Sundstrand Corp. v. US
| Decision Date | 21 June 1995 |
| Docket Number | Slip Op. No. 95-114. Court No. 93-03-00149. |
| Citation | 890 F. Supp. 1100 |
| Parties | SUNDSTRAND CORPORATION, Plaintiff, v. UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Barnes, Richardson & Colburn, Chicago, IL (Robert E. Burke and Lawrence M. Friedman), for plaintiff.
Frank W. Hunger, Asst. Atty. Gen.; and David M. Cohen, Director, Commercial Litigation Branch, Civil Div., U.S. Dept. of Justice
(Michael S. Kane); of counsel: Stacy J. Ettinger, Attorney-Advisor, U.S. Dept. of Commerce, Washington, DC, for defendant.
Plaintiff, Sundstrand Corporation, its operating unit Sundstrand Aerospace and its wholly-owned subsidiary Sundstrand Pacific, Pte., Ltd. (collectively "Sundstrand"), brings this motion, pursuant to Rule 56.2 of this Court, for judgment upon the agency record contesting the final scope ruling issued by the U.S. Department of Commerce, International Trade Administration ("Commerce"), concluding that Sundstrand's part number 742973, the outer race of a cylindrical roller bearing, is within the scope of the countervailing duty order on antifriction bearings (other than tapered roller bearings) and parts thereof from Singapore. Final Affirmative Countervailing Duty Determinations and Countervailing Duty Orders: Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From Singapore ("Final Determination"), 54 Fed.Reg. 19,125 (May 3, 1989).
On March 31, 1988, The Torrington Company ("Torrington"), a United States manufacturer of antifriction bearings ("AFBs"), filed an antidumping and countervailing duty petition on all antifriction bearings (other than tapered roller bearings) and all parts thereof, both finished and unfinished from several countries, including Singapore. Petition Requesting the Imposition of Antidumping and Countervailing Duties on Imported Antifriction Bearings ("Petition") at 1-20. Sundstrand took no role in the resulting administrative investigation or subsequent annual reviews. Plaintiff's Rule 56.2 Motion for Judgment Upon the Agency Record and Brief in Support Thereof ("Plaintiff's Brief") at 5.
In response to the petition, Commerce initiated a countervailing duty investigation on antifriction bearings (other than tapered roller bearings) and parts thereof from Singapore. Initiation of Countervailing Duty Investigation; Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From Singapore, 53 Fed.Reg. 15,084 (April 27, 1988). On September 6, 1988, Commerce published its preliminary affirmative countervailing duty determination, Preliminary Affirmative Countervailing Duty Determinations: Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From Singapore ("Preliminary Determination"), 53 Fed.Reg. 34,329 (September 6, 1988), which specifically identified an outer race of a cylindrical bearing — as a bearing part covered by the investigation:
These investigations cover all of the subject bearings and parts thereof outlined above with certain limitations. With regard to finished parts (inner race, outer race, cage, rollers, balls, seals, shields, etc.), all such parts are included in the scope of these investigations. For unfinished parts (inner race, outer race, rollers, balls, etc.), such parts are included if (1) they have been heat treated, or (2) heat treatment is not required to be performed on the part. Thus, the only unfinished parts that are not covered by these investigations are those where the part will be subject to heat treatment after importation.
Preliminary Determination, 53 Fed.Reg. at 34,333.
On May 3, 1989, Commerce published its Final Determination and Order. Final Determination, 54 Fed.Reg. 19,125. The Final Determination incorporated the language set forth above from the Preliminary Determination specifically identifying an "outer race" as a bearing part within the scope of the investigation. Final Determinations of Sales at Less than Fair Value: Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From the Federal Republic of Germany ("Scope Appendix"), 54 Fed.Reg. 18,992, 18,997-98 (May 3, 1989).
During the investigation, several respondents argued that aerospace bearings "have physical characteristics that are different from those of the bearings subject to these investigations," "satisfy unique customer expectations and needs," and, are "specialized products manufactured in accordance with specialized and detailed aerospace standards." Scope Appendix, 54 Fed.Reg. at 19,010-12. Commerce, however, refused to exclude such bearings from the scope of its order on the basis of quality, design, precision, end-use, material content or degree of engineering control. Id. at 19,012. Similarly, the Final Determination emphasized that "tariff classification numbers are not determinative of the products under investigation." Id. at 19,011.
Specifically, Commerce stated that:
Scope Appendix, 54 Fed.Reg. at 19,012.
Accordingly, Commerce determined that its countervailing duty order regarding antifriction bearings would include all AFBs used in aviation applications so long as they were related to the reduction of friction. Id. at 19,010.
On October 30, 1992, Sundstrand filed a request for clarification of the scope of the countervailing duty order in this investigation. Plaintiff's Brief at 6. On February 4, 1993, Commerce determined that the product in question as imported was within the scope of the order on cylindrical roller bearings and parts thereof. Final Scope Ruling — Countervailing Duty Order on Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From Singapore: Request by Sundstrand Aerospace ("Final Scope Ruling") at 1-4. Commerce rejected Sundstrand's arguments regarding the enduse and final application of the bearing as irrelevant. Final Scope Ruling at 3. On March 5, 1993, Sundstrand filed its summons challenging Commerce's Final Scope Ruling and the present action ensued.
This Court must uphold Commerce's determination as to whether a particular type of merchandise is within the scope of a countervailing duty order unless Commerce's determination 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 is defined as "relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 217, 83 L.Ed. 126 (1938); Alhambra Foundry Co. v. United States, 12 CIT 343, 345, 685 F.Supp. 1252, 1255 (1988). 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).
In this action, Sundstrand requests a review of Commerce's response to its request for a scope clarification of the countervailing duty order. Sundstrand raises three arguments alleging Commerce's findings were not in accordance with law and were not supported by substantial evidence. Plaintiff's Brief at 7-8.
Sundstrand argues that part number 742973 performs substantial and independent non-antifriction bearing functions, is substantially advanced in function and value and is therefore outside the scope of the merchandise covered by the countervailing duty order. Sundstrand bases its argument upon several Commerce determinations which found an item to be outside the class or kind of merchandise covered by an order because of substantial advancements in function or value. Sundstrand cites as an example Final Determination of Sales at Less Than Fair Value: Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From the Federal Republic of Germany, 54 Fed.Reg. 18,992, 19,017 (May 3, 1989) wherein Commerce stated that when the value of a bearing incorporated into the imported product constitutes a relatively small portion of the overall value of the components, it "appears obvious that the product is substantially more than a bearing." Sundstrand contends the principle of administrative law that an agency must be consistent with its prior actions or explain its deviation therefrom compels Commerce to apply the same standards as it did in the cited scope clarification of textile machine components. Plaintiff's Brief at 10-16.
Plaintiff asserts part number 742973 is advanced in both function and value beyond a simple bearing. Sundstrand states the part is principally a housing which holds a hydraulic unit together and provides support and positioning for a hydraulic assembly. Its function of incorporating the outer race of a cylindrical roller bearing is ancillary to these other functions, according to plaintiff. Plaintiff's Brief at 14-15.
Commerce states it has correctly determined that Sundstrand's part number 742973 is covered by the order because the outer race of a cylindrical bearing is a bearing part and falls squarely within the definition of the covered merchandise. Defendant states its published determinations make it clear Commerce did not intend to distinguish between AFBs based upon criteria such as...
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