Timken Co. v. United States
| Decision Date | 08 July 2015 |
| Docket Number | Court No. 14–00155.,Slip Op. 15–72. |
| Parties | The TIMKEN COMPANY, Plaintiff, v. UNITED STATES, Defendant, NSK Ltd., NSK Corporation, NSK Precision America, Inc., NTN Bearing Corp. of America, NTN Corporation, NTN Bower, Inc., NTN Driveshaft, Inc., American NTN Bearing Manufacturing Corp., JTEKT Corporation, JTEKT North America, Inc., Nachi–Fujikoshi Corporation, Nachi America, Inc., Nachi Technology, Inc., Defendant–Intervenors. |
| Court | U.S. Court of International Trade |
Geert M. De Prest, Stewart and Stewart, of Washington, DC, argued for plaintiff. With him on the brief was Terence P. Stewart.
L. Misha Preheim, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for defendant. With her on the brief were Benjamin C. Mizer, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Claudia Burke, Assistant Director. Of counsel on the brief was Shana A. Hofstetter, Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, DC.
Alexander H. Schaefer, Crowell & Moring, LLP, of Washington, DC, argued for defendant-intervenors. With him on the brief for NSK Ltd., NSK Corporation, and NSK Precision America, Inc. were Hea Jin Koh and Robert A. Lipstein.
Kevin M. O'Brien, Diane A. MacDonald, Eunkyung Kim Shin, Baker & McKenzie, LLP, of Washington, DC, for defendant-intervenors NTN Bearing Corp. of America, NTN Corporation, NTN Bower, Inc., NTN Driveshaft, Inc., and American NTN Bearing Manufacturing Corp.
Neil R. Ellis, Dave M. Wharwood, Rajib Pal, Sidley Austin, LLP, of Washington, DC, for defendant-intervenors JTEKT Corporation and JTEKT North America, Inc.
Greyson L. Bryan, Jr., David J. Ribner, McAllister M. Jimbo, O'Melveny & Myers, LLP, of Washington, DC, for defendant-intervenors Nachi–Fujikoshi Corporation, Nachi America, Inc., and Nachi Technology, Inc.
OVERVIEW
This matter is before the court on plaintiff The Timken Company's (“Timken”) motion for judgment on the agency record pursuant to USCIT Rule 56.2. Timken contests the U.S. Department of Commerce's (“Commerce”) final results in the 2009–2010 annual administrative reviews of the antidumping duty orders covering imports of ball bearings and parts thereof from Japan and the United Kingdom. Ball Bearings and Parts Thereof from Japan and the United Kingdom: Final Results of Antidumping Duty Administrative Reviews and Rescission of Review in Part; 2009–2010, 79 Fed.Reg. 35,312 (Dep't Commerce June 20, 2014) (“Final Results ”). Specifically, Timken challenges Commerce's failure to apply the differential pricing analysis to determine whether the examined foreign exporters engaged in targeted dumping. The court grants the motion and remands the Final Results to Commerce.
This case concerns Commerce's decision not to apply the differential pricing analysis in the challenged administrative reviews to determine whether the examined foreign exporters engaged in a practice commonly referred to as “targeted dumping.” To better understand the dispute, it is necessary to provide some background on the statutory and regulatory framework regarding targeted dumping before addressing Commerce's decision not to apply the differential pricing analysis in the administrative reviews at issue.
Prior to 2012, Commerce's default methodology for comparing home market and export prices in administrative reviews had been the average-to-transaction (“A–T”) methodology. See Antidumping Proceedings: Calculation of the Weighted–Average Dumping Margin and Assessment Rate in Certain Antidumping Duty Proceedings; Final Modification, 77 Fed.Reg. 8101, 8101 (Dep't Commerce Feb. 14, 2012) (“Final Modification ”). When applying the A–T methodology, Commerce did not allow transactions with export prices above the home market price to offset transactions with export prices below the home market price, a controversial practice commonly referred to as “zeroing.”1 Id.
Commerce's default comparison methodology in investigations in 2012, however, was (and continues to be) the average-to-average (“A–A”) methodology, without zeroing. See 19 U.S.C. § 1677f–1(d)(1)(A) (2012) ; see also Beijing Tianhai Indus. Co. v. United States, 7 F.Supp.3d 1318, 1325 (CIT 2014). Commerce is permitted to use the A–T methodology in an investigation if it finds “a pattern of export prices (or constructed export prices) for comparable merchandise that differ significantly among purchasers, regions, or period of time.” 19 U.S.C. § 1677f–1(d)(1)(B)(i). This pattern is commonly referred to as “targeted dumping.” Additionally, Commerce must explain why the default A–A methodology cannot take account of the pattern before the A–T methodology can be employed. Id. § 1677f–1(d)(1)(B)(ii).2
Starting in 2008, Commerce began using the “Nails test”3 in investigations to determine whether there was targeted dumping.4 See Mid Continent Nail Corp. v. United States, 712 F.Supp.2d 1370, 1372–73 (CIT 2010). Under the Nails test, Commerce required domestic petitioners to make allegations of targeted dumping before Commerce would determine whether targeted dumping was occurring. Issues and Decision Memorandum for the Final Results of the Administrative Review of the Antidumping Duty Order on Light–Walled Rectangular Pipe and Tube from Mexico; 2011–2012 at 3–4, A–201–836, (Jan. 22, 2014), available at http://enforcement.trade.gov/frn/summary/mexico/2014–02068–1.pdf (last visited June 29, 2015) (“Mexican Pipe and Tube ”). For several years, the Nails test was applicable only to investigations because, as explained, the A–T comparison methodology was used in administrative reviews by default.
