82 F.3d 1039 (Fed. Cir. 1996), 95-1210, Torrington Co. v. United States

Docket Nº:95-1210, 95-1211.
Citation:82 F.3d 1039
Party Name:The TORRINGTON COMPANY, Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee, v. KOYO SEIKO CO., LTD. and Koyo Corporation of U.S.A., Defendants/Cross-Appellants, v. NTN BEARING CORPORATION OF AMERICA, American NTN Bearing Manufacturing Corporation and NTN Corporation, and NSK Ltd. and NSK Corporation, Defendants-Appellees.
Case Date:April 23, 1996
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit
 
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Page 1039

82 F.3d 1039 (Fed. Cir. 1996)

The TORRINGTON COMPANY, Plaintiff-Appellant,

v.

The UNITED STATES, Defendant-Appellee,

v.

KOYO SEIKO CO., LTD. and Koyo Corporation of U.S.A.,

Defendants/Cross-Appellants,

v.

NTN BEARING CORPORATION OF AMERICA, American NTN Bearing

Manufacturing Corporation and NTN Corporation,

and

NSK Ltd. and NSK Corporation, Defendants-Appellees.

Nos. 95-1210, 95-1211.

United States Court of Appeals, Federal Circuit

April 23, 1996

Page 1040

Appealed from U.S. Court of International Trade; Judge Tsoucalas.

James R. Cannon, Jr., Stewart & Stewart, Washington, DC, argued for plaintiff-appellant. With him on the brief were Terence P. Stewart and John M. Breen.

Velta A. Melnbrencis, Assistant Director, Commercial Litigation Branch, Department of Justice, Washington, DC, argued for defendant-appellee. With her on the brief were Frank W. Hunger, Assistant Attorney General and David M. Cohen, Director. Also on the brief were Stephen J. Powell, Chief Counsel for Import Administration, Berniece A. Browne, Senior Counsel, Mark A. Barnett and Thomas H. Fine, Attorneys-Advisor, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of counsel. Of counsel was David J. Ross, Kazumune V. Kano, Barnes, Richardson & Colburn, Chicago, Illinois, argued for defendants-appellees. Donald J. Unger, Barnes, Richardson & Colburn, Chicago, Illinois, was on the brief for defendants-appellees. Of counsel were Cindy H. Chan and Jesse M. Gerson.

Neil R. Ellis, Powell, Goldstein, Frazer & Murphy, Washington, DC, argued for defendants/cross-appellants. With him on the brief were Peter O. Suchman and Susan M. Matthews.

Robert A. Lipstein, Matthew P. Jaffe and Grace W. Lawson, Lipstein, Jaffee & Lawson, Washington, DC, were on the brief for defendants-appellees.

Before NEWMAN, Circuit Judge, FRIEDMAN, Senior Circuit Judge, and SCHALL, Circuit Judge.

SCHALL, Circuit Judge.

This case arises under the antidumping laws. It presents us with three issues. The first issue is whether the Department of Commerce ("Commerce") may lawfully not assess antidumping duties upon merchandise which is imported into the United States by a company related to the foreign manufacturer and which then is exported to a third country, when no sale of the merchandise takes place in the United States. The second issue is whether Commerce may lawfully reduce the potential antidumping duty on merchandise imported into the United States by taking into account pre-sale transportation expenses associated with the sale of like merchandise in the manufacturers' home market as an exporter's sales price ("ESP") offset. The third issue is whether, when computing an antidumping duty, Commerce, under the ESP offset regulation, may lawfully adjust the foreign market value of merchandise for certain post-sale price adjustments ("PSPAs") as indirect selling expenses.

The Torrington Company ("Torrington") and Koyo Seiko Co., Ltd. ("Koyo Seiko") and Koyo Corporation of U.S.A. ("Koyo USA") (together, "Koyo"), appeal and cross-appeal, respectively, parts of the final judgment of the United States Court of International Trade in Torrington Co. v. United States, 818 F.Supp. 1563 (Ct. Int'l Trade 1993), and Federal-Mogul Corp. v. United States, 871 F.Supp. 443 (Ct. Int'l Trade 1994). In these two decisions, the court decided the lawfulness of various aspects of the final results of Commerce's review of the antidumping order in effect for antifriction bearings. Those final results are set forth in Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From Japan; Final Results of Antidumping Duty Administrative Reviews, 56 Fed.Reg. 31,754 (July 11, 1991)

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("Final Results I "), and in the issues appendix to Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof from the Federal Republic of Germany; Final Results of Antidumping Duty Administrative Review, 56 Fed.Reg. 31,692 (July 11, 1991) ("Final Results II ").

