                           Slip Op. 06-9

           UNITED STATES COURT OF INTERNATIONAL TRADE


HYUNDAI ELECTRONICS INDUSTRIES
CO., LTD. and HYUNDAI
ELECTRONICS AMERICA, INC.,

                 Plaintiffs,       Before: Richard W. Goldberg,
                                           Senior Judge
          v.
                                   Cons. Court No. 00-01-00027
UNITED STATES,

                 Defendant,

          and

MICRON TECHNOLOGY, INC.,

                 Defendant-
                 Intervenor.


                               OPINION

[Motion for reconsideration and partial modification granted in
part. Previous remands of Commerce antidumping duty
determination modified and case remanded with instructions.]

                                           Dated: January 18, 2006

Willkie, Farr & Gallagher LLP (Daniel L. Porter and James P.
Durling) for Plaintiffs Hyundai Electronics Industries Co., Ltd.
and Hyundai Electronics America, Inc.

Peter D. Keisler, Assistant Attorney General, David M. Cohen,
Director, Jeanne E. Davidson, Deputy Director, Commercial
Litigation Branch, Civil Division, United States Department of
Justice (Kenneth S. Kessler); Patrick V. Gallagher, Jr., Of
Counsel, Office of the Chief Counsel for Import Administration,
United States Department of Commerce, for Defendant United
States.

King & Spalding LLP (Gilbert B. Kaplan, Cris R. Revaz, and Daniel
L. Schneiderman) for Defendant-Intervenor Micron Technology, Inc.
Cons. Court No. 00-01-00027                                   Page 2

GOLDBERG, Senior Judge: This case is before the Court following

second remand to the United States Department of Commerce

(“Commerce”) of the results of a fifth administrative review of

an antidumping duty order and upon motion for reconsideration of

the Court’s previous remand decisions.    The Court has

jurisdiction pursuant to 28 U.S.C. § 1581(c).

                          I. BACKGROUND

     In Hyundai Electronics Industries Co. v. United States, 29

CIT __, Slip Op. 05-105 (Aug. 25, 2005) (“Hyundai II”),

familiarity with which is presumed, the Court sustained in part

and remanded in part Commerce’s first redetermination in the

fifth administrative review regarding Dynamic Random Access

Memory Semiconductors of one megabit or above from the Republic

of Korea (“Korea”) produced by Hyundai Electronics Industries

Co., Ltd. and Hyundai Electronics America, Inc. (collectively

“Hyundai”) and LG Semicon Co., Ltd. (“LG Semicon”).1      See Final

Results of Redetermination Pursuant to Court Remand (Aug. 31,

2004), available at http://ia.ita.doc.gov/remands/04-37.pdf (the

“First Remand Results”); Dynamic Random Access Memory

Semiconductors of One Megabit or Above From the Republic of

Korea, 64 Fed. Reg. 69694 (Dec. 14, 1999) (final results of


     1
       After the fifth administrative review was completed,
respondent Hyundai acquired LG Semicon. In this opinion,
Hyundai-as-successor-in-interest-to-LG Semicon is referred to as
LG Semicon.
Cons. Court No. 00-01-00027                                    Page 3

administrative review) (the “Final Results”).

     In Hyundai II, the Court reviewed several aspects of the

First Remand Results, including, in relevant part2: (1)

Commerce’s decision to use Plaintiffs’ amortized research and

development (“R&D”) expenses in the calculation of the cost of

producing the subject merchandise; and (2) Commerce’s provision

of additional evidence to support its rejection of Plaintiffs’

deferral of R&D costs related to long-term projects.     See Hyundai

II, 29 CIT at ___, Slip Op. at 17-23.    The Court sustained

Commerce’s redetermination with respect to issue (1), id. at ___,

Slip Op. at 20; but, citing evidentiary deficiencies, rejected

Commerce’s position as to issue (2).     Id. at ___, Slip Op. at 23.

The Court remanded this issue to Commerce with instructions to

accept Plaintiffs’ deferral methodology in calculating R&D

expenses for long-term projects.   Id.   Commerce duly complied

with the Court’s order.   After receiving no comments from

Plaintiffs or Defendant-Intervenor Micron Technology, Inc.



