NTN Bearing Corp. of America v. US

• Decision Date: 19 April 1996
• Docket Number: Slip Op. 96-67. Court No. 93-12-00793.
• Citation: 20 CIT 508,924 F. Supp. 200
• Parties: NTN BEARING CORP. OF AMERICA, American NTN Bearing Mfg. Corp., and NTN Corporation, Plaintiffs, v. UNITED STATES, U.S. Department of Commerce and Ronald H. Brown, Secretary, U.S. Department of Commerce, Defendants, The Timken Company, Defendant-Intervenor.
• Court: U.S. Court of International Trade

924 F. Supp. 200

20 CIT 508

NTN BEARING CORP. OF AMERICA, American NTN Bearing Mfg. Corp., and NTN Corporation, Plaintiffs, v. UNITED STATES, U.S. Department of Commerce and Ronald H. Brown, Secretary, U.S. Department of Commerce, Defendants The Timken Company, Defendant-Intervenor.

Slip Op. 96-67. Court No. 93-12-00793.

United States Court of International Trade.

April 19, 1996.

COPYRIGHT MATERIAL OMITTED

Barnes, Richardson & Colburn (Donald J. Unger and Jesse M. Gerson), Washington, DC, for plaintiffs.

Frank W. Hunger, Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Michael S. Kane), Washington, DC; of counsel: Linda Chang, Attorney-Advisor, U.S. Department of Commerce, for defendants.

Stewart and Stewart (Terence P. Stewart, James R. Cannon, Jr., William A. Fennell and Olufemi A. Areola), Washington, DC, for defendant-intervenor.

OPINION

TSOUCALAS, Judge:

Plaintiffs, NTN Bearing Corporation of America, American NTN Bearing Manufacturing Corporation and NTN Corporation (collectively "NTN"), commenced this action challenging certain aspects of the Department of Commerce, International Trade Administration's ("Commerce" or "ITA") final results of administrative review entitled Final Results of Antidumping Duty Administrative Reviews; Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and Components Thereof, From Japan ("Final Results"), 58 Fed.Reg. 64,720 (1993).

Background

On November 22, 1991, Commerce initiated administrative reviews of tapered roller bearings ("TRBs") from Japan covering the period of 1990 to 1991. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 56 Fed.Reg. 58,878 (1991). On November 27, 1992, Commerce initiated administrative reviews of TRBs imported from Japan during the period of 1991 to 1992. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 57 Fed.Reg. 56,318 (1992). Commerce published the preliminary results of both reviews on September 30, 1993. See Preliminary Results of Antidumping Duty Administrative Reviews; Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and Components Thereof, From Japan, 58 Fed.Reg. 51,058 (1993).

On December 9, 1993, Commerce published its final determinations concerning these reviews. See Final Results, 58 Fed.Reg. at 64,720. NTN commenced this action pursuant to Rule 56.2 of the Rules of this Court for judgment on the agency record alleging the following actions by Commerce were unsupported by substantial evidence on the agency record and not in accordance with law: (1) refusing to apply a ten percent cap as part of the sum of the deviations model match methodology; (2) splitting the price of sets sold in the home market for the purpose of determining foreign market value ("FMV") of cups and cones sold individually in the United States; (3) performing the cost of production test after splitting the sets into cups and cones; (4) using individual cups and cones sold as components of sets as comparison models; (5) using best information available ("BIA") to determine variable cost of manufacturing; (6) including zero price sales, sample sales and small quantity sales as home market sales; (7) comparing merchandise sold at different levels of trade; (8) denying a level of trade adjustment; (9) using a three month extended period of time test; (10) using certain sales in determining FMV; and (11) comparing bearings of different design types. Pls.' Mem.Supp.Mot.J. Agency R. at 15-77.

On February 3, 1994, this Court granted plaintiffs' consent motion for a preliminary injunction enjoining Commerce from liquidating entries of TRBs subject to the Final Results at issue during the pendency of this litigation.

Discussion

The Court's jurisdiction in this action is derived from 19 U.S.C. § 1516a(a)(2) (1994) and 28 U.S.C. § 1581(c) (1994).

