Snr Roulements v. U.S.

• Decision Date: 10 August 2004
• Docket Number: SLIP OP. 04-100. COURT NO: 01-00686.
• Citation: 341 F.Supp.2d 1334
• Parties: SNR ROULEMENTS, Koyo Seiko Co., Ltd., Koyo Corporation of U.S.A., NSK Corporation, NSK Bearings Europe, Ltd., NSK Ltd., NTN-BCA Corporation, NTN Bower Corporation, NTN-Driveshaft, Inc., American NTN Bearing Manufacturing Corp., NTN Bearing Corporation of America, NTN Corporation, INA-Schaeffler KG, INA USA Corporation, Plaintiffs, v. UNITED STATES, Defendant, and The Torrington Company, Defendant-Intervenor.
• Court: U.S. Court of International Trade

341 F.Supp.2d 1334

SNR ROULEMENTS, Koyo Seiko Co., Ltd., Koyo Corporation of U.S.A., NSK Corporation, NSK Bearings Europe, Ltd., NSK Ltd., NTN-BCA Corporation, NTN Bower Corporation, NTN-Driveshaft, Inc., American NTN Bearing Manufacturing Corp., NTN Bearing Corporation of America, NTN Corporation, INA-Schaeffler KG, INA USA Corporation, Plaintiffs, v. UNITED STATES, Defendant, and The Torrington Company, Defendant-Intervenor.

SLIP OP. 04-100. COURT NO: 01-00686.

United States Court of International Trade.

August 10, 2004.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Grunfeld, Desiderio, Lebowitz & Silverman, New York City (Bruce Mitchell) for plaintiff SNR Roulements.

Sidley Austin Brown & Wood (Neil R. Ellis and Neil C. Pratt) for plaintiffs Koyo Seiko Co., Ltd. and Koyo Corporation of U.S.A.

Crowell & Moring, LLP (Matthew P. Jaffe and Robert A. Lipstein) for plaintiffs NSK Corporation, NSK Bearings Europe, Ltd., and NSK Ltd.

Barnes, Richardson & Colburn, Chicago, IL, (Donald J. Unger and Kazumone V. Kano) for plaintiffs NTN-BCA Corporation, NTN Bower Corporation, NTN-Driveshaft, Inc., American NTN Bearing Manufacturing Corp., NTN Bearing Corporation of America and NTN Corporation.

Sonnenschein Nath & Rosenthal (Stephen L. Gibson) for plaintiffs INA-Schaeffler KG and INA USA Corporation.

Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, Patricia McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Claudia Burke); Philip Curtin and Peter Kaldes, of counsel, Office of the Chief Counsel for Import Administration, United States Department of Commerce, for defendant United States.

Stewart & Stewart (Geert N. DePrest and William A. Fennell) for defendant-intervenor The Torrington Company.

OPINION

GOLDBERG, Senior Judge.

In this action, plaintiffs challenge the United States Department of Commerce's ("Commerce") final determination in the 11th administrative review of dumping orders covering antifriction bearings in Antifriction Bearings (Other than Tapered Roller Bearings) and Parts Thereof from France, et al.; Notice of Final Results of Antidumping Duty Administrative Reviews and Revocation, 66 Fed.Reg. 36551 (July 12, 2001) ("Final Results").¹ Defendant-Intervenor The Torrington Company ("Torrington") also challenges certain aspects of the Final Results. The Final Results covers the period of review May 1, 1999 through April 30, 2000 for ball bearings and May 1, 1999 through December 31, 1999 for cylindrical roller bearings and spherical plain bearings. Pursuant to USCIT R. 56.2, plaintiffs and defendant-intervenor move for summary judgment and request the Court to remand Commerce's Final Results.

For the reasons that follow, the Court sustains in part and reverses and remands in part the Final Results. The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1581(c).

I. STANDARD OF REVIEW

The Court will sustain the Final Results 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). To determine whether Commerce's construction of the statutes is in accordance with law, the Court looks to Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). The first step of the test set forth in Chevron requires the Court to determine "whether Congress has directly spoken to the precise question at issue." Id. at 842, 104 S.Ct. 2778. It is only if the Court concludes that "Congress either had no intent on the matter, or that Congress's purpose and intent regarding the matter is ultimately unclear," that the Court will defer to Commerce's construction under step two of Chevron. Timex V.I., Inc. v. United States, 157 F.3d 879, 881 (Fed.Cir.1998). If the statute is ambiguous, then the second step requires the Court to defer to the agency's interpretation so long as it is "a permissible construction of the statute." Chevron, 467 U.S. at 842. In addition, "[s]tatutory interpretations articulated by Commerce during its antidumping proceedings are entitled to judicial deference under Chevron." Pesquera Mares Australes Ltda. v. United States, 266 F.3d 1372, 1382 (Fed.Cir.2001) (interpreting United States v. Mead, 533 U.S. 218, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001)). Accordingly, the Court will not substitute "its own construction of a statutory provision for a reasonable interpretation made by [Commerce]." IPSCO, Inc. v. United States, 965 F.2d 1056, 1061 (Fed.Cir.1992).

