Koyo Seiko Co., Ltd. v. U.S.
| Decision Date | 12 August 1996 |
| Docket Number | No. 96-1116,96-1116 |
| Citation | 92 F.3d 1162 |
| Parties | KOYO SEIKO COMPANY, LTD., and Koyo Corporation of U.S.A, Plaintiffs-Appellants, v. The UNITED STATES and Department of Commerce, Defendants-Appellees, and The Torrington Company and Federal-Mogul Corporation, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Federal Circuit |
Neil R. Ellis, Powell, Goldstein, Frazer & Murphy, Washington, D.C., argued, for plaintiffs-appellants. With him on the brief were Peter O. Suchman, Susan M. Mathews, and Lee Ann Alexander.
Velta A. Melnbrencis, Assistant Director, Commercial Litigation Branch, Civil Division, Department of Justice, Washington, D.C., argued, for defendants-appellees The United States and Department of Commerce. With her on the brief were Frank W. Hunger, Assistant Attorney General, and David M. Cohen, Director. Also on the brief were Stephen J. Powell, Chief Counsel for Import Administration, U.S. Department of Commerce, of Washington, D.C., Berniece A. Browne, Senior Counsel, and Mark A. Barnett and Dean A. Pinkert, Attorney-Advisors.
James R. Cannon, Jr., Stewart and Stewart, Washington, D.C., argued, for defendants-appellees The Torrington Company and Federal-Mogul Corporation. With him on the brief were Terence P. Stewart, William A. Fennell, and Timothy C. Brightbill.
Before ARCHER, Chief Judge, NEWMAN and LOURIE, Circuit Judges.
Koyo Seiko Co., Ltd. and Koyo Corporation of U.S.A., Inc. (together "Koyo") appeal two aspects of the judgment of the Court of International Trade 1 sustaining the Final Results of the Department of Commerce, International Trade Administration (Commerce or ITA) second administrative review of the antidumping duty order on certain antifriction roller bearings from Japan. The Court of International Trade sustained Commerce's use of the "best information available" (BIA) rule to calculate the dumping margin for a certain class of bearings; we affirm that decision. However, on the issue of the doubtful debt reserve it was incorrect to treat this accounting procedure differently when calculating home market selling expenses and United States selling expenses. This aspect of the court's decision is reversed.
The antidumping law provides that when Commerce determines that a class or kind of foreign merchandise is being sold in the United States at less than fair value, and the International Trade Commission determines that a United States industry is materially injured or threatened with material injury by imports of that merchandise, Commerce must publish an antidumping duty order and the Customs Service must assess an antidumping duty equal to the difference between the foreign market value and the United States price. 19 U.S.C. §§ 1673d and 1673e. 2 Commerce must, upon request, periodically review and redetermine the antidumping duty. 19 U.S.C. § 1675(a).
On May 15, 1989, Commerce published antidumping duty orders for certain antifriction roller bearings from Japan. Antidumping Duty Orders: Ball Bearings, Cylindrical Roller Bearings, and Spherical Plain Bearings, and Parts Thereof from Japan, 54 Fed.Reg. 20,904 (Dep't Comm.1989). This appeal relates to the second administrative review, Antifriction Bearings (Other than Tapered Roller Bearings) and Parts Thereof from France, Germany, Italy, Japan, Romania, Singapore, Sweden, Thailand, and the United Kingdom, 57 Fed.Reg. 28,360 (Dep't Comm.1992) (), amended, 57 Fed.Reg. 59,080 (Dep't Comm.1992). Koyo appealed certain aspects of the review results to the Court of International Trade. The court sustained Commerce's determinations, and this appeal followed.
The Court of International Trade must sustain any determination, finding or conclusion found by Commerce on review of determinations on the record unless it is unsupported
by substantial evidence or otherwise not in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i). "Substantial evidence" is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Zenith Elec. Corp. v. United States, 77 F.3d 426, 430 (Fed.Cir.1996) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 216-17, 83 L.Ed. 126 (1938)). We review a decision of the Court of International Trade to decide, applying the statutory standard, whether Commerce's determinations should be sustained. NEC Home Elec., Ltd. v. United States, 54 F.3d 736, 742 (Fed.Cir.1995). Thus we review the findings and conclusions of the agency for evidentiary support and for compliance with law. Id.
