Appvion, Inc. v. United States

Slip Op. 15-104
UNITED STATES COURT OF INTERNATIONAL TRADE
________________________________
APPVION, INC., 	:
:
Plaintiff, 	: 	Before: Nicholas Tsoucalas,
: 	Senior Judge
v. 	:
: 	Court No.: 14-00143
UNITED STATES, 	:
: 	PUBLIC VERSION
Defendant, 	:
And 	:
:
PAPIERFABRIK AUGUST KOEHLER SE, :
:
Defendant-Intervenor. :
:
_____________________ 	:
OPINION
[Plaintiff’s 	Motion 	for 	Judgment 	on 	the 	Agency 	Record 	is 	denied
and Commerce’s Final Results are affirmed.]
Dated: ______________
Gilbert B. Kaplan and Daniel L. Schneiderman, King & Spalding LLP,
of Washington, D.C., for Plaintiff.
Joshua 	E. 	Kurland, 	Trial 	Attorney, 	U.S. 	Department 	of 	Justice,
Commercial Litigation Branch, of Washington, D.C., for Defendant.
With 	him 	on 	the 	brief 	were 	Reginald 	T. 	Blades, 	Jr., 	Assistant
Director, 	Jeanne 	E. 	Davidson, 	Director, 	and 	Benjamin 	C. 	Mizer,
Principal 	Deputy 	Assistant 	Attorney 	General. 	Of 	counsel 	on 	the
brief was Nanda Srikantaiah, Office of the Chief Counsel for Trade
Enforcement 	& 	Compliance, 	U.S. 	Department 	of 	Commerce 	of
Washington, D.C.
F. Amanda DeBusk and Matthew R. Nicely, Hughes Hubbard & Reed LLP,
of Washington, D.C., for Defendant-Intervenor.
September 17, 2015
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Tsoucalas, 	Senior 	Judge: 	This 	case 	concerns 	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); Issues and Decision
Memorandum 	for 	the 	2011-2012 	Final 	Results 	of 	the 	Administrative
Review on Lightweight Thermal Paper from Germany, (“IDM for AR4”)
A-428-840, 	(June 	11, 	2014). 	The 	period 	of 	review 	(“POR”) 	is
November 	1, 	2011, 	through 	October 	31, 	2012. 	Final 	Results, 	79
Fed. Reg. at 34,719.
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. 	Compl., 	June
19, 	2014, 	ECF 	No. 	7. 	Appvion 	has 	filed 	a 	Motion 	for 	Judgment 	on
the 	Agency 	Record. 	Pl.’s 	Mot. 	for 	J. 	on 	the 	Agency 	R. 	(“Pl.’s
Br.”), 	Dec. 	22, 	2014, 	ECF 	No. 	28. 	Commerce 	and 	Defendant-
Intervenor, 	Papierfabrik 	August 	Koehler 	SE 	(“Koehler” 	or
“Defendant-Intervenor”) 	oppose 	Appvion’s 	Motion. 	Def.’s 	Mem. 	in
Opp’n to Pl.’s Rule 56.2 Mot. for J. Upon Agency R. (“Def.’s Br.”),
May 29, 2015, ECF No. 39; Def.-Intervenor’s Resp. in Opp’n to Pl.’s
Rule 56.2 Mot. for J. on the Agency R., May 28, 2015, ECF No. 36.
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For 	the 	following 	reasons, 	Appvion’s 	Motion 	for 	Judgment 	on 	the
Agency Record is denied, and Commerce’s Final Results are affirmed.
BACKGROUND
Appvion 	is 	a 	manufacturer 	of 	domestic 	like 	product 	and
participated 	in 	the 	review 	that 	gave 	rise 	to 	the 	Final 	Results.
Compl. 	at 	¶4. 	Koehler 	is 	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).