     2
       These are two of the aspects of the Final Results which
were first remanded to Commerce in Hyundai Electronics Industries
Co. v. United States, 28 CIT ___, 342 F. Supp. 2d 1141 (2004)
(“Hyundai I”), familiarity with which is presumed. In addition,
the Court in Hyundai II also reviewed two other previously-
remanded aspects of the Final Results: Commerce’s recalculation
of LG Semicon’s dumping margin using only partial adverse facts
available and Commerce’s provision of additional evidence to
support its R&D cost cross-fertilization theory. Hyundai II, 29
CIT at ___, Slip Op. at 6-17. Hyundai II also addressed certain
newly raised challenges to Commerce’s calculation of Hyundai’s
entered value. Id. at ___, Slip Op. at 23-28.
Cons. Court No. 00-01-00027                                    Page 4

(“Micron”) on its draft calculations, Commerce released the Final

Results of Redetermination Pursuant to Court Remand (Sept. 23,

2005) (the “Second Remand Results”).     Although expressing

disagreement with the findings in Hyundai II, Commerce

recalculated Plaintiffs’ R&D expenses pursuant to the Court’s

instructions.   Second Remand Results at 1.

     Eighteen days later, Micron submitted a Memorandum

Addressing the Final Results of Redetermination Pursuant to Court

Remand (“Def.-Intvr.’s Br.”).    While acknowledging the Second

Remand Results’ conformity with Hyundai II, Micron argued that an

intervening opinion by the United States Court of Appeals for the

Federal Circuit (the “Federal Circuit”) had indirectly overruled

the conclusions of law underpinning Hyundai II.     Def.-Intvr.’s

Br. at 1 (citing Hynix Semiconductor Inc. v. United States, 424

F.3d 1363 (Fed. Cir. 2005) (“Hynix IV”)3).    Plaintiffs submitted

Rebuttal Comments in Response to Defendant-Intervenor’s

Memorandum (“Pls.’ Br.”), arguing that the Federal Circuit’s

decision in Hynix IV was based on conclusions of fact particular

to the investigation at issue in that case rather than general

conclusions of law.    Pls.’ Br. at 2.   Commerce filed a response

brief (“Commerce’s Br.”) agreeing with Micron’s arguments.

Commerce’s Br. at 2.    Commerce additionally filed a motion for


     3
       The Federal Circuit issued its mandate in Hynix IV on
November 28, 2005.
Cons. Court No. 00-01-00027                                  Page 5

reconsideration and partial modification of the Court’s previous

remand decisions (“Commerce’s Motion”), requesting that the Court

direct Commerce to reinstate certain of its original findings and

recalculate the antidumping duty margins accordingly.    Commerce’s

Motion at 2.

     This case is now properly before the Court following second

remand and upon Commerce’s Motion, consolidated for purposes of

this opinion.   The Court must uphold Commerce’s determination if

it is supported by substantial evidence and otherwise in

accordance with law.   19 U.S.C. § 1516a(b)(1)(B)(i) (2000).    The

Court may exercise its discretion to revise its previous remand

decisions, see USCIT R. 59(a),4 although the Court will generally

only do so on motion for reconsideration where the Court’s

previous decisions are “manifestly erroneous.”     Former Employees

of Quality Fabricating, Inc. v. United States, 28 CIT ___, ___,

353 F. Supp. 2d 1284, 1288 (2004) (quotation marks omitted); cf.

Doe v. New York City Dep’t of Social Services, 709 F.2d 782, 789

(2d Cir. 1983) (“The major grounds justifying reconsideration are

an intervening change of controlling law, the availability of new

evidence, or the need to correct a clear error or prevent

manifest injustice.”) (quotation marks omitted).    After due


     4
       “Courts have liberally construed Rule 59(a) to include any
matter which is appealable, or for which the court has issued a
decision foreclosing further arguments pertaining thereto.”
Witex, U.S.A., Inc. v. United States, 29 CIT ___, ___ n.2, 360 F.
Supp. 2d 1327, 1328 n.2 (2005) (citations omitted).
Cons. Court No. 00-01-00027                                  Page 6

consideration of the parties’ submissions, the Federal Circuit’s

decision in Hynix IV, the administrative record, and all other

papers had herein, and for the reasons that follow, the Court

grants in part Commerce’s Motion, modifies its previous

decisions, and remands this case with instructions.

