Samsung Elecs. Co. v. United States

72 F.Supp.3d 1359

SAMSUNG ELECTRONICS CO., LTD., and Samsung Electronics America, Inc., Plaintiffs

v.UNITED STATES, Defendant.

Slip Op. 15–58.

Court No. 13–00098.

United States Court of International Trade.

June 12, 2015.

Warren E. Connelly, J. David Park, Jarrod M. Goldfeder, and Phyllis L. Derrick, Akin Gump Strauss Hauer & Feld LLP of Washington D.C., for Plaintiff Samsung Electronics Co., Ltd. and Samsung Electronics America, Inc.

Daniel L. Porter, James P. Durling, Christopher A. Dunn, Ross E. Bidlingmaier, and Claudia D. Hartleben, Curtis, Mallet–Prevost, Colt & Mosle of Washington, D.C., for Consolidated Plaintiffs LG Electronics, Inc. and LG Electronics USA, Inc.

Jack A. Levy, Myles S. Getlan, James R. Cannon, Jr.John D. Greenwald, Matthew Frumin, and Thomas M. Beline, Cassidy Levy Kent (USA) LLP of Washington, D.C., for Plaintiff and Defendant–Intervenor Whirlpool Corporation.

Douglas G. Edelschick, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice of Washington, DC, for Defendant United States. With him on the brief were Stuart F. Delery, Assistant Attorney General, Jeanne E. Davidson, Director, Franklin E. White, Jr., Assistant Director. Of counsel on the brief was Joanna V. Theiss, Attorney, Office of the Chief Counsel, for Trade Enforcement and Compliance for the United States Department of Commerce.

OPINION

GORDON, Judge:

This consolidated action involves a U.S. Department of Commerce (“Defendant” or “Commerce”) final determination in the less than fair value investigation of large residential washers from the Republic of Korea. Large Residential Washers from the Republic of Korea, 77 Fed. Reg. 75,988 (Dep't of Commerce Dec. 26, 2012) (final determ. LTFV investigation) (“Final Results ”); see also Issues and Decision Memorandum for the Antidumping Duty Investigation of Large Residential Washers from the Republic of Korea, A–580–868 (Dep't of Commerce Dec. 26, 2012), available at http://enforcement.trade. gov/frn/summary/korea–south/2012–31104–1.pdf (last visited this date) (“Decision Memorandum ”). Before the court are the motions for judgment on the agency record of Plaintiffs Samsung Electronics Co., Ltd. and Samsung Electronics America, Inc. (collectively, “Samsung”), Consolidated Plaintiffs LG Electronics Inc. and LG Electronics USA, Inc. (collectively, “LG”), and Consolidated Plaintiff Whirlpool Corporation (“Whirlpool”). This opinion addresses Samsung and LG's challenges to the Final Results. See Br. of Respondent Pls. LG Elecs. & LG Elecs. USA in Supp. of their Mot. for J. on the Agency R. (Sept. 27, 2013), ECF No. 43 (“LG Br.”); Mem. of Pls. Samsung Elecs. Co., Ltd. & Samsung Elecs. Am., Inc. in Supp. of their Rule 56.2 Mot. for J. upon the Agency R. (Sept. 27, 2013), ECF No. 45 (“Samsung Br.”); Def.'s Consol. Resp. to Pls.' Mots. for J. on the Agency R. 1–50 (Feb. 14, 2014), ECF No. 62 (“Def. Resp.”); Resp. Br. of Whirlpool Corp. 1–24 (Mar. 7, 2014), ECF No. 68; Reply Br. of Pls. Samsung Elecs. Co., Ltd., & Samsung Elecs. Am., Inc. (Apr. 21, 2014), ECF No. 81 (“Samsung Reply”); Consol. Pls. LG Elecs., Inc.'s & LG Elecs. USA, Inc.'s Reply Br. (Apr. 21, 2014), ECF No. 82. 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) (2012),¹ and 28 U.S.C. § 1581(c) (2012).

Specifically, Samsung argues that Commerce's targeted dumping analysis violates the statute because (1) Commerce's established targeted dumping test uses weighted average prices instead of individual transaction prices and (2) Commerce thereafter applied the average-to-transaction price comparison to all of Samsung's sales rather than a subset of those sales. LG raises similar arguments, albeit with emphasis on different points, and adds that Commerce unlawfully excluded certain home market sales from its model-matching analysis.

