                                      Slip Op. 15-57

               UNITED STATES COURT OF INTERNATIONAL TRADE


 SAMSUNG ELECTRONICS CO., LTD.,
 AND SAMSUNG ELECTRONICS
 AMERICA, INC.,
                                                       PUBLIC
                      Plaintiffs,
                                                       Before: Leo M. Gordon, Judge
               v.
                                                       Consol. Court No. 13-00098
 UNITED STATES,

                      Defendant.


                                        OPINION

[Motion for judgment on agency record denied; final determination of sales at less than
fair value sustained in part.]

                                                                    Dated: June 12, 2015

       Warren E. Connelly, J. David Park, Jarrod M. Goldfeder, and Phyllis L. Derrick,
Akin Gump Strauss Hauer & Feld LLP of Washington D.C. for Plaintiffs Samsung
Electronics Co., Ltd and Samsung Electronics America, Inc.

      Daniel L. Porter, James P. Durling, Christopher A. Dunn, Ross E. Bidlingmaier,
and Claudia D. Hartleben, Curtis, Mallet-Prevost, Colt & Mosle of Washington, D.C. for
Consolidated Plaintiffs LG Electronics, Inc. and LG Electronics USA, Inc.

        Jack A. Levy, Myles S. Getlan, James R. Cannon, Jr. John D. Greenwald, Matthew
Frumin, and Thomas M. Beline, Cassidy Levy Kent (USA) LLP of Washington, D.C. for
Plaintiff and Defendant-Intervenor Whirlpool Corporation.

       Douglas G. Edelschick, Trial Attorney, Commercial Litigation Branch, Civil
Division, U.S. Department of Justice of Washington, DC for Defendant United States.
With him on the brief were Stuart F. Delery, Assistant Attorney General, Jeanne E.
Davidson, Director, Franklin E. White, Jr., Assistant Director. Of counsel on the brief was
Joanna V. Theiss, Attorney, Office of the Chief Counsel for Trade Enforcement and
Compliance for the United States Department of Commerce.
Consol. Court No. 13-00098                                                        Page 2


       Gordon, Judge: This consolidated action involves a U.S. Department of Commerce

(“Defendant” or “Commerce”) final determination in the less than fair value investigation

of large residential washers from the Republic of Korea. Large Residential Washers from

the Republic of Korea, 77 Fed. Reg. 75,988 (Dep’t of Commerce Dec. 26, 2012) (final

determ. LTFV investigation) (“Final Results”); see also Issues and Decision Memorandum

for the Antidumping Duty Investigation of Large Residential Washers from the Republic

of   Korea,   A-580-868    (Dep’t   of   Commerce     Dec.    26,   2012),   available   at

http://enforcement.trade.gov/frn/summary/korea-south/2012-31104-1.pdf (last visited this

date) (“Decision Memorandum”). Before the court are the motions for judgment on the

agency record of Plaintiffs Samsung Electronics Co., Ltd. and Samsung Electronics

America, Inc. (collectively, “Samsung”), Consolidated Plaintiffs LG Electronics Inc. and

LG Electronics USA, Inc. (collectively, “LG”), and Consolidated Plaintiff Whirlpool

Corporation (“Whirlpool”). The court has jurisdiction pursuant to Section 516A(a)(2)(B)(i)

of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(i) (2012),1 and 28

U.S.C. § 1581(c) (2012).

       This opinion addresses Whirlpool’s challenge to the Final Results. See Consol. Pl.

Whirlpool’s Mot. for J. on the Agency R. 1-50 (Sept. 27, 2013), ECF No. 46 (“Whirlpool

Br.”); Def.’s Consol. Resp. to Pls.’ Mots. for J. on the Agency R. 51-81 (Feb. 14, 2014),

ECF No. 62 (“Def. Resp.”); Consol. Def.-Intervenors LG Elecs., Inc.’s and LG Elecs. USA,

Inc.’s Resp. to Whirlpool Corp.’s Br. in Supp. of its Mot. for J. on the Agency R. 2-15



1
 Further citations to the Tariff Act of 1930, as amended, are to the relevant provisions of
Title 19 of the U.S. Code, 2012 edition.
Consol. Court No. 13-00098                                                        Page 3


(Mar. 7, 2014), ECF No. 66 (“LG Resp.”); Resp. Br. of Samsung Elecs. Co., Ltd. and

Samsung Elecs. Am., Inc., in Opp’n to Whirlpool Corp.’s Rule 56.2 Mot. for J. upon the

Agency R. 1-21 (Mar. 10, 2014), ECF No. 70 (“Samsung Resp.”); Reply Br. of Whirlpool

Corp. 1-37 (Apr. 21, 2014), ECF No. 83 (“Whirlpool Reply”).

       Specifically, Whirlpool challenges (1) Commerce’s finding that LG was not affiliated

to its suppliers; (2) Commerce’s finding that LG properly reported all its costs; (3)

Commerce’s refusal to apply adverse facts available to LG due to LG’s rebate reporting;

(4) Commerce’s sales-below-cost test; (5) Commerce’s refusal to apply adverse facts

available to Samsung due to an affiliated retailer’s failure to cooperate; (6) Commerce’s

selection of the shipment date rather than the invoice date as the date of sale for certain

Samsung transactions; and (7) Commerce’s treatment of Samsung’s costs related to an

unforeseen event as direct warranty expenses rather than a different kind of direct

expenses. For the reasons set forth below, the court denies Whirlpool’s motion for

judgment on the agency record and sustains the Final Results for each of the issues

challenged by Whirlpool.

                                 I. Standard of Review

       The court sustains Commerce‘s “determinations, findings, or conclusions” unless

they are “unsupported by substantial evidence on the record, or otherwise not in

accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i). More specifically, when reviewing

agency determinations, findings, or conclusions for substantial evidence, the court

assesses whether the agency action is reasonable given the record as a whole. Nippon

Steel Corp. v. United States, 458 F.3d 1345, 1350-51 (Fed. Cir. 2006). Substantial
Consol. Court No. 13-00098                                                      Page 4


evidence has been described as “such relevant evidence as a reasonable mind might

accept as adequate to support a conclusion.” DuPont Teijin Films USA v. United States,

407 F.3d 1211, 1215 (Fed. Cir. 2005) (quoting Consol. Edison Co. v. NLRB, 305 U.S.

197, 229 (1938)). Substantial evidence has also been described as “something less than

the weight of the evidence, and the possibility of drawing two inconsistent conclusions

from the evidence does not prevent an administrative agency's finding from being

supported by substantial evidence.” Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 620

(1966). Fundamentally, though, “substantial evidence” is best understood as a word

formula connoting reasonableness review. 3 Charles H. Koch, Jr., Administrative Law and

Practice § 9.24[1] (3d ed. 2014). Therefore, when addressing a substantial evidence issue

raised by a party, the court analyzes whether the challenged agency action “was

reasonable given the circumstances presented by the whole record.” 8A West's Fed.

