Timken Co. v. U.S.

• Decision Date: 03 December 1997
• Docket Number: Court No. 96-12-02686.,Slip Op. 97-164.
• Citation: 989 F.Supp. 234
• Parties: The TIMKEN COMPANY, Plaintiff and Defendant-Intervenor, v. UNITED STATES, Defendant, NTN Bearing Corporation of America, American NTN Bearing Manufacturing Corporation and NTN Corporation; NSK Ltd. and NSK Corporation, Defendant-Intervenors and Plaintiffs, American Honda Motor Co., Inc., Honda of America Mfg., Inc. and Honda Motor Co., Ltd., Defendant-Intervenor.
• Court: U.S. Court of International Trade

989 F.Supp. 234

The TIMKEN COMPANY, Plaintiff and Defendant-Intervenor, v. UNITED STATES, Defendant, NTN Bearing Corporation of America, American NTN Bearing Manufacturing Corporation and NTN Corporation; NSK Ltd. and NSK Corporation, Defendant-Intervenors and Plaintiffs, American Honda Motor Co., Inc., Honda of America Mfg., Inc. and Honda Motor Co., Ltd., Defendant-Intervenor.

Slip Op. 97-164.

Court No. 96-12-02686.

United States Court of International Trade.

December 3, 1997.

COPYRIGHT MATERIAL OMITTED

Stewart and Stewart (Terence P. Stewart, James R. Cannon. Jr., William A. Fennell, Patrick J. McDonough and David S. Johanson), for plaintiff and defendant-intervenor, Timken.

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: Carlos A. Garcia, Attorney-Advisor, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, for defendant.

Barnes, Richardson & Colburn (Donald J. Unger and Kazumune V. Kano) for defendant-intervenor and plaintiff NTN.

Lipstein, Jaffe & Lawson, L.L.P. (Robert A. Lipstein, Matthew P. Jaffe and Grace W Lawson) for defendant-intervenor and plaintiff NSK.

Gibson, Dunn & Crutcher, LLP (Donald Harrison and Judith A. Lee) for defendant-intervenor Honda.

OPINION

TSOUCALAS, Senior Judge.

Plaintiff, The Timken Company ("Timken"), brings this action pursuant to Rule 56.2 of the Rules of this Court for judgment upon the agency record contesting the final results the Department of Commerce, International Trade Administration's ("Commerce") final results of the administrative review, entitled 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 of Antidumping Duty Administrative Reviews and Revocation in Part of an Antidumping Finding ("Final Results"), 61 Fed.Reg. 57,629 (Nov. 7, 1996).

Background

The administrative review at issue encompasses imports of tapered roller bearings ("TRBs") during the review period of October 1, 1992 through September 30, 1993. On May 5, 1995, Commerce published the preliminary results of the instant review. See 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; Preliminary Results of Antidumping Duty Administrative Reviews, Termination in Part, and Intent to Revoke in Part ("Preliminary Results"), 60 Fed.Reg. 22,349. On November 7, 1996, Commerce published the Final Results at issue. See Final Results, 61 Fed.Reg. at 57,629.

Timken claims Commerce erred in: (1) failing to reduce U.S. price by the amount of antidumping duties pursuant to the reimbursement regulation; (2) failing to disregard below-cost sales when calculating profit for constructed value ("CV"); (3) accepting NTN Bearing Corporation of America, American NTN Bearing Manufacturing Corporation and NTN Corporation's (collectively "NTN") reported U.S. credit expenses; (4) treating NTN's home market discounts and NSK Ltd. and NSK Corporation's (collectively "NSK") return rebates, post-sale price adjustments ("PSPAs") and lump-sum PSPAs as indirect selling expenses; and (5) revoking the antidumping duty order with respect to American Honda Motor Co., Inc., Honda of America Mfg., Inc. and Honda Motor Co., Ltd. (collectively "Honda").

Defendant-intervenor and plaintiff, NSK, asserts Commerce erred in: (1) treating NSK's return rebates and PSPAs as indirect, rather than direct, expenses; (2) denying adjustments to foreign market value for distributor incentives, performance incentive rebates and stock transfer commissions; (3) using NSK's submitted related-party cost information for calculating foreign market value ("FMV") rather than using the related-party transfer prices when the cost of production ("COP") for the input exceeded the transfer price that NSK reported for the input; (4) improperly including samples in the U.S. sales database; and (5) failing to rely on COP that NSK's suppliers submitted for the below-cost test for inputs from related suppliers.

