Timken Co. v. U.S.

• Decision Date: 22 April 2002
• Docket Number: No. 98-12-03235.,Slip Op. 02-38.,98-12-03235.
• Citation: 201 F.Supp.2d 1316
• Parties: THE TIMKEN COMPANY, Plaintiff, v. UNITED STATES, Defendant, and Peer Bearing Company, Defendant-Intervenor.
• Court: U.S. Court of International Trade

201 F.Supp.2d 1316

THE TIMKEN COMPANY, Plaintiff, v. UNITED STATES, Defendant, and Peer Bearing Company, Defendant-Intervenor.

Slip Op. 02-38.

No. 98-12-03235.

United States Court of International Trade.

April 22, 2002.

COPYRIGHT MATERIAL OMITTED

Stewart and Stewart (Terence P. Stewart, James R. Cannon, Jr. and Amy S. Dwyer), Washington, DC, for Timken.

Robert D. McCallum, Jr., Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Lucius B. Lau); of counsel: Rina Goldenberg, Office of the Chief Counsel for Import Administration, United States Department of Commerce, Washington, DC, for the United States.

Arent Fox Kintner Plotkin & Kahn, PLLC (John M. Gurley and Matthew J. McConkey), Washington, DC, for Peer Bearing.¹

OPINION

TSOUCALAS, Senior Judge.

Plaintiff, The Timken Company ("Timken"), moves pursuant to USCIT R. 56.2 for judgment upon the agency record challenging the Department of Commerce, International Trade Administration's ("Commerce") final determination, entitled Final Results of 1996-1997 Antidumping Duty Administrative Review and New Shipper Review and Determination Not To Revoke Order in Part of Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China ("Final Results"), 63 Fed.Reg. 63,842 (Nov. 17, 1998), as amended, Amended Final Results of 1996-1997 Antidumping Duty Administrative Review of Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China ("Amended Final Results"), 63 Fed.Reg. 71,447 (Dec. 28, 1998).

Specifically, Timken contends that Commerce erred in: (1) selecting, for valuing the hot-rolled steel bar used to manufacture tapered roller bearings ("TRBs") cups and cones, export data from Japan to Indonesia, rather than the annual report data from eight Indian bearing producers or Indian import statistics or export statistics from Japan to India; (2) valuing material costs for steel inputs by using the prices paid by a People's Republic of China ("PRC") bearing producer and a PRC trading company to market-economy suppliers; (3) valuing scrap generated from the production of cups, cones and rollers using unadjusted Indonesian import statistics; and (4) failing to adjust overhead, selling, general and administrative expenses ("SG & A") and profit rates to account for differences in material and labor values of other surrogate sources used in determining normal value ("NV").

BACKGROUND

This case concerns the 1987 antidumping duty order on TRBs from the PRC for the period of review ("POR") covering June 1, 1996, through May 31, 1997.² See Antidumping Duty Order; Tapered Roller Bearings and Parts Thereof, Finished or Unfinished, From the People's Republic of China ("Antidumping Duty Order"), 52 Fed.Reg. 22,667 (June 15, 1987). On July 10, 1998, Commerce published the preliminary results of the subject review. See Preliminary Results of 1996-1997 Antidumping Duty Administrative Review and New Shipper Review of Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China ("Preliminary Results"), 63 Fed.Reg. 37,339. Commerce published the Final Results on November 17, 1998. See 63 Fed.Reg. at 63,842.

JURISDICTION

The Court has jurisdiction over this matter pursuant to 19 U.S.C. § 1516a(a) (1994) and 28 U.S.C. § 1581(c) (1994).

STANDARD OF REVIEW

In reviewing a challenge to Commerce's final determination in an antidumping administrative review, the Court will uphold Commerce's determination 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)(i) (1994).

I. Substantial Evidence Test

Substantial evidence is "more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Universal Camera Corp. v. NLRB ("Universal Camera"), 340 U.S. 474, 477, 71 S.Ct. 456, 95 L.Ed. 456 (1951) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938)). Substantial evidence "is something less than the weight of the evidence, and the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence." Consolo v. Federal Maritime Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966) (citations omitted). Moreover, "[t]he court may not substitute its judgment for that of the [agency] when the choice is `between two fairly conflicting views, even though the court would justifiably have made a different choice had the matter been before it de novo.'" American Spring Wire Corp. v. United States ("American Spring Wire"), 8 CIT 20, 22, 590 F.Supp. 1273, 1276 (1984) (quoting Penntech Papers, Inc. v. NLRB ("Penntech Papers"), 706 F.2d 18, 22-23 (1st Cir.1983) (quoting, in turn, Universal Camera, 340 U.S. at 488, 71 S.Ct. 456)).