Forms, National Courts § 3:6 (5th ed. 2015).

      Separately, the two-step framework provided in Chevron, U.S.A., Inc. v. Natural

Res. Def. Council, Inc., 467 U.S. 837, 842-45 (1984), governs judicial review of

Commerce's interpretation of the antidumping statute. See United States v. Eurodif S.A.,

555 U.S. 305, 316 (2009) (Commerce's “interpretation governs in the absence of

unambiguous statutory language to the contrary or unreasonable resolution of language

that is ambiguous.”). The court first considers whether Congressional intent on the issue

is clear. Dupont, 407 F.3d at 1215. When a “court determines Congress has not directly

addressed the precise question at issue, . . . the question for the court is whether the

agency's answer is based on a permissible construction of the statute.” Chevron, 467
Consol. Court No. 13-00098                                                        Page 5


U.S. at 843. Under Chevron’s second prong, the court must defer to Commerce's

reasonable construction of the statute. See, e.g., Eurodif, 555 U.S. at 316; Union Steel v.

United States, 713 F.3d 1101, 1106–10 (Fed.Cir.2013).

                                     II. Discussion

       Whirlpool makes seven multipart arguments in opposition to the Final Results.

                                     A. Exhaustion

       As a preliminary matter, Defendant and Samsung both respond that Whirlpool

failed to exhaust certain arguments: (1) that Commerce improperly rejected a factual

submission and (2) that Samsung was able to compel its affiliate to act on a prior

occasion. Whirlpool Br. at 32-36. Defendant and Samsung explain that Whirlpool failed

to raise either issue in its administrative case brief. Def. Resp. at 73, 75; Samsung Resp.

at 11-14. Defendant also contends that Whirlpool did not raise any of the exceptions to

the exhaustion requirement in its opening brief “despite a manifest exhaustion problem.”

Def. Resp. at 73.

       Whirlpool replies that it preserved its rejected submission argument. Whirlpool

Reply at 23-26. Whirlpool explains that it twice attempted to submit the relevant

arguments and exhibits, and that Commerce twice issued rejection memoranda outlining

the agency’s reasoning. Id. at 24. Whirlpool cites to Itochu Bldg. Prods. v. United States,

733 F.3d 1140 (Fed. Cir. 2013), a case that, according to Whirlpool, considered and

rejected “almost identical” exhaustion arguments to those Defendant and Samsung raise

here. Whirlpool Reply at 25. Whirlpool also argues that “the issue of whether Samsung

could compel [its affiliated retailer] was squarely before Commerce” because Whirlpool in
Consol. Court No. 13-00098                                                        Page 6


its administrative case brief contended that Samsung did not exert “maximum efforts” to

compel cooperation. Id. at 22 (quoting Whirlpool Case Brief, 32-42 (Dep’t of Commerce

Oct. 31, 2012), CD 3122 (“Whirlpool Admin. Br.”)).

       The court agrees with Defendant and Samsung that exhaustion is appropriate in

these circumstances. When reviewing Commerce's antidumping determinations, the U.S.

Court of International Trade is mandated by statute to require exhaustion of administrative

remedies “where appropriate.” 28 U.S.C. § 2637(d). “This form of non-jurisdictional

exhaustion is generally appropriate in the antidumping context because it allows the

agency to apply its expertise, rectify administrative mistakes, and compile a record

adequate for judicial review-advancing the twin purposes of protecting administrative

agency authority and promoting judicial efficiency.” Carpenter Tech. Corp. v. United

States, 30 CIT 1373, 1374-75, 452 F.Supp.2d 1344, 1346 (2006) (citing Woodford v. Ngo,

548 U.S. 81, 88-90 (2006)). The court “generally takes a ‘strict view’ of the requirement

that parties exhaust their administrative remedies before the Department of Commerce

in trade cases.” Corus Staal BV v. United States, 502 F.3d 1370, 1379 (Fed. Cir. 2007).

       An important corollary to the exhaustion of administrative remedies is Commerce's

own regulatory requirement that parties raise all issues within their administrative case

briefs. 19 C.F.R. § 351.309(c)(2) (2014) (“The case brief must present all arguments that

continue in the submitter's view to be relevant to the final determination.”); Mittal Steel

Point Lisas Ltd. v. United States, 548 F.3d 1375, 1383 (Fed. Cir. 2008) (parties are



2
  “CD” refers to a document contained in the confidential administrative record. “PD”
refers to a document contained in the public administrative record.
Consol. Court No. 13-00098                                                          Page 7


“procedurally required to raise the[ir] issue before Commerce at the time Commerce [is]

addressing the issue”); see also 19 U.S.C. § 1677f(i)(3)(A) (“the administering authority

shall include . . . an explanation of the basis for its determination that addresses relevant

arguments, made by interested parties”). This requirement works in tandem with the

exhaustion requirement and promotes the same twin purposes of protecting

administrative agency authority and promoting judicial efficiency.

       Whirlpool had the opportunity during this proceeding to address the rejected

submission and the affiliate’s past cooperation, but chose not to do so. By declining to

argue or develop either issue in its administrative case brief, Whirlpool signaled that both

issues no longer merited attention from Commerce. Whirlpool thereby undermined

Commerce’s ability to analyze both issues in the Decision Memorandum and in turn

deprived the court of a fully developed record on the contested issues. Furthermore,

Commerce’s regulatory requirement that parties raise all issues within their administrative

case briefs carries the force of law, and the court cannot simply ignore it. Exhaustion is

therefore appropriate here because it serves the twin purposes of protecting

administrative agency authority and promoting judicial efficiency.

       The court also notes that Itochu does not apply here. The U.S. Court of Appeals

for the Federal Circuit in Itochu explained that 19 C.F.R. § 351.309(c)(2) did not apply to

the voluntary submission made during a changed-circumstances review at issue in that

appeal. Itochu, 733 F.3d at 1145 n.1. This action does not involve a changed-

circumstances review, but rather a less than fair value investigation to which the
Consol. Court No. 13-00098                                                         Page 8


regulation requiring a party to raise all issues in an administrative case brief applies.

19 C.F.R. 351.309(c)(2); Itochu, 733 F.3d at 1145 n.1.

       Lastly, Samsung contends that Whirlpool makes an argument in its confidential

opening brief about Samsung’s invoicing that did not appear in Whirlpool’s administrative

case brief. Samsung maintains that Whirlpool has therefore failed to exhaust its

administrative remedies on this issue. Samsung Resp. at 17-18. Whirlpool does not

respond to this argument in its reply brief. Whirlpool Reply at 29-32. Because Whirlpool

failed to raise this argument below, the court agrees with Samsung that requiring

exhaustion is appropriate in these circumstances as well.

