Timken Co. v. US
| Decision Date | 22 May 1992 |
| Docket Number | Court No. 90-06-00313. |
| Citation | 795 F. Supp. 438,16 CIT 429 |
| Parties | The TIMKEN COMPANY, Plaintiff, v. UNITED STATES, Defendant, Koyo Seiko Co., Ltd. and Koyo Corporation of U.S.A.; NSK Ltd. and NSK Corporation, Defendants-Intervenors. |
| Court | U.S. Court of International Trade |
Stewart and Stewart, Eugene L. Stewart, Terence P. Stewart, James R. Cannon, Jr., John M. Breen, Vincent J. Branson, Patrick J. McDonough and Amy S. Dwyer, Washington, D.C. (Scott A. Scherff, Managing Atty., The Timken Co., Canton, Ohio, of counsel), for plaintiff.
Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civ. Div., U.S. Dept. of Justice, Velta A. Melnbrencis, Washington, D.C. (Joan L. MacKenzie, Atty. Advisor, Office of the Chief Counsel for Import Admin., U.S. Dept. of Commerce, of counsel), for defendant.
Powell, Goldstein, Frazer & Murphy, Peter O. Suchman, Richard Belanger, Susan P. Strommer, Neil R. Ellis, T. George Davis, Susan E. Silver, Eric G. Stockel, Robert Torresen, Jr., Niall P. Meagher, Jonathan A. Knee, Washington, D.C., and Barbara D.A. Eyman, Boston, Mass., for defendants-intervenors Koyo Seiko Co., Ltd. and Koyo Corp. of U.S.A.
Donohue and Donohue, Joseph F. Donohue, Jr., James A. Geraghty, Kathleen C. Inguaggiato and Daniel W. Dowe, Washington, D.C., for defendants-intervenors NSK Ltd. and NSK Corp.
This Court is called upon to examine the conclusions of the Commerce Department, International Trade Administration ("ITA"), in its first administrative review of tapered roller bearings ("TRBs") from Japan produced by Koyo Seiko Co., Ltd., Koyo Corporation of U.S.A. ("Koyo"), NSK Ltd. and NSK Corporation ("NSK"). Tapered Roller Bearings Four Inches or Less in Outside Diameter From Japan; Final Results of Antidumping Duty Administrative Review, 55 Fed.Reg. 22,369 (1990) ("Final Results"). These Final Results cover the period from April 1, 1974 through March 31, 1979 for Koyo and April 1, 1974 through July 31, 1980 for NSK. Plaintiff in this case, The Timken Company ("Timken"), moves pursuant to Rule 56.1 of the Rules of this Court for judgment on the agency record and remand to the ITA for recalculation of dumping margins.
This case comes before the Court for decision along with two related cases, all challenging the ITA's Final Results on various grounds. This decision is to be considered in conjunction with the Court's opinions in Koyo Seiko Co. v. United States, 16 CIT ___, 796 F.Supp. 517 (1992), and NSK Ltd. v. United States, 16 CIT ___, 794 F.Supp. 1156 (1992). This Court's opinions in these related cases directly impact on the outcome of this case.
Refer to this Court's opinions in Koyo Seiko Co., 16 CIT ___, 796 F.Supp. 517, and NSK Ltd., 16 CIT ___, 794 F.Supp. 1156, for a comprehensive history of the circumstances surrounding this action.
Plaintiff Timken's allegations in this action are as follows: (1) in calculating Koyo's export selling expenses, ITA erroneously relied on unverified data; (2) ITA erred in its selection of "best information otherwise available" to replace information not supplied by respondents; (3) ITA's adjustment of constructed value for "difference in circumstance of sale" was contrary to law and unsupported by substantial evidence; (4) ITA's failure to deduct importer's profit from Exporters Sales Price ("ESP") was improper and contrary to law; (5) ITA's computer programming instructions failed to implement its stated methodology of matching sales of identical bearings in the home and U.S. markets for Koyo; (6) ITA incorrectly implemented the "twenty percent cap" on difference in merchandise cost; and (7) ITA failed to instruct the U.S. Customs Service to collect the full amount of antidumping duties payable on entries made between June 5, 1974 and January 29, 1975.
Defendant ITA agrees with Timken's contentions in regard to the collection of full antidumping duties on entries made between June 5, 1974 and January 29, 1975 and in regard to the implementation of the "twenty percent cap" on difference in merchandise cost. ITA requests the Court to remand this proceeding to them on these two issues and to sustain the ITA's actions in all other respects.