Koyo states that Commerce unlawfully applied its BIA rule in calculating the dumping margin for one model of antifriction bearings. Use of the BIA, when actual data are not available, is authorized in 19 U.S.C. § 1677e(c):
In making their determinations under this subtitle, the administering authority and the Commission 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.
See Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1190-91 (Fed.Cir.1990) ().
Koyo correctly states that unless the requisite information has been fairly requested, it is inappropriate to take recourse to secondary evidence such as the best information that can be gleaned from other sources. See Olympic Adhesives, Inc. v. United States, 899 F.2d 1565, 1572-75 (Fed.Cir.1990) (). Koyo states that Commerce never requested cost data for the bearings here at issue.
Koyo points to certain apparently conflicting instructions, and fairly extensive correspondence and negotiations. However, it is sufficiently clear that Commerce requested from Koyo cost data for all bearings that continued to be subject to the antidumping duty order after use to make finished products in the United States. Koyo appears to have understood what was needed, for in a December 23, 1991 letter to Commerce Koyo stated:
Koyo's situation regarding these sales in the United States is very complex. Indeed, our response to the request for information in the questionnaire regarding these sales has been delayed because of this complexity, as well as the difficulty in obtaining resale information regarding the non-scope merchandise from U.S. companies whose relationships with Koyo are extremely tenuous.
Koyo eventually stated that it was unable to obtain this resale information from a United States affiliated company. Although Koyo continues to argue that it was not asked to provide the particular information here at issue, there is substantial evidence supporting the contrary finding by Commerce. When Koyo failed to supply the requested data for its affiliated company, Commerce was required to use the best information available.
Koyo also contends that even if Commerce were found to have requested the data for these bearings, Commerce improperly and unfairly applied the BIA rule. According to Koyo, Commerce applied the "Roller Chain rule" too rigidly, thus preventing these bearings from being excluded from the antidumping duty order. The so-called Roller Chain rule is a de minimis exception to the requirement that dumping margins be computed for all United States imports at less than fair value. The rule is named for the ruling that implemented congressional intent that an antidumping duty be assessed only when significant amounts of imported merchandise The Roller Chain rule applies only to imported goods that are not resold as imported but are incorporated into finished products in the United States, and the first sale to an unrelated person is of the finished product. To be excluded from the antidumping duty order, the entered value of the merchandise must be an insignificant portion of the value of the finished product when sold to unrelated customers in the United States. Commerce established a one percent threshold for determining significance. See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From the Federal Republic of Germany et al., 54 Fed.Reg. 18992, 19090 (Dep't Comm.1989).
are used in further manufacture or assembly before sale to unrelated purchasers. See Roller Chain, Other Than Bicycle, From Japan, 48 Fed.Reg. 51,801 (Dep't Comm.1983) (); H.R.Rep. 571, 93d Cong., 2d Sess. 70 (1973) (expressing congressional intent).
Commerce applied the one percent threshold in the first antifriction bearing administrative review, although it had initially proposed (but not used) a five percent threshold for that proceeding. Considerable deference is due to Commerce's reasonable statutory interpretation and its application. See Zenith Elec., 77 F.3d at 430 (). With appropriate deference to the discretionary authority of the agency charged with administering the statute, the choice of the one percent figure is not unreasonable.
The bearings at issue comprise slightly more than one percent of the sales value of the finished product. Although Koyo argues that these bearings should be excluded from antidumping duty because they only slightly exceed the one percent threshold, Commerce did not abuse its discretion in applying its rule rigorously.
Koyo also argues that Commerce did not reasonably apply the statutory definition of "exporter," as used in 19 U.S.C. § 1677a(e)(3), in requiring that Koyo obtain cost data from a United States affiliate "for whose account the merchandise is imported." Commerce applied the...
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