Slip Op. 09-91 UNITED STAT ES COURT OF INTERNATIONAL TRADE

____________________________________ : NSK CORPORATI ON, e t al

. , : : Pla int if fs , :

: an d : : FAGI TAL I A SpA, e t al

. , : : Pla int if f- Inte rv e no rs , :

: Before: Judith M. Barzilay, Jud ge v . : Consol. Court No. 06-00334 : UN I TE D ST AT ES, : : De fe nd ant, : : an d : : THE TI MKEN COMPANY, : : Def endant- Interve nor. : ____________________________________:
OP IN ION & O RD ER [Defenda nt’s Remand De termination is not supported by substantial evidence or in ac corda nce with law and is, there fore , rema nded.] Dated: August 31, 2009
Cro we ll &Mo ring LLP

( Ma tth e w P. J

aff e , Ro be rt A . Li

ps te in , and Carrie F. Fletcher), for Plaintiffs NSK Corporation, NSK L td., and NSK Europe L td. Sid le yAu sti n LLP

( Ne il R . E lli

s and J ill Cai az zo ), f o r P l a i n t i f f s J T E K T C o r

p o r a t i o nan d

K o yo Corporation of U.S.A.Consol. Court No. 06-00334 P age 2

Th e I TC i s an in de pe nd e nt f e de ra l a g e nc y

of De fe nd ant Unit e d St a te s th a t is re sp on sib le 1 for makingthe deter

mination that is t he subjec t of this disput e. Grun fe ld, De sid e rio , Le bo witz

, S ilv e rm an &Kle

sta dt, LLP

( Max F. Sc hutzman and An dr e w T. Sc hu tz ), for

Plaintiff-Interve nors FA G I talia SpA, Schaef fler G roup USA, Inc., Schae ffler KG, The B arde n Corporation (U.K .) Ltd., and The B arde n Corporation. Steptoe &Johnson (

Herbe rt C. Shelley , Alice A. Kipel , and Susan R. Gihring), for PlaintiffInterve nors SKF Ae roeng ine B earings U K and SKF USA, Inc. United States International Trade Commission , Jame s M. Lyons (Ge nera l Counsel), Neal J. Re y no lds (Assistant Gene ral Counsel for L itigation), Da v id A.J. Goldfine , and Mark B. Re es , Of fi c e of the Ge ne ra l Co un se l, f

or De fe nd ant Unit e d St a te s. Ste war t an d S

te war t ( Te re nc e P. Ste war t , Eric P. Salonen , and El iza be th A . A rge nti ), for D e f e n d an t - In t e r

v e n o r T h e T i m k e nC o mp an y.
BA RZIL AY, JUD GE : This case r eturns to the cour t following the U.S. I nternational Trade Commi ssion’s (“I TC”) re mand deter mination on the second five -y ear , or “sunse t,” re view of c e rt a in a nti dumpi ngduty

or de rs c ov e ri ngba ll b e ari ng s f ro m Jap an a

nd the Un ite d K ing do m. 1 Certain Ball Bearings and Parts Ther [ e ] of from Japan and the United Kingdom , USI TC Pub. 4082, Inv. Nos. 731-TA- 394-A, 731-T A-399-A(May 2009), available at http:// www.usitc.g ov/publications/701_731/pub4082.pdf (“Remand D etermination ”). I n NSK Corp. v. United States , 32 CI T ___, 577 F. Supp. 2d 1322 (2008) (“ NSK I ”), a nd as fur ther
c l ar i f i e d b y NSK Corp. v. United States , 32 CI T ___, 593 F. Supp. 2d 1355 (2008) (“ NSK II ”), the cour t affir med in part, a

nd rema nded in par

t, the I TC’s second sunse t reviewof the subjec t antidumping duty

order s. The foc us of the thre e issues re manded to the I TC center ed on the prese nce a

nd eff ect of signific ant numbers of

non-subject imports in the domestic marke t and the eff ect of signific ant re structuringin the domestic ball bea ringindustry . Upon consider ation ofConsol. Court No. 06-00334 P age 3

De fe nd ant- Inte rv e no r T he Ti mke n Co mpa ny (“ Ti mke n” ), wh o jo ins thi s p ro c e e din g a s a 2 matter of r ight unde r USCI T Rule 24, ag ree s with the I TC’s final re sults described in the Remand Determ ination
. NSK Corporation is a U.S. company that produce s ball bear ings dome stically and 3 imp or ts the se pr od

uc ts f ro m it s si ste r c omp anie s – NSK L td. , a Japa ne se c or po ra tio n, and NSK Europe Ltd., a B ritish corporation. NSK L td. is a party to the prese nt action, while NSK Europe L td. is a party

in Court No. 06-00336, which joins this case pur suant to USCI T R. 42(a). J T E K T C o r

p o r at i o ni s a

J a p an e s e m anu f

a c tur e r a n d e x p o rt e r o f b a l l b e ar i n g s , an d

K o yo 4 Corporation of U.S.A. is a dome stic importer of suc h products. B oth J TEKT Corporation and Koy o Corporation of U.S.A. a re pla intiffs in Court No. 06-00335, a ca se that the c ourt consolidated with the a ction here . USCI T R. 42(a). the cour t’s rema nd instructions in the two cited ca ses, the I TC ag ain deter mined that revoc ation of the a ntidumping duty

order s would be likely

to lead to continuation or re curr ence of mater ial injury to the domestic industry

within a rea sonably

fore seea ble time. Remand D etermination at

2 1. Pla int if

fs NSK Cor po ratio n, NSK

L td. , N SK E ur op e L td. (t og e the r, “ NSK ” ), a lon g wi th 3 J TEKT Corporation and Koyo Corporation of U.S.A. ( collectively , “JTEKT”), challeng e the 4 I TC’ s r e mand

de te rm inatio n, arguin g that it is uns up po rt e d b y

su bs tanti a l e vid e nc e and

no t in
acc ordanc e with law. The court finds that the I TC’s rema nd deter mination is neither supported by substantial evidence or in ac corda nce w ith law for the r easons e x plained her ein, and ther efor e
re mand s th e c a se to t

he a g e nc y fo r a se c on d ti me to c on du c t f ur the r p ro c e e din g s c on sis te nt w ith this opini on. I. Bac kgr ound A . Th e R o le o f t he U . S. I nt e r na t io na l T r a de C o m m is s io n i n a Su ns e tR e v ie w Ev e ry fi ve y e ars fo llo wi ngthe ini tia l pu bli c a tio n o f a

n a nti dumpi ngduty

or de r, the U. S. De pa rtme nt o f C omm e rc e (“ Comme rc e ” ) a nd the I TC m

us t c on du c t a

suns e t r e vie w. 19 U. S.C.Consol. Court No. 06-00334 P age 4

§ 1675(c) . More spe cifica lly , for a n antidumping duty

order to remain in ef

fec t, (1) Commerce
mus t a ff ir mativ e ly de te rm ine that dumpi ngof the su bje c t me rc ha

nd ise “ wo uld

be lik e ly to
c on tin ue or re c ur ,” and

(2 ) t he I TC m us t si mil arl y

fi nd that th e su

bje c t im po rt s w ou ld b e lik e ly

to
c on tin ue or c a us e mate ri a l in

jur y to t he do me sti c ind

us tr y in t he a bs e nc e of the anti dumpi ngduty
or de r. § 1 67 5( d) (2 ). In o the r w or ds , th e c e ntr a l ta sk of the I TC i n a

suns e t r e vie w i s to de te rm ine wh e the r t

he su bje c t me rc ha

nd ise wo uld

lik e ly c on tin ue to m a te ri a lly

inj ur e or c a us e materia l injury

to the domestic industry

if Commerce revoke d the antidumping duty order
. § 1 67 5( d) (2 )( B ). To make a pr op e r i nju

ry de te rm inatio n, the I TC m us t “ c on sid e r t

he lik e ly volume, price eff

ect, a nd impact of imports of the subjec t mercha ndise on the [domestic] industry if the or de r i s r e vo ke d .
. . .” 19 U. S.C. § 1 67 5a (a )( 1) . T he I TC m us t w e ig h nume ro us fa c tor s in
m ak i n g th atd et erm i n at i o n , i n cl u d i n g (A) its prior injury

deter minations, including the volume, pric e ef fec t, and impact of imports of the subjec t mercha ndise on the industry

befor e the or der w as issued . . . , (B ) whe ther a

ny improvement in the state of the industry

is related to the order . . . , (C ) whe the r t

he ind us tr y is vuln e ra

ble to m a te ri a l in

jur y if the or de r i s revoke d . . . , and (D) in a n antidumping pr ocee ding unde r [§ 1675(c)] . . . , the finding s of [C ommerce ] reg ardingduty absorption under

