Nachi-Fujikoshi Corp. v. US

• Decision Date: 23 June 1995
• Docket Number: Slip Op. No. 95-118. Court No. 92-07-00502.
• Citation: 890 F. Supp. 1106,19 CIT 914
• Parties: NACHI-FUJIKOSHI CORPORATION, Nachi-America, Inc. and Nachi Technology, Inc., Plaintiffs, v. UNITED STATES, Defendant, Federal-Mogul Corporation and the Torrington Company, Defendant-Intervenors.
• Court: U.S. Court of International Trade

890 F. Supp. 1106

19 CIT 914

NACHI-FUJIKOSHI CORPORATION, Nachi-America, Inc. and Nachi Technology, Inc., Plaintiffs, v. UNITED STATES, Defendant Federal-Mogul Corporation and the Torrington Company, Defendant-Intervenors.

Slip Op. No. 95-118. Court No. 92-07-00502.

United States Court of International Trade.

June 23, 1995.

O'Melveny & Myers, Los Angeles, CA (Greyson L. Bryan, Bruce R. Hirsh and Steven A. Spencer), for plaintiffs Nachi-Fujikoshi Corp., Nachi-America, Inc. and Nachi Technology, Inc.

Frank W. Hunger, Asst. Atty. Gen.; David M. Cohen, Director, Commercial Litigation

Branch, Civ. Div., U.S. Dept. of Justice (A. David Lafer and Marc E. Montalbine); of counsel: Stephen J. Claeys and Stacy J. Ettinger, Office of the Chief Counsel for Import Admin., U.S. Dept. of Commerce, Washington, DC, for defendant.

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

Stewart and Stewart, Washington, DC (Eugene L. Stewart, Terence P. Stewart, James R. Cannon, Jr., John M. Breen, Margaret L.H. Png and Robert A. Weaver), for defendant-intervenor the Torrington Co.

OPINION

TSOUCALAS, Judge:

Plaintiffs Nachi-Fujikoshi Corporation, a producer and exporter of antifriction bearings, and its U.S. subsidiaries, Nachi-America, Inc. and Nachi Technology, Inc. (collectively "Nachi") move for judgment on the agency record pursuant to Rule 56.2 of the Rules of this Court. In their motion, plaintiffs contest the final results of administrative review issued by the United States Department of Commerce, International Trade Administration ("Commerce"), concerning antifriction bearings ("AFBs") from Japan. See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France; et al.; Final Results of Antidumping Duty Administrative Reviews ("Final Results"), 57 Fed.Reg. 28,360 (1992). Specifically, Nachi claims that Commerce improperly (1) included its sampled sales shipped to the United States via air freight in the exporter's sales price ("ESP") database, and (2) disallowed a certain rebate claimed by Nachi. Nachi contends that these errors caused Commerce to overstate its dumping margin and rendered Commerce's Final Results unsupported by substantial evidence and contrary to law.

Defendant-intervenors Federal-Mogul Corporation ("Federal-Mogul") and The Torrington Company ("Torrington") oppose Nachi's challenge.

Background

Commerce published antidumping duty orders on ball bearings, cylindrical roller bearings and spherical plain bearings and parts thereof from Japan, Germany, France, Italy, Romania, Singapore, Sweden, Thailand and the United Kingdom. See Antidumping Duty Orders: Ball Bearings, Cylindrical Roller Bearings, and Spherical Plain Bearings, and Parts Thereof From Japan, 54 Fed.Reg. 20,904 (1989).¹

On June 28, July 19 and August 14, 1991, the ITA announced its initiation of administrative reviews of these orders with respect to sixty-three manufacturers and exporters, including Nachi-Fujikoshi Corporation and Nachi-America, Inc., for the period May 1, 1990 through April 30, 1991. 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); Initiation of Antidumping and Countervailing Duty Administrative Reviews, 56 Fed.Reg. 33,251 (1991); Initiation of Antidumping and Countervailing Duty Administrative Reviews, 56 Fed.Reg. 40,305 (1991).

