Nsk Ltd. v. U.S., Slip Op. 06-157. Court No. 04-00519.

• Decision Date: 23 October 2006
• Docket Number: Slip Op. 06-157. Court No. 04-00519.
• Citation: 462 F.Supp.2d 1254
• Parties: NSK LTD., et al., Plaintiffs, v. UNITED STATES, Defendant, and Timken U.S. Corporation, Defendant-Intervenor.
• Court: U.S. Court of International Trade

462 F.Supp.2d 1254

NSK LTD., et al., Plaintiffs, v. UNITED STATES, Defendant, and Timken U.S. Corporation, Defendant-Intervenor.

Slip Op. 06-157. Court No. 04-00519.

United States Court of International Trade.

October 23, 2006.

Crowell & Moring, LLP, (Matthew Philip Jaffe, Robert A. Lipstein, Alexander H. Schaefer and Sobia Hague) for Plaintiffs NSK Ltd., NSK Corp., and NSK Precision America, Inc.

Baker & McKenzie, LLP, (Donald J. Unger, Diane A. MacDonald, Paul E. Amberg, and Louisa Vassileva Carney) for Plaintiffs NTN Corp., NTN Bearing Corp. of America, American NTN Bearing Manufacturing Corp., NTN-Driveshaft, Inc., and NTN-BCA Corp.

Sidley Austin LLP, (Neil. R. Ellis and Neil C. Pratt) for Plaintiffs Koyo Seiko Co., Ltd., and Koyo Corp. of U.S.A.

Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director; Patricia M. McCarthy, Assistant Director; Michael D. Panzera, Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice; and Jennifer I. Johnson, Attorney-Advisor, Office of Chief Counsel for Import Administration, U.S. Department of Commerce, for Defendant United States.

Stewart and Stewart, (Terence P. Stewart, William A. Fennell, Lane S. Hurewitz, and Geert De Prest) for Defendant-Intervenor Timken U.S. Corporation.

WALLACH, Judge.

I INTRODUCTION

This matter comes before the court following its remand of January 31, 2006, to the United States Department of Commerce ("the Department" or "Commerce"). In NSK Ltd. v. United States, 416 F.Supp.2d 1334 (CIT 2006) ("NSK I"), the court remanded Commerce's findings in Antifriction Bearings and Parts Thereof From France, Germany, Italy, Japan, Singapore, and the United Kingdom: Final Results of Antidumping Duty Administrative Reviews, Rescission of Administrative Reviews in Part, and Determination To Revoke Order in Part, 69 Fed.Reg. 55,574 (September 15, 2004) ("Final Results").

In NSK I, this court held that Commerce's denial of Koyo's negative lump-sum billing adjustments was not in accordance with law. NSK I, 416 F.Supp.2d at 1342. In addition; the court held that Commerce's determination that sales by NTN Corp., NTN Bearing Corp. of America, American NTN Bearing Manufacturing Corp., NTN Driveshaft, Inc., and NTN-BCA Corp. (collectively "NTN") were made in the ordinary course of trade was not supported by substantial evidence and not in accordance with law. Id. at 1344. On April 1, 2006, Commerce filed its Remand Determination stating and explaining its decision to deny all of Koyo's lump-sum billing adjustments and its determination that NTN's reported high profit sales were not transactions "outside the ordinary course of trade." Remand Determination NSK Ltd. v. United States, Consol. Court No. 04-00519 at 2-14 (March 31, 2006) ("Remand Determination").

Plaintiffs, Koyo Seiko Co. Ltd., arid Koyo Seiko Corp. of U.S.A (collectively "Koyo"); NTN; and NSK Ltd., NSK Corp., and NSK Precision America, Inc. (collectively "NSK") filed their respective responses to the Remand Determination on May 3, May 8, and June 13, 2006. Defendant-Intervenor Timken U.S. Corporation ("Timken") filed its response to the Remand Determination on June 5, 2006. The Department filed its Response to Comments on Redetermination Pursuant to Remand ("Defendant's Response") on June 8, 2006.

This court has jurisdiction pursuant to 28 U.S.C. § 1581(c). For the reasons set forth below, Commerce's Remand Determination is affirmed.

II BACKGROUND

On September 15, 2004, Commerce published in the Federal Register the Final Results of the May 1, 2002, through April 30, 2003, review of the antidumping duty orders on antifriction bearings and parts thereof from France, Germany, Italy, Japan, Singapore, and the United Kingdom. Final Results, 69 Fed.Reg. at 55,574. In the Final Results, Commerce found Koyo's allocation to be "`unreasonably distortive' because the billing adjustments `were incurred during time periods that did not correspond to the POR [period of review]' and because Koyo reported adjustments on all models, even when not incurred on all of their." NSK I, 416 F.Supp.2d at 1341 (citing Defendant's Supplemental Brief at 1-2). Based on this finding, Commerce rejected Koyo's negative billing adjustments, but accepted Koyo's positive adjustments to provide an incentive to report these adjustments in the most specific and non-distortive manner feasible. Defendant's Response at 3 (citing Issues and Decision Memorandum for the Antidumping Duty Administrative Review of Antifriction Bearings (Other than Tapered Roller Bearings) and Parts Thereof from France, Germany, Italy, Japan, Singapore, and the United Kingdom for the Periods of Review May 1, 2002, through April 30, 2003, Memorandum to James J. Jochum from Jeffrey A. May (September 15, 2004) ("Issues and Decision Memo") at cmt. 21). In the Final Results, Commerce also denied NTN's proposed exclusion of certain home market sales based on its findings that NTN did not provide any evidence suggesting "that these sales have characteristics that would make them outside the ordinary course of trade." Remand Determination at 7 (citing Issues and Decision Memo at cmt. 33).

