Torrington Co. v. U.S.
| Citation | 146 F.Supp.2d 845 |
| Decision Date | 10 May 2001 |
| Docket Number | Slip Op. 01-56.,No. 99-08-00462.,99-08-00462. |
| Parties | THE TORRINGTON COMPANY, Plaintiff and Defendant-Intervenor, v. UNITED STATES, Defendant and Koyo Seiko Co., Ltd. and Koyo Corporation of U.S.A.; NTN Corporation, NTN Bearing Corporation of America, American NTN Bearing Manufacturing Corporation, NTN Driveshaft, Inc., NTN-Bower Corporation and NTN-BCA Corporation, Defendant-Intervenors and Plaintiffs. |
| Court | U.S. Court of International Trade |
Stewart and Stewart (Terence P. Stewart, Wesley K. Caine, Geert De Prest and Lane S. Hurewitz) for Torrington.
Stuart E. Schiffer, Acting Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Velta A. Melnbrencis, Assistant Director); of counsel: William G. Isasi, Joon W. Lee, Peter G. Kirchgraber, John F. Koeppen, David R. Mason and Arthur D. Sidney, Office of the Chief Counsel for Import Administration, United States Department of Commerce, for the United States.
Powell, Goldstein, Frazer & Murphy LLP (Neil R. Ellis, Elizabeth C. Hafner and Lisa A. Crosby) for Koyo.
Barnes, Richardson & Colburn (Donald J. Unger, Kazumune V. Kano, Carolyn D. Amadon and Shannon N. Rickard) for NTN.
Plaintiffs, The Torrington Company ("Torrington"), Koyo Seiko Co., Ltd. and Koyo Corporation of U.S.A. (collectively "Koyo"), NTN Corporation, NTN Bearing Corporation of America, American NTN Bearing Manufacturing Corporation, NTN Driveshaft, Inc., NTN-Bower Corporation and NTN-BCA Corporation (collectively "NTN"), move pursuant to USCIT R. 56.2 for judgment upon the agency record in this consolidated action challenging various aspects of the United States Department of Commerce, International Trade Administration's ("Commerce") final determination, entitled Final Results of Antidumping Duty Administrative Reviews of Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France, Germany, Italy, Japan, Romania, Sweden, and the United Kingdom ("Final Results"), 64 Fed.Reg. 35,590 (July 1, 1999).
Specifically, plaintiffs Koyo and NTN contend that Commerce unlawfully conducted a duty absorption inquiry under 19 U.S.C. § 1675(a)(4) (1994) for the ninth administrative review of the applicable antidumping duty order.
Plaintiff NTN alleges that Commerce erred in its treatment of the following: (1) NTN's home market sales with high profit levels and home market sample sales in Commerce's calculation of normal value; (2) inputs that NTN obtained from affiliated parties in Commerce's calculation of cost of production and constructed value; (3) downstream sales for which NTN did not report the total downstream sales value of merchandise sold by affiliated parties; (4) normal value in Commerce's decision to base it on constructed value after both below-cost identical and similar merchandise was disregarded; (5) NTN's claim for level of trade adjustment; (6) NTN's United States and home market indirect selling expenses in Commerce's recalculation of these selling expenses without regard to levels of trade; (7) NTN's constructed export price profits in Commerce's calculation of constructed export price after including NTN's profits from export price sales; (8) NTN's constructed export price profits in Commerce's calculation of constructed export price without regard to levels of trade; (9) NTN's home market packing expenses; (10) NTN's directors' retirement benefits in Commerce's calculation of NTN's general and administrative expenses; (11) NTN's normal value in Commerce's refusal to adjust NTN's normal value by home market commissions to affiliated parties that were not designated with the specificity necessary to presume arm's length transactions.
Plaintiff Torrington contends that Commerce erred in accepting Koyo's home market "adjustment number two" as direct adjustment to price.
This case concerns the ninth administrative review of the outstanding 1989 antidumping duty order on antifriction bearings (other than tapered roller bearings) and parts thereof ("AFBs") imported from Japan for the period of review ("POR") covering May 1, 1997 through April 30, 1998. See Final Results, 64 Fed.Reg. at 35,599, 35,617. In accordance with 19 C.F.R. § 351.213 (1998), Commerce initiated the administrative review of this order on June 29, 1998, see Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 63 Fed.Reg. 35,188, and published the preliminary results of the subject review on February 23, 1999. See Preliminary Results of Antidumping Duty Administrative Reviews and Partial Rescission of Administrative Reviews of Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France, Germany, Italy, Japan, Romania, Singapore, Sweden, and the United Kingdom ("Preliminary Results"), 64 Fed.Reg. 8790, 8791. Commerce published the Final Results on July 1, 1999. See 64 Fed.Reg. at 35,590.