A 	brief 	synopsis 	of 	the 	third 	administrative 	review
(“AR3”) 	is 	necessary 	to 	place 	the 	instant 	review 	in 	context. 	In
AR3, Koehler engaged in a fraudulent transshipment scheme where it
sold 	48-gram 	thermal 	paper 	that 	was 	destined 	for 	consumption 	in
Germany 	through 	various 	intermediaries 	in 	third 	countries, 	in
order to manipulate prices of paper shipped directly to its German
customers. 	Issues 	and 	Decision 	Memorandum 	for 	the 	Final 	Results
of 	the 	2010-2011 	Administrative 	Review 	on 	Lightweight 	Thermal
Paper from Germany (“IDM for AR3”) at 2, A-428-840, Apr. 10, 2013.
The manipulated prices would affect the calculation of normal value
that 	would 	be 	used 	in 	determining 	the 	antidumping 	margin. 	Id.
Koehler 	did 	not 	voluntarily 	disclose 	the 	transshipment 	scheme
during 	AR3. 	Id. 	at 	12. 	Koehler 	discontinued 	the 	transshipment
scheme 	on 	[[ 	]]. 	Pl.’s 	Confidential 	App. 	Koehler’s
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Supplemental Resp. at 25, May 15, 2013, ECF No. 30. 	As a result,
Commerce 	applied 	total 	AFA 	to 	Koehler 	in 	AR3. 	IDM 	for 	AR3 	at 	6.
Commerce’s 	decision 	was 	affirmed 	by 	this 	Court. 	Papierfabrik
August Koehler SE v. United States, 38 CIT ____, 7 F.Supp.3d 1304
(2014), appeal filed and docketed, Papierfabrik August Koehler SE
v. United States, Appeal No. 15-1489 (Fed. Cir. Mar. 25, 2015).
In 	AR4, 	however, 	Koehler 	acknowledged 	that 	the
transshipments began prior to the POR and ended during AR4. Pl.’s
Confidential 	App., 	Koehler 	Section 	A 	Response 	at 	15-17, 	Feb. 	25,
2012. 	In 	contrast 	to 	AR3, 	in 	AR4 	Koehler 	fully 	disclosed 	the
transshipment sales channel, Channel 2, and its related sales data
in 	its 	reporting 	of 	home 	market 	sales 	during 	AR4. 	See 	id. 	at 	15-
17, 24, and Ex. A-7. 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).
IDM for AR 4, at 3.
During 	AR4, 	Appvion 	contended 	that 	sales 	of 	KT 	48 	(a
grade 	of 	thermal 	paper) 	products 	through 	Channels 	1 	and 	3 	were
outside 	the 	ordinary 	course 	of 	trade. 	Id. 	Appvion 	claimed 	that
the sales were made at artificial prices that were “aberrationally
low 	and 	not 	determined 	by 	commercial 	considerations 	nor 	market-
based supply and demand, in part because of the particular manner
in which Koehler established prices for these sales.” 	Id. 	Appvion
also argued that the application of AFA was warranted. 	Id. at 18.
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In the Final Results, Commerce determined that the 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. 	Id. 	at 	6-7; 	Final 	Results 	79 	Fed. 	Reg. 	at 	34,719.
Accordingly, 	Commerce 	found 	that 	Koehler’s 	LWTP 	was 	subject 	to 	a
zero 	percent 	weighted-average 	dumping 	margin 	for 	the 	POR. 	Final
Results 	79 	Fed. 	Reg. 	at 	34,720. 	Furthermore, 	Commerce 	found 	no
basis 	to 	apply 	AFA. 	IDM 	for 	AR4 	at 	19. 	Appvion 	filed 	the 	instant
action disputing Commerce’s Final Results and a Motion for Judgment
on the Agency Record. 	Compl. at 1-6; Pl.’s Br. at 1-45.