[§ 1675(a)(4) ] . . . . § 1675a(a )(1) (A)- (D). While the I TC must consider all of the f actor s enumerated in the statute, no one fa ctor is nec essar ily dispositi ve: [t ]he presenc e or a

bsence of any

fac tor which the [I TC] is require d to consider under [§ 1675a(a )] shall not necessar ily g ive dec isive g uidance with respec t to the [I TC’s] determination of whethe r mater ial injury is likely to continue or re cur within a rea sonably

fore seea ble time if the orde r is revoke d . . . . In making that deter mination, the [ I TC] shall consider that the eff ects of r evocation . . . may not be imminent, but may

manifest themselve s only over a longe r per iod of time. § 1675a(a )(5)
.Consol. Court No. 06-00334 P age 5

B. Th e Or ig in a l A nt id um pi ng D ut y Or de r & Su bs e qu e ntR e v ie ws In 1 98 9, Comme rc e iss ue d a n a nti dumpi ngduty

or de r c ov e ri ngba ll b e ari ng s f ro m, amongother nations, J apan a nd the United King dom. An tid um ping D uty

Or de rs: Ba ll B e ar ing

s, Cylindrical Roller Bearings, and Spherical Plain Bearings and Parts T hereof From theFede ral Republic of Ge rmany, France, Italy, Japan, Rom ania, Singapore, Sweden, Thailand, and the United Kingdom , 54 Fe d. Reg . 20,900, 20,900-911 (De p’t Commerce May 15, 1989). The I TC ini tiate d th e fi rs t se t of

suns e t r e vie ws purs ua

nt t o § 16 75 (c ) i n 1 99 9, wi th t he a g e nc y ult imate ly deter mining that the r evocation of the antidumping duty order s would likely

lead to continuation
or re curr ence of mater ial injury to the U.S. ball bear ing industry
. See Continuat ion of Antidumping Duty Orders: Certain Bearings From Franc e, Ge rmany, Italy, J apan, Singapore, the United Kingdom, and the People 's Republic of Chi na , 65 Fe d. Reg . 42,665, 42,665 (De p’t Commerce July

11, 2000). In J une 2005, the I TC automatically initiated a sec ond sunset revie w of the a ntidumping duty

order s. See Ce rtain Bearings From China, France, Germany , Italy, Japan, Singapore, and the U nited Kingdom , 70 Fe d. Reg . 31,531, 31,532 (I TC J une 1, 2005). Approxim ately

one y ear later, the I TC made an a ffirmative deter mination that the revoc ation of the anti dumpi ngduty

or de rs wo uld

lik e ly le a d to c on tin

uatio n o r r e c ur

re nc e of mate ri a l in

jur y to the domestic industry
. Certain Bearings From China, France, Germ any, Italy, J apan, Singapore, and the United Kingdom , 71 Fe d. Reg . 51,850, 51,850 (I TC Aug . 31, 2006). Plaintiffs NSK and J TEKT ther eaf ter filed suit to cha lleng e the f inal results of the se cond sunset revie w.Consol. Court No. 06-00334 P age 6

C. P roce dural Hi story In NSK I , the cour t affir med in part, a

nd rema nded in par

t, the I TC’s second sunse t de te rm inatio n. 32 CI T _

__ , 5 77 F . Su

pp . 2 d 1 32 2. Spe c if

ic a lly , th e c ourt

or de re d th e I TC t o addre ss three issues on r emand. F irst, the court dire cted the I TC to reeva luate whe ther the
revoc ation of the a

ntidumping duty

order would be likely

to lead to continuation or re curr ence of
mate ri a l in

jur y to t he do me sti c ind

us tr y g ive n th e signif

ic ant p re se nc e of

no n- su bje c t im po rt s in the domestic marke t. Id. , 32 CI T at ___, 577 F . Supp. 2d at 1330-34. The c ore of that instruction directe d the I TC to reconsider whether , in light of the sig nificant pre sence of nonsubject imports, the subject imports are more than a mere tang ential fa ctor in the mate rial injury to t he do me sti c ind

us tr y that is lik e ly

to c on tin ue or re c ur in t he a bs e nc e of the anti dumpi ngduty order
. Se e id . Second, the c ourt instructed the I TC to reasse ss the supply conditions within t he domestic marke t, with a particula r eye towar ds ree x amining the ag ency ’s vulnera bility and impact finding s g iven the sig nificant re structuringwithin the globa l ball bear ing industry
. Id. , 32 CI T at __ _, 57 7 F . Su

pp . 2 d at 13 38 -3 9. F ina lly , th e c ourt dir e c te d th e I TC t o r e c on sid e r i ts discernible a dverse impact ana ly sis and decision to cumulate ba ll bearing s from the United Ki ng do m w ithoth e r s ub

je c t im po rt s b e c a

us e the a g e nc y ’s ana ly sis on thi s is su e wa s in c omp le te without a more scr

upulous ex amination of the sig nificant rise in non-subject imports and the larg e-sc ale r estructur ing w ithin the ball bearingindustry
. Id. , 32 CI T at ___, 577 F . Supp. 2d at 1337-38. In NSK II , Def endant a nd Def endant- Interve nor aske d the cour t to reconsider

its decision in NSK I in view of a

n alleg ed cha

ng e in the contr olling law – Mittal Steel Point Lisas Ltd. v.Consol. Court No. 06-00334 P age 7

United States , 542 F.3d 867 ( Fe d. Cir. 2008) (“ Mittal ” )
. 3 2 C IT _

_ _ , 5 9 3 F
. S u

p p . 2 d 1 3 5 5
. In response , the cour

t first expl ained in deta il the statutory demands plac ed on the I TC in a sunset revie w by §§ 1675(c) and 1675a( a). Id. , 32 CI T at ___, 593 F . Supp. 2d at 1363-67. Sections 1675(c) and 1675a( a) f

ocus on the issue of c ausation in a sunset re view, and the court noted that the ce ntral task for

the I TC is to di scer

n “whe ther the subjec t imports themselves would be a
s u b s t an t i a l f

a c t o r i nth e c a u s e o f i n j ur y t o th e d o m e s t i c i n d

u s tr y, r a th e r th ans o m e s e c o n d ar

y, ‘mere ly incidental, tang ential, or trivial fa ctor.’” Id. , 32 CI T at ___, 593 F . Supp. 2d at 1364-65 (citation omitted). That oblig ation, howeve r, does not mea n that the I TC must “identify and analy ze ever y fac tor that could potentially cause injury

to the domestic industry

[or] deter

mine that the subject mer chandise is the ‘sole or pr incipal ca use of injury .’” Id. , 3 2 C I T at__ _, 59 3 F. Sup p. 2d a t 13 65 (c itatio n o mitte d) . In c are fu lly e xpound ingthe a g e nc y ’s duty , th e c ourt pla inl y emphasized that the I TC i s n ot r e qu ir e d “ to a dd re ss t he c a us a tio n is su e in a

ny pa rt ic ula r w ay , o r t o apply a pre sumption t hat non-subjec t produce rs would have repla ced the subject imports if the subject imports had bee n remove d from the mar ket.” Mittal , 542 F .3 d at 87 8 ( fo otn ote omi tte d) . Rathe r, the pr ima ry re sp on sib ili ty

of the I TC i s “to consider

the ca usal relation between the subject imports and the injury to the domestic industry

. . . .” Id . at 87 7 ( e xpla ini ngthat [ Bratsk Aluminum Smelter v

. United States , 444 F.3d 1369 ( Fe d. Cir. 2006) (“ Brats k ”)] does not requir e the I TC to employ

a pre sumption t hat non-subjec t goods w ould replac e subjec t goods if the subject g oods were remove d from the mar ket). The I TC is sim ply

require d “to g ive full consider ation to the causation issue and to provide a me aning ful explanation of its conclusions.” Id . at 87 8 ( c itatio n o mitte d) . T he I TC f ulf ill s it s statutory duty by deter mining “whether

the subject imports wer e a substantial fac tor in t

he inj ur y to t he do me sti c ind

us tr y , a s o pp os e d to a

me re ly inc ide nta l, tang ential, or trivial fa ctor.” Id
. at8 7 9 (i n t er p re t i n g Brats k, 444 F.3d at 1373) (citations & quotations omit ted).Consol. Court No. 06-00334 P age 8

Id. , 32 CI T at ___, 593 F . Supp. 2d at 1366. The cour t went on to state that the F eder al Circuit’s opinion in Mi tta l did not constitut e an inter veningchang e in the contr olling law. Id. , 32 CI T at