Since the administrative review at issue was initiated after December 31, 1994, the applicable law in this case is the antidumping statute as amended by the Uruguay Round Agreements Act ("URAA"), Pub.L. No. 103-465, 108 Stat. 4809 (1994) (effective Jan. 1, 1995).
The Court has jurisdiction over this matter pursuant to 19 U.S.C. § 1516a(a) (1994) and 28 U.S.C. § 1581(c) (1994).
In reviewing a challenge to Commerce's final determination in an antidumping administrative review, the Court will uphold Commerce's 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)(i); see NTN Bearing Corp. of America v. United States ("NTN Bearing"), 24 CIT ___, ___, 104 F.Supp.2d 110, 115-16 (2000) ().
Title 19 of the United States Code, § 1675(a)(4) provides that during an administrative review initiated two or four years after the "publication" of an antidumping duty order, Commerce, if requested by a domestic interested party, "shall determine whether antidumping duties have been absorbed by a foreign producer or exporter subject to the order if the subject merchandise is sold in the United States through an importer who is affiliated with such foreign producer or exporter." Section 1675(a)(4) further provides that Commerce shall notify the International Trade Commission ("ITC") of its findings regarding such duty absorption for the ITC to consider in conducting a five-year ("sunset") review under 19 U.S.C. § 1675(c), and the ITC will take such findings into account in determining whether material injury is likely to continue or recur if an order were revoked under § 1675(c). See 19 U.S.C. § 1675a(a)(1)(D).
On May 29, 1998, and July 29, 1998, Torrington requested that Commerce conduct a duty absorption inquiry pursuant to § 1675(a)(4) with respect to various respondents, including Koyo and NTN, to ascertain whether antidumping duties had been absorbed during the ninth period of review ("POR"). See Final Results, 64 Fed.Reg. at 35,600, 35,617.
In the Final Results, Commerce determined that duty absorption had in fact occurred for the ninth review. See id. at 35,591, 35,600-02. In asserting its authority to conduct a duty absorption inquiry under § 1675(a)(4), Commerce first explained that for "transition orders" as defined in § 1675(c)(6)(C) (), regulation 19 C.F.R. § 351.213(j) provides that Commerce would make a duty absorption inquiry, if requested, for any antidumping administrative review initiated in 1996 or 1998. See id. at 35,600. Commerce concluded that (1) because the antidumping duty order on the AFBs in this case has been in effect since 1989, the order is a transition order pursuant to § 1675(c)(6)(C), and (2) since this review was initiated in 1998 and a request was made, it had the authority to make a duty absorption inquiry for the ninth POR. See id. at 35,600-02.
Koyo and NTN contend that Commerce lacked authority under § 1675(a)(4) to conduct a duty absorption inquiry for the ninth POR of the outstanding 1989 antidumping duty order. See Koyo's Mem. P. & A. Supp. Mot. J. Agency R. ("Koyo's Mem.") at 5-7; Koyo's Reply Br. Supp. Mot. J. Agency R. ("Koyo's Reply") at 219; NTN's Mem. J. Agency R. ("NTN's Mem.") at 2, 6, 12-13; NTN's Reply at 6-7. In the alternative, Koyo asserts that even if Commerce possessed the authority to conduct such an inquiry, Commerce's methodology for determining duty absorption was contrary to the law and, accordingly, the case should be remanded to Commerce to reconsider its methodology. See Koyo's Mem. at 7-9; Koyo's Reply at 19-21.
Commerce argues that it: (1) properly construed subsections (a)(4) and (c) of § 1675 as authorizing it to make a duty absorption inquiry for antidumping duty orders that were issued and published prior to January 1, 1995; and (2) devised and applied a reasonable methodology for determining duty absorption. See Def.'s Mem. Partial Opp'n Pls.' Mot. J. Agency R. ("Def.'s Mem.") at 13-23. Also, Commerce asserts that no statutory provision or legislative history specifically provides that Commerce is precluded from conducting a duty absorption inquiry with respect to merchandise covered by a transition order. See id. at 2, 19.
Torrington generally agrees with Commerce's contentions. See Torrington's Resp. Pls.' Mot. J. Agency R. ("Torrington's Resp.") at 2-4, 17-37, 46-48. In addition, Torrington asserts that Commerce has inherent...
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