747 F.Supp. 726 (CIT. 1990), 87-11-01066, NTN Bearing Corp. of America v. United States

Docket Nº:Court No. 87-11-01066.
Citation:747 F.Supp. 726
Party Name:NTN BEARING CORPORATION OF AMERICA, American NTN Bearing Manufacturing Corporation, and NTN Toyo Bearing Co., Ltd., Plaintiffs, v. UNITED STATES, Defendant, and The Timken Company, Defendant-Intervenor.
Case Date:September 07, 1990
Court:Court of International Trade
 
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747 F.Supp. 726 (CIT. 1990)

NTN BEARING CORPORATION OF AMERICA, American NTN Bearing Manufacturing Corporation, and NTN Toyo Bearing Co., Ltd., Plaintiffs,

v.

UNITED STATES, Defendant,

and

The Timken Company, Defendant-Intervenor.

Court No. 87-11-01066.

United States Court of International Trade.

Sept. 7, 1990

Page 727

[Copyrighted Material Omitted]

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Barnes, Richardson & Colburn (Robert E. Burke, Donald J. Unger and J. Kevin Horgan), for plaintiffs.

Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civil Div., U.S. Dept. of Justice (Velta Melnbrencis, of counsel), Stephanie J. Mitchell, Atty.-Advisor, Office of Chief Counsel for Import Admin., Dept. of Commerce, for defendant.

Stewart & Stewart (Eugene L. Stewart, Terence P. Stewart, James R. Cannon and John M. Breen, of counsel), Scott A. Scherff, Sr. Corporate Counsel, The Timken Co., for defendant-intervenor.

OPINION

TSOUCALAS, Judge:

This action is presently before the court on plaintiffs', NTN BEARING CORPORATION of AMERICA, AMERICAN NTN BEARING MANUFACTURING CORPORATION and NTN TOYO BEARING COMPANY, LTD. (collectively "NTN"), motion, pursuant to Rule 56.1 of the Rules of this Court, for judgment on the agency record as to Counts II through VI of its complaint as supplemented. The court's jurisdiction is predicated upon 28 U.S.C. § 1581(c). 1

Plaintiffs challenge the legality of the antidumping determination published by the United States Department of Commerce, International Trade Administration ("ITA" or "Commerce") on August 17, 1987. Final Determination of Sales at Less Than Fair Value; Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan, 52 Fed.Reg. 30,700, amended, 52 Fed.Reg. 47,955 (Dec. 17, 1987). Plaintiffs charge that the ITA's calculations are significantly flawed and that the final antidumping determination is not supported by substantial evidence in the administrative record, and specifically allege the following:

1. the ITA should not have included tapered roller bearing ("TRB") component parts within the scope of its investigation;

2. the ITA erred in not applying the "special rule" provided in 19 C.F.R. § 353.56(b) (1987) when computing its currency conversion rate;

3. the ITA failed to select the most similar merchandise when conducting its fair market value ("FMV") calculation;

4. the ITA's computed exporter's sales price ("ESP") reflected an improper calculation of NTN's depreciation expenses;

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5. the ITA unlawfully deducted direct United States selling expenses from exporter's sales price;

6. the ITA's practice in determining whether or not to consider sales below cost is contrary to law;

7. the ITA's calculation of fair market value for individual cups and cones by "splitting" unitary set prices in the home market is unlawful;

8. the ITA should have made a circumstance of sale adjustment to fair market value for warehouse expenses incurred by NTN;

9. the ITA unlawfully included sales not made "in the usual commercial quantities" in the home market sales it considered;

10. the ITA unlawfully included general and administrative expenses in its cost of production calculation;

11. the ITA understated the level of trade adjustment to fair market value; and

12. the ITA failed to include warehouse expenses in the ESP offset pool.

Commerce refutes plaintiffs' contentions except that it concedes the inadvertent exclusion of certain pertinent data in the ITA's calculation of ESP offset pool. Consequently, Commerce maintains, the case should be remanded to the ITA to correct this error. Defendant-intervenor opposes plaintiffs' motion as well as Commerce's request for remand. For the reasons detailed below, the Court finds that this case must be remanded to the ITA so that appropriate corrections can be made to the dumping calculations.

