Timken Co. v. United States

• Decision Date: 10 May 2016
• Docket Number: Slip Op. 16–47,Consol. Court No. 14–00155
• Citation: 179 F.Supp.3d 1168
• Parties: The Timken Company, Plaintiff, v. United States, Defendant, NSK Ltd., NSK Corporation, NSK Precision America, Inc., NTN Bearing Corp. of America, NTN Corporation, NTN Bower, Inc., NTN Driveshaft, Inc., American NTN Bearing Manufacturing Corp., JTEKT Corporation, JTEKT North America, Inc., Nachi–Fujikoshi Corporation, Nachi America, Inc., Nachi Technology, Inc., NSK Bearings Europe, Ltd., NSK Europe Ltd., Defendant–Intervenors.
• Court: U.S. Court of International Trade

179 F.Supp.3d 1168

The Timken Company, Plaintiff,

v. United States, Defendant,NSK Ltd., NSK Corporation, NSK Precision America, Inc., NTN Bearing Corp. of America, NTN Corporation, NTN Bower, Inc., NTN Driveshaft, Inc., American NTN Bearing Manufacturing Corp., JTEKT Corporation, JTEKT North America, Inc., Nachi–Fujikoshi Corporation, Nachi America, Inc., Nachi Technology, Inc., NSK Bearings Europe, Ltd., NSK Europe Ltd., Defendant–Intervenors.

Slip Op. 16–47

Consol. Court No. 14–00155

United States Court of International Trade.

May 10, 2016

Geert M. De Prest, Stewart and Stewart, of Washington, DC, argued for plaintiff. With him on the brief was Terence P. Stewart.

L. Misha Preheim, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for defendant. With him on the brief were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, and Claudia Burke, Assistant Director. Of counsel on the brief was Scott D. McBride, Senior Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, DC.

Alexander H. Schaefer and Hea Jin Koh, Crowell & Moring, LLP, of Washington, DC, for defendant-intervenors NSK Ltd., NSK Corporation, NSK Precision America, Inc., NSK Bearings Europe, Ltd., and NSK Europe Ltd.

Diane A. MacDonald, Riggle and Craven, of Chicago, IL, argued for defendant-intervenors NTN Bearing Corp. of America, NTN Corporation, NTN Bower, Inc., NTN Driveshaft, Inc., and American NTN Bearing Manufacturing Corp. With her on the brief was David J. Craven.

Neil R. Ellis, Justin R. Becker, Rajib Pal, Sidley Austin, LLP, of Washington, DC, for defendant-intervenors JTEKT Corporation and JTEKT North America, Inc.

Greyson L. Bryan, Jr., David J. Ribner, McAllister M. Jimbo, O'Melveny & Myers, LLP, of Washington, DC, for defendant-intervenors Nachi-Fujikoshi Corporation, Nachi America, Inc., and Nachi Technology, Inc.

OPINION

Restani

, Judge:

This matter is before the court following the U.S. Department of Commerce's (“Commerce”) Final Results of Remand Redetermination, ECF No. 85 (“Remand Results”). The court remanded to Commerce to apply its differential pricing (“DP”) analysis in the 2009–2010 annual antidumping duty (“AD”) administrative review of imports of ball bearings and parts thereof from Japan and the United Kingdom. Timken Co. v. United States , 79 F.Supp.3d 1350, 1352, 1361 (C.I.T.2015)

(“Timken ”). Commerce has complied with the court's remand order and, for the reasons stated below, Commerce's Remand Results are sustained.

BACKGROUND

The facts of this case have been documented in the court's previous opinion, and the court presumes familiarity with that opinion. See id. at 1351–55

. There, The Timken Company (“Timken”) contested Commerce's decision not to apply its DP analysis in the challenged administrative reviews. See

id. at 1352 ; see also

Ball Bearings and Parts Thereof from Japan and the United Kingdom: Final Results of Antidumping Duty Administrative Reviews and Rescission of Review in Part; 2009–2010 , 79 Fed.Reg. 35,312 (Dep't Commerce June 20, 2014) (“Final Results”). The court agreed that Commerce had abused its discretion by departing from its routine practice of applying the DP analysis rather than the Nails test to address potential targeted dumping. Timken , 79 F.Supp.3d at 1352, 1361.

Thus, on October 8, 2015, Commerce published, under protest, its Remand Results , in which it applied its DP analysis. Remand Results at 1, 2. The court's reasoning in its prior opinion fully addresses the issue and will not be addressed further here.

Commerce uses its DP analysis to “determine whether an alternative comparison methodology is appropriate.” Id. at 3. Typically, in administrative reviews, Commerce uses the average-to-average (“A–A”) methodology, without zeroing,¹ as the default methodology to calculate weighted-average dumping margins. Antidumping Proceedings: Calculation of the Weighted–Average Dumping Margin and Assessment Rate in Certain Antidumping Duty Proceedings; Final Modification , 77 Fed.Reg. 8,101, 8,101

–03 (Dep't Commerce Feb. 14, 2012) (“Final Modification ”). Relevant to this case, Commerce also sometimes uses the average-to-transaction (“A–T”) alternative comparison methodology, with zeroing,² to calculate a weighted-average dumping margin. Id. at 8,101.

