Pokarna Engineered Stone Limited v. United States

Slip Op. 21-107
UNITED STATES COURT OF INTERNATIONAL TRADE
Before: Leo M. Gordon, Judge
Consol. Court No. 20-00127
OPINION
[Commerce’s Final Determination is sustained.]
Dated: August 25, 2021
Lizbeth R. Levinson, Ronald M. Wisla, and Brittney R. Powell, Fox Rothschild LLP,
of Washington, D.C., for Plaintiff Pokarna Engineered Stone Limited.
Joshua E. Kurland, Trial Attorney, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of Washington, D.C., for Defendant United States. 	On the
brief were Brian M. Boynton, Acting Assistant Attorney General, Jeanne E. Davidson,
Director, and Tara K. Hogan, Assistant Director. 	Of counsel were Vania Wang and
W. Mitch Purdy, Attorneys, U.S. Department of Commerce, Office of Chief Counsel for
Trade Enforcement and Compliance, of Washington, D.C.
Luke A. Meisner and Roger B. Schagrin, Schagrin Associates, of Washington,
D.C., for Defendant-Intervenor Cambria Company LLC.
Gordon, 	Judge: 	This 	action 	involves 	the 	U.S. 	Department 	of 	Commerce
(“Commerce”) final determination in the antidumping duty (“AD”) investigation of certain
quartz surface products (“QSPs”) from India. See Certain Quartz Surface Products from
POKARNA ENGINEERED STONE LIMITED,
Plaintiff,
v.
UNITED STATES,
Defendant,
and
CAMBRIA COMPANY LLC,
Defendant-Intervenor.
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India, 85 Fed. Reg. 25,391 (Dep’t of Commerce May 1, 2020) (final affirm. determ.) (“Final
Determination”), and the accompanying Issues & Decision Memorandum, A-533-889
(Dep’t 	of 	Commerce 	Apr. 	27, 	2020),
https://enforcement.trade.gov/frn/summary/india/2020-09407-1.pdf (last visited this date)
(“Decision Memorandum”). 	Before the court is the motion for judgment on the agency
record of Plaintiff Pokarna Engineered Stone Limited (“PESL”). 1 See Pl.’s Mem. in Supp.
of Rule 56.2 Mot. for J. on the Agency R., ECF No. 36 (“Pl.’s Opening Br.”); see also
Pl.’s Rev’d R. 56.2 Mot. for J. on the Agency R., ECF No. 41-1 (“Pl.’s Br.”); Def.’s Resp.
in Opp’n to Pl.’s R. 56.2 Mots. for J. on the Agency R., ECF No. 45 (“Def.’s Resp.”);
Def-Intervenor’s Resp. in Opp’n to R. 56.2 Mots. for J. on the Agency R., ECF No. 47
(“Def.-Int.’s Resp.”); Pl.’s Reply Brief, ECF No. 53 (“Pl.’s Reply”). 	The court has
jurisdiction pursuant to Section 516A(a)(2)(B)(i) of the Tariff Act of 1930, as amended,
19 U.S.C. § 1516a(a)(2)(B)(i) (2018) 2 , and 28 U.S.C. § 1581(c) (2018).
I. Standard or Review
The court sustains Commerce’s “determinations, findings, or conclusions” unless
they are “unsupported by substantial evidence on the record, or otherwise not in
accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i). More specifically, when reviewing
agency determinations, findings, or conclusions for substantial evidence, the court
1 To facilitate the efficient disposition of this action, this opinion focuses only PESL’s
challenge to Commerce’s inclusion of PESL’s paid sample sales in the agency’s
calculation of U.S. price of the subject merchandise. See Scheduling Order, ECF No. 33
(bifurcating briefing in this matter between issues raised by PESL and Consolidated
Plaintiff M S International, Inc.).
2 Further citations to the Tariff Act of 1930, as amended, are to the relevant portions of
Title 19 of the U.S. Code, 2018 edition.
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assesses whether the agency action is reasonable given the record as a whole. Nippon
Steel Corp. v. United States, 458 F.3d 1345, 1350–51 (Fed. Cir. 2006); see also Universal
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.”). 	Substantial
evidence has been described as “such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.” DuPont Teijin Films USA v. United States,
407 F.3d 1211, 1215 (Fed. Cir. 2005) (quoting Consol. Edison Co. v. NLRB, 305 U.S.
197, 229 (1938)). Substantial evidence has also been described as “something less than
the weight of the evidence, and the possibility of drawing two inconsistent conclusions
from the evidence does not prevent an administrative agency’s finding from being
supported by substantial evidence.” 	Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 620
(1966). 	Fundamentally, though, “substantial evidence” is best understood as a word
formula connoting reasonableness review. 	3 Charles H. Koch, Jr., Administrative Law
and Practice § 9.24[1] (3d ed. 2021). Therefore, when addressing a substantial evidence
issue raised by a party, the court analyzes whether the challenged agency action “was
reasonable given the circumstances presented by the whole record.” 	8A West’s Fed.
Forms, National Courts § 3.6 (5th ed. 2021).
