Koyo Seiko Co., Ltd. v. US

• Decision Date: 13 October 1995
• Docket Number: Slip Op. 95-171. Court No. 93-08-00448.
• Citation: 905 F. Supp. 1112
• Parties: KOYO SEIKO CO., LTD. and Koyo Corporation of U.S.A., Plaintiffs, v. The UNITED STATES and The United States Department of Commerce, Defendants, Federal-Mogul Corporation; The Torrington Company, Defendant-Intervenors.
• Court: U.S. Court of International Trade

905 F. Supp. 1112

KOYO SEIKO CO., LTD. and Koyo Corporation of U.S.A., Plaintiffs, v. The UNITED STATES and The United States Department of Commerce, Defendants Federal-Mogul Corporation; The Torrington Company, Defendant-Intervenors.

Slip Op. 95-171. Court No. 93-08-00448.

United States Court of International Trade.

October 13, 1995.

Powell, Goldstein, Frazer & Murphy, Peter O. Suchman, Neil R. Ellis and Robert A. Calaff, for plaintiffs.

Frank W. Hunger, Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, Jeffrey M. Telep, of counsel; Michelle Behaylo, Thomas Fine, Anna Park and David Ross, Attorney-Advisors, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, for defendants.

Frederick L. Ikenson, P.C., Frederick L. Ikenson, Larry Hampel and Joseph A. Perna, V, for defendant-intervenor Federal-Mogul Corporation.

Stewart and Stewart, Terence P. Stewart, James R. Cannon, Jr. and Lane S. Hurewitz, for defendant-intervenor The Torrington Company.

OPINION

TSOUCALAS, Judge:

Plaintiffs, Koyo Seiko Co., Ltd. and Koyo Seiko Corporation of U.S.A. (collectively "Koyo"), commenced this action challenging certain aspects of the United States Department of Commerce, International Trade Administration's ("Commerce") final results of its third administrative review of certain antifriction bearings ("AFBs") (other than tapered roller bearings) and parts thereof from Japan covering the period of May 1, 1991 to April 30, 1992. See Final Results of Antidumping Duty Administrative Reviews and Revocation in Part of an Antidumping Duty Order ("Final Results"), 58 Fed.Reg. 39,729 (July 26, 1993).

Background

On May 15, 1989, Commerce published antidumping duty orders covering AFBs including ball bearings, cylindrical roller bearings and spherical roller bearings and parts thereof imported from several countries, including Japan. See Antidumping Duty Orders: Ball Bearings, Cylindrical Roller Bearings, and Spherical Plain Bearings, and Parts Thereof From Japan, 54 Fed.Reg. 20,904 (1989).

On June 11, 1990, Commerce initiated an administrative review for the period of November 9, 1988 to April 30, 1990. See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From the Federal Republic of Germany, France, Italy, Japan, Romania, Singapore, Sweden, Thailand and the United Kingdom Initiation of Antidumping Administrative Reviews, 55 Fed.Reg. 23,575 (1990). The final determinations of that review were published on July 11, 1991. See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From Japan; Final Results of Antidumping Duty Administrative Reviews, 56 Fed.Reg. 31,754 (1991).

On June 28, 1991, Commerce initiated a second administrative review for the period of May 1, 1990 to April 30, 1991. See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From the Federal Republic of Germany, France, Italy, Japan, Romania, Singapore, Sweden, Thailand, and the United Kingdom; Initiation of Antidumping Administrative Reviews, 56 Fed.Reg. 29,618 (1991). Commerce issued the final determinations for the second administrative review on June 24, 1992. See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France; et al.; Final Results of Antidumping Duty Administrative Reviews ("1990/91 Final Results"), 57 Fed.Reg. 28,360 (1992). On December 14, 1992, Commerce amended the 1990/91 Final Results to correct clerical errors. See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France, Germany, Italy, Japan, Sweden, and the United Kingdom; Amendment to Final Results of Antidumping Duty Administrative Reviews, 57 Fed. Reg. 59,080 (1992).

On July 6, 1992, Commerce initiated a third administrative review covering the period of May 1, 1991 to April 30, 1992. See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof; Initiation of Antidumping Administrative Reviews and Request for Revocation of Order (in Part), 57 Fed.Reg. 29,700 (1992). On April 27, 1993, Commerce published the preliminary results of the third administrative review. See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From Japan; Preliminary Results of Antidumping Duty, Administrative Reviews and Partial Termination of Administrative Reviews, 58 Fed.Reg. 25,616 (1993). Commerce published the Final Results of the third review on July 26, 1993. See Final Results, 58 Fed.Reg. at 39,729.