                      B. Affiliation Between LG and its Suppliers

       Whirlpool challenges Commerce’s finding that LG was not affiliated with certain

input suppliers. Whirlpool Br. at 11-19; see also Decision Memorandum at 48-51. The

statute defines “affiliated persons” as persons that have at least one of a number of

relationships, including “[a]ny person who controls any other person and such other

person.” 19 U.S.C. § 1677(33)(G). The statute further provides that “a person shall be

considered to control another person if the person is legally or operationally in a position

to exercise restraint or direction over the other person.” 19 U.S.C. § 1677(33). In making

the determination of whether “control” exists, Commerce’s regulations provide that it will

consider inter alia “[c]orporate or family groupings; franchise or joint venture agreements;

debt financing;” and critically for this case, “close supplier relationships.” 19 C.F.R.

§ 351.102(b)(3); see also Statement of Administrative Action, H.R. Doc. No. 103-316, vol.

1 at 838 (1994) (control sufficient to establish affiliation may be demonstrated “for
Consol. Court No. 13-00098                                                           Page 9


example, through . . . close supplier relationships”) (“SAA”). Not all close supplier

relationships are control relationships, however. A close supplier relationship is a control

relationship under the statute when “the supplier or buyer becomes reliant upon the

other.” SAA at 838 (emphasis added).

       Despite a comprehensive discussion by Commerce in the Decision Memorandum

addressing the issue of affiliation against a well-developed factual record, see Decision

Memorandum at 48-51, Whirlpool challenges the issue of affiliation through an elaborate,

multi-part argument that the administrative record mandates that LG is affiliated with

certain suppliers.

       Whirlpool begins with a “legal” challenge. Whirlpool argues that “Commerce plainly

adopted a standard of exclusivity as a prerequisite to finding affiliation” that “is not found

in the statute or Commerce’s regulations and does not reflect a reasonable interpretation

of either.” Whirlpool Br. at 16, 19. Whirlpool, however, does not apply the Chevron

framework to the applicable statutory language. See id. at 16-19. Whirlpool also does not

mention or apply the standard of review applicable to Commerce’s interpretation of its

own regulations. See id.; see also Am. Signature, Inc. v. United States, 598 F.3d 816,

827 (Fed. Cir. 2010) (citing Reizenstein v. Shinseki, 583 F.3d 1331, 1335 (Fed. Cir. 2009))

(explaining standard of review for agency interpretations of its own regulations).

       Whirlpool’s insistence that Commerce “plainly adopted a standard of exclusivity” is

a mischaracterization of the Decision Memorandum and Commerce’s collapsing analysis.

Rather than “adopt a standard of exclusivity,” Commerce simply applied its standard

collapsing analysis, crediting as important the specific fact that LG’s suppliers did not
Consol. Court No. 13-00098                                                           Page 10


exclusively supply LG. This is therefore not a “legal” issue, but instead a more

straightforward substantial evidence issue involving the relative weight Commerce

accorded “exclusivity” in determining whether LG’s suppliers were reliant on LG. See

Whirlpool Br. at 15-17 (“Commerce’s decision to find that LG and certain input suppliers

were not affiliated through a close supplier relationship rested almost entirely on its finding

that the suppliers did not exclusively supply LG.”).

       When framed properly as a substantial evidence issue, Whirlpool’s arguments are

unavailing. Whirlpool contends that Commerce weighed the duration and terms of the

supply agreements and the suppliers’ profitability too heavily in its analysis. Whirlpool

explains that LG maintained loan agreements with its suppliers that extended over longer

terms than the supply agreements, and that the suppliers were profitable because of the

loans and other help provided by LG. Whirlpool also argues that “Commerce

misunderstood the relevance of LG supplying raw materials for less than market value to

its suppliers,” insisting that this arrangement “tied the suppliers to LG” suggesting a

potential for control. Id. at 18. Whirlpool argues that the record instead supports a finding

that LG had the potential to control its suppliers. Specifically, according to Whirlpool, LG:

(1) purchased an overwhelming majority of certain suppliers’ production; (2) transferred

raw materials to suppliers at less than market price; (3) provided no-interest loans to four

suppliers and specified how those loans were to be used; (4) provided technical

assistance to increase suppliers’ productivity; (5) replaced suppliers’ old facilities;

(6) “partnered” with suppliers “to venture into foreign markets;” and (7) collaborated with
Consol. Court No. 13-00098                                                        Page 11


suppliers and met customers together; and engaged in other business proprietary activity

with suppliers indicative of an affiliation. Id. at 13-17.

       These arguments are ultimately not responsive to the substantial evidence

standard of review because they fail to address the whole administrative record. Whirlpool

does not account for the record information that detracts from Whirlpool’s preferred

affiliation outcome. An administrative record for an antidumping investigation may support

two or more reasonable, though inconsistent, determinations on a given issue. Whirlpool’s

argument just emphasizes that portion of the administrative record that supports its

preferred outcome. For Whirlpool to prevail on judicial review on fact-intensive issues like

control and affiliation, the administrative record must support one and only one

determination. In other words, Commerce’s conclusion that LG’s suppliers were not

affiliated with LG would have to have been unreasonable because the overwhelming

weight of information and argument on the administrative record demonstrates that they

were affiliated with LG.

       Here, that was not the case. The issue of affiliation was arguable. Despite the “high

level of cooperation and convenience that LG and its suppliers employ in their commercial

relationships,” Commerce found that “record evidence regarding the suppliers’ sales

establishes that LG’s input suppliers could, and did, look to other unaffiliated buyers of

their goods,” and reasonably concluded that arrangement “belies the existence of a

relationship in which the suppliers have become ‘reliant’ on LG.” Decision Memorandum

at 49. Commerce explained that it also considered “(i) the terms and provisions of supply

agreements; (ii) the relative percentage that sales to LG represented of each of the
Consol. Court No. 13-00098                                                         Page 12


suppliers’ total sales; (iii) the terms of any financing agreements with the suppliers; and

(iv) the overall profitability of the suppliers.” Id. Commerce found that the supply

agreements were short-term in nature, were renewable at either party’s option, and did

not prohibit sellers from selling to other buyers. Commerce also found that no supplier

sold exclusively to LG, and that the suppliers were all profitable. Id. at 49-50. Commerce

noted that LG does not assume any risk in extending credit to its suppliers because the

agreements require the suppliers to post collateral in the form of credit guarantees from

commercial banks. Id. at 50. Commerce concluded that LG’s suppliers are not reliant on

LG, and that therefore, LG’s relationship with its suppliers is not a control relationship

under the statute.

       The information and argument on the administrative record was not so one-sided

to require Commerce to find that LG’s suppliers were reliant upon LG. The court therefore

cannot, on this administrative record, direct Commerce by affirmative injunction to find

that LG is affiliated with its suppliers.

