Transcom, Inc. v. U.S.

• Decision Date: 27 June 2002
• Docket Number: No. 01-1138.,01-1138.
• Citation: 294 F.3d 1371
• Parties: TRANSCOM, INC., Plaintiff-Appellant, and L & S Bearing Company, Plaintiff, v. UNITED STATES, Defendant-Appellee, and The Timken Company, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1371

294 F.3d 1371

TRANSCOM, INC., Plaintiff-Appellant, and L & S Bearing Company, Plaintiff, v. UNITED STATES, Defendant-Appellee, and The Timken Company, Defendant-Appellee.

No. 01-1138.

United States Court of Appeals, Federal Circuit.

June 27, 2002.

George W. Thompson, Neville, Peterson & Williams, of Washington, DC, argued for plaintiff-appellant. With him on the brief were John M. Peterson, and Curtis W. Knauss.

Henry R. Felix, Trial Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, of Washington, DC, argued for defendant-appellee United States. With him on the brief were Stuart E. Schiffer, Acting Assistant Attorney General; David M. Cohen, Director; and Velta A. Melnbrencis, Assistant Director. Of counsel on the brief was William Isasi, Attorney, Office of the Chief Counsel for Import Administration, Department of Commerce, of Washington, DC.

Wesley K. Caine, Stewart and Stewart, of Washington, DC, argued for defendant-appellee The Timken Company. With him on the brief were Terence P. Stewart, Amy S. Dwyer and Patrick John McDonough. Of counsel was Amy A. Karpel.

Before SCHALL, Circuit Judge, ARCHER, Senior Circuit Judge, and BRYSON, Circuit Judge.

BRYSON, Circuit Judge.

In a review of an antidumping order, the Commerce Department determined that two Hong Kong resellers of tapered roller bearings from the People's Republic of China ("PRC" or "China") were subject to a dumping margin calculated using the "best information available" ("BIA"). Transcom, Inc., which purchased tapered roller bearings from the two Hong Kong resellers for importation into this country, challenged Commerce's determination before the Court of International Trade, which upheld Commerce's decision. We agree with the Court of International Trade that Commerce provided the degree of notice required by statute and regulation, and that the use of a BIA-based antidumping rate was not unlawful.

I

A

In an antidumping investigation covering goods exported from a country with a market-based economy, Commerce sets individual antidumping duty rates for investigated companies. Entries from other companies are subject to an "all others" rate, which is typically computed as a weighted average of the individual rates. Thereafter, a company is subject to either its individual rate or the all others rate unless the rate is changed as a result of an administrative review of the dumping order conducted pursuant to 19 U.S.C. § 1675. An interested party, typically a member of the affected domestic industry, may request a review of a particular exporter if it believes the current rate for that exporter is too low. Conversely, an exporter may request a review of its own exports if it believes its rate is too high.

Before 1991, Commerce used the combination of individual rates and an all others rate for antidumping investigations of imports not only from market economy countries, but also from countries with nonmarket economies ("NMEs") such as China. In 1991, however, Commerce reversed course and decided that individual rates were not appropriate in an NME setting. See Iron Construction Castings From the People's Republic of China; Final Results of Antidumping Duty Administrative Review, 56 Fed.Reg. 2742, 2744 (Jan. 24, 1991); Final Determination of Sales at Less than Fair Value: Sparklers From the People's Republic of China, 56 Fed.Reg. 20,588, 20,589 (May 6, 1991). Instead, Commerce determined that NME exporters would be subject to a single, countrywide antidumping duty rate unless they could demonstrate legal, financial, and economic independence from the Chinese government (referred to by Commerce as "the NME entity"). 56 Fed. Reg. at 2744.

This court upheld the application of this "NME presumption" in Sigma Corp. v. United States, 117 F.3d 1401 (Fed.Cir.1997). Under the NME presumption, a company that fails to demonstrate independence from the NME entity is subject to the countrywide rate, while a company that demonstrates its independence is entitled to an individual rate as in a market economy. Id. at 1405-06. The Court of International Trade has stated that when an NME rate is used in conjunction with individual rates, it is unnecessary for Commerce to calculate an all others rate since all exporters have, at least in theory, been reviewed. Transcom, Inc. v. United States, 5 F.Supp.2d 984, 989 (Ct. Int'l Trade 1998).

