Torrington Co. v. U.S.

• Citation: 44 F.3d 1572
• Parties: The TORRINGTON COMPANY, Plaintiff-Appellant, and Federal-Mogul Corporation, Plaintiff, v. The UNITED STATES, Defendant-Appellee, and SKF USA Inc. and SKF (U.K.) Limited, Defendants-Appellees. 94-1117. Federal Circuit
• Decision Date: 13 January 1995
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Page 1572

44 F.3d 1572

16 ITRD 2313

The TORRINGTON COMPANY, Plaintiff-Appellant and Federal-Mogul Corporation, Plaintiff, v. The UNITED STATES, Defendant-Appellee and SKF USA Inc. and SKF (U.K.) Limited, Defendants-Appellees.

94-1117.

United States Court of Appeals,Federal Circuit.

Jan. 13, 1995.

Terence P. Stewart, Stewart & Stewart, of Washington, DC, argued for plaintiff-appellant. With him on the brief were James R. Cannon, Jr. and Patrick J. McDonough. Of counsel was Myron A. Brilliant.

Velta A. Melnbrencis, Asst. Director, Commercial Litigation Branch, Dept. of Justice, of Washington, DC, argued for defendant-appellee. With her on the brief were Frank W. Hunger, Asst. Atty. Gen. and David M. Cohen, Director. Also on the brief were Stephen J. Powell, Chief Counsel for Import Admin., Berniece A. Browne, Sr. Counsel and Dean A. Pinkert, Attorney-Advisor, Office of the Chief Counsel for Import Admin., U.S. Dept. of Commerce, of counsel. Herbert C. Shelley, Howrey & Simon, of Washington, DC, argued for defendants-appellees. With him on the brief was Alice A. Kipel.

Before ARCHER, Chief Judge, RADER, and SCHALL, Circuit Judges.

RADER, Circuit Judge.

The Torrington Company (Torrington) appeals the judgment of the United States Court of International Trade rejecting Torrington's and Federal-Mogul Corporation's challenge to an antidumping administrative review. Torrington Co. v. United States, 824 F.Supp. 1095 (Ct.Int'l Trade 1993) (Torrington I ), after remand, 834 F.Supp. 1405 (Ct.Int'l Trade 1993) (Torrington II ). The Court of International Trade refused to reach Torrington's challenge to the International Trade Administration's (ITA) method of calculating the assessment rate and cash deposit rate for imported merchandise because it was moot. The Court of International Trade also affirmed ITA's decision to adjust the foreign market value of the bearings for imputed inventory carrying costs. This court affirms.

BACKGROUND

Antidumping laws protect domestic industries from actual, or likely, sales of imported goods at less than fair value. 19 U.S.C. Sec. 1673. ¹ When the International Trade Commission finds that imports injure or threaten to injure United States industry, Title 19 authorizes imposition of a special duty on such imported goods. This antidumping duty equals the amount by which the foreign market value of the merchandise exceeds the United States price. Id.

ITA, an agency of the Department of Commerce, determines the foreign market value and the United States price of imported products. Foreign market value generally refers to the price of the merchandise in the home market of the exporting foreign country. 19 U.S.C. Sec. 1677b(a)(1)(A). In the absence of sufficient home market sales, ITA bases foreign market value on either the sales price in countries other than the United States, 19 U.S.C. Sec. 1677b(a)(1)(B), or a "constructed value," 19 U.S.C. Sec. 1677b(a)(2).

ITA calculates United States price in terms of (i) the purchase price or (ii) the exporter's sales price. 19 U.S.C. Sec. 1677a. Purchase price sales occur between a foreign manufacturer and an independent United States importer. Purchase price is the "actual or agreed-to price between the foreign producer and the independent importer, prior to the time of importation." Smith-Corona Group v. United States, 713 F.2d 1568, 1572, 1 Fed.Cir. (T) 130, 133 (1983), cert. denied, 465 U.S. 1022, 104 S.Ct. 1274, 79 L.Ed.2d 679 (1984); 19 U.S.C. Sec. 1677a(b). Exporter's sales price sales, on the other hand, occur between a foreign manufacturer and its related importer, such as a United States subsidiary. Exporter's sales price is "the price at which the foreign manufacturer or its agent sells or agrees to sell the merchandise in the United States." Ad Hoc Comm. of AZ-NM-TX-FL Producers of Gray Portland Cement v. United States, 13 F.3d 398, 399 n. 2, --- Fed.Cir. (T) ----, ---- n. 2 (1994) (citing Zenith Elecs. Corp. v. United States, 988 F.2d 1573, 1577, --- Fed.Cir. (T) ----, ---- (1993)); 19 U.S.C. Sec. 1677a(c). To calculate exporter's sales price, ITA first measures the price at which goods are ultimately resold to an independent party in the United States. This price is then subject to several mandatory statutory adjustments to arrive at exporter's sales price. Thus, as with purchase price sales, ITA arrives "at a United States price that reflects the price that the [goods] would command in 'an arms-length transaction, whether from the importer to an independent retailer or directly to the public.' " Koyo Seiko, Co. v. United States, 36 F.3d 1565, 1567, --- Fed.Cir. (T) ----, ---- (1994) (quoting Smith-Corona, 713 F.2d at 1572).

