254 F.3d 1022 (Fed. Cir. 2001), 00-1305, SKF USA v. United States

Docket Nº:00-1305
Citation:254 F.3d 1022
Party Name:SKF USA INC. and SKF GmbH, Plaintiffs, and FAG KUGELFISCHER GEORG SCHAFER AG and FAG BEARINGS CORPORATION, Plaintiffs-Appellants, v. UNITED STATES, Defendant, and THE TORRINGTON COMPANY, Defendant-Appellee, and NTN BEARING CORPORATION OF AMERICA and NTN KUGELLAGERFABRIK (Deutschland) GmbH, Defendants, and SNR ROULEMENTS, Defendant.
Case Date:May 25, 2001
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit

Page 1022

254 F.3d 1022 (Fed. Cir. 2001)

SKF USA INC. and SKF GmbH, Plaintiffs,

and

FAG KUGELFISCHER GEORG SCHAFER AG and FAG BEARINGS CORPORATION,

Plaintiffs-Appellants,

v.

UNITED STATES, Defendant,

and

THE TORRINGTON COMPANY, Defendant-Appellee,

and

NTN BEARING CORPORATION OF AMERICA and NTN KUGELLAGERFABRIK (Deutschland) GmbH, Defendants,

and

SNR ROULEMENTS, Defendant.

00-1305

United States Court of Appeals, Federal Circuit

May 25, 2001

Appealed from: United States Court of International Trade Senior Judge Nicholas Tsoucalas

Page 1023

[Copyrighted Material Omitted]

Page 1024

Mark E. Pardo, Grunfeld, Desiderio, Lebowitz & Silverman LLP, of New York, New York, argued for plaintiffs-appellants. With him on the brief were Max F. Schutzman,

Page 1025

Andrew B. Schroth, and Adam M. Dambrov. Of counsel was Jeffrey S. Grimson.

Velta A. Melnbrencis, Assistant Director, Commercial Litigation Branch, Department of Justice, of Washington, DC, for defendant United States.

Donald J. Unger, Barnes, Richardson & Colburn, of Chicago, Illinois, for defendants NTN Bearing Corporation of America, Et Al.

Wesley K. Caine, Stewart and Stewart, of Washington, DC, argued for defendant-appellee, The Torrington Company. With him on the brief was Geert De Prest. Of counsel was Lane S. Hurewitz.

Before BRYSON, Circuit Judge, PLAGER, Senior Circuit Judge, and DYK, Circuit Judge.

DYK, Circuit Judge.

This case concerns the obligation of a court to remand a case to an administrative agency upon the agency's change in policy or statutory interpretation. We hold that the Court of International Trade erred in declining to remand the case to the Department of Commerce, and accordingly we reverse that court's decision in SKF USA Inc. v. United States, 77 F.Supp.2d 1335 (Ct. Int'l Trade 1999).

I

Appellants FAG Kugelfishcher Georg Schafer AG and FAG Bearings Corporation (collectively, "FAG") are, respectively, a manufacturer and importer of antifriction bearings from Germany. This case concerns an antidumping duty order on antifriction bearings (other than tapered roller bearings) and parts thereof. Before the Court of International Trade, this case involved issues that are no longer in dispute and other parties who are no longer involved in the remaining issue. We limit our discussion to the issue that remains before us.

In 1994, following the submission of review requests by interested parties, the Department of Commerce ("Commerce") initiated an antidumping administrative review covering the period from May 1, 1993, through April 30, 1994. See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France, Germany, Italy, Japan, Romania, Singapore, Sweden, Thailand, and the United Kingdom; Initiation of Antidumping Duty Administrative Reviews and Notice of Request for Revocation of an Order, 59 Fed. Reg. 32,180 (June 22, 1994).

During the course of this review, FAG submitted information concerning the cost of production of the subject merchandise. This appeal involves the proper disposition of one component of FAG's costs: a loss incurred by FAG on the sale of its Korean subsidiary, and whether that loss should be included in FAG's general and administrative ("G&A") expense calculation.