Defendant-intervenor Koyo supports remand of this action in regard to the alleged failure of the ITA's computer programming instructions to implement its stated methodology for matching sales of identical models in the home and U.S. markets for Koyo, and the ITA's incorrect implementation of the "twenty percent cap" on difference in merchandise cost. Koyo opposes Timken's motion for judgment on the agency record in regard to all other issues raised in this action.
Defendant-intervenor NSK opposes Timken's motion in regard to Timken's challenge of the ITA's choice of best information available where NSK did not provide requested information to the ITA, Timken's challenge of the ITA's adjustment to constructed value for differences in circumstances of sale and Timken's challenge of the ITA's failure to deduct importer's profits from ESP. NSK requests the Court to deny plaintiff's motion for judgment on the agency record and to dismiss this action.
For the reasons detailed below, the Court finds that the case must be remanded to the ITA to make corrections in its calculation of the dumping margins.
The Court's jurisdiction over this matter is derived from 28 U.S.C. § 1581(c) (1988).1
A final determination by the ITA in an administrative proceeding will be sustained unless that 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 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, 216-17, 83 L.Ed. 126 (1938); Alhambra Foundry Co. v. United States, 12 CIT 343, 345, 685 F.Supp. 1252, 1255 (1988). Under this standard, the ITA is granted considerable deference "in both its interpretation of its statutory mandate and the methods it employs in administering the antidumping law." Chemical Prods. Corp. v. United States, 10 CIT 626, 628, 645 F.Supp. 289, 291, remand order vacated, 10 CIT 819, 651 F.Supp. 1449 (1986) (citations omitted).
Plaintiff argues that the ITA used unsubstantiated and unverified information in calculating the deduction from ESP for export selling expenses by using Koyo's claimed allocation of its export department expenses to U.S. sales.2 Timken claims that Koyo did not substantiate this claimed allocation, and that the ITA did not verify it. Moreover, Timken claims that this unsubstantiated and unverified allocation should not have been used in calculating the deduction of export selling expenses from ESP when verified per-unit export expenses were available.
ITA and Koyo argue that the ITA is not required to verify every piece of information submitted to it citing Monsanto Co. v. United States, 12 CIT 949, 951, 698 F.Supp. 285, 288 (1988). ITA points out that it did verify Koyo's export department's expenses but reasonably chose not to verify, but to accept, Koyo's proposed allocation of those expenses.
While it is true that the ITA is not required to verify every piece of information submitted to it, it would seem that the ITA did in fact attempt to verify Koyo's proposed allocation methodology and was unable to do so. The verification report for Koyo states:
Koyo nevertheless allocated of total export expenses to U.S. exports. This allocation was not substantiated.
Administrative Record ("AR") (Pub.) Doc. 289 at 7 (emphasis added). ITA's preliminary analysis memorandum also states that Koyo's proposed allocation method was unsubstantiated. AR (Pub.) Doc. 387 at 16-17.
The preference for the use of verified information in the conduct of an administrative review, and for the use of best information available when verified information is unavailable, is clear from 19 U.S.C. § 1677e(b)(3) (1988).3 There is also a preference for the use of verified data as best information available when the use of best information is necessary. This Court has supported this preference for the use of verified data as best information available. See Smith Corona Corp. v. United States, 15 CIT ___, ___, 771 F.Supp. 389, 399 (1991); Hercules, Inc. v. United States, 11 CIT 710, 754-55, 673 F.Supp. 454, 490 (1987).
In this administrative review the ITA also has shown a preference for using verified data instead of unverified data as best information available:
As best information otherwise available, we used the information from the April 1978 to March 1979 period because these data had been verified in September 1979.
Final Results, 55 Fed.Reg. at 22,378 (Comment 42) (emphasis added);
Koyo was unable to provide supporting documentation for data submitted prior to 1980 as confirmed at verification in December 1986. We used the 1978-1979 period data as best information otherwise available because these data were verified.
Id. at 22,379 (Comment 43) (emphasis added). See also Porcelain-on-Steel Cooking Ware From Mexico; Final Results of Antidumping Duty Administrative Review, 55 Fed.Reg. 21,061, 21,062 (1990) (Comment 8); Television Receivers, Monochrome and Color, From Japan; Final Results of Antidumping Duty Administrative Review, 53 Fed.Reg. 4050, 4052 (1988) (Comment 13).
ITA's use of unverified data for the allocation of Koyo's export department's expenses to U.S. sales as best information available, when verified per-unit export department expenses were available, was unsupported by substantial evidence on the record. This Court remands this proceeding to the ITA to use the verified per-unit export department expenses as best information available when calculating the adjustment to ESP for Koyo's export selling expenses.
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