenses because these direct expenses “are incurred
after [the merchandise] leaves the factory”) (relying on
19 U.S.C. § 1677b(e)(3)).
18 I & D Mem. cmt. 5 at 14 (relying on Polyethylene
Terephthalate Film, Sheet, and Strip from the People’s Republic
of China, Issues & Decision Mem., A-570-924, ARP 08-09 (Feb. 14,
2011) (“Film from the PRC”) cmt. 1). See also Certain New
Pneumatic Off-the-Road Tires from the People’s Republic of
China, Issues & Decision Mem., A-570-912, ARP 08-09 (Apr. 18,
2011) cmt 11 at 23 (“Because [Commerce] cannot go behind line-
items in the surrogate financial statements, it is [Commerce]’s
longstanding practice not to make adjustments that may introduce
unintended distortions into the data rather than achieving
greater accuracy . . . .”).
19 See supra note 17.
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similar to Landblue’s simply because the surrogate (“Thantawan”)
was “a Thai producer of similar merchandise, has a similar
customer base, and operated with a profit.” Id. at 14.
Landblue, however, exported all of its merchandise
during the period of review, whereas no evidence suggests that
the same is true of Thantawan. See I & D Mem. cmt. 5 at 13-14.
Because Landblue exported all of its merchandise, its actual
direct selling costs (e.g., freight) are likely to be
significantly higher than those of a company selling largely
within its home market. 20 And as “Thantawan’s total selling
expenses do not provide details on whether the expenses are
direct or indirect in nature,” I & D Mem. cmt. 5 at 14, Commerce
merely presumed – based solely on the possibility that some
(unknown) portion of Thantawan’s selling expenses may have been
comprised of direct expenses – that introducing Landblue’s
(export-based) direct expense ratio into the calculation of
20 See Domestic Producers’ Br. at 11 (emphasizing that
“Landblue’s direct selling expenses [were] comprised [[
]]”) (citing
Ex. 2 to Landblue’s Supp. Financial Submission (June 22, 2011),
Admin. R. Con. Doc. 43 [Pub. Doc. 82]). 	Commerce’s vague
explanation – that Thantawan’s direct selling expense ratio was
likely to be similar to Landblue’s because Thantawan was “a Thai
producer of similar merchandise, ha[d] a similar customer base,
and operated with a profit”, I & D Mem. cmt. 5 at 14 – neither
addresses this argument nor refers to any evidence to the
contrary. See id.
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constructed value was more likely to result in greater accuracy
than further distortion. See id. 21
Because unfounded assumptions are not evidence,
Commerce’s decision that adjusting Thantawan’s selling expenses
to reflect Landblue’s own direct expense ratio would avoid
distortion and achieve greater accuracy is not supported by a
reasonable reading of the evidence in the record. 	This matter
is therefore remanded for further consideration, consistent with
this opinion.
V. 	Landblue’s Constructed Profit
Finally, the Domestic Producers claim that Commerce
improperly constructed Landblue’s profit 22 from publicly
21 Compare with Coated Free Sheet Paper from Peoples
Republic of China, Issues & Decision Mem., A-570-906,
Investigation (Oct. 17, 2007) cmt. 4 at 28 (“[B]ecause
[Commerce] does not know all of the components that contribute
to the costs of a surrogate producer, it cannot be certain of
the individual components which comprise the various line items
in surrogate financial statements. 	Therefore, adjusting those
statements may not make them any more accurate and indeed may
only provide the illusion of precision.”) (citation omitted).
See also Film from the PRC cmt. 1 (relied on in I & D Mem.
cmt. 5 at 14) at 7 (“[Commerce]’s practice is to not make
adjustments to [surrogate] financial statements data, as doing
so may introduce unintended distortions into the data rather
than achieving greater accuracy.”) (internal quotation marks and
citation omitted).
22 See supra note 16. 	When constructing normal value
pursuant to Section 1677b(e), Commerce includes, inter alia, an
amount for “profits, in connection with the production and sale
(footnote continued)
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Consol. Court No. 11-00408 	Page 18
available Thai surrogate information, rather than using TPBI’s
confidential information. See Domestic Producers’ Br. at 15-16
(emphasizing that, unlike TPBI’s financial statements, the
surrogate financial statements used to construct Landblue’s
profit did not disaggregate profits attributable specifically to
sales of foreign like product in Thailand). 	But because TPBI
was the sole other respondent selected for individual
examination in this review, 23 Commerce could not have relied on
TPBI’s financial statements without revealing TPBI’s business-
proprietary information in contravention of the administrative
protective order. Cf. Polyethylene Retail Carrier Bags from
Thailand, Issues & Decision Mem., A-549-821, Investigation
(June 18, 2004) (“Bags from Thailand Investigation”) cmt. 4 at
21 (“[B]ecause there is only one other respondent in this case,
[Commerce] could not calculate . . . profit based on [actual
amounts realized by the other respondent] because [doing so]
would reveal the business-proprietary information of the other
respondent . . . .”). 	Accordingly, Commerce reasonably
determined that relying on TPBI’s profit information was not an
of a foreign like product, in the ordinary course of trade, for
consumption in the foreign country.” 19 U.S.C. § 1677b(e)(2)(A).
23 See Final Results, 76 Fed. Reg. at 60,000.
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Consol. Court No. 11-00408 	Page 19
available alternative. 24 See Geum Poong Corp. v. United States,
25 CIT 1089, 1092, 163 F. Supp. 2d 669, 674 (2001) (holding that
Commerce properly determined that an alternative was unavailable
where it would impermissibly reveal a respondent’s proprietary
profit ratio). 	This determination is therefore affirmed. See
id.
CONCLUSION
For all of the foregoing reasons, Commerce’s Final
Results are sustained except with regard to 1) Commerce’s
decision to include TPBI’s asset sale gain in the calculation of
TPBI’s G&A expenses; and 2) Commerce’s adjustment of the
surrogate financial statements used to construct Landblue’s
selling expenses to reflect Landblue’s own direct to indirect
selling expense ratio. 	As explained above, these issues are
remanded for further consideration, consistent with this
opinion. 	Commerce shall have until May 20, 2013, to complete
24 Although Commerce acknowledged that the Domestic
Producers “reiterate[d] their argument that [Commerce] should
base the profit ratio for Landblue on the profit rate it
calculate[d] for TPBI,” I & D Mem. cmt. 4 at 11, the agency did
not specifically address this argument in explaining its
decision to continue to base Landblue’s profit calculation on
publicly available information from a Thai surrogate. See id.
at 12. As this argument was considered and addressed in detail
in the underlying investigation, however, see Bags from Thailand
Investigation cmt. 4 at 21, it is reasonable to infer that
Commerce based its decision in this review on the same reasoning
as that supporting its decision regarding the same issue in the
prior proceeding.
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and file its remand results. 	Plaintiffs and Defendant-
Intervenors shall have until June 3, 2013, to file comments.
The parties shall have until June 10, 2013, to file any reply.
It is SO ORDERED.
__/s/ Donald C. Pogue_______
Donald C. Pogue, Chief Judge
Dated: March 19, 2013
New York, NY
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