__ _, 59 3 F . Su

pp . 2 d at 13 67 -7 2. I mpo rt antl y , th e I TC’ s d isc us sio n o f t he c ourt ’s ho ldi ng s in NSK II in i ts r e mand

ana ly sis is n oti c e a

bly sc ant. II. Su bjectMatt er Jurisdiction & Standard of Review Pursuant to 28 U.S.C. § 1581(c), the Court has e x clusive jurisdiction over a ny civil action
c omm e nc e d und e r s e c tio n 5 16 A o f t he Ta ri ff Ac t of 19 30 , c od if

ie d a s ame nd e d at 19 U. S.C. § 1516a, which pr ovides for judicia l reviewof, amongother proc eeding s, a sunset re view. § 1 51 6a (a )( 2) (B )( iii ). In r e vie wi ngon e of the I TC’ s su

ns e t de te rm inatio ns , th e Court wi ll h old unlawful a

ny deter mination that is “unsupported by substantial evidence on the re cord, or otherwise not in ac corda

nce w ith law.” § 1516a( b)(1) (B )(i). An ag ency

supports its determination and the finding s therein with substantial evidenc e when the r ecor d contains “more than a mer e scintilla” of pr oof that demonstrates to the court that
a re asonable mind might acc ept the re levant evide nce a s adequate to support the conc lusion. Consol. Edison Co. v. NLRB , 305 U.S. 197, 229 (1938). The mere asser tion of evidenc e which in and of itself justifies the ag ency ’s deter mination does not satisfy

the substantial evidenc e standard. See G erald Metals, Inc . v. United States , 132 F.3d 716, 720 ( Fe d. Cir. 1997) (“ Ge ra ld Me tal s ”). To pr ovide the re quisite support, the ag ency must offer mor e than c onjecture and
rea sonably

explain the basis for its decisions. See NMB Singapore Ltd. v. United States , 557 F.3d 1316, 1319- 20 (F ed. Cir. 2009) (c itation omit ted). “ [W ]hi le [the ag ency ’s] ex planations do not have to be pe rfe ct, the path of [i ts] decision must be re asonably discernible to a

revie wingConsol. Court No. 06-00334 P age 9

court.” NMB Singapore Ltd. , 5 57 F .3 d at 13 19 -2 0 ( c itatio n o mitte d) . Impo rt antl y , at a minimum , a dete rmination must necessar ily include an e x planation of the standa rds applied a

nd the ana ly sis leading to the conclusion, there by demonstratinga rational connec tion between the fac ts on the rec ord and the conclusions dra wn. See Matsushita Elec. Indus. Co., Ltd. v. United States , 750 F.2d 927, 933 ( Fe d. Cir. 1984). That ther e may be two inconsistent conc lusions drawn from the e vidence “does not pre vent an a dminist rative a g ency ’s findingfrom being supported by

substantial evidence .” Consolo v. Fed. Mar. Comm’n , 383 U.S. 607, 620 (1966) (citations omitted). Even whe re the re a re two f airly conflictingviews in the re cord, the court must not di splace the ag ency ’s choice for its own had the matter be en bef ore the bar de novo. See U niversal Camera Corp. v. NLRB , 340 U.S. 474, 488 (1951). Howe ver, the ag ency ’s dis c re tio n is no t un

bo un de d, and

the c ourt wi ll n ot a c c e pt a

de te rm inatio n th a t “ e nti re ly fa il[s] t o consider a

n important aspec t of the problem . . . .” Motor VehicleMfrs. Ass’n of U.S., Inc. v

. State Farm Mut. Auto. Ins. Co. , 463 U.S. 29, 43 (1983). An a g e nc y de te rm inatio n is in a c c or da nc e wi th l aw whe n th a t de c isi on is c on sti tut ion a l, and not contra

ry to statute, regulation, prec edent, or proce dures. Se e FCC

v . Ne x tW av e Pe rs. Commc’ns I

nc. , 537 U.S. 293, 300 (2003). The failure of an a g ency to candidly

comply with the ins tr uc tio ns in a

re mand or de r n ot o nly

sh ow s a dis re g ard fo r t he iss uin g c ourt ’s a

uth or ity , b ut i t is also an ac t that is contrary to law. See, e .g., Smith Corona Corp. v. United States , 915 F.2d 683, 688 (F ed. Cir. 1990) (notingthat a dec ision of the Court has controlling eff ect whe n rende red)
.Consol. Court No. 06-00334 P age 10

NSK’s comments on the Remand D etermination focus e x clusively on two of the 5 rema nded issues – the likely

impact of the subjec t imports and the supply conditions therein, and the cumulation of ba ll bearing s from the United K ingdom with other subject imports – where as JTEK T’ s c omm e nts c e nte r o n th e iss ue of c a us a tio n a nd the ro le of

no n- su bje c t im po rt s. NSK inc or po rate s b y

re fe re nc e JTEK T’ s c omm e nts on the iss ue of

c a us a tio n a nd no n- su bje c t im po rt s, while J TEKT a dopts NSK’s comments on the I TC’s decision to cumulate the subject imports. NSK Comments at 30-31; J TEKT Comments at 3 n.2. J TEKT take s no position on t he I TC’s rea ssessment of its vulnerability and impact f

indings. JTEKT Comments at 3 n.2. III. Discussion Plaintiffs NSK and J TEKT c ontend that the I TC’s analy sis of the issues on rema nd is not supported by

substantial evidence nor in ac corda nce w ith law. The c ourt’s opinions in NSK I 5 and NSK II eff

ectively rema nded thre e issues to the ag ency to rec onsider. In examining the Remand D etermination under the applicable standard of revie w, the cour

t finds that the ag ency ’s deter minations here do not pass muster be cause the I TC failed to (1) fully comport with the court’s r emand instructions and ( 2) mea ningf ully demonstrate a

rational c onnection betwe en the fac ts in the recor d and the c onclusions rea ched. A. The Causation In qui ry & t he Analysis of Non-Sub jec t Im ports On re mand, Def

endant rea ffirme d its original position that “re vocation of the
anti dumpi ngduty

or de rs c ov e ri ngba ll b e ari ng s f ro m Jap an a

nd the Un ite d K ing do m is lik e ly to result in the continuation or re curr ence of mater ial injury by rea son of subject imports.” Remand Determ ination at 37. Plaintiff J TEKT a rgues that anothe r re mand is neede d so that the I TC may fully addre ss the impact of the non- subject imports on the U.S. market. JTEKT alleg es that the I TC acted c ontrary

to law by not addre ssing the f

undamental c oncer

ns of the cour

t’s rema nd instructions. J TEKT Comments at 2-3, 8-9, 27. Mor eover , J TEKT c laims that the ag ency failed to adequately

consider c erta in data that is outcome de terminative. JTEKT Comments at 8-27.Consol. Court No. 06-00334 P age 11

As part of

its discussion, Defenda

nt cites to Nucor Corp. v. United States , 32 CI T ___, 6 59 4 F . Su pp . 2 d 1 32 0 ( 20 08 ). In th at de c isi on , th e Court fo un d th a t th e I TC n e e d n ot c on du c t a non-subject import ana ly sis in a sunset reviewwhen c erta in fac tual conditions are pr esent, noting that the Fe dera l Circuit has appar ently limit ed the a g ency ’s use of sa id analy sis to original injury investigations. Nucor Corp. , 32 CI T at ___, 594 F . Supp. 2d at 1380. Howeve r, the Court stated that it s d e c isi on

“ sh ou ld n ot b e re a d to pr ov ide the [I TC] l ic e ns e to u nil a te ra lly

dis re g ard data re late d to no n- su

bje c t im po rt s d ur inga suns e t r e vie w” and

may c on sid e r t

hat in fo rm a tio n in

its analy sis “if it finds that such imports are a ‘re levant ec onomic fac tor [ ] ’ to its determination” under § 1675a (a) (2) a

nd (a) (4). Id ., 32 CI T at ___, 594 F . Supp. 2d at 1382. This court disag ree s with the analy sis in Nucor Corp. on this iss ue for the re asons explained in NSK I and NSK II

. The c ourt expects that the I TC will not repeat these arguments in its nex t remand 7 de te rm inatio n a s th e y

are mor e pr op e rl y

dir e c te d to the F e de ra l Cir c uit
. The I TC also disag ree s with the court’s c onsideration of the fac tual conditions that 8 trig g ere d the non-subjec t imports analy sis, an issue that is outside the scope of the rema nd instructions and one that the c ourt will not address her e. Id . at 14-17. The I TC acted c ontrary

to law when it fa iled to ge nuinely comply with the court’s r emand instructions. The ag ency

dedicates nea

rly a third of its rema

nd analy sis to vociferously disag ree with the court’s holdingin NSK I
. Remand D etermination at 4-17. More spe cifica lly , the I TC 6 7 argues that the non-subje ct import analy sis is l imited to original injury investigations and other simil ar r etrospec tive inquiries on causation. Id . at 9-11. In the I TC’s interpre tation, the Fe dera l Circuit in Mi tta l ruled that the non- subject import analy sis does not apply to a “pr ospective repla ceme nt analy sis” like that in a sunset re views. Id . at 10. Fina lly , notwithstanding the court’s holdingin NSK II , th e a g e nc y

a lso a lle g e s th a t th e c ourt un lawf ull y fo rc e d it to p e rf or m a repla ceme nt/benefit test on re mand – an e x amination that the I TC calls the “ma rket shar e repla ceme nt analy sis” and which it alleg es is simil ar in kind to one de scribed a s unlawful by the Fe dera l Circuit. Se e id
. at7 , 1 1 -1 2 (c i t i n g Mittal , 542 F.3d at 879). 8Consol. Court No. 06-00334 P age 12

