                        Slip Op. 99-47

      UNITED STATES COURT OF INTERNATIONAL TRADE
___________________________________
                                   :
E.I. DUPONT DE NEMOURS & COMPANY,  :
                                   :    Court No. 97-08-01335
            Plaintiff,             :
                                   :
            v.                     :
                                   :
THE UNITED STATES,                 :
                                   :
            Defendant,             :
                                   :
            and                    :
                                   :
ARAMID PRODUCTS V.o.F. and         :
AKZO NOBEL ARAMID PRODUCTS INC.,   :
                                   :
            Defendant-Intervenors. :
___________________________________:

[ITA determination remanded upon consent.]

                                        Dated:   June 2, 1999

     Wilmer, Cutler & Pickering (John D. Greenwald, Ronald I.
Meltzer, and John A. Trenor) for plaintiff.

     David W. Ogden, Acting Assistant Attorney General, David M.
Cohen, Director, Velta A. Melnbrencis, Assistant Director,
Commercial Litigation Branch, Civil Division, United States
Department of Justice (Mark L. Josephs), Mildred E. Steward,
Office of the General Counsel, United States Department of
Commerce, of counsel, for defendant.

     Adduci, Mastriani & Schaumberg, L.L.P (Barbara A. Murphy,
Tom M. Schaumberg, and Gregory C. Anthes) for defendant-
intervenors.

                             OPINION
     RESTANI, Judge:   This matter is before the court on

plaintiff, E.I. DuPont De Nemours & Company's ("DuPont"), motion
Court No. 97-08-01335                                     Page 2

for judgment on the agency record pursuant to USCIT R. 56.2.

Plaintiff, the domestic party petitioner before the Department of

Commerce, challenges Commerce's antidumping duty determination in

the second administrative review of its order on aramid fiber

from the Netherlands.   See Aramid Fiber Formed of Poly Para-

Phenylene Terephthalamide from the Netherlands, 62 Fed. Reg.

38,058 (Dep't Commerce 1997) [hereinafter Final Results].

                            Background

     During the original less-than-fair-value ("LTFV")

investigation, a wholly-owned subsidiary of the Dutch

corporation, Akzo Nobel NV ("Akzo"), increased its equity holding

in Aramid Products V.o.F. ("Aramid")1 from 50 to 95 percent.       See

Aramid Fiber Formed of Poly-Phenylene Terephthalamide from the

Netherlands, 59 Fed. Reg. at 23,688.     Commerce did not consider

the corporate reorganization for purposes of the LTFV

investigation because the reorganization took place after the

period of investigation ended.   Id.   Commerce, however, accepted

Aramid's and Akzo's corporate restructuring for purposes of the


     1
        Aramid is a Dutch producer of PPD-T aramid fiber. Aramid
Fiber Formed of Poly-Phenylene Terephthalamide from the
Netherlands, 59 Fed. Reg. 23,684, 23,687 (Dep't Commerce 1994)
(LTFV final determination). Akzo Nobel Aramid Products Inc. is
Akzo's U.S. selling arm. Commerce's Verification Report (Feb.
21, 1997), at 2, C.R. Doc. 27, Def.'s App., Tab 9, at 2
[hereinafter Verification Report]. The U.S. parent company is
Akzo Nobel, Inc., which is wholly owned by Akzo Nobel NV. Id.
Court No. 97-08-01335                                      Page 3

first administrative review.   See Aramid Fiber Formed of Poly

Para-Phenylene Terephthalamide from the Netherlands, 61 Fed. Reg.

51,406, 51,407 (Dep't Commerce 1996) (final results of

antidumping admin. rev.) [hereinafter First Review].      Commerce

states that it took this approach because the first

administrative review covered the period following consolidation.

Gov't Br. at 3.

     During the first administrative review, having recognized

the corporate restructuring, Commerce, for purposes of cost of

production ("COP"), calculated "the respondent's net interest

expense based on the financing expenses incurred on behalf of the

consolidated group of companies to which the respondent belongs."

First Review, 61 Fed. Reg. at 51,407.     Commerce utilized this

methodology because of Akzo's controlling interest in Aramid and

the fungible nature of debt and equity.     Id.   The court upheld

this approach in DuPont's challenge to Commerce's first

administrative review.   E.I. DuPont de Nemours & Co. v. United

States, No. 96-11-02509, 1998 WL 42598, *3-5 (Ct. Int'l Trade

Jan. 29, 1998) ("E.I. DuPont I").

