Here, however, Commerce excluded Plaintiffs' price data on the ground that Plaintiffs (located in the market economy of Korea) sold the merchandise to buyers located in China (a nonmarket economy). An agency acts impermissibly when it treats similar situations in a manner that is "internally inconsistent," NSK, Ltd. v. United States, 390 F.3d 1352, 1357 (Fed. Cir. 2004), and fails to "reasonably explain the inconsistency," id. at 1358. As discussed above, Plaintiffs' sales were not made to Chinese buyers.
NICHOLAS TSOUCALAS, Senior Judge This matter comes before the Court pursuant to the decision of the Court of Appeals for the Federal Circuit ("CAFC") in NSK Ltd. v. United States, 390 F.3d 1352 (Fed. Cir. 2004), and the CAFC mandate of January 24, 2005, vacating and remanding the judgment of the Court in NSK Ltd. v. United States, 28 CIT ___, 217 F. Supp. 2d 1291 (2004). This action was brought by The Torrington Company that was later acquired by The Timken Company, and is now known as Timken U.S. Corporation. The Court refers to plaintiff and defendant-intervenor as Timken U.S. Corporation in the caption.
B. The pertinent rules of statutory construction are well-settled. "Our review of questions of statutory interpretation is de novo , except to the extent deference to an agencyโs construction of a statute it administers is required under the two-step analysis set forth in Chevron ...." NSK Ltd. v. United States , 390 F.3d 1352, 1354 (Fed. Cir. 2004) (citing Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc. , 467 U.S. 837, 842โ43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984) ); see also Vassallo v. Depโt of Def. , 797 F.3d 1327, 1330 (Fed. Cir. 2015) (explaining that we generally review an agencyโs statutory interpretation using the two-pronged framework established by Chevron ). The first prong of Chevron requires us to assess "whether Congress has directly spoken to the precise question at issue"; if so, we "must give effect to the unambiguously expressed intent of Congress." Chevron , 467 U.S. at 842โ43, 104 S.Ct. 2778. If the statute does not answer the precise question at issue, however, meaning that it is "silent or ambiguous," then, under prong two of Chevron , we must determine whether the agency provided "a permissible construction of the statute.
Before addressing each of the three time periods at issue, we must determine the correct construction of 5 U.S.C. ยง 8332(c)(2). The pertinent rules of statutory construction are well-settled. "Our review of questions of statutory interpretation is de novo, except to the extent deference to an agencyโs construction of a statute it administers is required under the two-step analysis set forth in Chevron ...." NSK Ltd. v. United States , 390 F.3d 1352, 1354 (Fed. Cir. 2004) (citing Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc. , 467 U.S. 837, 842โ43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984) ); see also Vassallo v. Depโt of Def. , 797 F.3d 1327, 1330 (Fed. Cir. 2015) (explaining that we generally review an agencyโs statutory interpretation using the two-pronged framework established by Chevron ). The first prong of Chevron requires us to assess "whether Congress has directly spoken to the precise question at issue"; if so, we "must give effect to the unambiguously expressed intent of Congress." Chevron , 467 U.S. at 842โ43, 104 S.Ct. 2778. If the statute does not answer the specific question at issue, however, meaning that it is "silent or ambiguous," then, under prong two of Chevron , we must determine whether the agency provided "a permissible construction of the statute.
โOur review of questions of statutory interpretation is de novo , except to the extent deference to an agency's construction of a statute it administers is required under the two-step analysis set forth in Chevron.โ NSK Ltd. v. United States , 390 F.3d 1352, 1354 (Fed. Cir. 2004) (citation omitted); see also Vassallo v. Dep't of Def. , 797 F.3d 1327, 1330 (Fed. Cir. 2015) (explaining that we review an agency's statutory interpretation using the two-pronged framework established by Chevron ). The first prong of Chevron requires us to assess โwhether Congress has directly spoken to the precise question at issueโ; if so, we โmust give effect to the unambiguously expressed intent of Congress.โ Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc. , 467 U.S. 837, 842โ43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). If the statute does not answer the specific question at issue, however, meaning that it is โsilent or ambiguous,โ then, under prong two of Chevron, we must determine whether the agency provided โa permissible construction of the statute.โ Id. at 843, 104 S.Ct. 2778 ; Hymas v. United States , 810 F.3d 1312, 1318 (Fed. Cir. 2016).