       On the same issue of affiliation, Whirlpool argues that Commerce erroneously

deviated from a past administrative precedent in which it found affiliation. Whirlpool Br. at

15 (citing Certain Welded Stainless Steel Pipe from Taiwan, 62 Fed. Reg. 37,543 (Dep’t

of Commerce July 14, 1997) (final results admin. review) (“Steel Pipe”)). There is a

general principle of administrative law that “an agency must either follow its own

precedents or explain why it departs from them.” See generally, 2 Richard J. Pierce,

Administrative Law Treatise § 11.5, at 1037 (5th ed. 2010). Here, rather than arbitrarily

deviating from a prior precedent, Commerce reasonably explained that the relationship
Consol. Court No. 13-00098                                                        Page 13


at issue in Steel Pipe featured many indicia of control that were not present in this

instance. The respondent in Steel Pipe “had full-time access to its supplier’s computer

system, as well as physical custody of the supplier’s signature stamp,” and “the supplier

pledged its entire inventory and accounts receivable directly to the respondent’s bank

without any consideration, or even a written agreement.” Decision Memorandum at 50-

51 (citing Steel Pipe, 62 Fed. Reg. at 37,549-50); see also Steel Pipe, 62 Fed. Reg. at

37,550 (finding control through a close supplier relationship in part because the

respondent was the exclusive stainless steel supplier to the alleged affiliate and because

there was no evidence the alleged affiliate ever looked elsewhere for stainless steel

products). Whirlpool does not address these distinguishing facts. See Whirlpool Br. at 15.

       As a final note, Whirlpool raises for the first time a brand new argument on this

issue in its reply brief. Whirlpool’s opening brief argues that Commerce “ignored” two

facts. This argument lacks any basis because Commerce addressed those facts in its

Decision Memorandum. Compare Whirlpool Br. at 17 (“Commerce ignored the fact that

each supplier’s sales to LG accounted for a very substantial proportion of its total sales,”

and “Commerce ignored that the zero interest loan provided by LG to the suppliers bound

[the suppliers] to LG for terms of [numerous] years.”) with Decision Memorandum at 49

(“Another factor we considered in our analysis was the relative percentage that sales to

LG represented of each of the supplier’s total sales,” and “we also examined the terms of

any financing agreements with the suppliers.”). Nevertheless, in its reply brief Whirlpool

identifies five additional facts that Commerce supposedly “ignored.” Whirlpool Reply at 8-

11. Whirlpool may not introduce these new arguments for the first time in its reply. See
Consol. Court No. 13-00098                                                      Page 14


SmithKline, 439 F.3d at 1320; see also Scheduling Order at 4 (June 13, 2013), ECF No.

22 (“The reply brief may not introduce new arguments.”).

      The court therefore sustains Commerce’s conclusion that LG is not affiliated to its

suppliers through a close supplier relationship.

                     C. Unaccounted Costs of Production for LG

      Whirlpool argues that Commerce failed to address its argument that LG’s cost of

production may not reflect certain “costs related to specific sub-assemblies for washers

supplied by certain suppliers.” Whirlpool Br. at 19. Whirlpool cites record evidence

showing that LG provided loans to its suppliers and that LG shared engineers, know-how,

and equipment with its suppliers. According to Whirlpool, Commerce “dispatched this

important contention with one blithe comment,” and that remand is therefore necessary

“for further investigation.” Id. at 20-21 (citing Decision Memorandum at 51).

      Commerce responded to Whirlpool’s contention that LG’s cost of production did

not include certain expenditures by explaining that it “verified that LG had accounted for

all appropriate manufacturing, G&A, and financing expenses in its reported costs.”

Decision Memorandum at 51. “Verification is a spot check and is not intended to be an

exhaustive examination of a respondent’s business.” Monsanto Co. v. United States,

12 CIT 937, 944, 698 F. Supp. 275, 281 (1988); see also Micron Tech v. United States,

117 F.3d 1386, 1396 (Fed. Cir. 1997); U.S. Steel Group v. United States, 22 CIT 104,

107, 998 F. Supp. 1151, 1154 (1998); PMC Specialties Group Inc. v. United States,

20 CIT 1130, 1134 (1996). Commerce is “not required . . . [to] trace through every number

of the response–a representative sample is sufficient.” Micron, 117 F.3d at 1396.
Consol. Court No. 13-00098                                                       Page 15


Commerce inferred that LG properly reported its financing and technical support costs

because Commerce was able to reconcile a representative sample of LG’s costs during

verification. Although brief, Commerce’s explanation provides a reasonably discernable

path that addresses Whirlpool’s contention. Decision Memorandum at 51; see NMB

Singapore Ltd. v. United States, 557 F.3d 1316, 1321-22 (Fed. Cir. 2009) (The court must

sustain a determination “‘of less than ideal clarity’” where Commerce’s decisional path is

reasonably discernable. (quoting Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins.

Co., 463 U.S. 281, 286 (1974))).

       Whirlpool would have preferred if Commerce had identified direct evidence

indicating that LG reported its financing and technical support costs. See Whirlpool Br. at

19-21; Whirlpool Reply at 12-13. Whirlpool does not, however, demonstrate why

Commerce’s inference that LG did report financing and technical support costs is

unreasonable. For example, Whirlpool does not show that the sample Commerce verified

was not statistically valid, and Whirlpool does not analyze the adequacy of Commerce’s

verification procedures. Whirlpool also does not explain why LG should have separately

itemized its financing and technical support costs in its responses. See Whirlpool Br. at

19-21; Whirlpool Reply at 12-13. All Whirlpool offers is its own negative inference about

the absence of direct evidence. That alone is insufficient to undermine the

reasonableness of Commerce’s inference from the available record evidence. Daewoo

Elecs. Co. v. Int’l Union of Elec., Elec., Technical, Salaried & Mach. Workers, AFL-CIO,

6 F.3d 1511, 1520 (Fed. Cir. 1993) (“The question is whether the record adequately
Consol. Court No. 13-00098                                                            Page 16


supports the decision of [Commerce], not whether some other inference could reasonably

have been drawn.”). The court therefore sustains this aspect of the Final Results.

             D. Departure from Past Practice in not Applying AFA to LG

       Whirlpool argues that Commerce unreasonably departed from its past practice in

not applying partial adverse facts available (“AFA”) to LG for LG’s reporting of three rebate

programs: REBATE1U, REBATE5H, and REBATE4U. Whirlpool Br. at 21-27. Once

again, the court is not persuaded.

       Commerce uses facts otherwise available under 19 U.S.C. § 1677e when

“necessary information is not available on the record” or when “an interested party . . .

withholds information that has been requested by [Commerce], . . . fails to provide such

information by the deadlines for submission of the information or in the form and manner

requested[,] . . . significantly impedes a proceeding[,] . . . or . . . provides such information

but the information cannot be verified.” 19 U.S.C. § 1677e(a). Commerce “may use an

inference that is adverse . . . in selecting from among the facts otherwise available” when

an interested party “fails to cooperate by not acting to the best of its ability to comply with

a request for information.” Id. § 1677e(b).

       In Bottom Mount Combination Refrigerator-Freezers from Korea, 77 Fed. Reg.

