NSK LTD. v. US

• Decision Date: 14 November 1995
• Docket Number: Slip Op. 95-178. Court No. 93-08-00469.
• Citation: 910 F. Supp. 663
• Parties: NSK LTD. and NSK CORPORATION, Plaintiffs, v. UNITED STATES, Defendant, Federal-Mogul Corporation; The Torrington Company, Defendant-Intervenors.
• Court: U.S. Court of International Trade

910 F. Supp. 663

NSK LTD. and NSK CORPORATION, Plaintiffs, v. UNITED STATES, Defendant Federal-Mogul Corporation; The Torrington Company, Defendant-Intervenors.

Slip Op. 95-178. Court No. 93-08-00469.

United States Court of International Trade.

November 14, 1995.

COPYRIGHT MATERIAL OMITTED

Lipstein, Jaffe & Lawson, L.L.P. (Robert A. Lipstein, Matthew P. Jaffe and Grace W. Lawson), Washington, DC, 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, Alexandra Levinson, Thomas Fine, Anna Park and David Ross, Attorney-Advisors, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, Washington, DC, for defendants.

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

Stewart and Stewart (Terence P. Stewart, James R. Cannon, Jr. and Patrick J. McDonough), Washington, DC, for defendant-intervenor The Torrington Company.

OPINION

TSOUCALAS, Judge:

Plaintiffs, NSK Ltd. and NSK Corporation (collectively "NSK"), commenced this action challenging certain aspects of the final results of administrative review of the United States Department of Commerce, International Trade Administration ("Commerce"), entitled Final Results of Antidumping Duty Administrative Reviews and Revocation in Part of an Antidumping Duty Order ("Final Results"), 58 Fed.Reg. 39,729 (1993), as amended, Anti-friction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France, Germany, Italy, Japan, Romania, Singapore, Sweden, Thailand, and the United Kingdom; Amendment to Final Results of Antidumping Duty Administrative Reviews, 58 Fed.Reg. 42,288 (1993), Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France and the United Kingdom; Amendment to Final Results of Antidumping Duty Administrative Reviews, 58 Fed. Reg. 51,055 (1993), and Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From Japan; Amendment to Final Results of Antidumping Duty Administrative Reviews, 59 Fed.Reg. 9,469 (1994).

Background

On April 27, 1993, Commerce published the preliminary results of its administrative review of antidumping duty orders on anti-friction bearings (other than tapered roller bearings) and parts thereof from Japan, France, Germany, Italy, Romania, Singapore, Sweden, Thailand and the United Kingdom. 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).

On July 26, 1993, Commerce published the Final Results at issue. See Final Results, 58 Fed.Reg. at 39,729. NSK moves pursuant to Rule 56.2 of the Rules of this Court for partial 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) rejection of NSK's related party transfer prices in favor of best information available ("BIA") in calculating foreign market value ("FMV"); (2) determination of home market levels of trade based on customer categories; (3) classification of postsale price adjustment rebates and stock transfer commissions as indirect selling expenses; (4) addition of U.S. repacking expenses to United States price; (5) deduction of further manufacturing expenses from exporter's sales price; and (6) commission of clerical errors.¹Memorandum of Points and Authorities in Support of Motion for Partial Judgment on the Agency Record ("NSK's Brief") at 23-52.

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 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 to Calculate Foreign Market Value

In this review, Commerce decided to use second tier BIA to calculate FMV based on the following reasoning:

Despite our requests in the initial and supplemental questionnaires, NSK failed to provide either purchase prices from unrelated parties that we could have used to determine whether the transfer prices that NSK paid to related parties for inputs were at arm's length or cost of production data to demonstrate that the transfer prices were not less than COP. Further, the standard established by Japanese law is not sufficiently similar to that established in section 773(e)(2) of the Tariff Act for us to rely on NSK's compliance with that law as evidence that transfer prices paid by NSK are arm's-length prices. Therefore, we determine that NSK's CV data do not provide a reliable basis for FMV. As a result, we have used second tier BIA to determine the dumping margins for those U.S. sales for which CV would have been used as FMV.

