US, Domestic Producers Say Loper Bright Doesn't Apply to Commerce Cost Valuations
The U.S. and defendant-intervenors led by Archer Daniels Midland each argued June 10 that Loper Bright doesn’t impact the Commerce Department’s discretion in deciding to use a mandatory review respondent’s annual conversion costs and quarterly direct material costs (Citribel v. United States, CIT # 24-00010).
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Exporter Citribel brought its case to the Court of International Trade in 2024, arguing that Commerce erred in using Citribel’s annual conversion costs and quarterly direct material costs in its valuation (see 2412170080).
Answering CIT Judge M. Miller Baker’s request for supplemental responses, the U.S. and Archer Daniels both argued that Loper Bright doesn’t apply in Citribel’s case.
Loper Bright was primarily meant to be prospective, not retrospective, the government said. As a result, “extant precedent still controls an issue unless there is a consideration beyond a court’s reliance on Chevron that would call the legitimacy of that precedent into question.” In cases that do implicate Loper Bright, this “consideration” has most commonly been subsequent legislation or case law, it said. It noted that there has been neither with regard to Commerce’s cost data selection criteria.
Both parties also argued that the 1930 Tariff Act offers “tremendous deference” to Commerce in its implementation of the law due to the department’s trade expertise.
And they both defended as reasonable the department’s policy of annualizing conversion costs when relying on quarterly direct costs. Archer Daniels said that the policy takes into account the fact that conversion costs aren’t stable: “For example, repair and maintenance costs may be recorded at irregular intervals during the year, such as when production equipment is down.” These fluctuations could cause distortions if not addressed, it said.
It also said that Citribel was only raising for the first time the argument that Commerce should have at least looked to quarterly energy costs when determining whether conversion costs had changed by more than 25% over the course of four fiscal quarters, necessitating quarterly rather than annual cost reporting. During administrative proceedings, Citribel only argued, based on a “misunderstanding of Commerce’s established practice,” that the department can’t use annual figures for any conversion costs, Archer Daniels said.
“In other words, before the agency, Citribel did not argue that Commerce’s existing practice is unreasonable and should be changed,” it said.