JURISDICTION AND STANDARD OF REVIEW
This 	Court 	has 	jurisdiction 	pursuant 	to 	section 	201 	of
the 	Customs 	Courts 	Act 	of 	1980, 	28 	U.S.C. 	§ 	1581(c) 	(2012), 	and
section 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended,
19 U.S.C. § 1516a(a)(2)(B)(iii) (2012).1
In 	reviewing 	a 	challenge 	to 	Commerce's 	final
determination 	in 	an 	antidumping 	administrative 	review, 	the 	Court
will uphold Commerce's determination unless it is “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
means 	“more 	than 	a 	mere 	scintilla” 	of 	“such 	relevant 	evidence 	as
a 	reasonable 	mind 	might 	accept 	as 	adequate 	to 	support 	a
1 Further citations to the Tariff Act of 1930, as amended, are to the relevant
provisions of Title 19 of the U.S. Code, 2012 edition.
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conclusion.” Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71
S.Ct. 	456, 	459, 	95 	L.Ed. 	456, 	462 	(1951)(quoting 	Consol. 	Edison
Co. 	v. 	NLRB, 	305 	U.S. 	197, 	229, 	59 	S.Ct. 	206, 	217, 	83 	L.Ed. 	126,
140 	(1938)). 	To 	determine 	if 	substantial 	evidence 	exists, 	the
court 	reviews 	the 	record 	as 	a 	whole, 	including 	whatever 	“fairly
detracts 	from 	its 	weight.” 	Id. 	at 	488, 	71 	S.Ct. 	at 	464, 	95 	L.Ed.
at 	467. 	The 	mere 	fact 	that 	it 	may 	be 	possible 	to 	draw 	two
inconsistent 	conclusions 	from 	the 	record 	does 	not 	prevent
Commerce's 	determination 	from 	being 	supported 	by 	substantial
evidence. 	Am. 	Silicon 	Techs. 	v. 	United 	States, 	261 	F.3d 	1371,
1376 	(Fed. 	Cir. 	2001); 	see 	also 	Consolo 	v. 	Fed. 	Mar. 	Comm'n, 	383
U.S. 607, 620, 86 S.Ct. 1018, 1026, 16 L.Ed.2d 131, 141 (1966).
DISCUSSION
1. Ordinary Course of Trade
Antidumping duties are equal to the “amount by which
the 	normal 	value 	exceeds 	the 	export 	price 	(or 	the 	constructed
export 	price) 	for 	the 	merchandise.” 	19 	U.S.C. 	§ 	1673. 	The
antidumping 	statute 	defines 	normal 	value 	as 	the 	price 	of 	the
subject 	merchandise 	“at 	a 	time 	reasonably 	corresponding 	to 	the
time of the sale used to determine the export price or constructed
export price,” 19 U.S.C. § 1677b(a)(1)(A), where the price is “the
price 	at 	which 	the 	foreign 	like 	product 	is 	first 	sold 	. 	. 	. 	for
consumption 	in 	the 	exporting 	country, 	in 	the 	usual 	commercial
quantities and in the ordinary course of trade . . . .” 19 U.S.C.
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§ 1677b(a)(1)(B)(i). 	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). 	In 	turn,
the “ordinary course of trade” means:
the 	conditions 	and 	practices 	which, 	for 	a
reasonable 	time 	prior 	to 	the 	exportation 	of
the 	subject 	merchandise, 	have 	been 	normal 	in
the trade under consideration with respect to
merchandise 	of 	the 	same 	class 	or 	kind. 	The
administering 	authority 	shall 	consider 	the
following 	sales 	and 	transactions, 	among
others, 	to 	be 	outside 	the 	ordinary 	course 	of
trade:
(A) 	Sales 	disregarded 	under 	section
1677b(b)(1) 	of 	this 	title 	[sales 	below
the cost of production].
(B) 	Transactions 	disregarded 	under 	section
1677b(f)(2) 	of 	this 	title 	[sales 	between
affiliated 	persons 	where 	the 	amount
representing 	the 	element 	of 	value 	does 	not
fairly reflect the amount usually reflected in
sales 	of 	merchandise 	under 	consideration 	in
the market under consideration].
