Apex Frozen Foods Private Ltd. v. United States
2017 U.S. App. LEXIS 12400
| 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; mandatory respondents were Devi and Falcon.
- Commerce applied a differential-pricing/Cohen’s d analysis: Devi’s sales supported full average-to-transaction (A‑T) treatment; Falcon’s sales supported a mixed approach (A‑T for passing sales, average‑to‑average (A‑A) for non‑passing sales). Non‑mandatory respondents received a simple average rate.
- Commerce used its “meaningful difference” test comparing final margins under A‑A (no zeroing) and A‑T (with zeroing) across all sales; margins moved from de minimis under A‑A to positive under the alternatives, so Commerce applied the alternatives.
- Falcon’s mixed computation produced an A‑T positive margin and a negative A‑A margin; Commerce zeroed the negative A‑A margin when aggregating (i.e., no offset). Plaintiffs (Apex and others) sued challenging methodology and zeroing.
- The Court of International Trade sustained Commerce’s AR8 results; the Federal Circuit affirmed, reviewing for substantial evidence and Chevron deference where statutes were ambiguous.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument (Commerce) | Held |
|---|---|---|---|
| Whether Commerce adequately explained why A‑A "cannot take into account" identified price differences under 19 U.S.C. § 1677f‑1(d)(1)(B)(ii) | Apex: Commerce failed to justify why A‑A could not account for the targeted differences; statute requires explanation focused on the targeted sales. | Commerce: Its meaningful‑difference test (comparing ultimate margins across all sales as they would be applied) shows A‑A masked dumping; comparing final rates is reasonable and informs whether A‑A can account for differences. | Court: Statute is not dispositive on methodology; Commerce’s meaningful‑difference test is a permissible, reasonable exercise of delegated authority and supported by explanation. |
| Whether Commerce erred by using all sales (not only Cohen’s d passing sales) in the meaningful‑difference analysis | Apex: The statute’s “such differences” means focus only on the targeted (passing) sales at the threshold stage, not all sales. | Commerce: All sales are relevant because the final margin must address masked dumping as it will be applied; considering all sales is reasonable and aligns with statutory purpose. | Court: Rejects Apex; considering all sales is reasonable and not arbitrary. |
| Whether Commerce improperly applied zeroing unevenly in the meaningful‑difference comparison (A‑T with zeroing vs A‑A without) | Apex: Comparing methodologies should not conflate calculation differences caused solely by zeroing; zeroing should be applied consistently in the threshold test to avoid artifice. | Commerce: The agency appropriately compared the methodologies as they are actually applied in practice; zeroing is intrinsic to A‑T and reveals masked dumping. | Court: Commerce’s approach is reasonable; comparing real‑world applications (A‑A without zeroing vs A‑T with zeroing) makes sense and is consistent with precedent. |
| Whether Commerce’s aggregation (zeroing negative A‑A margin when combining A‑T and A‑A results for Falcon) was arbitrary ("double zeroing") | Apex: Zeroing the negative A‑A margin during aggregation defeats the purpose of including A‑A in the mixed method and inflates the final margin; Commerce should allow offsets. | Commerce: Aggregating without offset preserves uncovered masked dumping revealed by A‑T; agency reasonably chose to maximize detection of masked dumping when mixing methods. | Court: Deferentially upholds Commerce’s discretionary choice; zeroing in the aggregation step was a reasonable implementation of mixed methodology. |
Key Cases Cited
- Union Steel v. United States, 713 F.3d 1101 (Fed. Cir.) (discusses A‑T/A‑A distinction and continued use of zeroing with A‑T)
- Koyo Seiko Co. v. United States, 20 F.3d 1156 (Fed. Cir.) (explains how A‑T detects intermittent/targeted dumping)
- U.S. Steel Corp. v. United States, 621 F.3d 1351 (Fed. Cir.) (addresses zeroing and methodology differences)
- Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) (framework for judicial deference to reasonable agency statutory interpretation)
- PSC VSMPO‑Avisma Corp. v. United States, 688 F.3d 751 (Fed. Cir.) (discusses deference to Commerce’s technical antidumping decisions)
- JBF RAK LLC v. United States, 790 F.3d 1358 (Fed. Cir.) (agencies may choose reasonable procedures where statute is silent)
- Dongtai Peak Honey Indus. Co. v. United States, 777 F.3d 1343 (Fed. Cir.) (standard of review for Commerce decisions)
- Novosteel SA v. United States, 284 F.3d 1261 (Fed. Cir.) (respect for CIT factual findings)
- FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009) (agency decisions permissible even if explanation is of less‑than‑ideal clarity)