17,413 (Dep’t of Commerce Mar. 26, 2012) (“Refrigerators”), Commerce applied partial

AFA to LG because LG failed to disclose its rebate allocation methodology to

Commerce’s satisfaction and because LG’s rebate allocation methodology produced

distortions. Issues and Decision Memorandum for the Antidumping Duty Investigation of

Bottom Mount Refrigerator Freezers from the Republic of Korea, A-580-865, at 40-49,
Consol. Court No. 13-00098                                                          Page 17


59-69 (Dep’t of Commerce Mar. 16, 2012), available at http://enforcement.trade.gov/

frn/summary/korea-south/2012-7237-1.pdf       (last   visited   this   date)   (“Refrigerators

Memorandum”). Whirlpool insists that LG’s rebate reporting in this investigation is

similarly flawed. Commerce discovered at verification that a time lag between the dates

of sales eligible for rebates under the REBATE1U program and the dates LG paid those

rebates caused underreporting of rebate amounts and revealed the possibility that LG’s

two-year rebate reporting window was not sufficiently large to capture all rebates

applicable to POI sales. Whirlpool Br. at 23-24. Commerce also discovered that LG’s

records permitted allocation of all rebates under the REBATE5H and REBATE4U

programs by time period even though “LG claimed it had ‘insufficient information’” to do

so. Id. at 24 (quoting LG U.S. Verification Report at 24 (Dep’t of Commerce Oct. 16, 2012),

PD 446). Whirlpool argues that these deficiencies show that LG knew its methodology

would not capture all rebate amounts and would cause distortions, and that LG possessed

but did not report information that permitted a more specific rebate allocation. According

to Whirlpool, these same problems led Commerce to apply partial AFA to LG in

Refrigerators. Id. at 23-26.

       In Refrigerators, Commerce found that LG did not act to the best of its ability in

reporting its home market “sell-out” rebates” because:

       1) LG's methodology resulted in rebate amounts which were excessive and
       not consistent with its commercial activity; 2) LG attempted to mask the
       unreasonable results of its chosen methodology by capping its reported
       amounts at 50 percent of gross unit price (rather than requesting guidance
       from the Department as to an acceptable methodology); and 3) LG failed to
       disclose its capping methodology in its initial questionnaire response, and
Consol. Court No. 13-00098                                                           Page 18


       when it finally disclosed the cap, it only did so as a note in an exhibit
       attached to a supplemental response, rather than in the narrative itself.

Refrigerators Memorandum at 40-41. Commerce in Refrigerators then detailed LG’s

many attempts to hide the true nature of its rebate programs and highlighted the

distortions that LG’s rebate reporting produced. Id. 41-49. Commerce made similar

findings about other LG rebate programs in Refrigerators:

       After analyzing the facts on the record, we find that LG’s methodology for
       calculating [LG’s U.S. lump sum and sell-out rebates] was distortive
       because: 1) LG’s methodology (before adjustment) resulted in rebates
       ranging from negative amounts to rates significantly exceeding gross unit
       price; and 2) LG’s modification to this methodology via an arbitrary cap and
       floor did not make the results more reasonable (but instead only masked
       the distortion). Moreover, we find that LG did not act to the best of its ability
       because it: 1) did not respond fully to the Department’s supplemental
       questions; 2) stated inaccurate information in its questionnaire responses;
       3) did not disclose its methodology until verification; and 4) failed to request
       guidance from the Department as to an acceptable methodology (but rather
       tried to mask what the company itself recognized as unreasonable results
       by spreading what it considered to be excess amounts over other, unrelated
       sales).

Id. at 59; see id. at 59-69.

       By contrast, Commerce below recognized LG’s “substantial effort” at cooperating

and resolving issues that emerged during verification:

       As an initial matter, we recognize that LG has put forth substantial effort and
       resources to address the rebate reporting deficiencies identified in
       Refrigerators in order to provide a more accurate methodology for reporting
       rebates in this investigation. As LG outlines in its case brief, LG has
       provided substantial information for the record to describe and document its
       rebate reporting methodology. Among other things, LG solicited a meeting
       with Department officials on this topic early in the investigation to seek
       guidance as to how it should reports its rebates. LG submitted extensive
       questionnaire and supplemental questionnaire responses addressing
       rebate reporting, and engaged in a thorough examination of rebate reporting
       during the two sales verifications. Although the petitioner contends that LG’s
Consol. Court No. 13-00098                                                       Page 19


      overall methodology is flawed, it only provided three sets of rebate
      examples where it identifies specific issues with LG’s rebate reporting. As
      discussed further below, only with respect to one of these sets of rebates
      do we find cause to adjust LG’s reporting. Otherwise, we accept LG’s rebate
      reporting as reasonable and non-distortive.

      a) REBATE1U

      As the petitioner states, during the CEP sales verification, we identified two
      issues concerning the reporting of LG’s sell-in rebates. We disagree with
      the petitioner that these issues demonstrate the overall inaccuracy and
      distortiveness of LG’s rebate reporting. Rather, they represent the only
      significant issues which arose from a thorough examination of LG’s
      methodology. LG fully disclosed its methodology in reporting these rebates
      in its questionnaire responses, and we obtained the necessary information
      at verification to revise the reported amounts in a manner we believe is more
      representative of these rebates. Consequently, we find no basis to conclude
      that LG’s REBATE1U reporting is distortive, nor that LG did not act to the
      best of its ability in reporting REBATE1U. Thus, there is no basis to apply
      AFA in adjusting REBATE1U.

      ....

      With respect to the two-year window LG used to reconcile accrual amounts
      with actual rebate payments, we observed at verification that this
      methodology may not fully account for volume-based rebates because the
      window ended at December 31, 2011, and rebate claims for the year 2011
      may have continued through 2012. At our request, LG performed an
      additional analysis at verification and showed that expanding the window
      for an additional six months captured additional rebate amounts. This
      revision of LG’s methodology, we believe, provides a reasonable means of
      matching rebates paid after the POI with the sales made during the POI.
      Accordingly, we have adjusted the reported REBATE1U amounts using the
      information derived from the additional six-month period, as provided at
      verification. . . .

      b) REBATE5H and REBATE4U

      ....

      The petitioner points to results derived from a detailed examination of
      specific sales selected at verification, where the Department obtained
      information that indicated it may have been possible to allocate certain
Consol. Court No. 13-00098                                                      Page 20


      rebates reported in these categories on a more specific basis. As we noted
      in our verification reports, LG was able to obtain additional detailed rebate
      information beyond its electronic records for the relatively small number of
      sales examined at verification, however, “it did not perform this manual
      exercise for the thousands of rebate programs applicable to the sales of
      hundreds of thousands of washing machine units during the POI.”
      Moreover, our examination of other rebate programs reported under these
      variables supported LG’s explanation that a more specific allocation was
      not possible. Given the extremely large number of sales and rebate
      programs involved in this investigation, and the time and resource restraints
      LG faced in meeting the questionnaire response deadlines, along with the
      fact that LG reported most rebates on a more specific basis, we find LG’s
      REBATE5H and REBATE4U reporting methodology reasonable and, thus,
      we do not agree with the petitioner that we should find that LG failed to
      cooperate by not acting to the best of its ability and to apply AFA for these
      rebates.

