Koyo Seiko Co., Ltd. v. US

• Decision Date: 21 September 1993
• Docket Number: Court No. 91-09-00704.
• Citation: 17 CIT 1040,834 F. Supp. 431
• Parties: KOYO SEIKO CO., LTD. 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

834 F. Supp. 431

17 CIT 1040

KOYO SEIKO CO., LTD. and Koyo Corporation of U.S.A., Plaintiffs, v. UNITED STATES, Defendant and The Timken Company, Defendant-Intervenor.

Court No. 91-09-00704.

United States Court of International Trade.

September 21, 1993.

Powell, Goldstein, Frazer, & Murphy, Peter O. Suchman, Susan P. Strommer, Elizabeth C. Hafner, Neil R. Ellis, Niall P. Meagher and D. Christine Wood, Washington, DC, for plaintiffs.

Frank W. Hunger, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civ. Div., U.S. Dept. of Justice, Velta A. Melnbrencis; Joan McKenzie and Linda S. Chang, Atty.-Advisors, Office of the Chief Counsel for Import Admin., U.S. Dept. of Commerce, Washington, DC, of counsel, for defendant.

Stewart and Stewart, Eugene L. Stewart, Terence P. Stewart, James R. Cannon, Jr., William A. Fennell, Patrick J. McDonough and Edith A. Eisner, Washington, DC, for defendant-intervenor.

OPINION

TSOUCALAS, Judge:

Plaintiffs, Koyo Seiko Co., Ltd. and Koyo Corporation of U.S.A. ("Koyo"), move pursuant to Rule 56.1 of the Rules of this Court for judgment on the agency record contesting the Department of Commerce, International Trade Administration's ("Commerce") final results in Tapered Roller Bearings, Finished and Unfinished, and Parts Thereof, From Japan; Final Results of Antidumping Duty Administrative Review ("Final Results"), 56 Fed.Reg. 41,508 (1991). Plaintiffs specifically object to Commerce's (1) failure to average U.S. price in the same manner as it averaged foreign market value; (2) model match methodology which resulted in comparisons of commercially dissimilar U.S. and home market products contrary to the requirements of the antidumping law; (3) comparison of U.S. and home market sales across different levels of trade; (4) decision to reclassify plaintiffs' home market post-sale price adjustments, rebates and warranty expenses as indirect selling expenses; (5) failure to deduct direct selling expenses from its calculation of foreign market value; and (6) failure to amortize certain "non-operating and extraordinary expenses" in calculating the value added by further manufacturing.

On April 3, 1991, Commerce published the preliminary results of its administrative review of tapered roller bearings ("TRBs") covering the period from March 27, 1987 through September 30, 1988. Tapered Roller Bearings and Parts Thereof, Finished and Unfinished From Japan; Preliminary Results of Antidumping Duty Administrative Review, 56 Fed.Reg. 13,618 (1991). On August 21, 1991, Commerce published the final results of its administrative review, which are the subject of this action. Final Results, 56 Fed.Reg. 41,508.

DISCUSSION

In reviewing a final determination of Commerce, this Court must uphold that 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) (1988). Substantial evidence has been defined as being "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, 216, 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. Averaging of U.S. Prices

In its administrative review, Commerce compared individual U.S. sales prices of TRBs with an annualized, weighted-average foreign market value. Koyo claims that Commerce's failure to average U.S. price in the same manner as it averaged foreign market value was an abuse of discretion and now asks the Court to remand this case to Commerce with instructions to average U.S. price and foreign market value on the same basis.

According to 19 U.S.C. § 1677f-1 (1988 & Supp.1993):

For the purpose of determining United States price or foreign market value under sections 1677a and 1677b of this title, and for purposes of carrying out annual reviews under section 1675 of this title, the administering authority may —

(1) use averaging or generally recognized sampling techniques whenever a significant volume of sales is involved or a significant number of adjustments to prices is required, and

(2) decline to take into account adjustments which are insignificant in relation to the price or value of the merchandise.

(b) Selection of samples and averages

The authority to select appropriate samples and averages shall rest exclusively with the administering authority; but such samples and averages shall be representative of the transactions under investigation.