B

In 1986, Commerce launched an antidumping investigation of Chinese-manufactured tapered roller bearings in response to a request from the Timken Company, a domestic producer of tapered roller bearings. The investigation ultimately led to the establishment of dumping margins for two entities. The first, the state-controlled China National Machinery and Equipment Import and Export Corporation ("CMEC"), which was then the only exporter of tapered roller bearings from China, received an antidumping duty rate of 4.69%. The second, Premier Bearing & Equipment, Ltd. ("Premier"), a Hong Kong-based trading company, received an antidumping duty rate of 0.97%. Commerce also established an all others rate of 2.96% for other potential Chinese exporters of tapered roller bearings. Tapered Roller Bearings From the People's Republic of China; Amendment to Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order in Accordance With Decision Upon Remand, 55 Fed.Reg. 6669 (Feb. 26, 1990).

The final results of the first two annual reviews, which covered the period from February 1987 to May 1989, were published on January 2, 1991. In those reviews, Commerce had not yet begun the practice of applying the NME presumption. The reviews, which covered only Premier, left intact both Premier's antidumping duty rate of 0.97% and the all others rate of 2.96%. Commerce also established a "new shipper rate" of 0.97% for exporters whose first shipment from China occurred after May 31, 1989. Final Results of Antidumping Duty Administrative Reviews: Tapered Roller Bearings and Parts Thereof From the People's Republic of China, 56 Fed.Reg. 66 (Jan. 2, 1991).

In the third administrative review, which covered the period from June 1989 to May 1990, Commerce changed its methodology for setting rates. In response to requests from various Chinese exporters, Commerce established eight company-specific dumping margins. Commerce also explained that it was abandoning its use of the new shipper rate. Instead, Commerce stated that all shippers not having an individual rate would be subject to the all others rate, which would be equal to the highest rate for any reviewed firm and adjusted accordingly in each successive administrative review. Commerce therefore changed the rates for all Chinese exporters of tapered roller bearings, even though some of the affected companies were not listed in the notice of initiation for the review. Final Results of Antidumping Duty Administrative Review: Tapered Roller Bearings and Parts Thereof From the People's Republic of China, 56 Fed. Reg. 67,590 (Dec. 31, 1991).

On appeal of the third administrative review, the Court of International Trade held that Commerce could not use the all others rate to adjust dumping margins for companies outside the scope of the review. UCF Am. Inc. v. United States, 870 F.Supp. 1120, 1128 (Ct. Int'l Trade 1994) ("UCF I"). Accordingly, Commerce reinstated the 2.96% rate for those exporters on remand. In doing so, however, Commerce labeled that rate a "PRC rate" rather than an "all others" rate. The Court of International Trade struck down that practice, noting that a single countrywide rate did not take into account independent exporters within China and would lead to excessive complexity in conducting administrative reviews. UCF Am. Inc. v. United States, 919 F.Supp. 435, 440-41 (Ct. Int'l Trade 1996) ("UCF II").

Before the completion of judicial review of the results of the third administrative review, Commerce initiated the fourth, fifth, and sixth administrative reviews, covering June 1990 through May 1993. In the notices of initiation for each of those reviews, Commerce listed 43 companies that it believed were exporters of tapered roller bearings. Commerce grouped the three review periods together in announcing its final results. Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China; Final Results of Antidumping Duty Administrative Reviews, 61 Fed. Reg. 65,527 (Dec. 13, 1996).

Despite the court's disapproval of a single countrywide rate in UCF II, Commerce persisted. It announced that the PRC rate would be applicable to all exporters unless they had demonstrated their independence from the NME entity. Commerce stated that the NME presumption applied to a company whether or not it was named in the notice of initiation for a review and whether or not it had received a questionnaire from Commerce. Commerce also stated that non-Chinese exporters of tapered roller bearings would be subject to the rates applicable to their Chinese suppliers.

During the fourth, fifth, and sixth review periods, Transcom had entries from companies that, although not listed in the notices of initiation for those reviews, were subject to the PRC rate. Transcom appealed. The Court of International Trade, which had previously struck down the use of the PRC rate in UCF II, upheld Commerce's determinations in the fourth, fifth, and sixth reviews "in the interest of efficient administration of the dumping law to NMEs," citing this court's endorsement of the NME presumption in the Sigma case. Transcom, Inc. v. United States, 5 F.Supp.2d at 989.

This court reversed, although not with respect to the use of the NME presumption itself. Instead, we held that because Transcom's exporters were not named in the notices of initiation, their rates could not be adversely affected. Transcom, Inc. v. United States, 182 F.3d 876, 881 (Fed. Cir.1999) ("Transcom had no reason to expect that the antidumping duties on its...