347 F.Supp.2d 1326 (CIT. 2004), 01-00036, Luoyang Bearing Corp. v. United States

Docket Nº:Court No. 01-00036.
Citation:347 F.Supp.2d 1326
Party Name:LUOYANG BEARING CORP. (Group), Zhejiang Machinery Import & Export Corp., and China National Machinery Import & Export Corporation, Plaintiffs, and Wafangdian Bearing Company, Ltd., Plaintiff and Defendant-Intervenor, v. UNITED STATES, Defendant, and The Timken Company, Defendant-Intervenor and Plaintiff. SLIP OP. 04-53.
Case Date:May 18, 2004
Court:Court of International Trade
 
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347 F.Supp.2d 1326 (CIT. 2004)

LUOYANG BEARING CORP. (Group), Zhejiang Machinery Import & Export Corp., and China National Machinery Import & Export Corporation, Plaintiffs,

and

Wafangdian Bearing Company, Ltd., Plaintiff and Defendant-Intervenor,

v.

UNITED STATES, Defendant,

and

The Timken Company, Defendant-Intervenor and Plaintiff.

SLIP OP. 04-53.

Court No. 01-00036.

United States Court of International Trade.

May 18, 2004

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        Hume & Associates PC, Washington, DC (Robert T. Hume) for Luoyang and ZMC, plaintiffs and Wafangdian, plaintiffs and defendant-intervenors.

        Venable, Baetjer, Howard & Civiletti, LLP, Washington, DC (Lindsay B. Meyer and Kristin K. Woody) for CMC, plaintiff.

        Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Henry R. Felix); John F. Koeppen, Office of the Chief Counsel for Import Administration, United States Department of Commerce, for the United States, defendant, of counsel.

        Stewart and Stewart, Washington, DC (Terence P. Stewart, Wesley K. Caine and Amy A. Karpel) for Timken, defendant-intervenor and plaintiff.

        OPINION

        TSOUCALAS, Senior Judge.

        This consolidated action concerns the claims raised by plaintiffs, Luoyang Bearing Corp. (Group) ("Luoyang"), Zhejiang Machinery Import & Export Corp. ("ZMC"), and China National Machinery Import & Export Corporation ("CMC"), and plaintiff and defendant-intervenors, Wafangdian Bearing Company, Ltd. ("Wafangdian") and The Timken Company ("Timken"), who move pursuant to USCIT R. 56.2 for judgment upon the agency record challenging the Department of Commerce, International Trade Administration's ("Commerce") final determination, entitled Final Results of 1998-1999 Administrative Review, Partial Rescission of Review, and Determination Not To Revoke Order in Part on Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of

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China ( "Final Results" ), 66 Fed.Reg. 1,953 (Jan. 10, 2001) , as amended by Amended Final Results of 1998-1999 Administrative Review and Determination To Revoke Order in Part on Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China ( "Amended Final Results" ), 66 Fed.Reg. 11,562 (Feb. 26, 2001).

        Specifically, CMC and ZMC contend that Commerce improperly rejected a market economy price of imported steel for the production of People's Republic of China ("PRC") tapered roller bearings ("TRBs") based upon a "reason to believe" or suspect that the price was subsidized. CMC further argues that Commerce erred in: (1) holding an ex parte meeting with counsel for Timken; (2) including employer welfare and provident fund expenses in the selling, general and administrative expenses ("SG & A") ratio; and (3) adding ocean freight and insurance costs to the export price of Japanese steel to determine the surrogate value. Luoyang, Wafangdian and ZMC maintain that Commerce erred in: (1) rejecting ZMC's input value for steel bought from a PRC supplier and paid for with PRC currency; (2) disregarding actual ocean freight charges paid in market economy currency to PRC freight forwarders rather than to the exporter; and (3) using aberrational data in calculating the surrogate value for wooden cases and the steel used to make rollers.

        Timken contends that: (1) Commerce improperly applied the PRC rate to all Premier Bearing & Equipment Ltd. ("Premier") United States sales; (2) the administrative record does not support the use of other producers' factors data to calculate Premier's normal values; (3) the upward post-sale price adjustments to certain Wafangdian sales were unlawful; (4) Commerce failed to account for defective parts in calculating normal value for Wafangdian; and (5) Commerce acted contrary to law in revoking the order relating to Wafangdian imports.

