BMW of N. Am. LLC v. United States
| Decision Date | 26 March 2020 |
| Docket Number | Slip Op. 20-41,Court No. 15-00052 |
| Citation | 437 F.Supp.3d 1336 |
| Parties | BMW OF NORTH AMERICA LLC, Plaintiff, v. UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Max F. Schutzman, Ned H. Marshak, and Kavita Mohan, Grunfeld Desiderio Lebowitz Silverman & Klestadt LLP, of New York, N.Y. and Washington, D.C., for Plaintiff BMW of North America LLC. Andrew T. Schutz and Jordan C. Kahn also appeared.
Tara K. Hogan, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for Defendant United States. With her on the brief were Joseph H. Hunt, Assistant Attorney General, and Jeanne E. Davidson, Director. Of counsel on the brief was Mykhaylo A. Gryzlov, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C. Alexander O. Canizares and Jessica M. Link also appeared.
BMW of North America LLC ("BMW" or "Plaintiff") brought this action challenging the final determination in the 2010–2011 administrative review of the antidumping duty order on ball bearings and parts thereof from the United Kingdom. See Ball Bearings and Parts Thereof From Japan and the United Kingdom, 80 Fed. Reg. 4248 (Dep't Commerce Jan. 27, 2015) (final results of 2010–2011 administrative review), as amended, 80 Fed. Reg. 9694 (Dep't Commerce Feb. 24, 2015) (amended final results of 2010–2011 administrative review) (collectively, "Final Results"). Before the court are the Final Results of Remand Redetermination, ECF No. 113 ("Second Remand Results"), filed by the U.S. Department of Commerce ("Commerce") pursuant to the court's second remand order, ECF No. 103 ("Second Remand Order"), following the U.S. Court of Appeals for the Federal Circuit's decision in BMW of North America LLC v. United States, 926 F.3d 1291 (Fed. Cir. 2019). For the following reasons, the court sustains the Second Remand Results.
The court presumes familiarity with the facts and procedural history set forth in its prior opinions and recounts the facts relevant to the court's review of the Second Remand Results. See BMW of N. Am. LLC v. United States, 41 CIT ––––, 255 F. Supp. 3d 1342 (2017), vacated, 926 F.3d 1291 (Fed. Cir. 2019), and BMW of N. Am. LLC v. United States, 41 CIT ––––, 208 F. Supp. 3d 1388 (2017).
In 1989, Commerce issued an antidumping duty order on ball bearings from the United Kingdom. See Antidumping Duty Orders and Amendments to the Final Determinations of Sales at Less Than Fair Value: Ball Bearings, and Cylindrical Roller Bearings and Parts Thereof From the United Kingdom, 54 Fed. Reg. 20,910 (Dep't Commerce May 15, 1989) ("Order"). Commerce assigned weighted-average margins of 61.14% and 44.02% to the two cooperating respondents and 54.27% to all other exporters. Id. In 2011, Commerce revoked the Order and discontinued the 2010–2011 administrative review, in response to challenges to the International Trade Commission's determination in the second sunset review of the Order. See NSK Corp. v. United States, 35 C.I.T. 432, 774 F. Supp. 2d 1296 (2011) ; Ball Bearings and Parts Thereof From Japan and the United Kingdom: Revocation of Antidumping Duty Orders, 76 Fed. Reg. 41,761 (Dep't Commerce July 15, 2011). After the ruling in NSK Corp. v. U.S. International Trade Commission, 716 F.3d 1352 (Fed. Cir. 2013), Commerce reinstated the Order and resumed the 2010–2011 administrative review. Ball Bearings and Parts Thereof From Japan and the United Kingdom: Notice of Reinstatement of Antidumping Duty Orders, Resumption of Administrative Reviews, and Advance Notification of Sunset Reviews, 78 Fed. Reg. 76,104, 76,104 (Dep't Commerce Dec. 16, 2013). To effectuate the reinstatement, Commerce notified all respondents’ counsel of a forthcoming quantity and value ("Q&V") questionnaire, published a corresponding notice in the Federal Register, and emailed the questionnaire to all interested parties. Id. at 76,105 –06; U.S. Department of Commerce Memo to File Regarding E-mail Sent to BMW's Counsel Forwarding the Quantity and Value Questionnaire, PD 65 (Dec. 12, 2013); U.S. Department of Commerce Letter to Interested Parties Granting Extension of Time to File Quantity and Value Questionnaire Responses, PD 9 (Dec. 20, 2013). Counsel for BMW asserted that he "did not see and/or receive that email." Compl. ¶ 13, ECF No. 7. BMW did not return the Q&V questionnaire, withdraw its request for a review, or otherwise cooperate. See USDOC: Decision Memorandum for Preliminary Results of Antidumping Duty Administrative Reviews: Ball Bearings and Parts Thereof From Japan and the United Kingdom, PD 64, at 6 (Sept. 17, 2014). Commerce selected NSK Europe Ltd. and NSK Bearings Europe Ltd. (collectively, "NSK") as the sole mandatory respondent. See Ball Bearings and Parts Thereof From Japan and the United Kingdom: Preliminary Results of Antidumping Duty Administrative Review; 2010–2011, 79 Fed. Reg. 56,771, 56,772 (Dep't Commerce Sept. 23, 2014).