Decision Memorandum at 39-41 (footnotes and citations omitted).

      As Defendant and LG describe in their responses, see Def. Resp. at 66-70; LG

Resp. at 10-15, LG’s level of cooperation in Refrigerators differed from its level of

cooperation in this investigation. In Refrigerators LG submitted misleading and inaccurate

questionnaire responses, hid the full nature of its rebate programs, and refused to seek

guidance from the agency in preparing its questionnaire responses. Commerce also

found that LG’s rebate reporting was distortive. Refrigerators Memorandum at 40-49, 59-

69. Here, LG sought guidance from Commerce early in the investigation on how to report

rebates. Additionally, LG submitted over 1,000 pages of questionnaire and supplemental

responses concerning its rebate reporting, and engaged in a thorough examination of its

rebate reporting during both sales verifications. Commerce found that LG “provide[d] a

reasonable means” of solving issues with its REBATE1U program at verification by

expanding the number of rebates it reported. Decision Memorandum at 40. Commerce
Consol. Court No. 13-00098                                                        Page 21


explained that “there is no basis to apply AFA in adjusting REBATE1U” because of LG’s

cooperation, and accepted LG’s REBATE5H and REBATE4U reporting as “reasonable

and non-distortive.” Id. at 39. Most important, Commerce distinguished the present case

from Refrigerators by explaining that LG “put forth substantial effort and resources to

address the rebate reporting deficiencies identified in Refrigerators.” Id. In the court’s

view, Commerce provided a reasonable explanation for treating this situation differently

than Refrigerators and therefore did not act arbitrarily in refusing to apply partial AFA to

LG.

                        E. Commerce’s Sales Below Cost Test

       Whirlpool argues that Commerce’s sales-below-cost test violates clear statutory

language because it does not account for level of trade. Whirlpool Br. at 5-11. The court

is not persuaded. Under 19 U.S.C. § 1677b(b), Commerce may exclude home market

sales made at less than the cost of production from its determination of normal value if

such sales “have been made within an extended period of time and in substantial

quantities.” 19 U.S.C. § 1677b(b)(1). Commerce explained below that it “has, over time,

developed a consistent, predictable and reasonable practice in this regard to perform the

sales-below-cost test and the ‘substantial quantities’ test on a model specific basis.”

Decision Memorandum at 43. Under this methodology, if below-cost sales represent

20 percent or more of the volume of sales of a specific model of subject merchandise,

Commerce may exclude those below-cost sales. “[A]ll sales of a given model, regardless

of [levels of trade], are aggregated for purposes of determining the percentage that were

below cost.” Decision Memorandum at 41. This approach has been sustained as a
Consol. Court No. 13-00098                                                      Page 22


reasonable interpretation of 19 U.S.C. § 1677(b). See Mitsubishi Heavy Indus., Ltd. v.

United States, 22 CIT 541, 563-65, 15 F. Supp. 2d 807, 826-28 (1998) (sustaining

Commerce’s sales-below-cost test as reasonable under Chevron step two), after remand,

23 CIT 326, 54 F. Supp. 2d 1183 (1999), after remand, 24 CIT 275, 97 F. Supp. 2d 1204

(2000), aff’d, 275 F.3d 1056 (Fed. Cir. 2001) (same); NSK Ltd. v. United States, 28 CIT

1535, 1549-53, 346 F. Supp. 2d 1312, 1326-29 (2004), aff’d, 481 F.3d 1355 (Fed. Cir.

2007) (same).

      Whirlpool    nevertheless     challenges    this   longstanding,    court-approved

methodology, arguing that the statute requires Commerce to disaggregate home market

sales by level of trade before determining whether below-cost sales represent 20 percent

or more of the volume of sales of a specific model. Whirlpool Br. at 5-9. By way of

example, Whirlpool explains that sales below cost represent more than 20% of LG’s sales

made at particular levels of trade when considering groups of sales at each level of trade

in isolation. Id. at 7-8. Section 1677b(b), though, only requires Commerce to consider

whether a respondent made home market sales at less than cost of production “within an

extended period of time and in substantial quantities.” 19 U.S.C. § 1677b(b)(1). The

statute provides no explicit instructions on whether to aggregate sales or not before

considering whether they meet those criteria. Id. Moreover, the phrase “level of trade”

does not appear alongside “extended period of time and in substantial quantities” or

anywhere else in § 1677b(b). Id. The SAA also explains that “the cost test generally will

be performed on no wider than a model-specific basis” without any mention of “level of

trade.” SAA at 832; see also H.R. Rep. No. 571, 93rd Cong., 1st Sess. 71 (1973)
Consol. Court No. 13-00098                                                        Page 23


(discussing sales below cost without reference to “level of trade”); S. Rep. No. 1298, 93rd

Cong., 2d Sess. 173 (1974) (same). Similarly, the level of trade provision in § 1677b(a)

describes how Commerce adjusts normal value “[i]n order to achieve a fair comparison

with the export price or constructed export price,” without instructing Commerce to alter

the set of sales used to calculate normal value. 19 U.S.C. § 1677b(a)(7) (describing

requirements for comparing foreign like product sales to U.S. sales by similar levels of

trade, but not referencing foreign like product sales made below cost); see also 19 C.F.R.

§ 351.412(a) (same).

       Section 1677b(b)’s references to “sales of foreign like product under consideration

for the calculation of normal value” are not clear instructions to group sales by level of

trade as Whirlpool claims. 19 U.S.C. § 1677b(b). Rather, as Defendant and LG explain,

the statute is silent as to the overlap between level of trade and sales below cost, meaning

Congressional intent on this issue is not clear. In the absence of clear Congressional

intent on how to resolve the specific issue, Commerce’s interpretation governs so long as

it is reasonable. See Eurodif, 555 U.S. at 316. Commerce’s long-standing sales-below-

cost test addresses the statute’s explicit “extended period of time and in substantial

quantities” criteria as well as the SAA’s specification that Commerce conduct the test on

no wider than a model-specific basis. Whirlpool identifies a different approach based on

level of trade that, in its view, has certain advantages and would have led to a different

determination below. Whirlpool, however, fails to demonstrate that its preferred approach

is the only correct interpretation of the statute. Whirlpool Br. at 5-9. The court therefore

agrees with Defendant and LG that Commerce’s established sales-below-cost test, which
Consol. Court No. 13-00098                                                      Page 24


does not account for level of trade, must be sustained as a reasonable interpretation of

an otherwise silent statutory provision.

