Koyo Seiko Co., Ltd. v. US

• Decision Date: 31 August 1992
• Docket Number: Court No. 91-08-00591.
• Citation: 16 CIT 539,796 F. Supp. 1526
• Parties: KOYO SEIKO COMPANY, LTD. and Koyo Corporation of U.S.A., Plaintiffs, v. UNITED STATES and the United States Department of Commerce, Defendants, The Torrington Company and Federal-Mogul Corporation, Defendant-Intervenors.
• Court: U.S. Court of International Trade

796 F. Supp. 1526

16 CIT 539

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

Court No. 91-08-00591.

United States Court of International Trade.

June 30, 1992.

Amended Judgment August 31, 1992.

COPYRIGHT MATERIAL OMITTED

Powell, Goldstein, Frazer & Murphy, Peter O. Suchman, Neil R. Ellis and Niall P. Meagher, Washington, D.C., for plaintiffs.

Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civ. Div., U.S. Dept. of Justice (Velta A. Melnbrencis, Asst. Director, and A. David Lafer, Sr. Trial Atty.), of counsel: Stephen J. Claeys, Craig Giesze, D. Michael Kaye and Dean Pinkert, Atty.-Advisors, Office of Chief Counsel for Import Admin., U.S. Dept. of Commerce, Washington, D.C., for defendants.

Stewart and Stewart, Eugene L. Stewart, Terence P. Stewart, James R. Cannon, Jr., John M. Breen and Geert De Prest, Washington, D.C., for The Torrington Co., defendant-intervenor.

Frederick L. Ikenson, P.C., Frederick L. Ikenson, J. Eric Nissley, Larry Hampel and Joseph A. Perna, V, Washington, D.C., for Federal-Mogul Corp., defendant-intervenor.

OPINION

TSOUCALAS, Judge:

Plaintiffs, Koyo Seiko Company, Ltd. and Koyo Corporation of U.S.A. ("Koyo"), move pursuant to Rule 56.1 for judgment on the agency record. This administrative review covers the period from November 9, 1988 through April 30, 1990. The preliminary results of this review were published in Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts thereof from Japan; Preliminary Results of Antidumping Duty Administrative Reviews and Partial Termination of Antidumping Duty Administrative Reviews, 56 Fed. Reg. 11,186 (1991). The Department of Commerce, International Trade Administration ("Commerce" or "ITA"), preliminarily determined antidumping margins for Koyo to be .49% for ball bearings and .02% for cylindrical roller bearings. On July 11, 1991, the final results were published in 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) ("Final Results"). At this time, Commerce established dumping margins for Koyo of 9.82% for ball bearings and 1.45% for cylindrical roller bearings.

Koyo contests several actions undertaken by Commerce in calculating the final dumping margins. Specifically, Koyo objects to (1) Commerce's methodology used to calculate assessment rates; (2) Commerce's decision to classify Koyo's home market post-sale price adjustments as indirect selling expenses; (3) Commerce's exclusion of home market sales to related parties in its calculation of foreign market value; (4) Commerce's use of home market samples in calculating foreign market value; (5) Commerce's decision to subtract Koyo's U.S. direct selling expenses from U.S. price, rather than treating them as "circumstance of sale" adjustments and deducting them from foreign market value; and (6) Commerce's comparison of sales across different levels of trade.

DISCUSSION

Pursuant to the Tariff Act of 1930, 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, 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." The 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. Assessment Rates

Koyo claims that Commerce's establishment of assessment rates was contrary to law and unsupported by substantial evidence. In its investigation, Commerce employed separate methodologies for exporter sales price and purchase price transactions in order to arrive at appropriate assessment rates.

For purchase price sales, Commerce divided the total potential uncollected dumping duties for each importer by the total number of units sold to that importer. They did not divide by the number of units entered because they simply did not have this information. They assessed the resulting unit dollar amount against each unit of merchandise in each of that importer's entries under the relevant order during the review period.

For exporter's sales price, Commerce divided the total potential uncollected dumping duties by the total entered value of those reviewed sales for each importer.

