Koyo Seiko Co., Ltd. v. US

• Decision Date: 05 August 1996
• Docket Number: Slip Op. 96-122. Court No. 94-12-00779.
• Parties: KOYO SEIKO CO., LTD. and Koyo Corporation of U.S.A., Plaintiffs, v. UNITED STATES and the United States Department of Commerce, Defendants, The Timken Company, Defendant-Intervenor.
• Court: U.S. Court of International Trade

936 F. Supp. 1040

20 CIT 920

KOYO SEIKO CO., LTD. and Koyo Corporation of U.S.A., Plaintiffs, v. UNITED STATES and the United States Department of Commerce, Defendants, The Timken Company, Defendant-Intervenor.

Slip Op. 96-122. Court No. 94-12-00779.

United States Court of International Trade.

August 5, 1996.

Powell, Goldstein, Frazer & Murphy (Peter O. Suchman, Niall P. Meagher, Elizabeth C. Hafner and Lee Ann Alexander), Washington, DC, for plaintiffs.

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: David W. Richardson, Attorney-Advisor, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, for defendants.

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

OPINION

TSOUCALAS, Judge:

Plaintiffs, Koyo Seiko Co., Ltd. and Koyo Corporation of U.S.A. (collectively "Koyo"), commenced this action challenging certain aspects of the Department of Commerce, International Trade Administration's ("Commerce" or "ITA") final determination of administrative reviews entitled Tapered Roller Bearings, Four Inches or Less in Diameter, and Components Thereof, From Japan ("Final Results"), 59 Fed.Reg. 56,035 (1994).

Background

In 1980, Commerce began administering the antidumping law and initiated a number of administrative reviews covering outstanding antidumping determinations, including the finding on tapered roller bearings ("TRBs") from Japan issued on August 18, 1976. See Tapered Roller Bearings and Certain Components From Japan, 41 Fed.Reg. 34,974 (1976). The initiated reviews covered the period of 1980 through 1985.

In 1986, when the antidumping statute was amended to provide administrative reviews by request only, Commerce re-initiated incomplete reviews based on requests from interested parties. On July 9, 1986, Commerce re-initiated the reviews of Koyo's entries for the period of 1974 through 1985. See Initiation of Antidumping Duty Administrative Reviews, 51 Fed.Reg. 24,883 (1986). In 1989, in an attempt to dispose of a backlog of incomplete reviews of TRBs, Commerce divided the administrative proceedings for Koyo into two parts — one covering the 1974 through March, 1979 review periods, and the other covering the April, 1979 through July, 1985 review periods (later expanded to include the 1985-86 review periods).

On June 1, 1990, Commerce published the final results for the 1974 through March, 1979 review periods for Koyo. See Tapered Roller Bearings Four Inches or Less in Outside Diameter From Japan; Final Results of Antidumping Duty Administrative Review, 55 Fed.Reg. 22,369 (1990).

On May 13, 1991 Koyo resubmitted its data for the 1979-86 review periods to conform with Commerce's current computer format. P.R.Doc. No. 719, Fiche 16, Frame 1. On September 17, 1993, Commerce issued a supplemental questionnaire. P.R.Doc. No. 790, Fiche 41, Frames 66-71. Koyo responded to the supplemental questionnaire on November 1, 1993. P.R.Doc. No. 799, Fiche 42, Frame 1. Commerce published the final results for these reviews on November 24, 1994. See Final Results, 59 Fed.Reg. at 56,035.

Koyo brought this action pursuant to Rule 56.2 of the Rules of this Court for judgment upon the agency record claiming that the following actions by Commerce were unsupported by substantial evidence on the agency record and not in accordance with law: (1) applying best information available ("BIA") to sample sales; (2) applying BIA to discounts and allowances; and (3) comparing components split from home market tapered roller bearing sets to cups and cones sold individually in the U.S. market.¹ On January 18, 1993, this Court granted Koyo's consent application for a preliminary injunction suspending liquidation of entries of TRBs involved in the reviews 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 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. Application of BIA to Sample Sales

In the Final Results at issue, Commerce resorted to BIA to determine the value of Koyo's U.S. sample sales. 59 Fed.Reg. at 56,049. Commerce explained its choice of BIA as follows:

We only have information on Koyo's home market sample sales. Therefore, we used the data for home market sample sales from the 1985/86 period. We used the relationship of home market sample sales to total home market sales to represent the relationship of U.S. sample sales to total U.S. sales. With this information, we determined a value for those U.S. sample sales and applied a BIA margin to that value. We added both the resulting duties due amount and the calculated value of the sample U.S. sales to our respective margin and value totals in deriving our weighted-average margin.