To place the G&A expense calculation in context, we outline briefly its place in the antidumping statutory scheme. Under the law that applied to this proceeding, Commerce was required to impose an antidumping duty on imported merchandise that was being sold, or was likely to be sold, in the United States at less than its fair value to the detriment of a domestic industry. See 19 U.S.C. § 1673(1)-(2) (1988)1. The amount of the duty equaled "the amount by which the foreign market value exceeds the United States price for

Page 1026

the merchandise." 19 U.S.C. § 1673. Foreign market value was the price of the merchandise in the producer's home market or its export price to countries other than the United States. 19 U.S.C. § 1677b(a)(1); IPSCO, Inc. v. United States, 965 F.2d 1056, 1059 (Fed. Cir. 1992). However, under specified circumstances when Commerce had reasonable grounds to believe that home or export market sales prices were less than the cost of production, the statute mandated calculation of "constructed value" in lieu of foreign market value. 19 U.S.C. § 1677b(b); IPSCO, 965 F.2d at 1059. G&A expenses were one component of constructed value and were based upon "an amount for general expenses . . . 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." 19 U.S.C. § 1677b(e)(1)(B). The result of this statutory scheme was that when the loss incurred by FAG on its Korean sale was included in G&A expenses, constructed value was increased, thereby increasing the "minimum price level at which imported goods may be sold without incurring antidumping duties." Thai Pineapple Public Co. v. United States, 187 F.3d 1362, 1365 (Fed. Cir. 1999), cert. denied, 529 U.S. 1097 (2000).

During the course of Commerce's administrative review, FAG argued that the loss it incurred on the sale of its Korean subsidiary should not be included in its G&A expense calculation. FAG argued that because the Korean joint venture produced bearings exclusively in Korea, the loss from the Korean joint venture should not have been included in the G&A calculation for the subject merchandise (that is, bearings produced in Germany). It is argued that because Germany was the "country of exportation" for purposes of 19 U.S.C. § 1677b(e)(1)(B), losses associated with the Korean facility should have been excluded from G&A.

Commerce concluded that the loss from the sale of the Korean facility should be included in FAG's G&A expenses. See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France, Germany, Italy, Japan, Singapore, Sweden, and the United Kingdom; Final Results of Antidumping Duty Administrative Reviews and Partial Termination of Administrative Reviews, 61 Fed. Reg. 66,472, 66,497 (Dec. 17, 1996) ("Final Results"). It explained that "[t]his cost relates to the overall operation of the company. Therefore, it is most appropriately characterized as a G&A expense . . . ." Id. at 66,497.

On appeal to the Court of International Trade, FAG again argued that the loss related to the Korean sale should not be included in the G&A expense calculation. Commerce reversed course. Rather than defending its Final Results, it stated in its brief to the Court of International Trade that: "Upon review of FAG's argument, Commerce agrees that this loss should not be included in FAG's G&A ratio because the operations of the joint venture were unrelated to the production of the subject merchandise. Consequently, this case should be remanded to Commerce to remove the costs related to the sale of the Korean facility from FAG's G&A calculation." Brief for Defendant United States of America, at 35-36.

The Court of International Trade rejected Commerce's request for a remand and affirmed Commerce's decision in its Final Results to include the loss from the Korean sale in the G&A expense calculation. The court found that "Commerce's decision to include the loss because it relates to the overall operation of the company

Page 1027

results from a reasonable construction" of the relevant statute, and it therefore affirmed Commerce's determination. SKF USA Inc. v. United States, 77 F.Supp.2d 1335, 1346 (Ct. Int'l Trade 1999). Regarding Commerce's new position and request for remand, the court held that it could not "rely on the post-hoc position advanced by Commerce in its brief as the basis to uphold or overturn its administrative action . . . ." Id. at 1345 n.3. The court cited Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 169 (1962), for the proposition that "an agency's discretionary order [must] be upheld, if at all, on the same basis articulated in the order by the agency itself." SKF USA Inc., 77 F.Supp.2d at 1345 n.3 (brackets in original). FAG now appeals the Court of International Trade's decision to this court.

II

We have jurisdiction over this appeal pursuant to 28 U.S.C. § 1295(a)(5). We discuss in section III below the standard of review appropriate to reviewing the Court of International Trade's denial of an agency's request for remand.

In this case, we do not reach the merits of Commerce's determinations. Nevertheless, because we are concerned with Commerce's authority to change its policy, it is worthwhile to describe the deferential standard under which we review Commerce's antidumping determinations. When reviewing those determinations, we apply anew the same standard of review applied by the Court of International Trade in reviewing the administrative record: we uphold Commerce's determinations unless they are "unsupported by substantial evidence in the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i); F.lli De Cecco di Filippo Fara S. Martino S.p.A. v. United States, 216 F.3d 1027, 1031 (Fed. Cir. 2000). In reviewing an agency's construction of a statute it administers, this court addresses two questions, as required by the Supreme Court's...

To continue reading

FREE SIGN UP