Separately, the two-step framework provided in Chevron, U.S.A., Inc. v. Natural
Res. Def. Council, Inc., 467 U.S. 837, 842–45 (1984), governs judicial review of
Commerce’s interpretation of the antidumping statute. See United States v. Eurodif S.A.,
555 U.S. 305, 316 (2009) (Commerce’s “interpretation governs in the absence of
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unambiguous statutory language to the contrary or unreasonable resolution of language
that is ambiguous.”).
II. Discussion
PESL, a foreign producer and exporter of the subject merchandise, argues that
Commerce should have performed a bona fide sales analysis of what it characterizes as
paid sample sales it made in the United States, and that Commerce ultimately should
have excluded those sales. Pl.’s Br. at 7–16; see also Decision Memorandum at 12–14.
The court could not find merit in this claim. For the reasons that follow, the court sustains
the Final Determination.
As Commerce explained, it has a practice, followed here, to exclude free samples
from the U.S. sales database, treating them as a direct selling expense across remaining
U.S. sales. 	See Decision Memorandum at 12–14. 	A corollary of that practice is that
Commerce does not, in investigations, exclude paid U.S. sample sales from the sales
database. 	More important, Commerce does not perform an ordinary course of trade or
bona fide sales analysis for such sales in investigations. 	Instead, Commerce has a
simpler test: a sale occurs if there is a “transfer of ownership to an unrelated party and
consideration.” Id. at 14 (quoting NSK Ltd. v. United States, 115 F.3d 965, 975 (Fed. Cir.
1997)).
Nothing in the statute mandates that Commerce must perform a bona fide sales
analysis on paid U.S. sample sales during an investigation. 	Plaintiff therefore seeks to
engraft “ordinary course of trade” and “bona fide sale” concepts from other provisions of
the statutory scheme (i.e., 19 U.S.C. § 1677b(a)(1)(B) (normal value); 19 U.S.C.
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§ 1675(a)(2)(B)(iv) 	(new 	shipper 	and 	administrative 	reviews)) 	onto 	Commerce’s
calculation of export price during investigations. Rather than argue that Commerce has
a clear non-discretionary duty to act, PESL is left to argue that Commerce has
“discretionary authority” to perform a bona fide sales analysis on U.S. sales in an
investigation. 	See Pl.’s Br. at 14. 	And, PESL wants the court to order Commerce to
perform this discretionary act. Id. at 17. It should go without saying that, without a legal
requirement that Commerce perform such an analysis, there is no basis for the court to
issue an affirmative injunction that Commerce must conduct a bona fide sales analysis
on PESL’s paid U.S. sample sales.
PESL also argues that “fundamental fairness” requires that the court override
Commerce’s current practice with one of the court’s own making, directing the agency to
conduct bona fide sales analyses on the export price side of the equation in investigations.
See Pl.’s Br. at 14. 	This fairness “angle” is not persuasive though, especially when
measured against the specific objectives of the “bona fide sales” provision 19 U.S.C.
§ 1675(a)(2)(B)(iv) (rectifying fraud by and unfairness of importers abusing the new
shipper review process), as well as the differences between new shipper/administrative
reviews, and investigations. The Government explains the difference:
Unlike 	investigations, 	both 	new 	shipper 	reviews 	and
administrative 	reviews 	involve 	reviewing 	exporters 	and
producers 	under 	an 	existing 	antidumping 	duty 	order.
Because the exporter or producer in question has notice that
it is subject to the discipline of an existing order and potential
duty liability, Commerce performs a bona fide sales test to
ensure that the exporter or producer has not manipulated their
sales in light of the existing order to receive a lower individual
rate or margin. See, e.g., Huzhou, 324 F. Supp. 3d at 1376;
Novolipetsk, 483 F. Supp. 3d at 1287 (“The legislative history
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indicates 	that 	Congress 	was 	driven 	by 	concerns 	that
exporters and producers were abusing the ability to obtain a
new shipper rate on an expedited basis in order to circumvent
antidumping and countervailing duties.”). In an investigation,
however, where an order is not yet in place and the exporter
or producer is not yet subject to its discipline, the same
incentive does not exist for a producer to make atypical sales
to receive a lower dumping rate or margin ….
Consequently, as we noted above, PESL fails to point to a
single past instance in which Commerce has applied a bona
fide sales analysis in an investigation (and we are not aware
of any). Instead, PESL relies heavily on case law discussing
application 	of 	Commerce’s 	bona 	fide 	sales 	test 	in
administrative or new shipper reviews. See PESL Br. 13-15.
But as we explained, those proceedings following issuance of
an 	order 	present 	different 	concerns 	about 	potential
manipulation than those present in an investigation when no
order exists.
Def.’s Resp. at 32–33. Commerce’s practice of not conducting a bona fide sales analysis
for paid U.S. sample sales during an investigation seems more than reasonable and fair.
III. Conclusion
Again, the court could find no merit in Plaintiff’s claim. 	Accordingly, the court
sustains the Final Determination as to Commerce’s decision to include PESL’s paid
sample sales in the U.S. sales database.
/s/ Leo M. Gordon
Judge Leo M. Gordon
Dated: August 25, 2021
New York, New York
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