On March 31, 1992, Commerce issued its preliminary determinations in these second administrative reviews. 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, 57 Fed.Reg. 10,868 (1992).²

On June 24, 1992, the ITA published the consolidated Final Results of these nine administrative reviews. Final Results, 57 Fed. Reg. at 28,360.

Discussion

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) (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 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. Nachi's Air Freight Shipments

In this review, Commerce sampled exporter's sales price transactions falling within a six-week period for each class or kind of merchandise where sales of such merchandise exceeded 2,000 transactions. Commerce's six-week sampling captured certain sales of AFBs shipped by Nachi via air freight to the United States.

Nachi asserts that it made its air freight shipments of AFBs on an ad hoc basis and that one third of these ESP transactions occurred during the six-week sample period. Plaintiffs', Nachi-Fujikoshi Corporation, Nachi-America, Inc. and Nachi Technology Inc., Memorandum in Support of Their Motion for Judgment on an Agency Record ("Nachi's Brief") at 6. Nachi claims that, had Commerce tested, it would have found that its air freight transactions had not occurred evenly throughout the period of review. Nachi's Brief at 5. In addition, Nachi contends that its air freight charges for sampled ESP transactions accounted for over one half of the total costs for all of its period-of-review ESP sales. Id. at 6-7. Nachi maintains that the distortive effect of this air freight anomaly rendered Commerce's sample unrepresentative and argues that section 777A(b) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1677f-1(b) (1988), requires that samples be representative. Id. at 4-5.

It is Nachi's position that, in the interest of fairness in pricing comparisons, Commerce should adjust for this air freight anomaly. Id. at 8-9. Therefore, Nachi requests that the Court instruct Commerce to exclude its sampled air freight shipments from the ESP sales database or, alternatively, that it multiply against the potential duties calculated for ESP air freight transactions instead of employing the higher multiplier of 8.69. Nachi explains that the 8.69 figure represents the ratio of total weeks in the year to sampled weeks, whereas its preferred multiplier represents the ratio of period-of-review air freight charges to sampled air freight charges. Id. at 3, 7; Plaintiffs', Nachi-Fujikoshi Corporation, Nachi-America, Inc. and Nachi Technology Inc., Reply Brief in Support of its Motion for Judgment on an Agency Record at 4.

In the Final Results, Commerce rejected Nachi's arguments stating:

In choosing a random time-sampling methodology, we have acted within the authority granted to the Department under section 777A to "use averaging and generally recognized sampling techniques." Nachi does not argue that the time-sampling technique in general produces unrepresentative results, but that the particular sample selected using this technique has an air freight anomaly which must be adjusted. However, insofar as the Department has selected a representative sample, that sample must be considered to be reflective of the broad range of Nachi's sales transactions. Therefore, acting upon Nachi's proposals would compromise this sample and skew the results.

Final Results, 57 Fed.Reg. at 28,399. Commerce adheres to that position. See Defendant's Memorandum in Opposition to Plaintiffs' Motion for Judgment on the Agency Record ("Defendant's Brief") at 8. In addition, Commerce points out that its sampled six weeks were chosen at random, one week from each two-month interval during the period of review. Defendant's Brief at 7. Commerce argues that, in view of Nachi's enormous number of ESP transactions for this period of review, it would not have been feasible or efficient to test in order to determine whether air freight transactions occurred evenly throughout the period before resorting to sampling. Id. at 9-10.

Federal-Mogul and Torrington support Commerce's inclusion of Nachi's ESP transactions, for which air freight charges were incurred, in the ESP sample of sales analyzed. Opposition of Federal-Mogul Corporation, Defendant-Intervenor, to Plaintiffs' Motion for Judgment on an Agency Record ("Federal-Mogul's Brief") at 3-10; Opposition of The Torrington Company to Plaintiffs' Motion for Judgment on the Agency Record ("Torrington's Brief") at 3-9.

The antidumping law expressly permits the use of sampling. Title 19, United States Code, section 1677f-1 states:

§ 1677f-1. Sampling and averaging

(a) In general

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, although...