In performing the DP analysis, Commerce uses two tests to determine whether there is “a pattern of [export prices] or [constructed export prices] for comparable merchandise that differs significantly among purchasers, regions, or time periods.” Remand Results at 3. “This pattern is commonly referred to as ‘targeted dumping.’ ” Timken , 79 F.Supp.3d at 1352

. First, Commerce uses the “Cohen's d test” to measure “the extent of the difference between the mean of a test group and the mean of a comparison group.” Remand Results at 4. Commerce may calculate a Cohen's d coefficient only when “the test and comparison groups of data each have at least two observations, and when the sales quantity for the comparison group accounts for at least five percent of the total sales quantity of the comparable merchandise.” Id. When evaluating “the extent to which the net prices to a particular purchaser, region or time period differ significantly from the net prices of all other sales of comparable merchandise,” Commerce considers the difference significant if the calculated Cohen's d coefficient “is equal to or exceeds the large (i.e. , 0.8) threshold.” Id. Second, Commerce uses the “ratio test” to determine “the extent of the significant price differences for all sales.” Id. Under this test, Commerce determines if the value of sales to purchasers, regions, and time periods that pass Cohen's d falls between the 0 to 33 percent range, 33 to 66 percent range, or the 66 to 100 percent range of total sales. Id. at 4–5. Respectively to the percent range calculated, Commerce will either apply A–A to all sales, A–A to the sales that don't pass Cohen's d and A–T to the sales that do pass Cohen's d (i.e., “mixed methodology”), or A–T to all sales. See

id. at 5.

Next, Commerce “examine[s] whether using only the [A–A] method can appropriately account for such differences” by determining “whether using an alternative method ... yields a meaningful difference in the weighted-average dumping margin as compared to” A–A without zeroing. Id. Commerce considers a difference “meaningful” if “there is a 25 percent relative change in the weighted-average dumping margin between the [A–A] method and the appropriate alternative method when both rates are above the de minimis threshold, or ... the resulting weighted-average dumping margin moves across the de minimis threshold.” Id. If the difference is meaningful as defined by Commerce, then Commerce determines that the default A–A without zeroing methodology cannot account for the price differences and that use of an alternative method is appropriate. Id.

Relevant to this appeal, after applying the DP analysis, Commerce calculated weighted-average dumping margins for NTN Corporation and NTN Kongo Corporation of 6.37 percent, for NSK Japan of 2.79 percent, and for NSK UK of 6.47 percent.³ Remand Results at 41, 42. For each of these companies, Commerce determined that under the Cohen's d test, prices differed significantly, and it determined that under the ratio test, the value of sales that passed the Cohen's d test fell between 33 percent and 66 percent of total value. Id. at 7–8. Commerce then concluded that A–A without zeroing could not appropriately account for such price differences for each of the companies. Id. Thus, the margins increased from the Final Results

, where Commerce had assigned zero margins to all companies from Japan and the United Kingdom. Final Results , 79 Fed.Reg. at 35,313 –14.

NTN Precision America, Inc., NTN Bearing Corp. of America, NTN Corporation, NTN Bower, Inc., NTN Driveshaft, Inc., and American NTN Bearing Manufacturing Corp. (collectively, “NTN”⁴ ) challenge Commerce's Remand Results. NTN argues that Commerce deprived it of a meaningful opportunity to comment on the Draft Results of Remand Redetermination, bar code 3296505–01 (Aug. 6, 2015) (“Draft Remand Results ”). Def.-Intrvnr. NTN's Cmts. on Final Results of Remand Redetermination 2–7, ECF No. 118 (“NTN Cmts.”). NTN also argues that Commerce abused its discretion by applying the DP analysis because the methodology itself is erroneous, id. at 22–24, 28–29, and Commerce's specific application of its DP analysis in this case to NTN's sampled sales database⁵ was unlawful, id. at 7–22. NTN further contends that Commerce failed to adequately explain why the default methodology could not take into account price differences, id. at 24–28.⁶

The government and Timken respond that NTN was provided sufficient notice of Commerce's application of its DP analysis and therefore had a meaningful opportunity to respond to the Draft Remand Results. Def.'s Resp. to Cmts. Regarding the Remand Redetermination 4–6, ECF No. 109 (“Gov.Resp.”); Pl.'s Cmts. in Supp. of the Final Results of Remand Redetermination 7–12, ECF No. 110 (“Timken Resp.”). They maintain that Commerce's DP analysis is lawful, refuting each of NTN's general challenges, Gov. Resp. at 6–9, 13–15; Timken Resp. at 6–7, 23–27, and arguing that application of the DP analysis to NTN's sampled database was proper, Gov. Resp. at 16–25; Timken Resp. at 16–22, 27–30. They add that certain of NTN's arguments were not properly exhausted. Gov. Resp. at 22; Timken Resp. at 12–16. The government also responds that Commerce properly explained why the default methodology could not account for the pattern of prices that differed significantly. Gov. Resp. at 9–11.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (2012)

. The court upholds Commerce's determination in an administrative review unless it is ...