                         II. DISCUSSION

A.   The Court Must Apply Relevant Federal Circuit Decisions
     Issued During the Course of Remand Proceedings

     At the outset, it is necessary to recite that this Court is

bound by the decisions of its appellate courts.    Before entering

final judgment, the U.S. Court of International Trade must

consider the legal effect of Federal Circuit or U.S. Supreme

Court decisions issued during the course of the often lengthy

remand proceedings which characterize this Court’s antidumping

and countervailing duty cases.   When, for example, an intervening

decision by the Federal Circuit clarifies a legal principle of

relevance to a case at bar, the Court must apply it.    See, e.g.,

E.I. DuPont de Nemours & Co. v. United States, 17 CIT 1266, 1288,

841 F. Supp. 1237, 1254 (1993) (remanding case to allow Commerce

to reexamine its methodology in light of intervening Federal

Circuit decision); Fed.-Mogul Corp. v. United States, 18 CIT 160,

163 (1994) (remanding case to allow Commerce to consider issues

raised by intervening Federal Circuit decision).   A regrettable

byproduct of this due deference may be to prolong already lengthy

litigation with another agency remand; nonetheless, the Court may
Cons. Court No. 00-01-00027                                    Page 7

not shirk its ongoing responsibility to review the legality of

agency determinations.

     It is, however, equally true that there are certain natural

limits to the reach of Federal Circuit decisions.     As with any

judicial precedent, they are only as relevant to subsequent cases

as their unique fact patterns will allow.     A Federal Circuit

decision which turns on case-specific findings of fact may be of

less precedential importance to a case at bar than a decision

based on generally applicable conclusions of law.     The Court is

charged with discerning the controlling legal principles from

Federal Circuit decisions.     See Aves. in Leather, Inc. v. United

States, 423 F.3d 1326, 1331 (Fed. Cir. 2005) (noting “doctrine of

stare decisis applies to only legal issues and not issues of

fact”).

     In this light, it is clear that Micron has rightly drawn the

Court’s attention to Hynix IV, a recent Federal Circuit decision

potentially relevant to the disposition of certain issues in this

case.     By the same measure, Plaintiffs have appropriately

cautioned the Court to consider the possibly limited application

of a case involving a different factual record.     With the inquiry

so framed, the Court turns to its analysis of Hynix IV.

B.   Hynix IV Clarified Legal Principles at Issue in this Case

     1.      Overview of Hynix IV

     The factual and procedural background of Hynix IV is

familiar to the parties and the Court.     Hynix IV involved an
Cons. Court No. 00-01-00027                                  Page 8

appeal of judgments by the U.S. Court of International Trade

(Carman, J.)5 which reviewed several aspects of the seventh

administrative review of the same antidumping duty order at issue

in the case at bar.   Although the cases cover two different

periods of review and two different administrative records, the

parties in these two cases are identical6 and they raised many of

the same issues in both proceedings.

     Of particular relevance is the issue of the appropriate

treatment by Commerce of certain R&D cost accounting practices

used by Hynix during the period of review covered by Hynix IV.

During the seventh administrative review, Hynix accounted for R&D

costs by amortizing them, which represented a change from the

cost accounting practice of expensing used in previous periods of

review.   Hynix I, 27 CIT at ___, 248 F. Supp. 2d at 1305.     At the

same time, Hynix also chose to defer recognition of the R&D costs

associated with certain long-term projects until these projects

were commercialized (i.e., revenue-producing).   Id.   Although

acknowledging that these two cost accounting practices were


     5
      See Hynix Semiconductor, Inc. v. United States, 27 CIT
___, 248 F. Supp. 2d 1297 (2003) (“Hynix I”); Hynix
Semiconductor, Inc. v. United States, 27 CIT ___, 295 F. Supp. 2d
1365 (2003) (“Hynix II”); Hynix Semiconductor, Inc. v. United
States, 28 CIT ___, 318 F. Supp. 2d 1314 (2004) (“Hynix III”).
The Hynix case history also includes two opinions concerning
evidentiary issues which were not reviewed in Hynix IV.
     6
       The difference in the named plaintiffs in these two cases
is attributable to Hyundai’s corporate name change, which took
place subsequent to the fifth administrative review at issue
here.
Cons. Court No. 00-01-00027                                  Page 9

recognized under Korea’s generally accepted accounting principles

(“GAAP”), Commerce rejected the amortization and deferral of

Hynix’s R&D expenses as distortive of the antidumping

calculations required for its final determination.     Id. at ___,

248 F. Supp. 2d at 1307-09.    Concerning amortization, Commerce

found that the switch in accounting methods resulted in an

undercounting of production costs in the current period of

review, because Hynix’s recent adoption of amortization

necessarily resulted in recognition of only a fraction of Hynix’s

costs.   Id. at ___, 248 F. Supp. 2d at 1308.   Likewise, Commerce

found that deferral also resulted in an undercounting of

production costs, because the future commercialization dates of

Hynix’s long-term projects were too speculative and could result

in indefinite deferral of certain R&D costs.     Id. at ___, 248 F.