19 	U.S.C. 	§ 	1677(15). 	Other 	than 	for 	the 	aforementioned
subsections (A) and (B), the Tariff Act provides “little assistance
in determining what is outside the scope of that definition.” NSK
Ltd. 	v. 	United 	States, 	25 	CIT 	583, 	599, 	170 	F.Supp.2d 	1280, 	1296
(2001). 	The Court has held that “the statutory provision defining
what 	is 	considered 	outside 	the 	ordinary 	course 	of 	trade 	is
unclear.” Id. 	Accordingly, the Court has found that Commerce has
discretion to determine what sales are outside the ordinary course
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of 	trade. 	U.S. 	Steel, 	37 	CIT 	at 	____, 	953 	F.Supp.2d 	at 	1341.
Commerce 	may 	consider 	sales 	or 	transactions 	to 	be 	outside 	the
ordinary 	course 	of 	trade 	“if 	. 	. 	. 	based 	on 	an 	evaluation 	of 	all
of 	the 	circumstances 	particular 	to 	the 	sales 	in 	question, 	that
such 	sales 	or 	transactions 	have 	characteristics 	that 	are
extraordinary 	for 	the 	market 	in 	question.” 	19 	C.F.R. 	§
351.102(b)(35) 	(2015). 	Examples 	of 	sales 	that 	Commerce 	might
consider 	as 	being 	outside 	the 	ordinary 	course 	of 	trade 	are 	sales
or 	transactions 	involving 	off-quality 	merchandise 	or 	merchandise
produced according to unusual product specifications, merchandise
sold 	at 	aberrational 	prices 	or 	with 	abnormally 	high 	profits,
merchandise sold pursuant to unusual terms of sale, or merchandise
sold 	to 	an 	affiliated 	party 	at 	a 	non-arm’s 	length 	price. 	Id. 	In
determining 	whether 	home 	market 	sales 	are 	in 	the 	ordinary 	course
of 	trade, 	Commerce 	must 	“evaluate 	not 	just 	‘one 	factor 	taken 	in
isolation but rather . . . all the circumstances particular to the
sales in question.’” Cemex, S.A. v. United States, 133 F. 3d 897,
900 (Fed. Cir. 1998) (quoting Murata Mfg. Co. v. United States, 17
CIT 	259, 	264, 	820 	F.Supp. 	603, 	607 	(1993)). 	“In 	applying 	its
totality 	of 	the 	circumstances 	test, 	Commerce 	does 	not 	give
particular 	weight 	to 	any 	single 	factor. 	Instead, 	Commerce
determines 	which 	factor 	may 	be 	more 	or 	less 	significant 	based 	on
the 	case 	at 	hand.” 	U.S. 	Steel, 	953 	F. 	Supp.2d 	at 	1342 	(citing
Murata, 17 CIT at 263, 820 F.Supp. at 606). “An analysis of these
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factors should be guided by the purpose of the ordinary course of
trade 	provision 	which 	is 	‘to 	prevent 	dumping 	margins 	from 	being
based on sales which are not representative’ of the home market.”
Id. 	(quoting 	Monsanto 	Co. 	v. 	United 	States, 	12 	CIT 	937, 	940, 	698
F.Supp. 275, 278 (1988)).
Very 	low 	prices 	or 	profits 	may 	be 	indicative 	of 	sales
outside 	the 	ordinary 	course 	of 	trade; 	however, 	the 	mere 	fact 	of
such 	low 	prices 	or 	profits 	does 	not 	necessarily 	mean 	that 	such
sales 	are 	outside 	the 	ordinary 	course 	of 	trade, 	as 	Commerce 	must
evaluate all the circumstances particular to the sales in question.
See 	Cemex, 	S.A. 	v. 	United 	States, 	19 	CIT 	587, 	592, 	(not 	reported
in Federal Supplement) (1995), aff’d, Cemex, S.A. v. United States,
133 	F.3d 	at 	900; 	see 	also, 	NTN 	Bearing 	Corp. 	of 	America, 	25 	CIT
664, 	681, 	155 	F.Supp.2d 	715, 	732 	(2001), 	rev’d 	on 	other 	grounds
sub nom. Fag Italia S.p.A. v. United States, 402 F.3d 1356 (2005).