     Commerce followed the approach taken in the first

administrative review in calculating Aramid's financing expenses

in the second administrative review covering the period June 1,

1995, through May 31, 1996.    See Final Results, 62 Fed. Reg. at
Court No. 97-08-01335                                    Page 4

38,060.   During the second review, Commerce requested that Aramid

report its corporate structure and affiliations, Commerce's

Questionnaire (Aug. 20, 1996), at A-3, P.R. Doc. 4, Def.'s App.,

Tab 1, at 4 [hereinafter Commerce's Questionnaire], in order to

confirm that Aramid's corporate structure remained unchanged from

the first administrative review, Gov't Br. at 4.    Aramid

responded that this structure had not changed, indicating that

Akzo owned a 95 percent interest in the producing company.

Aramid's Questionnaire Section A Response (Sept. 20, 1996), at 6,

P.R. Doc. 10, Def.'s App., Tab 2, at 4 [hereinafter Aramid's

Section A].

     As part of its request for information relating to U.S.

sales,2 Commerce requested that Aramid report financing expenses

as part of indirect selling expenses ("ISE").    See Commerce's

Questionnaire, Def.'s App., Tab 1, at 6.   In response, Aramid

reported financing expenses and explained that the interest

expenses component of the ISE was based upon information taken

from Akzo's consolidated financial statements.    Aramid's

Questionnaire Sections B-D Response (Oct. 25, 1996), at 111-112,

C.R. Doc. 2, Def.'s App., Tab 3, at 3-4 [hereinafter Aramid's



     2
        To determine the dumping margin, U.S. sales prices are
compared to normal value, which may be based on home market
sales, third country sales, or constructed value ("CV"), which
reflects COP. 19 U.S.C. § 1677b (1994).
Court No. 97-08-01335                                     Page 5

Sections B-D].    Similarly, Commerce requested that Aramid report

its financial interest expenses related to COP.     See Commerce's

Questionnaire, at D-18, Def.'s App., Tab 1, at 7.     In response,

Aramid reported the net interest expenses associated with COP.

Aramid's Sections B-D, at D-18, Def.'s App., Tab 3, at 17.     As

with the ISE, the interest expense component of COP was based

upon the consolidated financial statements of Akzo.     Id.3

     Aramid submitted Akzo's consolidated financial statements as

part of its response to the original questionnaire.     See

generally Aramid's Section A, P.R. Doc. 10, Def.'s App., Tab 2.

These statements contained the financing costs incurred by Akzo

on behalf of all of its subsidiaries.     See id. at A-15 to A-16,

Def.'s App., Tab 2, at 24-67.    Commerce subsequently issued a

supplemental questionnaire requesting additional financing

information.     See Commerce's Supplemental Questionnaire (Nov. 19,

1996), at 1-8, C.R. Doc. 8, Def.'s App., Tab 4, at 3-10.

Commerce conducted verification of the costs and expenses that

Aramid reported in its original and supplemental questionnaires

in January and February of 1997.    See Commerce's Verification

     3
        For U.S. ISE, Commerce used the consolidated financial
data of Akzo Nobel, Inc., the U.S. parent company. See
Verification Report, at Ex. 24, Def.'s App., Tab 9, at 19-20.
For COP, Commerce used the consolidated financial data of Akzo
Nobel, NV, the Dutch parent company of producer Aramid. Gov't
Br. at 5 n.2, see also Aramid's Section B-D Response, at 161-162,
Def.'s App., Tab 3, at 13-14.
Court No. 97-08-01335                                     Page 6

Outline (Jan. 13, 1997), at 1, C.R. Doc. 13, Def.'s App., Tab 5,

at 1.

     In its first administrative review, Commerce isolated the

various parts of Akzo's amortized goodwill and included within

COP certain depreciation expenses related to devalued assets, but

declined to account for the residual goodwill arising from Akzo's

corporate restructuring.    See E.I. DuPont I, 1998 WL 42598, at

*5-6.   This approach was upheld by the court.   Id. at *8-9.

     Commerce followed this approach in its treatment of Akzo's

goodwill in the second review.    Final Results, 62 Fed. Reg. at

38,063.   In response to Commerce's section D questionnaire,

Aramid indicated that it was reporting COP based upon the actual

costs incurred during the POR.    Aramid's Sections B-D, at 128,

139-140, Def.'s App., Tab 3, at 7, 9-10.   Aramid also stated in

this response that it was following the depreciation methodology

used by Commerce in the first administrative review as part of

Commerce's breakdown of goodwill.    Id. at 128 n.26, Def.'s App.,

Tab 3, at 7 n.26.   Accordingly, Aramid's reported cost of

manufacturing ("COM") included the part of depreciation

associated with the revaluation of Aramid's assets that occurred

as part of the corporate restructuring.    Id.

     Commerce verified Aramid's COP and CV from January 27,

through January 31, 1997.   Commerce's COP/CV Verification Report
Court No. 97-08-01335                                   Page 7

(Feb. 21, 1997), at 1, C.R. Doc. 26, Def.'s App., Tab 8, at 1.

