Apex Frozen Foods Private Ltd. v. United States
862 F.3d 1327
| Fed. Cir. | 2017Background
- Commerce completed the 7th administrative review (Feb 1, 2011–Jan 31, 2012) of the antidumping order on frozen warmwater shrimp from India and selected Apex Frozen Foods as a mandatory respondent.
- The American Shrimp Processors Association alleged Apex engaged in targeted (masked) dumping; Commerce applied the Nails test and found a pattern of targeted sales for Apex.
- Commerce used the average-to-transaction (A-T) methodology with zeroing for Apex, producing a 3.49% duty; average-to-average (A-A) produced a de minimis rate for Apex (0.0%).
- Apex challenged Commerce’s use of A-T and zeroing and the calculation methodology at the Court of International Trade (CIT); the CIT upheld Commerce’s results and denied Apex’s motion to amend.
- On appeal, Apex argued Commerce failed to explain why A-A could not account for targeting, misapplied the meaningful-difference test, and improperly applied A-T/zeroing to all sales rather than only targeted sales.
- The Federal Circuit reviewed under Chevron/deference principles and affirmed the CIT, finding Commerce’s explanations and methodologies reasonable and supported by substantial evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Commerce adequately explained why A-A cannot account for targeted price differences | Apex: Commerce’s meaningful-difference test improperly measured effects of zeroing and didn’t show A-A couldn’t account for targeting | U.S.: Commerce reasonably compared the ultimate applied rates (A-T with zeroing vs A-A without) to show A-A would yield no duty while A-T would | Held: Affirmed — statutory silence allows Commerce’s reasonable approach; comparing applied rates was permissible and not arbitrary |
| Whether Commerce’s meaningful-difference test should compare only targeted sales rather than all sales | Apex: Meaningful-difference should focus on sales that passed the Nails test (targeted sales) | U.S.: Apex failed to exhaust this argument before the agency; Commerce reasonably compared across all sales to reveal masked dumping | Held: Not reached on merits — CIT did not abuse discretion in finding argument unexhausted |
| Whether crossing the de minimis threshold (0.5%) is an arbitrary benchmark for a "meaningful" difference | Apex: Any rule turning on crossing 0.5% is arbitrary and unreasonable | U.S.: The 0.5% regulatory de minimis threshold is a reasonable, case-by-case benchmark showing A-A would yield no duty while A-T would | Held: Affirmed — Commerce’s use of the de minimis benchmark was reasonable and supported by substantial evidence |
| Whether Commerce properly applied A-T and zeroing to all sales (not just targeted sales) | Apex: A-T (and zeroing) should be limited to only the targeted subset; at minimum zeroing should apply only to targeted sales | U.S.: Statute doesn’t limit scope; applying A-T to all sales reasonably eliminates masking; zeroing is an integral part of A-T in reviews | Held: Affirmed — Commerce reasonably applied A-T and zeroing to all sales; Limiting Rule for investigations does not bind administrative reviews |
Key Cases Cited
- Union Steel v. United States, 713 F.3d 1101 (Fed. Cir. 2013) (upholding Commerce’s use of zeroing with A-T in administrative reviews and explaining methodological differences between A-A and A-T)
- Mid Continent Nail Corp. v. United States, 712 F. Supp. 2d 1370 (Ct. Int’l Trade 2010) (court-sanctioned Nails test for identifying targeted dumping)
- Koyo Seiko Co. v. United States, 20 F.3d 1156 (Fed. Cir. 1994) (rationale for identifying masked/targeted dumping and A-T’s role)
- U.S. Steel Corp. v. United States, 621 F.3d 1351 (Fed. Cir. 2010) (discussing zeroing’s role in revealing masked dumping under A-T)
- Dongbu Steel Co. v. United States, 635 F.3d 1363 (Fed. Cir. 2011) (criticizing Commerce’s inconsistent justification for zeroing across proceedings)
- JTEKT Corp. v. United States, 642 F.3d 1378 (Fed. Cir. 2011) (similar to Dongbu: demanding adequate justification for differing zeroing practices)
- Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (U.S. 1984) (framework for judicial deference to agency statutory interpretations)