CIT Erred in Rejecting First Sale Valuation, Failing to Consider Second Sale Valuation, Importer Tells CAFC
The Court of International Trade erred in failing to grant importer Meyer Corp. first sale treatment when valuing its cookware imports, the importer told the U.S. Court of Appeals for the Federal Circuit in its opening brief. In one of "two major assignments of error," Meyer said CIT impermissibly rejected first sale prices based on the absence of financial information from Meyer's parent company, Meyer International Holdings (Meyer Corp. v. United States, Fed. Cir. #23-1570).
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
The importer said the record shows that Meyer's first sale prices recover all costs plus a profit, claiming that "the text of the regulation calls for the seller’s profits in the sales under investigation to be compared with the seller’s overall profits -- not the profits of a parent corporation." The regulation does not ask for the profits of a parent corporation that does not sell the same "class or kind" of goods as those being appraised, the brief said.
Meyer said the trade court's second error was its failure to carry out its duty set under Jarvis Clark Co. v. U.S., which requires the court to find the correct result in every case. In rejecting Meyer's bid for first sale treatment, CIT merely assigned second sale valuation to the goods at issue without examining whether they qualified for second sale. "This error alone warrants remand," the brief said, adding that the trade court's latest opinion in the case "did not significantly progress this litigation."
Meyer's case initially revolved around a question raised by CIT of whether first sale valuation could ever be used for goods coming from non-market economies. The Federal Circuit found that CBP has no basis to consider a nation's NME status when deciding whether to grant first sale treatment, and sent the case back for CIT to consider Meyer's shipments specifically (see 2208110060). In its second opinion, the trade court said the cookware imports do not qualify for first sale treatment due to Meyer International's failure to submit financial information (see 2302090053).
On appeal again, Meyer claimed that its goods are entitled to first sale treatment under the criteria established in Nissho-Iwai America Corp. v. U.S. since they were "sold pursuant to a bona fide sale," sold at arm's length, clearly meant for export to the U.S. and not subject to non-market influences. The importer also challenged the trade court's finding that the absence of Meyer International's data "in some unarticulated way" gave an independent reason to reject first sale treatment, despite the fact that Meyer International is not a party to the proceeding.
"Ironically, the lower court upheld the Government’s 'second sale' appraisements, even though those sales are also between companies owned by MIH, and such sales would presumably be subject to any imagined taint emanating from MIH," the importer said. Meyer found this odd given that Meyer International is a holding company that doesn't produce or sell goods and that the statute says nothing about a company's "access to credit and capital," nor an actor's bargaining leverage with creditors, as the basis for transaction value.