Supp. 2d at 1309.

     After two remands, the court required Commerce to accept the

amortization of R&D costs as an acceptable accounting method, but

upheld Commerce’s rejection of deferred R&D costs related to

long-term projects.     With regard to the amortization issue, the

court concluded that Commerce had failed to establish “that a

change from one permissible accounting method to another

necessarily creates a distortion in the cost of production

calculation[.]”     Hynix II, 27 CIT at ___, 295 F. Supp. 2d at

1369.    In so concluding, the court rejected Commerce’s use of

hypothetical factual scenarios to demonstrate the per se
Cons. Court No. 00-01-00027                                  Page 10

distortive effect of switching cost accounting practices from

expensing to amortization.    Id.   Instead, the court viewed the

relevant section of the antidumping statute, 19 U.S.C. §

1677b(f)(1)(A),7 as requiring Commerce to produce substantial

evidence that the change in cost accounting methods actually

resulted in a distortion of antidumping calculations “in this

period of review for these Plaintiffs under these facts.”     Id.

Unable to produce such specific evidence, Commerce revised its

calculations using amortized R&D costs, which the court affirmed.

Hynix III, 28 CIT at ___, 318 F. Supp. 2d at 1319.

     With regard to the deferral issue, the court concluded that

Commerce was ultimately able to satisfy 19 U.S.C. §

1677b(f)(1)(A) by providing “a reasoned explanation for rejecting

Plaintiffs’ indefinite deferral of certain R&D expenses.”     Hynix

II, 27 CIT at ___, 295 F. Supp. 2d at 1371.    The court concurred

with Commerce that Hynix had failed to provide evidence on the

administrative record of the expected timing of revenues from the

deferred R&D costs, making likely the prospect of indefinite




     7
      This section provides, in pertinent part, that:
     Costs shall normally be calculated based on the records
     of the exporter or producer of the merchandise, if such
     records are kept in accordance with the generally
     accepted accounting principles of the exporting country
     (or the producing country, where appropriate) and
     reasonably reflect the costs associated with the
     production and sale of the merchandise.
19 U.S.C. § 1677b(f)(1)(A) (2000).
Cons. Court No. 00-01-00027                                 Page 11

deferral and thus cost undercounting during the period of review.

Id. at ___, 295 F. Supp. 2d at 1371.

     On appeal, the Federal Circuit reversed the court on the

issue of amortization but affirmed as to the issue of deferral.

Hynix IV, 424 F.3d at 1370, 1372.   First speaking generally of

the appropriate application of 19 U.S.C. § 1677b(f)(1)(A), the

Hynix IV court stated:

     The statute and our prior pronouncements are clear.
     The company has the responsibility of showing that its
     records are kept in accordance with its home country’s
     GAAP. If the company meets this burden, Commerce may
     counter with substantial evidence that the records do
     not comply with the home country’s GAAP. If the
     records withstand this scrutiny, Commerce may show, by
     substantial evidence, that the costs do not reasonably
     reflect the costs of production and should not,
     therefore, be used.

Id. at 1369.

     Turning specifically to the issue of amortization, the

Federal Circuit concluded that, “[w]hile Hynix was able to show

that its records compl[ied] with Korean GAAP, Commerce showed by

substantial evidence that Hynix’s reported R&D expenses fail[ed]

to reflect the costs of production.”   Id. at 1370.   The Hynix IV

court found that, during the period immediately following a

company’s switch in cost accounting methods from expensing to

amortizing, an amount representing only a fraction of the

company’s current costs is necessarily recognized by the
Cons. Court No. 00-01-00027                                  Page 12

company.8   Id.   The Federal Circuit concluded that “[i]t is

facially apparent that a fraction of costs does not accurately

capture full costs[,]” thereby justifying a judgment by Commerce

that a company’s reported costs do not reasonably reflect the

costs of production under 19 U.S.C. § 1677b(f)(1)(A).     Id.   The

Hynix IV court further indicated that, even in situations where

the “inadequacy of [the cost accounting] method [is] not

transparent,” it would be appropriate to defer to Commerce’s

expert judgment in this area.    Id.   The Hynix IV court therefore

remanded this issue with instructions for Commerce to revise its

calculations by expensing R&D costs as in Commerce’s original

determination.    Id.

