Apex Frozen Foods Private Ltd. v. United States
2017 U.S. App. LEXIS 12418
| Fed. Cir. | 2017Background
- Commerce completed the 8th administrative review (AR8) of antidumping duties on certain frozen warmwater shrimp from India covering Feb 1, 2012–Jan 31, 2013; Devi and Falcon were mandatory respondents; non-mandatory respondents (including Apex) received a simple average rate.
- Commerce applied a differential-pricing framework (Cohen’s d) to identify a pattern of significant price differences and then decided whether the average-to-transaction (A‑T) method or a mixed approach was justified under 19 U.S.C. § 1677f-1(d)(1)(B).
- Commerce found Devi’s sales met the threshold for full A‑T (with zeroing) and assessed a 1.97% duty; Falcon’s sales supported a mixed method (A‑T for passing sales, A‑A for others) yielding a 3.01% duty; other exporters received 2.49%.
- In deciding whether A‑A “could account for” the differences, Commerce performed a “meaningful difference” test comparing the final margins that would result under A‑A (without zeroing) and the alternatives (with zeroing), using all sales; margins shifted from de minimis under A‑A to above de minimis under alternatives.
- Apex challenged (at the CIT and on appeal) Commerce’s methodology: (1) using all sales in the meaningful-difference/account analysis instead of only targeted sales, (2) using zeroing asymmetrically in that analysis, and (3) “double zeroing” when aggregating A‑A and A‑T margins under the mixed method.
- The Court of Appeals affirmed the CIT, holding Commerce’s implementation of the investigations framework in reviews, its meaningful-difference test (using all sales and comparing the methodologies as applied in practice), and its aggregation/zeroing choices for the mixed method were reasonable and entitled to deference.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Commerce unlawfully used all sales in the "cannot be taken into account" (A‑A account) analysis instead of only targeted sales | Apex: "Such differences" means only targeted (Cohen’s d passing) sales must be used in the meaningful-difference/account test | Commerce: statute silent on mechanics; reasonable to compare ultimate rates across all sales because final margin must reflect all sales and masked dumping concerns | Court: Commerce’s use of all sales in the meaningful-difference test is a permissible, reasonable interpretation and not arbitrary or capricious; Chevron deference applies |
| Whether Commerce’s asymmetric use of zeroing in the meaningful-difference test was unlawful | Apex: Asymmetric zeroing measures methodology differences not whether A‑A can account for masked dumping; should apply zeroing consistently for an apples-to-apples comparison | Commerce: comparing methodologies as they are actually applied (A‑A without zeroing; A‑T with zeroing) is reasonable and reflects how margins are computed in practice | Court: Permissible to compare methods as applied; zeroing’s effects are relevant to detecting masked dumping; approach is reasonable |
| Whether Commerce acted unreasonably by "double zeroing" when aggregating A‑T and A‑A margins under the mixed method (i.e., zeroing negative A‑A margin in aggregation) | Apex: Double zeroing unduly inflates final rate and undermines A‑A portion; Commerce should allow negative A‑A margins to offset positive A‑T margins | Commerce: Mixed method merges different methodologies with different goals; electing not to offset preserves uncovered masked dumping and is a reasonable discretionary policy choice | Court: Commerce’s choice to zero negative A‑A margins in aggregation is a reasonable exercise of discretion and consistent with statutory purpose to remedy masked dumping |
| Whether Commerce’s reliance on the investigations statutory framework for administrative reviews (and its meaningful-difference test) was lawful | Apex: Framework or application is improper or insufficiently justified here | Commerce: Statute is silent as to reviews; applying investigations framework and meaningful-difference test is reasonable | Court: Commerce reasonably applied the investigations framework to reviews and its methodology passes deferential review |
Key Cases Cited
- Viet I-Mei Frozen Foods Co. v. United States, 839 F.3d 1099 (Fed. Cir. 2016) (antidumping statute purpose and methods overview)
- Union Steel v. United States, 713 F.3d 1101 (Fed. Cir. 2013) (discussion of A‑T, A‑A, zeroing, and masked dumping)
- Koyo Seiko Co. v. United States, 20 F.3d 1156 (Fed. Cir. 1994) (targeted/ masked dumping rationale for A‑T)
- U.S. Steel Corp. v. United States, 621 F.3d 1351 (Fed. Cir. 2010) (zeroing and methodology differences)
- Dongtai Peak Honey Indus. Co. v. United States, 777 F.3d 1343 (Fed. Cir. 2015) (standard of review for Commerce determinations)
- Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (U.S. 1984) (agency deference framework)
- Apex Frozen Foods Private Ltd. v. United States, 144 F. Supp. 3d 1308 (Ct. Int’l Trade 2016) (CIT decision sustaining AR8)