Background

In response to a petition filed by The Timken Company on behalf of the domestic industry, the ITA initiated an antidumping investigation of all tapered roller bearing imports from Japan not already subject to an existing dumping order. Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan; Initiation of Antidumping Duty Investigation, 51 Fed.Reg. 33,286 (Sept. 19, 1986). The ITA completed its investigation and determined that certain Japanese importers, including plaintiffs herein, were engaging in sales of TRBs in the United States at less than fair value ("LTFV"). 52 Fed.Reg. 30,700. The International Trade Commission ("Commission") further determined that a domestic industry was materially injured or threatened with material injury as a consequence of said sales. Tapered Roller Bearings and Parts Thereof, and Certain Housings Incorporating Tapered Rollers From Japan, USITC Pub. 2020 (1987). The imported TRBs and parts thereof were therefore made subject to an antidumping duty order.

On December 3, 1987, NTN instituted this action challenging certain aspects of Commerce's final determination. Pending disposition of the case, however, the ITA reviewed its calculations and issued an amended final determination on December 17, 1987. Amendment to Final Determination of Sales at Less Than Fair Value and Amendment to Antidumping Duty Order; Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan. 52 Fed.Reg. 47,955. Thus, the Court permitted plaintiffs to file a supplemental complaint incorporating any changes prompted by the ITA's amendment.

By the instant motion, plaintiffs move for judgment on the agency record as to Counts II through VI of the complaint as supplemented. Count I of the complaint was adjudicated separately and is, therefore, not considered herein.

Plaintiffs come before the court pursuant to 19 U.S.C. § 1516a(a)(2) (1982). As such, the applicable standard of review is whether Commerce's actions were supported by substantial evidence and otherwise in accordance with law. See 19 U.S.C. § 1516a(b)(1)(B); Toho Titanium Co. v. United States, 11 CIT 160, 164, 657 F.Supp. 1280, 1283 (1987).

Discussion

1. Scope of the Investigation

A TRB consists of various components which are combined to create the finished bearing. When Commerce investigated

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TRB imports from Japan, it included within the scope of its investigation plaintiffs' imports of TRB component parts. 2 Commerce calculated a United States price for the components by "taking the sale price of the completed TRBs and attributing a portion of that price to the imported parts" and found these itemized prices to be at less than fair value. Defendant's Memorandum in Opposition to Plaintiffs' Motion for Judgment on the Agency Record as to Counts II Through VI of Their Complaint as Supplemented (" Defendant's Memo ") at 8-9. Consequently, when Commerce issued its final affirmative antidumping duty determination, TRB component parts imported by NTN became subject to antidumping duties.

Plaintiffs allege that because their imports of TRB components are used solely to supply their subsidiary, AMERICAN NTN BEARING MANUFACTURING CORP., Commerce unlawfully included the TRB components within the scope of its investigation. NTN contends that since the imported components were simply transferred intracompany, no actual sales of components occurred in the United States. In the absence of a "sale of imported merchandise," plaintiffs maintain, the antidumping laws of this country are not invoked. Plaintiffs' Memorandum in Support of Their Motion for Judgment on the Agency Record As to Counts II Through VI of Their Complaint As Supplemented (" Plaintiffs' Memo ") at 10.

Commerce, in turn, claims it was compelled to include TRB component parts imported within the scope of its investigation because they were specified in the petition. Additionally, Commerce maintains that TRB component parts are properly included in the antidumping determination because "[i]f plaintiffs' argument were accepted, then all foreign manufacturers could circumvent the application of the antidumping law by establishing finishing operations in the United States by one of their subsidiaries and 'transferring' the unfinished product to their subsidiaries for completion and subsequent resale. Defendant's Memo at 10.

Procedures for the initiation of antidumping duty investigations are outlined in 19 U.S.C. § 1673a (1982 & Supp. V 1987), whereby the administering authority is required to commence an antidumping investigation whenever an interested party (as defined by the statute) files an adequate petition alleging the necessary elements. Upon receipt of such a petition, the ITA's role in examining its sufficiency is limited to a ministerial function. Republic Steel Corp. v. United States, 4 CIT 33, 35, 544 F.Supp. 901, 904 (1982).

The law states that [the ITA] shall determine only two things, first "whether the petition alleges the elements necessary for the imposition of a duty under section 701(a)" [19 U.S.C. § 1671(a) ] and second, whether the petition "contains information reasonably available to the petitioner supporting the allegations."

Id. If the petition is deemed sufficient, the ITA is statutorily obliged to insure that the proceedings are maintained in a form which corresponds to the petitioner's clearly evinced intent and purpose. Mitsubishi Elec. Corp. v. United States, 12 CIT 1025, 700 F.Supp. 538 (1988), aff'd, 898 F.2d 1577 (Fed.Cir.1990).

In the instant action, The Timken Company filed with the ITA a comprehensive petition requesting it to investigate completed TRBs imported from Japan, as well as unfinished TRBs and parts thereof. A.R.Doc. 1. 3 Against this backdrop, then, Commerce

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