Vicentin S.A.I.C. v. United States

42 F.4th 1372

VICENTIN S.A.I.C., Oleaginosa Moreno Hermanos S.A., Molinos Agro S.A., Plaintiffs

LDC Argentina S.A., Plaintiff-Appellant

v.UNITED STATES, National Biodiesel Board Fair Trade Coalition, Defendants-Appellees

2021-1988

United States Court of Appeals, Federal Circuit.

Decided: August 2, 2022

Gregory J. Spak, White & Case LLP, Washington, DC, argued for plaintiff-appellant. Also represented by Jessica Lynd.

Joshua E. Kurland, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for defendant-appellee United States. Also represented by Brian M. Boynton, Patricia M. Mccarthy, Loren Misha Preheim.

Myles Samuel Getlan, Cassidy Levy Kent USA LLP, Washington, DC, argued for defendant-appellee National Biodiesel Board Fair Trade Coalition. Also represented by Thomas M. Beline, Chase Dunn, Jack Alan Levy, James Edward Ransdell, IV.

Before Moore, Chief Judge, Taranto and Hughes, Circuit Judges.

Hughes, Circuit Judge.

This is an appeal from an antidumping investigation of biodiesel from Argentina. Appellant LDC Argentina S.A. challenges two calculations Commerce used to determine antidumping duties: export price and constructed value of the subject biodiesel.

Certain renewable fuels, such as the biodiesel at issue here, are entitled to tradeable tax credits. In calculating export price, Commerce subtracted the value of these tradeable credits, calling the credits "price adjustments" under 19 C.F.R. § 351.401(c). Because the credits fall within the regulatory definition of a "price adjustment" and substantial evidence supports the value Commerce used for the credits, we affirm Commerce's export price calculation.

Calculating constructed normal value of biodiesel in Argentina, Commerce used an international market price for soybeans, the primary input into biodiesel, because the price of soybeans in Argentina is subsidized. Commerce also addressed the same soybean subsidy through countervailing duties. LDC argues that correcting for the soybean subsidy in the export price creates an improper double remedy. But Commerce demonstrated with substantial evidence that its constructed value calculation does not result in a double remedy. We affirm the constructed value.

BACKGROUND

The National Biodiesel Board Fair Trade Coalition and its members submitted an antidumping petition alleging that biodiesel from Argentina was sold at less-than-fair value into the United States. Commerce initiated an antidumping investigation and selected Vicentin S.A.I.C. and LDC Argentina S.A. as mandatory respondents.

Decision Memorandum for the Preliminary Determination in the Less-Than-Fair-Value Investigation of Biodiesel from Argentina at 3, 82 ITADOC 50391 (Oct. 19, 2017) (Preliminary Results Memo ).

In an antidumping investigation, Commerce determines whether the subject merchandise was sold at less than fair value by subtracting the "export price," the price at which the subject merchandise was first sold to a purchaser in the United States, from the "normal value," which is the price of identical or similar merchandise sold outside the United States. 19 U.S.C. §§ 1677(35), 1677a(a), 1677b(a). The difference between the two is the dumping margin, and Commerce imposes antidumping duties in an amount equal to the dumping margin. 19 U.S.C. §§ 1673, 1677(35)(A). In this appeal, LDC challenges Commerce's determination of both the export price and the normal value.

I

The U.S. Environmental Protection Agency (EPA) incentivizes the use of renewable fuels by requiring certain entities, including United States gasoline and diesel fuel producers and importers, to meet an annual "renewable volume obligation." Preliminary Results Memo at 28–29. Entities show compliance with their renewable volume obligation by submitting to the EPA Renewable Identification Numbers (RINs) equaling the number of gallons in their renewable volume obligations. Id. RINs are tradeable credits created by the importation and domestic production of renewable fuels. RINs are "attached" to biodiesel at the time of importation, and importers can later sell them as "detached" or "separated" RINs.

When calculating export price, 19 C.F.R. § 351.401(c) directs Commerce to "use a price that is net of price adjustments, as defined in section 351.102(b), that are reasonably attributable to the subject merchandise." Commerce considered the value of RINs generated by the importation of the subject biodiesel to be a "price adjustment" and so subtracted the value of the RINs from the export price. Final Results of Redetermination Pursuant to Ct. Remand at 1–2, 14–15 (First Remand Results ), Vicentin S.A.I.C. v. United States , 404 F. Supp. 3d 1323 (Ct. Int'l Trade 2019) ( Vicentin I ), ECF No. 79-1.¹ Commerce explained that the value of RINs is a "price adjustment" as defined in 19 C.F.R. § 351.102(b)(38) because "the invoice price does not reflect the true ‘starting price’ of biodiesel or ‘price at which the subject merchandise is first sold’ because it includes a RIN value." Id. at 10.

