Rhp Bearings Ltd. v. U.S., 01-1160.
| Decision Date | 30 April 2002 |
| Docket Number | No. 01-1160.,01-1160. |
| Citation | 288 F.3d 1334 |
| Parties | RHP BEARINGS LTD., NSK Bearings Europe Ltd., and NSK Corporation, Plaintiffs-Appellants, v. UNITED STATES, Defendant-Appellee, and The Torrington Company, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Federal Circuit |
Matthew P. Jaffe, Lipstein, Jaffe & Lawson, LLP, of Washington, DC argued for plaintiffs-appellants. With him on the brief were Robert A. Lipstein and Grace W. Lawson.
Velta A. Melnbrencis, Assistant Director, Commercial Litigation Branch, Civil Division, Department of Justice, of Washington, DC, argued for defendant United States. With her on the brief were Stuart E. Schiffer, Acting Assistant Attorney General; and David M. Cohen, Director. Of counsel on the brief were John D. McInerney, Acting Chief Counsel; Berniece A. Browne, Senior Counsel; and David R. Mason, Attorney, Office of Chief Counsel for Import Administration, Department of Commerce, Washington, DC.
Geert De Prest, Stewart and Stewart, of Washington, DC, argued for defendant-appellee The Torrington Company. With him on the brief were Terence P. Stewart and Lane S. Hurewitz. Of counsel was Wesley K. Caine.
Before NEWMAN, SCHALL, and BRYSON, Circuit Judges.
RHP Bearings Ltd. ("RHP Bearings"), NSK Bearings Europe Ltd. ("NSK Bearings"), and NSK Corporation (collectively, "RHP-NSK") appeal the final decision of the United States Court of International Trade that affirmed the final antidumping duty determination of the United States Department of Commerce, International Trade Administration ("Commerce"), in Antifriction Bearings (Other Than Tapered Rolling Bearings) and Parts Thereof From France, Germany, Italy, Japan, Romania, Singapore, Sweden, and the United Kingdom; Final Results of Antidumping Duty Administrative Reviews ("Final Results"), 63 Fed.Reg. 33,320 (Dep't Commerce June 18, 1998). RHP Bearings Ltd. v. United States, 120 F.Supp.2d 1116 (Ct. Int'l Trade 2000). The Court of International Trade held that, in its determination of the antidumping duty to be applied to antifriction bearings imported into the United States by RHP-NSK during the period covered by the Final Results, Commerce had not erred in computing (i) the constructed export price of the imported bearings, pursuant to 19 U.S.C. § 1677a (1999)1, or (ii) the normal value of the bearings, pursuant to 19 U.S.C. § 1677b. RHP Bearings, 120 F.Supp.2d at 1131. Specifically, the court determined that Commerce did not err when, in computing the constructed export price of the subject bearings, it declined to apply the special rule of 19 U.S.C. § 1677a(e), that comes into play in the circumstances where value is added to merchandise after importation. RHP Bearings, 120 F.Supp.2d at 1126. The court also held that, when using constructed value to determine the normal value of the subject bearings, see 19 U.S.C. § 1677b(e), Commerce did not err in computing the profit component of constructed value.2 RHP Bearings, 120 F.Supp.2d at 1126-27.
We affirm the decision of the Court of International Trade sustaining Commerce's determination of constructed export price. We do so because we conclude that, under 19 U.S.C. § 1677a(e), Commerce had discretion as to whether to apply the special rule, and RHP does not, in the alternative, challenge Commerce's calculation as otherwise unreasonable or unsupported by substantial evidence. However, we vacate the court's decision sustaining Commerce's calculation of the profit component of constructed value and remand the case for further proceedings. That result is mandated by our recent decision in SKF USA Inc. v. United States, 263 F.3d 1369 (Fed.Cir.2001). There, we vacated the decision of the Court of International Trade and remanded the case with the instruction that Commerce (i) explain its methodology for calculation of constructed value profit (identical to Commerce's constructed value profit calculation challenged in this appeal), and (ii) explain why that methodology comported with statutory requirements. We thus affirm-in-part, vacate-in-part, and remand.
