Tokyo Kikai Seisakusho, Ltd. v. U.S.

• Decision Date: 24 January 2007
• Docket Number: Slip Op. 07-12. Court No. 06-00078.
• Parties: TOKYO KIKAI SEISAKUSHO, LTD., and: TKS (U.S.A.), Inc., Plaintiffs, and Mitsubishi Heavy Industries, Ltd., Plaintiff-Intervenor, v. UNITED STATES, Defendant, and Goss International Corporation, Defendant-Intervenor.
• Court: U.S. Court of International Trade

473 F.Supp.2d 1349

TOKYO KIKAI SEISAKUSHO, LTD., and: TKS (U.S.A.), Inc., Plaintiffs, and Mitsubishi Heavy Industries, Ltd., Plaintiff-Intervenor, v. UNITED STATES, Defendant, and Goss International Corporation, Defendant-Intervenor.

Slip Op. 07-12. Court No. 06-00078.

United States Court of International Trade.

January 24, 2007.

Sidley Austin LLP, Washington, DC (Lawrence R. Walders), Daniel Bahar, Neil R. Ellis, Neil C. Pratt, Ruthanne M. Deutsch, Peter J. Toren; Law Offices of Hoken S. Seki, Hoken S. Seki, for Plaintiffs Tokyo Kikai Seisakusho, Ltd. and TKS (U.S.A.), Inc.

Steptoe & Johnson LLP, Washington, DC, Alexandra E. Baj, Daniel J. Calhoun, Richard 0. Cunningham, Eric C. Emerson, (Gregory S. McCue), for Plaintiff-Intervenor Mitsubishi Heavy Industries, Ltd.

Stuart E. Schiffer, Assistant Attorney General; David M. Cohen, Director; (Patricia M. McCarthy) Assistant Director; (Kent G. Huntington), Commercial Litigation Branch, Civil Division, United States Department of Justice; Hardeep K. Josan, Office of Chief Counsel, for Import Administration, United States Department of Commerce for Defendant United States.

Wiley Rein & Fielding LLP, Washington, DC, (Charles O. Verrill, Jr.), Eileen P. Bradner, (John R. Shane), M. William Schisa, for Defendant-Intervenor Goss International Corporation.

OPINION

BARZILAY, Judge.

I. Introduction

This case consolidates various challenges to the Department of Commerce's ("Commerce" or "Department") antidumping ("AD") determination Large Newspaper Printing Presses and Components Thereof, Whether Assembled or Unassembled from Japan: Final Results of Changed Circumstances Review, 71 Fed.Reg. 11,590-01 (Dep't Commerce Mar. 8, 2006) ("Final Results"). See also Issues and Decision Memorandum for the Changed Circumstances Review of Large Newspaper Printing Presses and Components Thereof Whether Assembled or Unassembled, from Japan, A-588-837 (Dep't Commerce Mar. 8, 2006), http://ia.ita.doc.gov/ frn/summary/Japan/E6-3295-1.pdf ("I & D Memo."). Plaintiffs Tokyo Kikai Seisakusho, Ltd., and TICS (U.S.A.), Inc., (collectively "TICS" or "Plaintiffs") challenge 1) Commerce's authority to initiate and conduct the changed circumstances review that led to the Final Results, 2) the Department's determination to reinstate the AD order in question with respect to TICS for the period from September 1, 2000 through September 3, 2001, and 3) Commerce's determination to reopen for reconsideration the sunset review that resulted in the complete revocation of the AID order. Plaintiff-Intervenor Mitsubishi Heavy Industries, Ltd. ("MHI"), also contests the Department's determination to reopen for reconsideration the sunset review. Lastly, Plaintiff/Defendant—Intervenor Goss International Corporation ("Goss") challenges Commerce's conclusion that the record compiled in the changed circumstances review supported a finding that TKS did not intentionally withhold information relevant to the 1998-1999 and 1999-2000 reviews, and the resulting determination not to apply adverse facts available ("AFA") in those reviews. For the reasons given below the Final Results are affirmed in part and overturned in part.

II. Procedural History

On September 4, 1996, the Commerce Department issued an amended final determination and AD order on large newspaper printing presses ("LNPPs") from Japan, which covered TKS and MHI.¹ Notice of Antidumping Duty Order and Amended Final Determination of Sales at Less Than Fair Value: Large Newspaper Printing Presses and Components Thereof Whether Assembled or Unassembled, from Japan, 61 Fed.Reg. 46,621-01 (Dep't Commerce Sept. 4, 1996). Over subsequent years, Commerce conducted three administrative reviews of TKS pursuant to 19 U.S.C. § 1675(a), covering the periods 1) from September 1, 1997 to August 31, 1998; 2) from September 1, 1998 to August 31, 1999; and 3) from September 1, 1999 to August 31, 2000. See Large Newspaper Printing Presses and Components Thereof Whether Assembled or Unassembled, from Japan: Initiation of Changed Circumstances Review, 70 Fed.Reg. 24,514-01, 24,514 (Dep't Commerce May 10, 2005) ("Changed Circumstances Review Initiation"). TKS received a zero margin in each investigation, see id., which led the Department, on January 16, 2002, to revoke the AD order with respect to TKS pursuant to 19 C.F.R. § 351.222(b)(2). Large Newspaper Printing Presses and Components Thereof Whether Assembled or Unassembled, from Japan: Final Results of Antidumping Duty Administrative Review and Revocation in Part, 67 Fed.Reg. 2190-01 (Dep't Commerce Jan. 16, 2002) ("Partial Revocation Determination"). Barely over a month later, Commerce revoked the AD order entirely during a five-year sunset review pursuant to 19 U.S.C. § 1675(c)(3)(A).² Large Newspaper Printing Presses and Components Thereof Whether Assembled or Unassembled, from Japan (A-588-837) and Germany (A-428-821): Notice of Final Results of Five-Year Sunset Reviews and Revocation of Antidumping Duty Orders, 67 Fed. Reg. 8522-01 (Dep't Commerce Feb. 25, 2002) ("Full Revocation Determination").³

