Torrington Co. v. U.S., Slip Op. 97-57.

• Decision Date: 14 May 1997
• Docket Number: Court No. 95-03-00351.,Slip Op. 97-57.
• Citation: 965 F.Supp. 40
• Parties: The TORRINGTON COMPANY, Plaintiff and Defendant-Intervenor, v. The UNITED STATES, Defendant, and NMB Singapore Ltd., Pelmec Industries (Pte.) Ltd. and NMB Corporation, Defendants-Intervenors and Plaintiffs.
• Court: U.S. Court of International Trade

965 F.Supp. 40

The TORRINGTON COMPANY, Plaintiff and Defendant-Intervenor, v. The UNITED STATES, Defendant and NMB Singapore Ltd., Pelmec Industries (Pte.) Ltd. and NMB Corporation, Defendants-Intervenors and Plaintiffs.

Slip Op. 97-57.

Court No. 95-03-00351.

United States Court of International Trade.

May 14, 1997.

Stewart and Stewart (Terence P. Stewart, James R. Cannon, Jr., Amy S. Dwyer, Olufemi Areola and Timothy C. Brightbill, Washington, DC), for plaintiff and defendant-intervenor The Torrington Company.

White & Case (Walter J. Spak, William J. Clinton and David E. Bond, Washington, DC), for NMB Singapore Ltd., Pelmec Industries (Pte.) Ltd. and NMB Corporation.

Frank W. Hunger, Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Velta A. Melnbrencis); of counsel: Michelle K. Behaylo, Stacy J. Ettinger and Dean A. Pinkert, Attorney-Advisors, Washington, DC, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, for defendant.

OPINION

TSOUCALAS, Senior Judge.

Plaintiff and defendant-intervenor The Torrington Company ("Torrington") moves this Court pursuant to Rule 56.2 of the Rules of this Court for judgment on the agency record challenging aspects of the final determination of the Department of Commerce, International Trade Administration ("Commerce"), of the fourth administrative review of antifriction bearings ("AFBs") from Singapore, entitled Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France, et al.; Final Results of Antidumping Duty Administrative Reviews. Partial Termination of Administrative Reviews. and Revocation in Part of Antidumping Duty Orders ("Final Results"), 60 Fed.Reg. 10,900 (1995). Defendant-intervenors and plaintiffs NMB Singapore Ltd., Pelmec Industries (Pte.) Ltd. and NMB Corporation (collectively "NMB") oppose Torrington's motion and also challenge Commerce's fourth administrative review of AFBs from Singapore.

Background

On May 15, 1989, Commerce published the antidumping duty orders on AFBs from Singapore. See Antidumping Duty Order of Sales at Less Than Fair Value: Ball Bearings and Parts Thereof From Singapore, 54 Fed.Reg. 20,907 (1989). The fourth administrative review encompasses imports of AFBs entered during the period of May 1, 1992 through April 30, 1993. The present consolidated action concerns imports from Singapore.

On February 28, 1994, Commerce published the preliminary results of the fourth administrative review. See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France, Germany, Italy, Japan, Singapore, Sweden, Thailand, and the United Kingdom; Preliminary Results of Antidumping Duty Administrative Reviews, Partial Termination of Administrative Reviews, and Notice of Intent To Revoke Orders (in Part), 59 Fed.Reg. 9,463 (1994). On February 28, 1995, Commerce published the Final Results at issue. See Final Results, 60 Fed.Reg. at 10,900.

Torrington contests the following actions of Commerce: (1) accepting reporting of NMB of home market and U.S. billing adjustments and discounts; and (2) relying on NMB's air and ocean freight expenses reported on a commingled basis.

NMB claims that Commerce erred by including research and development ("R & D") expenses related to non-scope merchandise in the calculation of cost of production and constructed value and by failing to allocate R & D expenses of Minebea Co., Ltd. ("Minebea Japan") over total consolidated cost of sales.

