Torrington Co. v. U.S.
| Decision Date | 15 October 1997 |
| Docket Number | No. 97-1181,97-1181 |
| Citation | 127 F.3d 1077 |
| Parties | The TORRINGTON CO., Plaintiff-Appellant, and Federal-Mogul Corporation, Plaintiff, v. The UNITED STATES, Defendant-Appellee, and SKF USA, Inc., SKF France, S.A., SKF GmbH, SKF Industrie, S.p.A., SKF (U.K.) Limited, SKF Sverige AB, Defendants-Appellees, and Koyo Seiko Co., Ltd., Koyo Corporation of U.S.A., Defendants-Appellees, and NSK Ltd., NSK Corporation, Defendants-Appellees, and NTN Bearing Corporation of America, American NTN Bearing Manufacturing Corporation, NTN Corporation, NTN Kugellagerfabrik (Deutschland) GmbH, Defendants-Appellees, and NMB Thai Ltd, Pelmec Industries Ltd., NMB Corporation, NMB Singapore Ltd., Defendants-Appellees, and FAG (U.K.) Limited, Barden Corporation (U.K.) Limited,FAG Bearings Corporation, The Barden Corporation, FAG Kugelfischer Georg Schaefer KGaA, FAG Cuscinetti S.p.A., Defendants-Appellees, and Ina Walzlager Schaeffler KG, Ina Bearing Company, Inc., Defendants-Appellees, and GMN Georg Muller Nurnberg AG, Defendant-Appellee. and RHP Bearings Inc., RHP Bearings Of U.S.A., Peer Bearing Company, Defendants. |
| Court | U.S. Court of Appeals — Federal Circuit |
James R. Cannon, Jr., Stewart and Stewart, Washington, DC, argued for plaintiff-appellant. On the brief were Terence P. Stewart and Wesley K. Caine. Of counsel were Lane S. Hurewitz and Geert M. DePrest.
Lucius B. Lau, Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, Washington, DC, argued for defendant-appellee The United States. On the brief were Frank W. Hunger, Assistant Attorney General, David M. Cohen, Director, and Velta A. Melnbrencis, Assistant Director. Of counsel on the brief were Stephen J. Powell, Chief Counsel, Berniece A. Browne, Senior Counsel, and Mark A. Barnett, Attorney, Office of the Chief Counsel for Import Administration, Department of Commerce, Washington, DC. Of counsel was Thomas H. Fine, Department of Commerce, Washington, DC.
Herbert C. Shelley, Howrey & Simon, Washington, DC, argued for defendants-appellees SKF USA, Inc., et al. With him on the brief were Alice A. Kipel and Anne Talbot.
Peter O. Suchman, Powell, Goldstein, Frazer & Murphy LLP, Washington, DC, for defendants-appellees Koyo Seiko Co., Ltd., et al. With him on the brief were Neil R. Ellis and Susan M. Mathews.
Robert A. Lipstein, Lipstein, Jaffe & Lawson, L.L.P., Washington, DC, for defendants-appellees NSK Ltd., et al. With him on the brief were Matthew P. Jaffeand Grace W. Lawson.
Donald J. Unger, Barnes, Richardson & Colburn, Chicago, IL, for defendants-appellees NTN Bearing Corporation of America, et al. With him on the brief was Kazumune V. Kano. Of counsel was Robert E. Burke.
Walter J. Spak, White & Case, Washington, DC, for defendants-appellees NMB Thai Ltd., et al. With him on the brief were William J. Clinton, Christopher F. Corr, and Richard J. Burke. Of counsel was Richard G. King.
Max F. Schutzman, Grunfeld, Desiderio, Lebowitz & Silverman LLP, New York City, for defendants-appellees FAG (U.K.) Limited, et al. With him on the brief were Andrew B. Schroth and Mark E. Pardo.
Stephen L. Gibson, Arent Fox Kintner Plotkin & Kahn, Washington, DC, for INA Walzlager Schaeffler KG, et al. With him on the brief was Peter L. Sultan.
Charles W. Petty, Jr., Ross & Hardies, Washington, DC, for defendant-appellee GMN Georg Muller Nurnberg AG. Of counsel was Jeffrey S. Neeley.
Before RICH, MAYER, and RADER, Circuit Judges.
The United States Court of International Trade upheld an antidumping determination of the United States Department of Commerce (Commerce). See Torrington Co. v. United States, 881 F.Supp. 622, 629-33 (Ct. Int'l Trade 1995). Commerce had declined to apply 19 C.F.R. § 353.26(a) (1992) in calculating the "United States price" and to exclude below-cost sales from its calculation of the "foreign market value" of certain ball bearings. The Torrington Company (Torrington) appealed. Because Torrington did not show that the below-cost sales were actually reimbursements for ball bearing duties or that the below-cost sales were outside "the ordinary course of trade," this court affirms.