Koyo claims that the total potential uncollected dumping duties represent the difference between foreign market value and total U.S. price for the entries under review and that nothing in the antidumping law grants Commerce the latitude to assess duties on the basis of the ratio of sales data to the entered number of units. They further claim that the only lawful ratio by which to establish assessment rates is "one in which the denominator is also based on sales data." Motion of Plaintiffs Koyo Seiko Company, Ltd. and Koyo Corporation of U.S.A. for Judgment on the Agency Record, at 15-16.

Koyo, however, offers no support for this conclusion. The only provision cited by Koyo which refers to the actual assessment of antidumping duties is 19 U.S.C. § 1675(a)(1)(B) (1988 & 1992 Supp.), which provides that Commerce shall "review, and determine (in accordance with paragraph (2), the amount of any antidumping duty, ..." Paragraph two further states that the amount by which foreign market value exceeds the U.S. price "shall be the basis for the assessment of antidumping duties on entries of the merchandise included within the determination...." 19 U.S.C. § 1675(a)(2) (1988 & 1992 Supp.).

Commerce did in fact calculate the dumping margins as the difference between foreign market value and the U.S. price, which was therefore the basis for the assessment of dumping duties. The entered value was used by Commerce only to allocate to each entry a portion of the antidumping duties due.

It is well-established that Commerce is granted tremendous deference in selecting the appropriate methodology. ICC Indus., Inc. v. United States, 812 F.2d 694, 699 (Fed.Cir.1987); Consumer Prods. Div., SCM Corp. v. Silver Reed America, Inc., 753 F.2d 1033, 1039 (Fed.Cir.1985). As long as Commerce's "decision is reasonable, then Commerce has acted within its authority even if another alternative is more reasonable." See Koyo Seiko Co. v. United States, 16 CIT ___, ___, 796 F.Supp. 517, 523 (1992); see also Zenith Radio Corp. v. United States, 9 CIT 110, 113 and n. 9, 606 F.Supp. 695, 699 and n. 9 (1985), aff'd, 783 F.2d 184 (Fed.Cir.1986).

In this case Commerce's methodology is a reasonable means of achieving the end result and, therefore, Commerce's actions are justified and in accordance with law.

2. Post-Sale Price Adjustments

In the final results, Koyo had two post-sale price adjustments to correct invoicing errors and retroactive price changes. First, Koyo argues that Commerce improperly classified these adjustments as "circumstance of sale" adjustments. Koyo claims that circumstance of sale adjustments are expenses that arise exclusively from preparing merchandise for sale and from selling activities themselves. Koyo cites Smith-Corona Group v. United States, 713 F.2d 1568, 1575 (Fed. Cir.1983), cert. denied, 465 U.S. 1022, 104 S.Ct. 1274, 79 L.Ed.2d 679 (1984), for the premise that circumstance of sale adjustments need only have a reasonably direct relationship to the sales under consideration. Id. at 1580.

That same case recognized Commerce's broad authority to define "circumstance of sale." The Court of Appeals stated that:

The statute does not expressly limit the exercise of the Secretary's authority to determine adjustments, nor does it include precise standards or guidelines to govern the exercise of that authority. Additionally, the statute does not define the term "circumstance of sale" nor does it prescribe any method for determining allowances. Congress has deferred to the Secretary's expertise in this matter.

Smith-Corona, 713 F.2d at 1575.

Thus, Commerce's decision to treat these adjustments as circumstances of sale was within its discretion and reasonable.

Secondly, Koyo claims that even if Commerce treats these adjustments as circumstances of sale, Commerce's treatment of Koyo's home market post-sale price adjustments as indirect expenses is contrary to law and unsupported by substantial evidence in the administrative record. Koyo adds that the adjustments should be characterized as direct selling expenses. Commerce claims that they are indirect expenses because Koyo did not allocate these adjustments on a product-specific basis.

Koyo again relies on Smith-Corona, 713 F.2d 1568, because the rebates involved in that case were considered direct selling expenses even though these were allocated on a non-product specific basis. The case at hand, however, can be differentiated in that the rebates in Smith-Corona were granted as a straight percentage of sales, regardless of the models sold. They did not vary from sale to sale and product to product as did the post-sale price adjustments at issue in this case. In Smith-Corona the rebates could be specifically correlated with direct merchandise using verified cost and sales information. This cannot be done in the case at hand and thus, Commerce was justified in treating the adjustments as indirect...