Skf Usa Inc. v. U.S.

• Decision Date: 24 August 2005
• Docket Number: Court No. 03-00490.,Slip Op. 05-104.
• Citation: 391 F.Supp.2d 1327
• Parties: SKF USA INC., SKF France S.A., and Sarma, Plaintiffs, v. UNITED STATES, Defendant, and The Timken U.S. Corporation, Defendant-Intervenor.
• Court: U.S. Court of International Trade

391 F.Supp.2d 1327

SKF USA INC., SKF France S.A., and Sarma, Plaintiffs, v. UNITED STATES, Defendant, and The Timken U.S. Corporation, Defendant-Intervenor.

Slip Op. 05-104.

Court No. 03-00490.

United States Court of International Trade.

August 24, 2005.

Steptoe & Johnson, LLP, (Herbert C. Shelley, Alice A. Kipel, and Susan R. Gihring) for Plaintiffs.

Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director; Jeanne E. Davidson, Deputy Director; Stephen C. Tosini, Trial Attorney, U.S. Department of Justice, Civil Division, Commercial Litigation Branch; and Rachael E. Wenthold, Attorney-Advisor, Office of Chief Counsel for Import Administration, U.S. Department of Commerce, for Defendant, of counsel.

OPINION

WALLACH, Judge:

[United States Department of Commerce's Final Results of Administrative Review is Remanded]

I Introduction

This matter comes before the court following Plaintiffs' Motion for Judgment Upon the Agency Record challenging the United States Department of Commerce's ("the Department" or "Commerce") administrative determination in Ball Bearings and Parts Thereof from France, Germany, Italy, Japan and Singapore: Final Results of Antidumping Duty Administrative Reviews, Recission of Administrative Review in Part, and Determination Not to Revoke Order in Part, 68 Fed. Reg. 35,623 (June 16, 2003) ("Final Results"). Commerce's Final Results are found to be unsupported by substantial evidence and not in accordance with law because Commerce failed to properly support its finding and used partial facts available by basing its decision on demonstrably false evidence. As a result, this matter is remanded to Commerce for action consistent with this opinion. This court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (2003).

II Background

Plaintiffs are producers and exporters of ball bearings subject to the antidumping duty order on ball bearings and parts thereof from France published on May 15, 1989. Antidumping Duty Orders: Ball Bearings, Cylindrical Roller Bearings, Spherical Plain Bearings, and Parts Thereof from France, 54 Fed. Reg. 20,902 (May 15, 1989). On February 7, 2003, Commerce published its preliminary results of administrative review for the May 1, 2001, to April 30, 2002, period of review ("POR"). Ball Bearings and Parts Thereof from France, Germany, Italy, and Singapore: Preliminary Results of Antidumping Duty Administrative Reviews, Partial Rescission of Administrative Reviews, and Notice of Intent to Revoke Order in Part, 68 Fed. Reg. 6404 (Feb. 7, 2003).

On January 24, 2003, the Department forwarded the verification outline to SKF USA Inc., SKF France S.A., and Sarma ("collectively SKF"), indicating that Commerce would conduct verification of SKF France, S.A., and Sarma from February 3, 2003, to February 7, 2003. Defendant's Opposition to Plaintiffs' Motion for Judgment Upon the Administrative Record ("Defendant's Opposition") at 3. All parties agreed that verification would take place at SKF headquarters in Paris. The Department conducted its verification from February 3, 2003, to February 6, 2003. Id. at 4. Upon completion of verification, Commerce provided a copy of its Verification Report to SKF and SKF commented on the verification in its administrative case brief. Id. at 5. Commerce then published the Final Results on June 16, 2003. 68 Fed. Reg. 35,623. In the Final Results, Commerce said SKF and Sarma were unprepared to segregate sales by market or by class or kind of subject merchandise and therefore Commerce was unable to verify the accuracy of the reported information. Defendant's Opposition at 6. As a result, Commerce found that SKF did not act to the best of its ability and assigned a margin of 10.08 percent based on partial adverse facts available ("AFA") in the Final Results. Plaintiffs' Motion for Judgment Upon the Agency Record ("Plaintiffs' Motion") at 4.

The parties filed their briefs on this matter in which Plaintiffs claimed they had offered to provide all necessary documentation at verification and were fully prepared to do so, and the Defendant directly disputed that allegation saying that at verification Plaintiffs' representatives had said they were unable to obtain or provide the necessary documentation. The court held a hearing on November 19, 2004, to determine the accuracy of these directly conflicting factual statements made by the parties in their initial briefs. The parties filed their respective post-hearing briefs and the Final Results are now before the court for review.