Commerce’s decision is “entitled to deference from this
Court.” 	Mantex, 	Inc. 	v. 	United 	States, 	17 	CIT 	1385, 	1403, 	841 	F.
Supp. 1290, 1306 (1993). “The Plaintiff has the burden of proving
whether 	sales 	used 	in 	Commerce’s 	calculations 	are 	outside 	the
ordinary course of trade or not . . . .” Nachi-Fujikoshi Corp. v.
United States, 16 CIT 606, 608, 798 F. Supp. 716, 718 (1992).
Appvion 	argues 	that 	direct 	sales 	of 	matching 	48 	gram
products were outside the ordinary course of trade and should not
have been included in the calculation of normal value, because the
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sales had extraordinary characteristics. 	Pl.’s Br. at 9. 	Appvion
argues 	that 	the 	sales 	were 	exceptional 	and 	should 	be 	excluded,
because they were the only sales vetted through [[
]] 	to 	eliminate 	dumping. 	Id. 	at 	10.
Appvion further contends that the sales were outside the ordinary
course of trade, because they were made at artificially low prices
or profit levels, while higher market-priced sales were concealed
through 	transshipments 	(Channel 	2). 	Id. 	at 	9-10. 	Appvion 	calls
this 	Koehler’s 	“two-tier 	pricing 	mechanism.” 	Id. 	at 	19. 	Appvion
came 	to 	this 	conclusion 	by 	aggregating 	sales 	between 	Channels 	1
(direct 	shipments) 	and 	3 	(consignment 	sales) 	and 	comparing 	them
against Channel 2 (transshipped sales). 	Def.’s Br. at 10.
Commerce contends 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. 	Id. 	at 	11. 	Appvion 	does 	not 	point 	to 	any
authority questioning the reasonableness of Commerce’s decision to
disaggregate 	the 	channels. 	Pl.’s 	Br. 	at 	1-44. 	Accordingly, 	the
court finds that Commerce’s decision to disaggregate the channels
was reasonable given that Koehler identified them as separate sales
channels. 	Pl.’s 	Confidential 	App. 	Koehler’s 	Resp. 	to 	Section 	A
Questionnaire at 15, Feb. 25, 2012.
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Appvion 	argues 	that 	sales 	of 	the 	55-gram 	product
(another grade of LWTP) “form a commercial benchmark” against which
to evaluate Koehler’s pricing for the matching product. 	Pl.’s Br.
at 	14. 	Appvion 	assumes 	that 	sales 	of 	the 	“48-gram 	product 	would
carry 	a 	substantial 	price 	premium 	(on 	a 	per 	weight 	basis) 	over
sales 	of 	a 	55-gram 	product, 	because 	one 	kilogram 	of 	the 	48-gram
product 	has 	15% 	more 	square 	meters 	of 	paper 	than 	one 	kilogram 	of
the 	55-gram 	product.” 	Id. 	Nevertheless, 	Commerce 	properly
considered 	various 	factors 	that 	may 	explain 	the 	difference 	in
price: 	there 	is 	“significant 	demand” 	for 	KT 	55 	products 	in
Koehler’s 	home 	market, 	as 	the 	KT 	55 	product 	is 	thicker 	and
stronger; 	transport 	costs 	are 	[[
]]; and [[ 	]] for the KT 55 product
allow for [[ 	]]. 	Def.’s Br. at
23-24. 	Thus, 	Commerce 	cited 	evidence 	in 	the 	record 	showing 	that
pricing 	patterns 	may 	be 	influenced 	by 	a 	variety 	of 	factors. 	See
id. 	Accordingly, 	Commerce’s 	decision 	not 	to 	use 	KT 	55 	as 	a
commercial 	benchmark 	was 	reasonable 	and 	supported 	by 	substantial
evidence.