Thus, the statute states that Commerce may use averaging techniques "whenever a significant volume of sales is involved or a significant number of adjustments to prices is required." Id. Furthermore, the statute grants Commerce exclusive authority to do so as long as the averaging is representative. Id.

In the case at hand, Commerce stated:

First, we compared the monthly weighted-average price to the weighted-average price for the entire review period. We found that the period's weighted-average price for more than ninety percent of the products sold came within ten percent of the monthly weighted-average price. Second, we tested whether home market prices of the subject merchandise consistently rose or fell during the period of review. We found that no significant correlation existed between price and time. That is, prices did not consistently rise or fall so as to make period weighted-average prices unrepresentative of home market prices.

Therefore, the results of these tests demonstrate that Koyo's pricing practices remained stable during the review period, thus insuring that a weighted-average FMV for the 18-month period of review is as representative of home market prices as the traditional monthly weighted-average FMV.

Final Results, 56 Fed.Reg. at 41,517.

Thus, Commerce's decision to average foreign market value was reasonable and representative. Koyo asserts that Commerce also should have averaged U.S. price. See Memorandum of Points and Authorities in Support of Plaintiffs' Motion for Judgment on the Agency Record ("Plaintiffs' Memorandum") at 9. The statute, however, gives no indication that Commerce must average both sides of the equation. In fact, Commerce stated in its Final Results that:

An average USP has been, and continues to be, unacceptable, because it would allow a foreign producer to mask dumping margins by offsetting dumped prices with prices above FMV.... Except in instances where the Department has conducted reviews of seasonal merchandise which has very significant price fluctuations due to perishability ... the idea of averaging USP has been rejected.... Since the merchandise under review is not a perishable product and significant fluctuations in the price did not occur, there is no reason to believe that averaging of USP is needed.

Final Results, 56 Fed.Reg. at 41,517-18.

The same issue was presented in Koyo Seiko Co. v. United States, 17 CIT ___, 1993 WL 190929, Slip Op. 93-87 (June 1, 1993), and Koyo Seiko Co. v. United States, 17 CIT ___, 1993 WL 366970, Slip Op. 93-176 (Sept. 9, 1993), where this Court upheld Commerce's use of the annualized weighted-average technique only for foreign market value and not for U.S. price. The Court finds no difference between the two cases and thus concludes that Commerce was justified in not averaging U.S. prices. Therefore, the determination of Commerce as to this issue is hereby affirmed.

2. Model Match Methodology

Koyo also claims that Commerce's model match methodology resulted in comparisons of commercially dissimilar U.S. and home market products contrary to the requirements of the antidumping law. Koyo states that in its final results Commerce erroneously revised its model match methodology and that it should have remained with the methodology it used in the original investigation.

In its original investigation of TRBs, Commerce used a "greatest single deviation" measurement for ranking home market similar merchandise. Thus, the U.S. product would be matched with the TRB model whose greatest single deviation among the five physical criteria (inner diameter, outer diameter, width, Y factor and load rating) was smaller that the greatest single deviation of any other foreign market model. Furthermore, the methodology implemented a ten percent cap where no two models would be matched where they differed by more than ten percent in any one of the five criteria. Final Determination of Sales at Less Than Fair Value; Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan ("Final Determination"), 52 Fed.Reg. 30,700, 30,703 (1987).

In the final results of this review, Commerce revised its methodology to a "sum of the deviations" measurement for ranking home market similar merchandise without continuing to apply the ten percent cap. In this process Commerce determines the value of each of the five criteria and compares the values of each, thereby selecting the most similar home market TRB model.

Koyo concedes that both methodologies are capable of generating comparisons of such or similar merchandise; however, it further states that there is a limit on the permissible deviation of the criteria used to match TRB models and, therefore, Commerce should use the ten percent cap. Reply of Koyo Seiko Co., Ltd. and Koyo Corporation of U.S.A. to Oppositions to Plaintiffs' Motion for Judgment on the Agency Record ("Plaintiffs' Reply") at 14.

Commerce claims that the ten percent cap is not necessary as it would eliminate from use as comparison models home market sales which overall are most similar to...