Tehnoimportexport v. US

• Decision Date: 04 June 1991
• Docket Number: Court No. 89-06-00337.
• Citation: 766 F. Supp. 1169,15 CIT 250
• Parties: TEHNOIMPORTEXPORT and Peer Bearing Company, Plaintiffs, v. UNITED STATES, Defendant, The Torrington Company, Defendant-Intervenor.
• Court: U.S. Court of International Trade

766 F. Supp. 1169

15 CIT 250

TEHNOIMPORTEXPORT and Peer Bearing Company, Plaintiffs, v. UNITED STATES, Defendant The Torrington Company, Defendant-Intervenor.

Court No. 89-06-00337.

United States Court of International Trade.

June 4, 1991.

COPYRIGHT MATERIAL OMITTED

Cooter & Gell, John M. Gurley, Washington, D.C., for plaintiffs.

Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civ.Div., U.S. Dept. of Justice, Jeanne E. Davidson, of counsel: Maria Solomon, Atty.-Advisor, Office of the Chief Counsel for Import Admin., U.S. Dept. of Commerce, Washington, D.C., for defendant.

Stewart and Stewart, Eugene L. Stewart, Terence P. Stewart, James R. Cannon, Jr., Charles A. St. Charles, Patrick J. McDonough, Washington, D.C., for defendant-intervenor.

OPINION

TSOUCALAS, Judge:

Plaintiffs, Tehnoimportexport and Peer Bearing Corp. ("Tehnoimportexport"), challenge the final determinations of the Department of Commerce, International Trade Administration ("Commerce" or "ITA") in Final Determinations of Sales at Less Than Fair Value; Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From Romania, 54 Fed.Reg. 19,109 (1989). Specifically, plaintiffs contest the decision to use surrogate pricing data from Portugal to determine the foreign market value ("FMV") of plaintiffs' imported antifriction bearings ("AFBs") from Romania, and they also challenge the failure of the ITA to correct certain ministerial errors.

Background

On March 31, 1988, The Torrington Company ("Torrington") filed an antidumping petition which alleged, inter alia, that imports of AFBs from Romania were being sold in the United States at less than fair value and were injuring, or threatening to injure, an American industry. General Administrative Record ("GAR") (Pub.) Doc. 1. The ITA initiated an investigation of Romanian AFBs on April 27, 1988. 53 Fed.Reg. 15,077 (1988). Because Romania has a nonmarket, or state-controlled, economy, the ITA was obliged to use data from a market economy country to determine the foreign market value of Romanian AFBs. 19 U.S.C. § 1677b(c) (1988); 19 C.F.R. § 353.8 (1988).¹

The petition proposed Italy and Portugal as surrogate countries. GAR Doc. 1 at 95. Tehnoimportexport, on the other hand, suggested that Turkey, Yugoslavia or Indonesia should be considered. Romanian Record ("RR") (Pub.) Doc. 75. Later, Tehnoimportexport wrote that Mexico or, in the alternative, Yugoslavia, would be an appropriate substitute for Romania. RR (Pub.) Doc. 162. In a memorandum dated August 8, 1988, the ITA listed five potential surrogate countries: Portugal, Brazil, Mexico, Korea and Yugoslavia. RR (Pub.) Doc. 94 at 1. The ITA stated that these countries were selected "because we determined that their economies were comparable to that of Romania." Id. The factors considered in making these choices included gross per capita income and the distribution of labor between the agricultural and non-agricultural sectors; attached statistics support this conclusion.

Once the ITA had selected five possible surrogates for Romania, it sent questionnaires to companies and embassies in those countries requesting information regarding prices and the values of the factors of production. These questionnaires were sent out between August and September 1988. See e.g., RR (Pub.) Docs. 101, 103, 126, 127, 138 and 147. The ITA indicated that, "no affirmative responses were received" from any of the companies contacted by the ITA. Preliminary Determinations of Sales at Less Than Fair Value: Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From Romania, 53 Fed.Reg. 45,324, 45,326 (1988). Therefore, the ITA "used the factors of production valued in a comparable economy as the basis of foreign market value." Id. at 45,326-327. This methodology is expressly authorized by statute and regulation. 19 U.S.C. § 1677b(c); 19 C.F.R. § 353.8(c).

Furthermore, since no responses to its questionnaires were received by the ITA, the agency was authorized by Section 776 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1677e(c) (1988), to use the best information otherwise available in its valuations of the factors of production. Where possible, "best information available was obtained from publicly available sources in Yugoslavia," the country selected as the most comparable to Romania. 53 Fed.Reg. at 45,327. However, given the dearth of information gathered to that point, the ITA made clear that it would attempt to obtain more surrogate pricing data prior to the final determinations. Id. at 45,326.

