Timken Co. v. United States

Citation10 CIT 86,630 F. Supp. 1327
Decision Date20 February 1986
Docket NumberNo. 82-6-00890.,82-6-00890.
PartiesThe TIMKEN COMPANY, Plaintiff, v. UNITED STATES, Malcolm Baldrige, Secretary of Commerce, Lionel H. Olmer, Undersecretary For International Trade Administration, United States Department of Commerce, Larry Brady, Assistant Secretary For International Trade Administration, United States Department of Commerce, Gary N. Horlick, Deputy Assistant Secretary For Import Administration, United States Department of Commerce, Leonard M. Shambon, Director, Office of Compliance, International Trade Administration, United States Department of Commerce, John Kugelman, Director, Antidumping Order Compliance Division, International Trade Administration, United States Department of Commerce, J. Linnea Bucher, Compliance Officer, Antidumping Order Compliance Division, International Trade Administration, United States Department of Commerce, Defendants, and NTN Bearing Corporation of America, Intervenor.
CourtU.S. Court of International Trade


Stewart & Stewart (Eugene L. Stewart, Terence P. Stewart, and James R. Cannon, Jr., Washington, D.C., on briefs), for plaintiff.

Richard K. Willard, Asst. Atty. Gen., David M. Cohen, Director, Dept. of Justice, Civil Div., Commercial Litigation Branch, Washington, D.C. (Velta A. Melnbrencis, New York City, on briefs), for defendants.

Barnes, Richardson & Colburn (James H. Lundquist, Robert E. Burke, Donald J. Unger, and Thomas M. Keating, Chicago, Ill., on briefs) for intervenor.

On Motions for Judgment on the Agency Record and for Remand

                                  TABLE OF CONTENTS
                  I. Background .................................. 1330
                 II. Res Judicata ................................ 1332
                III. Agency Failure to Collect Necessary Data      1332
                     A. The Impact of Freeport Minerals .......... 1332
                        1. Exhaustion—Freeport Minerals .......... 1334
                     B. Failure to Collect Data for Period Already
                         Reviewed ................................ 1335
                        1. Necessity of Complete Home Market
                            Data ................................. 1336
                        2. Exhaustion—Incomplete Data ............ 1340
                 IV. Legal Issues Raised Below ................... 1341
                     A. Deduction of Profit from ESP ............. 1341
                        1. Standard of Review .................... 1342
                        2. Agency Interpretation ................. 1342
                        3. Language of the Statute ............... 1343
                        4. International Law ..................... 1345
                        5. Non-absurdity of Results .............. 1347
                     B. Cost-value Relationship .................. 1348
                  V. Conclusion .................................. 1350
Opinion and Order

MALETZ, Senior Judge:

In 1982, the International Trade Administration (ITA) of the Department of Commerce issued a final determination revoking a dumping finding on tapered roller bearings and component parts (TRBs) made in Japan by NTN Toyo Bearing Company (NTN) and distributed by NTN's subsidiary, NTN Bearing Corporation of America (NBCA). Plaintiff, The Timken Company (Timken), an American manufacturer of TRBs, commenced the present action challenging the ITA determination. Upon the government's motion, unopposed by Timken, the court, over intervenor NBCA's opposition, remanded several issues for further consideration by the ITA. The ITA's recalculation upon remand revealed only de minimis dumping margins. Presently before the court are two motions by Timken pursuant to rule 56.1 of this court seeking reversal of the agency revocation decision and remand for further proceedings. The government for its part agrees that partial remand is apropriate; NBCA, on the other hand, seeks affirmance of the ITA revocation determination. For the reasons set forth below, the court again remands this action to the ITA for (1) collection and review of data up to the date of its tentative determination; (2) collection and review of additional home market sales data for the period of time already reviewed by the ITA, and for reassessment of proper TRB model comparisons; (3) review of the accuracy of all pertinent NTN production costs; (4) correction of all errors that may have occurred below; and (5) recalculation of dumping margins and rescission of the partial revocation of the dumping finding, if warranted.

