Skf Usa Inc. v. U.S.

• Decision Date: 27 October 2009
• Docket Number: Slip Op. 09-121. Court No. 07-00393.
• Citation: 659 F.Supp.2d 1338
• Parties: SKF USA INC., SKF France S.A., SKF Aerospace France S.A.S., SKF GmbH, and SKF Industrie S.p.A., Plaintiffs, v. UNITED STATES, Defendant, and The Timken Company, Defendant-Intervenor.
• Court: U.S. Court of International Trade

659 F.Supp.2d 1338

SKF USA INC., SKF France S.A., SKF Aerospace France S.A.S., SKF GmbH, and SKF Industrie S.p.A., Plaintiffs, v. UNITED STATES, Defendant, and The Timken Company, Defendant-Intervenor.

Slip Op. 09-121. Court No. 07-00393.

United States Court of International Trade.

October 27, 2009.

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

Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Claudia Burke and David D'Alessandris); Sapna Sharma, Mykhaylo A. Gryzlov, Deborah R. King, and Jonathan Zielinkski, Office of the Chief Counsel for Import Administration, United States Department of Commerce, of counsel, for defendant.

Stewart and Stewart, Washington, DC (Geert M. De Prest, Terence P. Stewart, William A. Fennell, and Lane S. Hurewitz) for defendant-intervenor.

OPINION

STANCEU, Judge.

Plaintiffs SKF USA Inc., SKF France S.A., SKF Aerospace France S.A.S., SKF GmbH, and SKF Industrie S.p.A. (collectively, "SKF" or "plaintiffs") contest a final determination that the International Trade Administration, United States Department of Commerce ("Commerce" or the "Department") issued in administrative reviews of antidumping duty orders on ball bearings and parts thereof from France, Germany, Italy, Japan, Singapore, and the United Kingdom (the "Final Results"). In support of their first claim, plaintiffs raise various objections to Commerce's use of actual cost of production ("COP") data, rather than SKF's acquisition cost, to determine the constructed value ("CV") of subject merchandise that SKF purchased from an unrelated manufacturer of ball bearings and exported to the United States. Second, plaintiffs challenge Commerce's use in the review of "zeroing" methodology, under which Commerce, when calculating a weighted-average dumping margin, deems sales of subject merchandise made in the United States at prices above normal value to have individual dumping margins of zero rather than negative margins. In a third claim, plaintiffs challenge the Department's decision to issue duty assessment and liquidation instructions to United States Customs and Border Protection ("Customs" or "CBP") fifteen days after the publication of the final results of the administrative reviews arguing that the antidumping statute requires Commerce to wait at least thirty days before issuing such instructions.

The court affirms the Department's use of the COP data and its use of the zeroing methodology. The court concludes that Commerce's policy, rule, or practice of issuing liquidation instructions fifteen days after publication of the final results of an administrative review, which it stated in the Federal Register notice announcing the Final Results and in Federal Register notices pertaining to other reviews of antidumping duty orders, was not in accordance with law. The court grants appropriate declaratory relief on plaintiffs' third claim. The court cannot conclude from the administrative record that the Department based its fifteen-day policy, rule, or practice on a consideration of the relevant factors.

I. BACKGROUND

Commerce, pursuant to 19 U.S.C. § 1675(a) (2006), issued the contested determination in its seventeenth administrative reviews of antidumping duty orders on ball bearings and parts thereof from France, Germany, Italy, Japan, Singapore, and the United Kingdom for the period May 1, 2005 through April 30, 2006 (the "period of review"). Ball Bearings and Parts Thereof from France, Germany, Italy, Japan, Singapore, and the United Kingdom: Final Results of Antidumping Duty Admin. Reviews and Rescission of Review in Part, 72 Fed.Reg. 58,053 (Oct. 12, 2007) ("Final Results"). Plaintiffs initially advanced four claims, among which was a claim challenging the "model-matching" methodology that Commerce applied during the reviews. Compl. ¶¶ 13-17. At oral argument, upon plaintiffs' motion and in the absence of any objection by the opposing parties, the court allowed plaintiffs to withdraw this claim. Tr. 3-4, Dec. 3, 2008. The court therefore adjudicates plaintiffs' three remaining claims.

