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Thai Plastic Bags Industries Co., Ltd. v. United States

United States Court of Appeals, Federal Circuit

December 24, 2014

THAI PLASTIC BAGS INDUSTRIES CO., LTD., MASTER PACKAGING, INC., AND INTEPLAST GROUP, LTD., Plaintiffs-Appellants,
v.
UNITED STATES, POLYETHYLENE RETAIL CARRIER BAG COMMITTEE, HILEX POLY CO., LLC, AND SUPERBAG CORPORATION, Defendants-Appellees

Appeal from the United States Court of International Trade in Nos. 1:11-cv-00408, 1:11-cv-00409, 1:11-cv-00416, Judge Donald C. Pogue.

IRENE H. CHEN, Chen Law Group LLC, of Rockville, Maryland, argued for plaintiffs-appellants.

RYAN M. MAJERUS, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee United States. With him on the brief were STUART F. DELERY, Assistant General, JEANNE E. DAVIDSON, Director, and PATRICIA M. MCCARTHY, Assistant Director. Of counsel on the brief was SCOTT D. MCBRIDE, Senior Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, United States Department of Commerce, of Washington, DC.

DANIEL L. SCHNEIDERMAN, King & Spalding, of Washington, DC, argued for defendants-appellees Polyethylene Retail Carrier Bag Committee, et al. With him on the brief was JOSEPH W. DORN. Of counsel was STEVEN A. JONES.

Before LOURIE, MOORE, and CHEN, Circuit Judges.

OPINION

Page 1367

Lourie, Circuit Judge.

Thai Plastic Bags Industries Co., Ltd., Master Packaging, Inc., and Inteplast Group, Ltd. (collectively, " TPBI" ) appeal from the decision of the United States Court of International Trade affirming the Final Results of the sixth administrative review of the antidumping duty order on polyethylene retail carrier bags from Thailand by the United States Department of Commerce (" Commerce" ) that excluded Blue Corner Rebate revenue from the calculation of the cost of production. See Thai Plastic Bags Indus. Co. v. United States, 904 F.Supp.2d 1326 (Ct. Int'l Trade 2013) (" Decision " ). Because we conclude that the Court of International Trade did not err in affirming Commerce's decision, we affirm.

Page 1368

Background

The Thai government provides rebates through the Blue Corner Rebate (" BCR" ) program to domestic manufacturers who produce and export products made from raw materials imported by domestic suppliers. TPBI manufactures polyethylene retail carrier bags in Thailand and exports them to the United States. TPBI obtains the polyethylene resin used for manufacturing those bags from Thai domestic suppliers, who in turn import the raw materials for producing resin and pay the associated import duties. To account for those duties, TPBI pays a compensation fee to the resin suppliers in exchange for tax certificates, which are then provided to the Thai government upon export of the finished bag products in exchange for rebates under the BCR program.

Commerce imposes remedial duties when foreign products are sold at less than fair value, which Commerce determines by comparing the exporter's home market price to the export price, i.e., the U.S. price. 19 U.S.C. § 1677b(a). If sales in the home market are made at prices below the cost of production of the product, however, Commerce will disregard the prices of those sales when determining the antidumping duty margin. 19 U.S.C. § 1677b(b). The calculation of the cost of production is based on the cost of producing the finished product for sale in the home market, and includes the cost of raw materials as well as a catch-all category of general and administrative expenses. See 19 U.S.C. § 1677b(b)(3). A lower calculated cost of production results in the inclusion of more sales at lower prices, which means a lower home market price to compare to the export price, and hence a smaller dumping margin and a lesser antidumping duty.

In 2004, Commerce determined that polyethylene retail carrier bags from Thailand were being sold in the United States at less than fair value, Polyethylene Retail Carrier Bags from Thailand, 69 Fed. Reg. 34,122 (Dep't of Commerce June 18, 2004) and 69 Fed. Reg. 42,419 (Dep't of Commerce July 15, 2004); the International Trade Commission determined that the domestic industry was materially injured by those imports, 69 Fed. Reg. 47,957 (USITC Aug. 6, 2004); and Commerce accordingly issued an antidumping duty order, 69 Fed. Reg. 48,204 (Dep't of Commerce Aug. 9, 2004). Several years later, Commerce conducted its sixth administrative review of that anti-dumping duty order, covering the period of August 1, 2009 through July 31, 2010. For this review, TPBI sought to adjust the calculation of its cost of production downwards by arguing that the Thai BCR program provided compensation for the fees paid to its resin suppliers and therefore that BCR revenue should be subsumed into production costs. J.A. 891 (Issues and Decision Memorandum for the Final Results). Because previous attempts to offset its raw material costs had been rejected, TPBI incorporated BCR revenue this time as an adjustment to its general and administrative expenses. Id. The domestic industry of polyethylene retail carrier bag manufacturers and producers, as represented by the Polyethylene Retail Carrier Bag Committee and its individual members, Hilex Poly Co., LLC and Superbag Corporation, submitted briefs commenting on the administrative review and urging Commerce to deny the offset for BCR revenue to TPBI's general and administrative expenses.

Commerce determined that the BCR program related to export sales rather than production costs, and therefore that adjusting the calculation of TPBI's cost of production to take account of BCR revenue would be ...


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