     Next considering the issue of deferral, the Federal Circuit

found that Commerce produced substantial evidence that Hynix’s


     8
      For example, in the first year following a switch to a
five-year cost amortization schedule, a company would recognize
only one-fifth of its current expenses, instead of recognizing
one-fifth of its current expenses plus one-fifth of the previous
four years’ expenses as would occur under an established
amortization schedule. In this example, undercounting of current
costs would continue until the fifth year following the switch in
cost accounting methods. See Hynix IV, 424 F.3d 1370. Of
course, this analysis assumes that no radical decreases in the
company’s year-over-year costs occur during the period
immediately following the switch in cost accounting methods - a
factor which Commerce is apparently not required to consider
under Hynix IV’s per se rule that a switch in this cost
accounting practice is necessarily distortive of antidumping
calculations in subsequent periods of review. But see Hynix IV,
424 F.3d at 1374 (Dyk, J., dissenting) (rejecting per se rule and
noting that “Commerce is obligated to base its decision on actual
data establishing distortion, not on hypothetical numbers picked
from thin air”).
Cons. Court No. 00-01-00027                                   Page 13

cost accounting records did “not comport with the requirements of

its home country’s GAAP[.]”    Id. at 1372.   The Hynix IV court

accepted Commerce’s conclusion that an investigated company has

the burden of providing sufficient evidence that “its R&D costs

[would] result in future revenues” in order to establish

compliance with home country GAAP and that Hynix failed to do so

on the record of the seventh administrative review.     Id.   The

Federal Circuit therefore affirmed Commerce’s disallowance of

indefinite deferral of certain R&D costs.     Id.

2.   Applicability of Hynix IV to this Case

     The applicability of Hynix IV to the case at bar is

manifest.    Hynix IV plainly clarifies legal principles of direct

relevance to this case - i.e., Commerce’s permissible treatment

of certain cost accounting practices in antidumping proceedings.

These are the very same cost accounting practices at issue in

this case.   Indeed, the Federal Circuit expressly stated that its

analysis of the factual scenarios presented in Hynix IV was

intended to “help to clarify the application of [19 U.S.C. §

1677b(f)] further.”    Hynix IV, 424 F.3d at 1369.   It cannot be

seriously argued that the Federal Circuit did not mean for this

clarification of the law to be applied on a prospective basis by

courts facing similar (much less the same) interpretative issues

under the same section of the antidumping statute.     Plaintiffs’

arguments to this effect are therefore without merit.
Cons. Court No. 00-01-00027                                    Page 14

     Moreover, the factual parallels between Hynix IV and this

case cannot be ignored.    The cases involve the same cost

accounting practices followed by the same company and subject to

the same treatment by Commerce during the course of antidumping

review.     The only difference between the two cases is the timing

of Commerce’s review of the underlying antidumping duty order.

To be sure, this difference is an important one, as material

variations in the records for each administrative review (and

arguments related thereto) could lead to divergent dispositions.

Absent such variations, however, the Court cannot reach an

outcome other than that legally compelled by Hynix IV.       See Elkem

Metals Co. v. United States, 28 CIT ___, ___, Slip Op. 04-36 at 6

(2004) (finding an issue resolved as a matter of law by Federal

Circuit in earlier review).

C.   The Court Must Revise Its Previous Decisions and Remand to
     Bring the Instant Case into Conformity with Hynix IV on the
     Issue of R&D Cost Amortization Only

     The sole remaining question before the Court is therefore

the appropriate next step in this long-litigated case in light of

Hynix IV.    In Commerce and Micron’s view, Hynix IV is virtually

identical to this case and thus requires the Court to revise its

prior decisions and reinstate Commerce’s original findings with

respect to both amortization and deferral of Plaintiffs’ R&D

costs.    Plaintiffs maintain that Hynix IV did not announce
Cons. Court No. 00-01-00027                                  Page 15

conclusions of law which require a change in the Court’s prior

fact-based holdings with regard to either issue.