A “ c omm od ity

pr od uc t” is a g oo d th a t is “ g e ne ra lly

int e rc ha ng e a ble re g ard le ss o f i ts 9 source .” Brats k, 444 F.3d a t 1371. The re levant statutes that desc ribe the I TC’s task in a sunset re view cle arly contain an element of

causation, a point that is reaff irmed by the Court’s pre cede nt and which De fenda nt acknow ledg es in the Remand D etermination
. §§ 16 75 (c ), 16 75 a (a ); se e als o Usinor v. United States , 2 6 CI T 7 67 (2 00 2) (n ot r e po rt e d in F . Su pp .) ; Neenah Foundry

Co. v. United States , 25 CI T 7 02 , 1 55 F . Su

pp . 2 d 7 66 (2 00 1) ; Titani um Me tals Cor p. v. United States , 25 CI T 648, 155 F. Supp. 2d 750 (2001). E qually important here is the doctrine of sta rede c isi s , which states that “whe n [a] court ha s once la id down a princ iple of law a s applicable to a c e rta in s tate of f ac ts , it will adhere to that principle, and a pply it to all future ca ses, wher e facts are substantiall y the
same . . . . ” B LACK ’ S L AW D I CT I O N A RY 1406 (6th ed. 1990) ( emphasis adde d). Of pa ramount
conce rn in Ge ra ld M

e tal s , Brats k, Mi tta l and NSK I was whe ther the subjec t imports were the
cause of injury , or would ca use continuation or r ecur

renc e of injury , to the domestic industry
. The c ausation ana ly sis in Ge ra ld M e tal s , Brats k, and Mi tta l inv olv e d c omm od ity pr od uc ts i n wh ic h f a ir ly -t ra de d, pr ic e c omp e tit ive no n- su bje c t im po rt s w e re a

signif ic ant f a c tor in t he mark e t, fac ts which are substantially simil ar to those be fore the cour t in this action. Mittal , 542 F.3d at 9 87 0- 71 ; NSK

I , 3 2 CI T at __

_, 57 7 F . Su

pp . 2 d at 13 33 -3 4; Brats k, 4 44 F .3 d at 13 73 -7 6; Ge ra ld Me tal s , 1 32 F .3 d at 72 0- 23 . Guid e d b y its ana ly sis of

the pe rt ine nt s tatut e s a

nd by its understandingof the oblig ations char g ed to the I TC in light of the c ontrolling pre cede nt, the court he ld that the ag ency could not justify

its affirmative de termination on the ca usation issue without a more thoroug h examination of non-subject imports. NSK I , 3 2 C I T at__

_, 57 7 F.Consol. Court No. 06-00334 P age 13

The I TC also argues that §§ 1675(c ) and 1675a (a) are ambig uous as to whether the I TC 10 must perform a

repla ceme nt/benefit test, and ther efor e the c ourt must affor d defe renc e to the ag ency to interpret the statute as it pleases g iven that “‘ a cour t’s choice of one r easona

ble re ading o f a nam b i gu o u s s t atu t e d o es n o tp re cl u d e a ni mp l em en t i n g age n cy fr o ml at er

ad o p t i n g a differ ent re asonable interpre tation.’” Remand D etermination at1 3 (c i t i n g United States v. Eu ro dif S.A. , 129 S. Ct . 878, 886 (2009)) . Despite De fenda nt’s asser tions to t he contr ary , the court did not presc ribe a

Procrustea

n formula f

or the I TC to follow, but rather note d that the age n cy co u l d n o tco n d u cta m ea n i n gfu l i n qu i ry

o nth e i s s u e o f c au s at i o nwi th o u ta m o re th o ro u gh examination of non-subject imports. NSK II , 32 CI T at ___, 593 F . Supp. 2d at 1359-60 (citing NSK I , 32 CI T at ___, 577 F . Supp. 2d at 1333). Moreove r, there is nothing ambiguous about the S u p p . 2 d a t1 3 3 0
- 3 3
. R e g ar d l e s s o f i t s v i e wo nth e v a l i d i ty vel non of eve ry decision fr om the bench, the ag ency

must neverthele ss fully

comply with a cour

t’s rema nd instructions. Sm ith Corona Corp. , 915 F.2d at 688. The c ourt ac knowledg es that its remand instruc tions in NSK I on the ca usation issue may have pr ov ide d th e I TC w ithso me c on fu sio n. Ho we ve r, the c ourt a lle viate d a

ny su c h unc e rt a int

y when it issued NSK II

. Def endant ha d asked the court to re consider its opinion in NSK I in light of Mittal . In NSK II

, the cour t thoroug hly

examined the obligations that Congre ss imposed on the I TC in a sunset revie w. 32 CI T at ___, 593 F . Supp. 2d at 1363-1372. The c ourt made c lear that “the only

duty imposed on the I TC is to ensure that the subjec t imports, and not non-subject imp or ts o r s ome oth e r f

a c tor , w ou ld b e su

bs tanti a lly

re sp on sib le fo r i nju

ry to t he do me sti c industry .” Id. , 3 2 CI T at __ _, 59 3 F . Su

pp . 2 d at 13 65 . Cr iti c a lly , th e c ourt e xplic itl y emphasized that it does not require the I TC to conduct its causation inquiry in any particula r
mann e r, and

re a ff ir me d th at c omp le tin g a

mor e tho ro ug h a

na ly sis of no n- su bje c t im po rt s w ou ld not force “the I TC to adopt[ ] a rigid ‘ benef it’ analy sis or sacr ifice discr etion in determiningthe likelihood of material injury under § 1675a (a) ,” a statement Def endant a ltoge ther ig nores in the Remand D etermination
. Id. , 3 2 C I T at_ _ _ , 5 9 3 F. S u

p p . 2 d at1 3 6 0 (c i t i n g NSK

I , 32 CI T at 10Consol. Court No. 06-00334 P age 14

statut e s at is su e , a

nd in a suns e t r e vie w the I TC m us t de te rm ine wh e the r t

he su bje c t im po rt s would likely

continue to mater ially

injure or c ause material injury to the domestic industry

in the absenc e of the antidumping duty order . §§ 1675(c) , 1675a(a ). In o ne of the fe w i ns tanc e s in

wh ic h th e I TC m e nti on s NSK II in the Remand 11 Determ ination , Def

endant c ites to this quot ed passa g e as pr oof that the a g ency must determine whether non-subject imports ca

ptured the ma

rket shar e pre viously

held by the subject imports. Id
. at3 7 n . 2 6 0 , 3 9 n . 2 7 2 (c i t i n g NSK II , 32 CI T at ___, 593 F . Supp. 2d at 1372). Howe ver, a __ _, 57 7 F . Su

pp . 2 d at 13 33 ); see also id. , 32 CI T at ___, 593 F . Supp. 2d at 1366 (emphasizing that the I TC does not need to a ddress the c ausation inquiry in any particula r wa y ). It is of gr eat
conce rn that, af

ter a sking the court to re consider its opinion in NSK I , the I TC rare ly

cites to, let alone sig nificantly

discusses, the ana ly sis of this is sue in NSK II . T he I TC r ig htl y

state s th a t it “must examine factor s other than subjec t imports to ensure that it is not attributi ng injury from other fa ctors to the subjec t imports” in a way that inflates “a

n otherwise ta

ng ential ca

use of injury into one that satisfies the statutory materia l injury

threshold.” Remand D etermination at 7. Ho we v er , wi th o u ta m o re fa i th fu l ad h er en ce t o th e c o urt ’s re m an d i n s tru ct i o n s an d

th o ro u gh analy sis of non-subject imports, the cour t is not convinced that the I TC conducted a meaning ful inquiry on the issue of c ausation on re mand. Equally troubling to the c ourt is the cursor y treatment of the evide nce pr ovided and the
c on c lus ion s r e a c he d b y

the I TC o n th is i ssu e in i ts Remand D etermination. Th e I TC i nc or re c tly surmised that the cour

t had aske d it to conduct a rig id “marke t share r eplac ement” a naly sis and consider “ ‘whe ther non-subje ct imports have c apture d, or ar e likely to capture , marke t share pr e vio us ly

he ld b y the su bje c t im po rt s, and wh e the r t his le ve l of

dis pla c e me nt m ake s it

un lik e ly that remova l of the orde rs will lead to continuation or re curr ence of mater ial injury as a r esult of subject imports.’” Id. at9 , 3 7 (c i t i n g NSK I , 3 2 C I T at_