Torrington, a United States producer of antifriction bearings, appeals the Court of International Trade's affirmance of Commerce's decision not to assess antidumping duties upon certain antifriction bearings imported from Japan into the United States by the American Koyo Corp. ("American Koyo"), which is not a party to this litigation, and by Koyo USA. Both are American subsidiaries of Koyo Seiko, the manufacturer of the bearings. The bearings at issue were not sold in the United States, but were exported from this country by American Koyo and Koyo USA. Torrington also appeals the Court of International Trade's affirmance of Commerce's adjustment of the foreign market value of antifriction bearings manufactured in Japan by NTN Corporation ("NTN") and imported into the United States by NTN Bearing Corporation of America and American NTN Bearing Manufacturing Corporation. Commerce made this adjustment by taking into account pre-sale transportation expenses associated with the sale of like merchandise in NTN's home markets as an ESP offset. Torrington also appeals the court's affirmance of a similar ruling by Commerce with respect to antifriction bearings imported by affiliates of the Japanese manufacturers NSK, Ltd. and NSK Corporation (collectively, "NSK"). Finally, Koyo cross-appeals the court's rejection of Commerce's decision to adjust the foreign market value of some of Koyo Seiko's antifriction bearings for certain PSPAs.

For the reasons set forth below, we hold that Commerce acted lawfully (1) in not assessing antidumping duties upon antifriction bearings exported by American Koyo and Koyo USA; and (2) in adjusting the foreign market value of NTN's and NSK's antifriction bearings imported into the United States by taking into account, as an ESP offset, pre-sale transportation expenses associated with the sale of like merchandise in the manufacturers' home markets. We hold that Commerce acted unlawfully, though, in adjusting the foreign market value of Koyo Seiko's antifriction bearings for certain PSPAs. We therefore affirm the decisions of the Court of International Trade.

BACKGROUND

I.

The antidumping laws provide that Commerce must impose an additional duty on imported merchandise that is being sold, or is likely to be sold, in the United States at less than its fair value to the detriment of a domestic industry. See 19 U.S.C. § 1673(1)-(2) (1988). 1 This additional duty is known as the "dumping margin." See 19 C.F.R. § 353.2(f) (1994). The "dumping margin" is the amount by which the foreign market value 2 of the merchandise exceeds its United States price. 3 See 19 U.S.C. § 1673.

Commerce, acting through the United States International Trade Administration, determines what merchandise is subject to the antidumping laws and announces its decision in antidumping duty orders. An antidumping duty order is an order directing that duties equivalent to the dumping margin be assessed on merchandise described in the order whenever such merchandise is imported into the United States. See 19 U.S.C. § 1673(2). During the relevant period, the antifriction bearings at issue in this case were subject to an antidumping duty order.

II.

Commerce initiated an administrative review of imports of antifriction bearings from Japan and other countries in 1990 for the period November 9, 1988, through April 30, 1990. Antifriction Bearings (Other Than

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Tapered Roller Bearings) and Parts Thereof From the Federal Republic of Germany, France, Italy, Japan, Romania, Singapore, Sweden, Thailand and the United Kingdom; Initiation of Antidumping Administrative Reviews, 55 Fed.Reg. 23,575 (June 11, 1990). Commerce published its preliminary determination in regard to antifriction bearings imported from Japan in Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof from Japan; Preliminary Results of Antidumping Duty Administrative Reviews and Partial Termination of Antidumping Duty Administrative Reviews, 56 Fed.Reg. 11,186 (March 15, 1991). Commerce published its final determination as to issues relating specifically to the importation of antifriction bearings from Japan in Final Results I, 56 Fed.Reg. 31,754, and its final determination as to general issues pertaining to the reviews of Japan and various other countries in the issues appendix of Final Results II, 56 Fed.Reg. at 31,692, 31,717, 31,743.

As noted above, three aspects of Commerce's computation of antidumping duties imposed upon antifriction bearings are at issue. The first aspect involves certain merchandise exported from the United States by American Koyo and Koyo USA. Due to the large volume of sales in the Antifriction Bearings proceeding, Commerce did not determine dumping margins for each Koyo entry, but instead used a sampling methodology to determine a representative dumping margin, or antidumping duty. The total antidumping duty due for all entries during the review period was calculated by imputing the representative dumping margin, or antidumping duty, to all of Koyo's entries during that period. In the process of making this calculation, however, Commerce allowed Koyo Seiko to not report information regarding antifriction bearings that were imported into the United States but then were exported by American Koyo and Koyo USA. Final Results II, 56 Fed.Reg. at 31,743. Commerce explained that it could not calculate dumping margins on such imports because, in the absence of sales in the United States, there was no basis for calculating the United States price of the bearings. Id. Thus, the exported antifriction bearings did not enter into the calculation of the total antidumping duty due from Koyo.

The second aspect of the review at issue involves pre-sale home-market...

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