Koyo moves pursuant to Rule 56.2 of the Rules of this Court for judgment on the agency record, alleging the following actions by Commerce were unsupported by substantial evidence on the agency record and not in accordance with law: (1) use of best information available ("BIA") for cost of production ("COP") data; and (2) use of BIA to compute discount adjustments.¹ Memorandum of Points and Authorities in Support of Plaintiffs' Motion for Judgment on the Agency Record ("Koyo's Brief") at 2-36.

Discussion

The Court's jurisdiction in this action is derived from 19 U.S.C. § 1516a(a)(2) (1988) and 28 U.S.C. § 1581(c) (1988).

The Court must uphold Commerce's final 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) (1988). 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 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. Use of best information available for cost of production data

In this review Commerce resorted to BIA after Koyo failed to provide Commerce with COP data for the calculation of United States Price ("USP"). Koyo's Brief at 11-14. Koyo objects to Commerce's "rigid and mechanistic" application of three rules: (1) the definition of related parties; (2) the one percent "Roller Chain" threshold; and (3) the use of respondent's highest prior margin rate as BIA. Koyo's Brief at 16.

First, Koyo contends that Commerce's application of BIA is unlawful and punitive because Koyo's failure to provide the requested information was due to a related company's exclusive control over the information and not Koyo's failure to cooperate. Koyo argues that the definition of related parties is unreasonable in light of the fact that Commerce may expect one company to gain access to highly confidential and sensitive information from another affiliated company even though the companies are only remotely related. Id. at 16-18. According to Koyo, Commerce is not compelled by 19 U.S.C. § 1677(13)(D) (1988) to treat companies that are connected only through a long series of companies as "related" for the purpose of providing information. Id. at 17. Koyo claims that it would be impossible for one company to gain access to another company's confidential information especially if the relationship of the companies is as tenuous as it is in the present case. Id. at 17-18. Koyo contends that its failure to provide the COP data requested by Commerce was due to the "related" company's refusal to divulge the information to Koyo. Id. at 18.

Second, Koyo claims that the one percent "Roller Chain"² threshold applied by Commerce is rigid and unfair because it is not based in statute or well-established Department practice. Id. at 18. Koyo's strongest support for this claim is Commerce's decision to change the threshold, without explanation, from five percent to one percent late in the review. Id. at 19-20. According to Koyo, Commerce's use of BIA is punitive because of the insignificant amount by which the entered value of the merchandise at issue exceeded the one percent threshold. Id. at 20.

Finally, Koyo claims that the effect of Commerce's application of BIA is punitive and, therefore, unlawful. Koyo maintains that Commerce's application of an extremely high BIA rate is unfair particularly in light of Koyo's inability to obtain the requested information. Id. at 22-24. Koyo contends that Commerce's actions are inconsistent with the remedial purpose of the antidumping duty statute. Id. at 26.

In rebuttal, Commerce claims that Koyo and the "affiliated" company in question are clearly related parties as defined by the relevant statute. Defendant's Memorandum in Opposition to the Motion of Koyo Seiko Co., Ltd. and Koyo Seiko Corporation of U.S.A. for Judgment Upon the Agency Record ("Commerce's Brief") at 10. See also 19 U.S.C. § 1677(13)(D). Commerce further asserts that its responsibilities do not extend to the determination of which party caused the failure to provide the requested information. Commerce's Brief at 10-11. Commerce stresses that it has neither the time nor the resources to conduct this type of inquiry. Id. at 11. Commerce expresses a fear that accepting Koyo's arguments could lead to an inability to determine whether related parties are colluding to deny Commerce access to information. Id. at 12. Furthermore, Commerce points out that no evidence in the record even indicates that the affiliated party in question ever rejected Koyo's request for the information. Id.

Commerce further responds that its decision not to apply the "Roller Chain" exception was appropriate. According to Commerce, the legislative intent of § 772(e)(3) of the Tariff Act of 1930 (the "Act") is to ensure that the antidumping law covers further-processed merchandise. Id. at 13. Commerce...