_ _ , 5 7 7 F. S u

p p . 2 d at1 3 3 3 ). T h o u gh 11Consol. Court No. 06-00334 P age 15

closer r eadingof that passa g e demonstrates that the foc us of the cour t’s discussion was on the fac tual conditions that trigg ere d the non-subjec t import analy sis in Ge ra ld M e tal s , Brats k, and Mittal , just as they

did in NSK

I
. NSK II , 32 CI T at ___, 593 F . Supp. 2d at 1372. the cour t expl ained in NSK II that th e I TC w a s n ot r e qu ir e d to fo llo w a pa rt ic ula r m e tho do logy

in its causation inquiry , the ag ency nonetheless r ead the court’s instruc tions to contain three
se pa rate inq uir ie s: F ir st, the [c]o ur

t di re c te d th e [I TC] t o a sse ss whe the r “ no n- su bje c t im po rt s have captured . . . the marke t share pr eviously held by the subject imports.” [ NSK I , 32 CI T at ___, 577 F . Supp. 2d at 1333] (empha sis added). Sec ond, the [c]ourt instructed the [I TC] to assess whethe r the “ non-subject imports . . . ar e lik e ly to c ap ture marke t share pr eviously held by the subject imports” in its analy sis. Id. [(e mph a sis a dd e d) ]. T hir d, to t he e xtent th e no n- su

bje c t im po rt s h ave or

wi ll captur e the mar

ket share held by

the subject imports, the [c]ourt has instructed the [I TC] to assess “whe ther this level of displac ement make s it unli kely that remova l of the or de rs wi ll l e a d to c on tin uatio n o r r e c ur

re nc e of mate ri a l in

jur y a s a re su lt of subject imports.” Id
. Id . at 37 n. 26 0. Th e c ourt wi ll c omm e nt o n th is a

na ly sis to g ive fu

rt he r guid anc e to t

he I TC i n prepa ringits new rema

nd results. T h e IT C f i r s td e t e r m i n e d th atn o n - s u

b j e c ti mp o rt s d i d

n o t“ f u l l y, o r e v e nm o s t l y,
c a ptu re [] the mark e t sh are pr e vio us ly he ld b y the su bje c t im po rt s b e fo re the or de rs we re put in place .” Id . at 37-38. The ag ency noted that while the subjec t imports “lost approx imately seven perc entag e points of marke t share dur ing the period fr om 1987 throug h 2005,” the subjec t
merc handise re mained a c onsistent and signific ant pre sence in the marke t after the orde rs wer e imposed, maintaining a

marke t share be tween 11.5% and 14% ove r that time. Id . at 38. The
a g e nc y no te d th at a lth ou g h th e mark e t sh are of no n- su bje c t im po rt s g re w f

ro m 5. 2% in 1 98 7 to 23.6% in 2005, “most of the mar ket share incre ases obtaine d by the non-subjec t imports occurre d at the expense of the domestic industry . . . .” Id . at 38-39. The I TC then summarily conclude dConsol. Court No. 06-00334 P age 16

that beca use the subjec t imports “actually g ained a small amount of marke t share f rom the other participa nts in the market betwe en 2000 and 2005,” the ag ency had suff iciently established that “non-subjec t imports have ca ptured no mar

ket share at all from subjec t imports . . . .” Id . at 39. Ap art fr om t his c on c lus or

y state me nt, the I TC d oe s n ot j us tif y its fi nd ingon

the fi rs t pr on g wi th any additional evidenc e. The c ourt ca

nnot rea sonably

discern how

the I TC concluded that subject imports are mor e than a mer e minimal or tang ential ca use of likely

injury to the domestic industry , espec ially when
mos t of the no n- su

bje c t im po rt s’ mark e t sh are inc re a se s o c c ur re d a t th e e xpe ns e of

the do me sti c industry . The I TC fails to expl ain why the per iod from 2000 to 2005 is most i ndicative of trends in the subject imports’ marke t share, e specia lly when a more broa d analy sis that covers mar ket share fluctuations over

the life of the antidumping duty order seems most logic al. Moreove r, the ag ency does not reve al the identity of the “ other pa

rticipants” in the mar

ket from whic h subject imp or ts g a ine d ma

rk e t sh are , a

n o mis sio n th a t is signif

ic a nt b e c a us e do me sti c pr od

uc ts, a s w e ll
a s su bje c t and no n- su bje c t im po rt s, are no rm a lly

the on ly c omp on e nts that c omp ri se the do me sti c
mark e t in thi s c on te xt. E ve n mo re tr ou bli ngto t he c ourt is t hat th e a g e nc y

a c kn ow le dg e s, a lbe it in a fo otn ote , th at no n- su

bje c t im po rt s a re c e rt a in t o d e le te ri ou sly a ff e c t th e do me sti c mark e t: [B]ecause the non-subject imports enter ed the mar ket and took mar

ket share primarily from the domestic industry , we f ind that it was not the [antidum ping duty ] orders that dre w most of the non-subjec t imports int o the marke t, but the attrac tiveness of the U .S. market. In our view, this indicates that non-subject imports will not rea dily

exit the marke t and will compete a g g ressively with the likely signific ant volumes of subjec t imports that enter the mar ket af ter the revoc ation of the orde rs, in attempting to maintain their exis ting mar

ket share
. Th is i nte ns e c omp e tit ion

be tw e e n th e su

bje c t and no n- su bje c t im po rt s w ill lik e ly have a signific ant adve rse impac t on domestic market sha re, sa les volumes and re v en u es , an d

p ri ci n g.Consol. Court No. 06-00334 P age 17

Id. at 39 n.271. In spite of this evidence and the obvious g aps in log ic, the I TC concluded that
su bje c t im po rt s are a

mor e tha n mi nim a l or

tang e nti a l c a

us e of the lik e ly inj ur y to t he do me sti c i n d u s tr y. The I TC’s lack of

rig or is further

demonstrated in its ana ly sis of whether “non-subjec t imports . . . are likely to capture marke t share pr eviously held by the subject imports.” Id . at 39 (c i t i n g NSK

I , 32 CI T at ___, 577 F . Supp. 2d at 1333). Ag ain using historical marke t share trends, the I TC determined that “while the non- subject imports did capture some marke t share from the subjec t imports before [2000], they have not c apture d any

meaning ful level of ma

rket share from the subjec t imports si nce [2000].” Id . at 39 . T he se his tor ic a l tr e nd s, c ou ple d w ith evidenc e of the subject imports’ steady marke t share, le d the ag ency to theref ore c onclude that “in the re asonably

fore seea ble future non-subject imports ar e [un] likely to capture the marke t share previously

held by the subject imports befor e the or ders we re imposed.” Id . at 39. The I TC expl ained that “ the pre sence of the non-subje ct imports in the market will not preve nt the
su bje c t im po rt s f ro m se e kin g to r e g a in m ark e t sh are in a signif ic ant f a sh ion fr om t he do me sti c industry [] once the disciplining ef fec ts of the orde rs ar e re moved.” Id . at 40. The c ourt is not persuade d and, more importantly , the I TC’s analy sis here misses the po int . In it s e xami natio n o f t he se c on d p ro ng , th e a g e nc y me re ly a sse rt s th a t th e e vid e nc e it de e me d s uf

fi c ie nt t o s atis fy

the fi rs t pr on g of

the “ mark e t sh are re pla c e me nt” te st i s e qu a lly compelling in its analy sis of the second pr ong . Crucially , howeve r, the I TC does not set forth the g roundwork which explains why the historical data

on marke t share tr ends rationally explains that the subject imports play more than a

minor role in ca

using the likely

continuing or

rec urringConsol. Court No. 06-00334 P age 18

injury to the domestic industry . The I TC also fails to expl ain and support its view that subjec t produce rs would be a

ble to drop price s to the levels re quired to re captur e mar ket share from the
no n- su bje c t im po rt s. Ins te a d, the I TC’ s Remand D etermination includes nothing more than broad c onclusory

statements that leave the cour t in the dark a

nd unable to disce rn how the a g ency
connec ted the dots betwe en the f acts on the r ecor d and the c onclusions stated on rema nd. Finally , and cr

ucially , the I TC failed to ade quately explain why

subject imports would be more than a

minimal or tang ential ca

use of likely

injury g iven the sig nificant pric e under selling by non-subject imports. The I TC conducted c erta in price c omparisons, which showe d nonsubject imports “under sold the domestic like products in appr ox imately 66[%] of possible price compar isons and undersold the subjec t imports in approx imately 72[%] of the possible price compar isons.” Id. at 41 . Wh ile the I TC attr ibute s th e no n- su bje c t im po rt s’ un de rs e lli nga c tiv ity to t he “ vo lum e - a

nd pr ic e -d isc ipl ini nge ff

e c ts” of the anti dumpi ngduty

or de rs , th e a g e nc y

a lso emphasizes that its earlier analy sis demonstrates that “subjec t imports will , upon revoc ation of the orde rs, beg in ag g ressively underse lling the domestic a nd non-subject mer chandise in an attempt to reg ain the mar ket share that they

have lost . . . .” Id . T hat data , th e I TC c la ims , sufficie ntly

shows that the “leve ls of underse lling by the subject imports are likely to have a signific ant adve rse e ffe ct on both domestic and non-subje ct price s, and on the ove rall condition of the industry .” Id . T he a g e nc y ’s de te rm inatio n is pr ob le matic . F ir st, the I TC p re sume s, without providing a