        BACKGROUND

        This case concerns the antidumping duty order on TRBs and parts thereof, finished and unfinished ("subject merchandise"), from the PRC for the period of review covering June 1, 1998, through May 31, 1999 ("POR"). 1 See Final Results, 66 Fed.Reg. at 1,953. In 1987, Commerce published an antidumping duty order on TRBs from the PRC. See Antidumping Duty Order on Tapered Roller Bearings and Parts Thereof, Finished or Unfinished, From the People's Republic of China, 52 Fed.Reg. 22,667 (June 15, 1987). Commerce initiated an administrative review of the subject merchandise on July 23, 1999. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 64 Fed.Reg. 41,075 (July 29, 1999).

        On July 7, 2000, Commerce published the preliminary results of the subject review. See Preliminary Results of 1998-1999 Administrative Review, Partial Recission of Review, and Notice of Intent to Revoke Order in Part for Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China ( "Preliminary Results" ), 65 Fed.Reg. 41,944. Commerce published the Final Results on January 10, 2001. See Final Results, 66 Fed.Reg. 1,953. The

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Issues and Decision Memo2 which accompanied the Final Results, is dated January 3, 2001. See Final Results, 66 Fed.Reg. at 1,954. Commerce later published the Amended Final Results on February 26, 2001. See Amended Final Results, 66 Fed.Reg. 11,562.

        JURISDICTION

        The Court has jurisdiction over this matter pursuant to 19 U.S.C. § 1516a(a) (2000) and 28 U.S.C. § 1581(c) (2000).

        STANDARD OF REVIEW

        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) (1994).

        I. Substantial Evidence Test

        Substantial evidence is "more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S.Ct. 456, 95 L.Ed. 456 (1951) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938)). Substantial evidence "is something less than the weight of the evidence, and the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence." Consolo v. Federal Maritime Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966) (citations omitted). Moreover, "[t]he court may not substitute its judgment for that of the [agency] when the choice is 'between two fairly conflicting views, even though the court would justifiably have made a different choice had the matter been before it de novo.' " American Spring Wire Corp. v. United States, 8 CIT 20, 22, 590 F.Supp. 1273, 1276 (1984) (quoting Penntech Papers, Inc. v. NLRB, 706 F.2d 18, 22-23 (1st Cir.1983) (quoting, in turn, Universal Camera, 340 U.S. at 488, 71 S.Ct. 456)).

        II. Chevron Two-Step Analysis

         To determine whether Commerce's interpretation and application of the antidumping statute is "in accordance with law," the Court must undertake the two-step analysis prescribed by Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Under the first step, the Court reviews Commerce's construction of a statutory provision to determine whether "Congress has directly spoken to the precise question at issue." Id. at 842, 104 S.Ct. 2778. "To ascertain whether Congress had an intention on the precise question at issue, [the Court] employ[s] the 'traditional tools of statutory construction.' " Timex V.I., Inc. v. United States, 157 F.3d 879, 882 (Fed.Cir.1998) (citing Chevron, 467 U.S. at 843 n. 9, 104 S.Ct. 2778). "The first and foremost 'tool' to be used is the statute's text, giving it its plain meaning. Because a statute's text is Congress' final expression of its intent, if the text answers the question, that is the end of the matter." Id. (citations omitted). Beyond the statute's text, the tools of statutory

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construction "include the statute's structure, canons of statutory construction, and legislative history." Id. (citations omitted); but see Floral Trade Council v. United States, 23 CIT 20, 22 n. 6, 41 F.Supp.2d 319, 323 n. 6 (1999) (noting that "[n]ot all rules of statutory construction rise to the level of a canon, however") (citation omitted).

         If, after employing the first prong of Chevron, the Court determines that the statute is silent or ambiguous with respect to the specific issue, the question for the Court becomes whether Commerce's construction of the statute is permissible. See Chevron, 467 U.S. at 843, 104 S.Ct. 2778. Essentially, this is an inquiry into the reasonableness of Commerce's interpretation. See Fujitsu Gen. Ltd. v. United States, 88 F.3d 1034, 1038 (Fed.Cir.1996). Provided Commerce has acted rationally, the Court may not substitute its judgment for the agency's. See Koyo Seiko Co. v. United States, 36 F.3d 1565, 1570 (Fed.Cir.1994) (holding that "a court must defer to an agency's reasonable interpretation of a statute even if the court might have preferred another"); see also IPSCO, Inc. v. United States, 965 F.2d 1056, 1061 (Fed.Cir.1992). The "[C]ourt will sustain the determination if it is reasonable and supported by the record as a whole, including whatever fairly detracts from the substantiality of the evidence." Negev Phosphates, Ltd. v. United States, 12 CIT 1074, 1077, 699 F.Supp. 938, 942 (1988) (citations...

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