On February 14, 2012, Commerce announced that the A–A methodology (without zeroing) would be the new default comparison methodology for administrative reviews. Final Modification, 77 Fed.Reg. at 8101–02. Commerce, however, did not rule out the use of the A–T methodology with zeroing in all circumstances. See id. at 8102. Rather, Commerce explained that its practice in reviews would parallel its practice in investigations, under which Commerce used the A–T methodology with zeroing where it found targeted dumping and explained why the A–A methodology could not take account of the pattern of differing prices. See id. At the time of the Final Modification, Commerce's practice was to use the Nails test in order to determine whether there was targeted dumping in deciding if the alternative A–T methodology should apply. Accordingly, no mention was made of a differential pricing analysis. Commerce explained that the Final Modification would govern (1) administrative reviews with preliminary results issued after April 16, 2012, and (2) administrative reviews discontinued as of February 14, 2012, and resumed after April 16, 2012. Id. at 8113.
On March 4, 2013, Commerce first used the differential pricing analysis instead of the Nails test in a targeted dumping analysis in the investigation of xanthan gum from the People's Republic of China. See Xanthan Gum from the People's Republic of China: Final Determination of Sales at Less Than Fair Value, 78 Fed.Reg. 33,351, 33,351 –52 (Dep't Commerce June 4, 2013). Since that date, Commerce generally has applied the differential pricing analysis in all investigations and reviews when the preliminary results have issued after March 4, 2013.5 See Issues and Decisions Memorandum for the Antidumping Duty Administrative Review on Certain Frozen Warmwater Shrimp from Thailand at 22, A–549–822, (July 10, 2013), available at http://enforcement.trade.gov/frn/summary/thailand/2013–17042–1.pdf (last visited June 29, 2015) (“Thai Frozen Warmwater Shrimp ”). Importantly, Commerce performs the differential pricing analysis sua sponte, using sales data submitted by the parties, in order to determine whether there is targeted dumping; no allegation of targeted dumping is needed. Mexican Pipe and Tube at 4–5. As explained above, Commerce previously had required petitioners to file allegations of targeted dumping before Commerce would employ the Nails test.
Turning to the facts of this case, Commerce issued the preliminary results for these administrative reviews on April 21, 2011. Issues and Decision Memorandum for the Antidumping Duty Administrative Reviews of Ball Bearings and Parts Thereof from Japan and the United Kingdom; 2009–2010 at 1, A–588–804, A–421–801, (June 13, 2014), available at http://enforcement.trade.gov/frn/summary/multiple/2014–14493–1.pdf (last visited June 29, 2015) (“I & D Memo ”). At that time, the default comparison methodology in reviews remained the A–T methodology with zeroing, so no allegations regarding targeted dumping would have been relevant. On July 15, 2011, Commerce discontinued the reviews because of related litigation in the U.S. Court of International Trade and the Court of Appeals for the Federal Circuit. See id. Then, over two years later, Commerce resumed the instant reviews, effective November 29, 2013. Ball Bearings and Parts Thereof From Japan and the United Kingdom: Notice of Reinstatement of Antidumping Duty Orders, Resumption of Administrative Reviews, and Advance Notification of Sunset Reviews, 78 Fed.Reg. 76,104 (Dep't Commerce, Dec. 16, 2013). Because the reviews were discontinued as of February 14, 2012, and resumed after April 16, 2012, all parties agree that the instant reviews became subject to the Final Modification, that is, the A–A methodology would be the default comparison methodology. 77 Fed.Reg. at 8113 ; Pl.'s Reply Br. in Supp. of Its Mot. for J. on the Agency R. 2–3, ECF No. 66 (“Timken Reply Br.”); Def.'s Resp. to Pl.'s Rule 56.2 Mot. 8, ECF No. 64 (“Gov. Br.”); Def.-Intvnrs' Resp. in Opp'n to Pl.'s Rule 56.2 Mot. for J. on the Agency R. 9, ECF No. 65 (“Def.-Intvnrs' Br.”).
Commerce issued “post-preliminary”6 results on March 25, 2014. Post–Preliminary Analysis Memorandum and Intent to Rescind a Review in...
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