ny evidenc e to support its claim, that the subject imports will be in a position to compete suc cessf

ully ag ainst non-subject imports once the antidumping duty order is removed. This error echoe s those found in other se ctions of the non-subjec t analy sis: the just ificationsConsol. Court No. 06-00334 P age 19

pr ov ide d f

or its c on c lus ion

la c k r e a so n a

nd su bs tanc e . M or e ov e r, the I TC c ann ot r e ly on its
e arl ie r a na ly sis of the lik e ly un de rs e lli ngby

su bje c t im po rt s to su

pp or t it s d e te rm inatio n b e c a

us e that examination was itself inadequate. In other wor ds, the I TC fails to directly addre ss the signific ant under selling by non-subject imports, and instea d side-steps the issue using unpersua sive and incomplete rea soning. In sum, the I TC failed to comply with the court’s r emand instructions on the issue of
causation, and the evidenc e on re cord a nd the conc lusions reac hed in the Remand D etermination do no t e sta

bli sha c a us a l li nk be tw e e n th e su

bje c t im po rt s a nd lik e ly futur e inj ur

y to t he do me sti c i n d u s try . I tm ay

we l l b e t h atth e f

ac tth atth e m ark ets h ar e o f t h e s u b j ec ti mp o rt s d i d

n o tch an ge signific antly

from 2000 to 2005 shows that they rema in more than a

mere minimal or tang ential
c a us e of inj ur y to t he do me sti c ind

us tr y . H ow e ve r, the c ourt

c ann ot d e te rm ine that thre sh old iss ue on the re c or d b e fo re it, a

bs e nt a mor e c omp le te ana ly sis of the ro le of

no n- su bje c t im po rt s in the marke t. I n its second re mand deter mination, the ag ency

must perform a

more foc used analy sis on the causation issue to determine whe ther the subjec t imports are more than a mer e min ima l or

tang e nti a l c a

us e of inj ur y in l ig ht o f t

he signif ic ant p re se nc e of

no n- su bje c t im po rt s in the domestic marke t. Wi thout that analy sis, the I TC cannot “g ive full consider ation to the
causation issue and [ ] provide a meaning ful explanation of its conclusions.” Mittal , 542 F.3d at 878. B. Th e Cum ulation of B all Bearings f rom the United Kingd om wi th other Subject Im ports The I TC “may

cumulatively

assess the volume a

nd eff ect of imports of the subject
merc handise fr om all countries . . . if such imports would be likely to compete with ea ch otherConsol. Court No. 06-00334 P age 20

and with domestic like produc ts in the United States market.” § 1675a(a )(7) . Notably , the ag ency shall not cumulate imports of the subjec t mercha ndise in case s where it determines that such imports are not likely to have a discernible a dverse impact on the domestic industry
. Id
. Thus , th e c umu latio n q

ue sti on inv olv e s a

tw o- ste p p ro c e ss, wh e re by the a g e nc y

mus t f ir st a sk whether the subject imports will have a ny discernible impac t. See Neenah Foundry Co. , 2 5 C IT at 712, 155 F. Supp. 2d at 775. I f the I TC answer s that question affir matively , then the
rema ining que stion is whether that impact is adve rse. See id. On ly wh e re the imp a c t is bo th discernible a

nd adver se may

the I TC cumulate the subjec t imports. See id. In NSK I , the cour t asked the ag ency

to ree x amine its decision to cumulate ba ll bearing s from the United K ingdom with imports from other subject c ountries. 32 CI T at ___, 577 F . Supp. 2d at 1338. More specific ally , the cour

t found that “the I TC failed to addr ess the sig nificant rise in non-subject imports and larg e sca le re structuringwithin the ball bear ing industry . . . .” NSK

I , 32 CI T at ___, 57 7 F . Su pp . 2 d at 13 38 . T he c ourt the re fo re re ma

nd e d th e I TC’ s d e c isi on

to c umu late , a

nd in particula r its analy sis of the discer nible adver se impact of the U.K. ball bea ring s, (1) “ for additional explanation as to whether the potential volumes of U.K. e x ports . . . are likely to have an adve rse impac t on the domestic industry if the orde r is remove d,” as w ell as (2) for a more thoroug h analy sis of non-subject imports. Id. , 32 CI T at ___, 577 F . Supp. 2d at 1338. On re mand the I TC rea ffirme d its earlier decision, findingthat the subject imports from the Un ite d K ing do m “ are lik e ly to h ave a dis c e rn ibl e a dv e rs e imp a c t on the do me sti c ind

us tr y if the orde r is revoke d.” Remand D etermination at 21. NSK ar g ues that the I TC does not support its redeter mination of this is sue with substantial evidenc e, and that the court should re mand ane wConsol. Court No. 06-00334 P age 21

NSK lob bie s a ho st o f c ri tic ism s a g a ins t th e I TC’ s Remand D etermination , none of 12 wh ic h th e c ourt

e xplor e s in

de ta il h e re fo r r e a so ns e xpla ine d b e low . M or e sp e c if ic a lly , N SK c on te nd s th a t su

bs tanti a l e vid e nc e do e s n ot s up po rt the I TC’ s c la im that th e size a lon e of the ba ll bear ing industry

in the United King dom will li kely have a discernible a

nd adver se af

fec t on the domestic industry , espec ially when c ompare d to the I TC’s decision in a re lated investig ation wh ic h f ound that th e su

bje c t im po rt s f ro m Sin g a

po re , a c ountr y wh os e ba ll b e ari ngind

us tr y is muc h la rg e r i n s ize tha

n th at in the Un ite d K ing do m, w ou ld n ot b e lik e ly have a dis c e rn ibl e adver se impact. NSK Comments at 2-4. NSK g oes on to criticize the ag ency ’s ana ly sis of other elements of the U.K industry , specific ally noting that the industry

is simi lar in cha

rac ter to the industry in Singapor e; that the produc tion priorities of the U.K. pr oducer s do not focus on the U.S. market; and that the rema ining U.K . production ca pacity cannot be g ear ed towar d the Un ite d St a te s b e c a

us e re str uc tur ingwi thi n o ne of

the larg e st U .K . p ro du c e rs wi th e xce ss c a pa c ity restric ts that company ’s ability to ship ball bearing s to the United States. NSK Comments at 3-6. NSK also reje cts the I TC’s finding that the export focus of the U .K. industry makes it likely

that subject U.K. imports will have a discernible a dverse impact bec ause the statistics for the U.K. and Sin g a po re ind us tr ie s are ne arl y

ide nti c a l, a

nd the a g e nc y

fo un d th e latte r t o h ave no lik e ly discernible a dverse impact. NSK Comments at 7-10. NSK also discounts the I TC’s finding that the volume (in terms of va lue) of the U.K. industry ’s shipments makes it likely that subject imports from the United King dom will have a disce rnible adve rse impac t, alleg ing that the ag ency failed to c onsider that B ritish ball bearing s g ener ally involve highe r-va lue, unique pr od uc ts that c ann ot b e uti lize d in the Un ite d St a te s. NSK

Comme nts a t 10 -1 4. F ina lly , N SK aver s that the limit ed U.K. pr ice data pre vents the I TC from dra wing any conclusions about the price eff ects of ba ll bearing s from the United K ingdom. NSK Comments at 14-15. the issue of c umulation. NSK Comments at 2-17. J TEKT similarly claims that the Remand 12 Determ ination does not ade quately confr ont the conce rn surroundingthe sig nificant pre sence of non-subject imports in the domestic marke t. J TEKT Comments at 2-27. 1. Restr ucturing w ithin the Ball Bearing In dus try After the ag ency

rec y cled much of

the ana ly sis it originally

provided in the sec ond sunset revie w, Remand D etermination at 21 -2 4, the I TC f ir st a dd re sse d th e iss ue of

re str uc tur ingwi thi n the ba ll b e ari ngind

us tr y and fo un d th a t “ the do me sti c ind us tr y su ff e re d s e ri ou s d e c lin e s in

its production leve ls, sales volumes, sales re venues, inc ome, profit mar g ins, market shar e and employ ment, and that these declines c annot be attributed solely , or eve n primarily , to theConsol. Court No. 06-00334 P age 22

industry ’s ‘re structuring ’ ef forts.” Id. a t 25 . H e re , th e a g e nc y inc or po ra te d b y re fe re nc e its dis c us sio n o f r e str

uc tur ingin t

he ba ll b e ari ngind

us tr y that a pp e ars late r i n th e re po rt

in i ts
rea ssessment of the likely impact of the subjec t imports on the domestic market. Id. a t2 4
- 2 5
. In that analy sis, the I TC provides three principal justifications for its dete rmination that the domestic marke t is vulnerable a nd that subject imports will li kely have a neg ative impact on the domestic industry . First, the a g ency found that the domestic industry ’s ca pacity and produc tion reduc tions are a

result of c ompetition from subject imports, and not from re structuringwithin the ball bear ing industry
. Id. at 31-32. The bases f or the I TC’s conclusion we re that (1) only two do me sti c pr od

uc e rs state d th at th e dr op in p ro du c tio n c a pa c ity wa s inte nd e d to re too l th e ir capa city to produce high- valued, c ustomiz ed bea ring s; (2) the majority

of produc ers who r educe d pr od uc tio n c a pa c ity did so be c a us e of the ir ina bil ity to m e e t “ a g g re ssi ve imp or t c omp e tit ion ” in the U.S. marke t; and (3) the thr ee dome stic produce rs that re ported the la rg est ca pacity declines duri ngthe pe ri od