II. DISCUSSION

A. Commerce's Exclusion of SNR's Imputed Expenses In Calculating Total Expenses For Constructed Export Price Profits Is In Accordance With Law.

SNR challenges Commerce's calculation of constructed export price ("CEP") profits, arguing that the inclusion of imputed expenses in its calculation of "total U.S. expenses" necessitates the inclusion of those same imputed expenses in its calculation of "total expenses."

CEP profits are determined by multiplying the total actual profit by the percentage determined by dividing the total United States expenses by the total expenses. 19 U.S.C. § 1677a(f)(1); 19 U.S.C. § 1677a(f)(2)(A). "Total actual profit" is defined as "the total profit earned by the foreign producer, exporter and affiliated parties ... with respect to the sale of the same merchandise for which total expenses are determined[.]" 19 U.S.C. § 1677a(f)(2)(D). "Total expenses" consist of "all expenses ... which are incurred by or on behalf of the foreign producer and foreign exporter of the subject merchandise and by or on behalf of the U.S. seller affiliated with the producer or exporter with respect to the production and sale of such merchandise." 19 U.S.C. § 1677a(f)(2)(C). The price used to establish CEP is reduced by "the amount of the following expenses generally incurred by or for the account of the producer or exporter, or the affiliated seller in the United States, in selling the subject merchandise (or merchandise to which value has been added)." 19 U.S.C. § 1677a(d)(1). These expenses include "expenses that result from, and bear a direct relationship to, the sale, such as credit expenses, guarantees and warranties" and "any selling expenses not deducted under subparagraph (A), (B), or (C)." 19 U.S.C. § 1677a(d)(1)(B) and (D).

In short, when calculating CEP profit, the statute permits a reduction by the applicable percentage (i.e., a portion of total profit), thereby ensuring that the CEP profit calculation accurately reflects whether, and to what degree, the exporter has an unfair advantage over the domestic producer.

SNR argues that Commerce erred by not including imputed credit and inventory carrying expenses in its calculation of "total expenses" — because they were included in its calculation of "total United States expenses." SNR requests that this issue be remanded to Commerce with instructions to include the imputed credit and inventory carrying expenses in its calculation of "total expenses" for the purpose of calculating CEP profit.

Commerce denies that it failed to comport with the plain meaning of the statute and argues instead that its calculations are based on "normal accounting principles [which] permit the deduction of only actual booked expenses, not imputed expenses, in calculating profit." See Memo of the United States in Opposition to the Plaintiffs' Motions for Judgment upon the Agency Record ("Def.'s Br.") at 96. Commerce also argues that the inclusion of imputed expenses in the calculation of total expenses would result in a partial double counting of the expenses which would result in a distortion of the ratio of total U.S. expenses to total expenses. Id. at 95. Additionally, Commerce argues that if Congress had intended to require both total U.S. expenses and total expenses to be calculated using the same figures Congress would not have used disparate definitions when defining the two terms. Id. Finally, Commerce cites U.S. Steel Group v. United States, 225 F.3d 1284 (Fed.Cir.2000), followed by the Court of International Trade in Timken v. United States, 26 CIT ___, 240 F.Supp.2d 1228 (2002), which specifically rejects the argument that symmetry must exist in the ratio of total U.S. expenses to total expenses.

The Court first turns to the plain language of the statute under Chevron step-one. First, the Court finds the statute does not clearly address the use of imputed expenses in the calculation of total expenses or total profit. See Timken, 26 CIT at ___, 240 F.Supp.2d at 1245; cf. SNR Roulements v. United States, 24 CIT 1130, 1139, 118 F.Supp.2d 1333, 1341 (2000); NTN Bearing Corp. of America v. United States, 25 CIT 664, 694, 155 F.Supp.2d 715, 743 (2001). Second, on the issue of whether computational symmetry is statutorily required, the Court refers to U.S. Steel Group, which sustained Commerce's practice of including imputed expenses in the calculation of total United States expenses, but not including imputed expenses in the calculation of total expenses. See id. at 1290. Symmetry between the two is not required because "the definitions of the Act themselves under cut symmetrical treatment of `total U.S. expenses' and `total expenses.'" U.S. Steel Group, 225 F.3d at 1290. Total U.S. expenses are not a subset of total expenses because "[t]he statute itself defines `total U.S. expenses' distinctly, both structurally and substantively, from `total expenses.'" Id. at 1289.

Even if U.S. Steel Group was not applicable to selling expenses, Commerce's methodology was a reasonable interpretation of the statute. Timken, 26 CIT at ___, 240 F.Supp.2d at 1246. "Commerce has some flexibility in determining total United States expenses under 19 U.S.C. § 1677a(d)(1)-(2)... [b]ut if Commerce decides to include a category of expenses in calculating total United States expenses ... it must also include such expenses in [total expenses] unless they are...