Consumer Products Division, SCM Corp. v. Silver Reed America, Inc.
United States Court of Appeals for the Federal Circuit
753 F.2d 1033 (1985)
- Written by Solveig Singleton, JD
Facts
United States antidumping statutes required the imposition of antidumping duties on foreign merchandise sold in the United States for less than its fair value if the unfair pricing injured United States producers. The amount of the duty equaled the difference between the foreign market value (FMV) and the United States sale price (USP), the so-called dumping margin. If the exporter and importer were unrelated, the USP was the price paid to the exporter by the importer. If the exporter and the importer were related, the USP was based on the exporter’s United States sale price (ESP). Under § 1677b(a)(4)(B), prices were adjusted due to “circumstances of sale.” In 1979, Congress stated that adjustments should be allowed if reasonably quantifiable and directly related to sales. Since 1960, the secretary of commerce (secretary), charged with implementing antidumping law, limited deductions from the FMV under the circumstances-of-sale provision to direct costs of the sale. The limit stopped foreign producers from claiming such extensive deductions that dumping margins vanished. However, the statute required deductions of some indirect costs from the ESP, reducing the ESP and inflating the dumping margin. To compensate, the secretary provided an ESP offset cap, 19. C.F.R. § 353.15(c), allowing deduction of indirect costs from the FMV, but only to the extent that the same amount of indirect costs incurred in the United States was deductible from the ESP. In proceedings involving the secretary, Smith Corona Group’s Consumer Products Division (Smith Corona) (plaintiff), and Silver Seiko and its United States subsidiary (collectively, Silver Seiko) (defendants), an appellate court rejected Smith Corona’s argument that indirect expenses were not deductible. As the proceedings continued, Silver Seiko challenged the ESP offset cap in the United States Court of International Trade, arguing that exporters should be allowed to deduct all indirect costs from the FMV of the same type as those deductible from the ESP, not limited as to amount. The court ruled that the ESP offset cap was invalid because it did not result in a fair comparison of the ESP and the FMV.
Rule of Law
Issue
Holding and Reasoning (Nies, J.)
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