       Whirlpool argues in the alternative that Commerce’s sales-below-cost test is

unlawful because it “lacks the power to persuade” under the four factors outlined in

Skidmore v. Swift & Co., 323 U.S. 576 (1944), which Whirlpool insists applies here

because Commerce describes its sales-below-cost test in an agency manual. Id. at 9-11

(citing Christensen v. Harris County, 529 U.S. 576, 587 (2000)). The court, though,

reviews Commerce’s statutory interpretations articulated in antidumping proceedings

under Chevron. Pesquera Mares Australes Ltda., 266 F.3d 1372, 1382 (Fed. Cir. 2001).

Commerce has explained its sales-below-cost test in many antidumping proceedings over

the years. See, e.g., Ball Bearings and Parts Thereof from France, Germany, Italy, Japan,

and the United Kingdom, 67 Fed. Reg. 55,780 (Dep’t of Commerce Aug. 30, 2002) (final

results admin. reviews); see also Mitsubishi Heavy Indus., 22 CIT at 564, 15 F. Supp. 2d

at 827 (sustaining Commerce’s sales-below-cost test as reasonable under Chevron). It

did so again here. See Decision Memorandum at 41-43. Chevron is therefore the

appropriate standard of review, not Skidmore.

                   F. Samsung’s Uncooperative Retailer and AFA

       Whirlpool seeks a remand directing Commerce to apply adverse facts available to

Samsung. See Whirlpool Br. at 27-31, 35-39. Whirlpool contended during the

investigation that Samsung had submitted falsified cost and home market sales data,

which to Whirlpool demonstrated “that Samsung had engaged in fraudulent manipulation

of its accounting system to systematically falsify its entire accounting system.” Decision
Consol. Court No. 13-00098                                                           Page 25


Memorandum at 61, 67. Commerce sought information from one of Samsung’s affiliated

retailers to address Whirlpool’s fraud allegation, but the retailer refused to cooperate.

Further Discussion of Comments 16-19 in the Issues and Decision Memorandum, 1

(Dep’t of Commerce Dec. 18, 2012), CD 324 (“Supplemental Decision Memorandum”).

Commerce ultimately “found no evidence of falsified data or fraudulent conduct,” and

declined to apply total AFA to Samsung despite the affiliated retailer’s noncooperation.

Decision Memorandum at 67-68, 73.

       In essence, Whirlpool argues that Samsung could have compelled its affiliated

customer to participate but did not, meaning that Samsung did not cooperate to the best

of its ability. Whirlpool contends that the shared family ownership between Samsung and

its affiliated retailer positioned Samsung to compel its affiliate to cooperate. Whirlpool

Reply at 20; Whirlpool Br. at 35-36. Whirlpool also challenges Commerce’s treatment of

other facts that weighed on its conclusion. In particular, Whirlpool highlights the affiliate’s

cooperation during the Refrigerators investigation, and points out that Samsung only used

management-level employees to communicate with the affiliate rather than higher-level

officers or directors. In Whirlpool’s view, Samsung’s effort at obtaining its affiliated

retailer’s cooperation was “half-hearted.” Whirlpool Br. at 38.

       Whirlpool’s argument is unpersuasive on this administrative record. Commerce

reasonably found that Samsung demonstrated it could not compel its affiliated retailer to

cooperate, and more broadly that Samsung acted to the best of its ability. See Decision

Memorandum at 67-72; Supplemental Decision Memorandum at 6-10. Commerce

explained that it took numerous special steps in response to Whirlpool’s fraud allegation,
Consol. Court No. 13-00098                                                      Page 26


including: (1) issuing a supplemental questionnaire on the allegation to Samsung,

(2) reviewing Samsung’s response and other relevant data, (3) postponing verification of

Samsung to ensure Commerce had adequate time to prepare, (4) meeting with

Whirlpool’s counsel and accounting expert to help Commerce prepare for verification,

(5) staffing Commerce’s verification with two sales analysts and two consultants,

(6) requesting data from the home market customer (who ultimately refused to

cooperate), (7) conducting a “surprise” visit to another Samsung home market customer

(who did cooperate), (8) using several “surprise” testing methods that Whirlpool’s

accounting consultant recommended and that Commerce did not disclose to Samsung in

advance, and (9) conducting extensive testing of Samsung’s accounting system,

including the data Whirlpool flagged as indicative of fraud. Decision Memorandum at 67-

70. Commerce detailed steps Samsung took to accommodate each of these requests.

See id. Further, Commerce described Samsung’s “significant efforts” in trying to obtain

cooperation from the affiliated retailer. Commerce noted that Samsung contacted its

affiliate within one day of Commerce’s notification of the need to verify the affiliate’s

purchase data, and that Samsung communicated with the affiliate about cooperating with

the investigation several times. Supplemental Decision Memorandum at 8.

      Whirlpool stresses the shared family grouping in arguing that Samsung could

compel its affiliate to cooperate. Commerce, though, reasonably found that other

evidence on the record softened the relative impact of the shared family grouping. As

Commerce explained below, none of the enumerated factors besides “family groupings”

applies to Samsung and its affiliated retailer. Samsung and its directors did not have any
Consol. Court No. 13-00098                                                         Page 27


significant stock ownership in the affiliated retailer. Samsung and the affiliated retailer

shared no corporate board members or managers. Commerce could not find any

evidence of intertwined operations between the two companies. Id. at 8. Importantly,

Samsung provided documentation of events affecting its relationship with its affiliate3

undermining Whirlpool’s insistence that Samsung could compel its affiliate to act by virtue

of the shared family grouping. Id. at 10. Commerce also explained that there was “no

evidence that Samsung secured [its affiliate’s] cooperation in [Refrigerators] through

compulsion” and that “the timing of these events indicates that [the retailer] and Samsung

may have been on better terms during [Refrigerators] while their relationship deteriorated

to the point that [the retailer] was no longer willing to advance Samsung’s interests

through its cooperation with [Commerce’s] requests.” Id. In sum, Commerce found little

evidence indicating that Samsung might actually be legally or operationally in a position

to exercise restraint or direction over its affiliate. Coupled with the steps Samsung took at

Commerce’s behest to obtain the retailer’s cooperation, Commerce reasonably found that

Samsung could not compel its retailer to cooperate.

                                      G. Date of Sale

       During the proceeding Commerce selected shipment date as the date of sale for

Samsung’s transactions because Commerce determined that the material terms of sale

were set by that date. Supplementary Decision Memorandum at 23. Pursuant to




3
 “Samsung provided documentation demonstrating that it was involved in [[
                                 ]]” with its affiliated retailer. Supplemental Decision
Memorandum at 10.
Consol. Court No. 13-00098                                                         Page 28


regulation Commerce normally uses the date of invoice as the date of sale, but “may use

a date other than the date of invoice if [Commerce] is satisfied that a different date better

reflects the date on which the exporter or producer establishes the material terms of sale.”