Statutory interpretation by the ITC is a legal issue reviewed de novo, except to the extent deference to the ITC's construction of a statute it administers is required under the two-step analysis set forth in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). NSK Ltd. v. United States, 390 F.3d 1352, 1354 (Fed.Cir.2004). The ITC's interpretation must be set aside if is it is โarbitrary, capricious, or manifestly contrary to the statute.โ
Statutory interpretation by the ITC is a legal issue reviewed de novo, except to the extent deference to the ITC's construction of a statute it administers is required under the two-step analysis set forth in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). NSK Ltd. v. United States, 390 F.3d 1352, 1354 (Fed. Cir. 2004). The ITC's interpretation must be set aside if is it is "arbitrary, capricious, or manifestly contrary to the statute."
" M.M. P. Mar. Advancement, Training, Educ. Safety Program (MATES) v. Dep't of Commerce, 729 F.2d 748, 754-55 (Fed. Cir. 1984) (vacating agency decision because agency acted arbitrarily in imposing new requirement on party contrary to agency's precedent and without explanation); accord Motor Vehicle Mfrs. Ass'n of United States, Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 42, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983) ("[A]n agency changing its course . . . is obligated to supply a reasoned analysis for the change. . . ."); Greater Boston Television Corp. v. Fed. Communications Comm'n, 444 F.2d 841, 852 (D.C. Cir. 1970) (same); cf. NSK Ltd. v. United States, 390 F.3d 1352, 1357-58 (Fed. Cir. 2004) (vacating agency decision where agency acted arbitrarily in interpreting statutory provisions in an internally inconsistent fashion and in not reasonably explaining the inconsistency); SKF USA, Inc. v. United States, 263 F.3d 1369, 1381-82 (Fed. Cir. 2001) (vacating agency decision where agency acted arbitrarily in inconsistently defining a term in two provisions of statute and not reasonably explaining the inconsistency); Nat'l Org. of Veterans v. Sec'y of Veterans Affairs, 260 F.3d 1365, 1379 (Fed. Cir. 2001) (remanding an agency regulation to allow the agency to provide a reasonable explanation for its decision to interpret virtually identical statutory language inconsistently). The longstanding policy of the Board to allow parties an opportunity to submit rebuttal evidence appears in a number of Board decisions, beginning with Schultz v. Consumer Product Safety Commission, 9 MSPB 370, 10 M.S.P.R. 104 (1982).
But Commerce may not treat two like situations differently without explanation. Cf. NSK Ltd. v. United States, 390 F.3d 1352, 1357-58 (Fed. Cir. 2004) (rejecting as internally inconsistent a Commerce regulation interpreting "the price used to establish export price" in antidumping law); Husteel Co., Ltd. v. Seah Steel Corp., Ltd., 31 CIT ___, ___, Slip Op. 07-74 at 18 (May 15, 2007) (applying the NSK holding to Commerce's findings in a single antidumping proceeding). Defendant-intervenor U.S. Steel offers the following explanation for the apparently inconsistent determinations: "At verification, RTG officials specifically stated with respect to slab, and only slab, that if the 1% reduced import duty rate was rescinded, the `normal' rate of 10% would apply.
However, those expenses encompass movement expenses, not U.S. indirect selling expenses. See NSK Ltd v. United States, 390 F.3d 1352 (Fed. Cir. 2004) (selling expenses are not movement expenses). Cf. 19 U.S.C. ยง 1677a(d)(1)(D) (allowing for deduction of "other" selling expenses from constructed export price).