SKF USA Inc. v. INA Walzlager Schaeffler KG

• Decision Date: 10 June 1999
• Docket Number: 98-1140,Nos. 98-1139,s. 98-1139
• Parties: SKF USA INC. and SKF GmbH, Plaintiffs-Appellants, v. INA WALZLAGER SCHAEFFLER KG and Ina Bearing Company, Inc., Plaintiffs, and Fag Kugelfischer Georg Schaefer AG and Fag Bearings Corporation, Plaintiffs, v. United States, Defendant-Appellee, and NTN Bearing Corporation of America and NTN Kugellagerfabrik (Deutschland) GmbH, Defendants, v. The Torrington Company, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

180 F.3d 1370

SKF USA INC. and SKF GmbH, Plaintiffs-Appellants, v. INA WALZLAGER SCHAEFFLER KG and Ina Bearing Company, Inc., Plaintiffs, and Fag Kugelfischer Georg Schaefer AG and Fag Bearings

Corporation, Plaintiffs, v. United States, Defendant-Appellee, and NTN Bearing Corporation of America and NTN Kugellagerfabrik

(Deutschland) GmbH, Defendants, v. The Torrington Company, Defendant-Appellee.

Nos. 98-1139, 98-1140.

United States Court of Appeals, Federal Circuit.

Decided June 10, 1999.

Appeal from the United States Court of International Trade in consolidated Court No. 95-03-00318, Senior Judge Nicholas Tsoucalas.

Alice A. Kipel, Steptoe & Johnson LLP, of Washington, D.C., argued for plaintiffs-appellants. With her on the brief was Herbert C. Shelley.

Velta A. Melnbrencis, Assistant Director, Civil Division, Department of Justice, of Washington, D.C., argued for defendant-appellee. With her on the brief was David M. Cohen, Director. Of counsel on the brief were Stephen J. Powell, Chief Counsel for Import Administration, Berniece A. Browne, Senior Counsel, and Mark A. Barnett, Attorney, Office of the Chief Counsel for Import Administration, Department of Commerce, of Washington, D.C. Of counsel was Myles S. Getlan, Department of Commerce, of Washington, D.C.

Wesley K. Caine, Stewart and Stewart, of Washington, D.C., argued for defendant-appellee The Torrington Company. With him on the brief was Terence P. Stewart. Of counsel on the brief were Geert M. De Prest and Lane S. Hurewitz.

Before LOURIE, Circuit Judge, SMITH, Senior Circuit Judge, and GAJARSA, Circuit Judge.

SMITH, Senior Circuit Judge.

This case arises out of a United States Department of Commerce ("Commerce") antidumping administrative review of antifriction bearing ("AFB") sales. SKF GmbH is a manufacturer and exporter of AFBs in Germany, and SKF USA, Inc. is a United States importer of German AFBs (collectively "SKF"). SKF appeals from two decisions of the United States Court of International Trade, which sustained Commerce's denial of SKF's billing adjustment two and cash discounts. We agree that Commerce properly disallowed SKF's billing adjustment two and cash discounts because the claimed adjustments were not limited to merchandise within the scope of the antidumping order. We therefore affirm.

Background

The United States' antidumping laws penalize the sale of a foreign product in the United States at a price that is lower than the product's fair value in the home country. The purpose of the antidumping laws is to prevent foreign manufacturers from injuring domestic industries by selling their products in the United States at prices below that which the foreign manufacturers charge for the same products in their home markets. See NTN Bearing Corp. of America v. United States, 127 F.3d 1061, 1063 (Fed.Cir.1997); Torrington Co. v. United States, 68 F.3d 1347, 1352 (Fed.Cir.1995). ¹

Under 19 U.S.C. § 1673 (1994), Commerce is given the authority to determine whether dumping has occurred and, where dumping is found, Commerce is authorized to impose an antidumping duty equal to the "dumping margin." ² The "dumping margin" equals the amount by which the foreign market value ("FMV") exceeds the United States price ("USP") for the merchandise. See Koyo Seiko Co. v. United States, 36 F.3d 1565, 1567 (Fed.Cir.1994). "Foreign market value and United States price represent prices in different markets affected by a variety of differences in the chain of commerce by which the merchandise reached the export or domestic market. Both values are subject to adjustment in an attempt to reconstruct the price at a specific, 'common' point in the chain of commerce, so that value can be fairly compared on an equivalent basis." Smith-Corona Group v. United States, 713 F.2d 1568, 1572-73 (Fed.Cir.1983).

In the instant case, SKF participated as a respondent in Commerce's review of AFB imports between May 1, 1992 and April 30, 1993. SKF submitted information on its sales of AFBs in the German home market during the period of review, including its sales prices and adjustments to those prices. In the Final Results, Commerce disallowed two adjustments, known as billing adjustment two and cash discounts, that SKF claimed in calculating its FMV. See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France, et al.; Final Results of Antidumping Duty Administrative Reviews, and Revocation in Part of Antidumping Duty Orders, 60 Fed.Reg. 10900, 10931-32 (Feb. 28, 1995) ("Final Results").