Appvion 	further 	alleges 	that 	a 	dramatic 	price 	increase
among Channels 1 and 3 direct sales after the transshipment scheme
ended 	in 	June 	2012 	confirms 	that 	the 	sales 	at 	issue 	were 	made
outside 	the 	ordinary 	course 	of 	trade. 	Pl.’s 	Br. 	at 	14-15. 	The
court disagrees. 	When the sales were disaggregated, Commerce did
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not find a dramatic price increase after the transshipment scheme
ended. 	Pl.’s 	Confidential 	App. 	Price 	and 	Profitability 	Analysis
at Fig. 2, June 11, 2014.
Further, after the transshipment scheme was discontinued
in [[ 	]] Channel 1 prices [[ 	]] only in [[
]], 	which 	is 	[[ 	]] 	after 	the 	scheme 	was
discontinued. 	Id. 	at 	3. 	This 	suggests 	that 	the 	price 	increase
was not connected to the transshipment scheme. 	See id. 	There is
a 	consistency 	in 	prices 	between 	Channels 	2 	and 	3, 	as 	the 	Channel
3 	customer 	replaced 	the 	[[ 	]] 	Channel 	2 	customer 	after
the transshipment scheme ended in [[ 	]]. 	See id. at Fig.
2. 	The prices were similar both during and after the transshipment
scheme ended in [[ 	]]. See id. Correspondingly, Channel 1
sales were made to [[ 	]] and showed more variation
in 	price. 	See 	id. 	at 	5. 	This 	suggests 	that 	the 	price 	differences
between sales could be attributed to [[ 	]].
See id.
Appvion counters that Channel 3 (consignment) sales are
irrelevant 	to 	its 	ordinary 	course 	of 	trade 	argument, 	because
[[ 	]] 	of 	matching 	48-gram 	products
during 	the 	transshipment 	period. 	Pl.’s 	Br. 	at 	25. 	Appvion’s
argument, however, is inconsistent, because it claims that Channel
3 	sales 	are 	irrelevant, 	yet 	it 	argues 	for 	an 	aggregated 	price
analysis 	of 	Channels 	1 	and 	3. 	Id. 	at 	21, 	25. 	Channel 	3 	sales 	are
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Court No. 	14-00143 	Page 13
relevant, 	because 	they 	relate 	to 	Appvion’s 	claim 	of 	a 	dramatic
increase in price when the transshipment scheme was discontinued.
Commerce’s disaggregated profitability analysis reveals
that “Channel 1 profits, while ranging from [[
]] 	than 	the 	Channel 	2 	profits, 	were 	not 	so
different as to be ‘aberrational.’” Pl.’s Confidential App. Price
and Profitability Analysis at 8.
The 	court 	finds 	that 	Commerce’s 	profitability 	analysis
was 	reasonable. 	See 	id. 	Even 	assuming 	arguendo 	that 	the 	sales
were made at abnormally low prices and profits, the sales are not
necessarily 	outside 	the 	ordinary 	course 	of 	trade. 	The 	mere 	fact
of 	abnormally 	low 	prices 	and 	profits 	is 	not 	enough 	to 	put 	sales
outside of the ordinary course of trade, as Commerce examines all
the circumstances particular to the sales in question. Cemex, 133
F.3d 	at 	900 	(quoting 	Murata, 	17 	CIT 	at 	264, 	820 	F.Supp. 	at 	607).
Moreover, 	here, 	none 	of 	the 	other 	factors 	associated 	with 	sales
outside the ordinary course of trade are 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. 	19 	C.F.R. 	§ 	351.102(b)(35). 	Thus,
Commerce’s determination was reasonable.
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Court No. 	14-00143 	Page 14
Lastly, Appvion argues that Commerce’s interpretation of
the 	pricing 	data 	for 	KT 	48 	F20 	(another 	grade 	of 	LWTP) 	is
unsupported and irrational. 	Pl.’s Br. at 31. 	Appvion’s argument,
however, does nothing to change the fact that under a disaggregated
analysis, 	Commerce 	did 	not 	find 	a 	dramatic 	price 	increase 	after
the transshipment scheme ended. 	Pl.’s Confidential App. Price and
Profitability Analysis at Fig. 2.
