AD Petitioner Objects to Commerce's Affiliation Finding in AD Case on Brazilian Lemon Juice

The Commerce Department improperly found that lemon juice exporter Louis Dreyfus Co. (LDC) was not affiliated with its primary fresh lemon supplier, leading to a de minimis rate for LDC, petitioner Ventura Coastal argued in its Aug. 3 motion for judgment at the Court of International Trade. The petitioner said Commerce discussed only LDC's potential reliance on the supplier, whose name was redacted in the brief, but failed to consider the supplier's reliance on LDC, misapplying the legal standard (Ventura Coastal v. U.S., CIT # 23-00009).

In the antidumping duty investigation on lemon juice from Brazil, LDC served as one of the mandatory respondents. Commerce reversed its initial decision that LDC was affiliated with its main fresh lemon supplier on the grounds that there was no close supplier relationship between the two companies.

At the trade court, Ventura criticized Commerce's "one generally-worded sentence" describing its "sweeping" conclusion. The sentence said "contractual terms between LDC and its supplier recognize the sovereignty of the parties and indicate no obligation toward each other beyond those spelled out by the terms of the contract," citing LDC's partnership agreement, sale and purchase of citric fruit agreement and memorandum of understanding between the two entities.

Ventura said this analysis was contrary to the "plain language and clear intent of the statute," but it also did not align with "Commerce's practice of finding that control can exist by virtue of either 'the supplier or buyer [becoming] reliant upon the other.'" No explanation was given of this departure from past practice, the brief said.

Commerce also rejected the application of the major input role to adjust the exporter's lemon procurement cost because the evidence shows that LDC had other sources for buying this major input. Ventura said this outcome is "absurd" since Commerce found the main supplier of lemons to a lemon juice processor "did not constitute a major input." The highly redacted brief said this conclusion was also belied by evidence of LDC's access to other sources.

The petitioner also said that the affiliation analysis was illegal because Commerce "failed to consider the temporal aspect of the parties' relationship."