CAFC Says CIT Wrongly Imposed NME Test on First Sale Transaction in Meyer Case

The Court of International Trade was wrong to consider China's non-market economy status when analyzing whether to grant first sale treatment, the Court of Appeals for the Federal Circuit said in a Aug. 11 ruling. The decision overturns and remands a 2021 CIT ruling that said that first sale treatment shouldn't apply for cookware imported by Meyer from Thailand and China through a Chinese middleman because China is a NME.

A 1992 CAFC ruling in Nissho Iwai said a first sale transaction must be absent of distortive non-market influences, but the CIT wrongly interpreted that to extend to the role of NMEs, said the CAFC. "This provision concerns effects of the relationship between the buyer and seller, not effects of government intervention, and especially not with government intervention that affects the industry as a whole," said the court. "Because the Court of International Trade relied on its misreading of Nissho Iwai to reject Meyer’s first-sale price, we vacate and remand for the court to reconsider whether Meyer may rely on the first-sale price."