“ a ll s tate d th at th e y

c los e d p ro du c tio n f

a c ili tie s in

the Un ite d St a te s d

ue , in signific ant par

t, to price c ompetition from subject and/or non- subject imports.” Id. at 31. The evidenc e that the I TC cites to support its conclusion is tenuous. I mportantly , only one of the twenty companies that reporte d U.S. production ca pacity fig ures f or the 2000 to 2005 per iod actua lly stated that the su bje c t im po rts wer e re sponsible for the c hang es in production ca pacity
. See Certain Bearings from Chi na, France, G ermany , Italy, Japan, Singapore, and theUnited Kingdom: Inve

stigati on Nos. 731-TA-344, 391-A, 392-A and C, 393-A, 394- A, 396, and 399-A ( Se c on d R e v ie w) , USI TC Pub. 3876 (Aug . 2006) (“ Sta ff R e po rt ” ) a tB B
- I- 4 8 t o I- 5 5 , T a b l e B B
- I13. Moreove r, a c loser look at the top thre e compa nies who ac counted f

or more tha

n three

-Consol. Court No. 06-00334 P age 23

quarte rs of the r eduction in U.S. production ca pacity duringthe per iod of revie w conf irms that the ov e ra ll d e c re a se in p ro du c tio n c a pa c ity too k p la c e a s p art

of tho se c omp anie s’ e ff

or ts t o restruc ture their U .S. business platform for re asons totally unrelated to the subject imports. See id . at B B -I -4 8 to I -5 5, Ta

ble B B -I -1 3; id. , B B -I I I -1 to I I I -5 , T a ble B B -I I I -1 . T he I TC f

a ile d to
a c c ount f or thi s c on fl ic tin g e vid e nc e on the re c or d w he n it

sta te d it s c on c lus ion s, and

it mus t explain rationally

why such evide nce is insig nificant to its finding on the next remand. See Suramerica deAleacione s Laminadas, C.A. v. United States , 44 F.3d 978, 985 ( Fe d. Cir. 1994) (explaining that the I TC must address contra dictory evidenc e or e vidence from which c onflicting infere nces ma

y be dra wn in its analy sis). Se c on d, the I TC d e te rm ine d th a t “ e ve n if the re du c tio ns in t

he ind us tr y ’s c a pa c ity c ou ld be attributed to a

strateg ic dec ision on the industry ’s par t . . . , the declines in the industry ’s capa city levels do not fully

acc ount for the c orre sponding de clines in the industry ’s produc tion levels and sa les volumes duringthe per iod of revie w.” Remand D etermination at 32. The ag ency found that while c apac ity fell by 110.4 milli on ball bear ings f rom 2000 to 2005, production and shipment leve ls fell by 125 milli on ball bear ings ove r the same period, whic h repr esente d a drop that was “a pproxi mately

15 milli on bear ings la

rg er tha n the dec line in the industry ’s ca

pacity duringthe per iod.” Id . Wit hout any additional analy sis or expl anation, the I TC hastily

conclude d in the next s entenc e that bec ause the “15 million bearingdecline repr esents appr ox imately 12[%] of the de clines in the industry ’s total production and shipment quantities betwee n 2000 and 2005,” the decline in the industry ’s produc tion, shipm ent and sa les levels “c annot be attributed to the reduc tions in t he industry ’s ca pacity duringthe per iod, whetherConsol. Court No. 06-00334 P age 24

or not that reduc tion was desig ned to rationaliz e its bear ing pr oduction in the U.S. and other marke ts.” Id . H ow e ve r, the I TC d oe s n ot e xpla in, fo r e xamp le , h owthi s d a ta ans we rs the c ourt s
conce rn re g ardingthe ef

fec t of restruc turing within the ball bear ing industry , or why the per iod from 2000 to 2005 is the best time fra me in which the a g ency

must look t o alleviate the court’s
conce rns. That ther e we re de clines in the domestic industry ’s produc tion, shipm ent and sa les levels does not nec essar ily mean that the dome stic industry was vulner able to likely

materia l injury from the subjec t imports, and the I TC’s failure to offer some meaning ful explanation is y et another example of the abse nce of a rational connec tion between the fac ts and conc lusions in t he Remand D etermination. F ina lly , th e I TC e xami ne s c e rt a in e c on omi c ind ic ia to d isc re dit

the c la im m a de by

NSK that the domestic industry is stronge r, more r obust, and hea lthier as a r esult of re structuringin the ba ll b e ari ngind

us tr y . In p art ic ula

r, the I TC a

na ly zed (1 ) gro ss p ro fi ts a

nd op e ratin g inc ome levels, (2) g ross profit and ope ratingincome mar g ins, (3) cost structur es, (4) capa city utiliz ation rate s, (5) ne t sales re venues, a nd (6) mar

ket share levels. See id. at 32-34. In assessingeac h of the se six c omp on e nts , th e I TC c on c lud e d th a t r e str uc tur ingwi thi n th e ba ll b e ari ngind us tr y did littl e to improve the he alth of the domestic industry
. Se e id
. No twi th s t an d i n g th e ITC ’s th o ro u gh analy sis of these fa ctors, the c ourt is stil l left with the question of “whether the potential volumes of U. K. e xpor

ts . . . are lik e ly

to h ave an a dv e rs e imp a c t on the do me sti c ind

us tr y if the or de r i s
remove d.” NSK

I , 32 CI T at ___, 577 F . Supp. 2d at 1338. Here , the I TC did lit tle to expand on its earlier analy sis of the potential volumes of U.K. e x ports in the Remand D etermination . That restruc turing of the ba ll bearingindustry did not improve the hea lth of the domestic marke t doesConsol. Court No. 06-00334 P age 25

In consideringthis iss ue on re mand, the I TC expressly incorporated its analy sis of the 13 non-subject imports that is discussed and r eviewe d by the cour t in Section I I I .A of this opinion. Remand D etermination at 25. no t ne c e ssa

ri ly me an th at th e po te nti a l vo lum e s o f U .K . e xpor ts w ill have a

lik e ly dis c e rn ibl e impact if the a

ntidumping orde r is remove d. Wit hout more, the c ourt ca nnot sustain the I TC’s analy sis on remand. 2. The Pr esence of Non -Sub jec t Im ports in the Dom estic M arket On the ef fec t of non-subjec t imports and the I TC’s decision to cumulate the subject imports, the ag ency

deter mined that “the incr ease in non-subject imports has not resulted in a signific ant displace ment of the subjec t U.K. ball bea ring s during the per iod of revie w.” 13 Remand D etermination at 25. The I TC reiterated that the non-subjec t imports did not “sig nificantly

repla ce[] the subject imports from the United King dom” or “ captur e sig nificant marke t share f

rom the U.K. imports . . . .” Id. The I TC also noted that, upon revoc ation of the
or de r, “ the su

bje c t U .K . im

po rt s are lik e ly

to b e g in p ri c ingthe ir

pr od uc ts m or e a g g re ssi ve ly

in the marke t in order to re cover any marke t share that may

have be en lost immediately afte r imposit ion of the U.K. or der.” Id . The a g ency closes its analy sis ex plaining that its conclusions
are “not af

fec ted by the fa ct that non-subjec t imports occupy a conside rably

larg er sha

re of the marke t than the subject imports from the United King dom.” Id. Curiously , the ag ency does not provide a n explanation as to why

that fac t is inconsequential to its analy sis, but ins tead r eminds the c ourt that th e dis c e rn ibl e a dv e rs e imp a c t st and ard pr e se nts a