     The Court finds that Hynix IV announced legal conclusions

which require modification of the Court’s prior decisions only

with respect to the first issue - the amortization of R&D costs.

Because the Court discerns an important factual difference

between this case and Hynix IV on the issue of R&D cost deferral,

the Court finds that application of the legal conclusions of

Hynix IV does not upset (and in fact reinforces) the Court’s

prior decisions with regard to this second issue.

     1.   Amortization of Plaintiffs’ R&D Costs

     With regard to the amortization issue, it is uncontroverted

that Plaintiffs switched their cost accounting method from

expensing to amortization during the fifth administrative review.

Because Hynix IV concluded that such a recent switch in these

cost accounting practices is facially distortive of antidumping

calculations, Commerce was entitled to reject Plaintiffs’

amortized R&D costs without any additional factual

substantiation.   Commerce’s original findings to this effect

therefore must be reinstated; the Court’s previous decisions to

the contrary must be, and accordingly are, modified.

     2.   Deferral of R&D Costs

     With regard to the deferral issue, a similarly

straightforward application of Hynix IV is foreclosed by certain
Cons. Court No. 00-01-00027                                  Page 16

factual findings expressly made by Commerce in this case.    In

Hyundai I, the Court noted that “Commerce does not disagree that

the [deferral] accounting methodology is in accordance with

Korean GAAP[.]”    Hyundai I, 28 CIT at ___, 342 F. Supp. 2d at

1158.     In other words, the Court found that Commerce had conceded

that Plaintiffs’ R&D cost deferral was in accordance with Korean

GAAP.9    This is a critical factual distinction between this case

and Hynix IV overlooked by Commerce and Micron.    In Hynix IV,

Commerce was able to demonstrate by substantial evidence to the

Federal Circuit that “Hynix’s records do not comport with the

requirements of its home country’s GAAP[.]”    Hynix IV, 424 F.3d

at 1372.10    Unlike Hynix IV, Commerce did not attempt to prove

here that Plaintiffs had failed to meet the requirements of their

home country GAAP; rather, Commerce expressly found the opposite

to be true.    As such, the Federal Circuit’s specific disposition

of the R&D cost deferral issue in Hynix IV on the basis of

noncompliance with home country GAAP - an argument neither raised



     9
       See also Final Results, 64 Fed. Reg. at 69699 (“We agree
with Hyundai and LG [Semicon] that their method of amortizing and
deferring R&D costs is permissible with Korean GAAP . . . .”).
The Court has carefully reviewed the First Remand Results and the
Second Remand Results and has found no indication of Commerce’s
intention to eschew its original factual finding on this issue.
     10
       Commerce was entitled and, according to the Federal
Circuit, chose to make different arguments and factual
concessions in this case than in Hynix IV. But see Hynix I, 27
CIT at ___, 248 F. Supp. 2d at 1308 (noting that Commerce
“concedes that Plaintiffs’ method of amortizing and deferring R&D
costs is permissible under Korean GAAP”).
Cons. Court No. 00-01-00027                                    Page 17

nor proven here by Commerce - is not applicable to this case

under well established principles of administrative law.    It is

axiomatic that the Court’s review is defined by Commerce’s

determination below.     See SEC v. Chenery Corp., 332 U.S. 194, 196

(1947) (“[A] reviewing court, in dealing with a determination or

judgment which an administrative agency alone is authorized to

make, must judge the propriety of such action solely by the

grounds invoked by the agency.”).    “Chenery stands for the

proposition that a court may not make its own factual findings to

support an agency’s determination.”    Defenders of Wildlife v.

Hogarth, 330 F.3d 1358, 1368 (Fed. Cir. 2003).    Because the Court

would essentially have to rewrite Commerce’s factual findings in

order to apply the same legal principles used by the Federal

Circuit to resolve the R&D cost deferral issue in Hynix IV, the

Court cannot agree that Hynix IV controls this case in the way

Commerce and Micron contend.    For this reason, the Court declines

to modify its previous decisions on this issue.