The court remanded the matter to Commerce to reexamine its analysis and provide an adequate explanation of its differential treatment of Koyo's positive and negative billing adjustments. NSK I, 416 F.Supp.2d at 1342. The court also instructed Commerce to further explain its reasoning why it denied NTN's claim that its high profit sales were outside the ordinary course of trade. Id. at 1344.

III STANDARD OF REVIEW

This court will sustain Commerce's determinations, findings, or conclusions unless they are "unsupported by substantial evidence on the record, or otherwise not in accordance with law." Fujitsu Gen. Ltd v. United States, 88 F.3d 1034, 1038 (Fed. Cir.1996) (quoting 19 U.S.C. § 1516a(b)(1)(B) (2004)). Substantial evidence has been defined as "`more than a mere scintilla,' as `such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.'" Nippon Steel Corp. v. United States, 337 F.3d 1373, 1379 (Fed.Cir.2003) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938)). Under this standard, the court does not weigh the evidence nor will it substitute its own judgment for that of the agency. See Negev Phosphates, Ltd. v. United States, 12 CIT 1074, 1076-77, 699 F.Supp. 938 (1988).

Where Congress' purpose or intent is not clear or nonexistent, the court makes a determination of the lawfulness of an agency's statutory construction under Chevron U.S.A.., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Whenever Congress has "explicitly left a gap for the agency to fill," the agency's regulation is "given controlling weight unless [it is] arbitrary, capricious, or manifestly contrary to the statute." Id. at 843-44, 104 S.Ct. 2778. Furthermore, the Court of Appeals for the Federal Circuit has held that statutory interpretations articulated by Commerce during its antidumping proceedings are entitled to judicial deference under Chevron. Pesquera Mares Australes Ltda. v. United States, 266 F.3d 1372, 1382 (Fed.Cir.2001).

IV ANALYSIS

A Commerce's Decision to Deny All of Koyo's Lump-Sum Billing Adjustments is Supported by Substantial' Evidence

In NSK I, this court held that Commerce's denial of Koyo's negative lumpsum billing adjustments was not supported by substantial evidence and in accordance with law. NSK I, 416 F.Supp.2d at 1342. The basis of the court's holding was that "[t]here has been no factual showing that Koyo is able to produce more specific data on the particular allocation of its billing adjustments, and Commerce has presented no legal or factual basis to deny only the negative adjustments as an `incentive.'" Id.

In its Remand Determination, Commerce denied both Koyo's positive and negative lump-sum billing adjustments in order to prevent differential treatment. Remand Determination at 2. Commerce argues that the court did not direct it to grant all of Koyo's billing adjustments, but focused solely upon Commerce's differential treatment analysis. Defendant's Response at 6. In support, Commerce states that had the court intended for Commerce to only provide more explanation it would have used the same language as it remanded NTN's high profit sales issue. Remand Determination at 6. Furthermore, Commerce explains that since the court did not address the validity of Commerce's threshold determination regarding the allocation methodology itself, it remedied the differential treatment by denying both Koyo's positive and negative adjustments. Defendant's Response at 8.

Koyo argues that Commerce's. Remand Determination is inconsistent with the court's remand opinion and the court should remand this proceeding again. Comments of Plaintiffs Koyo Seiko Co., Ltd. and Koyo Corporation on the Remand Determination of the Department of Commerce at 2 ("Koyo's Comments"). Koyo claims that the court's intent was for Commerce to rectify its differential treatment of the billing adjustments by granting, not denying, all of Koyo's lump sum billing adjustments. Id. at 2-3. To support its claim, Koyo points to a caption of one section of the remand order entitled, "Koyo's Negative Billing Adjustments Were Unreasonably Disallowed by Commerce." Id. (quoting NSK I, 416 F.Supp.2d at 1340).

Defendant-Intervenor Timken argues that the court's remand order did not mandate a particular methodology and therefore the Department may adopt its original remedy so long as it provides sufficient justification that highlights the inaccuracy of Koyo's reporting and the particular nature of the adjustments claimed. Comments of Timken U.S. Corporation on Commerce's Remand Determination at 2.

Commerce's decision to deny both Koyo's positive and negative lump-sum billing adjustments due to Koyo's inability to support its reporting...