NTN Bearing Corp. of America v. US, Court No. 91-09-00695.

• Decision Date: 22 October 1993
• Docket Number: Court No. 91-09-00695.
• Citation: 17 CIT 1149,835 F. Supp. 646
• Parties: NTN BEARING CORP. OF AMERICA, American NTN Bearing Mfg. Corp. and NTN Corporation, Plaintiffs, v. UNITED STATES, Defendant, The Timken Company, Defendant-Intervenor.
• Court: U.S. Court of International Trade

835 F. Supp. 646

17 CIT 1149

NTN BEARING CORP. OF AMERICA, American NTN Bearing Mfg. Corp. and NTN Corporation, Plaintiffs, v. UNITED STATES, Defendant The Timken Company, Defendant-Intervenor.

Court No. 91-09-00695.

United States Court of International Trade.

October 22, 1993.

Barnes, Richardson & Colburn, Robert E. Burke, Donald J. Unger and Jesse M. Gerson, Chicago, IL, for plaintiffs.

Frank W. Hunger, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civ. Div., U.S. Dept. of Justice, Velta A. Melnbrencis, of counsel: Joan L. MacKenzie and Linda S. Chang, Attorney-Advisors, Office of the Chief Counsel for Import Admin., U.S. Dept. of Commerce, Washington, DC, for defendant.

Stewart and Stewart, Eugene L. Stewart, Terence P. Stewart, James R. Cannon, Jr., William A. Fennell, Patrick J. McDonough and Julie Chasen Ross, Washington, DC, for defendant-intervenor.

OPINION

TSOUCALAS, Judge:

Plaintiffs, NTN Bearing Corp. of America, American NTN Bearing Mfg. Corp. and NTN Corporation ("NTN"), move pursuant to Rule 56.1 of the Rules of this Court for judgment on the agency record. Plaintiffs specifically claim that the Department of Commerce, International Trade Administration ("Commerce" or "ITA"), erred in (1) failing to employ a 10% maximum deviation limit on any single physical criterion employed by the ITA in its "sum of the deviations" methodology used to determine similar merchandise sold in the home market; (2) basing foreign market value of tapered roller bearing cups and cones sold in the United States upon prices created by splitting the price of complete bearings sold in the home market; (3) crossing over to other levels of trade in calculating foreign market value for purposes of identifying sales of such or similar merchandise; (4) refusing to make a level of trade adjustment; (5) refusing to use a period of nine months as part of its test to exclude home market sales made at prices below the cost of production; (6) not using the interest rate supplied by NTN for purposes of calculating credit expenses in Japan and inventory carrying cost in the U.S.; and (7) failing to make an adjustment to home market price for NTN's home market packing expenses.

The administrative determination under review is the ITA's final results in Tapered Roller Bearings, Finished and Unfinished, and Parts Thereof, From Japan; Final Results of Antidumping Duty Administrative Review ("Final Results"), 56 Fed.Reg. 41,508 (1991).

Background

On March 8, 1989, Commerce initiated an administrative review of tapered roller bearings ("TRBs") covering the period March 27, 1987 through September 30, 1988. Initiation of Antidumping and Countervailing Duty Administrative Reviews, 54 Fed.Reg. 9,868 (1989).

In April of 1991 Commerce published its preliminary determination in the administrative review. Tapered Roller Bearings and Parts Thereof, Finished and Unfinished From Japan; Preliminary Results of Antidumping Duty Administrative Review, 56 Fed.Reg. 13,618 (1991).

On August 21, 1991, Commerce published its Final Results in this proceeding. Final Results, 56 Fed.Reg. at 41,508.

Discussion

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." 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. Ten Percent Deviation Cap

In this review, the model match methodology selected by Commerce first sought to match identical models sold in the home market and if none were found, the most similar model was selected based on the sum of the deviations methodology. In this methodology, Commerce evaluated five physical characteristics (inside diameter, outside diameter, width, load rating and the Y factor), in conjunction with a 20% variable cost of manufacture difference used as an eliminating factor or "cap." Administrative Record ("AR") (Pub.) Doc. 228 at 2. NTN claims that Commerce's refusal to employ an additional 10% maximum deviation cap on any single physical criterion employed by Commerce in its "sum of the deviations" methodology is unsupported by substantial evidence on the record and not in accordance with law. Plaintiffs' Motion and Memorandum in Support Thereof for Judgment on the Agency Record ("Plaintiffs' Motion") at 10.