I. Background

The dumping finding in question had been published by the United States Treasury Department on August 18, 1976. 41 Fed.Reg. 34,974. On November 14, 1979, Treasury published a notice of a tentative determination to modify or revoke the finding. 44 Fed.Reg. 65,690. That tentative determination was largely based upon information supplied to the Customs Service to the effect that there had been no sales at less than fair value between April 1, 1974 and March 31, 1978 of TRBs manufactured by NTN and sold by NBCA. See id. However, before Treasury had an opportunity to make a final determination regarding modification or revocation of the dumping finding, administration of the antidumping law was transferred from the Secretary of the Treasury to the Secretary of Commerce. Reorg.Plan No. 3 of 1979, § 5(a)(1)(C), 44 Fed.Reg. 69,273, reprinted in 19 U.S.C. at 963-64 (1982), and in 93 Stat. 1381, effective January 2, 1980, as provided by § 1-107(a) of Exec.Order No. 12,188, 45 Fed.Reg. 989, 993 (1980), reprinted in 19 U.S.C. at 968 (1982). Additionally, the Trade Agreements Act of 1979, which became effective on January 1, 1980, repealed the Antidumping Act of 1921 and replaced it with a new antidumping law. Trade Agreements Act of 1979, Pub.L. No. 96-39, tit. 1, § 106(a), 93 Stat. 144, 193.

Following transfer of administration to Commerce, the ITA conducted reviews of outstanding dumping findings pursuant to the annual review requirement of the Trade Agreements Act of 1979. See 19 U.S.C. § 1675 (1982), amended by 19 U.S. C.A. § 1675 (West Supp.1985). During review of the Treasury dumping finding on TRBs from Japan, the ITA reviewed production and sale of TRBs by NTN and NBCA for the period April 1, 1978 through November 14, 1979. On February 27, 1981, the ITA published a notice of preliminary results of administrative review and tentative determination to revoke in part the dumping finding, 46 Fed.Reg. 14,371, and on June 15, 1982, it published a final determination revoking the outstanding dumping finding insofar as it pertained to TRBs produced and sold by NTN and NBCA, 47 Fed.Reg. 25,757. Timken challenged this final determination by commencing the present action on June 25, 1982.

In the course of this action, the government itself moved to remand the case to the ITA for recalculation of dumping margins. In support of this motion, which was agreed to by Timken and opposed by NBCA, the government advised the court that the ITA had taken the position that its method of calculating dumping margins had not been in accordance with its normal practice and was probably not in accordance with the applicable law and regulations. The court granted the motion for remand. Timken Co. v. United States, 7 CIT ___, Slip Op. 84-63 (June 5, 1984). Thereafter, the government and Timken stipulated as to an order of remand, which was entered on June 26, 1984. Among other things, that order directed the ITA to recalculate dumping margins (1) using actual selling prices to the United States, (2) deducting an amount for United States import duties based on actual United States price, (3) weight-averaging home market prices on a monthly basis, and (4) using currency conversion factors applicable specifically to the date of exportation of the imported merchandise.

On February 5, 1985, the ITA submitted to the court the final results of its recalculation, which included a finding that the weighted-average dumping margin was 0.33%. Since the ITA considered this recomputed dumping margin to be de minimis, it did not rescind its partial revocation of the dumping finding.

Now before the court are two motions by Timken for partial judgment on the agency record. Timken's first motion requests that the case be remanded so that the ITA may (1) obtain from NTN a complete listing of its home market sales of TRBs during the period under investigation; (2) itself select from among NTN's home market sales the most appropriate "similar" merchandise for comparison with TRBs exported to the United States; (3) investigate and verify NTN's production cost figures for the period prior to March 21, 1978; (4) investigate and verify NTN's claimed adjustments for differences in merchandise; and (5) reject any partial submissions by NTN in response to investigation of the areas just identified and instead use the best information otherwise available.

Timken's second motion for partial judgment on the agency record alleges that the ITA erred in (1) revoking the antidumping duty order on the basis of an analysis of only a 19-month rather than a two-year period; (2) failing to deduct from exporter's sales price (ESP) an amount for reasonable profits; (3) adjusting foreign market value for certain advertising expenses and inland freight costs; (4) failing to investigate issues raised in a market-research report submitted by Timken; (5) deducting indirect selling expenses from foreign market value ("ESP offset"); (6) making deductions for differences in circumstances of sale in alleged contravention of a statutory requirement that there be a causal relationship between claimed differences in circumstances of sale and differences in value; and (7) failing to deduct from ESP selling expenses properly allocable to United States sales. Given these allegations of error, Timken seeks, in its second motion, a remand for recalculation of dumping margins, and reversal of the ITA's revocation of the dumping finding.

Supplementing its two motions for partial judgment, Timken has filed a brief arguing that the action should be remanded to the ITA on the additional ground that further review is required in light of the recent ...

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