In support of its finding that the invoice price includes the value of RINs, Commerce cited a statement by LDC's U.S. affiliate that "the price of [biodiesel] is comprised of the cost of biodiesel ... plus a RIN value" and that "buyers are cognizant of the value of RINs associated with a sale and likely factor [the value of RINs] in when negotiating a price." Id. at 12. Commerce also relied on an ITC report showing that biodiesel with RINs attached costs much more than biodiesel without RINs. Id. at 11–12. So the RINs value "must be accounted for to arrive at the net price actually paid by the customer for the merchandise under investigation." Id. at 11.

For the value of RINs attached to the imported biodiesel, Commerce used the "daily spot prices" of separated RINs as reported by LDC and other parties. Id. at 38. Commerce relied on the statements of exporters in related ITC proceedings that "if a given RIN has a value of $0.75, it would add $0.75 to a gallon [of] biodiesel ... [and] industry participants assume that a gallon of RINless [biodiesel] should be $0.75 per gallon less expensive than a gallon of [biodiesel] with ... RINs attached." Id. at 13–14.

The Court of International Trade sustained Commerce's decision to subtract the value of RINs from export price. Vicentin S.A.I.C. v. United States , 466 F. Supp. 3d 1227, 1233–37, 1239–42 (Ct. Int'l Trade 2020) ( Vicentin II ).

II

Calculating the normal value of the subject biodiesel, Commerce determined that "domestic biodiesel sales prices are established by the [Argentinian] government and are not based on competitive market conditions." Issues and Decision Memorandum for the Final Affirmative Determination in the Antidumping Duty Investigation of Biodiesel from Argentina at 16, 83 ITADOC 8837 (Feb. 20, 2018) (Final Results Memo ). Without a viable sales price in Argentina, Commerce based the normal value on a constructed value calculation pursuant to 19 U.S.C. § 1677b(a)(4). Id. Constructed value includes "the cost of materials ... employed in producing the merchandise, during a period which would ordinarily permit the production of the merchandise in the ordinary course of trade." 19 U.S.C. § 1677b(e)(1). But under the recent Trade Preferences Extension Act of 2015, "if a particular market situation exists such that the cost of materials and fabrication or other processing of any kind does not accurately reflect the cost of production in the ordinary course of trade," then Commerce "may use ... any other calculation methodology" for the cost of materials. Trade Preferences Extension Act of 2015 § 504, 19 U.S.C. § 1677b(e).

Soybeans are the primary input into biodiesel. National Biodiesel argued "that Argentina levies high export taxes on feedstock, [including soybeans,] which has the effect of lowering the feedstock cost domestically." Appx11979 (internal quotation marks omitted). In a parallel countervailing duty investigation, Commerce found that the same export tax regime was a countervailable subsidy for sales of soybean-based products. Issues and Decision Memorandum for the Final Determination in the Countervailing Duty Investigation of Biodiesel from the Republic of Argentina at 13, 16–29, 82 ITADOC 53477 (Nov. 6, 2017).

In this antidumping investigation, National Biodiesel alleged that the soybean subsidy creates a particular market situation affecting respondents' reported costs of soybeans. Commerce agreed. Using "any other methodology" under 19 U.S.C. § 1677b(e), Commerce disregarded the respondents' actual reported soybean costs in favor of an international market price.

Respondents appealed Commerce's final antidumping determination to the Court of International Trade, arguing that Commerce could not reasonably adjust the cost of soybeans to account for the soybean subsidy because Commerce had offset the same program as a countervailable subsidy in the parallel investigation. Vicentin I , 404 F. Supp. 3d at 1334. The Court of International Trade twice remanded for Commerce to explain why it made the particular market situation adjustment for the soybean subsidy if the parallel countervailing duty investigation addressed the same program. Id. at 1340–43 ; Vicentin II , 466 F. Supp. 3d at 1242–45. Commerce maintained that it was not required to "measure or alleviate any double remedy" when relying on 19 U.S.C. § 1677b(e). Final Results of Redetermination Pursuant to Ct. Remand at 16, Vicentin II , 466 F. Supp. 3d. 1227, ECF No. 108-1 (Second Remand Results ).

Under protest, Commerce also determined that using the international soybean price did not create a double remedy. It borrowed the "pass-through" analysis from 19 U.S.C. § 1677f-1(f)(1), a provision meant to mitigate double remedies arising from parallel antidumping and countervailing duty proceedings in nonmarket economies. Second Remand Results at 9.

Commerce found that the effect of the soybean subsidy was not "passed through" to lower the...