During verification, Commerce confirmed to its satisfaction that

Aramid had made a proper adjustment for depreciation associated

with the revaluation of certain assets.   Gov't Br. at 10; see

also Exhibit 27 to Verification Report (Feb. 21, 1997), C.R. Doc.

26, Def.'s App., Tab 10.   Commerce also verified that Aramid had

included that portion of goodwill appropriately associated with

certain assets used in the cost of production.   Gov't Br. at 10

(relying on figures found in Exhibits 36 and 37 to Verification

Report (Feb. 21, 1997), C.R. Doc. 26, Def.'s App., Tab 11.).     The

final calculated dumping margin was 26.25 percent for Aramid's

merchandise.   Final Results, 62 Fed. Reg. at 38,064.

     The issues raised by DuPont are: (1) whether Commerce erred

in using Akzo Nobel, Inc.'s consolidated financial data to

calculate the financial expense component of Aramid's U.S. ISE,

(2) whether Commerce erred in using Akzo Nobel NV's consolidated

interest expenses in calculating Aramid's COP, and (3) whether

Commerce erred in excluding residual goodwill expenses arising

from the earlier corporate restructuring from Aramid's COP.4




     4
        All parties are agreed that remand is necessary to
correct Commerce's use of constructed value when suitable above-
cost home market sales were available for contemporaneous price
to price comparisons. Accordingly, remand is permitted for this
purpose.
Court No. 97-08-01335                                      Page 8

                  Jurisdiction and Standard of Review

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

(1994).   In reviewing final determinations in antidumping duty

investigations, the court will hold unlawful those agency

determinations which are unsupported by substantial evidence on

the record, or otherwise not in accordance with law.      19 U.S.C. §

1516a(b)(1)(B)(i) (1994).

                              Discussion

     DuPont asserts that remand is necessary as to the first

issue involving the use of financial data from Akzo Nobel, Inc.,

the U.S. parent of Aramid's U.S. selling arm, for Aramid's      U.S.

ISE calculation, because Commerce did not address in the Final

Results DuPont's arguments that the subsidiary's data should be

used.   Commerce's reasoning with regard to this issue is readily

discernable and it fully disposes of DuPont's arguments.      A court

may uphold an agency decision if the agency's path is reasonably

discernable.   Ceramica Regiomontana, S.A. v. United States, 810

F.2d 1137, 1139 (Fed. Cir. 1987) (citing cases).      Commerce's

reasoning is exactly the same as that supporting its decision to

use consolidated financial information of the foreign parent to

compute COP of the Dutch subsidiary.       See Final Results, 62 Fed.

Reg. at 38,060.    In sum, Commerce determined that the parent

corporations and not the subsidiaries controlled financial
Court No. 97-08-01335                                        Page 9

structuring and their data provided the most accurate measures of

financial costs.    Remand to obtain further explanation is not

necessary.

     The remainder of DuPont's arguments as to the three issues

before the court, and the responses thereto are essentially those

that were presented in E.I. DuPont I.     Defendant-intervenor

Aramid argues that the court should not consider these issues

further, should apply collateral estoppel principles to this

case, and should find that DuPont is precluded from raising the

issues addressed in E.I. DuPont I.     The Court of Appeals for the

Federal Circuit requires that the following four conditions be

met for issue preclusion to apply:

     (1)     the issue previously adjudicated is identical
             with that now presented;

     (2)     the issue was "actually litigated" in the
             prior case;

     (3)     the previous determination of that issue was
             necessary to the end-decision then made; and

     (4)     the party precluded was fully represented in
             the prior action.

Thomas v. General Servs. Admin., 794 F.2d 661, 664 (Fed. Cir.

1986).

     Although the parties and legal issues are the same, and the

issues were necessarily litigated and decided in E.I. DuPont I,

Commerce's decision is based on the facts and arguments presented
Court No. 97-08-01335                                       Page 10

as to this review period.     That is, although the methodologies at

issue, which were found to be permissible under the statute, are

the same, the calculations are different.    Also, DuPont

specifically challenged ISE in the second, but not in the first,

review, and Commerce was required to reassess in the second

review the corporate financing structure to determine if it had

been altered from the first period of review.    Further, Commerce

reconsidered all of DuPont's arguments and was not prohibited

from taking other reasonable approaches.    DuPont was not

precluded from trying to convince Commerce to change its

methodologies.   Thus, it appears that DuPont should not be

precluded from, at least, having the court review Commerce's

determination not to change its methodologies in the second

review.5

     Moreover, DuPont notes, neither this court, nor the Court of

Appeals for the Federal Circuit, has found issue preclusion

applicable in a trade case.    In PPG Indus., Inc. v. United

States, 978 F.2d 1232, 1239 (Fed. Cir. 1992), the court rejected



     5
        DuPont is incorrect, however, in assuming the court fully
considered the preclusion issue in denying its motion for
extension of time to file appeal of the court's decision as to
the first review. E.I. DuPont De Nemours & Co. v. United States,
15 F. Supp.2d 859 (Ct. Int'l Trade 1998). The parties did not
discuss the issue and the court's decision did not rise or fall
on DuPont's ability or inability to pursue the same issues in the
future.
Court No. 97-08-01335                                    Page 11

the application of issue preclusion, observing that the factual

record was different, including the fact that the time period in

review was different.   Even if this case is distinguishable from

PPG, it is still far from clear that issue preclusion should be

applied to trade cases.6   A better approach might be to apply the

type of stare decisis principles applied by the court in customs

classification cases.

