Lemon Juice Exporter, Supplier Are Neither Affiliates Nor Partners, CIT Says
The Court of International Trade in a decision made public July 2 sustained the Commerce Department's decision on remand to find that antidumping duty respondent Louis Dreyfus Company Sucos and an unnamed supplier, referred to as "Supplier A," are neither affiliates nor partners. Judge Claire Kelly said the parties aren't affiliates, since neither party is reliant on the other nor controls the other, nor are they partners, since the companies aren't involved in a "cooperative business endeavor in which they share risk and reward."
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The question of the affiliation between Louis Dreyfus and Supplier A arose from a challenge from petitioner Ventura Coastal in the AD investigation on lemon juice from Argentina in which the agency said the parties aren't affiliates or partners. Kelly remanded this decision after defining the precise legal standard the agency was to use regarding both affiliation under 19 U.S.C. Section 1677(33)(G) and partnerships under 19 U.S.C. Section 1677(33)(C).
Specifically, Kelly defined the term "partners," after conducting a Loper Bright analysis of the statute, as "a for profit cooperative endeavor in which parties share in risk and reward" (see 2411180024). The judge also noted that a party is an "affiliated person" if they are one who "controls any other person and such other person." On remand, Commerce stuck with its decision to find that Louis Dreyfus and Supplier A aren't affiliates or partners (see 2502180037).
Kelly sustained the decision on a second go-round.
Regarding the affiliation analysis, Kelly noted that Commerce will consider, among other things, the presence of "close supplier relationships," which the legislative history to 19 U.S.C. Section 1677(33)(G) defines as one where "the supplier or buyer becomes reliant upon the other." The judge added that Commerce may find control sufficient to establish affiliation if the record shows the relationship has the potential to impact decisions concerning the product, pricing or costs of the merchandise.
The judge said Commerce reasonably said Louis Dreyfus and Supplier A aren't affiliated, since the agency "reasonably weighed Supplier A’s rights and obligations under its agreement with LDC, in conjunction with the existence of other lemon juice producers and suppliers in the Brazilian market." Commerce found Supplier A could contract with any other lemon juice producer "under certain circumstances" and Supplier A "could exercise other options available to it under the circumstances."
Commerce didn't end its analysis with its finding that other lemon suppliers exist in the market, as Ventura suggests, but instead, it used record evidence concerning the "existence of the other suppliers as one factor to assist in developing Commerce's conclusion that Supplier A is not reliant on" Louis Dreyfus, the decision said.
The agency also looked at the contract between Supplier A and Louis Dreyfus to see if the supplier is reliant on the respondent, finding that "contract exclusivity does not equate with reliance in this case because of confidential contractual provisions that mitigate any potential reliance." Commerce additionally said there's no evidence showing reliance "during the negotiation of pricing terms." Kelly said that the fact that Ventura offers a "different reasonable conclusion" based on the evidence "is of no moment."
Regarding the partnership analysis, Commerce said "the existence of a contractual relationship alone is insufficient to establish a partnership." Kelly agreed, finding that while some contracts "may create a partnership depending upon the terms of the agreement, here the terms of the contract fail to establish a cooperative business endeavor in which the parties share in risk and reward."
In addition, no evidence shows that the parties "have held themselves out externally to be in a cooperative endeavor, that either party has the ability to act on behalf of the other or the alleged partnership, or that either party has obligations beyond the terms of the contract," the court said. If Supplier A and Louis Dreyfus had "overlap" regarding staffing or reputation, it would be "logical" to expect evidence "indicating such activities," Kelly said.
(Ventura Coastal v. United States, Slip Op. 25-79, CIT # 23-00009, dated 06/24/25; Judge: Claire Kelly; Attorneys: Daniel Pickard of Buchanan Ingersoll for plaintiff Ventura Coastal; Anne Delmare for defendant U.S. government; Gregory Spak of White & Case for defendant-intervenor Louis Dreyfus Company Sucos)