The antidumping law provides that if Commerce determines that imported merchandise is being sold in the United States "at less than its fair value" and the practice is causing material injury to a domestic industry, "there shall be imposed upon such merchandise an antidumping duty." 19 U.S.C. § 1673. The antidumping duty is "in an amount equal to the amount by which the normal value exceeds the export price ... for the merchandise." 19 U.S.C. § 1673. "Normal value" generally is the price at which the "subject merchandise"3 is sold in the exporting country. See 19 U.S.C. § 1677b. "Export price" generally is the price at which the subject merchandise is first sold in the United States. See 19 U.S.C. § 1677a.
When a foreign producer or exporter sells a product to an affiliated purchaser in the United States, the antidumping law provides for the use of a "constructed export price" as the "export price" for purposes of computing the dumping margin (the difference between normal value and export price). Micron Tech., Inc. v. United States, 243 F.3d 1301, 1303 (Fed.Cir. 2001). Constructed export price is "the price at which the subject merchandise is first sold (or agreed to be sold) in the United States ... to a purchaser not affiliated with the producer or exporter, as adjusted under subsections (c) and (d) of [19 U.S.C. § 1677a]." 19 U.S.C. § 1677a(b).
Under section 1677a(c), the price used to establish constructed export price is subject to specified increases and reductions. Further adjustments to constructed export price are set forth in section 1677a(d). Pursuant to 19 U.S.C. § 1677a(d)(2), "the price used to establish constructed export price shall also be reduced by ... the cost of any further manufacture or assembly (including additional material and labor), except in circumstances described in subsection (e) of this section."
Subsection (e) of section 1677a sets forth a further method of calculating constructed export price when value is added to merchandise after importation:
(e) Special rule for merchandise with value added after importation.
Where the subject merchandise is imported by a person affiliated with the exporter or producer, and the value added in the United States by the affiliated person is likely to exceed substantially the value of the subject merchandise, the administering authority shall determine the constructed export price for such merchandise by using one of the following prices if there is a sufficient quantity of sales to provide a reasonable basis for comparison and the administering authority determines that the use of such sales is appropriate:
(1) The price of identical subject merchandise sold by the exporter or producer to an unaffiliated person.
(2) The price of other subject merchandise sold by the exporter or producer to an unaffiliated person.
If there is not a sufficient quantity of sales to provide a reasonable basis for comparison under paragraph (1) or (2), or the administering authority determines that neither of the prices described in such paragraphs is appropriate, then the constructed export price may be determined on any other reasonable basis.
19 U.S.C. § 1677a(e). While they both address the situation in which value is added to merchandise after importation, sections 1677a(d)(2) and 1677a(e) represent quite different approaches to calculating constructed export price. Section 1677a(d)(2) provides for the price used to calculate constructed export price being reduced by the cost of further processing. Section 1677a(e), on the other hand, provides for calculating constructed export price without reference to the price at which the further manufactured goods are sold to an unaffiliated purchaser.
As noted above, the antidumping duty for particular merchandise is the amount by which the merchandise's normal value exceeds its export price or, when applicable, its constructed export price. Typically, normal value is calculated within a reasonable time of the sale providing a basis for the export price. See 19 U.S.C. § 1677b(a)(1)(A). Normal value is "the price at which the foreign like product is first sold ... for consumption in the exporting country, in the usual commercial quantities and in the ordinary course of trade." 19 U.S.C. § 1677b(a)(1)(B)(i). However, in circumstances where an insufficient quantity of sales has occurred in the exporting country, or the market in the exporting country does not otherwise provide a comparable price, Commerce may look to third country sales of the subject merchandise to determine normal value. See 19 U.S.C. §§ 1677b(a)(1)(C) and 1677b(a)(1)(B)(ii). The antidumping law provides that, in such circumstances, Commerce may utilize "the price at which the foreign like product is so sold (or offered for sale) for consumption in a country other than the exporting country or the United States." 19 U.S.C. § 1677b(a)(1)(B)(ii).
In the alternative, section 1677b(a)(4) provides that where normal value cannot be determined under section 1677b(a)(1)(B)(i), then, notwithstanding section 1677b(a)(1)(B)(ii), "the normal value of the subject merchandise may be the constructed value of that merchandise." Constructed value is calculated according to 19 U.S.C § 1677b(e), which provides in pertinent part as follows:
(e) Constructed value.
For purposes of this subtitle, the constructed value of imported merchandise shall be an amount equal to the sum of —
(1) the cost of materials and fabrication or other processing of any kind employed in producing the merchandise...;
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