905 F.Supp. 1083 (CIT. 1995), 93-08-00501, NTN Bearing Corp. of America v. United States
|Docket Nº:||Court No. 93-08-00501.|
|Citation:||905 F.Supp. 1083|
|Party Name:||NTN BEARING CORPORATION OF AMERICA, American NTN Bearing Manufacturing Corporation and NTN Corporation, Plaintiffs, v. UNITED STATES, U.S. Department of Commerce and Ronald H. Brown, Secretary, U.S. Department of Commerce, Defendant, The Torrington Company; Federal-Mogul Corporation, Defendant-Intervenors.|
|Case Date:||October 02, 1995|
|Court:||Court of International Trade|
[Copyrighted Material Omitted]
Barnes, Richardson & Colburn (Robert E. Burke,Donald J. Unger, Kazumune V. Kano, Lawrence M. Friedman and Diane A. MacDonald), Chicago, IL, for plaintiffs.
Frank W. Hunger, Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Jeffrey M. Telep); of counsel: Stacy J. Ettinger, Thomas Fine, Michelle Behaylo, David Ross and Alexandra Levinson, Attorney-Advisors, Office of the Chief Counsel for Import Administration, United States Department of Commerce, Washington, DC, for defendants.
Stewart and Stewart (Terence P. Stewart, James R. Cannon, Jr., John M. Breen, Geert
De Prest and Myron A. Brilliant), Washington, DC, for defendant-intervenor The Torrington Company.
Frederick L. Ikenson, P.C. (Frederick L. Ikenson, Larry Hampel and Joseph A. Perna, V), Washington, DC, for defendant-intervenor Federal-Mogul.
Plaintiffs in this action, NTN Bearing Corporation of America, American NTN Bearing Manufacturing Corporation and NTN Corporation (collectively "NTN"), are manufacturers, importers and/or exporters of ball, cylindrical roller and spherical plain bearings ("antifriction bearings" or "AFBs") from Japan subject to the proceeding below. NTN contests certain aspects of the final results of administrative review of the United States Department of Commerce, International Trade Administration ("Commerce"), entitled Final Results of Antidumping Duty Administrative Reviews and Revocation in Part of an Antidumping Duty Order (" Final Results "), 58 Fed.Reg. 39,729 (1993), as amended, Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France, Germany, Italy, Japan, Romania, Singapore, Sweden, Thailand, and the United Kingdom; Amendment to Final Results of Antidumping Duty Administrative Reviews, 58 Fed.Reg. 42,288 (1993), Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France and the United Kingdom; Amendment to Final Results of Antidumping Duty Administrative Reviews, 58 Fed.Reg. 51,055 (1993), and Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From Japan; Amendment to Final Results of Antidumping Duty Administrative Reviews, 59 Fed.Reg. 9,469 (1994).
This action is before the Court on NTN's motion for judgment upon the agency record pursuant to Rule 56.2 of the Rules of the Court.
On April 27, 1993, Commerce published the preliminary results of its administrative review of antidumping duty orders on antifriction bearings (other than tapered roller bearings) and parts thereof from Japan, France, Germany, Italy, Romania, Singapore, Sweden, Thailand and the United Kingdom. See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From Japan; Preliminary Results of Antidumping Duty Administrative Reviews and Partial Termination of Administrative Reviews, 58 Fed.Reg. 25,616 (1993). 1
On July 26, 1993, Commerce published the Final Results at issue. See Final Results, 58 Fed.Reg. at 39,729. NTN alleges that the Final Results are flawed because Commerce improperly: (1) deducted direct selling expenses from exporter's sales price ("ESP") rather than adding such expenses to foreign market value ("FMV"); (2) refused to instruct the United States Customs Service ("Customs") to refund antidumping duties deposited on imported merchandise which was re-exported instead of being sold to an unrelated party in the United States; (3) included NTN's sample and other sales made outside the ordinary course of trade from the calculation of FMV; (4) compared U.S. sales to home market sales made at different trade levels; (5) failed to make a level-of-trade adjustment for product price differences due to differences in level-of-trade or other factors; (6) denied NTN a level-of-trade adjustment for indirect selling expenses; (7) included a theoretical amount for idled equipment in calculating cost of production ("COP") and constructed value ("CV"); (8)
denied NTN's claimed interest income offsets to interest expense in calculating COP and CV; (9) calculated difference in merchandise on the basis of total costs of manufacture; (10) excluded NTN's home market sales to related parties when calculating FMV; and (11) included needle roller bearings with a ratio of between 3:1 to 4:1 in the scope of the antidumping duty order. Plaintiffs NTN Bearing Corporation of America, American NTN Bearing Manufacturing Corporation and NTN Corporation 56.2 Motion for Judgment on the Agency Record and Memorandum in Support Thereof (" NTN's Brief ") at 1-36.