Defendant-intervenor and plaintiff, NTN, argues Commerce erred in: (1) treating certain home market discounts as indirect selling expenses; (2) treating NTN's related party commission payments as an indirect selling expense in purchase price transactions and deducting the amount from NTN's U.S. indirect selling expenses for exporter's sales price ("ESP") sales; (3) recalculating NTN's selling expenses based on level of trade; (4) denying NTN's claimed offset for interest expenses incurred in financing cash deposits of estimated antidumping duties; (5) applying one average rate to adjust further manufacturing calculations and CV for inputs NTN obtained from a related party; (6) refusing to make a level of trade adjustment for NTN based on the full difference in prices between levels of trade; and (7) splitting the prices of "unsplittable" TRBs.

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). 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, 216, 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. Absorption of Antidumping Duties by U.S. Importers Affiliated with Foreign Producers

Timken contends Commerce improperly failed to reduce U.S. price by the amount of antidumping duties absorbed by U.S. importers affiliated with foreign producers under 19 U.S.C. § 1677a(d)(2)(A) (1988). Timken's Mem. Supp. Mot. J. Agency R. at 15-16. While Timken recognizes that the Court decided this same issue against Timken's current position in Torrington Co. v. United States, 19 CIT ___, ___, 881 F.Supp. 622, 631-32 (1995), Timken believes the Court's reasoning is contrary to the statutory language stating that U.S. price shall be reduced by "any additional costs, charges, and expenses, and United States import duties." Id. (citing 19 U.S.C. § 1677a(d)(2)(A) (emphasis added)). In the alternative, Timken argues Commerce should deduct reimbursed duties from ESP pursuant to the reimbursement regulation, 19 C.F.R. § 353.26(a) (1994). Id. at 16-19.

Commerce responds that it properly did not deduct "absorbed" antidumping duties from U.S. price either as selling expenses or under the reimbursement regulation and claims the statutory language and current case law support its position. Def.'s Partial Opp'n to Mots. J. Agency R. at 13-19. NSK agrees generally with the position taken by Commerce. NSK's Opp'n to Timken's Mot. J. Agency R. at 7-10.

In Torrington, 19 CIT at ___, 881 F.Supp. at 631-32, the Court held that for the reimbursement regulation to apply, a petitioner must present evidence beyond a mere allegation that the foreign manufacturer either paid the antidumping duty on behalf of the U.S. affiliate importer or reimbursed the U.S. affiliate importer for its payment of antidumping duties, i.e., evidence of a link between intracorporate transfers and the reimbursement of antidumping duties. See also Torrington Co. v. United States, 20 CIT ___, ___, 944 F.Supp. 930, 933-34 (1996); Federal-Mogul Corp. v. United States, 19 CIT ___, ___, 918 F.Supp. 386, 393-94 (1996). The Court of Appeals for the Federal Circuit ("CAFC") recently affirmed Torrington, 19 CIT ___, 881 F.Supp. 622, stating that "Commerce has reasonably interpreted and applied its regulation to require some concrete link between below-cost transfers and antidumping duties before automatically assuming or undertaking an investigation to determine that a foreign producer is compensating an importer for the effects of duties." See Torrington Co. v. United States, 127 F.3d 1077, 1081 (Fed.Cir.1997).

First, the statute and its legislative history contain no language indicating that antidumping duties are to be considered costs for purposes of U.S. price. Moreover, in light of the CAFC's ruling upholding this Court's consistent position in Torrington and its progeny, the Court refuses to reconsider its stance on Timken's suggested employment of the reimbursement regulation. Because Timken has presented no evidence demonstrating that U.S. affiliates absorbed the antidumping duties as a cost of selling in the U.S. and because Timken has not made the requisite demonstration for the reimbursement regulation to apply in this case, the Court sustains Commerce's decision not to deduct paid antidumping duties from U.S. price.

2. Treatment of Home Market Below-Cost Sales When Calculating CV

Timken claims Commerce improperly included certain below-cost sales in its determination of CV profit because 19 U.S.C. § 1677b(b) (1988) explicitly directs Commerce to disregard below-cost sales in all FMV situations when certain conditions are met. Timken further supports its cause by alleging Commerce's position conflicts with the statutory scheme, as sales below cost are undoubtedly outside the concept of "ordinary course of trade." Timken's Mem. Supp. Mot. J. Agency R. at 23-26. Finally, Timken contends Commerce's position creates an anomaly in the law, contradicts a...