In the Final Results issued on January 21, 2015, Commerce determined that BMW had not cooperated to the best of its ability, applied an adverse inference against BMW in selecting from facts otherwise available ("AFA"), and assigned BMW a dumping margin of 254.25%. Issues and Decision Memorandum for the Antidumping Duty Administrative Review of Ball Bearings and Parts Thereof from the United Kingdom; 2010–2011, PD 81 (Jan. 21, 2015) ("I&D Memorandum"), see Final Results at 4248, as amended, 80 Fed. Reg. at 9694. Commerce assigned all other exporters a rate of 1.55%, which was amended to 1.43%. Id. The court upheld Commerce's determination to resume the administrative review and to apply AFA against BMW, but rejected the rate for lack of substantial evidence and remanded to Commerce for a different analysis or redetermination of the AFA rate. BMW of N. Am. LLC, 208 F. Supp. 3d at 1398. In the first remand order, the court sustained Commerce's revised AFA rate of 126.44% based on a transaction-specific margin calculated for the mandatory respondent, NSK. See BMW of N. Am. LLC, 255 F. Supp. 3d at 1346–47. On appeal, the U.S. Court of Appeals for the Federal Circuit affirmed the court's approval of the resumption of the 2010–2011 administrative review and Commerce's decision to apply AFA for BMW's failure to cooperate, but vacated the court's order and remanded for consideration of whether the AFA rate was unduly punitive in light of BMW's level of culpability and the "procedural irregularities" of resuming a discontinued review. BMW of N. Am. LLC, 926 F.3d at 1302. The court remanded to Commerce for reconsideration. Second Remand Order.
In the Second Remand Results, Commerce applied the Trade Preferences Extension Act of 2015 ("TPEA") and assigned an AFA rate of 61.14%. Second Remand Results at 13. Plaintiff opposes Commerce's application of the TPEA and the 61.14% rate. See Pl.’s Comments, ECF Nos. 115, 116.
The court has jurisdiction under 19 U.S.C. § 1516a(a)(2)(B)(iii) and 28 U.S.C. § 1581(c). The court will uphold Commerce's 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)(i).
BMW challenges the Second Remand Results on the grounds that (1) Commerce applied the TPEA impermissibly and (2) the AFA rate of 61.14% is unlawfully punitive, unsupported by substantial evidence, and inconsistent with the mandate of the U.S. Court of Appeals for the Federal Circuit. See Pl.’s Comments at 7–24.
Plaintiff avers that the TPEA does not apply retroactively because the issue of the AFA rate is an ongoing challenge stemming from the 2010–2011 administrative review that predates the TPEA's entry into force. Id. at 5–10. The court agrees and concludes that the TPEA does not apply retroactively to this remand determination.
Commerce issued the Final Results before the TPEA was enacted. See I&D Memorandum. In the first remand, Commerce applied the TPEA and BMW disagreed, but neither this court nor the U.S. Court of Appeals for the Federal Circuit reached the issue of the TPEA's applicability because Commerce used primary information that does not require corroboration either pre-TPEA or after enactment of the TPEA. BMW of N. Am. LLC, 926 F.3d at 1301 n.3 ; BMW of N. Am. LLC, 255 F. Supp. 3d at 1346 n.4. In the second remand, Commerce again applied the TPEA, arguing that the reduction of the AFA rate to 61.14% in the second remand was a new determination subject to the TPEA. Second Remand Results at 7–8, 14–15; Def.’s Reply 7–12, ECF No. 117. The 61.14% rate is based on secondary information, which requires different standards of corroboration depending on whether the TPEA applies.
When Commerce "finds that an interested party has failed to cooperate by not acting to the best of its ability to comply with a request for information," Commerce "may use an inference that is adverse to the interests of that party in selecting from among the facts otherwise available." 19 U.S.C. § 1677e(b)(1)(A). Commerce may use information from the petition, a final determination in the investigation, any previous review, or any other information on the record when selecting an AFA rate. See id. § 1677e(b)(2). Commerce need not corroborate the use of information on the record that was obtained during the instant segment of the proceeding (i.e., primary information). See id. § 1677e(c). However, "[w]hen [Commerce] relies on secondary information1 rather than on information obtained in the course of an investigation or review, [Commerce] shall, to the extent practicable, corroborate that information from independent sources that are reasonably at [its] disposal ...." Id.
President Obama signed the TPEA into law on June 29, 2015. Section 502, 19 U.S.C. § 1677e, relaxes the corroboration requirement when Commerce...
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...that is, information on the record obtained in the investigation or review in question. See BMW of N. Am. LLC v. United States , 44 CIT ––––, ––––, 437 F. Supp. 3d 1336, 1341 (2020) ("Commerce need not corroborate the use of information on the record that was obtained during the instant seg......