The ITA's preliminary determinations were released on October 27, 1988, and were published on November 9, 1988, in the Federal Register. In them, the ITA chose to use certain factors of production from Yugoslavia as the basis for calculating the FMV of Tehnoimportexport's AFBs. The ITA reasoned that Yugoslavia's level of economic development most closely approximated Romania's. 53 Fed.Reg. at 45,327. However, since public information was not available for all factors of production from Yugoslavia, the ITA used data from other countries, including Mexico, for the valuation of the balance of the factors of production for purposes of the preliminary determinations.

The final determinations were issued on March 24, 1989 and published in the Federal Register on May 3, 1989. Final Determinations, 54 Fed.Reg. 19,109. The ITA stated that since it was unable to obtain adequate pricing information from Yugoslavia, it opted to change surrogates and use Portugal as the surrogate country for purposes of calculating the factors of production in the final determinations. 54 Fed.Reg. at 19,110. Portugal was chosen because its "level of economic development also closely approximates that of Romania" and it had been listed in the preliminary determinations as one of five possible surrogate countries. Id. Portuguese data was used for: Steel used to manufacture bearing cages; steel scrap; brass used in the manufacture of brass cages; overhead; and labor. Id. at 19,110-111. Because Portugal does not produce bearing quality steel, the ITA used "information obtained from the World Material Study—Europe, as provided by Torrington and verified by the Department" to value steel used to produce inner and outer rings, balls, and other components. Id. at 19,110.

Plaintiffs contend that the ITA should not have switched surrogates in midstream. They claim that Yugoslavia was the country most economically comparable to Romania and thus should have been used for the final determinations as well as the preliminary.

Discussion

A determination by the Department of Commerce will be affirmed unless that determination is not supported by substantial evidence or is otherwise not in accordance with law. 19 U.S.C. § 1516a(b)(1)(B) (1988). Substantial evidence is relevant evidence that "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, 216, 83 L.Ed. 126 (1938); Alhambra Foundry Co. v. United States, 12 CIT 343, 345, 685 F.Supp. 1252, 1255 (1988). Under this standard, Commerce is granted considerable deference in its interpretation of its statutory authority and the methodology employed in the administration of the antidumping law. American Lamb Co. v. United States, 785 F.2d 994, 1001 (Fed.Cir. 1986). See also Ceramica Regiomontana, S.A. v. United States, 10 CIT 399, 404, 636 F.Supp. 961, 965-66 (1986), aff'd, 810 F.2d 1137 (Fed.Cir.1987).

Commerce's determination "will not be overturned merely because the plaintiff `is able to produce evidence ... in support of its own contentions and in opposition to the evidence supporting the agency's determination.'" The Torrington Co. v. United States, 14 CIT ___, ___, 745 F.Supp. 718, 723 (1990), quoting Hercules, Inc. v. United States, 11 CIT 710, 755, 673 F.Supp. 454, 490 (1987). The evidence introduced by plaintiffs must be "enough to convince the Court that a reasonable mind would not have found ITA's evidence sufficient to support its conclusion." Torrington, 14 CIT at ___, 745 F.Supp. at 723.

Plaintiffs first contest the ITA's decision to use Portugal as the surrogate in the final determinations. Second, Tehnoimportexport faults the ITA for calculating overhead costs using unverified data from a Portuguese company that was related to a company under investigation. Similarly, plaintiffs claim that the ITA violated its own precedent and policy by calculating packing costs based on confidential data from a Swedish firm whose prior written permission was not obtained by the ITA and which firm was related to a firm under investigation. Finally, plaintiffs contest the ITA's decision not to make corrections regarding the weights of rivets.

I. Use of Surrogate Pricing Data

When in the course of an antidumping investigation the ITA determines that the economy of the country from which the subject merchandise is exported is state-controlled, the agency is authorized to determine the FMV of the merchandise based on the "the best available information" regarding the values of the factors of production used in manufacturing the merchandise in a "market economy country or countries considered to be appropriate by the administering authority." 19 U.S.C. § 1677b(c)(1). If the ITA determines that adequate information is not available to determine FMV on this basis, then the agency may value FMV based on the price that merchandise which is "comparable to the merchandise under investigation," and "produced in one or more market economy countries that are at a level of economic development comparable to that of the nonmarket economy country," is sold in other countries, including the United States. 19 U.S.C. § 1677b(c)(2).

Commerce has interpreted this rather convoluted passage to mean that, if the economy of the country from which the imported merchandise originates is state-controlled, then FMV...