Peer Bearing Co. Changshan v. U.S.

• Citation: 587 F.Supp.2d 1319
• Decision Date: 08 December 2008
• Docket Number: Slip Op. 08-134. Court No. 07-00373.
• Parties: PEER BEARING COMPANY-CHANGSHAN, Plaintiff, v. UNITED STATES, Defendant, and The Timken Company, Defendant-Intervenor.
• Court: U.S. Court of International Trade

587 F.Supp.2d 1319

PEER BEARING COMPANY-CHANGSHAN, Plaintiff, v. UNITED STATES, Defendant, and The Timken Company, Defendant-Intervenor.

Slip Op. 08-134. Court No. 07-00373.

United States Court of International Trade.

December 8, 2008.

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COPYRIGHT MATERIAL OMITTED

Arent Fox PLLC (John J. Gurley, Nancy A. Noonan, and Diana Dimitriuc Quaia), Washington, DC, for Plaintiff Peer Bearing Company-Changshan.

Gregory G. Katsas, Assistant Attorney General; Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Jane C. Dempsey); Office of the Chief Counsel for Import Administration, U.S. Department of Commerce (Ahran Kang), Of Counsel, for Defendant United States.

Stewart and Stewart (Terence P. Stewart, William A. Fennell, and Wesley K Caine), Washington, DC, for Defendant-Intervenor The Timken Company.

OPINION

GOLDBERG, Senior Judge.

In this action, plaintiff Peer Bearing Company—Changshan ("CPZ"), a Chinese producer of tapered roller bearings, challenges the decision of the International Trade Administration of the United States Department of Commerce ("Commerce") in Tapered Roller Bearings and Parts Thereof, Finished or Unfinished, from the People's Republic of China: Final Results of 2005-2006 Administrative Review and Partial Rescission of Review, 72 Fed.Reg. 56,724 (Dep't Commerce Oct. 4, 2007) ("Final Results"). In its Final Results, Commerce found that because CPZ did not respond to its questionnaire, CPZ merited an antidumping rate pursuant to adverse inferences available under section 776 of the Tariff Act of 1930; 19 U.S.C. § 1677e(b) (2000). Accordingly, Commerce assigned CPZ the PRCwide entity rate of 60.95%.¹ CPZ does not contest the adverse facts available ("AFA") finding, but it argues that this finding should not automatically merit a presumption of state control and the application of the PRCwide entity rate. CPZ maintains that because it had previously qualified for a separate rate, that separate rate should continue to apply. In the alternative, CPZ disputes the rate chosen as the PRC-wide entity rate. For the reasons that follow, the Court affirms Commerce's findings.

I. JURISDICTION AND STANDARD OF REVIEW

The Court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (2000).

A court shall hold unlawful Commerce's final determination in an antidumping administrative review if it is "unsupported by substantial evidence on the record, or otherwise not in accordance with the law." Tariff Act of 1930, § 516a, 19 U.S.C. § 1516a(b)(1)(B)(i) (2000). Substantial evidence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Nippon Steel Corp. v. United States, 337 F.3d 1373, 1379 (Fed.Cir.2003) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938)). "[T]he 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. Fed. Mar. Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966) (citing NLRB v. Nevada Consol. Copper Corp., 316 U.S. 105, 106, 62 S.Ct. 960, 86 L.Ed. 1305 (1942)). The Court need only find evidence "which could reasonably lead" to the conclusion drawn by Commerce, thus making it a "rational decision." Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927, 933 (Fed.Cir.1984).

In determining the lawfulness of an agency's statutory construction, the Court examines "whether Congress's purpose and intent on the question at issue is judicially ascertainable." Timex V.I., Inc. v. United States, 157 F.3d 879, 881 (Fed. Cir.1998) (construing Chevron, U.S.A., Inc. v. Nat. Resources Def. Council, Inc., 467 U.S. 837, 843 n. 9, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984)). If Congress's intent is unclear, the Court must defer to the agency's construction if it is reasonable. Chevron, 467 U.S. at 843-44, 104 S.Ct. 2778. Commerce's determination may be deemed unlawful "where Commerce has failed to carry out its duties properly, relied on inadequate facts or reasoning, or failed to provide an adequate basis for its conclusions." Rhone-Poulenc, Inc. v. United States, 20 CIT 573, 575, 927 F.Supp. 451, 454 (1996).