On May 3, 1995, the Court granted Torrington's motion for a preliminary injunction enjoining the liquidation of the subject entries for the duration 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 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 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. Billing Adjustments and Discounts

Torrington contests Commerce's acceptance of NMB's reporting of various billing adjustments on U.S. and home market sales. Torrington alleges that the billing adjustments reported do not accurately reflect U.S. and home market sales because a variety of the adjustments may have been made as much as five years or more after the sales under review. Torrington stresses that because verification did not occur until December 1993 and January 1994, Commerce could have verified whether additional billing adjustments were made after June 1993.¹ According to Torrington, Commerce had an obligation to investigate whether the submitted prices should have been relied upon in light of the fact that NMB's reported sales prices may be changed for a period of five years or more after the period under review. Torrington's Mem. Supp. Mot. J. Agency R. at 11-14.

Torrington further argues that Commerce's treatment of NMB's billing adjustments was inconsistent with its treatment of other post-sale price adjustments ("PSPAs"). Torrington explains that while Commerce generally requires PSPAs to be tied directly to the sales under consideration, in this instance, Commerce relied on prices based on billing adjustments that may have occurred up to five years after the original sales. To avoid the use of strategies intended to reduce antidumping duty liability, Torrington asserts that Commerce should have at least disallowed favorable adjustments to U.S. and home market prices. Torrington requests a remand for Commerce either to disregard all of the U.S. and home market sales information reported by NMB or to apply best information available ("BIA") with respect to reported billing adjustments. Id. at 14-16.

Commerce counters that it was not required to resort to BIA with respect to NMB's billing adjustments because NMB submitted a complete and accurate response to Commerce's request for information. Def.'s Partial Opp'n to Mots. J. Agency R. at 4. Commerce further responds that Torrington failed to exhaust its administrative remedies regarding its contention that Commerce should have disregarded NMB's entire U.S. and home market sales database. Commerce contends that at the administrative level Torrington only asserted that Commerce should have used partial BIA for NMB's billing adjustments and never questioned the reliability of NMB's entire home market and U.S. sales database. Id. at 5-7.

In the alternative, Commerce maintains that Torrington's concerns regarding NMB's billing adjustments and sales database are not warranted as they are based on speculation and conjecture rather than record evidence. Commerce argues that it was unlikely that any significant quantity of billing adjustments relating to sales during the period of review occurred after the period covered by the response, and that any possible additional adjustments could serve either to decrease or increase the margins. Commerce further states that it accepted and verified the accuracy of NMB's database after concluding it was not possible for NMB to report billing adjustments that had not yet occurred by the time of the deadline for filing a questionnaire response. Commerce defends its need for setting deadlines and states that, given the necessary time constraints, NMB's reporting of its billing adjustments and U.S. and home market sales was complete. Id. at 7-9.

Defendant-intervenor and plaintiff NMB asserts that in accordance with Commerce's instructions, it reported billing adjustments on a transaction-specific basis. NMB insists that Commerce's on-site thorough verification revealed only one minor discrepancy. NMB further maintains that billing adjustments by definition occur after sales are made and, therefore, should be considered part of the original sales transactions regardless of when they are made. NMB's Opp'n to Mot. J. Agency R. at 3-6.

In rebuttal, Torrington argues that emphasizing the lack of discrepancies found at verification misses the point that Commerce failed to investigate further the potential for billing adjustments to occur several years after the original sales. In so doing, Torrington alleges that Commerce abdicated its responsibilities under the antidumping statute. Torrington's Reply to Opp'n to Mot. J. Agency R. at 6.

Commerce explained its treatment of NMB's home market and U.S. billing adjustments in the Final Results as follows:

The reporting of all HM [home market] billing adjustments during the POR [period of review] was not possible because the billing adjustments had not yet occurred by the deadline for filing the response. We verified NMB/Pelmec Singapore's reported billing adjustments and found them to be reported in accordance with our questionnaire instructions, and therefore have accepted the billing adjustments as reported.

...

We verified quantity and billing adjustments in the United States. We found that quantity and billing adjustments were properly reported, with one exception. At verification, we discovered a discrepancy regarding a relatively small billing adjustment. However, because the discrepancy involved was an isolated incident, we have accepted NMB/Pelmec's quantity and billing adjustments as reported.

Final Results, 60 Fed.Reg. at...