After learning of information arising from a recent federal court decision that found TKS provided false information to the government about their 1997-1998 sales,⁴ the Department self-initiated a changed circumstances review of the AD order⁵ with respect to the firms pursuant to 19 U.S.C. § 1675(b)(1). Changed Circumstances Review Initiation, 70 Fed. Reg. at 24,515; accord I & D Memo. at 4-5; see also Goss Int'l Corp. v. Tokyo Kikai Seisakusho, Ltd., 321 F.Supp.2d 1039 (N.D.Iowa 2004), aff'd sub nom. Goss Int'l Corp. v. Man Roland Druckmaschinen Aktiengesellschaft, 434 F.3d 1081 (8th Cir.2006), cert. denied sub nom. Tokyo Kikai Seisakusho, Ltd. v. Goss Int'l Corp., ___ U.S. ___, 126 S.Ct. 2363, 165 L.Ed.2d 280 (2006). In its preliminary results, Commerce found that

TKS granted [the Dallas Morning News] a $1 million rebate and credits for spare parts tied to the sale reviewed, yet it did not disclose this information in its questionnaire responses submitted in the 1997-1998 administrative review. TKS was specifically asked in the questionnaire issued in the 1997-1998 administrative review whether it had granted any discounts or rebates in connection with the subject sale. TKS unequivocally stated that "TKS did not provide any discounts to the contract price" and "TKS did not provide any rebates to the contract price."

Large Newspaper Printing Presses and Components Thereof Whether Assembled or Unassembled, from Japan: Preliminary Results of Changed Circumstances Review, 70 Fed.Reg. 54,019-01, 54,021 (Dep't Commerce Sept. 13, 2005) (citations omitted) ("Preliminary Results"). Consequently, Commerce preliminarily determined that TKS' actions warranted application of an AFA rate of 59.67 percent in the 1997-1998 administrative review. See id. at 54,022. It also decided that this change, which meant that TKS no longer enjoyed a rate of zero for three consecutive administrative reviews, necessitated a recision of the revocation of the AD order with respect to TKS. See id. at 54,023; see also Partial Revocation Determination, 67 Fed.Reg. 2190-01. This TKS-specific recision would reinstate the order with respect to TKS from September 1, 2000 through September 3, 2001. Finally, the Department determined that if the Preliminary Results were affirmed, the agency would reconsider the sunset review that fully revoked the AD order. See Preliminary Results, 70 Fed.Reg. at 54,023; see also Full Revocation Determination, 67 Fed. Reg. 8522-01.

On March 8, 2006, Commerce affirmed the Preliminary Results in their entirety. Final Results, 71 Fed.Reg. at 11,590. Plaintiffs then brought suit in this Court.

III. Jurisdiction & Standard of Review

This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1581(c). The court "must sustain `any determination, finding or conclusion found' by Commerce unless it is `unsupported by substantial evidence on the record, or otherwise not in accordance with the law.'" Fujitsu Gen. Ltd. v. United States, 88 F.3d 1034, 1038 (Fed.Cir.1996) (quoting 19 U.S.C. § 1516a(b)(1)(B)). Substantial evidence consists of "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927, 933 (Fed. Cir.1984) (quoting Consol. Edison Co. of N.Y. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938)) (quotations omitted). "[T]he possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence." Id. (quoting Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 619-20, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966)) (quotations omitted). The court therefore "affirms Commerce's factual determinations so long as they are reasonable and supported by the record as a whole, even if there is some evidence that detracts from the agency's conclusions." Olympia Indus., Inc. v. United States, 22 CIT 387, 389, 7 F.Supp.2d 997, 1000 (1998) (citing Au. Sugar, Ltd. v. United States, 744 F.2d 1556, 1563 (Fed.Cir.1984)). It may not "substitut[e] its judgment for that of the agency." Hangzhou Spring Washer Co. v. United States, 29 CIT ___, ___, 387 F.Supp.2d 1236, 1251 (2005) (citing Koyo Seiko Co. v. United States, 36 F.3d 1565, 1570 (Fed.Cir.1994)).

When the court examines the lawfulness of Commerce's statutory interpretations and regulations, it must employ the two-step test established in Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). See Pesquera Mares Australes Ltda. v. United States, 266 F.3d 1372, 1380 (Fed.Cir.2001). First, the court must examine "whether Congress has directly spoken to the precise question at issue." Chevron, U.S.A., Inc., 467 U.S. at 842, 104 S.Ct. 2778. If it has, the agency and the court must comply with the clear intent of Congress, see id. at...