Jtekt Corporation v. U.S., Slip Op. 09-147.

• Decision Date: 18 December 2009
• Docket Number: Slip Op. 09-147.,Court No. 06-00250.
• Citation: 675 F.Supp.2d 1206
• Parties: JTEKT CORPORATION and Koyo Corporation of U.S.A., Plaintiffs, v. UNITED STATES, Defendant, and The Timken Company, Defendant-Intervenor.
• Court: U.S. Court of International Trade

675 F.Supp.2d 1206

JTEKT CORPORATION and Koyo Corporation of U.S.A., Plaintiffs, v. UNITED STATES, Defendant, and The Timken Company, Defendant-Intervenor.

Slip Op. 09-147.

Court No. 06-00250.

United States Court of International Trade.

December 18, 2009.

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Sidley Austin, LLP (Neil R. Ellis and Jill Caiazzo) for plaintiffs JTEKT Corporation and Koyo Corporation of U.S.A.

Baker & McKenzie, LLP (Washington, District of Columbia) (Kevin M. O'Brien, Kevin J. Sullivan, and Sonal Majmudar) for plaintiffs FYH Bearing Units USA, Inc. and Nippon Pillow Block Company Ltd.

Crowell & Moring, LLP (Matthew P. Jaffe, Alexander H. Schaefer, Nicole M. Jenkins, and Robert A. Lipstein) for plaintiffs NSK Corporation, NSK Ltd., and NSK Precision America, Inc.

Baker & McKenzie, LLP (Chicago, Illinois) (Donald J. Unger, Diane A. MacDonald and Joseph W. LaFramboise) for plaintiffs American NTN Bearing Manufacturing Corp., NTN Bearing Corporation of America, NTN Bower Corporation, NTN Corporation, NTN Driveshaft, Inc., and NTN-BCA Corporation.

O'Melveny & Myers, LLP (Greyson L. Bryan) for plaintiffs Nachi Technology, Inc., Nachi-Fujikoshi Corporation, and Nachi America, Inc.

Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Claudia Burke); Jennifer I. Johnson, Hardeep Josan, Natasha Robinson, Sapna Sharma, Mykhaylo Gryzlov, Jonathan Zielinksi, and Deborah R. King, Office of Chief Counsel for Import Administration, United States Department of Commerce, of counsel, for defendant.

Stewart and Stewart (Geert M. De Prest, Terence P. Stewart, William A. Fennell, and Lane S. Hurewitz) for plaintiffs and defendant-intervenors The Timken Company.

Before: TIMOTHY C. STANCEU, Judge.

OPINION AND ORDER

STANCEU, Judge:

JTEKT Corporation, formerly Koyo Seiko Company, Ltd.,¹ and Koyo Corporation of U.S.A. (collectively, "JTEKT") brought an action pursuant to 28 U.S.C. § 1581(c) (2006) to contest the final determination of the United States Department of Commerce ("Commerce" or the "Department") in the sixteenth administrative reviews ("AFBs 16 reviews" or "AFBs 16") of antidumping duty orders on ball bearings and parts thereof ("subject merchandise") from France, Germany, Italy, Japan, and the United Kingdom. Summons 1; Ball Bearings & Parts Thereof from France, Germany, Italy, Japan, & the United Kingdom: Final Results of Antidumping Duty Admin. Reviews, 71 Fed. Reg. 40,064, 40,065 (July 14, 2006) ("Final Results"); Issues & Decision Mem. for the Antidumping Duty Admin. Reviews of Ball Bearings & Parts Thereof from France, Germany, Italy, Japan, & the United Kingdom for the Period of Review May 1, 2004, through April 30, 2005, at 2 (July 14, 2006) ("Decision Mem."). The reviews applied to imports of subject merchandise made during the period of May 1, 2004 through April 30, 2005 ("period of review" or "POR"). Final Results, 71 Fed.Reg. at 40,065.

Upon defendant's consent motion, the court consolidated JTEKT's action with five other cases. Consent Mot. to Consolidate 1. The five other groups of plaintiffs in the consolidated cases (referred to in this Opinion and Order collectively with their affiliates) are FYH Bearing Units USA, Inc. and Nippon Pillow Block Company Ltd. (collectively, "NPB"); NSK Corporation, NSK Ltd., and NSK Precision America, Inc. (collectively, "NSK"); American NTN Bearing Manufacturing Corp., NTN Bearing Corporation of America, NTN Bower Corporation, NTN Corporation, NTN Driveshaft, Inc., and NTN-BCA Corporation (collectively, "NTN"); Nachi Technology, Inc., Nachi-Fujikoshi Corporation, and Nachi America, Inc. (collectively "Nachi"); and The Timken Company ("Timken").