     Moreover, in the Court’s view, Hynix IV’s general guidance

on the application of 19 U.S.C. § 1677b(f) actually supports the

analytical framework employed in the Court’s previous decisions

concerning this issue.     Commerce’s arguments in Hyundai I and

Hyundai II focused on the agency’s contention that Plaintiffs had

failed to offer “reasonable evidence” that the deferred R&D costs

were more appropriately recognized in future periods rather than
Cons. Court No. 00-01-00027                                   Page 18

the current period of review.     First Remand Results at 6.11     The

Court rejected Commerce’s arguments on the basis of its holding

that Commerce, not Plaintiffs, bore the burden of proof on this

issue - i.e., the burden of providing substantial evidence that

R&D costs deferred in accordance with home country GAAP in fact

benefitted (and thus should be reflected in the cost accounting

for) the current period of review.     Hyundai II, 29 CIT at ___,

Slip Op. at 22-23.     Hynix IV confirms this holding.   In Hynix IV,

the Federal Circuit made clear that, where an investigated

company’s cost accounting records withstand scrutiny of their

compliance with home country GAAP, it is the obligation of

Commerce to “show, by substantial evidence, that the costs do not

reasonably reflect the costs of production and should not,

therefore, be used.”     Hynix IV, 424 F.3d at 1369.   This case

presents exactly that scenario.     Because the Court employed the

burden of proof dictated by Hynix IV, the Court finds no legal

error in its analytical approach to this issue.

     Nevertheless, the Court acknowledges that Commerce’s

argument on the issue of R&D cost deferral is identical in form

to Commerce’s argument, accepted by the Federal Circuit in Hynix

     11
       This argument is based on the second half of the two-part
statutory requirement for use of exporter/producer cost
accounting records in antidumping calculations. See 19 U.S.C. §
1677b(f)(1)(A) (2000) (for use in antidumping calculations,
requiring investigated company’s cost records to (1) be kept in
accordance with home country GAAP and (2)“reasonably reflect the
costs associated with the production and sale of the
merchandise”).
Cons. Court No. 00-01-00027                                 Page 19

IV, concerning the distortive effect of switching cost accounting

methods from expensing to amortizing.   The Hynix IV court allowed

Commerce to satisfy its evidentiary burden by employing a per se

rule concerning the distortive effect of such a switch.    In this

case, Commerce seeks a similar rule for situations involving

switches from expensing to deferral.    However, the Court does not

understand Hynix IV to have created the broad rule that all

switches in cost accounting methods are per se distortive of

antidumping calculations.   Such a rule seems particularly inapt

here: it is not “facially apparent” that a switch to deferral

necessarily results in cost undercounting in the current period

of review, Hynix IV, 424 F.3d at 1370, because Plaintiffs’ home

country GAAP allows deferral only if “certain conditions are

satisfied, namely that there be a reasonable expectation of

future benefit.”   Id. at 1372.

     Finally, while the Court is mindful that “Commerce’s

determinations are entitled to deference” in the complex area of

antidumping calculations, id. at 1370, such deference is

appropriate only “so long as there is substantial evidence to be

found in the record as a whole.”   NLRB v. Brown, 380 U.S. 278,

292 (1965); see also Anderson v. Dep’t of Transp., FAA, 827 F.2d

1564, 1577 (Fed. Cir. 1987) (Baldwin, J., dissenting) (“Although

deference is to be accorded to an administrative determination,

we, the reviewing court, retain a responsibility to scrutinize

the entire record and to reverse or remand a decision which is
Cons. Court No. 00-01-00027                                     Page 20
not supported by substantial evidence.”).     Here, the Court has

concluded that Commerce did not meet its evidentiary burden;

therefore, deference to Commerce’s determination on the issue of

R&D cost deferral is not warranted.

     Accordingly, absent a showing of previous manifest error,

see Former Employees of Quality Fabricating, 28 CIT at ___, 353

F. Supp. 2d at 1288, the Court declines to revisit its

conclusions on the issue of R&D cost deferral.

                            III. CONCLUSION

     The Court concludes that it is a sound use of its discretion

under USCIT Rule 59(a) to revise its previous decisions in order

to bring this case into conformity with Hynix IV.     This case is

therefore remanded for Commerce to reinstate its original

findings regarding R&D cost amortization and recalculate the

antidumping duty margins.     A separate order will be issued

accordingly.



                                      /s/ Richard W. Goldberg
                                      Richard W. Goldberg
                                      Senior Judge

Dated:    January 18, 2006
          New York, New York