III Arguments

Commerce argues that it chose to assign SKF a margin based upon partial AFA because "(1) SKF was unable to provide information `that would have confirmed that Sarma's sales were accurately reported'; and (2) SKF informed Commerce that it was unable to provide necessary documentation" after Commerce requested this information at verification. Defendant's Second Post-Hearing Brief at 2.

SKF says it did not refuse to provide Commerce with the requested supporting documentation at verification; rather Plaintiffs claim that they cooperated with Commerce, but that the Department rejected SKF and Sarma's offers to provide evidence for the verification of the reported sales information. Plaintiffs' Response to Defendant's Second Post-Hearing Brief at 1.

The parties' allegations of facts in their initial briefs were directly conflicting about objectively provable events. The court held a hearing on those conflicting presentations, not to reweigh the evidence presented, but to examine the very existence of the facts as stated by the parties. This opinion follows substantial oral and written arguments submitted by the parties.

IV

Applicable Legal Standard

A Clear and Convincing Evidence of Bad Faith

When evaluating whether or not the Government has acted in bad faith, a reviewing court must examine generally if there is a "strong showing of bad faith or improper behavior before [it] may inquire into the thought processes of administrative decisionmakers." Public Power Council v. Johnson, 674 F.2d 791, 795 (1982) (citing Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971)). The presumption is that public officials act in good faith when discharging their duties. See, e.g., Saha Thai Steel Pipe Co., Ltd. v. United States, 661 F.Supp. 1198 (CIT 1987). In order to rebut this presumption "one who contends they have not done so must establish that defect by `clear evidence.'" Carolina Tobacco Co., v. Bureau of Customs and Border Protection, 402 F.3d 1345, 1350 (Fed.Cir.2005). Clear and convincing evidence means evidence that creates in the trier of fact "an abiding conviction that the truth of a factual contention is `highly probable.' "Price v. Symsek, 988 F.2d 1187, 1191 (Fed.Cir.1993) (citing Buildex, Inc. v. Kason Indus., Inc., 849 F.2d 1461, 1463 (Fed.Cir.1988)). It is upon this standard that the court conducted its review of the record of this case.

B Substantial Evidence

The Court of International Trade, when reviewing a challenge to the Department's final results of administrative review, will uphold Commerce's determinations 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)(I) (2003). 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, 95 L.Ed. 456 (1951) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938)). Substantial evidence has been defined by the courts as "something less than the weight of the evidence, and the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence." Consolo v. Federal Maritime Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966). The court, however, "may not substitute its judgment for that of the [agency] when the choice is `between two fairly conflicting views, even though the court would justifiably have made a different choice had the matter been before it de novo.'" American Spring Wire Corp. v. United States, 590 F.Supp. 1273, 8 CIT 20, 22 (1984) (quoting Penntech Papers, Inc. v. NLRB, 706 F.2d 18, 22-23 (1st Cir.1983) (quoting, in turn, Universal Camera, 340 U.S. at 488, 71 S.Ct. 456)).

V Discussion

A SKF Did Not Refuse to Provide Supporting Documentation at Verification This Is Not A Conflict Regarding Evidence on the Administrative Case Record

The core conflict between the parties is whether representatives of SKF did or did not offer to provide supporting documentation to Department officials from which they could verify the accuracy of Sarma's reported sales. If Sarma did, then Commerce's determination cannot stand because it lacks a basis in substantial evidence; if Sarma did not, then Commerce prevails. No contemporaneous record was made of a refusal to provide evidence to support verification at the time the verification first was conducted, and the issue was raised to Plaintiffs only in the Final Results. A hearing to resolve the conflicting factual representations made to the court was held on November 19, 2005.

Because of what transpired at verification, at issue in this case is whether Commerce's use of partial AFA for Sarma's sales resulting in a margin of 10.08 percent is supported by substantial evidence and in accordance with law. Commerce contends that SKF failed to provide supporting documentation at verification as requested by Commerce. SKF in contrast contends that it attempted to provide all necessary documentation but that Commerce refused to accept the information and concluded verification earlier than scheduled. Commerce then issued its verification report in which it did not indicate that SKF and Sarma had failed a portion of...