JTEKT, NPB, NSK, NTN, and Nachi (collectively, "plaintiffs"), as well as Timken, which is both a plaintiff and the defendant-intervenor ("defendant-intervenor") in the consolidated cases, bring claims contesting various decisions and determinations that Commerce made in the Final Results. These claims are discussed in the respective sections of Part II of this Opinion and Order, as follows: (A) claims of JTEKT, NPB, NTN, and Nachi challenging the application of Commerce's "zeroing" methodology to non-dumped sales; (B) claims challenging the Department's revised model-match methodology, the adoption of which JTEKT, NPB, NSK, NTN, and Nachi oppose generally and the specific application of which JTEKT, NPB, NSK, and NTN challenge in certain respects; (C) JTEKT's claim objecting to Commerce's treating JTEKT and an affiliate as a single entity, (D) NSK's claim that Commerce unlawfully deducted certain benefits expenses when determining the constructed export price of NSK's subject merchandise, (E) NTN's claim opposing Commerce's reallocation of NTN's freight expense on the basis of weight, (F) NTN's claim opposing Commerce's recalculation of NTN's home market packing expenses, (G) NTN's claim challenging the Department's disallowance of NTN's downward price adjustments to reflect certain discounts to home market customers, (H) Nachi's claim challenging Commerce's use of facts otherwise available and adverse inferences in response to errors Nachi made in reporting physical characteristics of subject bearings, and (I) Timken's claim challenging Commerce's use of Japanese interest rates, rather than U.S. interest rates, for a portion of the adjustment for imputed interest carrying costs in the calculation of constructed export prices of subject merchandise of NTN and Nachi. As discussed in this Opinion and Order, the court grants relief on certain of these claims through an order of remand and, with respect to other claims, affirms Commerce's decisions and determinations in the Final Results.

I. BACKGROUND

The court sets forth below the procedural history of the administrative and judicial proceedings in general terms common to all plaintiffs. Additional background information specific to the individual claims is presented in Part II of this Opinion and Order.

A. Administrative Proceedings

On May 15, 1989, Commerce issued antidumping duty orders on imports of ball bearings from France, Germany, Italy, Japan, and the United Kingdom.² On June 30, 2005, Commerce initiated the sixteenth set of administrative reviews of these orders. Initiation of Antidumping & Countervailing Duty Admin. Reviews, 70 Fed. Reg. 37,749, 37,756-57 (June 30, 2005); Decision Mem. 2. Commerce issued the preliminary results of the administrative reviews ("Preliminary Results") in March 2006, setting forth its analysis for certain of its initial determinations. Ball Bearings & Parts Thereof from France, Germany, Italy, Japan, & the United Kingdom: Prelim. Results of Antidumping Duty Admin. Reviews, 71 Fed.Reg. 12,170 (Mar. 9, 2006) ("Prelim. Results"). Later that year, Commerce issued the Final Results and incorporated by reference therein an internal Issues and Decision Memorandum ("Decision Memorandum") containing the Department's analysis of issues raised by interested parties subsequent to the Preliminary Results. Final Results, 71 Fed. Reg. at 40,065; see Decision Mem.

B. Judicial Review in the Consolidated Actions

On September 13, 2006, the court granted the consent motion of Timken to intervene on behalf of defendant. Upon defendant's consent motion, the court ordered consolidation under Consolidated Court No. 06-00250 of JTEKT Corporation v. United States, No. 06-00250, Nippon Pillow Block Company Ltd. v. United States, No. 06-00258, Timken U.S. Corporation v. United States, No. 06-00271, NSK Ltd. v. United States, No. 06-00272, NTN Corporation v. United States, No. 06-00274, and Nachi-Fujikoshi Corporation v. United States, No. 06-00275. Order 1, Nov. 15, 2006; Consent Mot. to Consolidate 1. Each plaintiff and Timken filed a motion for judgment upon the agency record on February 8, 2007, which motions defendant opposes in the entirety and Timken, as defendant-intervenor, opposes with respect to certain claims.³

Oral argument was held in camera on October 30, 2007. On June 18, 2008, the court requested additional briefing regarding certain matters, to which JTEKT, NPB, NSK, NTN, defendant, and Timken responded. See Letter from Timothy C. Stanceu, Judge, Ct. of Int'l Trade, to Counsel for Pls., Def., & Def.-Intervenor in Consol. Ct. No. 06-250 (June 18, 2008). In addition, defendant and Timken made five additional submissions, and defendant made one additional submission, to notify the court of supplemental authority.

II. DISCUSSION

The court exercises jurisdiction pursuant to 28 U.S.C. § 1581(c), under which the Court of International Trade is granted exclusive jurisdiction of any civil action commenced under 19 U.S.C. § 1516a. 28 U.S.C. § 1581(c). The court reviews the Final Results on the basis of the agency record. See 28 U.S.C. § 2640(b) (2006); 19 U.S.C. § 1516a(b)(1)(B)(i) (2006). Upon such review, the court must "hold unlawful any determination, finding, or conclusion found," 19 U.S.C. § 1516a(b)(1), "to be unsupported by substantial evidence on the record, or otherwise not in accordance with law." Id. § 1516a(b)(1)(B)(i). "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." Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938).

A. The Claims of JTEKT, NPB, NTN, and Nachi Challenging the Department's Zeroing Procedure Are Inconsistent with Controlling Judicial Precedent

Plaintiffs claim that the Department's policy of zeroing in administrative reviews violates U.S. antidumping laws and is inconsistent with international obligations of the United States. Citing 19 U.S.C. §§ 1673, 1677(35), 1677b(a), and 1677f-l, NTN and Nachi argue that zeroing precludes a fair comparison of normal...