“ re lativ e ly

low thr e sh old ” and

is “re latively

easy” for the I TC to satisfy
. Id.Consol. Court No. 06-00334 P age 26

For the re asons explained above in Sec tion I I I .A, the I TC’s analy sis of non-subject imports is contrary

to law and, ther efor e, the a g ency ’s re liance on its conc lusions from that portion of the Remand D etermination is unhelpful. Fur thermore , the I TC’s analy sis here doe s nothing more than asser

t broad c onclusions, with each statement lackingconcr ete a nd rational g rounds for the ag ency ’s ultimate deter mination. The I TC also does not explain how the subject imports from the United King dom are well suited to beg in pricingtheir produc ts more ag g ressively

in the marke t to recove r marke t share onc e the or der is re voked. F inally , that the discernible a dverse impact standar d prese nts a “re latively low threshold” doe s not license the I TC to act ar

bitrarily , nor does it absolve the ag ency from its duty

to addre ss an import aspec t of the problem. See M

otor Vehicle M

frs. Ass’n of U.S., Inc. , 463 U.S. at 43. Thus, the cour

t asks the I TC to revisit this issue for a third time to provide a more car eful and re asoned e x amination of (1) the larg e sca le re structuringwithin the ball bear ing industry and (2 ) t he signif ic ant r ise in n on -s ub

je c t im po rt s in the do me sti c mark e t. C. The Vuln erability of the Dom estic M arket and the Likely Impactof S ubject Im ports on the Dom estic Industry To make a

proper injury deter mination, the I TC must consider the likely impact of imports of the subject mer chandise on the industry if the orde r is revoke d. § 1675a(a )(1) . As pa rt of that in qu ir

y , th e a g e nc y

e va luate s “ a ll r e le va

nt e c on omi c fa c tor s d e sc ri be d in [§ 1675a(a)( 4)] within t he conte x t of the business cycle a nd the conditions of competition that
are distinctive to the affe cted industry .” § 1675a( a)( 4). In the sec ond sunset revie w, the I TC divided the conditions of competition into three c ateg ories: supply , demand, a nd substitut ability
.Consol. Court No. 06-00334 P age 27

NSK I , 32 CI T at ___, 577 F . Supp. 2d at 1338. I n the sec ond sunset revie w, the I TC did not
acc ount for the sig nificant re structuringwithin the industry when it made its dete rmination on this iss ue. Id. , 3 2 CI T at __ _, 57 7 F . Su

pp . 2 d at 13 39 . T he c ourt the re fo re ins tr

uc te d th e I TC t o
rec onsider the supply

conditions within t he domestic mar ket, and to spec ifically

rea ssess the
a g e nc y ’s vu lne ra

bil ity and lik e ly imp a c t f ind ing s in light o f t he signif ic ant r e str uc tur ingwi thi n the g lobal ball bear ing industry
. Id. The c ourt explained that the rec ord sug g ests “g lobal restruc turing had the e ffe ct of de pressingcer tain economic me asure s of industry perf ormanc e
re lie d u po n [by the I TC] t o c a st the U. S. m ark e t a s vuln e ra ble ,” and “ [w]he the r t

he do me sti c industry is vulnerable to incr ease d volumes of subject imports or simply respondingto other marke t force s is an appropr iate inquiry” for the I TC to perfor

m on remand. Id. On re mand, the I TC found that “ser ious declines in almost all signific ant indicia of the industry ’s condition establish that the industry was in a w eake ned condition at the e nd of the period a nd was ther efor e vulner able to likely materia l injury

from the subjec t imports.” Remand Determ ination at 31. NSK argue s th at th e I TC d oe s n ot s up po rt its re a sse ssm e nt o f t

he lik e ly impact of the subjec t imports with s ubstantial evidenc e. F irst, NSK disag ree s with the I TC’s f i n d i n g th a tth e s u

b j e c ti mp o rt s , r ath e r

th ang l o b a l r e s tr

u c tur i n g w i th i nth e b a l l b e ar i n g i n d u s tr y,
are the source of the de cline in U.S. production ca pacity . NSK Comments at 18-21. Second, NSK c ha rg e s th at c ha

ng e s in U. S. p ro du c tio n v olume are no t by re a so n o f t

he su bje c t im po rt s and ther efor e it is unlikely that the subject ba ll bearing s will have a ne g ative impact on the domestic industry . NSK Comments at 21-24. Finally , NSK contends that c erta in financia lConsol. Court No. 06-00334 P age 28

indicators do not support the I TC’s deter mination that subject imports will likely have a neg ative impact on the domestic industry . NSK Comments at 24-30. F or the re a so ns e xpla ine d a

bo ve in S e c tio n I I I .B .1 of thi s o pin ion , th e I TC f

a ile d to sufficie ntly

addre ss the eff

ect of restruc turing within the ball bear ing industry in its analy sis on
re mand . T he a g e nc y

did no t g e nu ine ly

re sp on d to the c ourt ’s inq uir y of wh e the r t he do me sti c industry is vulnerable to incr ease d volumes of subject imports or is simply respondingto other
mark e t f or c e s. On

thi s is su e , th e I TC d oe s n ot c onne c t th e e vid e nc e on the re c or d w ithits conclusions in a rational fashion, and it fa ils to m eaning fully addre ss conflictingevidenc e on the
rec ord whe n it stated its conclusions. Moreover , the ag ency mere ly rec ites positions that the court found unpe rsuasive in NSK I . There fore , the cour

t remands this issue to the I TC for a
se c on d ti me so that it

may mor e tho ro ug hly

ana ly ze t he signif ic ant r e str uc tur ingin t

he ba ll be ari ngind

us tr y and its e ff e c t on (1 ) t he vu lne ra

bil ity of the do me sti c mark e t and (2 ) t he lik e ly impact of the subjec t imports on the domestic market. The I TC must also address conf licting evidenc e on the r ecor d in rea chingits conclusions on this i ssue. See Suram erica deAleacione s Laminadas, C.A. , 44 F.3d at 985. IV. Conclusion For the fore g oing r easons, the c ourt holds that the Remand D etermination is not supported by

substantial evidence or in ac corda nce w ith law. The I TC acted c ontrary to law when it fa iled to determine whether the subject imports are more than a minimal or tang ential
cause of likely

injury to the domestic industry

g iven the sig nificant pre sence of non-subjec t imp or ts i n th e do me sti c mark e t. T he I TC a lso fa ile d to su pp or t it s ( 1) de c isi on

to c umu late ba llConsol. Court No. 06-00334 P age 29

be ari ng s f ro m th e Un ite d K ing do m w ithoth e r s ub je c t im po rt s a nd (2 ) a na ly sis of the lik e ly imp a c t of su bje c t im po rt s o n th e do me sti c ind us tr y wi th s ub sta

nti a l e vid e nc e . A c c or din g ly , it is here by ORDERED that th e I TC’ s Remand D etermination is not supported by substantial evidenc e or in a ccor dance with law, and that the c ase is ther efor e REMAND ED to the I TC for fu rt he r p ro c e e din g s n ot i nc on sis te nt w iththi s o pin ion . Sp e c if ic a lly , it is OR DE RE D that the I TC must comply with the court’s instruc tions on the issue of
causation in NSK I and NSK II and dis c e rn wh e the r t he su bje c t me rc ha

nd ise wo uld

lik e ly continue to mater ially

injure or c ause material injury to the domestic industry

if Commerce revoke d the antidumping duty order . That inquiry

nece ssarily

require s the I TC to determine whether , in light of the sig nificant pre sence of non-subjec t imports, the subject imports are more tha n a me re min ima l or

tang e nti a l f

a c tor in t he mate ri a l in

jur y to t he do me sti c ind

us tr y that is likely to continue or re cur in the a bsence of the a

ntidumping duty

order ; it is further OR DE RE D that the I TC must reexamine its decision to cumulate ball bear ings f rom the United King dom with other subject imports. In so doing, the I TC must provide a more c are ful and re asoned e x amination of (1) the larg e sca le re structuringwithin the ball bear ing industry and (2) the sig nificant rise in non-subject imports in the U.S. market. In the sec ond rema nd proce eding , the ag ency

must demonstrate a r ational conne ction betwee n the evidenc e on the
rec ord and the conclusions it rea ches, a s well as provide a more throug h acc ount of the
c on fl ic tin g e vid e nc e on

the re c or d a

nd an e xplanatio n a s to why that e vid e nc e is n ot r e le va nt o r i s unpersua sive; it is furtherConsol. Court No. 06-00334 P age 30

OR DE RE D that the I TC must revisit i ts determination on the vulner ability of the d o m es t i c m ark etan d

th e l i k el y i mp ac to f s u

b j ec ti mp o rt s o nth e d o m es t i c m ark et . Inp ro v i d i n g a more rig orous and r easone d examination of the likely impact of the subjec t imports on the do me sti c ind

us tr y , th e I TC m

us t me anin g fu lly

(1 ) a na ly ze t he signif ic a nt r e str uc tur ingin t

he ba ll bear ing industry

and its eff

ect on the vulne rability

of the domestic mar

ket and the likely

impact of su bje c t im po rt s o n s a id m ark e t, a s w e ll a s ( 2) a dd re ss c on fl ic tin g e vid e nc e on the re c or d in
re a c hin g its c on c lus ion s and e xpla in why

that e vid e nc e is i rr e le va

nt o r i s unp e rs ua siv e ; and it i s further OR

DE RE D that th e I TC s ha ll h ave un til Janu ary 5, 20 10 , to fi le its re mand re su lts wi th the Court. All other par

ties shall file their comments on the I TC’s second r emand de termination with the Court no later than F ebrua ry 4, 2010.

D a t e d : A u g u s t3 1 , 2 0 0 9 / s /J u d i thM
. B ar z i l ay New Y ork, Ne w York J udith M. Barzil ay , J udg e