Final Results, 58 Fed.Reg. at 39,754. According to NSK, Commerce's actions were "arbitrary" and constituted "abuse of discretion." NSK's Brief at 23.

NSK contends that 19 U.S.C. § 1677b(e)(3) (1988) dictates that Commerce may not request from a respondent cost data about parts purchased from related suppliers absent a "specific and objective basis" for suspecting that the transfer price paid to a particular related supplier for a major input is below that supplier's cost. NSK's Brief at 23. NSK supports this position by highlighting the language in 19 U.S.C. § 1677b(b) (1988)² which requires "reasonable grounds to believe or suspect" below cost sales before Commerce must determine whether such sales were in fact made. Id. at 23-24. NSK cites Al Tech Specialty Steel Corp. v. United States, 6 CIT 245, 250, 575 F.Supp. 1277, 1282 (1983), aff'd on other grounds, 745 F.2d 632 (Fed.Cir.1984), for the proposition that 19 U.S.C. § 1677b(b) requires "a specific and objective basis for suspecting a particular foreign firm is engaged in home market sales at prices below its cost of production" in order for Commerce to be required to investigate a foreign manufacturer's cost of production ("COP"). NSK's Brief at 24. Applying the same standard to 19 U.S.C. § 1677b(e)(3), NSK maintains that there is no evidence on the record that NSK purchased parts from related suppliers for prices below COP. Id. at 25. In light of the lack of such evidence, NSK states that Commerce should consider relevant NSK's compliance with Japanese law which prohibits NSK from negotiating less than fair market prices with its related suppliers. Id. at 26, n. 6. NSK further submits that it was unfair for Commerce to require this data from NSK and not from other respondents. Id. at 25-26.

In addition, NSK asserts that it sufficiently proved that the price paid for parts purchased from related parties fairly reflected market values. Id. at 26. In support of its position, NSK states that it submitted to Commerce the same information that Commerce accepted in two prior reviews as proof of NSK's arm's-length relationship with its related suppliers. Id. NSK emphasizes that based on the information submitted in past reviews, Commerce should have known that NSK could not supply information showing that for every part purchased from a related supplier, NSK purchased the same or similar parts from unrelated suppliers at the same price. Id. at 27. NSK further claims that Commerce's supplemental questionnaires never indicated that the data provided by NSK were inadequate. Id. NSK concludes that the application of BIA is inappropriate in light of both NSK's responsiveness to Commerce's requests for information and Commerce's failure to indicate insufficiencies in NSK's response. Id. at 30.

Alternatively, NSK asserts that even if Commerce properly rejected NSK's transfer prices, Commerce should have used the best evidence available instead of BIA. According to NSK, use of the best evidence available under these circumstances is mandated by 19 U.S.C. § 1677b(e)(2) & (3) (1988).

Finally, NSK argues that Commerce unlawfully applied BIA to transactions which did not involve related party inputs, specifically, finished bearings and inputs from unrelated suppliers. Id. at 33-35. NSK contends that Commerce never requested information concerning whether NSK purchased finished bearings from related suppliers at fair market value or above the suppliers' costs. Id. at 34. As such, NSK submits that Commerce should have calculated the constructed value for all finished bearings purchased from related suppliers based on data submitted by NSK. Id. at 35. In addition, NSK maintains that Commerce should have calculated the constructed value for all bearings further manufactured in the United States with inputs from unrelated suppliers. Id. at 35-36.

In rebuttal, Commerce asserts that its actions were consistent with 19 U.S.C. § 1677b(e)(2) & (3). Defendant's Memorandum in Opposition to the Motion of NSK Ltd. and NSK Corporation for Judgment Upon the Agency Record ("Commerce's Brief") at 10-12. Commerce claims that NSK's "Section D" response to Commerce's questionnaire did not...