For the reasons set forth below, the court denies both motions and sustains the Final Results for each of the issues raised.

I. Standard of 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 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). 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, 59 S.Ct. 206, 83 L.Ed. 126 (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, 86 S.Ct. 1018, 16 L.Ed.2d 131 (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. 2015). 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. 2015).

Separately, the two-step framework provided in Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842–45, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), governs judicial review of Commerce's interpretation of the antidumping statute. See United States v. Eurodif S.A., 555 U.S. 305, 316, 129 S.Ct. 878, 172 L.Ed.2d 679 (2009) (Commerce's “interpretation governs in the absence of unambiguous statutory language to the contrary or unreasonable resolution of language that is ambiguous.”).

II. Discussion

A. Targeted Dumping

Commerce calculates a respondent's dumping margin by determining the “amount by which the normal value exceeds the export price or constructed export price of the subject merchandise.” 19 U.S.C. § 1677(35)(A). The statute provides three methods for comparing normal value to export price or constructed export price to make this calculation: (1) average-to-average (“A–to–A”), (2) transaction-to-transaction (“T–to–T”),² and (3) average-to-transaction (“A–to–T”). Id. § 1677f–1(d)(1). Under the A–to–A methodology, Commerce compares weighted-average normal values to weighted-average export prices or constructed export prices, whereas under the A–to–T methodology, Commerce compares weighted average normal values to export prices or constructed export prices of individual transactions. 19 C.F.R. § 351.414(b)(1)-(2).

The statute allows for the A–to–T methodology as an exception to the other methodologies. 19 U.S.C. § 1677f–1(d)(1)(A). Specifically, Commerce may apply the A–to–T methodology “if (i) there is a pattern of export prices (or constructed export prices) for comparable merchandise that differ significantly among purchasers, regions, or period of time, and (ii) the administering authority explains why such differences cannot be taken into account using” the A–to–A or T–to–T methodologies. Id. § 1677f–1(d)(1)(B). Pricing that meets both conditions is known as “targeted dumping.”

Commerce in Certain Steel Nails from the United Arab Emirates, 73 Fed. Reg. 33,985 (Dep't of Commerce June 16, 2008) and Certain Steel Nails from the People's Republic of China, 73 Fed. Reg. 33,977 (Dep't of Commerce June 16, 2008) (collectively, “Nails ”) adopted a practice for evaluating whether a respondent has engaged in targeted dumping. This so-called “Nails test” begins with two statistical analyses: the “standard deviation test” and the “price gap test.” If these two tests reveal a pattern of export prices or constructed export prices that differ significantly among purchasers, regions, or period of time, Commerce next considers whether the A–to–A methodology could take into account the observed price differences. Commerce does so by determining whether there is a “meaningful difference” between the results of the A–to–A methodology and the A–to–T methodology. Commerce explained its application of these procedures below:

In the first stage of the test, the “standard-deviation test,” we determined the volume of the allegedly targeted group's sales of subject merchandise that are at prices more than one standard deviation below the weighted-average price of all sales during the POI, targeted and non-targeted. We calculated the standard deviation on a product-specific basis (i.e., by CONNUM) using the POI-wide weighted-average sales prices for the allegedly targeted groups and the groups not alleged to have been targeted. If that volume did not exceed 33 percent of the total volume of a respondent's sales of subject merchandise for the allegedly targeted group, then we did not conduct the second stage of the Nails test. If that volume exceeded 33 percent of the total volume of a respondent's sales of subject merchandise for the allegedly targeted group, on the other hand, then we proceeded to the second stage of the Nails test.

In the second stage, we examined all sales of identical merchandise (i.e., by CONNUM) sold to the allegedly targeted group which passed the standard-deviat[i]on test. From those sales, we determined the total volume of sales for which the difference between the weighted-average price of sales to the allegedly targeted group and the next higher weighted-average price of sales for a non-targeted group exceeds the average price gap (weighted by sales volume) between the non-targeted groups. We weighted each of the price gaps between the non-targeted

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