II. Chevron Two-Step Analysis

To determine whether Commerce's interpretation and application of the antidumping statute is "in accordance with law," the Court must undertake the two-step analysis prescribed by Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc. ("Chevron"), 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Under the first step, the Court reviews Commerce's construction of a statutory provision to determine whether "Congress has directly spoken to the precise question at issue." Id. at 842, 104 S.Ct. 2778. "To ascertain whether Congress had an intention on the precise question at issue, [the Court] employ[s] the `traditional tools of statutory construction.'" Timex V.I., Inc. v. United States, 157 F.3d 879, 882 (Fed. Cir.1998) (citing Chevron, 467 U.S. at 843 n. 9, 104 S.Ct. 2778). "The first and foremost `tool' to be used is the statute's text, giving it its plain meaning. Because a statute's text is Congress's final expression of its intent, if the text answers the question, that is the end of the matter." Id. (citations omitted). Beyond the statute's text, the tools of statutory construction "include the statute's structure, canons of statutory construction, and legislative history." Id. (citations omitted); but see Floral Trade Council v. United States, 23 CIT 20, 22 n. 6, 41 F.Supp.2d 319, 323 n. 6 (1999) (noting that "[n]ot all rules of statutory construction rise to the level of a canon, however") (citation omitted).

If, after employing the first prong of Chevron, the Court determines that the statute is silent or ambiguous with respect to the specific issue, the question for the Court becomes whether Commerce's construction of the statute is permissible. See Chevron, 467 U.S. at 843, 104 S.Ct. 2778. Essentially, this is an inquiry into the reasonableness of Commerce's interpretation. See Fujitsu Gen. Ltd. v. United States, 88 F.3d 1034, 1038 (Fed.Cir.1996). Provided Commerce has acted rationally, the Court may not substitute its judgment for the agency's. See Koyo Seiko Co. v. United States, 36 F.3d 1565, 1570 (Fed.Cir.1994) (holding that "a court must defer to an agency's reasonable interpretation of a statute even if the court might have preferred another"); see also IPSCO, Inc. v. United States, 965 F.2d 1056, 1061 (Fed. Cir.1992). The "[C]ourt will sustain the determination if it is reasonable and supported by the record as a whole, including whatever fairly detracts from the substantiality of the evidence." Negev Phosphates, Ltd. v. United States, 12 CIT 1074, 1077, 699 F.Supp. 938, 942 (1988) (citations omitted). In determining whether Commerce's interpretation is reasonable, the Court considers the following non-exclusive list of factors: the express terms of the provisions at issue, the objectives of those provisions and the objectives of the antidumping scheme as a whole. See Mitsubishi Heavy Indus. v. United States, 22 CIT 541, 545, 15 F.Supp.2d 807, 813 (1998).

DISCUSSION

I. Commerce's Selection of Export Data From Japan to Indonesia as a Surrogate Value for Bearing Quality Steel Bar Used by PRC Producers to Manufacture TRB Cups and Cones

A. Background

Antidumping margins are the difference between NV and United States price of the merchandise. When the merchandise is produced in a non-market economy country ("NME") such as the PRC, Commerce constructs NV pursuant to section 1677b(c), which provides that

the valuation of the factors of production shall be based on the best available information regarding the values of such factors in a market economy country or countries considered to be appropriate by [Commerce].

19 U.S.C. § 1677b(c)(1) (1994) (emphasis supplied).

The statute does not define the phrase "best available information," it only provides that

[Commerce], in valuing factors of production ..., shall utilize, to the extent possible, the prices or costs of factors of production in one or more market economy countries that are[:]

(A) at a level of economic development comparable to that of the non-market economy country, and

(B) significant producers of comparable merchandise.

19 U.S.C. § 1677b(c)(4) (1994) (emphasis supplied).

Thus, the statute grants to Commerce broad discretion to determine the "best available information" in a reasonable manner on a case-by-case basis. See Lasko Metal Prods., Inc. v. United States ("Lasko"), 43 F.3d 1442, 1446 (Fed.Cir.1994) (noting that the statute "simply does not say — anywhere — that the factors of production must be ascertained in a single fashion.") Consequently, Commerce values as many factors of production ("FOPs") as possible using information obtained from the "primary" surrogate country, that is, the country that Commerce considers to be most comparable in economic terms to the NME country being investigated, and that also produces merchandise comparable to the subject merchandise. See, e.g., Tianjin Mach. Import & Export Corp. v. United States ("Tianjin"),...