NTN Bearing Corp. of America v. US

• Decision Date: 06 September 1995
• Docket Number: Court No. 92-06-00423. Slip Op. 95-156.
• Citation: 19 CIT 1165,903 F. Supp. 62
• Parties: NTN BEARING CORPORATION OF AMERICA, American NTN Bearing Manufacturing Corporation and NTN Corporation, Plaintiffs, v. UNITED STATES, Defendant, Federal-Mogul Corporation; The Torrington Company, Defendant-Intervenors.
• Court: U.S. Court of International Trade

903 F. Supp. 62

19 CIT 1165

NTN BEARING CORPORATION OF AMERICA, American NTN Bearing Manufacturing Corporation and NTN Corporation, Plaintiffs, v. UNITED STATES, Defendant Federal-Mogul Corporation; The Torrington Company, Defendant-Intervenors.

Court No. 92-06-00423. Slip Op. 95-156.

United States Court of International Trade.

September 6, 1995.

Barnes, Richardson & Colburn (Donald J. Unger, Robert E. Burke, Kazumune V. Kano and Diane A. MacDonald), Chicago, IL, for plaintiffs NTN Bearing Corporation of America, American NTN Bearing Manufacturing Corporation and NTN Corporation.

Frank W. Hunger, Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Marc E. Montalbine), of counsel; Stephen J. Claeys, Stacy J. Ettinger, Thomas H. Fine, Alicia Greenidge, Dean A. Pinkert and Craig R. Giesze, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, Washington, DC, for defendant.

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

Stewart and Stewart (Eugene L. Stewart, Terence P. Stewart, James R. Cannon, Jr., Robert A. Weaver, John M. Breen and William A. Fennell), Washington, DC, for defendant-intervenor, The Torrington Company.

OPINION

TSOUCALAS, Judge:

This case arises from the final administrative review determination of the International Trade Administration, United States Department of Commerce ("Commerce"), regarding ball bearings, cylindrical roller bearings and spherical plain bearings (collectively "antifriction bearings" or "AFBs") and parts thereof 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). Plaintiffs NTN Bearing Corporation of America, American NTN Bearing Manufacturing Corporation and NTN Corporation (collectively "NTN") are manufacturers, exporters and/or importers of AFBs subject to the contested determination.

This action is before the Court on NTN's motion for judgment upon the agency record pursuant to Rule 56.2 of the Rules of this Court.

Background

On May 15, 1989, Commerce published antidumping duty orders on antifriction 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, Commerce initiated administrative reviews of those orders with respect to sixty-three manufacturers and exporters, including NTN, for the period May 1, 1990 through April 30, 1991. See 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. 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, 57 Fed. Reg. 10,868 (1992).²

On June 24, 1992, Commerce published one joint final determination for the nine administrative reviews. See Final Results, 57 Fed.Reg. at 28,360.

Against this background, NTN now moves pursuant to Rule 56.2 of the Rules of the Court for judgment upon the agency record with respect to certain aspects of the Final Results. In particular, NTN objects to the following actions by Commerce with respect to Japan: (1) deduction of direct selling expenses incurred on U.S. sales from the exporter's sales price instead of adding such expenses to the foreign market value ("FMV"); (2) recalculation of NTN's reported credit expense to eliminate the effect of compensating deposits; (3) inclusion of NTN's sample sales and other sales allegedly made outside the ordinary course of trade in calculating FMV; and (4) matching of U.S. sales with home market sales at different levels of trade and failing to make a level of trade adjustment reflecting the full difference in price between trade levels. NTN's Motion for Judgment on the Agency Record and Memorandum in Support Thereof ("NTN's Brief") at 1-26.³

NTN asserts that these alleged errors render the Final Results unsupported by substantial evidence and contrary to law. NTN's Brief at 2-4.

On August 5, 1992, the Court granted NTN's motion for a preliminary injunction enjoining the liquidation of NTN's unliquidated entries of subject AFBs from Japan during the pendency of this litigation in the United States Court of International Trade.

Defendant-intervenors Federal-Mogul Corporation ("Federal-Mogul"), a manufacturer in the United States of AFBs, and The Torrington Company ("Torrington"), the petitioner in the original investigation, oppose NTN's challenge. On September 24, 1992, and October 23, 1992, respectively, the Court granted Federal-Mogul's and Torrington's motions to intervene as defendants in this civil action.

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 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. NTN's Direct Selling Expenses

In accordance with its long-standing administrative practice, Commerce deducted NTN's direct selling expenses incurred on U.S. sales of antifriction bearings from the exporter's sales price ("ESP") pursuant to 19 U.S.C. § 1677a(e)(2) (1988).⁴

NTN argues that Commerce should have added those expenses to the foreign market value as a "circumstance-of-sale" adjustment pursuant to 19 U.S.C. § 1677b(a)(4)(B) (1988). NTN's Brief at 8-11. According to NTN, judicial precedent supports its position. Id. at 8-9 (citing to NTN Bearing Corp. of Am. v. United States, 17 CIT 272, 1993 WL 129799 (April 21, 1993), and other cases). NTN asserts that, pursuant to 19 U.S.C. § 1677b(a)(4), Commerce must treat direct selling expenses, whether attributable to home market or United States sales, as a circumstance of sale adjustment. Id. at 9-11.

Commerce concedes that the Court has previously held that 19 U.S.C. § 1677a(e) only covers indirect selling expenses and any adjustment for direct selling expenses must be made to FMV pursuant to 19 U.S.C. § 1677b(a)(4). Defendant's Memorandum in Opposition to Plaintiffs' Motion for Judgment Upon the Agency Record ("Defendant's Brief") at 6. However, Commerce argues that it has interpreted the language "expenses generally incurred by . . . the exporter in the United States" in § 1677a(e)(2) as encompassing direct and indirect selling expenses related to U.S. sales. Defendant's Brief at 6. In addition, Commerce argues that 19 U.S.C. § 1677b(a)(4) does not specifically address direct selling expenses incurred in ESP transactions. Id. Commerce elaborates contending that

because the entered value does not include any selling expenses incurred by or for the account of the `exporter in the United states' (i.e., the U.S. related party), the adjustment for all such expenses (direct and indirect) from the ESP is necessary to produce accurate deposit rates and assessment rates as well as to conform to the congressional intent that FMV be compared to an f.o.b. origin value.

Id. at 8.

Federal-Mogul essentially supports Commerce on this issue. See Opposition of Federal-Mogul Corporation, Defendant-Intervenor, to NTN's Motion for Judgment on the Agency Record ("Federal-Mogul's Brief") at 5-11. It is Torrington's position that a remand on this issue would be impractical as only the estimated duty deposit rate would be affected. See Memorandum of The Torrington Company in Opposition to Motion for Judgment on the Agency Record ("Torrington's Brief") at 24.

This issue is governed by Koyo Seiko Co. v. United States, 36 F.3d 1565 (Fed.Cir.1994). In Koyo Seiko, the Court of Appeals for the Federal Circuit ("CAFC") found that the plain language of the statute is not dispositive on this question. Koyo Seiko, 36 F.3d at 1571. Guided by the Supreme Court's decision in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984), the CAFC also concluded that neither the statute nor its legislative history evince Congress' "unambiguously expressed intent" with regard to the precise question at issue. Koyo Seiko, 36 F.3d at 1571-73 (quoting Chevron, 467 U.S. at 843, 104 S.Ct. at 2781.) Therefore, the court scrutinized the reasonableness of the agency's statutory interpretation. Koyo Seiko, 36 F.3d at 1573-75. The CAFC concluded that...