In rejecting SKF's adjustments, Commerce relied upon Torrington Co. v. United States, 818 F.Supp. 1563 (Ct. Int'l Trade 1993) ("Torrington CIT "), wherein the Court of International Trade held that Commerce cannot calculate the FMV of merchandise that is within the scope of an antidumping review ("in-scope" merchandise) using a methodology that includes discounts, rebates, and price adjustments on merchandise outside the scope of the antidumping review ("out-of-scope" merchandise). See Final Results, 60 Fed.Reg. at 10931-32 (Comment 10, 11). See also Torrington CIT, 818 F.Supp. at 1578-79. ³ Commerce denied SKF the requested adjustments because they were not reported in a transaction-specific manner and therefore were not limited to merchandise within the scope of the antidumping review. See Final Results, 60 Fed.Reg. at 10931-32 (Comment 10, 11).

SKF filed a complaint with the Court of International Trade alleging among other things that Commerce erred in its calculation of the FMV by disallowing adjustments for SKF's billing adjustment two and cash discounts. See INA Walzlager Schaeffler KG v. United States, 957 F.Supp. 251 (Ct. Int'l Trade 1997). SKF claimed that all of the adjustments should be treated as "direct" and allowed as adjustments to the FMV. Id. at 268. Commerce had rejected that contention, however, because SKF failed to show that the allocated price adjustments at issue were calculated solely on the basis of merchandise under review. Id.

Between the filing of the complaint and the Court of International Trade's decision, this court handed down its decision in Torrington Co. v. United States, 82 F.3d 1039 (Fed.Cir.1996) ("Torrington "). ⁴ This court affirmed Torrington CIT, although on other grounds; specifically, that Commerce may not treat direct selling expenses as indirect expenses under the exporter's sale price ("ESP") offset regulation. See Torrington, 82 F.3d at 1050-51. The Torrington court therefore did not address the in-scope/out-of-scope distinction of Torrington CIT. See id. at 1051 n. 19.

In its decision in this case, the Court of International Trade sustained Commerce's denial of SKF's billing adjustment two and cash discounts but did so on slightly different grounds than those relied on by Commerce. See INA Walzlager Schaeffler KG, 957 F.Supp. at 269 ("adjustments and discounts which are actually direct expenses may not be treated as indirect expenses pursuant to the ESP offset provision"). In affirming Commerce's denial of SKF's price adjustments, the Court of International Trade combined the rationales of Torrington CIT and Torrington. Specifically, the court relied on Torrington to determine that the adjustments at issue are direct expenses, and therefore cannot be treated as indirect expenses; the court relied on the in-scope/out-of-scope rule, articulated in Torrington CIT and other cases, for the proposition that an allowable adjustment cannot include merchandise outside the scope of the antidumping order. The case was remanded to Commerce on other issues. SKF appeals to this court from the decisions of the Court of International Trade in INA Walzlager Schaeffler KG v. United States, 957 F.Supp. 251 (Ct. Int'l Trade 1997), and INA Walzlager Schaeffler KG v. United States, Slip Op. 97-141 (Ct. Int'l Trade Sept. 29, 1997) (appeal after remand), which affirmed Commerce's remand results and dismissed the case.

We affirm the decisions of the Court of International Trade on the basis of the in-scope/out-of-scope rule articulated in Torrington CIT, and applied by Commerce in disallowing SKF's billing adjustments in this case.

Jurisdiction and Standard of Review

This court has appellate jurisdiction based on 28 U.S.C. § 1295(a)(5) (1994), which empowers it to review final decisions of the Court of International Trade. The Court of International Trade's jurisdiction was based on 19 U.S.C. § 1516a(a)(2) (1994), which empowers that court to review final antidumping determinations of the Department of Commerce, including antidumping determinations under 19 U.S.C. § 1675 (1994).

This court reviews a decision of the Court of International Trade involving an administrative antidumping determination " 'by applying anew the statute's express judicial review standard.' " U.H.F.C. Co. v. United States, 916 F.2d 689, 696 (Fed.Cir.1990) (quoting Atlantic Sugar, Ltd. v. United States, 744 F.2d 1556, 1559 n. 10 (Fed.Cir.1984)). An administrative antidumping determination must be upheld 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) (1994). " 'Substantial evidence is more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support such a conclusion.' " Aimcor, Alabama Silicon, Inc. v. United States, 154 F.3d 1375, 1378 (Fed.Cir.1998) (quoting Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927, 933 (Fed.Cir.1984)).

Analysis

The antidumping laws provide that a foreign producer engages in dumping to the extent that the USP is less than the FMV of the same or similar merchandise. See 19 U.S.C. § 1673 (1994) (an antidumping duty represents the amount by which the FMV exceeds the USP for the merchandise). ⁵ Commerce initially determines whether articles are being sold in the United States at less than fair value. See 19 U.S.C. § 1673b(b)(1) (1994). If such determination is in the...