NTN claims that Commerce's model match methodology resulted in comparisons of commercially dissimilar U.S. and home market products contrary to the requirements of the antidumping law. NTN states that in its final results Commerce should have remained with the methodology it used in the original investigation.

In its original investigation of TRBs, Commerce implemented the 10% cap noting as follows:

We ... chose our selections by taking the U.S. bearing and comparing it to all bearings in the home market in which each individual criterion deviation is 10 percent or less.... This methodology relies on the physical properties of the bearings and would give interested parties a predictable basis for determining possible product matches in annual reviews under section 751 of the Act if such reviews are conducted in the future.

Final Determination of Sales at Less Than Fair Value; Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan, 52 Fed.Reg. 30,700, 30,703 (1987) (emphasis added).

Commerce claims that the 10% cap is not necessary as it would eliminate from use as comparison models home market sales which overall are most similar to the U.S. TRBs. Defendant's Memorandum in Opposition to Plaintiffs' Motion for Judgment on the Agency Record at 20.

This Court recently ruled on this issue in Koyo Seiko Co. v. United States, 17 CIT ___, ___ - ___, 834 F.Supp. 431, 434-35 (1993) stating that Commerce's methodology

must be used in conjunction with the ten percent cap to limit the permissible deviation of the criteria used to make TRB models. Commerce used the cap in its original less than fair value determination and its use avoids comparisons between products which differ so dramatically that they simply cannot be considered commercially similar.

Id. at ___, 834 F.Supp. at 435.

The Court adheres to its earlier decision and, therefore, this case is remanded to Commerce to apply the 10% cap to the methodology used in the final results.

2. Split Sales

NTN secondly claims that Commerce erred in basing foreign market value ("FMV") of tapered roller bearing cups and cones sold in the United States upon prices created by splitting the price of complete bearings sold in the home market. Plaintiffs' Motion at 14. In its final determination, Commerce "split" sales of TRB sets in the home market into "sales" of individual cups and cones for purposes of establishing the foreign market value of cups and cones sold in the United States. Final Results, 56 Fed.Reg. at 41,511. NTN now claims that such splitting of sets is contrary to the statute in that it results in the use of fictitious sales and fictitious markets for purposes of establishing foreign market value. Plaintiffs' Motion at 14-15. According to 19 U.S.C. § 1677b(a)(1) (1988):

In the ascertainment of foreign market value for the purposes of this subtitle no pretended sale or offer for sale, and no sale or offer for sale intended to establish a fictitious market, shall be taken into account.

In the present case, Commerce explained that FMV could be determined upon the basis of home market prices of sets by apportioning the price of a set to its component parts. Commerce stated:

Our set-splitting methodology is used to apportion the price of a set to its component parts based on a ratio of the cost of production of each part to the cost of production of the set. Set splitting was specifically upheld by the CIT citation omitted. At no time do we create a fictitious sale; we allot portions of the price of actual sales to their component parts.

Final Results, 56 Fed.Reg. at 41,511.

Plaintiffs' contention that the splitting of sets frustrates the antidumping law because it divests the exporter of control over its home market prices is without merit. If plaintiffs' interpretation of the statute were followed, "such interpretation would encourage importers to circumvent the antidumping laws by simply using divergent invoicing methods." See NTN Bearing Corp. of America v. United States, 14 CIT 623, 640, 747 F.Supp. 726, 741 (1990); see also, Timken Co. v. United States, 11 CIT 786, 794-95, 673 F.Supp. 495, 504-05 (1987).

These same issues were presented in NTN Bearing Corp., 14 CIT 623, 747 F.Supp. 726, as well as in Timken Co., 11 CIT 786, 673 F.Supp. 495, where this Court upheld Commerce's calculation of FMV for individual cups and cones by splitting the home market price for a set. The case at hand is similar and, therefore, the Court adheres to its earlier decisions and Commerce's use of the "splitting" methodology to calculate FMV is hereby affirmed.

3. Levels of Trade

NTN also contests Commerce's comparison of U.S. and home market sales across different levels of trade. Plaintiffs' Motion at 28. During the review, Commerce first searched for such or similar merchandise at the same level of trade and, if none could be found, then at different levels of trade. NTN claims that Commerce's comparison of U.S....