On May 15, 1989, Commerce published antidumping duty orders on ball bearings manufactured in France, Germany, Italy, Japan, Romania, Singapore, Sweden, Thailand, and the United Kingdom. See, e.g., Antidumping Duty Orders: Ball Bearings, Cylindrical Roller Bearings, and Spherical Plain Bearings and Parts Thereof From the Federal Republic of Germany, 54 Fed.Reg. 20,900 (May 15, 1989). In 1991, Commerce undertook administrative reviews for each country involved in the duty orders. Commerce published its final determinations on June 24, 1992. These determinations reduced the duties on foreign ball bearings. See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France; et al.; Final Results of Antidumping Duty Administrative Reviews, 57 Fed.Reg. 28,360 (June 24, 1992) [hereinafter Final Results ].
In making its determinations, Commerce compared the United States price (USP) of the imported bearings, see 19 U.S.C. § 1677a (1988), 1 with the foreign market value (FMV) of the same or similar merchandise in a particular foreign home market, see 19 U.S.C. § 1677b. When determining USP, Commerce did not apply its regulation at 19 C.F.R. § 353.26(a). This regulation further decreases the USP to account for the amount of any antidumping duty that a foreign producer "[p]aid directly on behalf of the importer" or "[r]eimbursed to the importer." 2
When determining FMV, Commerce may use either an average of actual sales prices or a "constructed value." See 19 U.S.C. § 1677b(a)(2). Title 19 defines constructed value as the sum of (A) "the cost of materials ... and of fabrication or other processing," (B) "an amount for general expenses and profit," and (C) the cost of packaging. 19 U.S.C. § 1677b(e)(1). In assessing the "amount for general expenses and profit," Commerce must consider whether the amount is "equal to that usually reflected in sales of merchandise of the same general class or kind as the merchandise under consideration which are made by producers in the country of exportation, in the usual commercial quantities and in the ordinary course of trade." 19 U.S.C. § 1677b(e)(1)(B) (emphasis added). The statute defines "ordinary course of trade" as "the conditions and practices which ... have been normal in the trade under consideration with respect to merchandise of the same class or kind." 19 U.S.C. § 1677(15).
When calculating FMV based on actual sales figures, Commerce must disregard sales made "at less than the cost of production." 19 U.S.C. § 1677b(b). However, the statute does not expressly state whether such below-cost sales must also be disregarded for purposes of calculating the "amount for general expenses and profit" when using a constructed value. Commerce did not exclude the below-cost sales on these bearings.
On July 21, 1992, Torrington, a domestic producer of ball bearings, filed suit to protest Commerce's determinations. Specifically, Torrington argued that in calculating USP, Commerce should have applied 19 C.F.R. § 353.26(a) to foreign manufacturers' sales to their U.S. importers at prices below cost plus a reasonable profit. Although not direct payments or reimbursements, these transactions, according to Torrington, were equivalent to, and should be regarded as, duty reimbursements. Torrington also argued that when using a constructed value for FMV, Commerce should have excluded below-cost sales in calculating the "amount for general expenses and profit." On these issues, the Court of International Trade affirmed Commerce's actions.
This court, duplicating the review given by the Court of International Trade, upholds an antidumping duty determination unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B); see also Torrington Co. v. United States, 82 F.3d 1039, 1044 (Fed.Cir.1996). In conducting this review, this court accords "substantial deference to an agency's interpretation of its own regulations." Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512, 114 S.Ct. 2381, 2386, 129 L.Ed.2d 405 (1994).
The "reimbursement regulation," 19 C.F.R. § 353.26, provides, in relevant part:
(a) In general. (1) In calculating the United States price, the Secretary will deduct the amount of any antidumping duty which the producer or reseller:
(i) Paid directly on behalf of the importer; or
(ii) Reimbursed to the importer.
This regulation has the effect of reducing the importer's USP by the amount of any reimbursed duties, thus exposing the importer to further antidumping duties to the extent that the manufacturer paid or reimbursed the original duty assessment.
The laws of the United States, however, do not make money transfers between related foreign and domestic businesses illegal. For this reason, Commerce correctly interprets its regulation to consider below-cost transfers between related manufacturers and importers presumptively legal. As Commerce persuasively reasoned: Final Results, 57 Fed.Reg. at 28,371. Thus,...
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