On October 20, 1993, the Court granted NTN's motion for a preliminary injunction, enjoining the liquidation of NTN's Japan-origin unliquidated entries of AFBs during the pendency of this litigation.
On September 27, 1993, and September 30, 1993, respectively, the Court granted The Torrington Company's ("Torrington") and Federal-Mogul Corporation's ("Federal-Mogul") motions to intervene in this civil action. Torrington, the petitioner in the original investigation, and Federal-Mogul, a U.S. manufacturer of AFBs, oppose NTN's challenge.
The Court must uphold Commerce's final 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) (1988). 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, 459, 95 L.Ed. 456 (1951) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 217, 83 L.Ed. 126 (1938)). "It is not within the Court's domain either to weigh the adequate quality or quantity of the evidence for sufficiency or to reject a finding on grounds of a differing interpretation of the record." Timken Co. v. United States, 12 CIT 955, 962, 699 F.Supp. 300, 306 (1988), aff'd, 894 F.2d 385 (Fed.Cir.1990).
1. Deduction for Direct Selling Expenses from Exporter's Sales Price
In the underlying review, Commerce deducted NTN's United States selling expenses from United States price ("USP") in exporter sales price sales. Final Results, 58 Fed.Reg. at 39,778.
NTN asserts that Commerce should have instead added direct selling expenses to FMV. According to NTN, Commerce's treatment of these expenses is contrary to the Court's decision in NTN Bearing Corp. v. United States, 17 CIT 272, Slip Op. 93-56, 1993 WL 129799 (Apr. 21, 1993) and many other cases. NTN's Brief at 8.
In response, Commerce argues that 19 U.S.C. § 1677a(e)(2) (1988) "specifically requires Commerce to reduce exporter's sales price by 'expenses generally incurred by or for the account of the exporter in the United States in selling identical or substantially identical merchandise.' " Defendants' Memorandum in Opposition to the Motion of NTN Bearing Corporation of America, American NTN Bearing Manufacturing Corporation and NTN Corporation for Judgment upon the Agency Record (" Commerce's Brief ") at 6. Commerce has interpreted the words "expenses generally incurred by ... the exporter in the United States" which are contained in 19 U.S.C. § 1677a(e)(2), to include direct and indirect selling expenses related to United States sales. Id.
In Koyo Seiko Co. v. United States, 36 F.3d 1565 (Fed.Cir.1994), the United States Court of Appeals for the Federal Circuit ("CAFC") agrees with Commerce's position on this question. The CAFC states:
In an exporter's sales price transaction, after an initial exporter's sales price is calculated, that value is adjusted, inter alia, pursuant to section 1677a(e)(2) by deducting therefrom all selling expenses (both direct and indirect) incurred in making U.S. sales. Then, in determining an initial foreign market value, appropriate sales are identified in the home market or
third country pursuant to 19 U.S.C. § 1677b(a) [ (1988) ]. Next, the initial foreign market value is adjusted, inter alia, by deducting therefrom a "circumstances of sale" amount to account for "any difference between the United States price and the foreign market value," 19 U.S.C. § 1677b(a)(4), for example, direct selling expenses incurred in making home market sales. In this way, the section 1677b(a)(4) adjustment to foreign market value counterbalances the section 1677a(e)(2) adjustment to exporter's sales price. As a result, the two parameters may be compared on equivalent terms.
Koyo Seiko Co., 36 F.3d at 1573.
The CAFC found that Commerce's statutory interpretation "accounts for the inherently different nature of purchase price and exporter's sales price" and it isn't "surprising that Commerce feels the need to treat them differently to make a fair comparison." Id. at 1574. Further, "[n]othing in the plain language or the legislative history of the Antidumping Act precludes Commerce's approach of adjusting exporter's sales price by deducting therefrom certain direct selling expenses incurred in the United States. Indeed, Commerce's stated rationale for its...
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