     Res judicata principles (including issue preclusion)7 do not

apply in customs classification cases, unless the entries at

issue are identical.    United States v. Stone & Downer Co., 274

U.S. 225, 235-37 (1927); United States v. Boone, 38 C.C.P.A. 89,

94, 188 F.2d 808, 810 (1951) ("doctrine [of res judicata] does


     6
        As stated by this court in PPG Indus., Inc. v. United
States, 13 CIT 297, 302, 712 F. Supp. 195, 199 (1989),

     The burden on the party seeking issue preclusion is and
     should be exacting. This is especially so in trade cases,
     since Congress has made specific provision for periodic
     administrative reviews in countervailing duty and dumping
     cases . . . Since the agencies involved perform the function
     of expert finders of fact concerning different programs,
     different time frames, economic statistics and other factors
     in countervailing duty and dumping investigations as well as
     similar functions during periodic reviews, principles of
     issue preclusion should be carefully applied. To hold
     otherwise would have a chilling effect upon the
     administrative processes envisioned by the Congress.
     7
        In Young Eng'rs, Inc. v. United States, 2 Fed. Cir. (T)
9, 19, 721 F.2d 1305, 1314 (1983), the Court of Appeals adopted
the view of res judicata as stated in the Restatement (Second) of
Judgments (1984), that the term is a broad one, which includes
the concepts of merger, bar, and issue preclusion.
Court No. 97-08-01335                                    Page 12

not apply in cases involving classifications of imported

merchandise.").   Certain principles of stare decisis, however, do

apply.   United States v. Mercantil Distribuidora, S.A., 45

C.C.P.A. 20, 23-24 (1957).     Prior decisions with regard to

classification of the same merchandise, unless clearly erroneous,

govern as to other entries of the same goods.     Id. ("public

policy of putting an end to litigation and of not reopening

questions which have been decided is a sound one, subject only to

the qualification that clear error should not be perpetuated.").

The doctrine does not apply if new evidence as to proper

classification is presented.    Heraeus-Amersil, Inc. v. United

States, 13 CIT 764, 766 (1989) (citing Schott Optical Glass Inc.

v. United States, 3 Fed. Cir. (T) 35, 36, 750 F.2d 62, 64

(1984)).

     This was the approach advocated by the court on issues of

statutory interpretation in trade cases in American Lamb Co. v.

United States, 9 CIT 260, 262, 611 F. Supp. 979, 981 ("stare

decisis counsels the court to follow the prior decisions."),

rev'd on other grounds, 4 Fed. Cir. (T) 47, 785 F.2d 994 (1986).

This makes sense even for methodological issues.     While

technically the factual basis may be different because different

entries during different time periods are involved, if the
Court No. 97-08-01335                                    Page 13

determinative facts and legal arguments do not vary, judicial

economy is served by application of stare decisis principles.

     In any case, because the precedential value of prior

judicial determinations of this court is not clear in trade

cases, even where the parties are the same and the operative

facts do not differ in any significant way, it is at least in the

interest of judicial economy under current issue preclusion

precedent for the court to consider these issues fully once

more.8

     The court has reviewed the legal arguments presented by the

parties and the relevant facts of this review.   They do not

differ in any significant way from those of E.I. DuPont I, as the

parties seem to acknowledge.   Having fully considered the issues

once again, the court arrives at the same conclusions.

Accordingly, the court adopts the reasoning of E.I. DuPont I for

purposes of this opinion and incorporates it by reference herein.

Thus, the court sustains Commerce's determination, except that

remand upon consent is ordered to consider suitable home market

sales for contemporaneous price comparison purposes.




     8
        Even if stare decisis principles applied, under customs
practice with respect to a decision of the same level, that is,
another CIT decision, the court would review the matter for clear
error. See Mercantil, 45 C.C.P.A. at 23-4.
Court No. 97-08-01335                                      Page 14

     Commerce shall issue amended results within 45 days.     Any

objections to the new price comparisons shall be filed within 11

days thereof.   Responses are due within 7 days thereof.    If no

objections are timely filed, defendant shall present a final

proposed judgment to the court on the 15th day following its

amended results.



                               _____________________
                                  Jane A. Restani
                                      JUDGE



Dated: New York, New York

       This 2d day of June, 1999.