Before the court is plaintiffs' motion under USCIT Rule 56.2 for judgment upon the agency record, in which plaintiffs seek a remand directing Commerce to redetermine plaintiffs' weighted-average dumping margin without using COP data from the unaffiliated ball bearing supplier and without zeroing negative antidumping margins. In support of their first claim, plaintiffs argue that Commerce erred both in requiring SKF to request and obtain COP data from the unaffiliated supplier and in using the COP data submitted, instead of the cost SKF incurred in acquiring the unaffiliated supplier's merchandise, to calculate the constructed value of that merchandise. See Brief In Supp. of SKF's Rule 56.2 Mot. for J. upon the Agency R. 10-18 ("Pls.' Br."). SKF points out that during the original investigation and sixteen subsequent periods of reviews of ball bearing antidumping duty orders, Commerce used acquisition cost in determining the constructed value of subject bearings that SKF sold but had obtained from another manufacturer. Pls.' Br. 3. During the fifteenth administrative reviews (2003-2004), Commerce announced that, when appropriate in future reviews, it would request all respondents who bought and resold bearings from unaffiliated producers to provide COP data obtained from the unaffiliated producers. See id. at 4, Attach. 13, at 4-6 (Mem. from Director, Office 5, AD/CVD Enforcement to Acting Deputy Assistant Sec'y for Imp. Admin. 4-6 (May 6, 2005)). After reviewing the respondents' submissions in the seventeenth reviews, Commerce deemed it appropriate to use the unaffiliated supplier's actual production costs as the basis for calculating the COP and CV where such data would have a significant impact on margin calculations and where no comparison-market sale of the foreign like product is available for margin-calculation purposes in reseller transactions. Issues and Decision Mem. for the Antidumping Duty Admin. Reviews of Ball Bearings and Parts Thereof from France, Germany, Italy, Japan, Singapore, and the United Kingdom for the Period of Review May 1, 2005, through April 30, 2006, at 47 (Oct. 1, 2007) ("Decision Mem."). Based upon information submitted by plaintiffs, Commerce then determined that "[w]ith respect to SKF Germany [i.e., SKF GmbH], which produced and purchased ball bearings, a substantial portion of its U.S. sales and some of its home market sales were sales of merchandise produced by unaffiliated suppliers." Pls.' Br., Attach. 3, at 4 (Mem. from Program Manager, AD/CVD Enforcement, to Director, Office 5, AD/CVD Enforcement 4 (Sept. 7, 2006) ("Unaffiliated Suppliers Mem.")). For this reason, the Department required SKF Germany "to report actual COP and CV data from the unaffiliated supplier which was the largest supplier, measured by the value of SKF Germany's U.S. sales" for the 2005-2006 period of review. Id. Departing from its previous methodology, which used acquisition cost, Commerce concluded that "[i]f acquisition costs do not capture all of the actual costs of the manufacturer supplying the bearings to the reseller, they are not an appropriate basis for the calculation of CV" and "the use of such acquisition costs would distort the reseller's dumping margin due to the missing elements of cost." Decision Mem. 48. Following issuance of the Department's preliminary results, SKF objected to Commerce's departure from its previous methodology. Id. at 41-46. The Department acknowledged SKF's objections but calculated constructed value based on the unaffiliated supplier's COP data rather than SKF's acquisition costs. Id. at 47-49; see Final Results, 72 Fed.Reg. at 58,054-55.

Plaintiffs' second claim is that Commerce acted contrary to the plain language of the statute, and construed the statute contrary to U.S. international obligations, in calculating SKF's weighted-average dumping margin by assigning dumping margins of zero to plaintiffs' individual sales made in the United States at prices above normal value. See Pls.' Br. 26-39; Decision Mem. 8-10. SKF contested the application of the zeroing methodology during the administrative reviews, submitting briefing on the issue in response to the Department's preliminary results. Decision Mem. 5-7. Rejecting SKF's position, Commerce decided to continue to rely on its zeroing methodology in preparing the Final Results. Id. at 8-10; Final Results, 72 Fed.Reg. at 58,054-55.

Plaintiffs' third claim challenges the Department's decision to issue liquidation instructions to Customs fifteen days after the publication of the Final Results. Pls.' Br. 2. In the notice setting forth the Final Results, published on October 12, 2007, Commerce stated that "[w]e intend to issue appropriate assessment instructions directly to CBP 15 days after publication of these final results of reviews." Final Results, 72 Fed.Reg. at 53,054. In stating that Commerce would issue the instructions "15 days after publication," the Federal Register notice appeared to depart from the procedure Commerce had announced in a 2002 policy statement, in which policy statement Commerce announced that it would issue liquidation instructions to Customs, pursuant to administrative reviews conducted under 19 U.S.C. § 1675(a)(1) and (a)(2), "within 15 days of publication of the final results of review in the Federal Register or any amendments thereto."¹ Announcement Concerning Issuance of Liquidation Instructions Reflecting Results of Admin. Reviews, Aug. 9, 2002, http://ia.ita.doc.gov/ download/liquidation-announcement.html (updated Aug. 14, 2002) (last visited October 27, 2009) ("Announcement"); see Pls.' Br., Attach. 11.

In commencing this action on October 23, 2007, eleven days after publication of the...