II. DISCUSSION

A. Commerce Properly Assigned CPZ the PRC-Wide Entity Rate

Regarding the assignment of the PRCwide entity rate, CPZ raises three arguments. First, it disputes the application of the PRC-wide entity rate and claims that a separate rate should apply because CPZ received a separate rate in prior reviews. Second, it argues that the calculation of the PRC-wide entity rate is in conflict with the statutory requirement of determining dumping margins by calculating the normal value and U.S. price of each entry. Third, CPZ argues that Commerce's presumption of state control in non-market economy countries is not entitled to Chevron deference because it is not based on a formal statute or regulation. The Court addresses each argument in turn.

i. CPZ Did Not Rebut the Presumption of State Control

A company operating in an NME such as China is presumed to be under government control. Shandong Huanri (Group) Gen. Co. v. United States, 31 CIT ___, ___, 493 F.Supp.2d 1353, 1357 (2007). Under this presumption, it is Commerce's policy to assign NME exporters of the same merchandise the countrywide antidumping duty rate. Transcom, Inc. v. United States, 294 F.3d 1371, 1373 (Fed.Cir.2002); Shandong Huanri, 31 CIT at ___, 493 F.Supp.2d at 1357; Manganese Metal from the People's Republic of China, 63 Fed.Reg. 12,440, 12,441 (Dep't Commerce Mar. 13, 1998) (final determination). However, if a company establishes its independence from the government, it will be assigned a separate rate calculated through the same process utilized in market economies. Transcom, 294 F.3d at 1373. To rebut the presumption of government control, an exporter must "`affirmatively demonstrate' its entitlement to a separate, company-specific margin by showing `an absence of central government control, both in law and in fact [de jure and de facto], with respect to exports.'" Sigma Corp. v. United States, 117 F.3d 1401, 1405 (Fed.Cir.1997) (quoting Tianjin Mach. Import & Export Corp. v. United States, 16 CIT 931, 935, 806 F.Supp. 1008, 1013-14 (1992)); see also Final Determination of Sales at Less Than Fair Value: Sparklers from the People's Republic of China, 56 Fed.Reg. 20,588, 20,589 (Dep't Commerce May 6, 1991). "Absence of de jure government control can be demonstrated by reference to legislation and other governmental measures that decentralize control. Absence of de facto government control can be established by evidence that each exporter sets its prices independently of the government and of other exporters, and that each exporter keeps the proceeds of its sales." Sigma, 117 F.3d at 1405 (citing Tianjin, 16 CIT at 935, 806 F.Supp. at 1013-14).

Here, CPZ maintains that it merits a separate rate, not because it rebutted the presumption of state control for this review period, but because it had been previously assigned a separate rate in its New Shipper Review and in the 2001-2002 administrative review.² CPZ does not dispute that AFA applied because CPZ did not respond to Commerce's questionnaire. Nevertheless, CPZ claims that AFA should not equate to a presumption of state control and the assignment of the PRC-wide entity rate. This argument fails because "each administrative review is a separate segment of proceedings with its own unique facts. Indeed, if the facts remained the same from period to period, there would be no need for administrative reviews." Shandong Huarong Mach. Co. v. United States, 2005 WL 1105110, 29 CIT 484, 491 (2005). Each individual review consists of different sales, adjustments, and underlying information. Issues and Decision Memorandum for the Administrative Review of Fresh Garlic from the People's Republic of China, A-570-831 (Mar. 13, 2002), available at http://ia.ita. doc.gov/frn/summary/prc/02-6076-1.txt; Heavy Forged Hand Tools, Finished or Unfinished, With or Without Handles, from the People's Republic of China, 65 Fed.Reg. 66,691, 66,693 (Dep't Commerce Nov. 7, 2000) (preliminary results).

Because CPZ did not respond to the questionnaire and failed to provide any other information relating to this review period, there is no alternative but to apply the presumption of state control to CPZ and, in turn, assign the PRC-wide entity rate to the company. Without any information to refute the presumption, CPZ does not merit a separate rate.

ii. A Presumption of State Control is Not in Conflict with the Statute

Secondly, CPZ argues that Commerce's calculation of the PRC-wide entity rate is not in accordance with law because the presumption of state control for NMEs conflicts with the Tariff Act of 1930, § 751(a)(2), 19 U.S.C. § 1675(a)(2)(A). This section of the Act requires Commerce to establish margins by determining the normal value and U.S. price of each entry.³ In its argument, CPZ does not explain how normal value could be calculated under 19 U.S.C. § 1675(a)(2)(A) if no information has been provided as to individual entries. Because neither CPZ, nor any other PRCwide entity company, responded to any part of the questionnaire or provide any other documentation, there is no available information on the record for review. It is thus not possible for Commerce to calculate a dumping margin specific to any of the entries during the period of review. There is also no information with which a separate rate could conceivably be calculated. Accordingly, there is no merit to this argument.

iii. Chevron Deference is Applicable to the Presumption of State Control

CPZ claims that Chevron deference is not applicable to Commerce's presumption of state control for NMEs. It argues that there never was a formal declaration of this policy, and informal means of establishing...