Michaels Stores, Inc. v. United States
2014 U.S. App. LEXIS 17460
| Fed. Cir. | 2014Background
- Michaels appeals a Court of International Trade ruling affirming Commerce antidumping rates for PRC cased pencils.
- Commerce applied a country-wide PRC rate rather than producer-specific rates to Michaels’ pencil exporters.
- PRC has been classified as a nonmarket economy (NME); NMEs use a default country-wide rate unless an exporter/producer demonstrates independence.
- During 2008–2009 and 2009–2010 reviews, three PRC pencil producers (China First, Three Star, Rongxin) and three PRC exporters sold pencils to Michaels; none exporters obtained a separate rate.
- Michaels deposited rates based on producers; Customs imposed a PRC-wide rate (114.90%) for both periods; ITC and this court upheld liquidation rates.
- The core issue is interpretation of 19 C.F.R. § 351.107(b)(2) versus § 351.107(d) in setting noncombination/exporter rates.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 351.107(b)(2) requires producer rates when no prior combination/noncombination rate exists. | Michaels contends (b)(2) mandates producer rates if no exporter/policy rate exists. | The regulation’s d(2) context requires considering the NME-wide default rate. | § 351.107(d) provides the default noncombination exporter/producer rate and governs in NMEs. |
| Whether subsection (d) clarifies the meaning of subsection (b)(2) and supplies the applicable rate. | Michaels argues (d) is irrelevant to (b)(2). | d ties to (b)(2) as the default noncombination rate in NMEs. | (d) lights the meaning of (b)(2) when read together, establishing the PRC-wide rate as the noncombination rate. |
| Whether Commerce’ interpretation is binding given the agency’s regulatory framework and prior practice. | Michaels asserts reliance on plain text and longstanding practice. | Agency interpretations of its own regs are entitled to deference. | Crucial interpretation aligns with decades-long practice; producer rates cannot override the PRC-wide rate here. |
Key Cases Cited
- Sigma Corp. v. United States, 117 F.3d 1401 (Fed. Cir. 1997) (recognizes deference to agency interpretation under regulatory structure)
- Transcom, Inc. v. United States, 294 F.3d 1371 (Fed. Cir. 2002) (notes policy favoring exporter rates when independent from state control)
- Torrington Co. v. United States, 156 F.3d 1361 (Fed. Cir. 1998) (reaffirms deference to agency interpretations of its regulations)
- Atar S.R.L. v. United States, 730 F.3d 1320 (Fed. Cir. 2013) (standard of review for agency rule interpretations)