"To ensure that the quantum of antidumping duties is calculated in a fair manner," ITA adjusts both foreign market value and United States price. Koyo Seiko, 36 F.3d at 1568.

Foreign market value and United States price represent prices in different markets affected by a variety of differences in the chain of commerce by which the merchandise reached the export or domestic market. Both values are subject to adjustment in an attempt to reconstruct the price at a specific, "common" point in the chain of commerce, so that value can be fairly compared on an equivalent basis. While the statute does not specify where in the chain of commerce price is constructed, the specific statutory adjustments appear to indicate an 'f.o.b. foreign port' price.

Smith-Corona, 713 F.2d at 1571-72 (emphasis in original); see 19 U.S.C. Sec. 1677a(d) (adjustments applicable to both purchase price and exporter's sales price); 19 U.S.C. Sec. 1677a(e) (adjustments applicable to exporter's sales price); 19 U.S.C. Sec. 1677b(a)(4) (adjustments applicable to foreign market value).

After making these price adjustments, ITA calculates the dumping margin by subtracting the United States price from the foreign market value. 19 U.S.C. Sec. 1675(a)(2). The dumping margin provides the basis for assessment of antidumping duties. It also provides the basis for cash deposits of estimated duties for future entries. Id.

The antidumping duty order at issue covers imports of antifriction bearings from the United Kingdom. Ball Bearings and Cylindrical Roller Bearings and Parts Thereof From the United Kingdom, 54 Fed.Reg. 20,910 (Dep't Comm.1989). SKF (U.K.) Ltd. exported goods covered by the duty order from the United Kingdom, and SKF USA Inc. sold them in the United States. Id. SKF (U.K.) Ltd. and SKF USA Inc. are defendant intervenors in this case.

ITA initiated its first administrative review of the order on June 11, 1990. Antifriction Bearings (Other than Tapered Roller Bearings) and Parts Thereof From the Federal Republic of Germany, France, Italy, Japan, Romania, Singapore, Sweden, Thailand and the United Kingdom, 55 Fed.Reg. 23,575 (Dep't Comm.1990) (initiation of antidumping admin. reviews). This review covered antifriction bearings imported between November 9, 1988 and April 30, 1990. Id. ITA published its preliminary determination on March 15, 1991. Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From the United Kingdom, 56 Fed.Reg. 11,197 (Dep't Comm.1991) (preliminary results of antidumping duty admin. reviews) (Preliminary Results ). On July 11, 1991, ITA reported the final results of its administrative review. Antifriction Bearings (Other than Tapered Roller Bearings) and Parts Thereof From the United Kingdom, 56 Fed.Reg. 31,769 (Dep't Comm.1991) (final results of antidumping duty admin. reviews) (Final Results ).

ITA calculated duty assessment rates for exporter's sales price sales during the period of review and cash deposit rates for estimated duties on future entries. Final Results, 56 Fed.Reg. at 31,771-72. ITA based both calculations on potential uncollected dumping duties (PUDD), measured generally as the difference between foreign market value and United States price. Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From the Federal Republic of Germany, 56 Fed.Reg. 31,692, 31,698 (Dep't Comm.1991) (final results of antidumping duty admin. review) (Issues Appendix ) (explaining how ITA calculated assessment rate and cash deposit rate). ² ITA did not, however, use the same method to calculate duty assessment rates and cash deposit rates. Final Results, 56 Fed.Reg. at 31,771-72. ITA calculated the assessment rate for exporter's sales price sales by dividing the total PUDD for each importer by the total entered value of its reviewed sales. Id. To compute the cash deposit rate, however, ITA divided the total PUDD for each exporter by the total United States price value for that exporter's sales during the review period. Id. In sum, ITA calculated the assessment rate as a percentage of entered value and the cash deposit rate as a percentage of United States price. ITA explained this difference:

Section 731 of the Tariff Act [19 U.S.C. Sec. 1673] defines an antidumping duty as the amount by which foreign market value exceeds United States price. As the Department has stated on numerous occasions, duty deposits are merely estimates of future dumping liabilities.

Issues Appendix, 56 Fed.Reg. at 31,699 (emphasis added).

To arrive at the appropriate assessment and cash deposit rates, ITA first had to calculate the United States price and the foreign market value. When calculating the United States price based upon exporter's sales price transactions, ITA adjusted the exporter's sales price for inventory carrying costs. ITA also made a corresponding deduction to the foreign market value. Issues Appendix, 56 Fed.Reg. at 31,727; see Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From United Kingdom, 56 Fed.Reg. 11,197 (Dep't Comm.1991) (prelim. results of antidumping duty admin. review). ITA measured the inventory carrying costs from the date the exporter completed production of the merchandise. Issues Appendix, 56 Fed.Reg. at 31,727.

ITA...