The Court must uphold Commerce's final determination unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance with the law." 19 U.S.C. § 1516a(b)(1)(B) (1994). 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 the 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. Model Match Methodology

NTN argues that Commerce erred in refusing to impose a ten percent limit upon individual bearing deviations as part of its five-criteria model match methodology for selecting the most similar home market TRB model. According to NTN, Commerce is required to employ a ten percent deviation cap as part of its sum of the deviations methodology. Pls.' Mem.Supp.Mot.J. Agency R. at 15-21.

Commerce responds that when identical merchandise is not available in the home market for comparison with the merchandise sold to the United States, Commerce must select the "most similar" merchandise based upon the physical characteristics of the merchandise being compared. Defs.' Opp'n to Pls.' Mot.J. Agency R. at 14; 19 U.S.C. § 1677(16) (1988).¹ In this review, Commerce compared home market sales of TRBs to U.S. sales by devising a "sum of the deviations" methodology. Under this approach, Commerce uses five physical characteristics (inner diameter, outer diameter, width, Y factor, and load rating) as criteria for selecting "similar" model matches. Commerce explains that in conjunction with the "sum of the deviations" methodology, it applied a twenty percent cost cap that prevents the matching of United States and home market models whose variable cost of manufacturing differs by more than twenty percent. Commerce argues its actions are within its discretion and in accordance with law. Defs.' Opp'n to Pls.' Mot.J. Agency R. at 12-15.

The Court of Appeals for the Federal Circuit ("CAFC") recently ruled on this issue in Koyo Seiko Co. v. United States, 66 F.3d 1204 (Fed.Cir.1995), holding that Commerce's model match methodology, without the ten percent cap, is a permissible approach under 19 U.S.C. § 1677(16). In reaching its conclusion, the CAFC noted that under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984), where a statute is silent or ambiguous with respect to a specific issue, the court is limited to determining whether the agency's approach is a permissible construction of the statute. Koyo, 66 F.3d at 1209. The CAFC upheld Commerce's construction of the statute stating the following:

Commerce's interpretation is reasonable because there is no evidence that any one of the five criteria should be decisive in determining whether to match a given U.S. TRB with a home-market TRB. By choosing not to apply the ten percent cap, Commerce in essence weighs each of the five criteria equally, which is plainly reasonable.

Koyo, 66 F.3d at 1210.

In light of the decision of the CAFC in Koyo, the Court finds that Commerce's model match methodology without the ten percent cap is a reasonable approach and consistent with law.

2. Splitting TRB Sets to Calculate FMV

For these Final Results, Commerce decided to split sales of TRB sets in the home market into sales of individual cups and cones for the purpose of establishing FMV. 58 Fed.Reg. at 64,722. NTN argues that Commerce's practice of splitting sets creates fictitious sales and fictitious markets which is contrary to the statutory framework of antidumping law. Pls.' Mem.Supp.Mot.J. Agency R. at 22-32.

Commerce responds that the splitting of TRB sets did not create fictitious prices because Commerce used actual prices based upon actual sales in the home market. Commerce argues that "by `splitting' TRB sets into TRB components, Commerce obtained sufficiently large `pools' of potentially comparable cups and cones in order to implement the congressional preference for using prices rather than constructed value in determining foreign market value." Defs.' Opp'n to Pls.' Mot.J. Agency R. at 15. According to Commerce, its methodology is reasonable and consistent with the statute. Id. at 15-24.

This Court has already upheld Commerce's practice of splitting sets to calculate FMV. NTN Bearing Corp. of Am. v. United States ("NTN I"), 18 CIT ___, ___, 881 F.Supp. 584, 590 (1994). Specifically, this Court found that "rather than frustrating the purpose of the antidumping law, ITA's set-splitting methodology furthers that purpose by discouraging circumvention." Id. NTN has not presented any new arguments persuading the Court to reconsider its position. Accordingly, the Court sustains Commerce on this issue.

3. Inclusion of Split Cups and Cones in the Cost of Production Test

In the review at issue, Commerce performed its cost of production test after splitting cups and cones. Final Results, 58 Fed.Reg. at 64,729. NTN contends that if splitting is a permissible practice, the cost of production test should occur before as opposed to after the splitting. Pls.' Mem.Supp. Mot.J. Agency R. at 39-44. According to NTN, the cost of production is based on sets and not on individual cups and cones. NTN also asserts that performing the cost of production test after splitting is inconsistent with 19 U.S.C. § 1677b(b) (1988) which authorizes Commerce to apply the cost of production test to "prices" rather than "values"...