59 Fed.Reg. at 56,049-50.

Koyo argues that Commerce's decision to apply BIA and its choice of BIA constituted an abuse of discretion. According to Koyo, it was unable to supply the information requested because Commerce did not request data regarding U.S. sample sales until September 17, 1993 which was fourteen years after the beginning of the first period of these reviews, and six years after the end of the final period. Koyo claims that it was unable to identify its U.S. sample sales after such a long period of time had passed since its original submission. Koyo explains that in order to comply with Commerce's request, it would have had to review manually all of its old U.S. invoices for the 1979-86 period which numbered in the tens of thousands. Pls.' Mem.Supp.Mot.J.Agency R. at 13-14.

Koyo further emphasizes that it was Commerce's failure to proceed with its investigation in a timely manner that resulted in Koyo's inability to provide the requested data. Relying on Shikoku Chems. Corp. v. United States, 16 CIT 382, 387, 795 F.Supp. 417, 421 (1992), Koyo maintains that Commerce improperly held Koyo responsible for Commerce's tardiness and repeated changes of methodology. Pls.' Mem.Supp.Mot.J.Agency R. at 16-17.

Commerce responds that Koyo, as an experienced importer/exporter, has been on notice since 1981 that Commerce regards U.S. sample sales as covered by a dumping finding and that Commerce had a policy of treating sample sales in the same manner as other U.S. sales. Defs.' Opp'n to Pls.' Mot.J.Agency R. at 8-10. Commerce emphasizes that Koyo's failure to submit the requested data in its supplemental questionnaire response was a result of Koyo not wanting to review manually all of its sales invoices as opposed to Koyo not having the information. Defs.' Opp'n to Pls.' Mot.J.Agency R. at 10-11.

Commerce also defends its choice of BIA arguing that under the circumstances, in which Koyo submitted no information regarding its U.S. sample sales, Commerce properly assumed that the relationship between Koyo's home market sample sales from the 1985-86 period of review to total home market sales represented the relationship of U.S. sample sales to total U.S. sales. If this were not a reasonable assumption, Commerce asserts that Koyo would have provided Commerce with data on its U.S. sample sales. In addition, Commerce suggests that it could have assigned to the missing U.S. sample sales a zero price which would have resulted in a more adverse dumping margin. Id. at 11-13 (citing J.C. Hallman Mfg. Co. v. United States, 13 CIT 1073, 1076, 728 F.Supp. 751, 753 (1989)).

Defendant-intervenor The Timken Company ("Timken") supports Commerce's position on this issue arguing that Koyo failed to demonstrate that business records regarding U.S. sample sales did not exist or could not be reviewed within the time allowed. Timken contends that the fact that Koyo had the ability to review manually a large quantity of other sales data supports the conclusion that Koyo could have segregated sample sales in the course of its sales data review. According to Timken, Koyo's response to Commerce's request for information was tailored to exclude U.S. sales from the margin analysis. Def.-Int.'s Opp'n to Pls.' Mot.J.Agency R. at 12-14. Timken also agrees with Commerce's choice of BIA arguing that it was reasonable in light of Koyo's refusal to submit requested data. Id. at 15-16.

Section 1677e(c) of Title 19, United States Code (1988), states that Commerce "shall, whenever a party or any other person refuses or is unable to produce information requested in a timely manner and in the form required, or otherwise significantly impedes an investigation, use the best information otherwise available." (Emphasis added). In addition, Commerce's regulations instruct the Secretary to use BIA whenever Commerce:

(1) Does not receive a complete, accurate, and timely response to the Secretary's request for factual information; or

(2) Is unable to verify, within the time specified, the accuracy and completeness of the factual information submitted.

19 C.F.R. § 353.37(a) (1993) (emphasis added).

Courts have clearly acknowledged that the statute does not specifically restrict...