Trade Court Remands Parts of Level of Trade Analysis in AD Case on Shopping Bags

Ditar argued it made its home market sales at two levels of trade: to unaffiliated distributors and end-user customers. In the investigation, Commerce found Ditar failed to show "either a difference in the level of trade" or "any significant effect on price comparability stemming from the asserted disparity."

While Judge M. Miller Baker upheld most of Commerce's determinations in its analysis, the judge said "remand is necessary" regarding the agency's finding that Ditar "failed to substantiate its claims that its warehousing and repacking expenses for home-market end users were more intensive than its expenses for distributors." Baker noted that the U.S. didn't contest that Commerce "simply misunderstood its own data reporting requirements for repacking and warehousing expenses," requiring the agency to revisit Ditar's claims that "intensity differences in these two categories show a difference in levels of trade."

Baker also remanded an element of Commerce's consideration of the pricing differences between sales to the distributors and to end users. The judge said Commerce failed to "articulate a satisfactory explanation" for why the differential in pricing between end-user and distributor pricing, which was greater than 5%, wasn't significant.

In the investigation, Commerce said Ditar didn't show its Colombian-market sales to distributors and end users were at "different marketing stages (or their equivalent)." The agency's regulations say a level of trade is a "marketing stage" when the merchandise changes hands twice or "the seller takes on a role comparable to that of a reseller if the merchandise had changed hands twice."

In its finding, Commerce relied in part on the "undisputed fact" that none of these sales "change[d] hands twice." Ditar argued that Commerce went against its own regulation, since the agency's Federal Register notice uses the regulation's phrase "or the equivalent," meaning that merchandise "need not change hands twice."

The court said Ditar "conflates the regulation's terms 'different marketing stages' and 'the equivalent' rather than considering them separately." Contrary to the respondent's claim, "the foundation for the agency’s statement is clear and correct: It comes from the Federal Register notice, which declares precisely what the agency said here," which is that the Colombian sales didn't change hands twice, the court said.

However, Baker said this isn't the end of the issue, since the regulation does provide an alternative: "the equivalent" of different marketing stages. Under this analysis, Commerce looks to whether the company took on the role of a reseller by engaging in an "additional layer of selling activities." While Ditar discusses its selling activities at length and expresses "incredulity" at Commerce's findings, Baker said the agency "gave a reasonable explanation why it weighed the evidence differently." The fact Ditar devoted the "vast majority of its staff and resources to end users rather than distributors" merely showed "an alignment of its resources with the requirements of making and servicing the vast majority of its sales," the court said.

While two different conclusions could be drawn from the record, "an agency’s decision to favor one conclusion over the other is the epitome of a decision that must be sustained upon review for substantial evidence," the court said.

Ditar also argued that the quantitative analysis it sent to Commerce shows that it "functioned like a distributor" in making sales to end users. Baker held that the respondent failed to "identify which activities a distributor (or 'reseller') would normally perform," noting that, instead, the company compared its distributor and end-user sales through various financial metrics, including number of staff, compensation and sales volume.

The judge said Commerce reasonably said that "when one type of customer represents a significantly larger part of the business, one would expect the company to devote more expense and effort to those customers, and it observed that what would be remarkable would be a business doing the opposite."

Commerce went on to hold that even if there were different levels of trade, prices didn't differ significantly between these levels. Considering a quantitative analysis submitted by Ditar that showed "considerably higher" prices to end users than distributors, the agency said the respondent "omitted two control numbers sold to both classes of customers but also included outlier sales that disproportionately affected the analysis." Commerce excluded the outlier sales and found Ditar's analysis to be "inadequate," instead using a methodology based on product codes that didn't show significantly different prices.

While Ditar argued that Commerce's approach bucked its established practice of using control numbers, Baker said the agency has wide discretion to alter its approach here and that Commerce reasonably found the control number analysis to be "inadequate," since "Ditar's reporting was incomplete." The agency adequately showed that switching to product codes was "more realistic," the court said.

(Ditar v. United States, Slip Op. 25-128, CIT # 24-00130, dated 10/01/25; Judge: M. Miller Baker; Attorneys: Robert Gosselink of Trade Pacific for plaintiff Ditar; Yaakov Roth for defendant U.S. government; J. Michael Taylor of King & Spalding for defendant-intervenor Coalition for Fair Trade in Shopping Bags)