19 C.F.R. § 351.401(i); see generally Yieh Phui Enter. Co. v. United States, 35 CIT ___,

___, 791 F. Supp. 2d 1319, 1322-24 (2011) (describing in detail Commerce’s date of sale

regulation). Whirlpool argues that Commerce erred in selecting shipment date rather than

invoice date as the date of sale for a particular subset of Samsung’s transactions that

according to Whirlpool involved changes to material terms after shipment date. Whirlpool

Br. at 39-44.

         Commerce, though, did not agree with Whirlpool that the underlying agreements

between Samsung and its customers materially changed. Supplemental Decision

Memorandum at 23-24. Instead, as Commerce reasonably explained, an event occurred4

during shipment that triggered a conditional item within Samsung’s customer agreements,

which provided that Samsung would compensate its customers for that particular event.

Id. at 23. Commerce explained that Samsung and its customers contemplated the event,

and provided for Samsung to make payments to its customers for such an event. To

Commerce the changes Whirlpool identifies were therefore not material changes to the

underlying sales agreements, but rather the unremarkable result of conditional terms

within the sales agreements applying to these particular transactions. Id. at 23-24. There




4
    [[              ]].
Consol. Court No. 13-00098                                                        Page 29


is evidentiary support within the record for a reasonable mind to so conclude. The court

therefore sustains Commerce’s selection of shipment date as the date of sale.

                                 H. Warranty Expenses

         Commerce treated certain Samsung expenses5 as direct warranty expenses, and

as a consequence reduced Samsung’s constructed export price. Supplemental Decision

Memorandum at 18 (citing 19 U.S.C. § 1677a(d)(1)(B)). In keeping with its past practice,

however, Commerce did not reduce Samsung’s constructed export price by the full

amount of the event expenses. Commerce relies “on a company’s three-year average of

warranty expenses . . . in place of the [period of investigation] warranty expenses if there

is evidence that the [period of investigation] expenses are not representative of a

respondent’s historical experience, thereby mitigating the impact of warranty claims that

may by nature occur at irregular intervals.” Issues and Decision Memorandum for the

Antidumping Duty Investigation of Crystalline Silicon Photovoltaic Cells, Whether or not

Assembled into Modules, from the People’s Republic of China, A-570-979, at 80 (Dep’t

of Commerce Oct. 9, 2012), available at http://enforcement.trade.gov/frn/summary/

prc/2012-25580-1.pdf (last visited this date) (citing Wooden Bedroom Furniture from the

People’s Republic of China, 76 Fed. Reg. 49,729 (Dep’t of Commerce Aug. 11, 2011)

(final results admin. review); Chlorinated Isocyanurates from Spain, 74 Fed. Reg. 50,774

(Dep’t of Commerce Oct. 1, 2009) (final results admin. review)). Whirlpool agrees with




5
    [[
      ]], affecting “a significant number of washers.” Supplemental Decision
Memorandum at 10.
Consol. Court No. 13-00098                                                     Page 30


Commerce’s decision to reduce Samsung’s constructed export price to account for the

event expenses. Whirlpool, though, disputes Commerce’s treatment of those expenses

as warranty expenses and seeks a remand directing Commerce to reduce Samsung’s

constructed export price by the full amount.

         Whirlpool alleges that “Commerce acted contrary to law by re-categorizing these

expenses as warranty expenses,” believing that Commerce must categorize expenses in

accordance with a respondent’s accounting system when that system complies with

generally accepted accounting principles. See Whirlpool Br. at 47. Whirlpool, however,

again does not identify a clear statutory provision that prohibits Commerce from treating

the event expenses as warranty expenses or evaluate the reasonableness of

Commerce’s interpretation under Chevron step two. See id. at 44-50; Whirlpool Reply at

33-37. The court therefore cannot identify a “legal” issue here.

         The main thrust of Whirlpool’s argument is instead that Commerce unreasonably

treated these expenses as warranty expenses (a substantial evidence argument).

Whirlpool argues that Samsung maintained a monthly warranty reserve that it used to

cover “actual warranty expenses,” such as the cost of parts for repair, service fees, and

scrapping defective units. Whirlpool Br. at 47-50. Whirlpool further argues that Samsung

did not cover the expenses using this warranty reserve, and did not otherwise treat those

expenses as warranty expenses in its own accounting system. Id. Whirlpool also argues

that certain specific expenses6 Samsung incurred are more analogous to direct expenses




6
    [[                                              ]] expenses.
Consol. Court No. 13-00098                                                       Page 31


that are not direct warranty expenses. Whirlpool contends that these expenses are a

direct and unavoidable consequence of specific sales and incident to bringing the subject

merchandise from Korea to the place of delivery. Id. at 47. Lastly, although Whirlpool

concedes that Commerce has previously treated certain kinds of expenses7 as warranty

expenses in Crystalline Silicon Photovoltaic Cells, Whether or not Assembled into

Modules, from the People’s Republic of China, 77 Fed. Reg. 63,791 (Dep’t of Commerce

Oct. 17, 2012) (final LTFV determ.) (“Solar Cells”), Whirlpool nevertheless argues that the

particular expenses here are distinguishable, and that Samsung did not experience these

expenses in “irregular intervals . . . over a three year period.” Id.

       The court does not agree with Whirlpool. Commerce below explained that it

consistently treats expenses like those in Solar Cells as warranty expenses, and

reasonably found that Samsung’s expenses are similar to those in Solar Cells.

Supplemental Decision Memorandum, at 19.8 Commerce also noted that a typical

warranty claim might include expenses similar to those Samsung incurred here.9 The

court is not convinced that the purported differences Whirlpool details in its brief

undermine Commerce’s reasonable conclusion that Samsung’s expenses were similar to

warranty expenses. See id. Furthermore, Samsung experienced the event only once

during the period of investigation, which reasonably led Commerce to find that the




7
  [[              ]] expenses.
8
  Specifically, Commerce explained that “[[
         ]].” Supplemental Decision Memorandum at 19.
9
  Specifically, expenses associated with [[
              ]].
Consol. Court No. 13-00098                                                     Page 32


associated expenses were not representative of Samsung’s historical warranty expenses.

In the court’s view Commerce reasonably calculated a three-year average warranty

expenses for Samsung in harmony with past practice. Id. (citing Honey from Argentina,

71 Fed. Reg. 26,333 (Dep’t of Commerce May 4, 2006)).

         Samsung’s treatment of the expenses in its own accounting system may support

an alternative calculation of constructed export price, but the court does not agree with

Whirlpool that Commerce’s treatment is unreasonable merely because of this possibility.

Whirlpool’s arguments amount to the identification of a potential reasonable alternative

finding Commerce could have made on the same facts. In any event, Commerce’s

treatment of Samsung’s expenses was reasonable. The court therefore will sustain this

issue.

                                     III. Conclusion

         For the foregoing reasons, the court sustains the Final Results for each of the

issues Whirlpool has raised in its motion for judgment on the agency record. Judgment

will be entered accordingly.



                                                            /s/ Leo M. Gordon
                                                          Judge Leo M. Gordon


Dated: June 12, 2015
       New York, New York