2. Adverse Facts Available
Commerce 	may 	apply 	AFA 	where 	“an 	interested 	party 	has
failed 	to 	cooperate 	by 	not 	acting 	to 	the 	best 	of 	its 	ability 	to
comply 	with 	a 	request 	for 	information.” 	19 	U.S.C. 	§ 	1677e(b).
“Compliance with the ‘best of its ability’ standard is determined
by 	assessing 	whether 	respondent 	has 	put 	forth 	its 	maximum 	effort
to provide Commerce with full and complete answers to all inquiries
in 	an 	investigation.” 	Nippon 	Steel 	Corp. 	v. 	United 	States, 	337
F.3d 1373, 1382 (Fed. Cir. 2003). 	Commerce enjoys broad discretion
when considering whether to apply AFA. 	See PAM, S.p.A. v. United
States, 582 F.3d 1336, 1339-40 (Fed. Cir. 2009). 	This discretion
does not require that Commerce show that an importer cooperated to
the 	best 	of 	its 	ability 	every 	time 	it 	determines 	that 	AFA 	should
not 	be 	applied. 	AK 	Steel 	Corp. 	v. 	United 	States, 	28 	CIT 	1408,
1417, 346 F.Supp.2d 1348, 1355 (2004). 	Cooperating to the best of
its ability means that the company must: take reasonable steps to
keep 	and 	maintain 	full 	and 	complete 	records 	documenting 	the
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Court No. 	14-00143 	Page 15
information 	that 	a 	reasonable 	importer 	should 	anticipate 	being
called 	upon 	to 	produce; 	have 	familiarity 	with 	all 	the 	records 	it
maintains; 	and 	conduct 	prompt, 	careful, 	and 	comprehensive
investigations of all relevant records. 	Nippon, 337 F.3d at 1382.
In AR3, 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. 	IDM 	for 	AR3 	at 	9.
Consequently, 	Commerce 	applied 	AFA 	in 	that 	review. 	Id. 	By
comparison, in AR4, Koehler fully disclosed its home market sales
information 	including 	the 	transshipment 	scheme, 	and 	Commerce
confirmed this through verification. IDM for AR4, at 15. Appvion,
however, contends that the transshipment scheme affected Koehler’s
entire accounting system with fraud such that any verification by
Commerce cannot be trusted. 	Pl.’s Br. 40-41.
Appvion heavily relies on the Court’s holding in Tianjin
Magnesium Int’l Co., Ltd. v. United States, 844 F. Supp. 2d 1342,
1347 (2012), in support of its contention. 	The Court takes issue
with Appvion’s contention. 	In Tianjin, this Court concluded that
the application of AFA was warranted where the respondent submitted
false documents two months after their falsity had been established
in a failed verification. Id. The instant case is distinguishable,
because, 	here, 	Koehler 	fully 	disclosed 	its 	home 	market 	sales
information 	including 	the 	transshipment 	scheme, 	and 	Commerce
confirmed 	this 	through 	verification. 	Pl.’s 	Confidential 	App.,
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Court No. 	14-00143 	Page 16
Koehler Section A Response at 15-17, 24, and Ex. A-7. 	Furthermore,
Koehler put forth maximum effort to provide Commerce with full and
complete 	answers 	to 	the 	request 	for 	information. 	See 	Nippon, 	337
F.3d 	at 	1382. 	Moreover, 	there 	is 	no 	indication 	that 	Koehler 	was
unfamiliar with its records or that it failed to maintain full and
complete records or that it did not conduct a prompt, careful, and
comprehensive 	investigation. 	See 	id. 	The 	court 	finds 	that
Commerce’s decision not to apply AFA here was reasonable.
3. Conclusion
For 	the 	foregoing 	reasons, 	Plaintiff’s 	Motion 	for
Judgment 	on 	the 	Agency 	Record 	is 	denied 	and 	Commerce’s 	Final
Results are affirmed. 	Judgment will be entered accordingly.
/s/ Nicholas Tsoucalas
Nicholas Tsoucalas
Senior Judge
Dated:
New York, New York
September 17, 2015
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